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2010-05-04 Joint CC ARRA CIC MinutesMINUTES OF THE SPECIAL JOINT CITY COUNCIL, ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY (ARRA) AND COMMUNITY IMPROVEMENT COMMISSION (CIC) MEETING TUESDAY- -MAY 4, 2010- -7:01 P.M. Mayor/Chair Johnson convened the meeting at 10:46 p.m. ROLL CALL - Present: Councilmembers / Board Members / Commissioners deHaan, Gilmore, Matarrese, Tam and Mayor/Chair Johnson – 5. Absent: None. CONSENT CALENDAR Councilmember/Board Member/Commissioner Matarrese moved approval of the Consent Calendar. Councilmember/Board Member/Commissioner Gilmore seconded the motion, which carried by unanimous voice vote – 5. [Items so enacted or adopted are indicated by an asterisk preceding the paragraph number] (*10-211 CC/ARRA/10-25 CIC) Minutes of the Special Joint City Council, ARRA and CIC Meeting Held on April 20, 2010. Approved. (*ARRA) Approve a Waiver of License Fees for Driver's Edge. Accepted. CITY MANAGER/EXECUTIVE DIRECTOR COMMUNICATION (10-212 CC/ARRA/10-26 CIC) Semimonthly Update on SunCal Negotiations The Deputy City Manager – Economic Development provided a handout and gave a brief presentation. Councilmember/Board Member/Commissioner Matarrese inquired whether the public trust exchange includes the tidelands, to which the Deputy City Manager – Economic Development responded in the affirmative and continued the presentation. In response to Councilmember/Board Member/Commissioner Matarrese’s inquiry about whether costs are too low and there is an assumption that there will be a lot of public money available to make the project work, the Deputy City Manager – Economic Development stated staff believes that some of SunCal’s market assumptions are very aggressive. Special Joint Meeting Alameda City Council, Alameda Reuse and Redevelopment Authority, and Community Improvement Commission May 4, 2010 1 Councilmember/Board Member/Commissioner Matarrese stated assumptions are optimistic and overestimated. The Deputy City Manager – Economic Development stated staff has questions regarding whether or not there is enough contingency; the bus rapid transit was based on an rough per mile estimate in Oregon; SunCal would provide additional back up information for review; continued the presentation; read the following email response from SunCal regarding special election costs: “In response to the letter from Ann Marie Gallant dated April 20, 2010 regarding special election costs, SunCal agrees to include in the Development and Disposition Agreement (DDA) executed by the Community Improvement Commission (CIC) and SunCal a provision that SunCal will reimburse the City for the cost of the election and such payment will be treated as an approved predevelopment cost”. Mayor/Chair Johnson inquired whether Development Agreement (DA) discussions have involved restructuring of concepts given the state of redevelopment funds. The Deputy City Manager – Economic Development responded SunCal has agreed to remove provisions in the DA that requires 100% commitment of the City’s redevelopment fund; stated staff has requested SunCal to review what happens to the project pro forma when tax increment funds are eliminated; staff is having on-going public financing discussions. Councilmember/Board Member/Commissioner Tam inquired whether mitigation fees are charged on top of having the developer build schools, parks, and other public amenities. The Deputy City Manager – Economic Development responded school fees are State fees and are separate; stated the concept is that SunCal would pay all school impact fees; staff has performed a very detailed analysis of all improvements proposed by SunCal and has provided credits regarding the dwelling unit tax, which is a fee for park improvements; there are $13 million in Citywide development fee credits; fees are not being duplicated. In response to Councilmember/Board Member/Commissioner Tam’s inquiry, the Deputy City Manager – Economic Development stated staff is concerned about which project the community and Council/ARRA/CIC would want; staff has received feedback from SunCal stating that there is a commitment to build the density bonus option; progress has been made. Vice Mayor/Board Member/Commissioner deHaan inquired whether SunCal has submitted a density bonus application, to which The Deputy City Manager – Economic Development responded in the negative. Vice Mayor/Board Member/Commissioner deHaan inquired whether a density bonus Special Joint Meeting Alameda City Council, Alameda Reuse and Redevelopment Authority, and Community Improvement Commission May 4, 2010 2 application is anticipated [in the near future]. The Deputy City Manager – Economic Development responded in the negative; stated provisions in the application require very detailed information that does not correspond to the planning effort and would require too much time and expense to finalize at this time. Vice Mayor/Board Member/Commissioner deHaan stated the face value of Measure B and the density bonus option look very much the same. Mayor/Chair Johnson inquired whether the $22 million for schools has been discussed with the School District, to which the Deputy City Manager – Economic Development responded SunCal has reached out to the School District but has not had any subsequent meetings. Mayor/Chair Johnson