2011-07-19 ARRA PacketAGENDA
Special Meeting of the Governing Body of the
Alameda Reuse and Redevelopment Authority
Alameda City Hall
Council Chambers
2263 Santa Clara Avenue
Alameda, CA 94501
1. ROLL CALL
Tuesday, July 19, 2011
Meeting will begin at 7:01 p.m.
2. ORAL COMMUNICATIONS, NON - AGENDA (PUBLIC COMMENT)
(A limited number of speakers may address the governing body in regard to any matter over which
the governing body has jurisdiction or of which it may take cognizance, that is not on the agenda;
this section is limited to 15 minutes; additional public comment will be addressed under Item 6.)
3. CONSENT CALENDAR
Consent Calendar items are considered routine and will be enacted, approved or adopted by one
motion unless a request for removal for discussion or explanation is received from the Board or a
member of the public.
3 -A. Approve the Minutes of the Joint City Council, ARRA and Community Improvement
Commission Meeting of June 28, 2011.
3 -B. Approve the Second Amendment to the Lease with St. George Spirits to Hangar
21 to Allow Qualified Shell Improvements Valued at $450,000 Over a Three Year
Period.
3 -C. Authorize the Executive Director to Execute an Amendment to an Agreement with
Russell Resources for Environmental Consulting Services for Alameda Point
Extending the Term for Four Months and Adding $94,200 to the Budget.
4. REGULAR AGENDA ITEMS
4 -A. Presentation on Alameda Point Collaborative Community Planning Process.
5. ORAL REPORTS
5- A.Oral Report from Member deHaan, Restoration Advisory Board (RAB)
Representative — Highlights of June 2, 2011 RAB Meeting.
6. EXECUTIVE DIRECTOR COMMUNICATIONS
6 -A. Alameda Point Update.
7. ADJOURNMENT
Alameda Reuse and Redevelopment Authority
Memorandum
To: Honorable Chair and
Members of the Alameda Reuse and Redevelopment Authority
From: John A. Russo
Executive Director
Date: July 19, 2011
Re: Approve the Second Amendment to the Lease with St. George Spirits to
Allow Qualified Shell Improvements Valued at $450,000 over a Three -
Year Period to Hangar 21
BACKGROUND
In 2004, St. George Spirits was located in a 20,000 square foot facility within
Rosenblum Cellars on Main St. in Alameda and produced many products, including eau
de . vie, single malt, and Hangar One Vodka. At that same time, St. George was
experiencing a ten -fold increase in sales, necessitating a move to a larger space. They
subsequently moved to Hangar 21 at Alameda Point with a ten -year lease. In 2008, the
Alameda Reuse and Redevelopment Authority (ARRA) amended the lease to change
the commencement date to May 2008 and the term from ten years to five years with five
one -year options.
DISCUSSION
In the past three years, St. George Spirits has experienced changes in its products and
ownership structure. In order to apply its successful business model to new products
and attract a larger customer base, the company has requested a monthly $12,500
qualified shell credit for 36 months (Exhibit 1) in order to invest in the property, expand
its product line and hire regional sales and marketing teams. The proposed
improvements include: painting the entire hangar, expanding the tasting room,
increasing the retail space (which also will generate sales tax revenue), remodeling and
beautifying the interior of the building, and adding offices and classrooms (Exhibit 2).
Over $360,000 of improvements are scheduled to be completed in the first twelve
months if the amendment is approved. St. George Spirits also plans an additional
$90,000 in improvements in the remaining 24 -month period. The amendment has
milestones to ensure that the credits are not provided for work that is not completed. If
the work is not completed, the rent reverts to the lease rate before the credit. St.
George has already invested over $500,000 in Hangar 21 and the ARRA has granted
previous rent credits for these investments.
ARRA
Agenda Item #3 -B
07 -19 -11
Honorable Chair and
Members of the Alameda Reuse and Redevelopment Authority
July 19, 2011
Page 2 of 3
Under their existing agreement, if St. George chooses not to exercise any of its options,
the tenant must give ARRA six months notice and the rent for the full term will be due.
If ARRA approves this amendment, and St. George decides to not exercise the option
following the credit period, the ARRA will receive an improved, immediately leasable,
facility available for lease.
FINANCIAL IMPACT
Over the 36-month period the ARRA fund (Fund 858) will receive $175,000, $150,000,
and $125,000 less revenue annually over the 36-month period. However, increased
retail sales could increase sales tax revenue for the General Fund.
