Exhibits:

1. Map of Conveyance Phases

2. Map of Phase 2 Conveyance Parcels

3. Map of Phase 2 Conveyance Parcels with Land Use Restrictions

4. City of Alameda Marsh Crust Ordinance

5. Draft Final Finding of Suitability of Transfer for Phase 2 Conveyance

6. Package of Documents to Be Executed and Recorded during Phase 2 Conveyance Closing

File #: 2016-2453
Type: Regular Agenda Item
Body: City Council
On agenda: 2/2/2016
Title: Recommendation to Approve a Resolution Authorizing the City Manager to Accept, on Behalf of the City, Certain Surplus Federal Property, and to Accept, Execute, and Record Conveyance Documents in Substantial Conformance with Certain Phase 2 Property and Conveyance Documents from the United States of America, Acting by and through the Department of the Navy, to Implement the Economic Development Conveyance Agreement for the Former Naval Air Station, Alameda (Phase 2 Alameda Point Conveyance). (Base Reuse 819099)
Attachments: 1. Exhibit 1 - Map of Conveyance Phases, 2. Exhibit 2 - Map of Phase 2 Conveyance Parcels, 3. Exhibit 3 - Map of Phase 2 Conveyance Parcels with Land Use Restrictions, 4. Exhibit 4 - Marsh Crust Ordinance, 5. Exhibit 5 - Draft Final Finding of Suitability of Transfer for Phase 2 Conveyance, 6. Exhibit 6 - Table of Contents, 7. Exhibit 6 - I. Deeds, 8. Exhibit 6 - II. Bill of Sale, 9. Exhibit 6 - III. Marsh Crust Covenants to Restruct Use of Property (CRUPs), 10. Exhibit 6 - IV. Petroleum Covenant, 11. Exhibit 6 - V. Lease in Furtherance of Conveyance Amendment No. 4, 12. Presentation, 13. Resolution - Alameda Phase 2 Conveyance

Recommendation to Approve a Resolution Authorizing the City Manager to Accept, on Behalf of the City, Certain Surplus Federal Property, and to Accept, Execute, and Record Conveyance Documents in Substantial Conformance with Certain Phase 2 Property and Conveyance Documents from the United States of America, Acting by and through the Department of the Navy, to Implement the Economic Development Conveyance Agreement for the Former Naval Air Station, Alameda (Phase 2 Alameda Point Conveyance). (Base Reuse 819099)

To: Honorable Mayor and Members of the City Council

From: Elizabeth D. Warmerdam, Interim City Manager

Re: Recommendation to Approve a Resolution Authorizing the City Manager to Accept, on Behalf of the City, Certain Surplus Federal Property, and to Accept, Execute, and Record Conveyance Documents in Substantial Conformance with Certain Phase 2 Property and Conveyance Documents from the United States of America, Acting by and through the Department of the Navy, to Implement the Economic Development Conveyance Agreement for the Former Naval Air Station, Alameda (Phase 2 Alameda Point Conveyance)

BACKGROUND

The Alameda Reuse and Redevelopment Authority (ARRA) and the Department of the Navy (Navy) entered into an Economic Development Conveyance Memorandum of Agreement (EDC MOA) in 2000, which authorized a no-cost conveyance of major portions of the former Naval Air Station Alameda (NAS Alameda) property, including Alameda Point and Bayport, to the ARRA consistent with the NAS Alameda Community Reuse Plan (Reuse Plan) adopted in 1996. The ARRA and Navy entered into Amendment No. 2 to the EDC MOA on January 4, 2012 that re-commits the ARRA and Navy to the Reuse Plan. On February 7, the City of Alameda accepted a transfer of all of the ARRA’s rights, obligations and assets, including the EDC MOA. The United States Office of Economic Adjustment, on behalf of the Secretary of Defense, recognized the City as the official Local Reuse Authority on March 9, 2012. Pursuant to these agreements, phase 1 conveyance of approximately 1,379 acres, including 509 acres of land and 870 acres of submerged land of the Alameda Point property was conveyed from the Navy to the City in June 2013 (Phase 1 Conveyance) (Exhibit 1). As the Navy has continued to remediate the Alameda Point property, a second phase of land is now ready to be transferred from the Navy to the City in March 2016, consisting of 183 acres (Phase 2 Conveyance) (Exhibit 1). Of the 183 acres, 37 acres will be uplands and 146 acres will be submerged. As depicted on Exhibit 1, it is currently anticipated that there will be at least two additional future conveyances.

DISCUSSION

Similar to the Phase 1 Conveyance, the Phase 2 Conveyance property is divided into multiple parcels (Phase 2: 11 parcels), based primarily on environmental conditions (Exhibit 2). Each parcel will have its own quitclaim deed that includes a distinct set of notifications and/or restrictions placed on the property, depending on a number of factors, including past use; presence of existing buildings; location within the Naval Air Station Alameda Historic District; and/or previously remediated or existing contamination of the soil or groundwater, if any. The detailed parcelization will allow the City to assemble and sell parcels for private development with clear information about the specific conditions relevant to each parcel. If fewer, larger parcels had been created instead, environmental restrictions and notifications would appear on deeds for many areas that do not need them, potentially creating a challenge in understanding which restrictions and notifications would apply to which portions of each parcel. Uncertainty regarding the condition of the property, especially pertaining to environmental conditions, would damage the marketability of the land. As a result, the Phase 2 Conveyance is divided into numerous parcels similar to how the Phase 1 Conveyance was executed.

