2005-03-02 ARRA PacketAGENDA
Regular Meeting of the Governing Body of the
Alameda Reuse and Redevelopment Authority
Alameda City Hall
Council Chamber, Room 390
2263 Santa Clara Avenue
Alameda, CA 94501
1. ROLL CALL
2. CONSENT CALENDAR
Wednesday, March 2, 2005
Meeting will begin at 7:00 p.m.
City Hall will open at 6:45 p.m.
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
Council or a member of the public.
2 -A. Approval of the minutes of the regular meeting of January 5, 2005.
2 -B. Approval of the minutes of the Special meeting of January 20, 2005.
2 -C. Recommendation to approve certain assignment and assumption agreements among
housing providers at Alameda Point.
2-D. Recommendation to Authorize the Executive Director to Approve Lease(s) at Alameda
Point.
3. PRESENTATION
3 -A. Presentation /update on Alameda Point Navy Negotiations and and Use Planning.
4. REGULAR AGENDA ITEMS
4 -A. Recommendation to approve a 10 -year lease agreement with Nelson's Marine for Building
167.
4 -B. Recommendation to approve a 5 -year lease, with a possible 3 (5 -year) options with Nelson
Marine for 400 linear feet of Pier 1.
5. ORAL REPORTS
5-A. oral report from APAC.
ARRA Agenda — March 2, 2005 Page 2
5-B. Oral report from Member Matarrese, RAB representative.
6. 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.)
7. COMMUNICATIONS FROM THE GOVERNING BODY
8. ADJOURNMENT
This meeting will be cablecast live on channel 15. The next regular ARR..A. meeting is
scheduled for Wednesday, April 6, 2005.
Notes:
▪ Sign language interpreters will be available on request. Please contact the ARRA Secretary, Irma Frankel
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 5, 2005
The meeting convened at 5 :46 p.m. with Mayor Johnson presiding.
1. ROLL CALL
Present: Beverly Johnson, Mayor, City of Alameda
Tony Daysog, Boardmember, City of Alameda
Doug DeHaan, Boardmember, City of Alameda
Frank Matarrese, Boardmember, City of Alameda
Marie Gilmore, Boardmember, City of Alameda
Absent: None,
2. CONSENT CALENDAR
2 -A. Recommendation to approve an amendment to Consultant Agreement with LFR, Inc. For
environmental consulting services at Alameda Point in the amount of $175,130 for a total .
agreement amount of $249,000.
2-B. Recomrm.endati on to authorize the Executive Di rector to execute subleases) at Alameda
Point.
Member Matarrese motioned for approval of the Consent Calendar items. The motion was
seconded by Member Gilmore and passed by the following voice vote: Ayes -• 5; Noes -- 0;
Abstentions - 0.
3. PRESENTATION
3 -A. Presentation /update on Alameda Point Navy Negotiations and Land Use Planning.
None.
4. REGULAR AGENDA ITEMS
None.
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5. ORAL REPORTS
5 -A. Oral report from APAC.
Chair Lee Perez noted that they did not hold a business meeting during December, although a
very nice social gathering was held. He noted that there was no discussion, and that the next
meeting would be held on January 19, 2005. He noted that they would decide how to carry out
the ARRA's wishes at that time.
Member DeHaan noted that while he was not part of the decision made at the last ARRA
meeting, he supported that decision. He was concerned that the process took much longer than
anyone could have anticipated, and that when he was Chair of. EDC, he ensured that they were up
to speed on Alameda Point issues. He recalled several team members (Al Clooney and Dan
Meyers) who had passed away during this process.
Mayor Johnson noted that she and Member Daysog had been members of the BRAG as well.
Chair Perez noted that three active former BRAG members sat on the City Council, and that
hoped that their dedication would reach Sacramento and Washington, D.C. He noted that it had
been an honor to serve in this capacity, and acknowledged that change was necessary.
5 -B. Oral report from Member Matarrese, RAB representative.
There was no report.
6. ORAL COMMUNICATIONS, NON - AGENDA (PUBLIC COMMENT)
None.
7, COMMUNICATIONS FROM THE GOVERNING BODY
Member Matarrese recalled previous discussions to bring the redevelopment of the Point to the
mainstream consciousness of Alameda. He noted that the very light turnout at the ARRA
meetings did not meet that goal. He requested that the regular meeting time be changed to 7:30
p.m. in order to encourage more community participation. He noted that the closed session could
be held before the regular meeting.
Mayor. Johnson suggested agendizing that item for the next meeting, and noted that a 7:00 start
time could be tried. A special meeting would be held on Thursday, January 20, 2005, at 7:30 p.m.
Member DeHaan requested an update on the Consultant Agreement to be placed on the next
agenda.
Chair Perez did not anticipate that there would be any further amendments to current consultant
contracts. He added that they could make an updated budget presentation at the next regular
meeting. They had anticipated some changes to the consultant contracts, and that they did not
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G:1Comdev\Base Reuse& Redev \ARRA \MIND 1 M512005\0I -05 -05 Regular.ARRA minutes.doc
impact their contingency or any other line items contained in the ARRA -led predevelopment
budget.
8. ADJOURNMENT TO CLOSED SESSION OF THE ARRA TO CONSIDER
CONFERENCE WITH REAL PROPERTY NEGOTIATOR:
8 -A. Property:
Negotiating parties:
Under negotiation:
Alameda Naval Air Station
ARRA, Navy, and Alameda Point Community Partners
Price and Terms
Announcement of Action Taken in Closed Session: The ARRA received a briefing
from the Real Property Negotiator; no action was taken.
9. ADJOURNMENT
Mayor Johnson adjourned the open session meeting at 6:11 p.m.
Respectfully submitted,
rma Frankel
ARRA Secretary
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UNAPPROVED
MINUTES OF THE SPECIAL MEETING OF THE
ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY
Thursday, January 20, 2004
The meeting convened at 8 :19 p.m. with Mayor Johnson presiding.
1. ROLL CALL
Present: Beverly Johnson, Mayor, City of Alameda
Doug DeHaan, Boardrnember, City of Alameda
Tony Daysog, Boardmember, City of Alameda
Frank Matarrese, B oardmember, City of Alameda
Marie Gilmore, Boardmernber, City of Alameda
2. Public Comment on Non - Agenda Items Only
There were no speaker slips.
3. CONSENT CALENDAR
3-A. Amending Resolution No, 010 establishing rules and procedures for Alameda Reuse and
Redevelopment Authority meetings by amending the starting time of regular meetings from 5:30
p.m. to 7:00 p.m. (requested by Boardinennber Matarrese)
Member Matarrese motioned for approval of the Consent Calendar items. The motion was
seconded by Member Gilmore and passed by the following voice vote: Ayes -- 5; Noes — 0;
Abstentions — 0.
Member Matarrese noted that this item is approved with the intent to increase public participation.
4. ADJOURNMENT TO CLOSED SESSION OF THE ARRA TO CONSIDER
CONFERENCE WITH REAL PROPERTY NEGOTIATOR:
4 -A. Property:
Negotiating parties:
Under negotiation:
Alameda Naval Air Station
ARRA and Navy
Price and Terms
The ARRA received a briefing from the Real Property Negotiator; no action was taken.
5. ADJOURNMENT
Mayor Johnson adjourned the open session meeting at 8:21 p.m.
Ressectfully sub fitted
r raFrank 1,
ARRA Secretary
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G:\Comdev\Base Reuse& Redevp \ARRA \MINUTES\2005\1 -20 -05 SpeciaLARRA minutes.doc
City of Alameda
Alameda Reuse and Redevelopment Authority
February 18, 2005
To: Honorable Chair and Members of the
Alameda Reuse and Redevelopment Authority
From: William C. Norton
Interim Executive Director
2 -C
Re: Recommendation to Approve Certain Assignment and Assumption of Subleases
and Legally Binding Agreements among Housing Providers at Alameda Point
Background
As required by the federal. Base Closure and Community Redevelopment and Homeless
Assistance Act of 1994, the Alameda Reuse and Redevelopment Authority (ARRA) worked with
the Alameda County Department of Housing and Community Development (County) and an
organized group of homeless service providers, known as the Alameda County Homeless
Providers Base Conversion Collaborative (currently known as the Alameda Point Collaborative
(APC)) to determine the quantity of residential and commercial square footage that would
constitute a reasonable accommodation of the homeless at the former Alameda Naval Air Station
(Alameda Point).
on May 3, 1995, the ARRA adopted the Standards of Reasonableness that provide general
commitments related to future reuse goals at Alameda Point. In July 1995, the Alameda County
Homeless Provider Base Conversion Collaborative submitted a Request of Property at Alameda
Naval. Air Station. The requests were considered by staff, and following negotiations, specific
allocations of property were included in the Housing Element of the NAS Alameda Community
Reuse Plan approved by the ARRA in January 1996. Two hundred existing housing units at
Alameda Point were allocated to several non - profit housing providers (Providers) for use by
clients transitioning from homelessness. There are no emergency shelters or shelters at the APC
per the Standards of Reasonableness for Homeless Uses at Alameda Point.
In addition to providing housing, it was expected that the Providers, through the APC, would
coordinate the delivery of various support services and property management to their residents.
Many residents are coping with medical, social, psychological or physical challenges and receive
related services from the Providers, the APC Community Service Center and other agencies.
In 1996, . the ARRA approved the form of a Legally Binding Agreement and Property Lease
(LBA) to be used by the Alameda Point Collaborative and each Provider that was allocated
housing units to accommodate its clients. The 59 -year term of each LBA was to begin once the
Dedicated to Excellence, Committed to Service
Honorable Chair and Members of February 18, 2005
Alameda Reuse and Redevelopment Authority Page 2
underlying real property was conveyed by the Navy to the ARRA. Believing that the Navy
would soon convey the real property, the Providers began to raise funds to rehabilitate their
units.
The ARRA subsequently entered into Interim Subleases with the Providers, in order to permit
them to establish "site control" necessary to retain their federal and state grant funding. In 2001,
in order to facilitate the Providers' further applications for funding, the APC requested, and the
ARRA approved, an amended form of a 59 -year LBA and Property Lease that includes "cure"
provisions and mortgagee provisions required by private lenders. In December 2001, the ARRA
entered into an LBA with University Avenue Housing for forty -five (45) units of housing.
Pursuant to their sub - leases, Dignity Housing West and Resources for Community Development
have requested that the ARRA consent to the assignment of their Interim Subleases to the
Alameda Point Collaborative. In addition, University Avenue Housing has requested that the
ARRA approve a transfer of its LBA to the Alameda Point Collaborative.
Discussion
The Interim Subleases and form of the LBA. contain provisions for the assignment and/or transfer
of the agreements to other housing providers. In particular, when the form of LBA was
approved, it was intended that APC would be a likely recipient of future assignments and special
provisions and findings were included in the form of the LBA to facilitate such assignments.
Dignity Housing West and RCD have requested that their Inerim Subleases be assigned to APC.
UA Housing has requested that its LBA be assigned to APC. All three providers believe that
their residents and the larger APC community would benefit from the assignment. The primary
mission of these providers is to develop housing and they feel that this mission has been fulfilled
by rehabilitating and leasing their units. These assignments will provide a better economy of
scale for operations and management activities at the APC community. APC has the financial .
capability, management expertise and operational capacity to assume the two subleases and the
LBA.
Therefore, the City Attorney's office has prepared and approved as to form the attached form of
Assignment and Assumption Agreement for subleases (Attachment A) and the form of
Assignment and Assumption Agreement for the Legally Binding Agreement (Attachment B)
which will be used for each Provider assignment requested at this time. Upon execution of these
agreements with Dignity Housing West, Resources for Community Development and University
Avenue Housing, the APC can begin its transition process and move forward with its next step of
closing on the necessary loan documents to secure Federal. Home Loan Bank. Board grant funds.
Dedicated to Excellence, Committed to Service
G:1Co ndevli3ase Reuse& Redevp \ARRA\STAFFREP1200513 March\2 -C12 -C Assignment Assumption of Subleases.doe
Honorable Chair and Members of February 18, 2005
Alameda Reuse and Redevelopment Authority Page 3
Fiscal Impact
There is no fiscal impact to approving the assignments and assumptions requested at this time.
Recommendation
It is recommended that the ARRA approve the assignment and assumptions, based on the
attached form of Agreement, between Dignity Housing West and APC and Resources for
Community Development and APC and approve the assignment and assumption, based on the
attached form of Agreement, between University Avenue Housing and APC and authorize the
Executive Director to execute the Agreements.
Leslie Little
Development Services Director
By: PT ebbie Potter
Base Reuse and Redevelopment Manager
Attachment A: Form of Assignment and Assumption. Agreement (subleases)
Attachment B: Form of Assignment and Assumption Agreement (Legally Binding Agreement)
Dedicated to Excellence, Committed itted to Service
C:1Corndev\Base Reuse& Redevp \ARRA\STAFFREP1200513 March12 -C\2 -C Assignment Assumption of Subleases.doc
EXHIBIT A
FORM OF
ASSIGNMENT AND ASSUMPTION AGREEMENT
(Sublease of Buildings )
This Assignment and Assumption Agreement (Sublease of Buildings
) (the "Agreement ") is dated as of
, 2005 ( "Effective Date "), and is entered into by and among the Alameda
Reuse and Redevelopment Authority, a joint powers authority formed under California law (the
"ARRA "), , a California nonprofit public benefit
corporation (" "), and Alameda Point Collaborative, Inc., a California nonprofit public
benefit corporation ( "APC "), with reference to the following facts:
A. The ARRA, as sublessor, and , as subtenant, entered into that certain
Agreement of Sublease, Sublease of Housing Units at the Former Alameda Naval Air Station for
the Sublease of Buildings and Adjacent Open Space
and Parking Area at Alameda Point dated , as amended by that certain
Amendment to the Sublease between the ARRA and for the Sublease of
Certain Portions of Naval. Air Station Alameda, located in Alameda, California (collectively, the
"Sublease ").
