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2009-03-04 ARRA PacketAGENDA Regular Meeting of the Governing Body of the Alameda Reuse and Redevelopment Authority Alameda city Fall Council Chamber, Room 390 2203 Santa Clara Avenue Alameda, CA 94501 Wednesday, March 4, 2009 Meeting will begin at 7:00 p.m. 1. ROLL CALL 2. CONSENT CALENDAR Consent calendar items are considered routine and will be enacted, approved or adopted by one motion unless a request for removal for discussion or explanation is received from the Board or a 2 -A. Approve the minutes of the Regular Meeting of January 7, 2009, 2-B. Approve the minutes of the Special Meeting of February 3, 2009. 2-c. Approve an Amendment to the consultant contract with Harris Associates for On -call Services for the Review of Land Development Entitlement Applications for the Redevelopment of Alameda Point. 2 -D, Approve a Second Amendment to Agreement with Economic Planning Systems, Inc., Increasing the Budget $145,000 and Extending the Term 11 Months, to Provide ongoing Negotiation Support for the Redevelopment of Alameda Point. 2-E. Authorize the Executive Director to Execute a consultant Agreement with National Response corporation Environmental Services in the Amount of $325,000 for Management of Alameda Point Port for the earlier of Five Years or Until Property is Conveyed to the Alameda Reuse and Redevelopment Authority 2 -F. Approve and Authorize the Executive Director to Execute a Second Amendment to the Alameda Point Lease in Furtherance of conveyance with the United States Navy. 3. REGULAR AGENDA ITEMS 3 -A. Alameda Point Update Presentation of Project Pro Forma. 3 -13. Approve a Five -Year Lease and Repayment Plan/Write -off with Ac Hornet Foundation. 3 -c. Provide Leasing Guidance for Proposed Autocross /Motocross Events in the Northwest Territories at Alameda Point ARRA Agenda March 4, 2009 4. ORAL REPORTS Page 2 4 -A. Oral report from Member Matarrese, Restoration Advisory Board (RAB) representative Highlights of February 5th Alameda Point RAB Meeting. 5. ORAL COMMUNICATIONS, NON AGENDA (PUBLIC COMMENT) (Any person may address the governing body in regard to any matter over which the governing body has jurisdiction that is not on the agenda.) 6= COMMUNICATIONS FROM THE GOVERNING BODY 7. ADJOURNMENT This meeting will be cablecast live on channel 15. Notes Sign language interpreters will be available on request. Please contact the ARRA Secretary at 749 -5800 at least 72 hours before the meeting to request an interpreter. Accessible seating for persons with disabilities (including those using wheelchairs) is available. Minutes of the meeting are available in enlarged print. Audio tapes of the meeting are available for review at the ARRA offices upon request. UNAPPROVED MINUTES OF THE REGULAR MEETING OF THE ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY Wednesday, January 7, 2009 The meeting convened at 7 :25 p.m. with Chair Johnson presiding. 1. ROLL CALL Present: Chair Beverly Johnson Boardmember Lena Tam Boardmember Frank Matarrese Boardmember Marie Gilmore Vice Chair Doug deNaan 2. CONSENT CALENDAR 2 -A. Approve the minutes of the Regular Meeting of November 5, 2008. 2 -B. Approve the minutes of the Special Meeting of November 18, 2008. 2 -C. Approve the minutes of the Special (Meeting of December 2, 2008. 2 -D. Authorize Negotiation and Execution of a Sublease Renewal for Mariusz Lewandowski dba Woodmasters at Alameda Point. 2 -E. Authorize Negotiation and Execution of a Sublease Renewal for Alameda Soccer club at Alameda Point. 2 -F. Authorize the Sale of Four Boston Whalers to NRC for $44,500, Approval of the Consent Calendar was motioned by Member Matarrese, seconded by Member Gilmore and passed by the following voice votes: Ayes: 5, Noes: 0, Abstentions: 0 3. REGULAR AGENDA ITEMS 3 -A. Alameda Point Update Presentation of SunCalrs Draft Redevelopment Master Plan. Debbie Potter, Base Reuse and Community Development Manager, addressed several topics actively discussed in the community and clarified that tonight's update is for information only, neither staff nor Suncal has requested formal action on the Master Plan. It is an opportunity for the community to comment on the draft Master Plan and for the ARRA Board to provide feedback to Suncal. Because SunCal's plan is not consistent with the city's charter, as it proposes a mix of residential structures that include multi- family rental and condo projects, this master plan can only be approved by a vote of the people. Suncal anticipates placing its plan on the ballot for the communities' consideration in November of this year, and the ENA requires Suncal to notify the city no later than April 30 if it plans to proceed with the ballot initiative. Tonight's presentation is part of the ongoing community dialogue that will continue over the next 18 months, as the City and Suncal negotiate a Disposition and Development Agreement (DDA) for the long term redevelopment of Alameda Point. Two key issues have been the focus of discussion: 1) the concept of a public trust modeled on the Presidio trust for Alameda Point, and 2} the amount of the Community Improvement Commission (CIC) investment in the Alameda Point project and whether or not that investment of redevelopment dollars adversely impacts the City's general fund which is responsible for financing critical city services. Ms. Potter discussed the Presidio conveyance model a transfer from military ownership via special legislation to the National Park Service and was not subject to BRAC requirements it was determined that the same conveyance model is not feasible for Alameda Point. Alameda Point is subject to BRAC, was previously screened for other federal agency uses, was screened pursuant to the McKinney -vento act for homeless uses, and is required to be conveyed at fair market value for private ownership and reuse. The ARRA is working with the Navy to negotiate a conveyance term sheet to transfer the property and provide for its ultimate reuse as a mixed use community that generates jobs, provides housing for all incomes, and opens up the waterfront and creates new recreational opportunities for Alameda and the region. To achieve that goal, the City entered into an Exclusive Negotiation Agreement with SunCal. Ms. Potter addressed the issue of tax increment funds, clarifying that there cannot be a pledge of tax increment funds without a DDA, approved by the City Council and CIC in public following a public hearing, therefore, any approval of tax increment funding will only happen after input and participation from the community. If tax increment funds are raised through the sale of tax increment bonds, those bonds are secured and repaid solely by tax increment funds generated in the Alameda Point Redevelopment Project Area (APIP), and in no way obligate the City's general fund. Based on current projections of the property value to be created by the build -out of the master plan, staff anticipates that a maximum of $184 million of tax increment will be created over the life of the project. This number is well short of the $700 million being referenced in the community. It should also be noted that large portion of the $184 million is restricted to the production of affordable housing. Furthermore, several years ago, the City Council adopted a resolution stating that all base reuse activities must pay for themselves and be fiscally neutral to the City's general Fund. The Council recognized the task of integrating former military property into the larger Alameda community would have a cost in terms of a need for the increase police and fire services, more demand on Parks and public libraries, and increased maintenance of new roads and infrastructure, and that cost should be borne by the new development. SunCal's draft Master Plan is supported by a Business Plan that provides for fiscal neutrality. Ms. Potter introduced Pat Keliher, SunCal's Alameda Point Project Manager, who presented the draft Master Plan via Powerpoint presentation. Following the presentation, there were several speakers who discussed various issues about the draft Master Plan. Member deHaan is concerned about some issues in the draft Master Plan, specifically regarding the plans for residential development, the sea level rising, and transportation issues. He also discussed the plans for the Sports Complex and that the plan has not changed, except for the price. He continues to have strong reservations. In response to public comment, Member Gilmore asked SunCal to explain its financial viability, the effect of the bankruptcies of other projects predevelopment funding and where that money comes from, ghat happens during the predevelopment period if SunCal doesn't come up with the money, and how SunCal sees the financing unfolding once we get to a DDA. Mr. Keliher explained that throughout ENA