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2000-09-06 ARRA MinutesAPPROVED MINUTES OF THE REGULAR MEETING OF THE 3—A_ ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY Wednesday, September 6, 2000 The meeting convened at 5:30 p.m. with Chair Appezzato presiding. 1. ROLL CALL Present: Tony Daysog, Councilmember, City of Alameda Albert DeWitt, Councilmember, City of Alameda Beverly Johnson, Councilmember, City of Alameda Absent: Chair Ralph Appezzato, Mayor City of Alameda Barbara Kerr, Councilmember, City of Alameda 2. CONSENT CALENDAR 2 -A. Approval of the minutes of the special meeting of June 6, 2000. 2 -B. Approval of the minutes of the special closed session meeting of June 20, 2000. 2 -C. Report and recommendation from the Assistant City Manager, Community and Economic Development to approve the annual audit for fiscal year 1998 -1999. 2 -D. Report and recommendation by the Assistant City Manager, Community and Economic Development for approval of the FY 2000 -2001 ARRA Fund Budget. Member Johnson moved approval of the Consent Calendar. The motion was seconded by Member DeWitt and passed by the following voice vote: Ayes - 3; Noes - 0. Abstentions - 0. Discussion. Kevin Kearney, City Auditor voiced his concern over Agenda Item 2C. He stated there were a number of items that had to do with the internal control over the residential rental units. The City had lost out on some interest or investment revenue, because of Gallagher and Lindsey and has incurred more expense because the City has had to obtain outside auditors for additional work. Due to the lack of Gallagher and Lindsey transferring money in a timely manner, the City lost approximately $20,000 in interest. Mr. Kearney stated that if the City has contracts with vendors and they do not adhere to policy, then how can the City get its money back? 1 Assistant City Attorney Terri Highsmith stated the City Attorney's Office will review the Gallagher and Lindsey contract and advise Council. The ability to recover any extra expenses involved in the review of the auditors would need to have been addressed in the contract. Vice -Chair Daysog asked Attorney Highsmith is each situation based on individual contracts? Attorney Highsmith stated that it is a contractual issue. The City would have to go back to the consultant or the contractor the City is doing business with and if there is an expectation that there are additional expenses involved in an audit of the practice under contract, then we would have to look to the contract to determine if there is an ability to recover that. Member DeWitt stated we need to change our procedures to get some type of policy to ensure that the contracts are enforced and are done correctly. Member Johnson asked the City Auditor, Kevin Kearney has the City not developed adequate ways to deal with past problems or do we need to tighten up contracts for the future? Mr. Kearney stated he suggests that when the City enters into a contract with a vendor and there are problems with following the procedures including transferring money or payments of money, the City is put in a position where they could have had the money, made interest and if this does not happen, what is the recourse for the monetary detriment to the City? The procedures and policies are the concern. Vice -chair Daysog stated those were strong statements that not only apply to the Alameda Reuse and Redevelopment Authority, but for City Council to take a serious look at this to apply and enforce the contracts. David Berger, Assistant City Manager, CE &D, stated the staff report has concluded that all of the past audit exceptions, including areas where there has not been sufficient control, have been specifically addressed internally, as well as with Gallagher and Lindsey. Assistant City Manager Berger stated that staff along with the City Auditors are satisfied with this report and ask that the Board accept it. Member Johnson asked can we get an opinion from the City Attorney's office if the City's contracts are adequate to deal with these issues? Attorney Highsmith stated their office will look at the Gallagher and Lindsey contract and the form for all other standard consultant and contractor agreements. If necessary, the City Attorney's office will amend the standard consultant and contractor agreements 2 to specify the costs in auditing the contract, and the consultant or contractor will have to bear those costs. In reference to what Mr. Kearney stated regarding the lack of following policy and procedures on the part of consultant contracts, that is a breech of contract issue. If the contractor or consultant is violating some of the procedures contractually set forth in the agreement, then staff will review to determine if there has been a breech of contract and what damages would be appropriate. It may or may not justify getting back the lost interest. Member DeWitt stated he would like staff to take a further look at it and see if it should be pursued for further damages. 