stated the School District has advised her that SunCal has reached out but has not done anything else. The Interim City Manager stated the pro forma negotiations just include the impact fee number and do not include the larger number for capital; staff is just starting to get into more detailed numbers. The Deputy City Manager – Economic Development stated the number has not been approved or confirmed by the School District. Mayor/Chair Johnson stated everything needs to pencil out at the end of the process. In response to Mayor Johnson’s inquiry, the Deputy City Manager – Economic Development stated economic advisors are reviewing all market and cost assumptions to ensure that numbers are realistic. Mayor/Chair Johnson inquired how staff is making up for the elimination of public financing and redevelopment funds. The Deputy City Manager – Economic Development responded the Internal Rate of Return [IRR] decreases significantly when public financing is taken out of the project. Mayor/Chair Johnson stated a large part of the discussion should involve what changes need to be made. The Deputy City Manager – Economic Development stated the on going negotiations involve starting to have said very serious conversations. Councilmember/Board Member/Commissioner Gilmore stated it does not appear that Special Joint Meeting Alameda City Council, Alameda Reuse and Redevelopment Authority, and Community Improvement Commission May 4, 2010 3 SunCal will provide a density bonus application at this point; inquired whether a density bonus application is needed to move forward with an Environmental Impact Report (EIR). The Deputy City Manager – Economic Development responded a foreseeable project needs to be studied under the California Environmental Quality Act (CEQA); stated the density bonus option needs to be studied as well as the base project, especially since SunCal submitted a letter on April 13th advising the City that the density bonus option is requested. Councilmember/Board Member/Commissioner Gilmore inquired when a density bonus application would normally be submitted, to which the Deputy City Manager – Economic Development responded at the same time as a base project. The Planning Services Manager stated the City’s ordinance is designed for a smaller project; both SunCal and the City are concerned about approving a 3,500 unit project and then having random density bonus applications pop up in the next twenty years in different locations at Alameda Point; SunCal would like to find a way to put forth some type of master density bonus application that would control where the density bonus would and would not be allowed. Mayor/Chair Johnson requested comments from Stan Brown with SunCal. Mr. Brown stated the struggle has been how to craft an application that would achieve a transit oriented plan suited for Alameda Point; SunCal came up with a Measure A compliant plan in addition to a density bonus option; SunCal could not call the application a density bonus application because the City has detailed requirements; SunCal has had some good, candid discussions with staff over the last couple of weeks regarding where densities would be, how densities would be laid out, and the criteria needed to implement individual buildings into building clusters. Vice Mayor/Board Member/Commissioner deHaan stated that he is baffled by the generalities; things seem open ended; inquired whether SunCal is comfortable with the base plan. Mr. Brown responded that he thinks the base plan is a viable application; stated the goal at the end of the approval process would be to have a density bonus plan approved for implementation; the base plan would need to be approved first; the next item would be to approve a density bonus plan; SunCal wants to build a density bonus plan; that he is more than happy to discuss a better way to thread the needle. Mayor/Chair Johnson requested Mr. Brown to describe some of the components of the transit-oriented plan; inquired whether SunCal has a transportation plan. Special Joint Meeting Alameda City Council, Alameda Reuse and Redevelopment Authority, and Community Improvement Commission May 4, 2010 4 Mr. Brown responded SunCal has a meeting tomorrow with the traffic engineer and planners; stated the proposal is to provide a new ferry location at the center of the community to provide additional transit services both inside and outside of Alameda; that he does not have the full scope at this time. Vice Mayor/Board Member/Commissioner deHaan inquired what is Mr. Brown’s position with SunCal. Mr. Brown responded that he has been with SunCal for twelve years; stated his title is Regional President; that he is responsible for the entitlement, development, and construction of a large number of various master plan communities; that he has supervised thirty or forty projects. Vice Mayor/Board Member/Commissioner deHaan stated that he is concerned that SunCal is pursuing something similar to Measure B. Mr. Brown stated SunCal does large, complicated projects; that he has been added to the team to help augment SunCal’s professional staff. Vice Mayor/Board Member/Commissioner deHaan requested that Mr. Brown describe SunCal’s team. Mr. Brown stated Nick Costas is a Planner; Amy Freilich is a Land Use Attorney and has been heavily involved in large scale entitlement projects; that