period, SunCal is required to reimburse the City for any expenditures, and deposit money to spend on predevelopment dollars. This is done every quarter and is audited. once we get through the ENA period, and the DDA period, and determine how to actually finance the project, once the land is conveyed, there are several different mechanisms, including debt equity. with regard to the bankruptcies on the other projects that SunCal was the operator on, not necessarily the owner of, most all of those were Lehman projects. When Lehman filed bankruptcy and decided to not fund SunCal, SunCal decided, involuntarily, to throw each of those projects into bankruptcy in hopes of forcing Lehman to start to fund those. These projects are independently financed and structured and have absolutely nothing to do with the Alameda Point project. Member Gilmore reiterated the concern regarding SunCal's ability to fund predevelopment expenses. Mr. Keliher explained that if SunCal defaults under the ENA and doesn't perform, it is simply over. He further stated that, to date, SunCal has deposited all the funds. Both Member Gilmore and Mr. Keliher clarified and confirmed that the ARRA is not obligated in any way to reimburse SunCal for the predevelopment funds that have been spent. There was discussion about the historic structures. Mr. Keliher is in agreement with the Board that it's not the wisest move to proactively rip down the structures, and that SunCal will work with staff on working out a process of evaluating the best direction. Member Matarrese offered comments for consideration, including requesting detail of commercial space, and what impact of those spaces would be with regard to traffic and truck routes, and the industrial -type uses. Member Tam also asked about industrial uses, mixed -use and residential. Peter Calthorpe described another similar project in San Jose where there was a balance of use in the commercial, civic, and retail areas. He stated that industrial development needs to be treated in special way, explaining that it has not yet been determined whether there are industrial users that are appropriate for this site and that should be part of the mix. Member Tam asked about the BCDC sea level rise, and the 24" that one speaker mentioned. Mr. Keliher responded that he has heard various levels, but that no one has come out with specific number to design to, an issue that SunCal does not want to ignore. Member Tara stated that we are at the point of our best and last opportunity to provide an economic stimulus package without public subsidies or a tax on our general fund. This draft Master Plan produces economic growth, a realistic transit system, and that the phasing will make it flexible enough to respond to varying economic conditions, whether it's 15 years, or the next 20 -30 yrs. Member Tam stated her appreciation to staff and SunCal that the plan has been vetted very thoroughly with the community, t Member Gilmore asked what would happen if the City breached its obligations under the ENA. Donna Mooney, Asst. General Counsel, replied that the ENA is a contract and if the City doesn't fulfill an obligation to it, it would be considered a breach of contract. SunCal would have a legal remedy to this breach, which could include asking a court to make us come back and continue negotiating, or it could be that the contract is terminated and we give back the $1 million deposit. Member Matarrese clarified that tax increment bonds are sold based on tax increment at the time the bond is sold, not based on the development for which those bonds will spur, Ms. Potter confirmed and explained that, typically, when you go to the market with debt and desire to raise money through the sale of bonds, the project has to be at least three years into its development so that the underwriters and folks interested in purchasing the bonds have an expectation of the track record and then projections about the increment that will be generated over the life of the project. At chair Johnson's request, Ms. Potter summarized the process and milestones of the ENA so that the public understands that this is not the end of the process. This report was for information only and no action was taken by the Board. S 3-B. VA/Navy Presentation Regarding the Navy/VA Federal -to- Federal Transfer at Former NAS Alameda, Nis. Potter gave a brief overview about the 500 acres on western portion of Alameda Point property. The Navy and VA have been in discussion for many years about its plans for the development of the portion of the wildlife refuge property. She introduced Claude Hutchinson of the VA. Mr. Hutchinson gave his presentation via Powerpoint to the Board and community, summarizing the status of the fed -to -fed transfer The plans include a 50-acre above ground columbarium, a site for a VA outpatient clinic, and a non VA -owned hospital. other presenters included Patrick McKay of the Navy BRAG office; Dr. Ron Chun, VA outpatient clinic site manager; Don Reiker, National Cemetary Assoc. regional director; Larry Jaynes, Capital Asset Manager of the VA; and Jayni Alsep, the VA's environmental consultant from EDAW. Chair Johnson clarified for the public that the ARRA is not a part of the transaction between the Navy and the VA, and has no decision making power in this transaction. she stated her appreciation to the VA on its presentation and all its efforts for community involvement. Chair Johnson also stated that although the ARRA has no control over this issue, we might be able to cooperate if the VA was willing to look at other areas of the base. 4. ORAL REPORTS 4 -A. oral report from Member Matarrese, Restoration Advisory Board (RAB) representative Highlights of December 4 Alameda Point RAB Meeting. Member Matarrese stated that the Dec. 4 RAB meeting was /2 Christmas party and 1 /2 highlights of the corning year's projects. 5. ORAL COMMUNICATIONS, NON- AGENDA (PUBLIC COMMENT) None. 6. COMMUNICATIONS FROM THE GOVERNING BODY None. 7. ADJOURNMENT Meeting was adjourned at 12:45 a.m. by Chair Johnson. Respectfully submitted, Irma Glidden �04 /4/�� ARRA Secretary 1. ROLL CALL Present: Chair Beverl Johnson Boardmember Lena Tam Boardmember Frank Matarrese Boardmember Marie Gilmore Vice Chair Dou deHaan 2. CONSENT CALENDAR 2-A. Approve the Minutes of the Special Joint Cit Council and CIC Meetin and the Special CIC Meetin held on Januar 6, 2009. Cit y Clerk) CIC 2-B. Recommendation to authorize the use of $350,000 of Tax Exempt Bond Funds from the Mer Area Bond (Funds 201.11 and 201.15) and appropriate the funds for use for the Fleet Industrial Suppl Center (FISC) Emer Water Repairs and Electrical Up at Park Street and Buena Vista Avenue; and authorize FISC Lease Revenue for additional annual support of the Fa Grant Pro (Development Services) [CIC and ARRA] Item 2-13 was pulled for discussion. Approval of Item 2-A was motioned b Member Matarrese and seconded b Member Gilmore and passed b the followin voice votes: A 5 Noes: 0 Abstentions: 0. Discussion of Item 2-B: Leslie Liittle, Development Services Director, summarized the pro and asked the Board for consideration so that the project can g et underwa for construction in the October timeframe. The re is essentiall an appropriation of $800,000 that staff expects there will be a trade of some funds between the FISC and the CIC. The tax exempt bonds will g o into the FISC water project as a Public Works project and the FISC lease revenues will come back to the CIC to be used outside of redevelopment project areas and does not have the same restrictions as redevelopment funds. Rob Ratto, PSBA Executive Director, discussed the current improvement pro on Park Street and ur the CIC/Board to approve the mone for the under the fa g rant, and the FISC propert Approval of Item 2-B was motioned b Member Matarrese, seconded b Vice-Chair deHaan, and passed b the followin voice votes: A 5 Noes: 0 Abstentions: 0. 