RECOMMENDATION
Approve the Second Amendment to the lease with St. George Spirits to allow qualified
shell improvements valued at $450,000 over a three-year period to Hangar 21.
Repe ully submitted,
Jen i er itt
Chief Opej-ating Officer — Alameda Point
By-1
net Mocanu
Finance & Administration Manager
Approved as to funds and account,
Fred Marsh
Controller
Honorable Chair and
Members of the Alameda Reuse and Redevelopment Authority
EXHIBITS:
1. St. George Spirits 36 Month Rent Schedule
2. Proposed Improvement Timeline
July 19, 2011
Page 3 of 3
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CATEGORY OVERVIEW _ INVESTMENT TIMELINE"
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PREVIOUS INVESTMENTS
Tasting Room /Retail /Restrooms Build out was necessary to host visitors and to make the facilities presentable. $ 395,221.69
Infrastructure Necessary improvements such as piping and rigging for production and hosting of office staff. $ 85,000.00
Permeable Land Creation Effort to reduce use on storm drains per request of city. $ 12,000.00
Landscaping Build out for customers to enjoy view and waiting for entry. $ 5,000.00
Landscape Maintenance General upkeep for green spaces. $ 28,080.00 $4,700 Annually
Monthly Building Maintenance General upkeep and necessary repairs. $ 54,000.00 $9,000 Monthly
TOTAL ALREADY INVESTED $ 579,301.69
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BUILDING ..!'"
Tasting Room Expansion New national advertising campaign being conducted for Hangar One Vodka. This campaign is solely centered $ 140,000.00 To be completed by 7/2011.
around bringing visitors to the distillery. This includes a national blimp tour that will end at the hangar! We will need to be
to be able to accommodate hosting over 20,000 visitors per annum from our current 12,000 per annum.
Retail Space Build Out To accommodate increased visitors and to make our space more buyer friendly through increased displays and product lines. $ 70,000.00 To be completed by 7 /2011.
We also hope to add a light faire food option based on local cuisine and establishments.
Bathroom Addition More people, more potties. We will add onto our existing bank on the first floor. $ 10,000.00 To be completed by 7/2011"
Private Event Room We are currently booked in our Pilot's Lounge that h olds 10 -25 people. Addition will allow us to triple capacity. $ 12,500.00 To be completed by 6/2011
Exterior Painting Painting and renovation of main facades to encourage street presence and welcoming appearance. $ 50,000.00 To be completed by 8/2011
Update /Expand Garden Area Expand upon exterior seating and waiting area, $ 5,000.00 To be completed by 8/2011
Remodeling Beautification
Visitor Bathrooms Complete painting, floor sanding and refurbishing, new sinks and hardware, as well as lighting. $ 8,500.00 To be completed by 3/2011
Entry Hallways Complete painting, tiling, door refurbishing and new hardware. $ 7,500.00 To be completed by 3/2011
Offices Addition for up to (3) new offices. $ 7,500.00 To be completed by 10/2011
Classrooms Building a set of classrooms complete with pilot lab and still to create the very first accredited distilling school in the US. $ _ 50,000.00 To be completed by 9/2012
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PRODUCTION CAPABILITIES " - - -
NewBoiler For production expansion. $ 125,000.00 To be completed by 4/2011
Chilling System For production expansion. $ 7,500.00 To be completed by 3/2011
Pilot Still for school. $ 55,000.00 To be completed by 9/2012
Bottling Label Equipment For production expansion. 25,000.00 To be completed by 2/2012 4.4
PRODUCT LINE
Gin To be completed by 6/2011
Bourbon
To be completed by 6 /201, 2
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STAFF
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Sales Team (4 -10) VP Sales and regional sales managers. $ 650,000.00 Initial (4) by 8/2011
Marketing Team (2 -3)
Support Team Office and general operations.