3. ACTION ITEMS 3 -A. Report from the Development Services Director recommending that the ARRA approve the disposition strategy of engaging a Master Developer for Alameda Point and to authorize staff to proceed with the selection process for such a Developer. Doug Yount, Development Services Director stated earlier this year in April, the ARRA hired a consulting team of Economic Planning Systems and Bascom Venture Partners to evaluate the question of the disposition strategy for Alameda Point. There was a multi -phase study that these consultants undertook, specifically to determine the capacity of the City to handle the redevelopment of the former Base, the appropriate role of the City in the redevelopment process and to assess market capabilities. They spoke with staff and developers in the market and after development of their recommendation, they spoke with APAC, the Chamber of Commerce and Business Consortium for Alameda Point. The staff report's recommendation is to move forward with a Master Developer and the role of the City as an Executive Developer. The report states bringing a recommendation of a developer and going through the selection process before the ARRA Board in March, 2001. It also recommends a two -step selection process, a Request for Qualifications/Vision Statement and a Request for Business Proposals and two community forums to gain input. The report recommends putting together a developer selection team listed on page two (2) of the staff report. Staff would like to return back to the ARRA Board in a special meeting on October 17, 2000 with a more detailed project timeline that goes beyond developer section into Exclusive Negotiating Agreement (ENA) areas and disposition and development agreement. Staff will have more detail on the format of the community forums, membership for developer negotiation team versus development selection and further detail on the website, tour and information exchange. Assistant City Manager Berger recommended to the Board that since Chair Appezzato and Member Kerr were not present, that they hold off until a special ARRA meeting on September 19, 2000. 3 The public hearing was opened. Richard Neveln, 1328 Park Street stated the APAC and ARRA staff have done an excellent job of developing the property. Mr. Neveln expressed that a Master Developer would add another layer of bureaucracy, thereby isolating the community from the process. There would be a great cost attached to this process. Diane Lichtenstein, APAC Vice - chairperson stated APAC is in favor of a Master Developer for Alameda Point, with a few additional conditions, which includes the strong oversight of the City and the continued input of the community. Ms. Lichtenstein stated she is concerned that there would only be two community meetings and recommends that number be taken out of the report and instead, include more community action and meetings. Ann Mitchum, 732 Central Avenue stated she would like to see more emphasis on the community action. The individual parcels at Alameda Point should be allocated out to individuals rather than a Master Developer so that we can maintain the individuality of the Island and work with the Planning Department for basic services. Each individual should be allowed to pick an architect. Ms. Mitchum stated she is against having a Master Developer. The public hearing was closed for Authority discussion. Member Johnson stated that after the last step of community input, would a recommendation be made to the ARRA regarding the developer? Doug Yount responded yes, a recommendation would be made to the ARRA. Member DeWitt asked if the ARRA Board approves a Master Developer, then would we proceed with the strategy of a Master Developer? Doug Yount responded that is correct. Member DeWitt asked what would be the role of the CIC be in this process? Attorney Highsmith responded that since all of this property falls in a redevelopment area, any development of the property would have to be in compliance with the existing redevelopment plan or the redevelopment plan as amended. The CIC will be over- 0 viewing any development plans that comes up within its redevelopment area. Anything that is developed within a redevelopment area must comply with redevelopment law, regarding issues of inclusionary housing and affordable housing. Member DeWitt asked will the ARRA Board be making all of the decisions in this process? Assistant City Manager Berger responded that the ARRA remains in existence because it will be the receiver of the property at Alameda Point, which is why recommendations are made to the ARRA Board. The implementation of the Board's decision would be the CIC, because there are functions under redevelopment law that must be carried out by the CIC to enter into the Exclusive Negotiating Agreement (ENA) that is outlined by the report and any follow up of disposition development agreement. There may also be City Council functions which staff has not gotten to. Member DeWitt stated the letter received from Renewed HOPE has debated the strategy of a Master Developer. There are individuals who feel that a Master Developer is not the right way to go, as the City has been doing a fine job. Will there be additional debate on the subject of