3. REGULAR AGENDA ITEMS 3-A. Recommendation to consider an amendment to the Lease A of 2315 Central Avenue between the CIC of the Cit of Alameda, Lessor, and Alameda Wine Compan LLC, Tenant. (Development Services) [CIC] Ms. Little gave a brief overview of Alameda Wine Company's request to amend their lease to change their hours of operation. Staff is recommending no change to their lease at this time. The tenant addressed the CIC explaining her request is due to financial reasons, stating that the hours of 11:00 a.m. 4:00 p.m. are the least profitable for her business. Member Matarrese motioned to follow staffs recommendation to keep the status quo and defer any change to the Alameda wine Company lease until such time that there is the eventuality and risk of the business closing. Only at that time should this item be brought back to the CIC. Member Gilmore seconded the motion and it was passed by the following voice votes: Ayes: 3 Noes: 1 (Vice -Chair deHaan) Abstentions: 1. (Member Tarn) 3 -B. Recommendation to approve a Five Year Lease and Repayment Plan/Write -off with AC Hornet Foundation. (Development Services) [ARRA] Ms. Little and Nanette Mocanu, Finance Administration Division Manager, summarized the Hornet's' repayment plan to alleviate their debt. The Board gave direction to staff to bring this item back after revisions to the repayment plan to include that the Hornet provide: a new business plan, credible financial reports, evidence of creditors, and address the issue of the benefit to the ARRA of moving the Hornet for profitable use of Pier 3. The Board also requested that a representative from the Hornet attend the meeting when this item is brought back before the ARRA. 3 -C. Recommendation to approve an amendment to Consultant Contract with Harris Associates for On -Call Services for Review of Land Development Entitlement Applications for Redevelopment of Alameda Point. (Development Services) [ARRA This item was continued to the next Regular ARRA meeting on March 4, 200910 4. ORAL REPORTS 4 -A. oral report from Member Matarrese, Restoration Advisory Board (RAB) representative Highlights of January 8th Alameda Point RAB Meeting. Member Matarrese requested the Board review the handouts regarding OU -5 and OU -2B technical details. The next RAB meeting is on Thursday, 215. 7. ADJOU ARRA, IC Meeting was adjourned at 1:22 a.m. by Chair Johnson. Respectfully submitted, 6�:> Irma Glidden ARRA Secretary ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY 2—C Memorandum To: Honorable Chair and Members of the Alameda Reuse and Redevelopment Authorit From: Debra Kurita Executive Director Date: March 4, 2009 Re: Approve an Amendment to the Consultant Contract with Harris Associates for On-Call Services for the Review of Land Development Entitlement Applications for the Redevelopment of Alameda Point BACKGROUND In Ma 2007, the Cit issued a re for q ualifications for consultin services for the review of redevelopment entitlement applications for Alameda Point. The scope of work includes the review of storm water/floodplain/Federal Emer Mana Act FEMA improvements, sewer infrastructure demands, transportation plannin traffic en g eotechnical support services, and project mana Three consultants submitted proposals, and after interviews with all the consultants, the Cit selected Harris Associates for the work. On November 29, 2007, the Cit entered into a Consultant A with Harris Associates, in an amount not to exceed $74,900, to conduct a review of the preliminar anal used in the preparation of SunCal's Development Concept. On November 4, 2008, the contract was amended to extend the term to June 30, 2009. DISCUSSION On December 19, 2008, SunCal submitted their Alameda Point Draft Master Plan. This plan was discussed at the Alameda Reuse and Redevelopment Authorit meetin of Januar 7, 2009. Once the Draft Master Plan is approved, detailed desi efforts will be undertaken b SunCal. Since the Cit does not have existin resources available to review the draft master plan, staff proposes to amend the current contract with Harris Associates to include the review of the detailed entitlement submittals; authorize hirin a sub-consultant, Nelson N to review the Transportation Plan and associated studies; and increase the total contract amount to a not to exceed amount of $225,000. Harris Associates has successfull assisted the Cit with similar work on the Catellus/Ba project. The are familiar with the Cit desi standards and are well q ualified to perform this work for Alameda Point. A cop of the contract is on file in the Cit Clerk's office. Honorable Chair and March 4, 2009 Members of the Alameda Reuse and Redevelopment Authorit Pa 2 of 2 FINANCIAL IMPACT The project is funded b the Alameda Point developer, SunCal. MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE This action does not affect the Alameda Municipal Code. RECOMMENDATION Approve an amendment to the consultant contract with Harris Associates for on-call services for the review of land development entitlement applications for the redevelopment of Alameda Point. Respectfull submitted, "o Matthew T. Naclerio Public Works Director ti B Barbara Hawkins to Cit En MTN:BH:gc From: Debra Kurita Executive Director Date: March 4, 2009 Re: Approve a Second Amendment to Agreement with Economic Planning Systems, Inc., Increasing the Budget $148,000 and Extending the Term 11 Months, to Provide ongoing Negotiation Support for the Redevelopment of Alameda Point On July 18, 2007, the Alameda Reuse and Redevelopment Authority (ARRA), Community Improvement commission (CIC), and City council approved an Exclusive Negotiation Agreement (ENA) with SCC Alameda Point LLC (SunCal) for the redevelopment of Alameda Point, Th ,,e original 24 -month ENA established key performance milestones, provided for reimbursement of ARRA staff and third party costs, identified activities to be completed by third party entities, and specified key personnel assigned to the project. The ENA was amended in March 2008 to provide more time to complete two tasks: preparation of the Development Concept and related documents, and preparation of the draft Master Plan. A second amendment to the ENA was approved in October 2008, The second amendment revised several mandatory milestone dates and authorized Suncal to partner with an equity investor to ensure adequate financing for the predevelopment phase. The amended ENA expires on July 20, 2010. The ENA includes cost recovery provisions that require Suncal to reimburse the ARRA for its pre development costs, including third -party consultant and legal costs and ARRA staff time. Upon approval of the ENA, ARRA staff executed agreements with third -party consultants to prepare for various entitlement processes and negotiations with the Navy and Suncal. ARRA contracted with Economic Planning Systems, Inc. (EPS) to provide real estate economic consulting services in August 2007, for an original total contract amount of $188,000 and a 12 -month term. Since that time, EPS has prepared a fiscal impact analysis, reviewed and provided critical feedback on SunCal's draft and final Business Plans, developed a joint Project Proforma that serves as the basis for negotiations with both Suncal and the Navy, and supported staff in responding to numerous questions and comments from the Navy regarding the Project Proforma. EPS's Agreement was amended in August 2008 to extend the term 12 months to August 2009. A second amendment is now necessary to increase the contract term 11 months, and the budget by $145,000 to cover EPS' expenses through the ENA period. Honorable Chair and March 4, 2000 Members of the Alameda Reuse and redevelopment Authority Page 2 of 3 The amended Agreement has a total contract amount of $330,000 and a 35 -month terra. The proposed second amendment to the Agreement is on file in the City Clerk's Office. DISCUSSION In addition to EPS's ongoing work at Alameda Point, the firm provided economic consulting services to the ARRA during the previous ARRA -led pre- development period, which included negotiations with the Navy and preparation of the Preliminary Development Concept. As a result, EPS has in -depth knowledge of the opportunities and constraints presented by the Alameda Point project site and the provisions of the draft Navy Term Sheet. In addition, EPS has extensive experience working on other large -scale reuse and redevelopment projects throughout the State, including former Navy bases such as Hunter's Point Naval Shipyard and Naval Station Treasure Island in San Francisco, and Tustin Marine corps Air Station in Tustin, California. EPS will provide continued support during the ongoing negotiation of the Project Proforma, a Conditional Acquisition Agreement, if applicable, Navy Term Sheet and Conveyance Agreement, and a Disposition and Development Agreement. As directed by ARRA staff EPS will participate in meetings with SunCal and the Navy, as appropriate, and provide ongoing analytical and strategic support to the ARRA in negotiations regarding business terms, revisions to the development plan, conditions of property transfer, and the Project Proforma. Specifically, EPS will assist in the evaluation of market values, absorption rates, phasing, land uses, fiscal mitigation, financing mechanisms, public improvements, infrastructure requirements costs, and profit participation. EPS will also control and maintain the Project Proforma for the project, jointly prepared with SunCal. FINANCIAL IMPACT There is no financial impact on the General Fund, CIC, or ARRA budgets. The cost recovery provision in the ENA requires that SunCal pay for all ARRA staff costs and consultant expenses. RECOMMENDATION Approve a Second Amendment to Agreement with Economic Planning Systems, Inc., Increasing the Budget $145,000 and Extending