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1997-01-06 ARRA Minutes APPROVED MINUTES OF THE REGULAR MEETING OF THE ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY Monday, January 6, 1997 The meeting convened at 5:45 p.m. with Chair Appezzato presiding. ROLL CALL Present: Chair Ralph Appezzato, Mayor, City of Alameda; Vice-Chair Sandré Swanson, District Director, 9th Congressional District; Mark Friedman, alternate to Wilma Chan, Alameda County Board of Supervisors, District 3; Jay Leonhardy, alternate to Henry Chang, Jr., Councilmember, City of Oakland; Kathleen Ornelas, alternate to Ellen Corbett, Mayor, City of San Leandro; Tony Daysog, Councilmember, City of Alameda; Albert DeWitt, Councilmember, City of Alameda; Greg Alves, alternate to Karin Lucas, Councilmember, City of Alameda; Barbara Kerr, Councilmember, City of Alameda; Lee Perez, Ex-officio, Base Reuse Advisory Group; Ardella Dailey, alternate to Ex-officio Berresford Bingham, Alameda Unified School District. Absent: None. CONSENT CALENDAR 2-A. Approval of Minutes for the regular meeting of November 6, 1996. 2-B. Approval of Minutes for the regular meeting of December 4, 1996. Alternate Friedman requested that the Minutes of December 4 be amended to reflect that it was requested by Supervisor Chan and concurred in by the ARRA that the draft Memorandum of Understanding for Pan Pacific University be brought to the ARRA for public discussion and approval. Executive Director Miller agreed that was the understanding and the Chair directed the ARRA secretary to so amend the December 4 meeting Minutes. Alternate Friedman moved to approve the consent calendar. Alternate Ornelas seconded the motion and it passed unanimously: 9. ACTION ITEMS 3-C. Report from the Executive Director recommending the ARRA Governing Body authorize the Executive Director to enter into a Master Large Parcel Lease with the Navy for a term of 15 years. Executive Director Miller explained that the Master Large Parcel Lease imposes no obligation on the City; the Navy will maintain the facilities until they are occupied (subleased). Assistant General Counsel McLaughlin stated that, as a long-term lease, this item requires the affirmative vote of five Governing Body members, of whom three must be Alameda City Councilmembers. Speakers: Stan Shane, an Alameda resident, spoke against items 3C, 3D, and 3E, stating that government is out of control and that ARRA has no business getting involved with housing. 2-A _Printed on recycled paper Alternate Friedman moved to authorize the Executive Director to enter into a Master Large Parcel Lease with the Navy for a term of 15 years. Alternate Alves seconded the motion and it passed by unanimous voice vote: 9. Chair Appezzato stated that item 3-E. Report from the Executive Director regarding Councilmember Daysog’s request to review approval authority for the Executive Director to execute leases. (Daysog) was being pulled from the agenda and item 3-D would be held until the public address system was working. He called item 4-F. 4-F. Report from the Assistant General Counsel on voting requirements for actions by the ARRA. (Appezzato, Daysog and Alves) Assistant General Counsel Heather McLaughlin stated that action by the ARRA governing body requires a majority of the members present to take action (assuming a quorum is present) with two exceptions: first, less than a quorum may vote to adjourn a meeting, and second, five ARRA members, of whom three must be Alameda City Councilmembers, must vote affirmatively on eight specific items outlined in the staff report, including the transfer of any real or personal property of the Authority. Member Daysog asked if this applies to long-term leases—anything more than seven years. Ms. McLaughlin answered yes. Alternate Alves asked if item 3-D requires three City Council votes. Ms. McLaughlin answered no. Alternate Alves moved to accept the report. Member Daysog seconded and it passed unanimously: 9. 4-G. Oral report from the BRAG updating the ARRA on current activities. BRAG Chair Lee Perez reported that the Base Reuse Advisory Group is currently reviewing issues such as the possibility of a limited use airfield, the commissary, retrocession, and how we can best protect and utilize housing. He also stated that the BRAG was looking at the Cooperative Services Agreement, adding that Fiscal Year 1999 (FY99) funding was a concern and that every possible dollar is needed. Chair Appezzato requested that Dave Ryan, present from the Navy’s EFA West division, explain the Navy’s budgeting process for the Cooperative Services Agreement (CSA), in particular for FY99. Mr. Ryan stated that the Navy first makes an analysis of the money required by the Navy to take care of the property that the Navy is responsible for. The ARRA and its subtenants will be responsible for the protection, maintenance, and improvements of leased property. The Navy expects that as time goes on, more property will be leased and more of the financial responsibility will go to the reusers. He stated that the budget for FY97 (5/97–9/97) [the 5 months following base closure] is approximately $4.5 million. For FY98 (10/97–9/98), the Navy is projecting $8.7 million, although he could not commit to that figure. Mr. Ryan stressed that he wanted to make it “loud and clear” that the Navy fully expects that the money is going down, and the best estimate they can put together for FY99 (10/98–9/99) is approximately $4.8 million. The figure that is approved through the Navy chain of command, voted on by the Congress, and finally appropriated cannot be guaranteed, but the amount is definitely going down. Chair Appezzato asked if the funds for FY99 are negotiable. Mr. Ryan stated that the CSA is a one-year agreement with the option to continue. The CSA is a “reimbursable document;” that is, the money has to be commensurate with the amount of work to be done. Mr. Ryan continued that if there is not enough money then the City just does not do the work. _Printed on recycled paper 2 Speaker: Neil Patrick Sweeney, concerned citizen, asked that BRAG and ARRA meetings be televised so that the community is fully informed. 3-D. Final report on the Housing Feasibility Study from Janet Smith-Heimer of Bay Area Economics and authorization for the ARRA Executive Director to take actions necessary to lease housing units in the Navy East Housing area. Executive Director Miller stated that for the final Housing Feasibility Study, ARRA asked Bay Area Economics (BAE) to (1) conduct a market study on the demand for residential housing in Alameda for rental, sale, new construction, and existing housing; and, (2) to recommend what to do with the existing housing at NAS Alameda. The findings from the BAE study were taken to the BRAG Housing Working Group and the entire BRAG for a determination as to what should be done immediately with the housing on the base. It had been expected that the East Housing would be conveyed to ARRA this year. However, due to slippage in the EIS work, the Record of Decision will not occur until well into 1998. As an interim measure (perhaps up to ten years for the apartment units), the BRAG and the ARRA staff recommend leasing the units because (1) the consensus is these units should not be boarded up, and (2) leasing could create a significant revenue stream. Executive Director Miller requested staff be authorized to move forward toward a leasing program. Chair Appezzato asked BRAG Chair Perez for comment, explaining that the Base Reuse Advisory Group is a volunteer citizens group that represents the 80,000 members of the community. Chair Appezzato thanked all the BRAG volunteers for giving their time to do a valuable job. Mr. Perez reported that the BRAG agrees overall on the leasing recommendation with the major caveat that decisions must be made with full knowledge of future ramifications. Mr. Perez then introduced Helen Sause, BRAG Co-Chair and Alice Garvin, Chair of the Housing Working Group. BRAG Vice-Chair Sause stated that the community and BRAG objective is for the base to become a seamless part of the fabric of the City. One concern is that there is a mixture of housing types with condos, rental units, and opportunities for home ownership. She explained that the townhouses and apartments were examined separately. It was decided that the townhouses should be leased if it is financially feasible to do so with an economic return to the City. No one wants empty, boarded up units that will attract nuisances and provide a danger to the community. A resolution of the relocation liability issue is major concern that must be factored into the economics of the project. The BRAG felt the townhouses should ultimately be sold or leased for private housing. The financial return to the City of leasing the apartments needs further thorough investigation. Deconstruction should be studied in the coming months, with the possibility of selling the land to a developer for a new development. Ms. Sause summarized the overall concerns of the BRAG with the financial feasibility of the proposals, including any relocation liability, the project phasing, and that the City should not be burdened with the renovation costs—all of which need further evaluation. Alice Garvin, Chair of the BRAG Housing Working Group, explained that the housing units presently cannot be torn down or sold. In the meantime, an economically feasible plan that provides a revenue stream is needed. A Grubb & Ellis Study on the rental market in Alameda County states the average vacancy rate in Alameda County is 3.48%. In reality, this is near zero, as there is always a 2–3% vacancy factor due to normal tenant movement in the marketplace. A property management firm would use startup funds to renovate 10–20 units with carpets, drapes, landscaping, etc. A model apartment and rental office would be set up and a good tight management plan would need to be formulated. It is projected that it would take two months to rent 10–20 units. The income from _Printed on recycled paper 3 those units would be used to fix up the next 10–20 units. It is essential to have very strong management, tight leases, and quality tenants. This is a short-term solution. Speakers: Bill Smith, Virtual Agile Manufacturing, stated that ARRA should be looking at properties where