B.
operated by
C.
of all of
The subleased premises have been rehabilitated and have been continuously
and managed by APC since
desires to assign to APC and APC desires to accept the assignment from.
's rights and obligations with respect to the Sublease.
D. The consent of the ARRA to the assignment of 's rights and obligations
under the Sublease is required pursuant to Section 5.1 of the Sublease.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises of the
parties hereto and for other good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged, the parties mutually agree as follows:
1. Assignment by . As of the Effective Date, hereby assigns and
delegates to APC all of 's rights, title, interest and obligations under the Sublease.
2. Acceptance of Assignment. As of the Effective Date, APC hereby accepts the
foregoing assignment and delegation and hereby assumes and agrees to perform each and every
of '5 duties, obligations, covenants, and agreements under or pursuant to the Sublease, and
1
further agrees to be bound by the terms and provisions of the Sublease. Any reference to
in the Sublease shall hereafter be deemed a reference to APC.
3. Consent to Assignment. The ARRA hereby consents to the foregoing assignment
and delegation of the Sublease from to APC.
4. Representations and Authorization.
(a) and APC represent and warrant that all of the financial and other
information required by Section 5 of the Sublease has been provided to the ARRA.
(b) Further, and APC represent and warrant that the foregoing
assignment and delegation shall not jeopardize funding sources for rehabilitation and/or
operations of the subleased premises and that and APC have obtained all necessary
consents and completed all required documentation for the transfer and continuation of all such .
funds concurrent with the foregoing assignment and delegation.
(c) has full power and authority to enter into this Agreement, and to
otherwise perform its obligations hereunder without the consent of any other person or entity.
The execution, delivery and performance of this Agreement, the fulfillment of and compliance
with the terms and provisions hereof and the due consummation of the transactions contemplated
hereby have been duly and validly authorized and approved by all requisite corporate and other
actions, all of which are in fuel force and effect.
5. Captions. The captions of this Agreement are inserted only as a matter of
convenience and for. reference. They do not define, limit or describe the scope or intent of this
Agreement and they shall not affect the interpretation hereof.
6. Governing Law. This Agreement and all matters relating to it shall be governed
by the laws of the State of California.
7. No Other Modifications. Except as modified by this Agreement, the Sublease
shall continue unmodified and in full force and effect.
8. Counterparts. This Agreement may be signed by different parties hereto in .
counterparts with the same effect as if the signatures to each counterpart were upon a single
instrument. All counterparts shall be deemed an original of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
2
a California nonprofit public benefit corporation
By:
Name:
Its:
APC:
Alameda Point Collaborative, Inc.,
a California nonprofit public benefit corporation
By:
Name:
Its:
ARRA:
Alameda Reuse and Redevelopment Authority,
a joint powers authority formed under California law
By: Approved as to form:
Name
Title: By:
Name:
Title:
3
N :IA\AIamc \Hh\docs\w -RCD Sublease Assign
EXHIBIT B
FORM OF
ASSIGNMENT AND ASSUMPTION AGREEMENT
(UA Housing)
This Assignment and Assumption Agreement (UA Housing) (the "Agreement ") is dated
as of , 2005 ( "Effective Date "), and is entered into by and among the Alameda
Reuse and Redevelopment Authority, a joint powers authority formed under California law (the
"ARRA "); the Community Improvement Commission of the City of Alameda, a public body,
corporate and politic (the "CIC "); the City of Alameda, a municipal corporation ( the "City ");
Alameda County, through its Department of Housing and Community Development, a political
subdivision of the State of California (the "County "); UA Housing, Inc. a California nonprofit
public benefit corporation ( "UA Housing "); and Alameda Point Collaborative, Inc., a California
nonprofit public benefit corporation ( "APC "), with reference to the following facts:
A. In connection with certain funding the City, the CIC and UA Housing entered two
(2) separate Affordable Housing Covenants, each dated as of August 1, 2000 (collectively, the
"Covenants ").
B. In connection with the use of HOME funds, the City and UA Housing entered
into a Contract, dated August 1, 2000 (the "Contract ") and a Regulatory Agreement dated
August 2000 (the "Regulatory Agreement "). The Contract, Regulatory Agreement and all other
agreements by and between the City and UA Housing with respect to the use of HOME funds
shall be referred to herein collectively as the "HOME Documents ").
C. The Covenants and the Regulatory Agreement are to be recorded concurrently
with the LBA (as defined below).
D. The ARRA, the County, UA Housing and APC entered into that certain Legally
Binding Agreement and Property Lease dated December 17, 2001 for certain premises located at
Alameda Point, Alameda, California (the "LBA ").
E. The leased premises have been rehabilitated and have been continuously operated
by UA. Housing, as Provider under the LBA, and managed by APC since
F. UA Housing desires to assign to APC and APC desires to accept the assignment
from UA Housing of all of UA Housing's rights and obligations with respect to the LBA, the
Covenants, and the HOME Documents.
1
G. The consent of the ARRA and the County to the assignment of. UA Housing's
rights and obligations under the LBA is required pursuant to Section 6(a) of the LBA.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises of the
parties hereto and for other good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged, the parties mutually agree as follows:
1. Assignment by UA Housing. As of the Effective Date, UA Housing hereby
assigns and delegates to APC all of UA Housing's rights, title, interest and obligations under (a)
the LBA, (b) each of the Covenants, and (c) the HOME Documents.
2. Acceptance of Assignment. As of the Effective Date, APC hereby accepts the
foregoing assignment and delegation and hereby assumes and agrees to perform each and every
of UA Housing's duties, obligations, covenants, and agreements under or pursuant to (a) the
LBA, (b) each of the Covenants, and (c) the HOME Documents, and further agrees to be bound
by the terms and provisions of (a) the LBA, (b) each of the Covenants, and (c) the HOME
Documents. Any reference to UA Housing in (a) the LBA, (b) each of the Covenants, and (c)
the HOME Documents, shall hereafter be deemed a reference to APC.
3. Consent to Assignment of Covenants. The City and the CIC hereby consent to
the foregoing assignment and delegation of each of the Covenants from UA Housing to APC.
4. Consent to Assignment of HOME Documents. The City hereby consents to the
foregoing assignment and delegation of the HOME Documents from UA Housing to APC.
5. Consent to Assignment of LBA. The ARRA and the County hereby consent to
the foregoing assignment and delegation of the LBA from UA Housing to APC.
6. Representations and Authorization.
(a) UA Housing and APC represent and warrant that all of the financial and
other information required by Section 6 of the LBA has been provided to the ARRA and to the
County.
(b) Further, UA Housing and APC represent and warrant that the foregoing
assignment and delegation shall not jeopardize funding sources for rehabilitation and/or
operations of the premises subject to the LBA and that UA Housing and APC have obtained all
necessary consents and completed all required documentation for the transfer and continuation of
all such funds concurrent with the foregoing assignment and delegation.
2
(c) UA Housing has full power and authority to enter into this Agreement,
and to otherwise perform its obligations hereunder without the consent of any other person or
entity. The execution, delivery and performance of this Agreement, the fulfillment of and
compliance with the terms and provisions hereof and the due consummation of the transactions
contemplated hereby have been duly and validly authorized and approved by all requisite
corporate and other actions, all of which are in full force and effect.
7. Captions. The captions of this Agreement are inserted only as a matter of
convenience and for reference. They do not define, limit or describe the scope or intent of this
Agreement and they shall not affect the interpretation hereof.
8. Governing Law. This Agreement and all matters relating to it shall be governed
by the laws of the State of California.
9. No Other Modifications. Except as modified by this Agreement, (a) the LBA, (b)
each of the Covenants, and (c) the HOME Documents, shall continue unmodified and in full
force and effect.
10. Counterparts. This Agreement may be signed by different parties hereto in
counterparts with the same effect as if the signatures to each counterpart were upon a single
instrument. All counterparts shall be deemed an original of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
UA HCOUSING:
UA Housing, Inc.,
a California nonprofit public benefit corporation
By:
Name:
Its:
3
APC:
Alameda Point Collaborative, Inc.,
a California nonprofit public benefit corporation
By:
Name:
Its:
ARRA:
Alameda Reuse and Redevelopment Authority,
a joint powers authority formed under California law
By:
Name
Title:
CIC:
Approved as to form:
By:
Name:
Title:
COMMUNITY IMPROVEMENT COMMISSION OF THE CITY OF ALAMEDA,
a public body, corporate and politic
By: Approved as to fog-
Name :
Title:
4
•
By:
Name:
Title:
CITY:
CITY OF ALAMEDA,
a municipal corporation
By: Approved as to form:
Name
Title: By:
Name:
Title:
COUNTY:
ALAMEDA COUNTY HOUSING AND COMMUNITY DEVELOPMENT,
a political subdivision of the State of California
By: Approved as to form:
Name
Title: By:
Name:
Title:
5
N:\A\Alamc\Hhldocs \w -UA Housing LBA Assignment
City of Alameda
Alameda Reuse and Redevelopment Authority
February 17, 2005
TO:
FROM:
SUBJ:
Background
Honorable Chair and Members of the
Alameda Reuse and Redevelopment Authority
William C. Norton
Interim Executive Director
2 -D
Report from the Executive Director Recommending the Approval of Sublease(s) at
Alameda Point
At the December 2004 ARRA Board Meeting, the ARRA elected to review and approve all subleases at
Alameda Point.
Discussion
Attachment "A" describes the business terms for the proposed sublease(s).
Fiscal Impact
The rent for: CAMETOID TECHNOLOGIES is $48,1.80 annually or $0.55 per square foot.
Recommendation
It is recommended that the Alameda Reuse and Redevelopment Authority approve the proposed
sublease(s).
LL/NB :dc
G: /Banks /ARRA Staff Reports /Cametoid Technologies
By:
le tte
Development Services Director
Nanette Banks
Finance & Administration Manager
Dedicated k) Excellence, Committed to Service
Honorable Chair and Members of the
Alameda Reuse and Redevelopment Authority
ATTACHEMENT "A"
PROPOSED SUBLEASE BUSINESS TERMS
March 2, 2005
Page 2
TENANT
Carnetoid Technologies
BUILDING
32
SIZE (SF)
TERM
RENT
7,300
3 years
$4,015 /mo.
G:IBanks /ARRA Staff ReportslCametoid Technologies
Dedicated to Excellence, Committed to Service
City of Alameda
Alameda Reuse and Redevelopment Authority
February 17, 2005
To: Honorable Chair and Members of the
Alameda Reuse and Redevelopment Authority
From:
Re:
Background
William C. Norton
Interim Executive Director
Report from the Executive Director recommending the Approval of a 10-
year lease with Nelson Marine for Building 167
In August 2004, the ARRA considered the proposed lease with Nelson Marine as
presented by PM Realty Group. At that meeting a law firm representing regional
boatyards made a presentation stating that the ARRA would lose $34 million in revenue
by entering into the lease. The ARRA directed staff and PM Realty to examine the law
firm's calculations and assumptions and report back with a recommendation. More
specifically, the ARRA directed staff not to consider boatyards throughout the region, but
instead those within the City of Alameda to ensure equitable rental rates.
Since that time, PM has been working to collect the data used by the firm. In addition,
the boatyards changed legal counsel, so it has taken a bit of time to perform the lease
comparisons. Attachment 1 is the most recent correspondence received by the boatyard
counsel.
Nelson's Marine is one of the original tenants at Alameda Point, operating a boatyard in
Building 167. Building 167 is a structure located in the Tidelands Trust property; Nelson
Marine is a compatible use for the site. The lease commenced in June 1997 and expired
in September 2002. In July 2002, APCP, acting as property managers, executed a lease
amendment for a month -to month lease at $16,000/month and began renegotiating a 20-
year lease for Building 167. Under the existing lease, the tenant has the first right to
negotiate a new lease for the premises at 90% of fair market value upon expiration of the
initial term.
Discussion
The boatyards raised four issues for the Nelson Marine lease: rate, percentage rent,
recapture provision and term.
Rate: PM Realty was able to secure lease information on two of the Alameda boatyards
used as comparison by the attorney group. The attorneys required PM to sign a
"Dedicated to Excellence, Committed to Service"
Honorable Chair and Members of the February 17, 2005
Alameda Reuse and Redevelopment Authority Page 2
confidentiality form, so our analysis will refer to boatyards 1 and 2. Attachment 2
outlines PM's analysis of the boatyards.
Essentially, of the two boatyards, the best comparison is boatyard 1 because it has a
similar site coverage ratio. Boatyard 2 consists of a very small structure on a large land
surface. In addition, the lease structure for the three leases are different, Nelson's Marine
is a net lease (tenant pays rent and all expenses) while the two Alameda boatyards are
gross leases (tenant pays rent and landlord pays all expenses, including property taxes),
which attributes to the difference in the rental rates. Nelson pays possessory interest
taxes to the county and city fees.
