Title
Summary Title: Adoption of Resolution and Introduction of Ordinance Authorizing Multiple Real Estate Transactions Related to Sale of Building 607 to the Alameda Food Bank
Public Hearing to Consider Adoption of Resolution Declaring the 1.7 Acres of Land Located on Pan Am Way at Alameda Point to Be Exempt Surplus Land under the Surplus Land Act;
Introduction of Ordinance Authorizing the City Manager to Execute a Purchase and Sale Agreement for the 1.7 Acres of Surplus Land (Building 607) with the Alameda Food Bank, Execute a 12-Month License with a 6-Month Optional Extension for Temporary Use of Adjacent Property During Project Construction, Execute a Lease for Wings 8 and 9 of Building 2 on West Midway Avenue at Alameda Point with the Alameda Point Collaborative, and Execute Release of the Legally Binding Agreements with the Alameda Point Collaborative and Alameda County [Requires 4 affirmative votes]
The streamlining provisions of Public Resources Section 21083.3 and Section 15183 of the California Environmental Quality Act (CEQA) Guidelines apply and no further environmental review is required. (Base Reuse 29061822)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
The recommended Surplus Lands Act Resolution, Purchase and Sale Agreement (PSA) with the Alameda Food Bank, Lease with the Alameda Point Collaborative (APC), and release of the Legally Binding Agreements with APC and Alameda County are separate, but related actions to facilitate and expedite:
• The construction of new infrastructure in support of the Historic District and occupants at Alameda Point consistent with City Council’s March 2023 Alameda Point Disposition and Leasing Strategy,
• The construction of affordable housing for Alameda’s most vulnerable households consistent with City Council’s July 2023 approval of the Rebuilding Existing Supportive Housing at Alameda Point project (RESHAP) project, and
• The provision of affordable food to Alameda’s most vulnerable communities by the Alameda Food Bank.
The recommended resolution and ordinance make it possible for:
• APC to temporarily move their services located in Building 613 of the RESHAP construction site to Building 2 on West Midway Avenue so that construction can proceed on the RESHAP project approved by City Council in July without disruption to these important services.
• APC to consolidate their administrative office located in Building 607 at 677 West Ranger to Building 2, until such time that their new offices in the RESHAP campus are completed.
• Existing structures currently operated by APC in the RESHAP and West Midway development footprint to be demolished, and residents in properties currently managed by APC, Operation Dignity, and Building Futures for Women and Children to ultimately relocate into new homes in RESHAP once they are completed.
• The Alameda Food Bank to vacate their leased premises in Building 92 and purchase Building 607 and the associated 1.7 acres of land on Pan Am from the City of Alameda (City) to construct a permanent Community Market for the distribution of food to vulnerable households.
• The City to sell the 1.7 acres and Building 607 to the Food Bank and ultimately list Building 92 for sale consistent with the Disposition and Leasing Strategy. The proceeds from these land sales will be used to finance the construction of the next phase of infrastructure and utilities serving the Historic District business and buildings at Alameda Point.
Staff is now recommending that City Council hold a public hearing and act to:
• Approve a resolution declaring the 1.7-acre Food Bank property at Alameda Point to be “exempt surplus land” under the Surplus Lands Act; and
• Approve a first reading of an ordinance authorizing the City Manager to:
o Execute the Purchase and Sale Agreement (PSA) with the Alameda Food Bank,
o Execute a short-term License for a portion of the adjacent property during project construction,
o Execute a lease with APC for Building 2 for a period of three years with two, one-year options to extend, and
o Execute a Release and Termination of Lease Agreement for all Legally Binding Agreements (LBAs) with APC and Alameda County.