people can both live and work. Eve Roberson, an interested citizen, spoke against leasing the housing, stating that it is short- sighted and a fatal blow to the 60% home ownership goal of the City Council. Alan K. Beales, Rental Housing Association, spoke against leasing the housing, stating that the housing is low quality, it would be a very expensive project, and would create terrific policing problems. Kurt T. Peterson, AIRR, asked questions regarding the difference between items 3-C and 3-D and suggested that the meetings be televised, as less than 1/10 of one percent of the community is involved in this discussion. Dave Ryan, EFA West (U.S. Navy), answered Mr. Peterson’s questions on item 3-C, the Large Parcel Master Lease, explaining that it will speed up the leasing process for commercial buildings on the base as well as some of the housing, if the ARRA decides to lease the housing. Amy Stone, Alameda Citizen, stated she was speaking neither for nor against the issue but voiced her concerns, asked questions, and suggested that students from U.C. Berkeley might be a good leasing population to consider. Ann E. Mitchum, an interested citizen, stated that potential homes should be a vision for the public to shape and that homes should be placed on the real estate market. Don Roberts, an interested citizen, stated that he was appalled that the ARRA has abrogated responsibility to the Executive Director to sign leases up to seven years, as that is too much power. He also stated that the meetings should be televised. Chair Appezzato opened up the issue for ARRA discussion. Lengthy debate, suggestions, and questioning by the ARRA followed. On behalf of the Alameda Unified School District, Ardella Dailey stated that the school district’s short-term issue is immediacy. In the past three years, Woodstock School has lost 300 of its 600 students, with another 100 students from military families due to leave at base closure. She stressed that 180–200 students is not a viable school and if it is boarded up for two to three years, it poses a question as to what will happen not only to Woodstock but to Miller School as well. The school district’s concern is to maintain this area as a viable community. More discussion by the governing body followed. Alternate Friedman made a motion that this issue require the vote of at least three Alameda City Councilmembers. Member Kerr seconded the motion. Chair Appezzato suggested that the five recommendations outlined on pages 2 and 3 of the staff report be voted on separately with a sixth vote to send the issues to the Planning Board for review and a seventh vote requiring the affirmative vote of three Alameda City Councilmembers. Alternate Friedman suggested that in addition to leasing possibilities, staff also be directed to aggressively investigate lease/option and home ownership possibilities. Assistant General Counsel McLaughlin stated that there was a motion on the floor. Further discussion followed. Chair Appezzato called for a vote on the motion that requires at least three votes be from the Alameda City Councilmembers. The motion passed unanimously: 9. _Printed on recycled paper 4 Original Recommendation 1: Consummate a master lease with the Navy for the East Housing that would allow ARRA to sublease the property to a management company. The ARRA would not be obligated to any expenses on the property unless it is subleased. This recommendation was approved previously by the action taken on item 3-C. Original Recommendation 2: Initiate action with the City Planning Department to rezone the East Housing area to allow leasing to private tenants. This process will take 3–4 months to accomplish. Member Daysog asked to include a moderate income aspect to reflect 85% moderate income and 15% other. Member Kerr asked that the wording of recommendation #2 be very broad, so the Planning Board would have the option to review all possible uses for East Housing, including boarding up and demolition as well as lease/option, right-of-first-refusal, renting, etc. Member DeWitt asked if we were asking the Planning Board to redo everything that had been done by the BRAG and the ARRA. Assistant General Counsel McLaughlin stated that the ARRA was requesting that, as part of the rezoning process, the Planning Board consider the impacts that the rezoning will have on the rest of the City, which is part of their normal process. It is then up the Planning Board how much discussion and detail they wish to pursue. In response to Member DeWitt’s question on how long this would take, Vice-Chair Swanson replied that if the process takes too long, interim decisions will have to be made by the ARRA but the request here is to engage the Planning Board in the process. Member Daysog advised Assistant General Counsel McLaughlin that he would contact her regarding how he wanted to have the question of 85% moderate income, 15% other reviewed by the Planning Board. Member Kerr made a motion to initiate action at the Planning Board level to consider the rezoning of the East Housing area and all of the possible uses thereof. The motion was seconded by Member Daysog and passed with the