Resolution 15352CITY OF ALAMEDA RESOLUTION NO. 15352
AUTHORIZING THE CITY
AMENDMENT TO THE
AGREEMENT AND ALL
BETWEEN THE CITY OF
PARTNERS, LLC FOR THE
POINT
MANAGER TO EXECUTE A THIRD
DISPOSITION AND DEVELOPMENT
OTHER NECESSARY DOCUMENTS
ALAMEDA AND ALAMEDA POINT
SITE A DEVELOPMENT AT ALAMEDA
WHEREAS, the City of Alameda ("City") and the Alameda Point Partners, LLC,
("Developer") entered into a Disposition and Development Agreement for Alameda Point -
Site A dated as of August 6, 2015 ("DDA"), authorized by City of Alameda Ordinance No.
3127, whereby the City agreed to convey to the Developer Property located at the former
Naval Air Station Alameda under certain terms and conditions and Developer agreed to
develop the Project on the Property all in accordance with a Milestone Schedule
incorporated in the DDA; and
WHEREAS, the DDA contemplated development of a 68 -acre area within Alameda
Point that extends generally from the Main Street entrance of Alameda Point to the eastern
edge of the Seaplane Lagoon and includes 800 housing units (200 affordable), 600,000
square feet of commercial development, and extensive parks and utility infrastructure (Site
A Project); and
WHEREAS, as part of the Site A Project, 130 affordable units will be constructed by
Eden Housing, a highly qualified nonprofit affordable housing developer, in two buildings
on Block 8 in Phase 1 for low- and very low-income households consistent with the DDA:
1) a family building with 70 units (Family Project), and 2) a senior building with 60 units
(Senior Project) (collectively, Affordable Housing Projects); and
WHEREAS, the DDA was amended on February 8, 2017, authorized by City of
Alameda Ordinance No. 3174, to extend the closing on the Phase 1 property (Phase 1
Property) by four additional months from December 12, 2016 to April 11, 2017 (Phase 1
Closing Date) due to the rising cost and complexity of the project requiring more time to
complete property due diligence items and to finalize financial commitments; and
WHEREAS, although significant efforts were made by Developer to finalize these
commitments, Developer did not meet the requirements of the DDA necessary to accept
conveyance of the Phase 1 Property by the Phase 1 Closing Date of April 11, 2017 and
was in default under the DDA; and
WHEREAS, as part of Developer's effort to cure its default, Developer submitted
proposed changes to the Site A Development Plan, which were approved by the Planning
Board on May 22, 2017, and a second DDA amendment, which was authorized by City of
Alameda Ordinance No. 3185, that enhanced the financial underwriting of the Site A Project
and allowed the Developer to make a $1.4 million option payment to the City and extend
the Phase 1 Closing Date to April 9, 2018, therefore curing its default; and
WHEREAS, Developer is requesting a third DDA amendment (Third Amendment) in
order to remove the requirement in Section 4.2 of Exhibit M (Affordable Housing
Implementation Plan) of the DDA that allows the City to withhold building permits for any
market rate units in excess of 395 units (Metering Requirement), if Eden Housing has not
received and executed their tax credit reservations for the Affordable Housing Projects; and
WHEREAS, while Eden Housing has been very successful at obtaining much of its
required financing for the Affordable Housing Projects, there are outstanding funding
applications, whose results will be unknown prior to the April 9, 2018 Phase 1 Closing Date,
which creates uncertainty for the Developer and their third -party vertical developers as to
whether the City will have the right to halt their building permits pursuant to the Metering
Requirement in the DDA; and
WHEREAS, the Developer asserts that the Metering Requirement inhibits their ability
to sell the market rate development blocks at sufficient value to cover the costs of the Phase
1 project, as the proceeds from the sale of these blocks are paying for the backbone
infrastructure and other amenities; and
WHEREAS, the Developer contends that if the Metering Requirement is removed,
they will be able to close by April 9, 2018, deliver the $10 million Seaplane Lagoon Ferry
Terminal contribution, and start construction on backbone infrastructure within 30 days, and
without this Third Amendment, the Developer will not be able to continue with the Site A
Project; and
WHEREAS, the Developer has indicated that there is significant momentum from
their development team and their third -party vertical developers who are poised to purchase
the market rate development blocks and to close by the April 9, 2018 deadline and that any
further delay from another paid extension or default (other potential options available to the
Developer within the current DDA) would jeopardize that momentum and inhibit the Site A
Project from moving forward; and
WHEREAS, there are significant catalytic transportation, housing, and economic
development benefits to other areas within Alameda Point of implementing Phase 1 of the
Site A Project; and
WHEREAS, Eden Housing has secured significant financing commitments to date; is
optimistic about its ability to secure all of the financing for the affordable housing by the
deadline in the DDA; and is supportive of the Developer moving forward with the Phase 1
closing and infrastructure construction as soon as possible so that Eden's ability to execute
financing commitments, and build and occupy their building is not jeopardized by lack of
backbone infrastructure; and
WHEREAS, the Developer and the City desire to amend the DDA in accordance with
the terms and conditions of the Third Amendment.