BACKGROUND
Legally Binding Agreements. The Base Closure Community Redevelopment and Homeless Assistance Act of 1994 requires that reasonable accommodations be made on closing military bases to meet the needs of the homeless. In 1995, the Alameda Reuse and Redevelopment Authority (ARRA) recognized the Alameda County Homeless Providers Base Conversion Collaborative (ACHPBCC) as the official organization representing homeless interests in the reuse process for the Naval Air Station (NAS) Alameda. APC is the successor to ACHPBCC. To implement this requirement, the parties negotiated Standards of Reasonableness (Standards) in 1996, which were amended in 2000 and 2007. Between 2004 and 2015, these Standards were augmented with building-specific Legally Binding Agreements (LBAs) between the City, APC, and Alameda County, which clarify lease terms and address certain aspects of building operations. None of the LBAs have expired, and they are still binding to the following properties:
• Non-residential: 677 West Ranger (Building 607); 650 West Ranger (Building 92); 451 Stardust (Building 613); 750 West Midway (Building 101);
• Residential: Miramar, Mariposa; New Life Gardens I and II; Dignity Commons; Bessie Coleman Court; Spirit of Hope I and II; and Unity Village.
Disposition Strategy. In March of 2023, City Council reviewed and approved a Disposition and Leasing Strategy for Alameda Point, which prioritizes the sale of City-owned land adjacent to new infrastructure and new utilities to finance new public infrastructure at Alameda Point in the Historic District. The City’s Public Works Department is currently completing the first phase of new infrastructure within the Historic District at Alameda Point, which serves the businesses and buildings facing West Tower Avenue and West Midway Avenue (between Pan Am Way and Saratoga Street) and those properties facing Saratoga Street and Pan Am Way (between West Tower and West Midway). Of those properties, the City has already sold Building 9, Building 91, and Building 8, the proceeds of which helped fund the current infrastructure phase. Building 92, Building 7, Building 114, Building 101, Building 607 and the adjacent parking lot are all served by the new infrastructure, but have yet to be sold. The proceeds from the sale of these properties will make it possible for the Public Works Department to commence with the construction of the second phase of the infrastructure, which will serve all the properties, buildings, and businesses that face West Midway and West Tower (between Saratoga and Monarch Streets) and the business and buildings that face Lexington Street and Monarch Street (between West Tower and West Midway Avenues).
RESHAP. In July of 2023, City Council approved the RESHAP project. RESHAP is a plan to construct and manage over 300 permanent supportive housing units on a new 8-acre campus at the corner of West Midway Avenue and Pan Am Way for extremely low, very low, and low-income households by MidPen Housing Corporation, APC, Operation Dignity, and Building Futures with Women and Children (the Collaborating Partners). The RESHAP project exemplifies the City’s continuing commitment to addressing the regional affordable housing crisis and to providing for the housing needs of Alameda’s most vulnerable residents. At the time City Council approved this project, City Council did not authorize the City Manager to release the LBAs authorizing APC and its partners to manage certain City-owned properties and provide services in those properties for formerly homeless individuals. The LBA releases are necessary for demolition of several buildings in the RESHAP footprint to commence in Fall 2024 as well as for Buildings 607 and 92, among others, to be sold. Per the terms of the RESHAP Disposition and Development Agreement (DDA), the Collaborating Partners are required to sign the LBA releases within one year of the approval date of the DDA and submit them to be held in escrow. At the time of closing, the LBA releases will be released from escrow and the fee interest in the improved land will be transferred to the Collaborating Partners for the construction of the housing and other support services facilities.
Alameda Food Bank. In 2022, the Alameda Food Bank approached the City to discuss their desire to purchase land to allow for the construction of a permanent “Community Market” at Alameda Point. The Food Bank is a non-profit organization that supports Alameda residents experiencing food insecurity from its 18,000 square feet of leased premises in Building 92 on West Ranger Avenue. The Food Bank serves approximately 700 customers per week and is open to the public on Monday, Wednesday, and Friday. A paid staff of four is supplemented by volunteers. During the COVID pandemic, the Food Bank served customers by pre-boxing food and placing it into car trunks in a drive through line. This led to food waste since customers could not pick what they wanted and discarded pre-selected items they did not want. To address this issue and provide its customers with a respectful grocery shopping experience, the operation has been reconfigured into a grocery store format with food arranged on shelves in aisles and produce displayed in a produce section. Grocery carts are provided for customers.