whether there should be a developer or not? Doug Yount stated that is up to the Board. Member DeWitt stated Assistant City Manager Berger recommended that the other two Councilmembers be allowed to participate in this decision making process. Will the decision be delayed for another meeting? Member Johnson suggested a motion be made to continue this item and to leave public comment open since the other Board members are not present and there may be further public comments. Member DeWitt stated that some individuals feel the ARRA meetings are not as widely viewed as the Council meetings. Will the final decision be made by the ARRA or Council? Doug Yount responded that when it comes back to the ARRA Board on September 19, 2000, that will be a special joint meeting of the CIC /Council /ARRA meeting, which will be fully noticed. Assistant City Manager Berger stated staff encourages the entire community who is interested in this process to submit comments between now and September 19, 2000. The comments will be reviewed prior to the meeting. This process should be open and able to reach out to the community as much as possible. All questions and concerns should come forward so that the Board and staff are aware of them and can respond to 5 9OTC i, Member Daysog stated staff should have a notice in the Alameda Journal in the Brief section or the Corresponding section in the Time Star. Alameda Point should be the model for base conversion as pointed out by President Clinton back in 1993. Member Daysog asked if the package concept plan several years ago jives with the current process? Jim Musbach, ARRA Consultant from Economic and Planning Systems responded that the package concept was developed as part the Business Plan for the EDC Application. The intent was to identify some logical sequencing of development for purposes of cash flow and financial feasibility analysis. Mr. Musbach further stated that it remained to be determined whether the development would be done by multiple developers or a Master Developer. Between Duke Bascom and Mr. Musbach, the conclusion is that pursing a Master Developer would be in the best interest of the City. In terms of the economics of the project, it is a different disposition framework that is being proposed now, as opposed to the original Business Plan. Member Johnson asked would a combination of package development and Master development be possible? Mr. Musbach stated that they are holding out the golf course and the conference center as a separate development, which the City could pursue on its own with a separate developer. The FISC property has already been pieced off and done separately with Catellus. Member Johnson asked if there are areas that can be developed more quickly than others, would it then make since to separate it? Mr. Musbach responded no, because the ownership would be fragmented and there will be people with different visions and courses. The best opportunity would be to create a cohesive package, which is advantageous for a variety of reasons. Member Johnson asked what kind of time frame would there be for a Master Developer in terms of actual development? Mr. Musbach responded it would be much sooner than what is stated in the Business Plan. The Business Plan development sequencing and phasing was based on market analysis. It would probably be a seven to ten year process. 0 Assistant City Manager Berger stated the packages that were identified in the sequence, was prepared for purposes of submitting an the Economic Development and Business Plan to the Navy. Once the no -cost legislation was passed, it became moot. The Business Plan is now just an informational document for reference. Member Johnson moved to continue the item and public comment at the next special meeting. The motion was seconded by Member DeWitt and passed by the following voice vote: Ayes - 3; Noes - 0; Abstentions - 0. 4. ORAL REPORTS 4 -A. Oral report from APAC Diane Lichtenstein, Vice - chair, stated the APAC has used most of its time working on the strategy of the Master Developer and will move onto other issues at their next meeting. 4 -13. Oral report from the Assistant City Manager, Community and Economic Development (non - discussion items). None. 5. ORAL COMMUNICATIONS, NON - AGENDA (PUBLIC COMMENT) Richard Neveln, 1328 Park Street stated that public participation that has gone on for the past seven to eight years has resulted in some very important documents, including the EBCRC Blue Print for base reuse and the Community Reuse Plan. Any developer discussions should align with the Community Reuse Plan. Bill Smith, 732 Central Avenue, #16 stated that if another party is going to be brought onto the base, the community should be included. The base should stand ready for any development. The individuals who speak about the community visions should be acknowledged and their vision should be carried out. Any Master Developer should provide documentation that they are an expert in their field. 6. COMMUNICATIONS FROM THE GOVERNING BODY None. 7 7. ADJOURNMENT The meeting was adjourned at 6:45 p.m. Respectfully, Lucretia Akil ARRA Secretary