Percentage Rent: The current lease with Nelson allows the ARRA and Nelson to share
the cost of an appraisal to determine the correct "market value" for the lease, As a result,
the financial terms of the Nelson Marine lease are based on a rental survey /appraisal
performed by Dunn & Associates (Attachment 3). The appraisal was initiated and
managed by PM Realty Group, the ARRA's property manager.
The appraisal looked at several lease structures, including a percentage rate lease, in .
which the landlord receives a percentage of the gross annual sales. The appraisal
recommended a straight per square foot rate lease in order to avoid fluctuations in the
market, However, the new lease with Nelson does allow for the ARRA to collect a
percentage of sales, when 6 percent of Nelson's gross annual sales exceed their current
rent. Therefore, Nelson would have to exceed approximately $3.4 million in annual gross
sales before the ARRA would receive its 6 percent profit share. In order to monitor the
profit breakpoint, PM Realty will require quarterly sales reports from Nelson.
Recapture Provision: The attorneys argued that Nelson Marine was benefiting from
having subtenants from which the ARRA had no financial gain. Under the proposed
lease, Nelson will pay "50% of sums or other economic considerations that exceed in
total the sums which tenant is obligated to pay landlord under the lease." For example, if
the tenant's rent was S1000 and they collect $ 1500 rent from subtenant, the tenant would
pay the landlord $250. Subtenant sales also are included in the definition of "gross
sales ", thereby increasing the opportunity to trigger the ARRA's percentage rent share
mentioned above.
Term: The final issue with the boatyard attorneys was the term of the proposed lease.
Originally, the new lease was to be a 20 -year term. Due to new discussions between the
developer and Nelson Marine about the future development plan, the proposed lease term
has been reduced to ten years. Also, the lease reserves the right to reduce the leased
premises with 90 -day notice to make the land available for development.
Fiscal Impct
The proposed base rent for the property is:
Years 1 -5: $16,943 /month $203,316 /annually
Years 6 -10: S 18,637 /month 5223,644 /annually
"Dedicated to Excellence, Committed to Service"
Honorable Chair and Members of the February 17, 2005
Alameda Reuse and Redevelopment Authority Page 3
Recommendation
The Interim Executive Director recommends that the Alameda Reuse and Redevelopment
Authority approve the proposed 10 -year lease with Nelson Marine.
Respectfully submitted,
Leslie Little,
Development Services Director
B y: Nanette Banks
Finance & Administration Manager
PBISPINB :dc
Attachments: 1. Letter from Attorneys
1 PM Realty Analysis of Nelson Marine Lease
3. Dunn & Associates Rental Survey/Appraisal
"Dedicated to Excellence, Committed to Service"
Stanley L. Gibson
G. G eoffrey Robb
Peter A. Linclh
Joshua E. Kirsch
Michael J. Cummins
Jennifer T. Sanchez
Michelle L. Tommey
Marker E. Lovell, Jr.
Roxanne Chester
Christopher A. Burnha.rm
GIBSON ROBE & LINDH LLP
no First Street, 27th Floor
San Francisco, CA 94105
November 8, 2004
"ATTACH M ENT . t!
Telephone
(415) 348 -6000
Facsimile
(415) 348-6001
Direct Dial
(415) 979 -234(1
BOATYARDS' SECOND SUBMISSION REGARDING
PROPOSED TERMS OF SUBLEASE RENEWAL WITH NELSON'S MARINE
[November 18, 2004 Agenda]
TO: Honorable Chair and Members of the
ALAMEDA REUSE AND REDEVELOPMMENT AUTHORITY
FROM: Four Concerned Bay Area Boatyards, on behalf of themselves
And the Public Interest
SUBJECT: Review of Other Leases of Boatyards Operating within Alameda to Bring the
Rental Terms for ARRA's Renewed Sublease with Nelson's Marine to Fair
Market Value
A REVIEW OF THE RELEVANT ALAMEDA BOATYARD LEASES DEMONSTRATES
THAT THE PROPOSED LEASE TERMS GROSSLY FAIL TO REALIZE THE
PROPERTY'S FAIR MARKET VALUE.
At the first hearing addressing the terms of the proposed sublease, a Motion was adopted
by the Commission requesting the Appraiser, with Dunn & Associates and/or the PM Realty
Group, to review the leases of the two other boatyards doing business in Alameda to make the
terms of the renewed Sublease with Nelson's Marine competitive with those other leases.
A review of those two Alameda leases, Svendsen's Boat Works and Mariner Boat Yard,
reveals that if the current form of proposed Sublease were to be approved by this Commission,
the ARRA and the taxpayers of Alameda would stand to lose more than $36 million dollars
over the proposed 20 year term of the lease. Three primary factors result in this dramatic
disparity between the proposed lease and the other Alameda yard leases which establish the true
Fair Market Value of the property:
(1) Grossly disparate lease rates per square foot and percentage of gross revenue
provisions;
(2) The lack of annual Consumer Price Increases ["CPI"] in the proposed lease; and
(3) The excessive proposed lease term [the length of the lease].
Honorable Chair and members of the
ALAMEDA REUSE AND REDEVELOPMMENT AUTHORITY
November 8, 2004
Page 2
(l) THE LEASE RATE IN THE PROPOSED LEASE IS ONLY 20% OF
THE PROPERTY'S FAIR MARKET VALUE BASED ON THE
LEASE RATE CHARGED IN THE TWO COMPARABLE
PROPERTIES.
The relevant leases do not follow the sane form. Exhibit "A" details the relevant
provision in the two Alameda leases in which the Board expressed an interest, and discusses
discrepancies in the proposed Nelson's lease.
Svendsen's Boat Works Lease
• As detailed in Exhibit "A," Svendsen's is paying $ 0.17 (seventeen cents) per sq. ft. for
its yard space and S 0.57 (fifty seven cents) per sq. ft. for its buildings.
• For comparison purposes, since the Nelson lease proposal does not provide for a different
rate for yard and buildings, on a blended basis Svendsen is paying an average of $ 0.31
(thirty one cents) per square foot for its entire leasehold versus the proposed rate of $
0.06 (six cents) per square foot for Nelson's. On a percentage basis, the proposed
Nelson rent is less than 20% of'the rent Svendsen pays.
Mariner Boat Yard Lease
• As detailed in Exhibit "A," Mariner Boat Yard is paying $ 0.20 (twenty cents) per sq, ft.
for the yard space and $ 0.75 (seventy five cents) per sq. ft. for its buildings.
• In addition to the fixed rent specified above, the "Marine Center Lease" also contains a
provision for the Tenant to pay fees based on its annual gross revenue. For example, last
year Mariner Boat Yard paid an additional $39,000 in rent. Accordingly, to arrive at the
actual amount of rent paid you must divide this amount equally through the year and add
this to the above fixed rental.
• For comparison purposes, since the Nelson lease proposal does not provide for a different
rate for yard and buildings, on a blended basis Svendsen is paying an average of $ 0.30
(thirty cents) per square foot for its entire leasehold versus the proposed rate of $ 0.06
(six cents) per square foot for Nelson's. On a percentage basis, the proposed Nelson
rent is 20% of the rent Mariner pays.
(2) THE LACK OF CPI INCREASES IN THE PROPOSED LEASE LOCKS IN
UNRLALISITICALLY LOW LEASE RETURNS WITHOUT ANY UPWARD
ADJUSTMENT.
Despite CPI increases in comparable leases in Alameda, including annual increases and a
CPI provision in another sublease between the ARRA and the same lessee, the subject lease
inexplicably excludes the customary CPI adjustment provision. The result is to grossly squander
public assets and to compound the severe competitive disadvantage which would be suffered by
other business in the area if the proposed lease were adopted.
Honorable Chair and members of the
ALAMEDA REUSE AND REDEVELOPMMENT AUTHORITY
November 8, 2004
Page 3
Svendsen's leases have annual CPI provisions for increasing its rental rates. The Mariner
Boat Yard also has annual CPI provisions in its leases.
The ARR.A's Sublease of Premises "Building 66" to Nelson [which is not currently being
renegotiated because its 10 terra does not expire until 2009], also contains annual increases in the
rental rate averaging 6.25% over the first five years of the lease term, and a provision for an
annual. CPI increase for the last four years.
In contrast, the proposed Sublease terms for Building 167 contains afixed rental rate
provision over each of four five year periods, with very modest increases at each five year
interval over the twenty year term, and the rates remain fixed once again for eac . jive year
interval.
The economic impact of this is dramatic. If the ARRA were to elect to adhere to the
proposed 20 year term of the Sublease, this discrepancy in comparison to the CPI that the two
other Alameda boatyards are paying would result in the ARRA and the taxpayer of Alameda
losing income in the range of $35,918,000, when combined with the marked inequity in the
rental per square foot rates.
The combined financial impact of these terms is depicted in the attached Exhibit "B ".
3) THE PROPOSED LEASE'S TWENTY YEAR TERM DRAMATICALLY
INCREASES THE LOST INCOME EFFECT TO THE CITY'S TAXPAYERS.
The Mariner Boat Yard lease has a length of 10 years. Svendsen's Boat Yard's original
lease term was for 7 years and it was extended to 15 years. Long term leases are not inherently
problematic as long as rent discrepancies which typically occur over extended terms are
accounted for with annual CPI adjustment provisions. There is no such adjustment in the
proposed lease. The proposed lease also varies from the other leases of comparable properties in
granting a renewal option at a discount from "fair market value." Neither of the comparable
leases contains such a provision.
It is fundamentally unsound fiscal policy to tie the City down with a 20 -year term without
annual lease increases based on the CPI. The lack of such a provision in the proposed lease will
exacerbate the loss of income to the City in what are projected to be particularly difficult fiscal
times. The unwarranted lease advantage that would be granted Nelson would also totally destroy
any competitive balance among boats yards in Alameda and throughout the Bay.
CONCLUSION
The attached article in "Boat & Motor Dealer" (Exhibit "C ") details how Nelson's
Marine has become "a waterfront service mecca" and credits them with creating "a marine
complex that is among the largest in California, with a relatively small investment ". The facility
is described as a "marine mall" in which Nelson's sub - leases space to nine other marine
Honorable Chair and members of the
ALAMEDA REUSE AND REDEVELOPMMENT AUTHORITY
November 8, 2004
Page 4
businesses. Not only does Nelson's charge its subtenants rent, it also receives 15% on the sales
it refers to those sub-tenants. The article makes it clear that Nelson's Marine is in the real estate
business as much, if not more, than in the boat repair business. The City of Alameda owns this
prime Bay Front property. It is the City, as prime landlord, which should be getting a fair market
return on its real estate assets.
The boat repair business is a small industry. In the immediate Bay Area there are only 11
boat yards. This submission speaks for four of those yards. Those boatyards, having reviewed
the proposed terms of the ARRA's renewal of its sublease to Nelson's Marine, unanimously
agree that the proposed terms will be detrimental to fair market competition in the marine repair
industry. The above analysis also demonstrates that the proposed lease will dramatically reduce
the Fair Market return that the City and the taxpayers of Alameda can reasonably expect to
realize from this Prime Bay Front Property and will result in tens of million of dollars in lost
revenue to the taxpayers of the City ofAlameda over the proposed 20 year terra of the sublease.
In the interest of fair competition, and in the interest of fiscal responsibility, we
respectfully urge the Board to reject the proposed lease.
Respectfully submitted,
GIB SON ROBB & LINDA I LLP
By
Peter A. Lindh
Exhibits: (A) Summary of Alameda Boat Yard Leases
(B) Summary of Loss
(C) Article from "Boat & Motor Dealer" August 2003
(D) Comparable Alameda Boat Yard Rent
Exhibit "A"
SUMMARY OF ALAMEDA BOAT YARD LEASES
Svendsen's Boat Works
• This lease is dated 17 September 1993. It was to have expired in November of 2000 but
was extended until April 2015. There are no provisions for extensions or discounts from
"fair market value" if the lease were to be renewed.
• The base rent was $20,000, which increases each year by the CPI after 2000. This
translates into approximately $21,730 in 2004. (We do not have the exact amount to the
penny Svendsen is paying).
• This rental portion of the lease in not broken down between yard and buildings. Nor are
there any breakdowns on a dollar per square foot basis. Although the lease does not
specify the price per square foot, it can be calculated by taking the total rent currently
paid and dividing by the square feet rented.
• The parcels of this lease consist of Building 12 with an area of 16,188 sq. ft (2' � and
Mezzanine floors have not been included as they are reportedly dilapidated and
"unusable ") and. Building 36 with an area of 4,995 sq. ft. This totals 21,183 sq. ft, for the
two buildings.
• The total yard area is calculated at approximately 60,000 sq. ft.
The lease was modified in October of 1996 to include additional space at the rate of
$6,000 per month, to increase each year by the CPI after 2000. This should result in .
additional rental in the range of $6,519 per month in 2004.
The modification included additional "dock space" with an area of. 6,210 square feet at
$2,000 per month or approximately S0.32 per sq. ft. per month, in 2000.
• The modified lease also includes Building 34 which has 8,040 sq. ft. of space rented at
the rate of $4,000 per month or S0,49 per sq. ft. per month, in 2000.
There is a second lease for Building 33, with rental space of 8,040 sq. ft. which expires in
November 2005. The rent started at $3,800 and increased each year by CPI, which .
translates into approximately $4,128 in 2004.
• The sum of the Buildings; # 12, # 36, # 34 and # 33 equals 3 7, 263 sq. ft.