On November 13, 2023, the Alameda Planning Board held a public hearing at which they reviewed and unanimously approved the Food Bank’s proposed Development Plan and Use Permit for Building 607 and the 1.7-acre property on Pan Am Way (Exhibit 1).
DISCUSSION
Surplus Land Resolution. Prior to taking any action to dispose of (i.e., sell or convey) land owned by the City, the Surplus Land Act [Government Code Section 54221(b)(1)] requires the City to declare the land "surplus land" or “exempt surplus land" with written findings.
The recommended draft resolution declares that the 1.7-acre property facing Pan Am Way and including Building 607 is “exempt surplus land” under the Surplus Land Act based on the following findings prescribed by Government Code Section 54221(f)(1)(J):
• Former Military Base. The subject property is located on the former Alameda Naval Air Station (Alameda NAS), which is greater than five acres in size and is expected to include a mix of residential and nonresidential uses with no fewer than 1,400 residential units upon completion of redevelopment on the former NAS Alameda;
• Affordable Housing. The affordability requirements for residential units on the NAS Alameda are governed by a settlement agreement (the Renewed Hope Settlement Agreement) which agreement restricts (a) 10% of all residential units development on Alameda NAS to lower income households, as defined in Health and Safety Code Section 50079.5 with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing and 45 years for ownership housing and (b) 15 percent of all residential units developed on Alameda NAS in accordance with Health and Safety Code Section 33413(b)(2). To date, the City has granted approvals for developments and has agreements with the developers of those developments that contemplate the development of 2,082 residential units on NAS Alameda, 632 or 30% of which units are required to occupied by lower income households as defined in Health and Safety Code Section 50079.5 at affordable rents, as defined in Sections 50052.5 and 50053 of the Health and Safety Code for a minimum of 55 years;
• Labor. As a condition of the conveyance of the Property, the City has required that the purchaser must negotiate and executed a project labor agreement related to development of the City Property consistent with the City’s Project Stabilization Agreement resolution (PSA), as adopted on February 2, 2021. The City’s PSA does not require a project labor agreement for projects with improvements of less than $5 million, which is the case with Building 607; moreover the Alameda Food Bank has been in discussions with the Alameda County Building Trades who have declined to negotiate a project labor agreement due to the small size of this improvement;
• Annual Report. The City does and shall continue to include, in its annual report required by paragraph (2) of subdivision (a) of Section 65400 of the Government Code, the status of development of residential units on the NAS Alameda, including the total number of residential units that have been permitted and what percentage of those residential units are restricted for persons and families of low or moderate income, as defined in Section 50093 of the Health and Safety Code or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
Food Bank Purchase and Sale Agreement. The Alameda Food Bank would like to purchase the 1.7 acres of exempt surplus land facing Pan Am Way, which includes Building 607, an existing parking lot and a cell tower (Exhibit 5). The land is located across the street from their current leased location in Building 92. The site is located on AC Transit Route 96 and in close proximity to a planned network of bicycle facilities and sidewalks. The project will also be served by Alameda Transportation Management Association services and programs consistent with and in compliance with the Alameda Point Transportation Demand Management Plan.
The Food Bank’s proposed Development Plan (Exhibit 1) for the 1.7-acre site includes the rehabilitation and expansion of Building 607, reconfiguration of the adjacent parking lot, and addition of trees, landscaping and impervious surfaces to accommodate the Community Market and a variety of operational areas, including food receiving, warehouse areas for dry and cold storage of food, food sorting and preparation areas, and related volunteer and staff operational areas. With its new addition, Building 607 will provide the Food Bank with approximately 18,000 square feet of space, which is comparable to the space they currently occupy in Building 92.
