Presentation on Site A Development at Alameda Point, Including Initial Development Concept. (Base Reuse 819099)

To: Honorable Mayor and Members of the City Council

From: John A. Russo, City Manager

Re: Presentation on Site A Development at Alameda Point, Including Initial Development Concept.

BACKGROUND

On November 18, 2014, the City Council approved an Exclusive Negotiation Agreement (ENA) with Alameda Point Partners (APP), the preferred developer for a 68-acre mixed-use development site at Alameda Point (Site A) consistent with the Waterfront Town Center Plan (Attachment 1). The ENA requires that APP complete a Disposition and Development Agreement (DDA) and a Development Plan for Site A before the end of the 6-month ENA period. As a result, this evening's meeting kicks off an in-depth community process that is anticipated to include a monthly hearing before the City Council, Planning Board hearings, meetings with other boards and commissions, stakeholder meetings and community open houses (outlined in greater detail in Attachment 2).

The terms in the ENA already agreed to by APP focus on Site A development bringing upfront transit infrastructure, such as dedicated bus rapid transit lanes and a new ferry terminal, to Alameda Point before any new development occurs; constructing utilities that serve the entire Alameda Point property that will catalyze employment uses in the adjacent adaptive reuse and enterprise areas; and funding near-term sports fields and waterfront park amenities for the entire Alameda community. The staff report this evening provides significant background information regarding the status of Site A, including the planning process leading up to Site A, the ENA and a profile of APP.
The Request for Qualifications (RFQ) process for Site A that commenced in April 2013 and the selection of APP as the preferred developer for Site A is the culmination of an extensive community planning process. Over the last two years, the Alameda community, City Council, Planning Board, and City staff worked together to prepare the necessary planning documents for Alameda Point (i.e., Zoning Amendment, Master Infrastructure Plan, Environmental Impact Report, Transportation Demand Management Plan, and Waterfront Town Center Plan) through a far-reaching planning process, including:

· Preparation of a Planning Guide for Alameda Point, which re-confirmed and updated the community priorities for the redevelopment of Alameda Point consistent with the 1996 Community Reuse Plan, which emphasized jobs and limited housing development. The Planning Guide was endorsed by the Planning Board on July 8, 2013, and endorsed by the City Council on July 23, 2013.

· Approximately 30 public hearings, public workshops, and public presentations with the City Council, Planning Board, Transportation Commission, Historical Advisory Board, Recreation and Parks Commission, and the Commission on Disability Issues with discussions on topics ranging from traffic impacts and sea-level rise to historic preservation and protected bikeways.

· Nineteen (19) presentations to community groups, with close to 700 people attending.

· Ten (10) community events involving approximately 450 people, including a bike tour of Alameda Point attended by over 130 people.

· E-mail blasts announcing upcoming meetings and opportunities for involvement reaching over 10,000 people.

· Facebook posts and Twitter feeds with over 4,000 hits to followers.

· Numerous front-page articles and advertisements in the Alameda Sun and The Alameda Journal, as well as City website announcements.

After this multi-faceted and extensive community planning process:
· On February 4, 2014, the City Council approved the Zoning Amendment, Master Infrastructure Plan and Environmental Impact Report for Alameda Point;

· On May 20, 2014, the City Council approved the Transportation Demand Management Plan for Alameda Point after thorough review by the Planning Board and a unanimous recommendation from the Transportation Commission; and

· On July 1, the City Council approved the Waterfront Town Center Plan, after an in depth review and unanimous recommendation from the Planning Board.

It was only after the community's vision for Alameda Point was set in place that the City issued an RFQ from developers interested in implementing the community's vision for Site A. In September 2014, the City Council narrowed the field of qualified developers for Site A down to two finalists out of 10 responses and the City held an open house for the community to meet the developer finalists. Over one hundred people attended the open house.

On November 18, 2014, the City Council took the first step in implementing the community's vision by entering into an ENA with APP, a highly qualified potential development partner for Site A. APP's response to the RFQ is included as Attachment 3 and the approved ENA as Attachment 4. The selection of APP for Site A will not be finalized until: (1) the Planning Board, with direction from the City Council, approves a Development Plan after numerous public meetings and a thorough vetting by the community; and (2) the City Council approves a DDA, which outlines all of the terms of development. This will happen in late spring 2015.

APP is a custom partnership created specifically for Alameda Point comprised of high-quality regional and national developers specialized in the various aspects of development relevant to Site A: base reuse, infrastructure, multi-family vertical mixed-use, retail and affordable housing development. The APP partnership includes Thompson Dorfman Partners, SRM Ernst Development Partners, Madison Marquette, and Tricon Capital. The APP submittal demonstrated that the partners have a successful history of working together. It also demonstrated that APP has a proven track record in developing complicated, multi-year, mixed-use, waterfront retail and residential infill developments within the Bay Area and, in certain instances, in the country, and an in depth understanding and knowledge of the site and Alameda community. The team of people the City would be working with on a day-to-day basis consists of the principals or high-level executives of the individual development firms.