1
EXHIBIT "A"
• The surn of the yard space, 60,000 sq. ft,, plus the "dock space, " 6,210 sq. ft., equals
66,210 sq. ft.
The total lease payments adjusted by CPI should be approximately $32,378 per month
[the Appraiser stated that it was paying $32,596 so our estimate is very close.) I.f you
"back into " the price per square, foot for yard space this equals approximately $. 017 per
sq. f t. for the yard space and $.0.57 per sq. II-. for the buildings.
• As a simple means of making a comparison between the Svendsen and Nelson 's leases, if
the total square feet rented is divided by the rent paid, this produces a per square foot
rent o for Svendsen versus $0.06 for Nelson. On a percentage basis, the
proposed Nelson rent is less than 20% of the rent Svendsen pays.
Mariner Boat Yard Lease
• This lease is dated 15 February 1996 with a term of 10 years. There are no provisions for
extensions or discounts from "fair market value" if the lease were to be renewed.
•
The "Marine Center Lease" consists of office & shop space identified as #10.23, #10.24
and #10.25 with a total of 1,205 square feet. At the inception of the lease the price per
sq. ft. was $0.50. The yard space is not specified in sq. ft. but it is reportedly 44,000 sq.
ft. The lease identifies the starting rate for the yard space in February 1996 as $5,600 per
month or approximately $0.13 per sq. ft. The lease identifies 240.5' of lineal dock space
at a starting rate of $1 ,322.75, or $5.50 per foot, which is now renting for $6.00 per linear
foot.
+�
There is a second lease consisting of office & shop space identified as #10.1D with 971 .
square feet. At the inception of the lease the price per sq. ft. was $0.50. The base rent
was $485.50 at the inception and has increased to $728.00.
• The sum of the office & shop space rented in both of the two leases equals 2,176 sq. ft.
The current rent for this space is $1,632 or $0.75 per Alit.
• The sum of the yard space rented equals approximately 44, 000 sq. ft. The current rent
for this space is $8,910.25 or $0.20 per sq. ft.
• In addition to the fixed rent specified above, the "Marine Center Lease" also contains a
provision for the Tenant to pay fees based on its gross sales which, "shall include all sales
made...received by Lessee for all other sources of income derived from the business
conducted on the premises." Mariner is paying 6% of gross revenue that exceeds
$750,000. Mariner Boat Yard informs us that its sales for 2003 were $1,400,000,
Deducting the $750,00 threshold leaves $650,000. Applying the 6% to the $650,000 in
revenue above the threshold results in an additional $39, 000 rent jar the year. On a
percentage basis, the fixed rent paid by Mariner Boat Yard is 16.5% of the gross revenue
threshold. [Annual rent per sq. ji, $126, 504 (not including berthing), divided by
threshold gross revenue, $750,000]. As discussed below, the recommendation for
2
EXHIBIT "A"
adoption of 'the lease is misleading in suggesting that the Nelson and Mariner leases are
similar because they each provide for a percentage of gross income above a certain
threshold.
• As a simple means of making a comparison between the Mariner and Nelson 's leases if
the total square feet rented is divided by the rent paid, this produces a per square foot
rent of $0.30 for the Mariner lease versus $0.O6, for the Nelson lease On a percentage
basis, the proposed Nelson rent is 20% of the rent Mariner pays.
The Proposed Terms of the Nelson's Sublease
• As to the sublease pertaining to Premises "Building 167" [The Sublease that is the subject
of these hearings] there are discrepancies between the prior lease and the proposed lease
in terms of square feet rented. The prior lease listed the "Building" as having 55,400 sq.
ft. of space versus the proposed at 53,785. The "Land" is stated to be 201,275 sq. ft.
versus the proposed sublease figure of 186,872 sq. ft. The following calculations have
been based on the prior figures but may easily be adjusted once the discrepancies have
been explained and the accurate figures have been ascertained.
• The proposed lease does contain language requiring the tenant to pay a percentage of
gross sales above a fixed threshold, based on the square feet rented.
• However, the rent charged on the fixed threshold is 6% in the proposed Nelson lease,
versus the 16.5% rent charged in. the Mariners lease.
(a) The Mariner Boat Yard lease specifies that when the gross sales exceed $750,000,
Mariner pays 6% of excess revenue in addition to its fixed rent. As detailed
above, the $126,504 fixed rent paid in the Mariner Boat Yard lease represents
16.5% of the threshold gross sales figure of'$750, 000;
( b) In the Nelson lease, however, the same 6% of gross sales rent is charged on both
the threshold and the excess gross sales. lithe 16.5% ofa threshold gross sales
formula used in the Mariner Boat Yard lease were used in the proposed Nelson
lease, the corresponding threshold lbr Nelson based on a market value monthly
rent of $69,0002 would be $$4,908,845, and the annual fixed rent would be
$828, 024, not the $203, 316 proposed.
(c) Based on the revised averages of the two comparable Alameda boat yards,
Nelson's monthly rent should be $85, 752 per month or $1,029,024 per year. (See
attached Exhibit "D ")
Nelson's advertises "132,000 sq. ft indoor facility on 15 acres ". The two leases state however that Building 167
contains 55,400 sq ft. and Building 66 contains 28,542 sq. ft., which total 83,942 sq. ft. or 1.92 acres, Where is the
other 48,058 sq. ft. of indoor space? The lease for the "Land" is 20 1,275 or 4.62 acres. If the indoor space is added
to the "Land" this is a total of 6.54 acres. Where are the other 8.46 acres? This discrepancy should also be addressed
and resolved.
3
EXHIBIT "A"
4
EXHIBIT "B"
SUMMARY OF LOSS
Proposed Extension vs. Fair Market Appraisal
Year One - Mo. Pmt.
Year Two - Mo. Pmt.
Year Three - Mo. Pmt.
Year Four - Mo. Pmt.
Year Five - Mo. Pmt.
Year - Mo. Pmt
Year 7 - Mo. Pmt.
Year 8 - Mo. Pmt.
Year 9 - Mo. Pmt.
Year 10 - Mo. Pmt.
Year 11 - Mo. Pmt
Year 12 - Mo. Pmt.
Year 13 - Mo. Pmt.
Year 14 - Mo. Pmt.
Year 15 - Mo. Pmt.
Year 16 - Mo. Pmt.
Year 17 - Mo. Pmt.
Year 18 - Mo. Pmt.
Year 19 - Mo. Pmt.
Year 20 - Mo. Pmt.
Sum Of Rent Pmts.
Over 20 Years
As Proposed
Before ARRA
Adjusted Every 5 Years
Based on Fair Market
Following Prior Lease
Adjusted Annually
$
16,943
$
85,752
$
16,943
$
91,652
$
16,943
$
97,957
$
16,943
$
104,697
$
16,943
$
111,900
$
18,637
$
119,599
$
18,637
$
127,827
$
18,637
$
136,622
$
18,637
$
146,021
$
18,637
$
156,067
$
20,501
$
166,805
$
20,501
$
178,281
$
20,501
$
190,547
20,501
$
203,656
$
20,501
$
217,668
$
22,551
$
232,644
$
22,551
$
248,649
22,551
265,756
$
22,551
$
284,041
$
22,551
$
303,582
$
4,717,920
$
41,636 680
City of Alameda will loose $36,918,760 with this proposal.
411
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\VC'dkITV1110, ,Aromo.
11H k i Util t fltU
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ti) c huNduig h nature, Ihu
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Changing times and fortunes
C tIVr117
ifl 199'S . km IH IdiNt
ntR4 rcraulnr. box,
1' fl v,Atortront Thc
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ork: thc
IhAt fl h c,tuay\
t.hc mush tut t
tnd {,.:•4)1111111.1111t\ I Aftill1(7dil,
OTC thi:`-re ht „,tart,A1 h tu tc..n
\ccrt. ;:wc k nd it hAd
l'hcw \kodid ko ho n() n i wt ht sd- ,,..!ro\vn tuIi 11-mw, dhow SI
ncyy,”, icx , 1CH,..'aik1 t wn in ft: \ ertuc,, thol
111 • MAP, 1.11.(!!
11-ic
vg4:',Ematifte
•
• :,,itiVil"*Nit
•
dellaktg, "V00.1,40
Nelson maintains 10011;f0,0::of
service-dock space on a Water
'tont undowafitt
•
Ba, the repair yard was starting to
feel the. limitations ()t its location.
I here \verc few huikting:s on the prop
erty. so all the tviajor work had to be
dorw outsitite, This put severe restric-
tions on their painting (.1i)era.tions, and
slowed theni down during Northern
notoriously wet \vinters.
Calik)rnia's eccmonly was also 1oni-
H1 I the and Carl and .
his lather, Hai (who had joined him:
in the venture), saw nothing but growth
on the horizon 1(11 boating in the Bay
Meanwhile, as NIscv's was expand-
ing. the Alameda Naval Air Station, at
the oppoite, end of the island,. \vas
sk)\\1\,' sinking into an uncertain fate as
result of the military's consolidation
oI hases that began in tile 19g0s. By
995 much of tile facility was empty,
and only helicopters were using the
hangars and runways
Vv..- A weit, from the at the edge
a former ilangar, showing (mt.,. of Nelson's
N.farine'.c .generat Si;..Trice bays,
Vu/dle: :4tigh, bay fin the ()id hangar
pror,,it.1...'s ample space pyr their
small, but diivrse, new-boot 0.
Bottom; The Lively, a Fair ( 5 i currently
undergroing c (ij ij)f a ibtn IJ stifilated
tke-•14.5.4:•..over::.•a•-•vear.,artel �1 nmc-,.1d.i.!
Floating an idea
In the fall of that car. John Platt, a sales
r.ep for. 'West Mrine, mentioned to CAri
that. the Na.x'y was rumiored to be plan
ning to lease some of it unused
includ.ing a conlptex of aircraft haniga.rs.
The lure or thoso expansive facilities
and the wide-open spaces around then
would prove to be irresistible.
bwtovailillili.n.h:-..:.•41::•44pialic,:•:•hanqar
'T he old
Idit %vas tot.ally ina.dequa.te for
in.d.00•r vorI, It had only abou.t half the
outdoor a.vaitthle
the ktriCi, So COrtUktie.:(1 Ale
niati.igernera teaTri that tI. City
.A.I.arric..d.a: had. put in cilarge of .evdop
irpg \-Nle g,..(‘).1 a very,' posit.k:e
recer.)fical frOln tile city,
up
that .1
t.he with the
tiley ivitcfnt (Jeri:nod what
going
Nothing ventured,
nothing gatned.—
when: Nelson's L ; ti :Alta th,:,
han.i.,,a-s in the spring 1996
the USS docked:
H.clicopters rna.cie regular
ilito Lind ou.t. .)1 the base provid-
in2.. reniirkicr that. Nekc.)•n's
Ma.nric.. had. a. tenuous. that la.nd.
The Nav,,,- ellari•g,.e its
and. efiti.w.:e
it upn.)•ot-
ed 11 rive years,
wa.s 1-.6g risk,- ..rt
Fi• • pF.01
this
hadn't:. '..,,:vorked oat, there'd rea.11,,,T1..-x....!.. no,
place to go,.-
It. was. a 1 1 ih timt ould lea.ve
the. Netsoris in ;.,.1.n.x.iouts. State (..).1:
for th.e first five years ::•:tt. the:
t:I:Om "We had. tt..,.) pu.t. off all ok.rir major
ph\ ca upgrades: to the biJil(11411.,,.„.-
adds, "We. eve.o put. off
caping—insteacl, we pti.t. all the: plants
in pots, an.d eve.:ry ,,ve went to do
son-Kell:ling, we had to .-ts.1‹.. (ntrselves„,
pc.frilanerit this going r;i0 be?"
all that ca.re: to not over-
invest, in Was stilt a cx.)stly
uner.taking, "We had to btlik.t our (-.Avn
clocks i..1pgrade the btlikii.fig with
etectrical sprinklers,- (d
says.. "13):: tile time \ve ie.c.a it alt done_
we 114,1.d. .-,;.)ent.. about $750,t.)01.1,. neves
would havc .. gotteri the none, ut. or
tint investrrient if we had u. "cave after
five years,-
Fort.ttnatel',;„ on
physi.c...;11 structure 1-r,,,Ive beefi
prAI:o.q.e.4 the.
• be• Ikleal• for
Work.,.1.,arge -allc:Av for man.): siz.cs
and shapes ° lx)ats.; offices aye located
41 t.he same.: buil.ding;. balt,:.orties built (,:m
the ed,2:e of the office area afford. a
bird's-eye view for keepin4 an on.
tIi e. facilities.:, a.n.d Ia nc asphalt lots sur-
round tht,.. building, providing plenty of.'
space for movit4; arkl storn boats,.