NOW, THEREFORE, BE IT RESOLVED, that the City Council:
Approves amendments to the Site A DDA to remove conditionally the requirement in
Section 4.2 of Exhibit M (Affordable Housing Implementation Plan) of the DDA that allows
the City to withhold building permits for any market rate units in excess of 395 units, if Eden
Housing has not received and executed their Tax Credit Reservations for the Affordable
Housing Projects within the timelines set forth in the DDA (Attachment A).
Attachment A
THIRD AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT FO
ALAMEDA POINT — SITE A i
This Third Amendment to Disposition and Development Agreement ("Third
Amendment") is entered into as of March 7, 2018 ("Effective Date"), by and between the City of
Alameda, a California charter city (the "City"), and Alameda Point Partners, LLC, a Delaware
limited liability company (the "Developer").
RECITALS
A. The City and the Developer have entered into that certain Disposition and Development
Agreement for Alameda Point -Site A, dated as of August 6, 2015 (the "Original
DDA"), as amended by that certain First Amendment to Disposition and Development
Agreement, dated as of February 8, 2017, and effective as of March 9, 2017 (the "First
Amendment"), and that Second Amendment to Disposition and Development
Agreement, dated as of July 19, 2017 ("Second Amendment"), and clarified by
Operating Memoranda dated September 16, 2015, October 26, 2015, March 6, 2017
and December 8, 2017 (collectively, the "Operating Memoranda"). The Original DDA,
as so amended and clarified, is referred to herein as the "DDA."
B. The DDA contemplated development of a 68 -acre area within Alameda Point that
extends generally from the Main Street entrance of Alameda Point to the eastern edge of
the Seaplane Lagoon and includes 800 housing units (200 affordable), 600,000 square
feet of commercial development, and extensive parks and utility infrastructure (Site A
Project).
C. As part of the Site A Project, 130 affordable units will be constructed by Eden Housing,
a highly qualified nonprofit affordable housing developer, in two buildings on Block 8
in Phase 1 for low- and very low-income households consistent with the DDA: 1) a
family building with 70 units (Family Project), and 2) a senior building with 60 units
(Senior Project) (collectively, Affordable Housing Projects).
D. Pursuant to Section 4.2(b) of the Affordable Housing Implementation Plan, which plan
is attached to and incorporated into the DDA, as Exhibit M, the City is entitled to
withhold issuance of residential building permits for the market rate residences after the
three hundred ninety fifth (395`") building permit until and unless a Tax Credit
Reservation has been received and executed for the Affordable Housing Projects
("Affordable Housing Metering Provision").
E. The Developer has requested that the City waive the Affordable Housing Metering
Provision with respect to Phase 1 of the Project and the City has agreed to
conditionally waive the Affordable Housing Metering Provision in accordance with the
provisions of this Third Amendment.
F. While Eden Housing has been very successful at obtaining much of its required
financing for the Affordable Housing Projects, there are outstanding funding
applications, whose results will be unknown prior to the April 9, 2018 Phase 1 Outside
Closing Date, which creates uncertainty for the Developer, the third -party vertical
developers and their respective lenders as to whether the City will have the right to halt
their building permits pursuant to the Affordable Housing Metering Provision.
G. The Developer asserts that the Affordable Housing Metering Provision inhibits its ability
to sell the market rate development blocks at sufficient value to cover the costs of the
Phase 1 project, as the proceeds from the sale of these blocks are paying for the backbone
infrastructure and other amenities.
H. The Developer contends that if the Affordable Housing Metering Provision is removed,
they will be able to close on or before the April 9, 2018 Phase 1 Outside Closing Date
and proceed with the development of Phase 1, which includes start construction on
backbone infrastructure within 30 days and timely payment of the $10 million Seaplane
Lagoon Ferry Terminal contribution, and without this Third Amendment, the Developer
will not be able to continue with the Site A Project.
I. The Developer has indicated that there is significant momentum from their development
team and their third -party vertical developers who are poised to purchase the market rate
development blocks and to close by the April 9, 2018 Phase 1 Outside Closing Date and
that any further delay from another paid extension or default (other potential options
available to the Developer within the current DDA) would jeopardize that momentum
and inhibit the Site A Project from moving forward.
J. In return for the conditional waiver of the Affordable Housing Metering Provision set
forth herein, Developer is willing to convert the date set forth in the Milestone Schedule
for the commencement of construction of the Phase 1 Backbone Infrastructure from a
Progress Milestone Date to a Major Milestone Date.
K. There are significant catalytic transportation, housing, and economic development
benefits to other areas within Alameda Point of implementing Phase 1 of the Site A
Project.
L. Eden Housing has secured significant financing commitments to date; is optimistic about
its ability to secure all of the financing for the affordable housing by the deadline in the
DDA; and is supportive of the Developer moving forward with the Phase 1 closing and
infrastructure construction as soon as possible so that Eden Housing's ability to execute
financing commitments, and build and occupy their building is not jeopardized by lack
of backbone infrastructure.
