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2003-09-03 ARRA MinutesAPPROVED MINUTES OF THE REGULAR MEETING OF THE ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY Wednesday September 3, 2003 The meeting convened at 5:35 p.m. with Mayor Johnson presiding. 1. ROLL CALL Present: Beverly Johnson, Mayor, City of Alameda Tony Daysog, Boardmember, City of Alameda Barbara Kerr, Boardmember, City of Alameda Frank Matarrese, Boardmember, City of Alameda 2. CONSENT CALENDAR 2 -A 2 -A. Recommendation from the Executive Director regarding the future role and responsibilities of APAC. Member Daysog moved approval of the recommendation. The motion was seconded by Member Matarrese and passed by the following voice vote: Ayes -3 Noes -1 (Member Kerr); Abstentions -0. 3. REGULAR AGENDA ITEMS There were no regular agenda items. 4. ORAL REPORTS 4 -A. Oral report from APAC. Chairman Lee Perez thanked the ARRA Board for approval of the Executive Director recommendation regarding the fiiture role of APAC. 4 -B. Oral report from the Executive Director (non - discussion items). There was no report from the Executive Director. 5. ORAL COMMUNICATIONS, NON - AGENDA (PUBLIC COMMENT) (Any person may address the governing body in regard to any matter over which the governing body has jurisdiction that is not on the agenda.) There were no public comments for the open session. 1 L ',Comdev Base Reuse& Redevp ARR-A'1\IINT?TES`,200 FINAL 1\Iodified Sept l\ finutes Open- ClosedSession doe 6. COMMUNICATIONS FROM THE GOVERNING BODY There was no communication from the Governing Board. 7. ADJOURNMENT TO CLOSED SESSION OF THE ARRA TO CONSIDER CONFERENCE WITH REAL PROPERTY NEGOTIATOR: 7 -A. Property: Alameda Naval Air Station Negotiating parties: ARRA, Navy and Alameda Point Community Partners Under negotiation: Price and Terms The Public Comment period was opened. Aidan Barry, APCP Project Manager, made a presentation regarding the history of negotiations with the ARRA from the point in time when APCP was selected as the potential master developer of Alameda Point, progress on developing a Conditional Acquisition Agreement (CAA), and requested an expedited negotiation process to achieve a CAA before the end of the year. Mr. Barry also discussed APCP's strategy regarding negotiations with the Navy for an early or phased transfer of Alameda Point property in order to expedite acquisition of the site. After the presentation, the ARRA was given an opportunity to ask any questions for the purpose of clarifying any information conveyed in the APCP presentation. City Attorney, Carol Korade, clarified the parameters of the meeting since this was the public comment period and it also had to be in the same format as it would be in the Council Chambers and that no one should engage in any type of negotiations with the developer. Only clarifying questions can be asked. Member Daysog asked about the phased transfer and whether or not it implies that the business model APCP presented during the selection process remains or has it been modified? Mr. Barry responded APCP remains committed as master developer of the entire footprint. At any stage of the discussions, even the original model, it was always anticipated that this process would be a phased build out, because of the position of the Navy. There is no choice but to fiirther develop a phased development process to coincide with certain transfers from the Navy to the local reuse authority. Member Matarrese asked APCP to elaborate on the deliverables, which support the process and what master developer product would be presented to help the process and project. Mr. Barry responded that fiindamentally APCP is in the process of working with the City on the CAA, and that the CAA proposal has been modified regarding cost recovery. APCP is committed to continuing with the negotiation process subject to concurrence with the ARRA that they would like to change how the process is working. Member Kerr asked about APCP's position regarding predevelopment costs and rate of return, given that this is a small City and therefore, cannot give up all of its lease revenue. Member Kerr also asked that APCP elaborate on what sources of ARRA revenues APCP is asking the ARRA to commit to the project through the CAA. L ',Comdev Base Reuse& Redevp ARR-A'1\IINT?TES`,200 FINAL 1\Iodified Sept l\ finutes Open- ClosedSession doe Jay Heckenlively, General Manager of APCP, responded that at this point, APCP is unable to answer the question fully because it does not know where the City stands. Mr. Heckenlively stated that APCP has identified three sources of revenues, which they have asked the City to consider, and there have been no discussions as to whether or not they have been palatable to the City: (1) a percentage of the gross revenues of the base, (2) the MARAD lease revenue from the renewal that is likely to occur; and (3) a capital lease revenue which is a concept that is currently built into the CAA document. These are the three sources APCP has requested that would go to predevelopment expenses for redevelopment of the Base. Member Kerr asked if it is correct that APCP have not been making their payments according to the terms of the ENA (which would be replaced by a CAA)? Phil Rafton, Vice President of Centex Homes, responded that is correct. APCP has made a request that its present obligation under the ENA to reimburse the ARRA for $500,000 of its predevelopment costs be recast as a condition of the CAA Also, APCP was permitted to divide its present obligation under the ENA to pay its quarterly payment of $450,000 into three payments of $150,000 each. The first of the three payments was made in August 2003. APCP has withheld further payments, pending receiving a response to its requests through the ENA negotiating process to reduce its redevelopment costs. Mayor Johnson asked about the re- openers regarding the transfer and phasing development with the Navy? Mr. Heckenlively stated that the ultimate "recipe" on how to work with the Navy is unknown at this point. There are a number of different methods to achieve transfer and the key is not whether it is an ET or privatization, the key is to get a transfer from the Navy on the phases of the property that coincide with the redevelopment effort that is going on at the Base in phased progression. There are number of different ways to do so and APCP remains committed to working with the City and the Navy to come up with the right recipe that balances the transfer process with the entire redevelopment effort. Mayor Johnson asked what is the anticipated date for the DDA? Mr. Heckenlively responded that it is a difficult question to ask since the recent events with the Navy, however, APCP would like to focus on understanding how the project will be revised and modified as a result of what is concluded with the Navy. Based upon what the resulting project thereafter, APCP will redevelop their plans and move the entitlement forward following that point. This is a two -year period after APCP starts the process. Mayor Johnson asked after that point, the IRR goes away and the real terms are negotiated? Mr. Heckenlively responded that is correct. Mr. Barry thanked the ARRA for their time and appreciated the opportunity to speak directly with the Board over APCP's concerns. 3 L ',Comdev Base Reuse& Redevp ARR-A'I\IINT TTES`,200 FINAL I\fodified Sept IV finutes Open- ClosedSession doe Mayor Johnson thanked APCP and all of its partners for the presentation and attendance at the meeting and hope to move forward from this point. The public hearing was closed for Authority discussion. The Mayor announced that the ARRA obtained a brief ng from and gave instructions to its Real Property Negotiator: Mayor Johnson adjourned the meeting at 9:35 p.m. Respectfully, Emily Parodi ARRA Secretary L ',Comdev Base Reuse& Redevp ARR-A'I\IINT TTES`,200 FINAL I\fodified Sept IV finutes Open- ClosedSession doe