Still, their careful btidget..ing ha s. not
pre•vented Nelson's from running. a full-
1.7
14.)t
\N, in re iN r t
n :a C.1011 t COX. r
n t ,k.a (nle
nid
.And
1 Ark":
)
An empty pot
becomes a feast
n 110%k.
thc:11
[Cal p01.C.II
L on 1
morc
ihc _ fl attcr
r‘.0 Liro,e
11.1101t2h: ohj
id cm (-on-kJ!
that v
M nmern.i.1 ',you I (I
arKi
11 enough .1....w.4.)pie
ppri....LiC
11 ti makers,
a • hrok.cr.. Nofie were
„ hut 'Mien
their. Io.ts: w4h Netson's, they
round. ti eniselvt:s cc.)mpany,
pnmusc stream (..$1
jUSt
and aH the
onc For
neithcr time. ric.w
sual ifl `ctillbitiOLIS
pc Uft 1ki1 d serk.11ialy„ tIL
of skilled
Orkel RIk lor the (4.ten
irnyacticai,
U o tIe
tor fi..L,'„ureci it was n."11...ire.
m.q)ortdfit for its u an what we
at, Carl Lind ,Necl.
brmg ij j fl t(..) the.
other kee.1.) [ht.'. quail-
\vorkinatship hiat,"
faitier e.c.hoes ti'.at n t,
tirnit initial inyes.trnt,nt
try: ij U-
ddirl• trganizing. a lot of
skitied boat work.ers: can be. a little bit
like trying to tw.rd •ays.,
is especially trUe. Wail IL II such as
Nelsons that serve:'-; a Wide range of
craft, froiri classic wooden sailboats to
igh-performnce racing boats, as Well
all kinds of DOW r
" S a cons,tam probiem: h.e
ct.munties„ -because people wto work
on boats .:„te a Tecial hreed, Sorne of
the ITiost skilled ()nes are very indc7-
pende.nt-tninded people. You give thetn
SpaCe. and some freedom to run their
own shops. and they do a great job. Boa.t
custorners can t much more demand-
ing than automotive custorner., simph,
twatise thcy know t lot more, There's,
tic) room for erri....)r, Lfld that level of
qt..ratity is hard ti..) maintain if you. have
I) .1:wage a
A marine :mall is born
11. was (fit:fit:lilt Lt the first t.wo busi-
nesses to El IL hew,- Cztri feCaliS,."A\T
h nothing to show., just some \vac-
houses afl d. a big empty lot, But once.
they moved in we got ihe 'Fravelift
oing, and we started qperating, so it
becanw en.sier t sub -lease the space,
Today Nelson' Marine s.hafes the
facilit),2 with nine: other marine busi-
nesses: Fred Anderson Wooden
Boat,Awk: Jack 1)., Scullion Yacht
Services: Ntetrorwlis Metal Works;
Neptune Niarine Towing; UK Sail
Mak.ers-: Pac (..1%d Canvas; Christine
Fiegert.„ marine .:irtisr, Drake Marine',
and Hansen Rigging_
Jack Scullion was, one of th- first o
the sub -tenants to move. in, In fact, his
shop \\:'as up anti running at the new
A.,thiimgh it 00A.I.jr.-fie'S (Oith 6" .cult..,
the coolzpit.,-.,t Jack Scuill.,;..ol's SINT-
ei; 1 -
g n 1 1 rk. CM. li_lrge
location before Ne.i.s.,on. it,,R1 comple
ed their T.mve., While jack's rigging,
1J• 11 lCCtL 1 L rvice shop is as large
illany independent repair shops, it
occupies only third of one of the
INtys, Next to him:, to the eat, is. Fred
nderon W(Nxteri Bolaworks oxhich
uxiny contains an cdd Chinese junk
in 9 11 tor a relit) To the west is a
space dna Nelson's USA-till tor iony-
tertr, project,
This set-up itas worked quite \yell
for me,- ,ki.ck. says. "I've got my nich.c
in thL kIL 11 mun6y,, and being, here
exposes nie to mote potenziA
torners. it also Nelson's the
opporlimity tp,,,e me as a s.uhcontrac-
tor, or refer people to me for the it
they don't 11.x.,,,v, For intnce, ‘vith the
boat Frn vv‘(-)rici fl on no \v, subron-
lracted the hull pairatinv,. to Nekon'
We bilow the accepted indUSWY-Stan-
dad 1:5 FL rccnt arscokint tor subco
trocting I do Work fOf Fred Arkierson
\kell all end up doing \vork kyr
each other, so everybody's busy,"
Making the best
of the location
The Nelsons.' arnbitiou.s plan has
,voirkech and provided the.m with sorat..
unforeseen opp4.)minities, Shortly 'after
movin?: to the Navy bef':aIl
ya.cht brokerag.e., and in 2101 rner:0-d
with Perrectian Marine, which had
been one t his tenants: n.der tho
uanie of Nelson's Yachts, the brokerage
now offers some 90 bots, 30 0-f whict
are. kept. an display out of the water at
the yard, In 2000, t also began sell-
nip. new bouts, 1 It LL fl tv,'0 fo-eign
anci
i ot:
%.krir.i.o. IT:In Pert ecti.(m.
iher rt.4,:s
1.01c, Aniericari
U11.0
Fl
s(yrnetliink-!,
t(..) faiH.-..Iack.
\k, s.ales ()ff. The
steady all -
rare
110:: L ij (.,".7.vdri,
he
1 • --;:aW:A, 0.1011
V,Ith
out r{.) the Liciiity.
dry tius.
repair There_
tnake an): repair
exceptAon of spray
and And, 1 the
fl()T Ut. 101."
Ole proles-
or oile.
dr/GI chve.rsio,.... of tile NelsOn'S
(11(.7. done
currently
1..inderzoiw.J.. c.oi-opk.7te. rel-mild. The
1..irc±V Jan
d bUi Icier who
describes himself rneticui()Lls.-
;.:t11 over
befort.'. .,ettlkii.1 on Nt-?,...lsoris
k.n• 1 tfix.,svy'(...!. job, tiy the timc the
\(H is complete. 1_11: hay e beA..11
iH h tk k"yr over a ve.ar,
wwi c the hodts interior kly-
o.m., so (hey tal,-..en the bo;!..4.1,
l)are hull;-1Ayoirsen.d
Llis(,) t poviered and rt...!...--
plunlbol the vessel. I chose to conic;
here hec(tuse t > offer so marry set
es :Ai )n ::1n( tIi uality of all
the work k 1.411, T.h.e,!,, \vere also able.. to
IK.1:-.) th Iou nd.c...)ors throughout the
\vhich rnost facilities can't
offer, they Ltriderstood iu rneticu-
lotAs n:::it.t.tre. arid. \-vere w1Iuo to work
with th...ktr-
Looking ahead
In the re.lativel):.- 1-.)fief hk ot' ol Nelson's
[lc, there hzrve bec.11: risks, and sonle
h..ave 1.)cen fl v l'br the most part, tile
stcps h 1.)een :measured, anci the busi
ness model rest.ed on solid louncla-
t
co.mple.A. tha.t is. anyong
with a rerativel:,,..,'
al.s(.) made
inroads new-boa.t sates.,
the preserving a solid lounda-
tion broker.agt, sales. A.aci so there are
r...h) huge floomians that might cripple the
in a (.10WITRIFIL
W11.(;:q1 Vted May a.nd
ot the !facility, he was
pr().uct. to point out th',:rtt. he. may firially
he able: to set aside: some (..-ff his more
cost-conscious Fir had
kis lease, guarame.eirw: t.h.e. bust -
•
horne at- that k.)cation. tor ti.W
IleXt 2.5 ears.. It's a. 1.7..n..2 weight. off.' our
•
wilkiers he said, -and it means \ve
can star( 1 olti:"2.: a hot (.)1,. thirws
,o,,e've had to 1)111 ori hold.-
(11P: ot Alaneci.a
::11:iproved zt developer's 0.1.an: tor thc:: rest
the otd base. yvhich includes an 800-
,) btiilt in the Sarrie
L,1,40(:).11: the Tx..)atvard-s dOCkS:
plan housi, ar-3(1 rna.n.y
boater.,,, to the a.re whe.ri
corne, alreacK be there,
readv [Irv; boatim2 cotri-
lrionity. Then, its that the risks the
.1\,:elsoris have tak.en j thetr truo:al
approach I.A.) a 2irrater
dividend than the\:' e\,:‘er
•
"
S, waN fot vow ftiV.r : LIOUN
. ,
1,5
TO1
or visit our website at
arinedeaterdirectcom
ring dealer
CmcLE 114
FEET RENTED
CY
z
uJ
(/)
CO
w
Dock Area
Price per ft.
270'
$5.67 per ft. mo.
400'
$6.00 per ft. mo.
Lc)
(ie)
re)
$5.83 per ft. mo. 1
Office /Shop Area
Price per ft.
37,263 sq. ft.
$0.57 sq. ft. mo.
2,176 sq. ft.
$0.75 sq. ft. mo.
v
oi)
r-
a)
.t-
0
E
Cr
0
to
a
te-
Yard Area
Price per ft.
66,210 sq. ft.
$0.17 sq. ft mo.
44,000 sq. ft.
$0.20 sq. ft mo.
55,105 sq. ft.
$0.19 sq. ft. mo.
Tenant
Svendsen's Marine
Mariner Boat Yard
age of Comparable Yards in Size
!Average of Comparable Yards $ Per Sq. Ft.
a
E 6
c \I
[COMPARABLE MONTHLY RENT - Per. Ft.
0 Z
ICOMPARABLEPERCENTAGE OF GROSS RENT
TOTAL COMPARABLE ANNUAL RENT DUE
(TOTAL COMPARABLE MONTHLY RENT DUE
Ci
Dock Area
Price per ft.
400'
$5.25 per ft. mo.
_
d
E
a)
0
c
c)
c\i
Ea
..............$25,200 pr yr.
Office /Shop Area
Price per ft.
55,400 sq. ft.
$0.59 sq, ft. mo.
$32,686 per mo.
$392,232 per yr.
Yard Area
Price per ft.
201,275 sq . ft.
$0.17 sq. ft. mo.
d
E
45
0.,
(-0
7-
C\{
co
to-
_IA Jed z6g `01, t$
di
E
L-i
0
a.
C‘i
0
c)
CC
to
f>.
$828,024 per yr.
$201,000 per yr.
>%
s-
0
a
CNI
0
CN1
0
-
$85,752 per mo.
Nelson's Area Based on Lease
Comparable Alameda Boat Yards, Less 10%
Monthly Rent Based On Sq. Ft. Rented
Yearly Rental On Sg. Ft. Rented
[COMPARABLE MONTHLY RENT - Per. Ft.
COMPARABLE ANNUAL RENT - Per. Ft.
ICOMPARABLEPERCENTAGE OF GROSS RENT
TOTAL COMPARABLE ANNUAL RENT DUE
(TOTAL COMPARABLE MONTHLY RENT DUE
TO:
FROM
SUBJECT:
DATE:
M Realty Group
MEMORANDUM
Honorable Chair and Members of the
Alameda Reuse and Redevelopment Authority
David A. Jaber
Regional Vice President
Nelson Marine Lease Renewal
February 17, 2005
"ATTACHMENT 2"
A proposal to approve the lease for Nelson Marine for Building 167 was
submitted to the ARRA Board on September 1, 2004.
When this lease was negotiated, five (5) important goals were achieved.
1. Offer a lease term long enough to provide an incentive for the tenant to
invest significant capital into building improvements.
2. Guarantee the ARRA a steady income stream over the life of the
lease, starting at 90% of Fair Market Value (FMV). This was one of
the renewal requirements of the existing lease.
3. Provide the ARRA with the opportunity for additional income should
the tenant's sales exceed a certain threshold (percentage rent).
4. Allow the ARRA to generate additional income by including a clause in
the lease, which requires the tenant to share with the ARRA, 50% of
their net proceeds derived from sublease income.
5. Provide the future developer the right to decrease the total leased
area, when necessary, so as not to negatively impact the future
development.
Four Concerned Bay Area Boatyards opposed the Nelson lease on behalf of
themselves and the `Public Interest" ( "Four Boatyards "). The attorney
representing the Four Boatyards, at that time, raised concerns with regard to a
June 10, 2004 Rent Survey that was conducted by Mike Dunn of Dunn &
Associates, an MAI appraiser, on behalf of PM Realty Group. According to the
calculations of the Four Boatyards' approval of the lease transaction would result
in a $34,308,941 loss to the City of Alameda during the proposed 20 -year lease
term.
At the conclusion of this agenda item at the ARRA Board Meeting, PM Realty
Group was asked to analyze the rent differential provided by the Four Boatyards'
attorney so that the City could be certain that the terms of the Nelson Marine
lease are competitive with other boatyard leases within Alameda.
The initial attorney representing the Four Boatyards has subsequently been
replaced. The new attorney is now contending that the proposed 20 -year lease
would result in a loss of $30,918,760 to the City of Alameda over the term of the
lease. According to the Four Boatyards' attorney, the three primary factors that
result in the disparity between the proposed lease and the other Alameda
boatyard leases, for establishing the fair market value of the property are:
1. Grossly disparate lease rates per square foot and percentage of gross
revenue provisions;
2. The lack of annual Consumer Price Increases ["CPI"} in the proposed
tease;
3. The [excessive] proposed lease term [the length of the lease]
Based upon the direction provided by the ARRA Board, and taking into
consideration the recent memorandum from the Four Boatyards' attorney, PM
Realty Group, working with Dunn & Associates, has completed the analysis that
compares the Nelson Marine lease with those of two Alameda Boatyards.
The best alternative to responding to the ARRA Board's directive is to
address the specifics raised by the Four Boatyards' new attorney. The following
sections will address the three concerns and then provide a summary at the end.
Lease rates per square foot and percentage of gross revenue provisions
The steps that were implemented for analyzing the Nelson Marine lease to
that of the other two Alameda Boatyards were as follows:
1. Determine the site coverage ratio for each of the properties.
2. Determine the adjustment for gross rent to net rent.
3. Compare the rent for each lease.
Site Coverage Ratio
Site coverage ratio is a calculation used to determine what percentage of the
land is covered by improvements. The use of site coverage ratio allows for the
comparison of different size properties, since each is broken down to a
percentage of the total coverage for that particular site. In addition, the ratio
allows for adjustments for the rent per square foot depending upon whether or
not the comparable property is either superior or inferior to the subject property
based upon the respective site coverage ratio. It should be noted that the land
used for the calculation is all and including that which contains improvements.