The site improvements include reconfiguration and landscaping of the existing parking lot to provide for approximately 68 automobile parking spaces and food bank delivery vans and vehicles. The Food Bank has agreed to allow neighboring commercial uses to share in the use of their parking lot, subject to use limitations that prioritize food bank uses during scheduled operational times, similar to how a typical grocery store parking lot is used in commercial areas. The Development Plan also includes the installation of new curb, gutter and sidewalk facilities along the associated frontage on West Ranger designed to connect to newly installed curb, gutter and sidewalk improvements along the frontage with Pan Am and West Midway. The site plan is designed to accommodate the existing cell tower facility on the site. The sale of the property to the Food Bank to be approved by City Council includes the transfer of the cell tower lease.
The proposal will require a variety of City permits and agreements. The Food Bank is pursuing the entitlements and agreements sequentially. First, the Food Bank requested Planning Board approval of the Development Plan and Use Permit for the project to confirm that their Development Plan is consistent with City land use and development regulations. Now that the Planning Board has approved the Development Plan and Use Permit, the Food Bank is requesting approval of the Purchase and Sale Agreement (PSA). If City Council approves the PSA, the Food Bank will then prepare and submit architectural plans for the project and submit for Design Review approval from the Planning Board and Certificate of Approval from the Historical Advisory Board. Building 607 is not a contributor to the NAS Alameda Historic District, but the City of Alameda Mitigation Monitoring and Reporting Program for the development of Alameda Point requires a Certificate of Approval for any new buildings constructed within the Historic District to ensure that the new structure does not impact the character defining features of the NAS Alameda Historic District.
The draft PSA establishes a sales price of $3,060,000 for the 1.7-acre property. The sales price is based on a cost of $1.8 million per acre, which is the City’s per acre cost to construct all of the Master Infrastructure needed at Alameda Point. Therefore, the Food Bank is funding their fair share of the cost for the new infrastructure, utilities, sea level rise, and parks that are needed to support the full development of Alameda Point. The $3.06 million will be used by the City to finance the Phase 2 infrastructure described above.
The PSA also establishes a schedule for the construction of the new site and the vacating of Building 92. Once the Food Bank has vacated Building 92 and the City has relocated the Red Cross warehouse, the City will be able sell Building 92. Similar to Buildings 9 and 91, which have already been sold and redeveloped, Building 92 is zoned for commercial purposes. Proceeds from the sale of Building 92 will also be used to finance the Phase 2 infrastructure described above.
Food Bank 12-month License. To facilitate and expedite the move across the street to the 1.7-acre parcel, the Food Bank would like to phase construction and operations in a manner that allows them to operate out of Building 607, while they are constructing the 10,000-foot addition to the building. To operate effectively, the Food Bank would like to have temporary use of approximately 10,000 square feet of land on the vacant parcel immediately adjacent to Building 607 for up to 12 months for the provision of a laydown and staging area, while the addition to Building 607 is being constructed.
Although the Food Bank believes they will only need the land for 12 months, the recommended license is designed to allow for 12 months and a 6-month extension if needed to accommodate any delays in the construction schedule. The draft license agreement is a no-cost license (Exhibit 4). The land is currently leased to APC at no cost pursuant to the 20+-year-old LBAs between the City and APC. As a condition of the Building 2 Lease with APC, APC is releasing its interests for this property. Once the Food Bank has terminated the short-term license, the adjacent vacant lands between Building 114 and the Food Bank property will be available for sale. The land is currently vacant. Building 101 that used to occupy the property was destroyed by fire in 2005 and was demolished.
Building 2 Lease with APC. Building 2 is a vacant, two story, City owned building that fronts West Midway Avenue between Monarch Street and Lexington Street on the North side. APC will lease the lower floor of wings 8 and 9 of Building 2, which consists of approximately 14,020 square feet, as well as the 9,600-square-foot bay between the wings, which is currently fenced landscaped space. Staff is recommending that City Council lease the building to APC for three (3) years at no cost, with the option for two 12-month extensions for the following reasons (Exhibit 3):
• APC needs to move existing service facilities that are located on the RESHAP construction site to avoid disruption to these services during RESHAP construction activities. Once the RESHAP project is complete, these services will move out of Building 2 and occupy their new buildings on the RESHAP property.
