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2010-04-20 Joint CC ARRA CIC MinutesMINUTES OF THE SPECIAL JOINT CITY COUNCIL, ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY (ARRA) AND COMMUNITY IMPROVEMENT COMMISSION (CIC) MEETING TUESDAY- -APRIL 20, 2010--7-01 P.M. Mayor /Chair Johnson convened the meeting at 10:18 p.m. ROLL CALL - Present: Councilmembers / Board Members / Commissioners deHaan, Gilmore, Matarrese, Tam and Mayor /Chair Johnson —5. Absent: None. CONSENT CALENDAR Mayor /Chair Johnson announced that the recommendation to direct staff to prepare amendments to the Grand Marina Village Master Plan [paragraph no. 10 -180A CC /10- 20A CIC] was removed from the Consent Calendar for discussion. Councilmember /Board Member /Commissioner Tam moved approval of the remainder of the Consent Calendar. Councilmember /Board Member /Commissioner Matarrese 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 -179 CC /ARRA/ *10 -19 CIC) Minutes of the Special Joint City Council, Alameda Reuse and Redevelopment Authority and Community Improvement Commission Meeting Held on April 6, 2010. Approved. (10 -180 CC /10 -20 CIC) Recommendation to Approve a Second Amendment to the Grand Marina Village Affordable Housing Agreement Between the City, Community Improvement Commission and Warmington Homes Decreasing the Number of Affordable Housing Units from Ten to Six and Authorizing the Interim City Manager /Interim Executive Director to Execute the Amendment; and (10 -180A CC /10 -20A CIC) Recommendation to Direct Staff to Prepare Amendments to the Grand Marina Village Master Plan for a Reduction in the Inclusionary Housing Obligation and an Enhancement of City Landscaping and Paving for City Council Consideration on June 1, 2010. Councilmember /Commissioner Gilmore stated the Grand Marina Village and Alameda Landing projects are subject to the 25% inclusionary requirement; inquired how Alameda Landing would be affected if the reduction is approved for Warmington Homes. Special Joint Meeting Alameda City Council, Alameda 1 Reuse and Redevelopment Authority, and Community Improvement Commission April 20, 2010 The Economic Development Director responded the language would automatically change the requirements for Alameda Landing based upon any subsequent code modifications the City would make. Councilmember /Commissioner Gilmore moved approval of the staff recommendation. Councilmember /Commissioner Matarrese seconded the motion, which carried by unanimous voice vote — 5. CITY MANAGER /EXECUTIVE DIRECTOR COMMUNICATION 10 -181 CC /ARRA/10 -21 CIC) Semimonthly Update on SunCal The Deputy City Manager — Development Services provided a handout and gave a brief presentation. Councilmember /Board Member /Commissioner Matarrese requested expansion on the Pacific Gas & Electric (PG &E) gas system issue. The Deputy City Manager — Development Services stated currently, ARRA owns the Alameda Point gas system; PG &E operates and maintains the gas system; the operating agreement expired years ago; PG &E is still meeting all [agreement] obligations; ARRA has options to either enter into an operating agreement to pay PG &E a certain amount annually or convey the system to PG &E; preliminary discussion have been held; operating costs could be included in the rates if PG &E owns the system, which would eliminate ARRA operation and maintenance costs. Vice Mayor /Board Member /Commissioner deHaan inquired whether the Environmental Impact Report (EIR) would scope the [modified Optional Entitlement Application (OEA)] project or the density bonus option, to which the Deputy City Manager — Development Services responded both. In response to Vice Mayor /Board Member /Commissioner deHaan's inquiry regarding the public scoping session the Deputy City Manager — Development Services stated the Planning Board meeting would have staff and EIR consultant presentations and public comment. The Planning Services Manager stated the purpose of the scoping session is to provide an opportunity for the public to identify issues to be addressed in the EIR, which has not been written yet. Vice Mayor /Board Member /Commissioner deHaan stated the public session would be significant; inquired whether there has been discussion regarding similarities between Measure B and the density bonus option. Special Joint Meeting Alameda City Council, Alameda 2 Reuse and Redevelopment Authority, and Community Improvement Commission April 20, 2010 The Deputy City Manager — Development Services responded in the affirmative; stated the Notice of Preparation will have a footnote describing the difference between Measure B and density bonus option; Measure B and the density bonus option are essentially the same in terms of residential units; the density bonus option includes one additional acre of open space and additional commercial square footage. Vice Mayor /Board Member /Commissioner deHaan questioned why SunCal had a Measure A non - compliant proposal because the numbers are the same. The Deputy City Manager — Development Services stated the [modified OEA] project is Measure A compliant. Vice Mayor /Board Member /Commissioner deHaan inquired whether the density bonus is Measure A compliant. The Deputy City Manager — Development Services responded a density bonus application has not been submitted; the [density bonus] project is foreseeable and needs to be studied under the California Environmental Quality Act (CEQA) because SunCal submitted a project description letter. Councilmember /Board Member /Commissioner Tam inquired whether there are any obligations to outreach to Chinatown regarding the scooping session. The Deputy City Manager — Development Services responded a Notice of Preparation would be sent to Chinatown. Councilmember /Board Member /Commissioner Tam inquired whether Chinatown would need to attend the public scooping session and the City would not have a special session with Chinatown, to which the Deputy City Manager — Development Services regular meetings are scheduled with Chinatown; a special meeting can be discussed. Councilmember /Board Member /Commissioner Matarrese inquired whether there is committee with Planning Board Members. The Deputy City Manager — Development Services responded in the affirmative; stated the committee