Site Coverage Ratio Total Building Area 1 Total Land Area
The lease for Nelson Marine specifies that Building 167 is 53,785 square feet
and the land contained in the lease is 186,872 square feet. This results in a site
coverage ratio of 29% for the Nelson Marine lease.
The leases and information provided by the Four Boatyards' attorney did not
specify the total and for each lease. Instead building space and yard space
were provided. Therefore, in order to provide some comparison between the
Nelson Marine lease and the two Alameda Boatyards we have included an
attachment that indicates our calculation of the site coverage ratio for all three
properties. To make the comparison equal, we have added the building square
footages to that of the yard leases for the two comparable Alameda Boatyards.
The leases for the two comparable Alameda Boatyards were not specific as to
the amount of yard square footage and the information used in our analysis was
provided directly by these tenants.
Nelson Marine has a similar site coverage ratio to Alameda Boatyard #1 (29%
to 33 %). Alameda Boatyard #2 is not a good comparable since the site coverage
ratio is significantly below the ratio of the other boatyards. However, in an effort
to include Alameda Boatyard #2 as a comparable in the rental survey per the
ARRA's request, the rental rate per square foot of building space will need to be
adjusted downward to reflect the disparity in the site coverage. The discount or
adjustment applied to the rental rate will be 84 %. This discount rate is reflective
of the difference between the site coverage ratio of Alameda Boatyard #2 and
Nelson Marine.
Gross Rent to Net Rent Adjustments
I n order to compare any lease it is important to make certain that the lease
types are either similar or adjustments are made to compensate for the
difference in the lease terms. The two primary types of leases used and a simple
definition are as follows:
3
Gross Lease — Tenant pays rent and landlord pays all expenses.
Net Lease — Tenant pays rent and all expenses.
There are some variations to these types of leases so a review of the lease
terms was necessary to determine the differences between the Nelson Marine
lease and those of the two other Alameda Boat Yards. After review of all three
leases it was determined that the Nelson Marine lease is a net lease while the
leases for Alameda Boatyard #1 and Alameda Boatyard #2 are modified gross
leases. The primary difference between the two lease types is establishing who
is responsible for the payment of real estate taxes, property insurance and
maintenance of the building.
In order to compare the Nelson Marine lease to the two other Alameda Boat
Yards, an attachment has been prepared which shows both a range and an
average cost per square foot for taxes, property insurance and maintenance.
These numbers, which are based upon industry average, were provided by Dunn
& Associates. The `gross rent' to net rent' conversion is $0.45 per square foot.
Rent Comparison
The next step in the comparison was to compare the per square foot rent for
each of the properties on a net lease basis. The monthly rent provided by the
two Alameda Boat yards included pier rent. Since pier rent is not included in the
Nelson Marine lease, an adjustment was made to remove the pier rent for the
two comparables. The monthly rental payment was then broken down to a rent
per square foot of building improvements. Because of the lower site coverage
ratio of Alameda Boatyard #2, a discount of 84% was applied to the rent per
square foot. After applying the discount the adjusted rate per square foot for
Boatyard #2 is $0.70 on a gross rent basis.
After determining the adjusted rent per square foot for each of the leases the
conversion to net lease could be performed. This was accomplished by
deducting the gross to net rent expense of $0.45 from each of the gross leases.
on a net rent basis the range from the three leases was from $.34 to $.38 per
square foot. The Nelson Marine lease is in the middle of the range when the rate
is adjusted for 100% of fair market value.
Percentage Rent
The Nelson Marine lease contains a clause requiring the tenant to pay 6% of
sales in excess of $3,388,000 in addition to the monthly fixed rent. Alameda
Boatyard #1 does not have a percentage rent clause in their lease. Alameda
Boatyard #2 has a clause requiring the tenant to pay 6% of all sales in excess of
$750,000.
4
The dollar amount of sales after which percentage rent Is paid, is called the
breakpoint. The breakpoint in the Nelson Marine lease is $3,386,800. The
breakpoint was calculated by dividing the annual rent by the percentage rent or
as follows:
Monthly rent - $16,943
$16,943 X 12 months 16% = $3,388,600
This method of calculation for determining the breakpoint in the Nelson
Marine lease is consistent with industry standards or "market" for determining the
calculation for percentage rent. This was confirmed with Dunn & Associates as
well as representatives of Cushman & Wakefield.
The percentage rent calculation for Alameda Boatyard #2 is identical to
Nelson Marine with the exception of the calculation of the breakpoint. The dollar
amount in which percentage sales are then calculated is below the breakpoint
calculation for Alameda Boatyard #2. This has resulted in Boatyard #2 paying a
higher effective percentage rent. Since the renewal is subject to an existing
lease clause that requires the calculation of "market rent ", consideration was only
given to the standard market calculation of determining the breakpoint for the
Nelson Marine lease.
Adjustments is in rental rate
The Nelson Marine lease includes a fixed increase of 10% in the monthly rental
every 5 years. The leases for Alameda Boatyards #1 and Alameda Boatyard #2
contain annual increases based upon the Consumer Price Index ( "CPI ").
The use of either a CPI or fixed rate calculation has no impact on determining
the market rate. The fixed rate increase is a common means of calculating
increases in industrial real estate. Further, the average of all local CPI increases
over the last ten (10) years, as derived from the Bureau of Labor and Statistics, is
2.4 %. In fact, if one were to consider only the last few years, the recent CP1
average would be even lower.
As mentioned previously, one of the primary considerations when negotiating
this lease, was to provide the ARRA and the developer the flexibility to downsize
the total yard space provided in the lease, as needed in the future, to facilitate
and preserve future development plans. This lease provides for a 76,000 square
foot or 41% potential reduction in space.
Therefore, given that the average annual increase of 2% (10% every 5 years) is
within the range of current CPI increases, and given that this was contemplated
as the trade -off for the ability to significantly downsize the space in the future
(with no decrease in rental rate), it is our opinion that the 10% increase, as
applied in this lease, is appropriate.
5
Lease Term
The original proposed lease term for Nelson Marine was for 20 years. The
Tenant requested this term in order to amortize the cost of improvements to the
premises, Due to new discussions between the Developer and Nelson Marine
about the future development plan, the proposed lease term has been reduced to
10 years.
Alameda Boatyard #1 was previously under a seven year lease and is currently
operating under a lease with a term of 14 years and six months. The lease for
Alameda Boatyard #2 is for a term of 10 years. Both Alameda Boatyard #1 and
Alameda Boatyard #2 are leased from landlords who have developed the
property as a boatyard operation, which includes the use of equipment.
Conversely, Nelson Marine, as the tenant, is undertaking the responsibility of
putting the marine infrastructure in place. Please also note that the
improvements are confirmed to be consistent with the long -term reuse of the
property.
I n addition to the Nelson Marine lease, The City of Alameda has previously
allowed for long -term leases on other marina sites. While Alameda Point has
special considerations, `long term' is generally considered any term of 10 years
or greater. More specifically, the lease for Encinal Industries at Grand Marina
and the lease for Encinal Industries at Fortran Marina were both for 25 years
with 25 -year options.
The lease term for Nelson Marine is appropriate given the specifics of the site
and is common to other City of Alameda Boatyards.
Summary
As indicated in our analysis, the lease for Nelson Marine is at the prevailing
market rate, the rental increases are appropriate for this type of lease and the
term is consistent with other Alameda Boatyards. Approval of the Nelson Marine
lease is therefore recommended.
6
r►AV 1 TAf H MEN
Dunn & Associates
REAL ESTATE APPRAISERS AND CONSULTANTS
RENTAL SURVEY
OF
NELSON'S MARINE
53,785 SQUARE FOOT WAREHOUSE
ON A 4.29 ACRE SITE
1500 Ferry Point
Alameda, California
For
Mr. Mike Ilampen
Property Manager
PM Realty Group
Real Estate Services
2175 Monarch Street
Alameda, California 94501
As of
June 10, 2004
1657 N. California Blvd., #208 •Walnut Creek, CA 94596 •Phone: (925) 472 -5850 • Fax: (925) 472 -5855
.tune 11, 2004
Mr. Mike 1--1 any p e n
Property Manager
PM Realty Group
Real Estate Services
2175 Monarch Street
Alameda, California 94501.
Re: NELSON'S MARINE
53,785 SQUARE FOOT WAREI OUSE
ON A 4.29 ACRE SITE
1500 Ferry Point
Alameda, California
Dear Mr. Hampen:
04 -05 -52
At your request and authorization, 1 have been requested to estimate the market rental rate for
Nelson's Marine located at 1500 Ferry Point, in the City of Alameda, California. The subject
improvements consist of a 53,785 square foot warehouse built -out with 19% office space on a 4.29
site indicating a site coverage of 26 %. The office portion of the subject property is two -story and
located on the west side of the property. In addition to the main structure, the leasable area includes
a boat launch facility and a 400 linear feet of pier located across Ferry Point. The yard area is
enclosed with a cyclone fence and is accessed from the northwest corner of the property facing West
Oriskany. The subject is located on property which was previously the Alameda naval. Air Station .
at the northernmost point of the City of Alameda.
The purpose of the rental survey is to estimate the market rental rate of the subject property. The
function of the rental survey is to assist in establishing the market rent for use by PM Realty Group
for internal decision purposes.
Identification: The subject improvements consist of a steel frame structure with a wood
frame exterior warehouse with an approximate 32 foot clear height. The
property is accessible by slide doors located on both the north and south sides
of the building. There are windows located around the perimeter of the
structure, which provide ample interior natural light. The structure is
improved with a flat roof with composition cover which is assumed to be in
average condition. The interior of the warehouse is improved with concrete
floors, open beam ceilings with overhead sodium vapor lighting as well as
skylights. The warehouse area is used for boat repair as well as a showroom
DUNN & ASSOCIATES
Rental Survey: 1500 Ferry Point, Alameda Page 1
for newer, smaller vessels. The interior of the office space consists of painted
sheetrock walls and ceilings with carpet flooring and overhead fluorescent
lighting. There are restroors on each floor of the office space. The
improvements consist of 53,785 square feet consisting of 43,600 square feet
of warehouse and 10,185 square feet of office space. The improvements
cover 26% of the site and the improvements are built out with 1.9% of office
space. The warehouse is accessed by side sliding doors which are atypical of
the market and lack utility. The overall layout of the improvements is ideal
with the two -story office space and warehouse at the rear which makes the
property highly useable for an alternative user, for both single and multi-
tenant occupancy.
Ownership: United States of America
Alameda County
Assessor's Parcel No.:
Zoning:
Improvement Size:
Area Data:
074 -0891 -001
M2 /G, Industrial Manufacturing-Government
53,785 square feet
The subject property is located at the southwest corner of Ferry Point and
West Oriskany in the old Alarneda. Naval Air Station area of the City of
Alameda. The City of Alameda is located approximately fifteen miles
southeast of San Francisco, between the San Francisco Bay and San
Leandro Bay. The city encompasses 12.4 square miles and had a
population, of 74,400 as of January 1, 2004, making it the eighth largest
city in the county. Over the last 22 years, the city has experienced
moderate growth. Census and State Department of Finance figures
indicate that the city's population increased by 11,148 from 1980 to 2004,
an increase of 0.64% per year on an average annual rate. Reasons for this
relatively low growth rate include the city's limited availability of land .
for potential development for residential uses.
DUNK & ASSOCIATES
Rental Survey: 1 500 Ferry Point Alameda Page 2
According to the Alameda. Chamber of Commerce, there are
approximately 28,000 of jobs in the City of Alameda. The local economy
is dominated by service sector nobs with manufacturing employers
leading all employment sectors. Some of the largest employers in the
City of Alameda include Ascend Communications with 620 employees,
the Alameda Hospital with 456 employees, Alameda Unified School
District with 446 employees, City of Alameda with 718 employees and
Wind River Systems with 282 employees. Other major employers in the
City of Alameda include Faralon. Computing, Weyerhouser Company,
Roach Molecular Systems, Cybex, Kaiser Foundation, Lucky Stores and
_Intrepid y stem s .
Transportation systems near the City of Alameda include Highways 5 $O
and 880 to the west in the City of Oakland. These highways provide
access throughout Alameda County in the north/south direction. In
addition to the freeway service, air transportation is available at the
Oakland. International Airport and approximately 30 miles west at the San
Francisco International. Airport.
In general, expectations for the City of Alameda are that the city will
continue to experience slow growth and be reasonably well supported by
a diversified economic base. The city's centralized location and well
educated population in close proximity to the major employment hubs of
the cities of Oakland and San Francisco has enhanced the attractiveness
of the city as a residential community.
DUNN & ASSOCIATES
Rental Survey: 1 500 Ferry Point, Alameda Page 3
PROPERTY DESCRIPTION
Site Description:
Location: 1500 Ferry Point
Alameda, California
Site: 4.29 acres, or 1.87,000 square feet
Shape: Rectangular
Topography: Level
Utilities: All standard utilities are available to the site, delivered above and
underground by the following:
Utility Provider
Electricity Alameda Power and Telecom
Gas Alameda Power and. Telecom
Water East Bay Municipal Utility District
Sewer City of Alameda
Telephone AT &T
Police City of Alameda
Fire City of Alameda
Street
Improvements: The subject property is located at the southwest corner of Fey Point and
West Oriskany Avenue in the Alameda Naval Station, across from Piers
2 and 3, which is the docking location of the US S Hornet. Both streets
consist of two lanes of traffic, one in each direction. The streets are
asphalt paved and have no concrete curbs, gutters nor sidewalks.