• APC is willing to move its administrative services currently in Building 607 into Building 2, which allows the City to expedite the Food Bank’s departure from Building 92 by selling the Food Bank building 607. Once the Food Bank departs Building 92, the City will be able to sell Building 92.
• Pursuant to the existing LBAs between the City and APC, APC currently leases Building 92 and Building 607 from the City at no cost. Therefore, in return for releasing the City from its no-cost obligation to lease buildings 92 and 607 to APC, staff is recommending that the City lease Building 2 to APC at no cost for three years (or five years if the extensions are needed due to delays in the construction of the RESHAP campus).
• Investing in Building 2 activates an otherwise unoccupied block of West Midway in Alameda Point, providing safety and security benefits to the area. Wings 8, 9 and 10 of Building 2 were formerly leased as office space and the City’s broker has been unable to attract a new tenant due to the softened regional office market. The remaining 60 percent of this improved area of Building 2 - roughly 28,000 square feet - is still available for lease to another tenant.
ALTERNATIVES
City Council may consider a number of alternatives, including:
• Approve the Surplus Lands Resolution and Ordinance as recommended. This will facilitate and expedite APC efforts to construct the RESHAP campus without disruption to its critical services, expedite the Food Bank’s efforts to create a permanent facility at Alameda Point for the distribution of low cost and free food to households in need, and expedite the City efforts to finance and construct new infrastructure for the businesses and properties within the NAS Alameda Historic District.
• Approve the Surplus Lands Resolution, but delay action on the Ordinance. If City Council is not comfortable with the PSA, License, Lease, or LBA release, City Council could approve the Surplus Lands Resolution but delay action on the Ordinance. Approving the Surplus Lands Resolution initiates a 30-day review period by HCD of the Council’s findings. If City Council is comfortable with those findings and comfortable with ultimately selling this property to the Food Bank or some other entity, City Council should approve the Resolution and direct staff to transmit the Resolution to HCD for review. This action does not predetermine that City Council will approve the proposed PSA with the Food Bank or the Lease with APC. If City Council chooses this alternative, City Council should identify the specific terms in either the PSA or the Leases that is causing concern and that City Council would like staff and the parties to renegotiate. This alternative will delay the Food Bank’s schedule and will potentially delay construction of the RESHAP project or result in a disruption to APC services, depending on the number of issues to be renegotiated.
• Deny Surplus Lands Resolution and the Ordinance. If City Council does not want to sell the land to the Food Bank or does not wish to lease Building 2 to APC, City Council may decide not to approve Surplus Lands Resolution or the Ordinance. City Council should identify the reasons for the denial. Based upon those reasons, staff may begin the process of looking for a new location for the Food Bank and/or APC, depending on City Council’s concerns. This alternative will certainly delay the Food Bank, RESHAP, and West Midway’s construction schedules.
FINANCIAL IMPACT
There is no direct fiscal impact from the recommended resolution and ordinance to the General Fund. Proceeds from the sale of property will be received in the Alameda Point/Base Reuse Fund (Fund 290), which is the funding source for the infrastructure improvements at Alameda Point.
• The sale of the 1.7 acres to the Food Bank will result in $3.06 million in revenue for the Alameda Point/Base Reuse Fund, which will be used to construct infrastructure. Similarly, the sale of Building 92 will result in revenue for the Alameda Point/Base Reuse Fund for infrastructure construction.
• The loss of $69,995 in annual cell tower revenue will result in less revenue to the Alameda Point/Base Reuse Fund used for operation and maintenance of Alameda Point building and property. However, as the City sells more property, the obligation to maintain buildings and property will be reduced as land and buildings are sold.
• Once the 1.7 acres, Building 92 and future properties are sold, these properties will begin to pay property taxes to the City, AUSD and other public agencies and districts. This positive impact on the General Fund would be offset by the extent to which the properties are held by nonprofit organizations that are exempted from paying property tax.