In most cases, the environmental restrictions on the parcels prohibit extraction and most uses of groundwater, and excavating below a specific threshold depth without a City marsh crust excavation permit. Only two acres (excluding Seaplane Lagoon) will contain restrictions on land use (i.e., no residences, hospitals, schools or day care facilities). In some cases the restrictions apply only to the ground floor. Typically, these restrictions are located in areas that do not affect the City’s future development plans and are consistent with the zoning for the property (Exhibit 3). There will also be approximately 7.5 acres of land that will contain open petroleum sites. The Navy is obligated to clean-up the open petroleum sites post-transfer. Many, if not most, of which include minor contamination or require minor additional investigation before they can be closed for unrestricted use. Once conveyance occurs and new development approaches, a Site Management Plan (SMP) will be developed similar to the SMP prepared for the Phase 1 Conveyance that is acceptable to the Navy and the environmental regulatory agencies. The SMP will provide information about historical activities and current environmental status, and contain guidelines to help ensure development and construction are implemented consistent with environmental conditions. Upon conveyance, the City will also manage a program through its existing permitting database to help ensure that unauthorized activities and land uses do not occur on specified petroleum sites similar to its current process in enforcing the City’s Marsh Crust Ordinance (Exhibit 4). The draft final Finding of Suitability of Transfer (FOST) issued by the Navy pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) is also attached (Exhibit 5).

There are a few additional documents that will be executed and recorded by the City along with the 11 quitclaim deeds on the day of the closing of the property transfer, including the following:

1) Covenants Restricting Use of the Property (CRUPs) between the City and the Department of Toxic Substances Control (DTSC) regarding the City’s ongoing management and enforcement of issues related to the Marsh Crust consistent with the City’s Marsh Crust Ordinance (Exhibit 4);

2) CRUP between the City and Regional Water Quality Board (Water Board) regarding the City’s ongoing management and enforcement of one closed petroleum site requiring land use restrictions;

3) Bills of sale for personal property, storm drain and wastewater lines in the Phase 2 property; and

4) An amendment to the Lease in Furtherance of Conveyance to update the areas to be occupied by the Navy on property not yet owned by the City.

The Conveyance Approval Package (Exhibit 6) consists of all of the documents listed above, as well as a prototypical “form deed,” which contains all of the restrictions and notifications which may be included in the deeds, and a matrix depicting which restrictions and notifications will apply to which deed and parcel. For example, some parcels will include a notification of the existence of the Naval Air Station Alameda Historic District, while others will include restrictions on digging and excavation within the Marsh Crust area. Subsequent to City Council approval, the 11 deeds will be generated based on the final form deed and matrix.

Staff is recommending approval of a resolution authorizing the City Manager to accept, on behalf of the City, certain surplus federal property, and to accept, execute, and record conveyance documents in substantial conformance with the Conveyance Approval Package.

FINANCIAL IMPACT

There is no financial impact to the City’s General Fund.

Environmental Review

On March 21, 2000, the City Council certified the Final Environmental Impact Report pursuant to the California Environmental Quality Act (CEQA) for the Reuse of Naval Air Station Alameda and the Fleet and Industrial Supply Center, Alameda Annex and Facility (State Clearinghouse No. 96022105) (the “2000 EIR”) , consisting of the Draft EIR and EIR Response to Comments Addendum, and adopted Findings and a Statement of Overriding Considerations, adopted and incorporated into the project all of the mitigation measures within the responsibility and jurisdiction of the City, and adopted a Mitigation Monitoring Program. On February 4, 2014, the City Council certified the Final Environmental Impact Report for the Alameda Point Project (State Clearinghouse No. 201312043) (the “2014 EIR”), consisting of the Draft EIR and Response to Comments volume, and adopted Findings and a Statement of Overriding Considerations, adopted and incorporated into the project all of the mitigation measures within the responsibility and jurisdiction of the City, and adopted a Mitigation Monitoring Program.

The Phase 2 Conveyance implements conveyance of NAS Alameda and subsequent reuse pursuant to the Reuse Plan, which were analyzed in the 2000 EIR. The analysis in the 2000 EIR was updated in the 2014 EIR, which analyzed the redevelopment and reuse of 878 acres of land and approximately 1,229 acres of water at the former NAS Alameda, including the Phase 2 Conveyance. The Phase 2 Conveyance is within the project area analyzed in both EIRs. The Phase 2 Conveyance would not require major revisions to the previously certified EIRs due to new or substantially increased significant environmental effects. There have been no substantial changes to the conveyance and reuse or substantial changes with respect to the circumstances under which the conveyance and reuse would be undertaken, that would require major revisions to the EIRs due to new or substantially increased significant environmental effects, and no new information of substantial importance has been discovered that would trigger or require major revisions to the EIRs due to new or substantially increased significant environmental effects.

RECOMMENDATION

Approve a Resolution authorizing the City Manager to accept, on behalf of the City, certain surplus federal property, and to accept, execute, and record conveyance documents in substantial conformance with certain Phase 2 property and conveyance documents from the United States of America, acting by and through the Department of the Navy, to implement the Economic Development Conveyance Agreement for the former Naval Air Station, Alameda.

Respectfully submitted,

Jennifer Ott, Chief Operating Officer - Alameda Point

Financial Impact section reviewed,

Elena Adair, Finance Director

Exhibits:

1. Map of Conveyance Phases

2. Map of Phase 2 Conveyance Parcels

3. Map of Phase 2 Conveyance Parcels with Land Use Restrictions

4. City of Alameda Marsh Crust Ordinance

5. Draft Final Finding of Suitability of Transfer for Phase 2 Conveyance

6. Package of Documents to Be Executed and Recorded during Phase 2 Conveyance Closing