Memo from City Manager to City Council and Planning Board Regarding Disposition Strategy for Alameda Point. (Base Reuse 819099), September 25, 2013



The United States Navy (Navy) transferred approximately 1,379 acres of the Alameda Point property to the City of Alameda on June 4, 2013, which included 509 acres of land and 870 acres of submerged property (Exhibit 1). Now that the City owns significant portions of Alameda Point, the City is committed to the realistic and balanced development of Alameda Point, which has the potential of generating thousands of jobs, millions of dollars in tax revenue and over a thousand housing units. This will result in important environmental, economic, social and health benefits to the City and region. It is one of the best opportunities in the Bay Area for infill development. After nearly 20 years of discussions, public meetings, plans, visions, debates, and millions of public dollars spent on studies and data collection, the City is finally preparing for City Council consideration in early 2014 a comprehensive zoning ordinance amendment and associated General Plan Amendments, a Master Infrastructure Plan, a Town Center and Waterfront Precise Plan, and an environmental impact report (EIR) for Alameda Point (collectively, Planning Approvals).

The Planning Approvals will be consistent with the 1996 NAS Alameda Community Reuse Plan (Reuse Plan) in compliance with the City's no-cost economic development conveyance agreement with the Navy, which prescribes a development program that first and foremost emphasizes the replacement of the 14,000 jobs lost when the base closed. The development program includes approximately 5.5 million square feet of employment uses in existing and newly constructed buildings, 1,425 residential units, and over 250 acres of parks and open space. If the City allows development of more than the 1,425 units, the City would be required to pay the Navy a penalty of $50,000 for each "over-the-limit" market rate unit per the no-cost conveyance agreement.

The 200 existing supportive housing units at Alameda Point are planned for reconstruction on-site within a smaller, consolidated footprint, and approximately 25 percent of the newly constructed residential units are intended to be made available for lower income households. While it is anticipated that Alameda Point will be developed in phases over the next 20 to 30 years, the pace of redevelopment will depend on economic conditions, the Navy's completion of the remaining environmental remediation activities, and the Navy's property conveyance schedule, among other factors. It is tentatively anticipated that construction of new infrastructure could occur as early as 2015.

It is also important to note that the City's agreement with the Navy requires that the City reinvest any lease revenue and land sale proceeds into the maintenance and development of the Alameda Point property for 25 years. As a result, only tax revenue generated from the Alameda Point development can be used to fund Citywide services, facilities and amenities.

As the property owner of much of the Alameda Point property, the City must soon decide how it will dispose of the property for development and for what uses and where. This report presents staff's strategy for disposition of the Alameda Point property. Obviously, staff's strategy is not and cannot be the final word in this regard. Planning Board and City Council, through the zoning and EIR process, will dictate the development envelope within which staff must operate. Even more importantly, the actual financial terms for the disposition of each and every piece of Alameda Point property will have to be analyzed and approved by the City Council. Additionally, any development project that does not fit within the bounds of the EIR and Zoning Plan will need specific Planning Board approval.