DUNN & ASSOCIATES
Naval Air Station
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DUNN & ASSOCIATES
Rental Survey: 1 500 Ferry Point, Alameda Page 5
Site
Improvements:
Building D escripti o n
The uncovered portion of the site consists of asphalt and concrete paved
yard area which is enclosed by a cyclone fence.
The subject improvements consist of a steel frame structure with a wood
frame exterior warehouse with an approximate 32 foot clear height. The
property is accessible by slide doors located around the perimeter ofthe
structure. There are windows located on the west and east sides of the
warehouse as well as along the two story office space consisting of single
pane windows which provide ample interior natural light. The structure
is improved with a flat roof with composition cover which is assumed to
be in average condition. The interior of the warehouse is improved with
concrete Boors, open beam ceilings with overhead sodium vapor lighting
as well as skylights. The warehouse area is used for boat repair as well
as a showroom for newer, smaller vessels. The interior of the office
space consists of painted sheetrock walls and ceilings with carpet flooring
and overhead fluorescent lighting. There are restrooms on each floor of
the office space. The improvements consist of 53,785 square feet
consisting of 43,600 square feet of warehouse and 10,185 square feet of
office space. The improvements cover 26% of the site and the
improvements are built out with 19% of office space. The warehouse is
accessed by side sliding doors which are atypical of the market and lack
utility. The overall layout ofthe improvements is ideal with the two-story
office space and warehouse at the rear which makes the property highly
useable for an alternative user, for both single and multi- tenant
occupancy.
Condition/Utility: The subject property was built in 1960 and has an actual age of 44 years
old. The structure is somewhat atypical of the market compared to other
warehouse buildings that are generally equipped with overhead grade
level doors. In addition, most competing warehouse space is either
concrete tilt up or metal exterior. Overall, the subject property is
considered to be in average condition.
DUNK & ASSOCIATES
225 FT.
218 FT.
BUILDING DIAGRAM
DUNN & ASSOCIATES
Rental Survey: 1500 Ferry Points Alameda
Page 7
VIEW OF SUBJECT PROPERTY LOOKING SOUTH ACROSS THE INTERSECTION
OF FERRY POINT AND WEST ORISKANY (PHOTO NO. 1)
VIEW OF SOUTH SIDE OF SUBJECT PROPERTY LOOKING WEST
(PHOTO NO. 2)
DUNN & ASSOCIATES
Rental Survey: 1500 Ferry Point, Alameda
Page 8
VIEW OF EAST SIDE SUBJECT PROPERTY LOOKING NORTH
(PHOTO NO. 3)
INTERIOR VIEW OF WAREHOUSE SPACE
USED FOR BOAT REPAIR (PIIOTO NO. 4)
DUNN & ASSOCIATES
Rental Survey: 1500 Ferry Point, Alameda
Page 9
INTERIOR VIEW OF WAREHOUSE AREA
USED FOR BOAT SALES (PHOTO NO. 5)
VIEW OF LAUNCHING RAMP
ACROSS FERRY POINT (PHOTO NO. 6)
DUNN & ASSOCIATES
Rental Survey: 1500 Ferry Point, Alameda
Page 10
VIEW OF 400 FEET OF PIER AREA ACROSS FERRY POINT
(PHOTO NO. 7)
INTERIOR VIEW OF OFFICE SPACE
(PHOTO NO. 8)
DUNK & ASSOCIATES
Rental Survey: 1500 Ferry Point, Alameda Page 11
Zoning:
According to Dave Valeskas, in charge of federal facilities, the subject
property is zoned M2 , Industrial Manufacturing /Government.
Permitted uses under the general industrial zoning include box and
cooperage manufacturing, breweries, cork production manufacturing, dye
casting, electrical equipment manufacturing, foundries, furniture
manufacturing, and other manufacturing uses. According to Mr.
Valeskas, there are no anticipated changes negatively impacting the
subject property.
DUNK & ASSOCIATES
Rental Survey: 1500 Ferry Point, Alameda Page 12
VALUATION
In order to estimate the market rental rate for the subject property 1 have obtained rental information
from both recently executed industrial leases in the subject's market, as well as boat yard lease
comparables throughout the Bay Area.1 will first analyze the industrial lease comparables followed
by the boat yard lease comparables.
Industrial Lease Comparables
I have obtained eight recently executed lease comparables which range in size from 20,000 to
233,640 square feet, reflecting an unadjusted rental rate range of $0.20 to $0.26 per square foot on
a triple net expense basis. The comparables are summarized on the following page. The comparables
reflect office build-outs ranging from 1.8% to 5.7% and were leased with no tenant improvements.
The comparables reflect site coverages ratios ranging from 9% to 30 %. The comparable leases were
executed on terns ranging from 26 months to 120 months. All of the comparable leases were
executed within the last 12 months under similar market conditions. All of the comparable leases
represent arms-length transactions and warrant no adjustments. The real estate market for industrial
space over the last 12 months has been fairly consistent, and all of the comparable leases were
executed within this time frame, and warranting no adjustment for market conditions (tine). Typical
tenant improvements for industrial space within the subject market consists of no contribution by
the lessor. None of the comparables were granted tenant improvements therefore warrant no
adjustment
As previously indicated, the comparable leases reflect office build -outs ranging from 1.8% to 5.7 %.
All of the comparables have an inferior office build -out to the subject property, therefore warranting
upward adjustments, The comparables reflect site coverages ranging from 9% to 30 %. The subject
property as a site coverage of 29 %. Comparable Nos. 1, 4 and 6 reflect site coverages ranging from
30% to 30.3% which is similar to the subject property and warrant no adjustments. Comparable Nos.
2, and 5 reflect site coverages, of 20,4% and 8.7 %, respectfully, therefore warranting downward
adjustments. Comparable No, 3 has an estimated site coverage of 80% which is inferior to the
subject property, therefore warranting an upward adjustment.
DUNN & ASSOCIATES
z
DUNN & ASSOCIATES
Rental Survey: 1500 Ferry Point, Alameda
Page 14
This analysis estimates the industrial rent of the subject warehouse, including the amenity of its boat
launch facility and pier rights. Ater adjusting the comparable leases for their various differences
in comparison to the subject property, have concluded with an adjusted rental rate range of $0.30
to $0.35 per square foot on a triple net expense basis. In consideration of the subject property's size,
average location on the naval air station in the City of Alameda, age and average condition of the
improvements, 29% site coverage, 19% office build -out, 32 foot clear height and overall site utility,
1 have concluded with a rental rate in the higher end of the adjusted range, or $O.35 per square foot.
Therefore, the estimated market rental rate based on the industrial lease comparable, as of june 10,
2004 is:
53,785 square feet x $0.35 - $15,525 per month
DUNN & ASSOCIATES
Rental Surve : 1500 Fer Point Alameda Pa. e 15
Boatyard Lease Commas
As previously stated, I have also analyzed boatyard lease comparables from the Bay Area in order
to estimate the market rental rate for Nelson's Marine as reflected on the following page. The
comparable leases of the boat yards are atypical of the market given that they are generally current
rental rates and the details of the leases were difficult to obtain and were confirmed when possible
by both the lessee and the lessor.
Comparable Lease No. 1, the Berkeley Marine Center is a 50 year lease that started in 1978 and
expires in 2028. The tenant is currently paying $1,700 per month versus 5% of gross sales. This
lease is adjusted every five years and in addition has a percentage sale of 2.5% on alcohol sales. This
is a triple net lease. The property consists of 4.5 acres and is a ground lease which has been
improved with approximately 8,000 square feet of improvements. This lease was confirmed by Cliff
Marchetti with the City of Berkeley. This comparable has fair access and is in average condition.
Comparable Lease No. 2 is Svendsen Marine located in Alameda, California. This represents a
twelve year lease which commenced in 2001 and expires in 2013. The tenant is currently paying
$31,065 per month for a 138 acre yard and 26,000 square feet of improvements plus an additional
$1,531 per month for nine slips, indicating a total rent of $32,596 per month. This is a gross lease
with lessor paying taxes, insurance and maintenance. This lease was confirmed by Sean Svendsen,
operator. This comparable has average access and is in good condition.
Comparable Lease No. 3 is the Mariner BoatYard located at 2021 Alaska Packer Place in Alameda,
California. I was informed by Rochella, the operator's assistant, that the improvements consist of
one shop and three offices estimated area of 20,000 square feet. The property is leased for 6% of
gross sales plus $1 4,000 per month. She was unable to provide any other details on this lease. We
have pulled county records to indicate that this site is 1.6 acres. This comparable has fair access and
is in average condition.
Comparable Lease No. 4 is the San Francisco Boat Works leased by Mike Denmen from the Port
of San Francisco. According to Rich Ravetti, representative with the Port of San Francisco, this is
a 20 year lease that began in 1987. it is a triple net lease with the tenant paying $10,000 per month
versus 8% of alcohol, and bar sales, 6% of f ood sales, 20% of boat storage, 10% of any sub - leasing
and 10% of all other uses. There are adjustments every five years on this lease. The operator, Mr.
Mike Denmen, indicates that he is in overage rent 9 out of 12 months per year. This comparable has
good access and is in average condition.
DUNN & ASSOCIATES
car
d
7
DUNK & ASSOCIATES
Rental Survey: 1 500 Ferry point, Alameda Page 17
In addition to the four boatyard lease comparables, 1 was able to obtain general information on three
other boat yards within the Bay Area.
According to Phil Westcott, the operator of Westmore Marine located at 145 Third Street in San
Rafael, he is currently paying a monthly rental rate with annual escalations. He has room for nine
boats for dry dock and two to three boats in the water. He has direct water access and a small shop
area. This boatyard has good access and is in average condition.
Bayside Boat Works located at 2360 MarinShip Way, Sausalito, California is on a month -to- month .
lease with annual escalations. This facility has room for eight to ten boats for dry dock and two to
three boats in the water and has minimal shop space. This lease was confirmed by Mike Winder,
operator. This boat yard has average access and is in fair condition.
According to Ron Anderson, operator for Anderson's Boatyard, he is currently leasing his facility
on a short term lease. Mr. Anderson is paying a monthly triple net rent. This boat yard has average
access and is in good condition.
In. general, three of the comparable boatyard comparable leases were leases on a percentage rent and
four were leased on a base monthly rent basis.
Given that the subject property consists of a 53,785 square foot warehouse built -out with 19% office
space with a 26% site coverage, its average location, average condition, indirect access to the water,
and use of 400 linear feet of pier area. 1. have concluded with a base rent of $0.35 per square foot,
or $1.8,825 per month versus a percentage rent of 6% of all annual gross sales based on a typical
lease term of ten years. Assuming a 10% escalation in the 61st month of the lease. This is a triple
net lease with the lessee paying all expenses.
DUNK & ASSOCIATES
Rental Survey: 1.500 Ferry Point, Alameda Page 18
If major improvements were required, which would be necessary for the lessee to amortize the
improvements over the term of the lease, a longer lease would be considered. l do not see that there
were any major improvements necessary for the current operation.
Respectfully submitted,
DUNN & ASSOCIATES
rMichael E. Dunn, 1\41
1, GCIM
Certified General Real Estate Appraiser
State of California #A0002882
DUNN & ASSOCIATES
ADDENDUM.
Exhibit A. Photographs of Comparable Industrial Leases
Exhibit B. Photographs of Comparable Boatyard Leases
Exhibit C. Engagement Letter
Exhibit D. Zoning ordinance
Exhibit E. Qualifications
EXHIBIT A
PHOTOGRAPHS OF COMPARABLE INDUSTRIAL LEASES
PHOTO OF COMPARABLE LEASE NO. 1
PHOTO OF COMPARABLE
ASE NO.2
l � �
PHOTO OF COMPARABLE LEASE NO. 3
PHOTO OF COMPARABLE LEASE NO. 4
PHOTO OF COMPARABLE LEASE NO. 5
PHOTO OF COMPARABLE LEASE NO. 6
EXHIBIT B
PHOTOGRAPHS OF COMPARABLE BOATYARD LEASES
PHOTO OF COMPARABLE LEASE NO. 1
PHOTO OF COMPARABLE LEASE NO. 2
PHOTO OF COMPARABLE LEASE NO. 3
PHOTO OF COMPARABLE LEASE NO. 4
PHOTO OF COMPARABLE LEASE NO. 5
PHOTO OF COMPARABLE LEASE NO. 6
•
- • '
PHOTO OF COMPARABLE LEASE NO. 7
EXHIBTT C
M Realty Group
REAL ESTATE SERVICES
May 13, 2004
Mike Dunn
Dunn & Associates
1657 N. California Blvd., Ste 208
Walnut Creek, CA 94596
Dear Mr. Dunn:
This letter will confirm the telephone conversation between David Japer, Regional Vice President PM Realty
Group, and yourself held Tuesday, May 11, 2004, to engage your company to conduct an MAI appraisal of
lease rates at Nelson's Marine located at 1500 Ferry Point, Alameda, CA 94501.