the Term 11 Months, to Provide Ongoing Negotiation Support for the Redevelopment of Alameda Point. Honorable chair and March 4, 2009 Members of the Alameda Reuse and Redevelopment Authority Page 3 of 3 Respectfully submitted, LYeLitt Development services Department Director Approved as to funds and account, M Ann e Gallant Interim finance Director Alameda Reuse and Redevelopment Authority Memorandum To: Honorable chair and Members of the Alameda Reuse and Redevelopment Authority From: Debra Kurita Executive Director Date. March 4, 2099 M Re: Authorize the Executive Director to Execute a consultant Agreement with National Response corporation Environmental Services in the Amount of $325,000 for Management of Alameda Point Port for the earlier of Five bears or Until Property is conveyed to the Alameda Reuse and Redevelopment Authorit .BACKGROUND In September 1996, the Alameda Reuse and Redevelopment Authority (ARRA) Governing Board directed the Executive Director to negotiate and execute a port management and maintenance contract with Trident Management, Inc. for port services at Piers 1, 2, and 3. Since that time, Trident has served as the ARRA's port manager. In September 2000, the ARRA approved a three -year contract with Trident. In January 2008, National Response corporation Environmental Services (NRC) acquired Trident and assumed the role of port manager for Alameda Point. DISCUSSION Since the Alameda Naval Air Station closed, Trident Management, Inc. has served as the port manager for the ARRA. Port management services are necessary to support the Navy and MARAD ships at Alameda Point as specified in the 20Ryear lease agreement with MARAD. NRC has been a leading national Oil Spill Removal Organization (OSRO) contractor since the passage of the oil Pollution Act of 1990 and brings considerable oil spill response expertise and equipment resources to their position as port manager. In November 2007, after the Cosco Busan oil spill, NRC's quick response to the spill and placement of booms around Alameda ensured the island was protected from oil contamination. NRC also acquired the exclusive license to operate the Bilge oily 'water Treatment System (BOWTS) from Trident. The BOWTS is an ARRA -owned equipment facility that skims oil off of the water. NRC generates revenue from this service and can therefore continue to offer port services at no additional cost. Prior to fiscal year 200412005, the ARRA and Trident shared revenue derived from the use of the BOWTS. In 2005, the ARRA relinquished that right, in exchange for approximately $300,000 reduction in the contract price. Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority March 4, 2009 Page 2of2 NRC currently occupies four Alameda Point buildings at no cost. As with Trident, ARRA pays for NRC's insurance for its use of ARRA- owned equipment. The insurance costs are approximately $100,000 annually and are included in the MARAD operating cashflow. FINANCIAL IMPACT The cost for proposed port services is $325,000 annually, plus approximately $100,000 for insurance. The funding source for the services is ARRA lease revenue. The ARRA cashflow (Attachment includes these costs as part of the port operations and maintenance budget. BECOMMENDATION Authorize the Executive Director to exequte a consultant agreement with National Response corporation Environmental services in the amount of $325,000 for management of Alameda Point Port for the earlier of five years or until property is conveyed to ARRA. ReYcIT submitted, Approved as to funds and account, Leslie Little By. Development services Department Ann M r e Gallant Director Interim finance Director r F f Nanette Banks Mocanu Finance and Administration Manager Attachment ARRA Cashflow CD Q4 71 15 b S7 C) ai -r C. C� 3 (D (D (D (D (D (D (D 0% -n 0 N) 0 0 00 I rQ 0 cn b Cr E -U C 57 L� (D 0 �—M--n'-nMWWM ct 0 U) 0 cn -U -U M 0 _0 al M ;11 W C 0 C7 'U m 0 rl m Z --i ---i r- c (1) W 0 ;u -0 M 0 0, m t- a) a C t" C, ME f'. 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CD CD co cn i --A m cm w 0) (o --A M m --4 (1) cn co oo w w 0) a) CP 0) cn (0 A C) (0 -A 00 N cn cn cn (n tn 4 U-) (-p (D C) W w -4 0) Ln U 0 C� -4 0 w Cn 4 Cq 0 0 0 co 0 co iQ C) 41 zl� '0 (n 0 00 -4 4� 0 0 cn co 0) 0 W •A 0 C N K) (J) U) (n GO r\L) W (1) N) (,Fl 4:�- CD M -4 C> C 0 -4 w (n cf) CD 0 m W (D a 0 0 CD CD to 4� 0) cn (n (n (1) (A U� w N Zo Z, K) LO w 0) (p 0 -1 �P rL P) p W C> --4 C]4 CP CD C3 (f7 0 co m Ql --A -P. 0 N) 0 U) W C] fon V) V) (n N) po cn 11 �-A 6 N) -A N) N) 0) 0 (A a) CY] N) 00 w -AL "m 'CD 'CO '0 cn m Co CD N) CD co (D (D N) (3) N cn --A (1) (n Cj) w (A CD 0) C� CY) a PO ()I 0 w IQ co 0 ho w Co N -4 0 w (A Co fln 0) c N> (D (o -r� 4�- -4 C� W (P C 0� (D m (D ow 0o 0 bo ca (D co (n 0 (3) i 7 0 0 -4 LI) LI) M Ol 0 to (o C) 0 m I-) Q0 --4 to N) w U� cn N) fj� cn (o 0) CF) 00- a N) -4 (f) (f) CD C) W A --'L C) C) (D CD 0 00 4 A N) (f) OF) U) (f) N) (D IV w w -4 4- (31 w 0 (D K) K) 0 tQ CD Al co w 0 W C) -4 (D -4 C) -4 cn RS co w 0) m w m UD CD 0) 'cr, '--A N) 'D 41 -4 0 00 (D (D (D (D (D (D (D 0% -n 0 N) 0 0 00 I rQ 0 From: Debra Kurita Executive Director Date: March 4, 2009 Re: Approve and Authorize the Executive Director to Execute a second Amendment to the Alameda Point Lease in Furtherance of conveyance with the United states Nav BACKGROUND On June 6, 2000, the Alameda Reuse and Redevelopment Authority (ARRA) and the United states Navy entered into a Lease in Furtherance of conveyance (LIFOC) for the former Naval Air station Alameda, now called Alameda Point. The LIFOC has a 50- year terra and replaced the Large Parcel Lease that had been in effect since April 1997. In November 2000, the LIFOC was amended to reduce the amount of comprehensive General Liability Insurance required for sUb- tenants from $5,000,000 to $3,000,000 per occurrence for property damage, to make the LIFOC insurance requirements consistent with the Large Parcel Lease. The Navy has requested a second amendment to the LIFOC to modify Exhibit A to remove several buildings from the leased premises so that remedial work can be conducted on those premises. In addition, the Navy wants to remove a portion of the seaplane Lagoon from the lease. Buildings excluded from the leased premises are not available for the ARRA to sub lease. The second amendment, which is on file in the City clerk's office, also further reduces the comprehensive General Liability Insurance requirements from $3,000,000 to $2,000,000 and changes the notification provisions. DISCUSSION The Navy's primary task prior to conveying Alameda Point is to conduct the required environmental remediation at the property. ARRA's ability to sub -lease space is contingent upon the Navy issuing a Finding of suitability to Lease (FOSL) for the specific build ingslfacilities to be leased and the Navy not needing regular access to those buildings /facilities to conduct required clean -up activities. Further, section 13.4, Environmental Protection Provisions, of the LIFOC provides that "Lessee (ARRA) agrees that should any conflict arise botween the terms of (the Federal Facilities) agreement... and the provisions of this Lease, the terms of the FFA will take precedence." Lessee shall have no claim on account of any such interference..." The Honorable chair and March 4, 2009 Members of the Alameda Reuse and Redevelopment Authority Page 2 of 3 FFA is the annual remediation schedule entered into between the Navy and the Environmental Protection Agency (EPA). The second amendment would remove a portion of the Seaplane Lagoon from the leased premises. Based on its environmental condition, the Navy has not issued a FOSL for the Seaplane Lagoon. Building 5 and the second and third floors of Building 400 would be removed from the leased premises to accommodate current environmental remediation activity. There are currently no sub leases for Building 5 or the second and third floors of building 400, nor have these facilities /floors ever been subleased. Portions of the ground floor of Building 400 are currently being leased. The second amendment does not affect ARRA's ability to continue to sub -lease the ground floor of Building 400. Buildings 44, 50 113, and 103 would be removed from the leased premises at the end of the current term of each of the sub leases. The Navy is requesting that these buildings be unavailable for sub leasing due to the need to conduct environmental rernediation work ranging from data gap analysis to possible clean up. The Navy has determined that it cannot conduct its required work with tenants in place; however, it is willing to begin the necessary work at the end of each sub -lease term rather than compel the ARRA to terminate the subleases early. The second amendment provides that, as these buildings are determined to be leasable again, they will be re- included in the leased premises through further