his background is in engineering and law and he has been in the business for over thirty years; Frank Faye is the Chief Operating Officer; David Soyca is part of the team; Dale Strickland and Tri Chan are Underwriters. Vice Mayor/Board Member/Commissioner deHaan inquired whether the team is spending one hundred percent of their time on the project except for Ms. Freilich and Mr. Faye. Mr. Brown responded everyone works on multiple projects; stated no one is fully devoted to one project except for Mr. Costas. Mayor/Chair Johnson inquired who is working on transportation planning, to which Mr. Brown responded that he does not know. Mayor/Chair Johnson requested that information be provided; stated people are very concerned about the transportation plan. The Deputy City Manager – Economic Development stated Jim Daisa with Kimley-Horn is working on transportation planning. Special Joint Meeting Alameda City Council, Alameda Reuse and Redevelopment Authority, and Community Improvement Commission May 4, 2010 5 Mayor/Chair Johnson inquired whether Mr. Daisa is working on a transportation plan. The Deputy City Manager – Economic Development responded not that she is aware of; stated Kimley-Horn has worked with SunCal to develop the chapters in the Master Plan. Mayor/Chair Johnson inquired how the plan can be called transit oriented when there has not been a lot of transportation planning yet. Mr. Brown responded a land plan is designed first; Peter Calthorpe, Calthorpe Associates, brings a higher level of design sensibility on how a community functions; blocks are designed with a scale of walk ability and transportation connections; home density surrounding the infrastructure encourages people to use facilities and not get into a car first. Mayor/Chair Johnson stated a high unit count project is not a transit-oriented development; having enhanced public transit access does not make a plan transit oriented. Mr. Brown stated the challenge is to ensure the reality of what will be delivered and that the community is comfortable that the vision has mechanisms in place. Mayor/Chair Johnson stated many questions have not been answered yet; the community keeps hearing that answers will come; people are anxious to get answers to questions. Mr. Brown stated the challenge is to convince decision makers that the plan is one that meets expectations and quality standards and solves mitigation problems. Mayor/Chair Johnson stated transit planning should not be just a reaction to mitigation issues identified in the EIR. Mr. Brown stated the process is an iterative process; traffic impacts are determined; volumes need to be understood. Mayor/Chair Johnson stated a transit oriented plan should be proactive rather than reactive to an EIR. Councilmember/Board Member/Commissioner Matarrese stated that Mr. Brown stated the base plan is a viable plan, but the intent is to build a density bonus plan; inquired whether the base plan is viable as a base plan to push off of to get to the density bonus plan. Mr. Brown responded that the base plan could be built but does not achieve some of SunCal’s goals of creating the nexus to have success with a transit oriented Special Joint Meeting Alameda City Council, Alameda Reuse and Redevelopment Authority, and Community Improvement Commission May 4, 2010 6 development and does not provide a larger variety of home opportunities for different lifestyles. Councilmember/Board Member/Commissioner Matarrese stated in 2007, the idea was to plug SunCal into the Preliminary Design Concept (PDC) which includes a certain number of residential units; [the number of] units increased; inquired whether the numbers are driven by financials first, to which Mr. Brown responded said statement is fair. Councilmember/Board Member/Commissioner Matarrese stated a financial balance is trying to be struck; 4,000 units are not for the sake of getting transit but are for financial return; that he would like some counter to staff’s comments regarding revenue being overstated; real numbers need to be provided regarding a unreliable public financing stream via redevelopment funds; the next meeting should include a reminder of the milestones and explain where negotiations should be in terms of the milestones. Vice Mayor/Board Member/Commissioner deHaan stated that he does not doubt that the process is being driven by economics; inquired whether the PDC has been revisited, to which Mr. Brown responded that he has only seen the general write-ups. Councilmember/Board Member/Commissioner Tam stated sixteen years of work has been done by various groups, consultants, and community meetings; economics and density drive the project; density has a play into ridership; ridership determines whether transit is viable or not; discussions have involved having amenities on the island to reduce vehicle trips off the island; the City does not want sales tax revenue to go off the island; a transit oriented development provides public and private amenities; Harbor Bay can barely get 40% fare box return on the ferry because of insufficient ridership. Councilmember/Board Member/Commissioner Matarrese stated the commercial aspect would be further studied; that he hopes the commercial aspect would include job replacement and not just involve retail; jobs were eliminated when the Base closed. Mr. Brown stated the