DIRECT BUILDING INVESTMENTS $ 493,500.00
INITIAL 2011 INVESTMENTS $ - 1,223,500.00
ARRA
Exhibit 2 to
Agenda Item #3-B
07-19-11
Alameda Reuse and Redevelopment Authority
Memorandum
To: Honorable Chair and
Members of the Alameda Reuse and Redevelopment Authority
From: John A. Russo
Executive Director
Date: July 19, 2011
Re: Authorize the Executive Director to Execute an Amendment to an
Agreement with Russell Resources for Environmental Consulting
Services for Alameda Point Extending the Term for Four Months and
Adding $94,200 to the Budget
BACKGROUND
Russell Resources has provided the environmental consulting services of reviewing,
analyzing, and preparing comments on Navy environmental documents for the
remediation of the Alameda Naval Air Station (Alameda Point) on behalf of the Alameda
Reuse and Redevelopment Authority (ARRA) for the past ten years. In addition, Russell
Resources attends and represents the ARRA at meetings with State and Federal
environmental regulators and the Navy and provides professional expertise to ARRA
staff to allow full participation in the remediation decisions made by the Navy. Russell
Resources also assists the ARRA on issues related to conveyance and environmental
remediation. Russell Resources' contract was approved on January 2, 2008 for
$117,500. It was amended on November 18, 2008 for an additional $147,500; on
December 9, 2009 for an additional $124,900; and on October 6, 2010 for an additional
$140,000. This fourth amendment adds $94,200 to the budget, for a total contract
amount of $624,100 through December 31, 2011. The original contract and
amendments are on file with the City Clerk.
DISCUSSION
In 2004, a limited Request for Proposals was issued for environmental consulting
services at Alameda Point to determine if an additional environmental firm should be
retained to augment Russell Resources, or if a new firm should be retained to replace
Russell Resources. Three firms were interviewed as part of that process. An evaluation
team met with Levine Fricke, Environmental Resources Management West, and CH2M
Hill. Following those interviews and a review of the proposals received, the evaluation
team determined that no additional services were necessary and that the ARRA should
continue to engage Russell Resources.
In addition, as part of evaluating environmental services for 2007, staff conducted an
informal solicitation from two environmental consulting firms, Erler & Kalinowski and
GeoMatrix, to determine if Russell Resources' expertise and cost were comparable to
ARRA
Agenda Item #3-C
07-19-11
Honorable Chair and
Members of the Alameda Reuse and Redevelopment Authority
July 19, 2011
Page 2 of 3
that of other firms. Given Russell Resources' familiarity with Alameda Point, long-
standing relationships with the Navy personnel and environmental regulators assigned
to Alameda Point, and competitive billing rate, the ARRA Board approved an agreement
to retain Russell Resources.
Also, Russell Resources' billing rates and expertise were comparable to all firms
interviewed. Russell Resources has the additional advantage of familiarity with Alameda
Point's environmental challenges. This knowledge is a crucial asset as the City moves
forward with responses to the Lawrence Berkeley National Lab (LBNL) request for
additional information, as well as with conveyance and development of Alameda Point,
including mitigation of the complex environmental issues involved with that process. It is
important that ARRA's consultant have full knowledge and history of issues at Alameda
Point to interact effectively with the Navy, Restoration Advisory Board (RAB),
environmental regulators, the ARRA Board, and staff on key environmental concerns.
It is recommended that the Russell Resources contract be amended to extend the term
for four months and to add $94,200 to the budget, for a total of $624,100. The amended
agreement would expire on December 31, 2011. The proposed amendment provides
that, over the next six months, Russell Resources will play an essential role in informing
discussions with LBNL related to the Second Campus selection process, and the Navy
regarding the conveyance of Alameda Point, as well as providing technical support to
staff regarding current and future environmental remediation efforts. In addition, Russell
Resources will continue to attend all Base Closure Team and key RAB meetings, attend
meetings in furtherance of conveyance between ARRA and the Navy, and attend other
technical meetings that may be necessary to support the LBNL Second Campus effort
and conveyance of Alameda Point. Russell Resources will also review and prepare draft
comments on technical environmental documents published by the Navy, along with
reports and work plans in support of the successful transfer and redevelopment of
Alameda Point.
FINANCIAL IMPACT
Funds for Alameda Point environmental services are budgeted in the ARRA budget in
account number 858-819099-61060.
RECOMMENDATION
Authorize the Executive Director to execute an amendment to the agreement with
Russell Resources for environmental consulting services for Alameda Point extending
the term by four months and adding $94,200 to the budget.
R
tfully submi
Je nife Oft
Chief 0 erating Officer —Alameda Point
Honorable Chair and
Members of the Alameda Reuse and Redevelopment Authority
Approved as to funds and account,
JA...- ...,�_.__r
Fred Marsh
Controller
July 19, 2011
Page 3 of 3
Russell Resources, Inc.
environmental management
Alameda Point RAB Meeting on June 2, 2011
Highlights and Analysis
RAB members present: Dale Smith (Community Co- Chair), Richard Bangert, Carol Gottstein,
M.D, Daniel Hoy, George Humphreys, Joan Konrad, James Leach, Jean Sweeney, Jim Sweeney,
and Michael John. Torrey.