amendment to the LIFOC. In addition to amending Exhibit A of the LIFOC to address leased premises, the second amendment modifies the comprehensive General Liability Insurance requirements by reducing insurance coverage from $3,000,000 to $2,000,000 per occurrence with respect to property damage. This change will make it easier for sub- tenants to acquire insurance without the added cost of supplemental insurance to meet the previous Navy requirement of $3,000,000. Finally, section 19, submission of Notices, is being amended to remove references to specific people and replace those references with positions (e.g., Executive Director, General counsel, etc.). The LIFOC provides that if there is a conflict between the ARRA's sub leasing activities and the Navy's environmental clean up obligations pursuant to the FFA., the Navy's clean up obligations take precedence. The proposed second amendment is consistent with section 13.4 of the LIFOC. In addition, the Navy has agreed to lower the insurance requirements as requested by ARRA, thereby making it easier for sub tenants to obtain the required Insurance. Therefore, it is recommended that the ARRA Board approve the second amendment. FINANCIAL IMPACT As noted above, buildings 44, 50, 113, and 133 are currently sub leased. The ARRA receives $235,548 annually from sub -lease revenues for these buildings. Once the current subleases expire, these buildings will be removed from the leased premises. Honorable chair and March 4, 2009 Members of the Alameda Reuse and Redevelopment Authority Page 3 of 3 However, the businesses in buildings 44 and 113 have already relocated or will relocate soon to other facilities at Alameda Point, so there will be no annual loss of revenue. One of these tenants, Nelson's Marine, will be vacating at the end of March 2009, and consolidating into existing rental space at another Alameda Point building. The ARRA will lose $95,904 in annual rent with the removal of building 00 from the leased premises. The sublease for building 103 does not expire until September 2010, so there is no immediate financial impact to removing this building from the leased premises; however, if the lease were to be terminated, it represents a loss of $71,505 annually in revenue. In addition, the Navy has indicated that it may be possible to do the required environmental work at building 103 without displacing the tenant. Lastly, it is possible that some, or all, of these buildings will be returned to the leased premises and be available for sub -lease in the future. RECOMMENDATION Approve and authorize the Executive Director to execute a Second Amendment to the Alameda Point Lease in Furtherance of Conveyance with the United States Navy. Res ectf I submitted, Leslie Little Development Services Department Director Approved as to funds and account, all Ann I ie Gallant Interim Finance Director Attachment 1: Amendment No. 2 to the LI FOC ATTACHMENT 1 AMENDMENT NO.2 TO THE LEASE IN FURTHERANCE OF CONVEYANCE BETWEEN THE UNITED STATES OF AMERICA AND THE ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY FOR THE FORMER NAVAL A.IR STATION ALAMEDA THIS AMENDMENT NO. 2 to the Lease in Furtherance oJ' C°onve yance is entered into this day of 2008 by and between. THE UNITED STATES OF AMERICA. acting by and through the Secretary of Navy (Government) and THE ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY (LESSEE) recognized as the local redevelopment authority by the office of Economic Adjustment on behalf of the Secretary of Defense. Government and Authority may also be referred to collectively as the Parties. This Amendment No. 2 supersedes and replaces all changes inude to the Lease through Amendment No. 1, executed on 28 November 2000. RECITALS WHEREAS, the Government is the owner: of certain real and personal property commonly referred to as the former Naval ,Air Station Alameda (NAS Alameda) which was closed as a military installation and is subject to disposal pursuant to, and in accordance with, the Defense Base Closure and Realignment Act of 19}1, as amended (Public Law no. 101 -510); and WHEREAS, prior to the conditions for a deed transfer being met, the Parties entered into a Lease in Furtherance of Conveyance granting the Authority immediate possession of portions of the NAS Alameda; and WHEREAS, the Parties desire to amend Paragraphs 1, 17, and 19 of the Lease, all as set 'forth below. NOW THEREFORE, in consideration of the forgoing premises and the respective representations, agreements, covenants and conditions herein set forth, and other good and valuable consideration, the receipt of which is hereby acknowledged, the Parties agree as follows: AGREEMENTS Paragraph I Leased Premises: Delete Paragraph 1.1 in its entirety and replace it with the following: Government does hereby lease, rent, and demise to Lessee, and Lessee does hereby hire and rent from Government, those parcels of real property as identified on the Revised Exhibit "A" dated 2008- 06 -03, attached hereto and made a part of this lease, together with all personal property thereon, all of which remains as originally identified in Exhibit "F which remains a part of this Lease, along with improvements thereon including elements of Government owned utility systerns within the Premises and serving the Premises, all hereinafter called the "Leased Premises and with the right of ingress and egress to said Leased Premises. Delete Paragraph 1.3 in its entirety and replace it with. the following: The Government reserves the right to continued use of those portions of the Leased Premises identified as follows: (a) approximately 4,600 sf of space, on the second floor Northwest corner; within Building 114, including the adjacent restrooms and the associated courtyard for the non- exclusive use by Government. (ROICC) (b) the first floor of building 112, and approximately 6000 sf of fenced area on the North side of said building 1.12; (c) Building 338 C; Building 33813; Building 309; Building 400 the second and third floors; and Building 5. Insert as new paragraph 1.4, the following: The following buildings are scheduled for environmental investigation and each is currently occupied by a tenant pursuant to a sub -lease with. Lessee with current sub -lease expiration dates as shown. For buildings 44, 66, and 11.3, the Lessee may extend each such sub lease on a month to month basis with each to expire not later than May 31, 2009 with all. premises to be vacant on that date. 'Upon May 31, 2009, for buildings 44, 66, and 113, and September 30, 2010 for building 163, or upon the earlier termination of any such sub lease, each building shall then be reserved exclusively for use by the Government until. the environmental. investigation relating to that building is complete. At that time should the building be deemed safe for tenant occupancy and use, this Lease in Furtherance of Conveyance will. be modified to place the building in the possession of Lessee, otherwise each such building shall remain reserved exclusively for Government use. These buildings, the current tenants and their Current sub -lease expiration dates are as follows: BuRd and Tenant Current Sub -Lease Expiration. Building 44 Mariuz Lewandoski-dba- woodmasters 12 -31 -08 Building 66 Nelson's Marine, Inc. 02 -28 -09 Building 113 IESCO 04- 30--09 2 Building 163 Sustainable Technologies 09 -30 -10 The use of ail. buildings reserved for Government use shall. be provided to the Government without payment of rent for the term of this Lease. The Government will relinquish possession. of the above identified space to Lessee at such time as Government no longer requires use of such space. In addition, That area shown on Revised Exhibit "A denominated as Seaplane Lagoon, including water, land and piers, shall be removed from. the LIFOC and no longer: available for Sub -Lease by the Lessee, subject however to a temporary "right of access" for boat launching and recovery hereby granted to Nelson Marine in connection with., and for the duration of, their current lease with Lessee said "Right of Access" shall. consist of an area of water 100 feet wide as pleasured from. the North edge of Pier 1, as depicted on revised Exhibit "A Nelson Marine shall be responsible for marling the designated area in a manner acceptable to the Government. Paragraph 17 Insurance: Delete Paragraph 17.4.1 in its entirety and replace it with the fallowing: Comprehensive commercial general. liability insurance, in the amount of `2,000,000 per occurrence with respect to personal injury or death, and $1,000,000 per occurrence with. respect to property damage. Paragraph 19 Submission of Notices: Delete Paragraph 1.9 in its entirety and replace it with the following: Notices shall be sufficient under this Lease if made in writing and to the following addressees: If to Authority Executive Director Alameda Reuse and Redevelopment .Authority Alameda City Mall. 2263 Santa Clara Avenue Alameda, CA 94501 -4456 (Facsimile: 510- 748 -4504) f with a copy to: General Counsel Alameda Reuse and Redevelopment Authority Alameda City Hall 2263 Santa Clara Avenue Alameda, CA 94501-4456 (Facsimile: 510-748-4691) and to: George R. Schlossberg, Esq. Kutak Rock 3 1101 Connecticut Avenue, N.W. 10 Floor Washington D.C. (Facsimile: 202 8282488) If to Government: Director Base Realignment and Closure Program Management office 1455 Frazee Road, Suite 900 San Diego, CA 92108 -4310 (Facsimile: 619 532.0940) Except as set forth herein., and unless specifically modified by this Amendment No.2, all terms and conditions contained in the .Lease shall. remain binding upon the Parties and their respective successors and assigns as set forth in the Lease. IN WITNESS WHEREOF, the Parties hereto have duly executed. this Amendment No.2 to the Lease in Furtherance of Conveyance as of the day and year first above Written. UNITED STATES OF AMERICA, acting by and through the Department of Navy. MO WILLIAM R. CARSILLO Real Estate Contracting officer ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY, DEBRA KURITA. Executive Director APPROVED AS TO FORM: TERESA HIGHSMITH City Attorney C) mi z 0 -j z 4) CL w Ln r- 0 LU 'm v a. LL io 0 m W z :3 z C� Fj jE-1-1.1'..'