The scope of work to be provided is a current market rate lease appraisal of the above building, the surrounding
yard area and associated private marina space. Once begun, the appraisal shall be conducted and a report
prepared in a three (3) week time frame. The agreed upon cost for this work is Four Thousand and No /1 oaths
Dollars ($4,000). Please signify your agreement to the terms described herein by affixing your signature below
and returning to my office at 2175 Monarch St., Alameda, CA 94601, Attention: Mike Hampen.
If you have any questions, please contact me by telephone at (510) 749-0304 or by electronic mail at
m ham pe ngp m realtyq rou p . co m .
Sincerely,
(---
P • Realty Group as agent for
la eda Reuse and Redevelopment Authority
ke Hampen
roperty Manager
I hereby agree to the terms described - ein.
e Dunn
2175 MONARCH STREET ALAMEDA, CA 94501
510/749 -0304 FAX: 510/749 -1095
HOUSTON LOS ANGELES CHICAGO SAN FRANCISCO ATLANTA DALLAS DENVER DETROIT ORLANDO PHOENIX NEW YORK
HONOLULU NEWPORT BEACH WASHINGTON DC CINCINNATI SEATTLE LAS VEGAS
prnrealtygroup.com
EXHIBIT D
MAY 26 2004 1 2: 25PM CITY OF ALAMEDA PLANNING 5107476804 p . 1
http : / /www.ci.aia neda.ca.usigovlmunioipal code,htmi Chapter 30, Section 30 -4
Subsection 30-4-17 G, Special Government Combining District.
a. General, The G District classification shall be combined with the district classifications applied
to all lands in the ownership of the U.S. Government or the State of California.
b. Prior to the use of any lands by any private or public entity other than the United States or State
of California, through. purchase or pursuant to lease from the U.S. Government or State of California,
rezoning procedures shall be completed to remove the G classifications and to consider further
appropriate district classification changes.
c. Notwithstanding the provisions in subsection. (b) herein, interim uses by private or public entities
other than the United States or State of California of lands owned by the U.S. Government or State of
California may be allowed, subject to a Use Permit, pursuant to subsection 30 -21.3, if the following
additional fndin.gs can be made:
1. The interim use is approved for a limited time, not to exceed the maximum time frame set forth
in the interim leasing program criteria;
2. 'The interim use utilizes existing facilities and does not require substantial new development;
3. The interim use will not disrupt on -going operations of the governmental entity should the
interim use occur concurrent with continuing operations by a governmental entity;
4 The interim use will not be detrimental to the ultimate redevelopment of the property or the
potential resumption of use of the property by the governmental agency; and
5. The interim use is consistent with an interim leasing program adopted. by the City.
d. An interim leasing prograrn shall be adopted by the City prior to interim use, as provided in
subsection (c) herein, The interim leasing program shall be for a specific parcel or parcels, shall specify
permitted land uses, consistent with the underlying zoning district, and shall specify the maximum time
frame for which a Use Permit may be granted. In the absence of an adopted interim leasing program, all
interim leases shall require rezoning. (Ord. No 2658 N.S. §1: 3rd, No 535 N.S. §11 . -1374; Ord. No.
1277 N.S.)
Post-Its Fax Note 7671
To
CJ V
ColDept,
Phone #
Page 1 of 1
MAY 26 2004 12:25PM CITY OF ALAMEDA PLANNING 5107476804
h.ttp:f vvww,ci,a .ar .eda.ca.usfgovfmunicipai codc.htn .l Chapter 30, Section 30 -4
Subsection 304-12 NI -2, General Industrial (Manu- facturing) District.
a, General, The following specific regulations and the general rules set forth in Section 3 0 -5 shall
apply in all M -2 Districts as delineated and described in the zoning map(s). It is intended that this district
classification be applied in areas suitable for the least restricted use of land within the City and that the
restrictions applied shall be those necessary for the public health, safety and general welfare.
b, Uses Permitted.
I. , Any use as permitted and regulated in the M-1 District,
2. The following and similar uses from which noise, smoke, dust, noxious fumes and gasses, glare,
heat and vibration are confined within the premises or held to volumes, intensities and levels at the
perimeters of individual properties which are no greater than those in the general area, and in which
disposal of all waste matter and material is in conformity with local and State standards and regulations,
and in which all operations are conducted principally within buildings, except that other operations will
be permitted within enciosures under conditions consistent with the intent of this article if approved by
the Planning Board.
(a) Box or cooperage manufacturing,
(b) Breweries,
(c) Cork products manufacturing,
(d) Die casting,
(e) Electrical Equipment manufacturing, including heavy motors (one (I.) horsepower and over),
switch gear, transformers, turbines and similar items,
(1) Enameling works, including ferrous =mei, panels, cast iron or pressed steel, sanitary ware and
similar items,
(g) Foundries - ferrous and nonferrous,
(h) Furniture (wood or metal) manufacturing,
(i) Match manufacturing (safety machines only),
() Metal products manufacturing or processing, structural, fabricated,
(k) Metal shipping drum, barrel manufacturing,
(1) Paperboard container product manufacturing and processing,
(m) Pickle or vinegar manufacturing,
(n) Pipe and pipe fitting manufacturing,
(0) Planing mill,
(p) Plumbing fixture manufacturing,
(q) Poultry or rabbit killing and dressing,
(r) Prefabricated houses or wood structural member manufacturing,
(s) Textile manufacturing, including canvas, cloth and similar items,
(t) Tool manufacturing - machine, hand,
(u) Transportation equipment manufacturing,
(v) Wood preservation processing,
(w) Trash Transfer Station. Hours of operation limited from 8:00 a.m. to 5 :00 p.m. Trash burning or
storage of hazardous materials is prohibited.
3. Uses customarily incidental to any of the above uses when located on the same premises,
including an attached or detached residence for an on- premises watchperson or manager and his or her
family, subject to provision of two hundred forty (240) square feet of private useable open space
immediately adjacent to and accessible from the residence. Open storage of materials and equipment
shall be permitted only within an area enclosed on all sides with a solid or open grill type wall, or a chain
link fence and gates, all not less than six (6') feet in height and in a manner consistent with the intent of
the section except that no wall or fence shall be required on the side that a property abuts a railroad right -
of -way, the Estuary or U.S. Tidal Canal. A solid wall or fence not less than six (6') feet high shall be
required where the proposed use adjoins property in an R District.
4. Signs: Those pertaining to the permitted and accessory uses on the property, poster panels and
painted bulletins, all as regulated further in Section 3 0 -6 of these regulations.
Page 1 of 2
MAY 26 2004 12:25PM CITY OF ALAMEDA PLANNING 5107476804
c. Uses Requiring Use Permits. It is the intent of this paragraph that the following uses shall be
reviewed by the Planning Board for their appropriateness in a specific location, or for such other factors
as safety, congestion, noise, and similar considerations.
1. Auto wrecking yards,
2. Outdoor amusements,
3. Veterinary clinics and/or veterinary hospitals upon the same terns and conditions set out in
subsection 30- 4.10c,
4. Any existing dwelling use as regulated by subsection 30-4,11c,
5. Airport and related facilities, aircraft landing areas,
6. Asphalt batehing plants, including hot mix,
7. Concrete products manufacturing, hatching plants,
8. Lumberyard (wholesale), kiln,
9. Railroad yards,
10. Shipbuilding and repairing (over one hundred (100) tons),
11, Shipping terminals,
12. Permitted uses which are not conducted within an enclosed building or structure,
13. Commercial marinas subject to the requirements of subsection 30-- 4.9c,15,
14. Columbariums and crematoriums,
15, Liquor stores,
16. Convenience stores located within three hundred (300) feet of any residential zoning district,
17, Hazardous materials processing, as defined by subsection 30 -2(b) of the Alameda Municipal
Code, and subject to the terms and conditions of Subsection 30- 21.,3(e) thereof,
18, Workllive studios subject to the requirements of Section. 30-15.
d. Minimum Height, Bulk and Space Requirements.
1_ Lot Area.: None.
2. Lot Width: None.
3, Maximum Total Building Coverage, including accessory buildings: Eighty (80 %) percent.
4. Building Height Limit: One hundred (100') feet.
5. Front Yard: Five (5') feet minimum.
6. Side Yards: None, or where a side yard is desired, a arninimu.m of twelve (12') feet shall be
provided; provided further, that in the event the use is adjacent to an R District, a minimum of twelve
(12`) feet shall be maintained,
7. Rear Yard: None required, except that in the event the nse is adjacent to an R District, a
minimum of twelve (12') feet shall be maintained.
8. Off= -Street Parking and Loading Space: As regulated in Section 30-7 of these regulations. (Ord.
No. 535 N.S. §§11-1349-11-1352; Ord. No. 1277 N.S.; Ord, No. 1356 N.S.; Ord, No, 1400 N.S.; Ord.
No. 802; Ord. No, 2174 N,S.; Ord. No. 2289 INS.. Ord. No. 2407, N.S, §9; Ord. No. 2422 N.S. §2; Ord.
No. 2671 N.S, §5, Ord. No. 2700 N.S. §4; Ord. No. 2727 N.S. §2; Ord. No, 2784 N.S. §4)
Page 2 of 2
p.3
EXHIBIT E
Dunn & Associates
REAL ESTATE APPRAISERS AND CONSULTANTS
PROFESSIONAL QUALI['ICATIONS
MICHAEL E. DUNN, MAI, CCIM
PROFESSIONAL EXPERIENCE
Dunn & Associates, walnut Creek, California, established July 1991. Provide appraisal and
consulting services for a variety of improved and vacant real estate products.
Appraisal
Experience appraising various residential and income producing proerties, both existing and
proposed, including commercial, industrial, office buildings, apartments, shopping centers, hotels
and motels, subdivisions, mixed use properties, RV parks, schools, restaurants, multi-plex
theaters, assisted living facilities, live /work complexes, and vacant land. In addition, have
appraised various agricultural properties including vineyards and wineries, as well as orchards,
row and field crop lands, and grazing land. Appraisals have been prepared for investment,
disposition, mortgage lending, loan workout, trust, condemnation and litigation support purposes.
Consultation
Acquisitions, dispositions, arbitrations, mediation, competitive market analysis, highest and best
use studies, project feasibility, market rent surveys, and lease negotiations.
Mr. Dunn holds the MAI designation from the Appraisal Institute, a CCIM designation from the
Commercial Real Estate Institute. He has been re- certified under the voluntary program of
continued education of the designated members of the Appraisal Institute. Mr. Dunn is certified
by the State of California Off ice of Real Estate Appraisers as a Certified General Real Estate
Appraiser ( #A0002882) and has ben appraising commercial real estate since 1986.
EDUCATION
BS, Agriculture Business Management Major, June 1985
California Polytechnic State University, San Luis Obispo, California
1657 N. California Blvd., #208 • Walnut Creek, CA 94596 • Phone: (925) 472 -5850 • Fax: (925) 472 -5855
Appraisal Institute Courses
Standards of Professional Practice
Real Estate Appraisal Principals
Basic Valuation Procedures
Capitalization Theory and Techniques, Part A
Capitalization Theory and Techniques, Part B
Case Studies in Real Estate Evaluation
Report Writing and Valuation Analysis
Commercial Investment Real Estate Institute
CI 101 Financial Analysis for Commercial Real Estate
CI 201 Market Analysis for Commercial Real Estate
CI 301 Investment Analysis for Commercial Investment Real Estate
PROFESSIONAL ASSOCIATIONS AND MEMBERSHIPS
Member (MAI), Appraisal Institute (#9671)
Certified General Real Estate Appraiser, State of California ( #AG002882)
Member (CCIM), Commercial Investment Real Estate Institute (#8538)
Member, International Right of Way Association
Affiliate Member of the National Association of Realtors (NAR)
California Real Estate License ( #01029164)
Currently serving as the Assistant Regional Member for Region 1 of the Ethics Administration
Division of the Appraisal Institute.
DUNN 8& ASSOCIATES
Alameda Reuse and Redevelopment Authority
Interoffice Memorandum
February 17, 2005
To: Honorable Chair and Members of the
Alameda Reuse and Redevelopment Authority
From:
William C. Norton.
Interim Executive Director
4 -B
DaffeneaMMONEMINNINA
Re: Report from the Executive Director recommending the Approval of a 5-year lease, with one
(5 -year) option with Nelson Marine for 400 linear feet of Pier 1
Background
Nelson's Marine is one of the original tenants at Alameda Point, operating a boatyard in Building 167 with
an adjacent 400 linear feet of pier space on Pier 1. The pier has served as a marina for shall boats. Nelson
Marine has operated a boat yard and marina at Alameda Point since June 1997. .
Discussion
Nelson Marine pier is an existing use at Alameda Point. The premises are used for storage, repair and sales
of boats.
Fiscal I. pact
The proposed base rent for the pier is $5 per linear foot, which is $2,000 monthly or $24,000 annually. The
ARR.A will have a 50 percent profit share opportunity should the tenant assign or sublet pier space with
prior landlord approval.
Recommendation.
The Executive Director recommends that the Alameda Reuse and Redevelopment Authority approve the
proposed pier lease with. Nelson Marine.
PB /SP /NB:dc
R.e sfpectfully submitted,
t F
Leslie Little
Development Services Director
By: Nanette Banks
Finance & Administration Manager
Dedicated to Excellence, Committed to Service
G :1Con`ldev \Banks \ARRA Staff Rcports\3 -2 -05 4-13 Nelson Marine 5 -Year Lease.doc