Navy BEC Derek Robinson announced that there would be no July RAB meeting. However,
there will be a tour on Saturday, July 16, which is planned to include four stops: (1) OU -2B six -
phase heating, (2) IR Site 1 drive through (with a chance to stop outside the site boundary, but
not within it), (3) IR Site 17 Seaplane Lagoon where dredging has stopped, but other activities
are ongoing, and (4) Building 5.
Remediation and other field work in progress:
o A Navy/EPA/University of Florida field research study is ongoing at Plume 4 -1,
immediately north of Building 360 near Alameda Point's east entrance. The research
focuses on better characterizing the solvent contamination in groundwater prior to
remedy selection and design. This research should improve not only the Navy's cleanup
of OU -2B groundwater, but similar contamination elsewhere.
o At IR Site 35 (EDC -5 (1) recreational area near Main Street north entrance and (2)
location of former elevated water tanks) is undergoing pre- excavation sampling, site
excavation, confirmation sampling, site restoration, and associated field activities.
o Performance groundwater monitoring is ongoing to assess the effectiveness of
remediation at IR Site 6 (Building 41, Aircraft Intermediate Maintenance Facility) and IR
Site 16 (Shipping Container Storage Area), in the southeast comer of Alameda Point.
o Radiological status surveys of selected buildings to rule out potential radiological
residues are ongoing.
o A radiological characterization survey is being conducted for surface and near - surface
soil at IR Site 32 (Northwestern Ordinance Storage Area), which is immediately east of
the IR Site 1 landfill, along Oakland Inner Harbor.
o The air sparge /vapor extraction system to treat groundwater contaminated with benzene
and naphthalene at Alameda Point OU -5 and FISCA IR Site 2 is operating.
o Pre - design sediment sampling is underway at IR Site 24 (Pier 1 and Pier 2 Sediments).
o Construction of six -phase heating dual cell array for pilot testing at IR Site 21 (Ship
Fitting and Engine Repair, Building 162) is in progress, including installation of power
lines, assembly of equipment, and driving of sheet piles. (This work is included on the
July 16, 2001, RAB tour.)
o Drying and off - hauling of the sediments already dredged from Seaplane Lagoon is
continuing through this summer. Dredging of the northwest corner of Seaplane Lagoon is
postponed until after the California least terns depart later in the year. (This site is
included on the July 16, 2001, RAB tour.)
RR!, 440 Nova Albion Way, Suite 1, San Rafael, California 94903 415.902.3123 fax 815.
ARRA
Agenda Item #5 -A
7 -19 -2011
Page 2of2
July 19, 2011
Alameda Point RAB Meeting, June 2, 2011
Highlights and Analysis
IR Site 1 Landfill; Groundwater Remedial Action
The Navy explained that it is currently preparing a ROD amendment for IR Site 1, which deals
with soil remediation issues. Because the amendment does not affect the groundwater remedy,
the Navy has elected to proceed with the groundwater remedial action, without waiting for the
ROD to be amended. The draft IR Site 1 remedial design /remedial action work plan will be
released in July for review and comment by the environmental regulatory agencies. The ARRA
will be copied on this draft.
The Navy explained its progress with pre - design investigation at the groundwater cleanup site.
The RAB members had several questions about the Navy's plans to clean up the solvents
(volatile organic compounds or VOCs) in groundwater by using in -situ chemical oxidation
(ISCO), in which chemicals are injected into the plume of contamination to break down the
VOCs into innocuous substances. Several rounds of ISCO injections may be needed to reduce
VOC concentrations sufficiently for monitored natural attenuation (MNA) to begin. MNA
involves periodic monitoring of groundwater contaminant levels to verify that natural processes
continue to reduce concentrations until clean -up goals are reached. In this case, clean -up goals
include protection of San Francisco Bay ecology. ISCO treatment of groundwater at IR Site 1 is
expected to begin in November 2011 and will take a year or more, depending on how many
injection events are needed.
IR Site 1 is include in the July 16, 2011, RAB tour.
RR!, 440 Nova Albion Way, Suite 1, San Rafael, California 94903 415.902.3123 fax 815.572.8600