AGREEMENT
WITH REFERENCE TO THE FACTS RECITED ABOVE, the City and the Developer
agree as follows:
1. Definitions. Capitalized terms not defined in this Third Amendment shall have the
same meaning set forth in the DDA.
2. Affordable Housing Metering Provision
1.1 Conditional Waiver. The City hereby agrees that the provisions of Section 4.2(b)
of the Affordable Housing Implementation Plan attached to and incorporated in the DDA will not
be applicable to Phase 1 of the Project if all of the following conditions are timely met by the
Developer:
(a) The Developer satisfies all of the conditions for Close of Escrow for Phase 1
without requiring or requesting any further Developer initiated amendments or operating
memoranda to the DDA and Close of Escrow occurs for Phase 1 on or before April 11,
2018.
(b) On or before the Close of Escrow for Phase 1, the Developer and the Qualified
Affordable Housing Developer, Eden Housing, demonstrate to the satisfaction of the City
that Eden Housing has 'secured sufficient public funds for the development of the Senior
Project to achieve a competitive "tiebreaker" score in the March 2018 round of 9% Low
Income Housing Tax Credit allocations as determined pursuant to the California Tax Credit
Allocation Committee Regulations. At the City's discretion, the public funds used for the
purposes of the tiebreaker shall include ($500,000) in East Bay Municipal Utility District
fee credits that the City allocated to the Site A Project, if needed to achieve a competitive
tiebreaker score. The City will provide the Developer and Eden Housing with its written
determination under this Section 2.1(b) within five (5) business days after such parties'
submittal of the required information.
(c) The Developer, as a condition of closing on Phase 1, shall have deposited into
escrow the Developer Contribution for the Affordable Housing Projects required pursuant
to `Section 3.8 of the Affordable Housing Implementation Plan in the amount of Three
Million Dollars ($3,000,000). Withdrawals from the escrow account shall be subject to the
provisions of Section 3.10 of the Second Amendment.
2.2 Failure to Meet Conditions. Failure of the Developer to satisfy any of the above
conditions will result in the Affordable Housing Metering Provision set forth in Section 4.2 being
applicable to Phase 1 of the Project.
2.3 Developer Cooperation and Assurances. Developer agrees that notwithstanding the
City's waiver of the Affordable Housing Metering Provision, the Developer shall continue to
cooperate with the Qualified Affordable Housing Developer with respect to the development of the
Phase 1 Infrastructure Phase and the Affordable Housing Site as set forth in Section 1.1 of the
Fourth Operating Memorandum to the DDA dated for references pursuant as of December 8, 2017
and to provide assurances necessary to the Qualified Affordable Housing Developer's lenders and
investors regarding the completion of the Phase 1 Infrastructure Phase to allow the Qualified
Affordable Housing Developer to commence construction of the Affordable Housing Projects in
accordance with the Milestone Schedule applicable to the Affordable Housing Projects.
2.4 Future Phases. Notwithstanding anything set forth herein or in the DDA, the City shall
have no obligation to convey Phases 2 and 3 of the Property until and unless a Tax Credit Reservation
has been received and executed for the Affordable Housing Projects.
3. Commencement of Construction — Phase 1 Infrastructure. The parties hereby agree that
the date in the Milestone Schedule for the commencement of construction of the Phase 1
Infrastructure (30 days after the Phase 1 Close of Escrow) shall be a Major Milestone Date rather
than a Progress Milestone Date.
4. Effect of Amendment. Except to the extent amended in this Third Amendment, the
DDA shall remain in full force and effect. In the event of a conflict between this Third
Amendment and the DDA, this Third Amendment shall control.
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CITY OF ALAMEDA
By:
Keituach
City mana� er
Date. -
Recommended forApproval:
Jenriiri�r Ott, fla,.,c, Reuje, DirectOr
Approved as to Form:
Aiidrico Q. Penick
Chict'Real EstateCounsel
Authorizcd by City Council RcsolUtIonNNo,
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ALAMEDA POINT PARTNERS, LLC,
z a Dek
-t-ware limited liability company
By: Alameda Point Investments,
a California limited liability company,
its, managing, ineiniv-r
Bv: NCCH 100 Alamed.t. L.P.,
a Delaware limited partnership,
its managing member
By: Maple lklulti-Farnily leer Oopment, I-L.C.,
al'MaS limit(�d liability company,
its (lerieral partner
B :
Nam:: 6 la
I, the undersigned, hereby certify that the foregoing Resolution was duly and
regularly adopted and passed by the Council of the City of Alameda in a regular meeting
assembled on the 6th day of March, 2018, by the following vote to wit:
AYES: Councilmembers Ezzy Ashcraft, Matarrese, Oddie and Vella
—4.
NOES: Mayor Spencer —1.
ABSENT: None.
ABSTENTIONS: None.
IN WITNESS, WHEREOF, I have hereunto set my hand and affixed the official
seal of said City this 71h day of March, 2018.
Lara Weisiger, Ci t� lerk
City of Alameda �y
Janet . Kern, City Attorney
City of Alameda