.." A C�n IM v. if t4 10, U. 0 0 U w C) C) ul o z LL z Z Z LU Z Co uj Lu c 0 U 0 0 (D CC i in LL. cn X X z 5 U) 0 0 o 0 0 0 W X F- M 4z w Alameda Reuse and Redevelopment Authority Memorandum To: honorable Chair and Members of the Alameda Reuse and Redevelopment Authority From: Debra Kurita Executive Director Date; March 4, 2009 3 Re: Alameda Point Update Presentation of Project Proforma In July 2007, the Alameda Reuse and Redevelopment Authority (ARRA), Community Improvement Commission (CIC), and City of Alameda (together Alameda) entered into an Exclusive Negotiation Agreement (ENA) with SCC Alameda Point LLC (SunCal) to secure the required land use entitlements to redevelop Alameda Point. The ENA identifies a number of mandatory performance milestones necessary for SunCal to complete the entitlement process during the ENA term, including the preparation of a Development Concept, Infrastructure Plan, draft pilaster Plan, Sports Complex Master Plan, Business Plan, and executed conveyance term sheet with the Navy. SunCal submitted a Development Concept, along with a draft Business Plan, draft Sports Complex Master Plan, and Infrastructure Plan, on September 19, 2008. Based on feedback provided to SunCal by numerous City boards and commissions, SunCal prepared its draft Master Plan, final Sports Complex Master Plan, and final Business Plan, which it submitted to the ARRA on December 19, 2003. ARRA staff and consultants worked cooperatively with SunCal in the preparation of these documents. A final Navy Term Sheet outlining the terms of conveyance (Terra Sheet) is required to be negotiated and completed by July 30, 2009. Concurrent with SunCal's and ARRA's joint efforts, ARRA staff has worked closely with its economic consultant, Economic Planning Systems (EPS), and cooperatively with SunCal, to prepare a Project Proforma based primarily on the final Business Plan. The Project Proforma is controlled and managed by ARRA staff and EPS and will evolve throughout the entitlement process as information is refined and land use plans are solidified. The Project Proforma estimates revenues and costs of the Project during the development period and serves as a strategic and analytical tool for negotiating and memorializing the provisions of the Term Sheet with the Navy and the Alameda Point Disposition and Development Agreement with SunCal. Under the ENA, documents specified by Suncal as confidential will not be disclosed to the public. Suncal has informed staff that the documents pertaining to financial models, such as the final Business Plan, the precise estimate for costs and revenues, and the Honorable Chair and Members March 4, 2009 of the Alameda Reuse and Redevelopment Authority Page 2 of 4 Project Proforma, are confidential. Suncal deems there confidential because they contain figures and financial models developed from proprietary information and/or trade secrets that would disadvantage suncal if disclosed to potential competitors. These types of documents are not public records. DISCUSSION This staff report provides a non confidential summary of the Project Proforma and outlines proposed next steps with the Navy in pursuing a final conveyance Terra Sheet. Summary of Project Proforma The Project Proforma is based on the December 19, 2008 draft /faster Plan, including the following: over 100 acres of parks and open space; Regional sports complex; significant transit improvements, including citywide infrastructure; west End Branch Library and collections; Upgrades to Fire station 8; New school; Preservation and adaptive reuse of existing buildings in the historic district; and Affordable housing. The Project Proforma also assumes fiscal neutrality is achieved through dedicated annual assessment revenue and direct payments by the project, when necessary. All new development at Alameda Point will pay an annual assessment to fund General Fund obligations created by the project. The assessment amount is based on estimates of Public works expenditures at project completion, and then levied on all development on a per -unit or per square -foot basis from day one of the project. During the years before project completion, when the assessment revenue does not cover the full cost of projected adverse impacts on the General Fund budget, the project will make direct payments to the city's General Fund, thereby ensuring fiscal neutrality. In analyzing the estimated impacts of the redevelopment of Alameda Point on the city's General Fund, BPS prepared a fiscal impact analysis, which makes conservative assumptions in terms of both potential project revenues and costs. Honorable chair and Members March 4, 2009 of the Alameda Reuse and Redevelopment Authority Page 3 of 4 The Alameda Paint Project Proforma currently assumes that project revenues consist primarily of residential and commercial land sales, interim leasing, public redevelopment tax increment financing, land secured financing, and private financing. Costs include public facilities and services, backbone infrastructure, financing casts, and indirect costs, such s p p p h redevela rnent expenses, professional services, fees, Development Services Department administration, and lease revenue bond repayment. Remaining amounts would be available for payment for land or developer profit. Because a Proforma is a financial "snapshot in time there are various aspects of the Project Proforma that will require further refinement and resolution among SunCal, the Navy, and the ARRA as development negotiations continue. Summary of Next Steps with Navy Initially, the master developer selection process and ENA anticipated that the developer would pursue conveyance of the Alameda Point property based on the requirements of the 2000 draft Term Sheet negotiated between the Navy and ARRA. During the last 18 months, SunCal has conducted due diligence work, in cooperation with ARRA staff and consultants, including analyzing property development constraints, and has concluded that a financially viable land plan requires portions of the previous Term Sheet be re- negotiated. As a result, ARRA staff submitted the most recent version of the Project Proforma to the Navy on December 22, 2008, and held a meeting with the Navy, SunCal on January 8, 2000, to present the assumptions contained in the Project Proforma and discuss staff's and SunCal's conclusion that the proposed APCP /Navy Term sheet is no longer viable. The provisions of the former Term sheet concluded no longer viable include: (1) the extent of the property to be conveyed, (2) the amount of land payment, (3) the amount of a per'unit "premium" payment, if any, (4) the type of transfer; and (5) privatized versus Navy retained environmental clean up. The Navy's economic consultants have asked numerous questions of bath the ARRA and SunCal and will provide feedback regarding the assumptions in the Project Proforma and the overall conveyance proposal by the end of the month. FINANCIAL IMPACT There is no financial impact on the ARRA and General Fund budgets as a result of receiving the Project Proforma. The cast recovery provision in the SunCal BNA requires that suncal reimburse the ARRA for any staff or consultant cost. RECOMMENDATION This report is for information only. No action is required. Honorable chair and Members March 4, 2009 of the Alameda Reuse and Redevelopment Authority Page 4 of 4 Respectfully �mi :d, r i Leslie Little Development Services Department Director We b ie Base Reuse and Community Development Manager By: ennifer Ott Redevelopment Manager