Exhibits:

1. Map of Existing leasehold and Proposed Future Campus of Collaborating Partners

2. Exclusive Negotiating Agreement between the City and MidPen Housing, Alameda Point Collaborative, Building Futures with Women and Children, and Operation Dignity

File #: 2015-2318
Type: Regular Agenda Item
Body: City Council
On agenda: 12/15/2015
Title: Recommendation to Approve an Exclusive Negotiating Agreement (ENA) between the City of Alameda and a consortium of four developers made up of MidPen Housing, Alameda Point Collaborative, Building Futures with Women and Children, and Operation Dignity for Planning and Development of a 13.2-Acre Parcel in the Main Street Neighborhood Area at Alameda Point bounded by West Midway Avenue, Orion Avenue, West Tower Avenue, and Main Street to Enable Predevelopment Activities for Designing and Constructing New Supportive Housing Facilities for these Existing Supportive Housing Providers. (Base Reuse 819099)
Attachments: 1. Exhibit 1 - Map of Existing Leasehold and Proposed Future Campus of Collaborating Partners, 2. Exhibit 2 - Exclusive Negotiating Agreement

Recommendation to Approve an Exclusive Negotiating Agreement (ENA) between the City of Alameda and a consortium of four developers made up of MidPen Housing, Alameda Point Collaborative, Building Futures with Women and Children, and Operation Dignity for Planning and Development of a 13.2-Acre Parcel in the Main Street Neighborhood Area at Alameda Point bounded by West Midway Avenue, Orion Avenue, West Tower Avenue, and Main Street to Enable Predevelopment Activities for Designing and Constructing New Supportive Housing Facilities for these Existing Supportive Housing Providers. (Base Reuse 819099)

To: Honorable Mayor and Members of the City Council

From: Elizabeth D. Warmerdam, Interim City Manager

Re: Recommendation to Approve an Exclusive Negotiating Agreement (ENA) between the City of Alameda and MidPen Housing, Alameda Point Collaborative, Building Futures with Women and Children, and Operation Dignity for Planning and Development of a 13.2-Acre Parcel in the Main Street Neighborhood Area at Alameda Point bounded by West Midway Avenue, Orion Avenue, West Tower Avenue, and Main Street to Enable Predevelopment Activities for Designing and Constructing New Supportive Housing Facilities for these Existing Supportive Housing Providers.

BACKGROUND

On February 19, 2015, Council approved a contract with Urban Planning Partners (UPP) to draft a Specific Plan for the Main Street Neighborhood within Alameda Point (Main Street Plan). This contract is funded by a grant in the amount of $250,000 from the Metropolitan Transportation Commission (MTC). A specific plan is a planning tool that cities use to more specifically guide development and implement their general plans. A specific plan for the Main Street Neighborhood must be prepared and approved before new development can occur in the Main Street Neighborhood Sub-district, as required by the Alameda Point Zoning District (Alameda Municipal Code 30-4.24), which was approved by City Council on February 4, 2014. A detailed specific plan was also required for the Waterfront Town Center sub-district, which was adopted by the City Council in July 2014 (Town Center Plan), and which enabled the development of Site A.

As with the Town Center Plan, the proposed Main Street Plan would lay out the development guidelines and regulations for future development within the Main Street Neighborhood. The Main Street Plan does not commit the City to developing the area, nor does it diminish the City’s absolute authority as landowner to decide how much or when to pursue any development within the Main Street Neighborhood. The document’s focus and effect is restricted to determining the regulations under which future development could occur.

The Main Street Plan will create the planning framework and regulations necessary to allow the three existing supportive housing organizations currently operating in the Main Street Neighborhood (Alameda Point Collaborative, Building Futures with Women and Children, and Operation Dignity, together referred to as the Collaborating Partners) to design and build replacement housing for their current facilities. This affordable housing replacement project will allow the City to continue to meet its obligations as the Local Reuse Authority to provide housing for formerly homeless households as defined by Legally Binding Agreements in connection with closure of the Alameda Naval Air Station.

During the City Council’s review and discussion of UPP’s proposed contract for preparing the Main Street Plan, staff was directed to study alternatives, including one scenario that only allowed the bare minimum of development necessary to enable the Collaborating Partners to build new facilities.

To build these new facilities and replace their existing housing, the Collaborating Partners have been working closely with City staff to come up with a plan that consolidates their existing leased campus of 34 acres (with 200 units) to a smaller footprint of 13.2 acres, which would allow them to own their own property and build new much-needed facilities designed specifically for their needs (see Exhibit 1 for a map of the existing leaseholds and proposed future campus of the Collaborative Partners). The remaining land, under the sole discretion of the city, would be available for private development and portions could be assembled, sold and developed by a market rate developer to potentially help fund the expensive development costs. To that end the Collaborating Partners have hired MidPen Housing (MidPen), a highly qualified Bay Area-based affordable housing developer, to help plan, design, finance, and construct their new facilities. Together the Collaborating Partners and MidPen have embarked on an intensive community outreach process with their own users, seeking to ensure that new facilities respond best to their community’s needs.

Staff has been coordinating with the Collaborating Partners and MidPen, incorporating their design and site plan ideas into the City’s draft concepts and alternatives and taking into consideration infrastructure costs and location restrictions dictated by affordable housing funding sources in an attempt to create an alternative that is palatable to all parties. City staff is additionally currently working with a real estate economic analyst and designers on the consultant team to craft alternatives for the Main Street Plan. The Main Street Plan is currently scheduled to be completed in 2016.

