Excerpt:

Exhibits:

1. Amendment to Disposition and Development Agreement between Alameda Point Partners, LLC and the City of Alameda for Site A at Alameda Point

2. Disposition and Development Agreement between Alameda Point Partners, LLC and the City of Alameda for Site A at Alameda Point (August 6, 2015)

3. Presentation
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Public Hearing to Consider Introduction of Ordinance Amending the Disposition and Development Agreement between Alameda Point Partners, LLC and the City of Alameda for Site A at Alameda Point to Extend the Phase 1 Outside Closing Date from December 12, 2016 to April 11, 2017 to Allow for Additional Time to Complete Property Due Diligence and to Secure Additional Financial Commitments. (Base Reuse 819099)

Body

To: Honorable Mayor and Members of the City Council

From: Jill Keimach, City Manager

Re: Public Hearing to Consider Introduction of Ordinance Amending the Disposition and Development Agreement between Alameda Point Partners, LLC and the City of Alameda for Site A at Alameda Point to Extend the Phase 1 Outside Closing Date from December 12, 2016 to April 11, 2017 to Allow for Additional Time to Complete Property Due Diligence and to Secure Additional Financial Commitments

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If approved, the DDA amendment will grant a 120-day extension of the Phase 1 Outside Closing Date to allow APP, in coordination with City staff, to accomplish the following:

1. Complete Complex Base Reuse Property Due Diligence Issues. The redevelopment of former military property is challenging due to complex infrastructure and environmental issues, including the need to upgrade 70-year-old deteriorating infrastructure, as well as issues related to prior, and in some cases existing, environmental conditions of the property. APP, in coordination with City staff, have tackled a significant number of infrastructure issues related to bridging existing utilities so that utilities are maintained to all existing users, complicated routing of infrastructure on or around Navy property to account for environmental issues, such as groundwater contamination near the Cartwright Electrical Sub-Station, and obtaining Navy approval for construction of infrastructure on their land. Additionally, in the transfers of land from the Navy to the City, the City inherited several open petroleum sites, a few of which are in the Phase 1 Site A boundaries. While APP has taken a leadership role in assisting the Navy in obtaining closure for several of these petroleum sites from the Water Board, the closure process is complicated and requires additional investigation and negotiation of covenants with the Water Board before closing on the property can occur. While these items are very close to being resolved, it is important to have a few more months to complete these due diligence items before transferring the Phase 1 Site A property to APP.

2. Secure Additional Financial Commitments from Capital Investor. While APP has secured significant financial commitment from its parent company, Trammell Crow Residential, APP has also been working with UDR, a New York Stock Exchange apartment developer and investor that specializes in unique urban mixed-use environments, over the last year to participate in the financing and development of Site A infrastructure and vertical construction of Blocks 9, 10, and 11. As specified in the DDA, APP must provide evidence of its financing commitments before the City transfers the property to them. While APP and UDR have been working diligently on their financing agreements and commitments, they need more time to complete the documentation. City staff and its financial consultants and attorneys have participated in discussions with UDR and APP and have reviewed draft documents. Staff and its advisors believe that providing more time to solidify UDR’s role in the Site A Project brings extensive additional capital investment and development expertise to the project and diversifies the sources of capital, which will enhance the ultimate feasibility of the project.

Staff recommends approving the DDA amendment because it is important for these items to be resolved before transferring the property out of City ownership. APP has invested significant financial and staff resources into the predevelopment of Phase 1 of Site A demonstrating a solid commitment to implementing the Site A Project successfully. As described above, APP has already expended $13 million in equity funds to date on predevelopment efforts. Additionally, in certain instances, APP expended funds and significant staff resources on accomplishing a number of tasks which exceeded the DDA requirements: (1) APP expended approximately $600,000 in predevelopment funds on planning and permitting of the Seaplane Lagoon Ferry Terminal before transfer of the land from the City; and (2) obtained design review approval for five of the six development blocks when the DDA only required approval of one block before the City’s transfer of the land.