• Wings 8 to 10 of Building 2 are in relatively good shape, but the City will be responsible for maintenance of the exterior structure. As the City currently has this responsibility, and exterior maintenance is equally essential for an occupied and vacant structure to maintain the value of the property, there is no change in expenditures resulting from this lease. Moreover, this property has been marketed by the City’s broker for some time, and as there are no other interested office tenants currently given high office vacancy rates, staff do not anticipate an opportunity cost to leasing a portion of this building to APC.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The Food Bank proposal for the Pan Am property and the use of Building 2 for APC offices is consistent with the Alameda General Plan, the Alameda Point Zoning District Zoning Regulations for the site, and the NAS Alameda Historic District. The General Plan Mixed Use Designation for this area of Alameda Point and the Alameda Municipal Code (AMC) encourages and supports the use of this land for commercial and institutional uses, including but not limited to uses that provide public services similar to the services provided by the Food Bank currently in Building 92.
The 1.7-acre property and Building 2 are located in the Alameda Point Adaptive Reuse Zoning district (AMC 30-4.24), which “provides lands for employment and business uses, including office, research and development, bio-technology and high-tech manufacturing and sales, light and heavy industrial, maritime, commercial, community serving and destination retail, and other uses that support reinvestment in the existing buildings and infrastructure within the NAS Alameda Historic District….” (AMC 30-4.24. c.7.)
This action addresses the following projects in the City of Alameda Strategic Plan:
• HH3 - Further the preservation, rehabilitation, or construction of affordable housing in Alameda.
• HH5 - Coordinate with Alameda Food Bank on their relocation and solicit purchase offers for Building 92.
• HH6 - Support implementation of West Midway (mixed use) and RESHAP (supportive housing) developments at Alameda Point.
This action is subject to the Levine Act.
ENVIRONMENTAL REVIEW
Pursuant to the streamlining provision of Section 15183 of the California Environmental Quality Act (CEQA) Guidelines, no further environmental review is required because the project is consistent with the General Plan and Zoning Regulations for the land. The environmental impacts of the development of the area were considered in the Alameda Point Project (APP) Final Environmental Impact Report (FEIR) adopted by the City Council on February 4, 2014, in compliance with CEQA and in the General Plan Update EIR adopted by the City Council on November 30, 2021; and as documented in the project CEQA Checklist (Exhibit 2), the Community Market project would not result in significant impacts that: (1) are peculiar to the project or project site; (2) were not already identified as significant effects, cumulative effects, or off-site effects in the FEIR; or (3) were previously identified as significant effects but are determined to be substantially more severe than discussed in the EIR.
CLIMATE IMPACT
Provision of affordable housing and food bank facilities in a mixed use, transit oriented, urban infill location is consistent with and supports the City of Alameda Climate Action Plan and regional and statewide Climate Protection and Greenhouse Gas Emission reduction strategies, including the Bay Area’s Sustainability Strategy, Plan Bay Area.
RECOMMENDATION
Adopt a resolution declaring the 1.7 acres of land located on Pan Am Way at Alameda Point to be exempt Surplus Land under the Surplus Land Act; and introduce an ordinance authorizing the City Manager to execute a Purchase and Sale Agreement for the 1.7 Acres of Surplus Land (Building 607) with the Alameda Food Bank, execute a 12-month license with a 6-month optional extension for temporary use of adjacent property during project construction, execute a lease for wings 8 and 9 of building 2 on West Midway Avenue at Alameda Point with the Alameda Point Collaborative, and execute release of the legally binding agreements with the Alameda Point Collaborative and Alameda County.
Respectfully submitted,
Abby Thorne-Lyman, Base Reuse and Economic Development Director
By,
Walker Toma, Community Development Manager
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibits:
1. Food Bank Development Plan
2. Food Bank CEQA Checklist
3. Building 2 Lease Agreement
4. Lot 101 License Agreement
5. Building 607 Purchase and Sale Agreement
6. Release and Termination of Lease for properties subject to Legally Binding Agreements