following voice vote: Ayes: 8. Noes: 1 - DeWitt. Original Recommendation 3: ARRA staff should continue to analyze the revenue potential of the East Housing leasing program. (Staff intends to apply for California Defense Matching Grant [DAM] money to obtain consultant assistance in the analysis.) Alternate Friedman moved to accept recommendation 3. The motion was seconded by Alternate Alves. Alternate Alves then made a friendly amendment to the motion to change the first sentence to read “ARRA staff should continue to analyze the revenue potential of the East Housing.” Alternate Friedman accepted the amendment and it passed by unanimous voice vote: 9. Original Recommendation 4: If substantial revenue return can be projected, staff will issue a Request for Proposals (RFP) to select a property management firm to manage and market the property. We will also seek grant funds to obtain assistance in crafting an RFP and evaluating proposals. Alternate Friedman made a motion that if substantial revenue return can be projected, and it is deemed that the leasing option is preferable, staff will bring an RFP to the ARRA for approval to select a property management firm to manage and market the property. We will also seek grant funds to obtain assistance in crafting an RFP and evaluating proposals. The proposed contract resulting from the RFP will be brought to the ARRA governing body for approval. The motion was seconded by Vice-Chair Swanson and passed by unanimous voice vote: 9. _Printed on recycled paper 5 Original Recommendation 5: Staff should simultaneously explore the prospects with the military for leasing some of the housing units through a “set-aside” program or some other mechanism. Vice-Chair Swanson made a motion to accept the original recommendation 5 as stated. The motion was seconded by Alternate Friedman and passed by unanimous voice vote: 9. New Recommendation 6: Alternate Friedman made a motion that staff be directed to fully investigate all aspects of potential home ownership, including lease/option. Member DeWitt seconded the motion. Member Daysog asked for an amendment to add “ . . . including lease/option and affordable rents to moderate income families.” It was suggested that Member Daysog make a separate motion. The unamended motion passed by unanimous voice vote: 9. Member Daysog made a motion that staff be directed to investigate affordable rent options that allow moderate income families to save for home ownership. After discussion, he withdrew his motion. ORAL REPORTS 4-H. Oral report from the Executive Director updating the ARRA. Executive Director Kay Miller reported that (1) the Cooperative Services Agreement for the Police and Fire services may be approved as early as January 7 at the City Council Meeting; (2) staff has not been officially approached by DeCA [the commissary] but the BRAG has advised that if contacted, we go forward with a normal short-term lease; (3) the logo chosen by the BRAG for Alameda Point is being passed around; (4) a workshop on the cashflow analysis for the Economic Development Conveyance is being scheduled for Saturday, March 15 from 8:30 a.m.–12:00 noon and a notice of its location will be forthcoming; (5) the EDA grant pre-application went off today and the answer will be received this Spring. ORAL COMMUNICATIONS, NON-AGENDA (PUBLIC COMMENT) Gratz Powers, an Alameda citizen and proponent of model airplane flying, discussed his group’s wish have flying space at NAS Alameda and to have a national meet there. Chair Appezzato referred Mr. Powers to work with Mr. Fred Framsted from the Recreation and Park Department. Mr. Powers left copies of his correspondence for the Chair. Bill Smith, Virtual Agile Manufacturing, spoke on research, energy, and environmental cleanup matters and announced that it was Ann Mitchum’s birthday. Ann Mitchum, concerned citizen, stated that ARRA should bulldoze, board up, or sell the housing units. She is not in favor of developers but the private sector seeking grants to buy homes. She suggested the ARRA become mortgagors with 7% interest loans with low or no down payment. COMMUNICATIONS FROM GOVERNING BODY Alternate Ornelas requested that when meetings need to be rescheduled, they are not rescheduled to a night when another critical meeting is scheduled. Mayor Corbett wanted to attend the meeting but she had to attend the San Leandro City Council meeting tonight. Executive Director Miller stated that, upon polling the governing body, this was the only night a quorum could be assembled. At 9:22 p.m., Chair Appezzato announced ADJOURNMENT TO CLOSED SESSION TO CONSIDER: CONFERENCE WITH REAL PROPERTY NEGOTIATOR - Property: building 530; negotiating parties: ARRA and Tower Aviation; under negotiation: price and terms of payment; Conference with Real Property Negotiator pursuant to subdivision (b) of Section 54956.8. _Printed on recycled paper 6 The meeting was called back into general session at 9:37 p.m. It was announced that direction had been given to counsel. ADJOURNMENT The meeting was adjourned by Chair Appezzato at 9:38 p.m. Respectfully submitted, Margaret E. Ensley ARRA Secretary _Printed on recycled paper 7