LA LID PIJ 0 From: Debra Kurita Executive Director Date: March 4, 2009 Re: Approve a Five-Year Lease and Repa Plan/Write-off with AC Hornet Foundation The initial lease with the Hornet Museum Foundation was executed in April 1998 for pier space and a parkin lot 80 feet of pier and approx 250,000 sf parkin lot The lease was amended in Ma 1999 after the Hornet was unable to meet its rent obli The base rent for the piers was restructured and lowered si The parkin lot rent was also lowered, and a portion of retroactive base rent was deferred for two y ears. A portion of base rent, which was not deferred, was for In Au 2000, the lease was amended a second time, si reducin the base rent to $8,500 per month, total, for both pier space and parkin lot, and the parkin lot premises were reduced b approximatel 7,260 sf. At the time, the Hornet was 20 months behind in rent pa and the Alameda Point master developer, propert mana and Alameda Reuse and Redevelopment Authorit ARRA) staff met with the Hornet to discuss a rent repa plan. In November 2005, after the Hornet a became delin in rent pa the ARRA and the Hornet entered into a license a re rent for the g reater of $3500 monthl or $1.00 for ever museum patron. An amount over $3500 would be applied to the outstandin balance the Hornet accrued durin the lease period. The license a was developed so that the Hornet could both be pa rent and reduce the lar balance owed to the ARRA. Before the license a was si the g rowin g rent delin had caused the Hornet to accrue a lar debt. The Actin Cit Mana ne this solution to allow the ARRA to g enerate revenue from the pier occupied b the Hornet, while at the same time assistin the Hornet with reducin its debt. At y ear-end 2005, the Hornet's arrears were $555,335. Honorable Chair and March 4, 2000 Members of the Alameda Reuse and Redevelopment Authority Page 2 of 3 DISCUSSION Under the 2005 license agreement, the Hornet has been consistently paying its minimum balance and has paid $38,531 above the minimum toward its original outstanding debt. However, the Hornet has had difficulty securing financing and attracting large donors because of the large rent liability it carries on its books. In addition, many of the corporate holiday parties scheduled on the Hornet at the end of last year were canceled. The ARRA's current financial reports are carrying funds owed from eight years ago. Neither eviction nor standard debt collection practices appear to be a solution to this problem. The Hornet is not in a position to pay these delinquent rents and continue to invest in the numerous capital needs of the museum ship. As a result, staff has discussed a partial repayment option with the Hornet and proposes the ARRA consider new lease terms. Under the proposed new lease agreement, in place of the monthly minimum payment of $3500 per month or $42,000 annually, the Hornet will be required to make an annual rent payment of $33,000 ($3000 per month). The Hornet will have five years to pay back 50% of its arrears ($277,558). For every dollar that the Hornet pays to the arrears, it is proposed that the ARRA also reduce the amount owed by one dollar. If at the end of the five -year period, the Hornet has not paid down the entire $277,038, the ARRA will restore the portion of arrears written off, and it will all come due. staff will provide an annual progress report on the repayment plan. Although the license was executed in 2005, the ARRA was reluctant to accept the license as payment for the Hornet's original lease obligation. As a result, the ARRA has been tracking what the Hornet would owe if the old lease were in effect. This amount, which appears in the ARRA's financial documents and on the Hornet's ledgers, is $332,608, plus the $555,335 owed as of the end of 2005. Should the ARRA approve the new lease and repayment plan, staff will no longer s report or track information related to the original lease agreement. At the February 3, 2000 ARRA meeting, the ARRA considered the five -year lease with the Hornet and added several conditions: 1. The Hornet must provide the ARRA with audited financials and allow the ARRA access to their financial documents. Since the meeting, the Hornet has provided staff with a draft of their fiscal years 2007 and 2008 audited financials. 2. The Hornet must provide the ARRA with information on whether any of its creditors have released the Hornet of its debt obligation and where the ARRA's position is among the creditors. Honorable Chair and March 4, 2009 Members of the Alameda Reuse and Redevelopment Authority Page 3 of 3 The Hornet has provided staff with several letters of debt write -off from its creditors. 1111'ore specifically, the Hornet's largest debt stemming from September 2003 has been classified as long -term debt, as the creditor has not demanded payments since December 2004 and has stated "should the foundation be in a position to repay the loan in the future, it will renegotiate repayment terms." Therefore ARRA would be in first position for repayment. 3. The Hornet must have a business plan. The Hornet has had several business plans and will provide the ARRA with a revised plan, since they recen named their new Executive Director. under the proposed lease, the ARRA would require the Hornet to provide its revised business plan within the first six months of the lease. FINANCIAL IMPACT The lease revenue that the ARRA receives from the Hornet will be reduced by $5000, from $42,000 annually to $36,000. The ARRA will begin to recapture half of the $555,335 owed by the Hornet under its former lease agreement. At the end of the five -year term, the ARRA will need write off up to half of the $555,335 $277,668) if the Hornet meets its repayment goal. This action will significantly restructure the ARRA's uncollected rent reporting within its monthly financial statement. The Hornet currently accounts for 42% of the ARRA's monthly reported uncollected rents. RECOMMENDATION Approve a five -year lease and repayment plan /write -off with AC Hornet. Respectful submit d, �r I Leslie Little Development Services Director By. x r Nanette Banks Mocanu Finance and Administration Manager Alameda Reuse and Redevelopment Authority 3 -C Interoffice Memorandum I W From: Debra Kurita Executive Director Date: March 4, 2009 Re: Provide Leasing Guidance for Proposed Autocross /Motocross Events in the Northwest Territories at Alameda Point BACKGROUND In late 2008, staff received a leasing referral from a member of the Alameda Reuse and Redevelopment Authority (ARRA) Governing Board for an individual who was interested in leasing the northwest Territories for an autocross (performance course in automobiles) event. Currently, the only autocross event allowed at Alameda Point is operated by the Porsche Club. The Porsche club has a use permit which allows a limited number of events per year. DISCUSSION Upon meeting with the applicant, it became evident that he wanted to hold more than an occasional autocross event. Initially the applicant proposed a master lease for the entire Northwest Territories in which existing users would go through the master lease for access to the area, and the Antiques Fair would be assigned to the entity for management and coordination. This lease structure was proposed because the applicant had planned to make extensive investment into the property in order to meet autocross standards. In addition to the autocross, the applicant thought the Northwest Territories would be a desirable location for special events such as car, boat, and RV shows. The applicant would pay the ARRA a flat fee for the property, and the ARRA would also share in a percentage rent and profits from merchandise sales and parking. After further consideration, the master lease concept was rejected. The applicant will have first priority for leasing on non Antique Fair weekends. As part of the initial feasibility review of the proposal, the applicant and staff presented the plan to the Alameda Point developer. SunCal approved of the proposed use for five years, with an additional five -year option, provided the applicant be prepared to reduce their leased premises upon SunCal's request. Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority March 4, 2009 Page 2of3 During the staff review period, the applicant's planned use for the area grew. The applicant wanted to have an autocross, motocross, 1/8 mile racing strip, space for an outdoor pavilion, and activities such as rodeos and circuses. The expanded plan included the entire Northwest Territories, including areas currently restricted by the Navy, so the development would need to occur in phases. In addition to expanding the plan for the property, the applicant talked to a variety of event sponsors and marketed this site as a potential west coast location for autocross and motocross events. Unlike the current autocross events at Alameda Point, the plan was to have multiple autocross events at the same time separated by K- rails, with no limit on the number of events. Staff was provided with a business plan with cost estimates of investments needed to be made in the property and projected revenue. The applicant's activities piqued the interest of the autocross community, and staff and leasing agents began receiving a number of inquiries and requests. Most of the users wanted to hold side -by -side racing events and wanted to lease directly from ARRA, other than going through the applicant. After receiving inquiries from other potential site users, staff told the applicant that no commitments could be made until the ARRA Governing Board had an opportunity to discuss the matter. As part of its due diligence, staff also contacted the ARRA's environmental consultant, Risk Manager, and the Police Department about this proposal. In the short: term, the ongoing environmental remediation at Alameda Point prevents all of the other proposed uses except the autocross and 118 mile racing strip. The Risk Manager stated that the City /ARRA could sanction racing and at the same time shield the city from liability by taking specific steps to mitigate exposure, such as requiring the applicant to reimburse the ARRA /City for the cost of special event insurance in addition to the usual insurance requirements. The Alameda Police Department had concerns over the 1/8 mile race strip, because Alameda Point is such a large property with several secluded areas, and overzealous racers may stray from the sanctioned area onto Alameda Point and other city streets. They do not want this location to be a designated place for drag racing or side shows and become a problem and an added straIn on City resources. The applicant met with police and discussed how they have addressed these issues at other locations. The police are willing to see if the same strategies will work in Alameda. In regards to autocross events, APD requests special event permits for each event, thereby giving APD the opportunity to ensure safety is provided for participants, guests, and the community. A new or amended use permit would be required for this proposed lease, which would allow for additional public review and comment. After reviewing the entire applicant proposal (See Attachment 1) and receiving feedback from Planning, Police, Risk Management and others the staff recommendation is to: Honorable Chair and Members of the Alameda Reuse and Redevelopment Authorit March 4, 2009 Pa 3 of 3 Lease the 1/8 mile and autocross strips to the applicant for all non-Anti Fair weekends; Allow the 118 mile racin but if an off-site racin event occurs on Alameda Point or other Alameda Cit street, this activit will be suspended; Allow unlimited autocross activit on the non-Anti Fair weekends; and Consider remainin uses at future ARRA meetin when the propert becomes available. The ARRA is bein re to discuss and provide direction on the followin q uestions: L 1. Does the ARRA want to entertain a phased development of the Northwest Territories or would the ARRA prefer that the applicant onl plan for propert available now? This q uestion is necessar as it will have financial implications for the applicant on short and lon term investments. 2. Does the ARRA want to allow 118 mile side-b racin conducted under International Hot Rod Association standards? 3. Does the ARRA want to allow multiple autocross events runnin concurrentl at Alameda Point? RECOMMENDATION Provide leasin g uidance for proposed autocross/motocross events in the Northwest Territories at Alameda Point. Res e ll submitted Leslie A. Little Development Services Director f r B anette Banks Mocanu Finance Administration Division Mana LAUNBM Attachment 1: map of proposed event area 8 CO) 0 �n 00 04 rQ Russell Resources, Inc. environmental management Alameda Point RAB Meeting on February 5, 2009 Highlights and Analysis Item 4 -A RAB members resent: Tale Smith. (co- chair), Fred Hoffman, Joan Konrad, Jinn. Leach, Jean Sweeney, Jim. Sweeney, and Michael John Torrey Remediation and other field work. in progress: Debris pi.l.e removal along north shore of Seaplane Lagoon—continuing—removal of pile I complete with about 25,000 yd having been excavated. Removal of the smaller debris pile 2 is in progress. The excavated debris pile material is to be hauled off site for disposal. While not presented at the RAB meeting, the following field -work activities are also in. progress o Groundwater petroleum remediation near Atlantic Avenue entrance; o Groundwater treatment at IR Site 5 to remove solvent (Plum.e. 5 -3) using 6-phase heating; o The petroleum remediation system at the southern end of the western hangar row is continuing to extract much more jet fuel. than was expected; and o Installation of the air- spargelvapor extraction system to treat groundwater contaminated with benzene and naphthalene at Alameda Point OU-5 and FISCA IR Site 2. Community Relations Plan The Navy announced that it is updating the Alameda Point Com.rn.unity Relations Plan (CRP). The CRP is used to guide the Navy on how to communicate with and involve the community. It can also be used by the community to learn about Alameda Point and whom to contact at the Navy. Alameda Point's CRP was last updated in 2003. IR Site 2 Nest Beach Landfill. and Wetlands Feasibility Stud The Navy presented a detailed overview of the IR Site 2 FS to the RAB. This site is the southwest corner of the former base and includes about 70 acres of landfill and 33 acres of wetlands. IR S1.te 2 is planned 'for Fed -to-Fed transfer from the Navy to the Department of Veterans Affairs. The IR Site 2 FS evaluates alternatives for soil remediation separately from alternatives for groundwater remediation. In addition to consideration of the "no action" alternatives, the FS evaluates three soil. alternatives and two g roundwater alternatives: Foil Multilayer Soil Cover, Engineering and Institutional. Controls (ICs), and Monitoring. This alternative would cover the landfill with a 3 -foot thick soil cover which would be designed to physically isolate the waste from contact by humans and wildlife. The ICs RR1, 440 Nova Albion Way, Suite 1, San Rafael, California 94903 415.902.3123 fax 815.572.8600 Page 2 of 2 M arch 4, 2009 Alameda Point RAB Meeting, February 5, 2009 Highlights and Analysis would be designed to prevent sensitive land uses, disturbance of the cover, disturbance of wells and other monitoring facilities, etc. Navy's cost estimate: $21 million This is the Nav 's preferred alternative for soil.. Engineered Cap, Engineering and ICs, and Monitoring. This alternative is the same as the above Alternative, except that this Alternative would cover the landfill. with a 3 -foot thick engineered ca that is designed, not only to isolate the waste, but to prevent most rainfall from percolating through the landfill. Navy's cost estimate: $47 million Near Complete Removal. and Backfill, Dewatering, Engineering and ICs, Disposal, and Monitoring. This alternative would remove all waste, except for a minor amount to protect the wetlands, and dispose of it off site. Navy's cost estimate: $903 million Cly r ti "d wutpr Monitored Natural Attenuation and Engineering and ICs. The Navy would monitor groundwater quality to verify that natural processes are lowering contaminant levels over tune. Navy cost estimate: $6 million This is the Nav 's preferred alternative for groundwater. w Hydraulic Barrier, Pump and Treat, Disposal, :Monitored Natural Attenuation, and Engineering and ICs. This alternative involves pumping groundwater from strategically placed wells to control potential migration of groundwater: so potential discharge of contaminants to San Francisco Bay is prevented. The extracted groundwater would be treated before disposal. Navy cost estimate: $23 million The RAB discussion of the FS focused primarily on (1) whether the presence of waste has been adequately characterized both within the presumed landfill boundary and outside it, and (2) whether the perimeter monitoring well network is adequate for detecting contaminated groundwater migrating to San Francisco Bay. In response to extensive comments on the draft FS, including those of the RAB, the scope of the alternatives was enhanced in preparing the final. FS. For example, the rernediation footprint was expanded, the thickness of the soil. cover and engineered cap was increased from. 2 feet to 3 feet, groundwater contamination and its remediation was evaluated in. greater detail, and estimated costs were updated. The draft Proposed Plan for IR Site Z will to be available for review by the ARRA and the environmental regulatory agencies, then. distributed for public review in March or April 2009. 440 Nova Albion Way, Suite 1, San Rafael, California 94903 415.902.3123 fax 815.572.8600