design process is to look at demand and needs and not build more than demand; at the end of the day, a comprehensive, complete plan would be presented and would contain all required elements. Mayor/Chair Johnson stated having a transit oriented plan is so critical; the tube is the only on and off access for two-thirds of the island. (10-213 CC/ARRA/10-27 CIC) Escrow Account The Deputy City Manager – Economic Development gave a brief presentation. In response to Mayor/Chair Johnson’s inquiry about whether SunCal will be asking for Special Joint Meeting Alameda City Council, Alameda Reuse and Redevelopment Authority, and Community Improvement Commission May 4, 2010 7 all funds, the Deputy City Manager – Economic Development stated not necessarily; staff has requested SunCal to provide a statement of predevelopment expenses; part of the pro forma negotiations include what predevelopment costs have been put into the pro forma as eligible predevelopment expenses; typically, [developers] seek a return on expenditures. Mayor/Chair Johnson inquired whether the pro forma should include all known numbers. The Deputy City Manager – Economic Development responded the pro forma includes predevelopment expenditures; stated staff needs to determine whether the number is correct. Mayor/Chair Johnson inquired what is the [predevelopment expenditure] figure, to which the Interim City Manager/Executive Director responded $9 million. Mayor/Chair Johnson stated getting a breakdown should not be a problem. The Deputy City Manager – Economic Development stated staff would request said information from SunCal on Thursday. Mayor/Chair Johnson stated the timeline is short; staff should not spend time on the issue; that she hopes SunCal provides said information; the issue is administrative. The Interim City Manager/Executive Director stated the pro forma includes $9 million for predevelopment costs which covers staff costs, the escrow account, and other items expended for the ballot initiative; staff is just starting to get into the detailed pro forma; the previous pro forma was based on the Measure B project; numbers are driven by the type of project; the key is to have the numbers be more than the budgeting numbers and start cutting numbers down to the detail to get to a point that the IRR makes sense. Vice Mayor/Board Member/Commissioner deHaan inquired whether predevelopment costs have been received. The Interim City Manager/Executive Director responded in the negative; stated that staff is still waiting for the escrow account and staff costs to date. The Deputy City Manager – Economic Development stated the total current costs [for which documentation has been submitted] are $5.5 million. The Interim City Manager/Executive Director stated costs are off by $4 million. Mayor/Chair Johnson stated the issue should be handled and staff needs to get onto other things; progressing at a rapid pace is important. Special Joint Meeting Alameda City Council, Alameda Reuse and Redevelopment Authority, and Community Improvement Commission May 4, 2010 8 Councilmember/Board Member/Commissioner Matarrese inquired whether SunCal can make a commitment [on numbers]. Mr. Brown responded that he will meet with staff tomorrow; stated an answer should be provided by Thursday or shortly thereafter; that he suspects the number will not total $9 million. (10-214 CC/ARRA/10-28 CIC) Staff Reimbursement Account The Deputy City Manager – Economic Development gave a brief presentation. (10-215 CC/ARRA/10-29 CIC) May 10th Project Scoping Meeting – Planning Board The Deputy City Manager – Economic Development gave a brief presentation. AGENDA ITEMS (10-216 CC/ARRA/10-30 CIC) Recommendation to Accept the Third Quarter Financial Report. Continued to May 18, 2010. ORAL REPORTS (ARRA) Oral report from Member Matarrese, Restoration Advisory Board (RAB) representative - Highlights of April 1 Alameda Point RAB Meeting Member Matarrese stated the Board could read the summary from Peter Russell since he did not attend the meeting; RAB and ARRA meetings would be held on Thursday. ARRA BOARD COMMUNICATIONS (ARRA) The Interim Executive Director stated the California Redevelopment Association (CRA) received a less than favorable ruling; the City would be cutting a very large check in the amount of $4.4 million; the check is due to the County on Monday. Chair Johnson stated a copy of the check should be provided to the newspaper in addition to a press release. Board Member Gilmore stated a nasty letter should be sent along with the check. Board Member deHaan requested that staff research whether the redevelopment money [taken by the State] would go to the schools. The Interim Executive Director stated the total amount of redevelopment funds [from all cities] is barely $5 billion out of a $20 billion to $24 billion [State] deficit. Special Joint Meeting Alameda City Council, Alameda Reuse and Redevelopment Authority, and Community Improvement Commission May 4, 2010 9 ADJOURNMENT There being no further business, Mayor/Chair Johnson adjourned the meeting at 11:54 p.m. Respectfully submitted, Lara Weisiger, City Clerk Secretary, CIC The agenda for this meeting was posted in accordance with the Brown Act. Special Joint Meeting Alameda City Council, Alameda Reuse and Redevelopment Authority, and Community Improvement Commission May 4, 2010 10