DISCUSSION

The RFQ process and selection of a preferred developer is the first step in implementing the community's plan for Alameda Point. The details of the preferred developer's plans, consistent with the City's documents prepared during this recent community planning process, will be decided initially through an extensive public process. This community input process is currently scheduled to include no less than ten separate public meetings including hearings before the City Council, Planning Board, the Historic Advisory Board, the Recreation and Parks Commission, and the Transportation Commission. The schedule also currently calls for a three month period from January through March of 2015 dedicated to public open houses and stakeholder meetings. The development contract between the City and the preferred developer, as well as other key implementation steps, will be decided by the City Council this spring. The following provides a summary of City staff's rationale behind recommending APP as the potential Site A developer, the key aspects of the agreed upon Term Sheet attached to the ENA, a presentation of the initial development concept for Site A, and the proposed next steps for the Site A process.

I. Recommendation of Alameda Point Partners as the Site A Developer

Both of the developer finalists were highly qualified to implement the development of Site A. The City was fortunate to have two such strong and qualified developers willing to become a private partner in developing one of Alameda Point's first major development projects. However, there could only be one developer for Site A. As a result, City staff recommended APP for the following reasons:
· They consist of a diverse team of highly qualified best-in-class developers that specialize in a particular land use, but at the same time have extensive experience on urban mixed-use infill projects. This provides greater potential for successfully achieving the community's vision for Alameda Point of a more vertically and horizontally mixed-use transit-oriented development that will leverage the existing landscape of structures and spaces to create a neighborhood that retains ties to its history;

· The Site A development will comprise one of the most valuable assets in APP's portfolio, which creates a strong incentive for prioritization of resources and focus towards implementing the project;

· The day-to-day project manager for the team, Joseph Ernst, who lives in Alameda, is a strong project manager with a proven track record at successfully implementing high-profile projects in Alameda, such as the VF Outdoor campus at Harbor Bay; and

· APP is proposing a more incremental approach to developing the property. This will allow for greater potential for reuse of existing buildings, improve the historic continuity and visual interest of the site, and focus development along the extension of Ralph Appezzato Memorial Parkway (RAMP), the primary transit corridor within Alameda Point.

II. Summary of ENA and Term Sheet

The ENA is an agreement that permits the developer to negotiate terms of development with the City during a set period of time, in this case six months with two three-month extensions by the City Manager. If successful, once the ENA period is finished both parties will have agreed to a DDA (i.e., price and terms of payment for the land and development obligations) and an approved Development Plan (i.e., detailed site plan, including backbone and in-tract street alignments and sections, building footprints and massing, landscape concepts, and a phasing plan). It is important to note the City's obligations under the ENA are only to negotiate exclusively and in good faith with APP and to consider approval of the Development Plan. The City is under no obligation to approve any document produced during the ENA period.
The following provides an overview of key aspects included in Exhibit C (Term Sheet) of the ENA negotiated with APP over the past two months:
1. Project Description. The project description includes 800 housing units and 200,000 square feet of commercial uses, including 100,000 to 150,000 square feet of retail, consistent with the City's Town Center Plan and other planning documents.

2. Term. 20 years

3. Phasing. The DDA will include a Phasing and Milestone Schedule. Additionally, a map of the proposed Phase 1 boundaries, a Phase 1 development schedule, and a preliminary Phase 0 plan are attached to the Term Sheet in the ENA. The Phase 0 package is intended to activate the site starting in Summer 2015 with events and temporary facilities designed to draw Alameda residents. The Phase 1 boundaries concentrate development along the northern boundary of RAMP, creating a strong entry corridor into the site. The Phase 1 schedule contemplates commencement of infrastructure construction in fall 2015 and completion of Phase 1 by the end of 2018.

4. Infrastructure and Amenity Package. City staff focused on negotiating upfront infrastructure and amenities that obligate the developer to bring transit infrastructure to Alameda Point before any new development occurs (i.e., ferry terminal and dedicated bus rapid transit lanes); major utility infrastructure that serves the entire Alameda Point property (i.e., sewer line extension to northern boundary) that will catalyze additional employment uses in the Adaptive Reuse and Enterprise areas; and park amenities that serve the entire community. This ensures that the priorities of the community - namely multi-modal transit infrastructure, job creation, and park amenities - are built into the project itself.