Recently, MidPen approached City staff about the possibility of applying for an Alameda County Affordable Housing Trust Fund loan (also known as a “boomerang loan”), from the Alameda County Housing and Community Development Department (the Grantor). This $350,000 forgivable loan, of which $170,000 is unrestricted and can be used for pre-development costs, would be critical to enabling MidPen and the Collaborating Partners to continue with their ongoing planning and entitlement process. In order to secure this loan, however, Alameda County requires the applicant to have a form of site control. Alameda County has indicated that an Exclusive Negotiation Agreement (ENA) between the City, MidPen, and the Collaborating Partners qualifies as an acceptable form. As an effort to assist the Collaborating Partners in relocating and developing their new facilities, staff is recommending that the City enter into an ENA to facilitate the award of this grant and agreement between the City and the Collaborating Partners on how the implementation of the new supportive housing facilities should occur.

The site in question is located in the southeastern corner of the Main Street Neighborhood, just south of Midway Avenue and east of Orion Street and is currently occupied by the PX Building (Building 152) as well as other vacant former residential buildings. As the City currently has no scheduled plans to develop the Main Street Neighborhood and as this location is ideal for affordable housing due to its proximity to existing parks and public transit, the proposed ENA has little cost for the City.

Winning this boomerang grant would allow the Collaborating Partners and MidPen to continue to move forward with their pre-development work and further the goal of consolidating their campus. By having a smaller campus, the Collaborating Partners will lower their service delivery costs to residents and be able to foster a greater sense of community among their residents, who will now be clustered around a cohesive campus.

From the City’s perspective, working closely with the Collaborating Partners on their development project has multiple benefits:

• By consolidating the Collaborating Partners’ existing scattered 34 acres of facilities into a smaller footprint elsewhere within the neighborhood, the value of the remaining available land increases. Whereas currently a potential developer would have to design a neighborhood to fit around the disjointed Collaborating Partner facilities, with a new, consolidated campus it reduces development constraints and thus increases the potential benefits to the City.

• The City’s efforts to craft a successful Main Street Plan are inextricably linked to the Collaborating Partners’ housing replacement plan. By assisting them in attaining this boomerang loan and the pre-development funds it contains, it allows the City to incorporate a more fully vetted supportive housing campus into the final proposed Main Street Plan.

• Replacing the existing aging housing stock utilized by the Collaborating Partners improve the City’s ability to offer high quality, affordable housing to its residents.

DISCUSSION

City staff has drafted the attached ENA (Exhibit 2) between the City, MidPen Housing, and the Collaborating Partners. This document is specifically designed to facilitate agreement about how to implement the project and to satisfy the requirements of the Grantor without requiring the City to make premature commitments before the Main Street Plan is adopted. The document does not authorize any development.

The following provides a summary of the notable deal points:

• Term: The ENA will expire upon Main Street Plan adoption by City Council. This ENA term limit allows the City Council at is sole discretion to amend the ENA to reflect the results of the completed Main Street Plan. If for some unforeseen reason it is not adopted then this ENA expires 12 months after the ENA’s execution.

• Deliverables: The ENA is geared toward the production of an Implementation Term Sheet that will be used as a road map for crafting detailed financial and other deal points, not a disposition and development agreement (DDA), and so if successful will not place the City in a position to prematurely be asked to approve or disapprove a detailed transaction until more information has been vetted and discussed publicly.

• City Responsibilities: The ENA only requires that the City not engage in negotiations with any other entity regarding the 13.2-acre parcel in question for the duration of the term and that the City negotiate in good faith with MidPen and the Collaborating Partners for the duration of the term. The land is currently vacant and the City has no plans for developing the site in the near future - and certainly not until the Main Street Plan is adopted minimizing any risk to the City.

• Developer Responsibilities: As per the ENA, the developer team is responsible for preparing a draft Development Plan, a draft business plan including project pro forma, and a proposed project schedule, all of which require an approved Main Street Plan in order to be finalized.

• Match Requirement and City Security: The parcel proposed to be developed by the Collaborating Partners and MidPen will qualify as the match requirement for this grant; however, the land will not be used as security in any way for the loan, nor will the City be liable for repayment as the Collaborating Partners and MidPen will indemnify the City.

FINANCIAL IMPACT

There is no impact to the General Fund or the Base Reuse Fund budgets as City staff time dedicated to this project fall within current staffing and legal budgets. The City is not required to submit any matching funds for this grant, nor is the land being used as security for the loan.

ENVIRONMENTAL REVIEW

On February 4, 2014, the City Council certified a Final Environmental Impact Report (State Clearinghouse No. 2013012043) for the Alameda Point project (including the Main Street Neighborhood), in compliance with the California Environmental Quality Act (CEQA).

MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE

Any new development of a new campus for the Collaborating Partners will comply with the Alameda Point zoning district, the Main Street Plan, and Master Infrastructure Plan for Alameda Point.

RECOMMENDATION

Approve an ENA between the City of Alameda and MidPen Housing, Alameda Point Collaborative, Building Futures with Women and Children, and Operation Dignity for planning and development of a 13.2-acre parcel in the Main Street Neighborhood Area at Alameda Point bounded by West Midway Avenue, Orion Avenue, West Tower Avenue, and Main Street to enable predevelopment activities for designing and constructing new supportive housing facilities for these existing supportive housing providers.

Respectfully submitted,

Jennifer Ott, Chief Operating Officer - Alameda Point

By,

Lev Kushner, Project Manager - Alameda Point

Financial Impact section reviewed,

Elena Adair, Finance Director

Exhibits:

1. Map of Existing leasehold and Proposed Future Campus of Collaborating Partners

2. Exclusive Negotiating Agreement between the City and MidPen Housing, Alameda Point Collaborative, Building Futures with Women and Children, and Operation Dignity