As part of the Site A project, APP will build all of the infrastructure included in the City's RFQ (Infrastructure Package), which includes a neighborhood park/greenway; eight acres of the Seaplane Lagoon waterfront park and promenade; and all new utilities and roads within Site A, and, in some instances, for other parts of the base.
Phase 1 infrastructure will include the following improvements from the Infrastructure Package: the crucial Ralph Appezzato Memorial Parkway (RAMP) transit and utility corridor between Main Street and the Seaplane Lagoon and the new sewer line extension between Site A and the pump station at the northern boundary of Alameda Point. Both of these infrastructure items have significant benefits for the entire Alameda Point property not just for Site A. Additionally, APP has agreed to fund amenities at Alameda Point beyond its required Infrastructure Package, including the Ferry Terminal at the Seaplane Lagoon and an initial phase of the Sports Complex. As discussed above, City staff's focus was on maximizing the upfront infrastructure and amenities at Alameda Point with site-wide and community-wide benefits.

5. Land Payments. APP has agreed to pay approximately $108 million for Site A (or $1.6 million per acre), with a credit of approximately $88 million (or $1.3 million per acre) towards infrastructure and a credit of $5 million for accelerating an initial phase of permanent waterfront park improvements at an equivalent value, as well as a $5 million contribution towards an initial phase of the Sports Complex, and a $10 million payment towards an initial Ferry Terminal at the Seaplane Lagoon. In sum, the land payments result in $15 million in additional amenities (above and beyond its share of infrastructure) at Alameda Point.

The following table summarizes the agreed upon land payment:

Total Land Payment

$108 million
Less Infrastructure Credit

($88 million)
Less Acceleration Credit

($5 million)
Total Cash Payment to City

$15 million*
*$10 million for initial ferry terminal and $5 million for initial phase of sports complex

III. Presentation of Initial Development Concept for Site A
APP has prepared an initial development concept for Site A (Attachment 5). This is the first opportunity for the public to provide feedback on the initial site plan. This initial concept will evolve over the next several months through feedback from the City Council, Planning Board, other boards and commissions, and community feedback and will culminate into a formal Development Plan application and approval process. As discussed above, APP proposes taking an incremental approach to development of Site A that will preserve a significant amount of the character and history of the site and still be consistent with the Town Center Plan, and will help ensure a truly mixed-use development, which includes new amenities and businesses, not just housing. The following provides an overview of staff's initial thoughts of the draft development concept:
· The concept implements the Town Center Plan and its goals of creating a mixed-use development with opportunities for a horizontal and vertical mix of uses and diversity of architecture; exceptional waterfront amenities with spaces that allow people to experience the Seaplane Lagoon firsthand; a retail core that takes advantage of the proximity to the waterfront and new development; and a gateway transit corridor that maximizes transit ridership and views of the larger Bay Area;

· The concept respectfully preserves the character and history of the site by maintaining some of the fabric of the existing abandoned railroad alignment, oval traffic circle and plane at the entrance to the site, and existing buildings that, once updated, will create a unique and authentic sense of place that will assist with attracting commercial businesses and amenities;

· The parks and open space concept creates a series of distinct, yet complementary and connected park spaces, that tie the private development areas together into a cohesive whole by creating clear, pedestrian-scaled pathways, and provide park amenities not only for new employees and residents, but the entire Alameda community;

· The public street network implements the Master Infrastructure Plan and Town Center Plan, which include extensive bikeways and pedestrian paths, that create strong multi-modal linkages between Alameda Point (and a new ferry terminal at Alameda Point) and the rest of Alameda, and a diversity of housing types concentrated along the extension of RAMP, a primary transit corridor, will incentivize transit ridership; and

· The phasing plan proposes a Phase 1 project that includes an important "gateway" corridor between Main Street and the Seaplane Lagoon waterfront, a ferry terminal, an initial phase of permanent waterfront park space, and transit, bike and pedestrian access to the waterfront parks and future jobs areas.

APP and staff look forward to receiving feedback on the initial development concept so that we can improve upon it and continue to move forward with the formal Development Plan process.

IV. Community Process
As presented in Attachment 2, City staff, along with APP, will be returning to the City Council every month to present a status report on the Site A development planning process and receive guidance from the City Council. This guidance will be integrated into the ongoing Planning Board and community process. At the same time, City staff and APP will be negotiating a DDA document that builds upon the key terms contained in Exhibit C (Term Sheet) of the ENA. The DDA will become before the City Council in spring at the earliest. Additionally, City staff will host three community open houses and forums about the Site A development, continue to meet with stakeholders on an ongoing basis and use its email lists, webpages, and social media to inform the Alameda community about next steps at Site A.
ENVIRONMENTAL REVIEW

This status report is for information only.

RECOMMENDATION

No action required. This item is for informational purposes only.

Respectfully submitted,
Jennifer Ott, Chief Operating Officer - Alameda Point

Exhibits:
1. Map of Site A Boundaries
2. Public Hearing and Community Outreach Schedule
3. Alameda Point Partners' Statements of Qualifications for Site A
4. Exclusive Negotiation Agreement between the City of Alameda and Alameda Point Partners
5. Presentation of Initial Development Concept for Site A
6. PowerPoint Presentation on Status Report on Site A Development at Alameda Point