meets monthly; stated the Planning Services Manager represents the City and would raise the issue; the Chinatown Committee would receive the Notice of Preparation and be invited to attend the May 10th meeting. In response to Mayor /Chair Johnson's inquiry regarding the agreement with Chinatown capping the number of housing units at 1,100 until a transportation solution is in place, the Planning Supervises Manager stated the agreement with Chinatown is designed to ensure coordination with Chinatown in the preparation of the EIR; the 1,100 figure is not a cap; the agreement states that the City would provide a specific amount for Special Joint Meeting Alameda City Council, Alameda 3 Reuse and Redevelopment Authority, and Community Improvement Commission April 20, 2010 transportation mitigation for each unit up to 1,000 units, which is described as the first phase of the project; in return, Chinatown agreed that they would not submit a lawsuits for the first phase. Mayor /Chair Johnson inquired how the matter fits with current discussions, to which the Planning Services Manager responded the mitigation payment still applies; mitigation required for units beyond the first 1,000 is unresolved with Chinatown. Mayor /Chair Johnson stated the Alameda Point Community Partners (APCP) plan was for 1,800 units; inquired how the proposal for more units fits into the agreement. The Planning Services Manager responded the agreement requires that the City coordinate with Chinatown through the entire environmental process, allows for a pre- determined mitigation payment for the first 1,000 units, and does not limit what the City can do in terms of an ultimate development envelope for Alameda Point; the City understood that there would be more than 1,000 units; the key is to coordinate the EIR process with the Chinatown process. Mayor /Chair Johnson inquired whether there have to be mitigation measures after first 1,000 units. The Planning Services Manager responded in the affirmative; stated the Planning Board representative on the Chinatown committee does wants to start conversations now and does not want to wait until the EIR is published. Mayor /Chair Johnson inquired what number is being used as the basis for discussions. The Planning Services Manager responded Chinatown work with whatever number the City puts out; until recently, Chinatown was working with the Measure B number; Chinatown will be working with the new application number once the Notice of Preparation is released. Speakers: Frank Faye, SunCal; and Rosemary McNally, Alameda. Following Mr. Faye's comments, Vice Chair /Board Member /Commissioner deHaan inquired whether costs that SunCal wishes to recover could be broken down. Mr. Faye responded in the affirmative; stated SunCal is not seeking to recover costs; the arrangement with the City is that monies are pulled out of a special escrow account set up with the City quite some time ago; the City has a record of each and every expenditure from the time that checks were issued and payments were made; that SunCal is happy to make anything available. Vice Mayor /Board Member /Commissioner deHaan inquired whether there would be a Special Joint Meeting Alameda City Council, Alameda 4 Reuse and Redevelopment Authority, and Community Improvement Commission April 20, 2010 breakdown of the costs, to which Mr. Faye responded in the affirmative. The Deputy City Manager — Development Services stated staff was informed that there are costs that were not included in the escrow account. Mr. Faye stated that he does not have any problem providing any additional incurred costs that have not come from the escrow account. Vice Mayor /Board Member /Commissioner deHaan provided a handout outlining the various plans submitted; stated the Measure B plan has 4,500 homes; the modified plan shows the same density of 4,500 homes; [Measure B has] 3.5 million square feet for commercial; the density bonus is up 4.3 million square feet; inquired why the City went through Measure B and now SunCal is submitting something that has more than Measure B. Mr. Faye responded there are a couple of answers to the question assuming the numbers are correct; stated Measure B would never have been necessary had State law relative to promoting affordable housing with the corresponding density bonus been in place and had the City's Municipal Code been modified to address the promotion of affordable housing through density bonus; if State law and Alameda's changes arrived at a different time or if the ENA timeline were different, there never would have been an election; the density would have been at the discretion of the Council. Vice Mayor /Board Member /Commissioner deHaan stated references were made to density bonus in the Measure B dialogue, which is contrary to what Mr. Faye is saying. Mr. Faye stated the project proponent submitted signatures in September; State law changes went into affect shortly thereafter; the City implemented State law through changes to the Municipal Code in mid December. Councilmember /Board Member /Commissioner Matarrese stated that he thought the density bonus State law was in place before. The City Attorney /Legal Counsel stated the State density bonus law has been in place for a couple of decades; the City was a little late in adopting its own ordinance, which is completely consistent with State law. Councilmember /Board Member /Commissioner Matarrese stated State law could have been invoked ten years ago; the City would need to comply because State law supersedes City law. Mayor /Chair Johnson requested clarification. The City Attorney /Legal Counsel stated the State density bonus law has been in place Special Joint Meeting Alameda City Council, Alameda 5 Reuse and Redevelopment Authority, and Community Improvement Commission April 20, 2010 for at least twenty years; the City's ordinance complies with the State and restates the law in a more user friendly way; anyone could have asked for a density bonus even if the ordinance was not in place. Mayor /Chair Johnson inquired whether anybody could have requested a density bonus under State law before the City adopted its ordinance, to which the City Attorney /Legal Counsel responded in the affirmative; stated one prior application did seek a density bonus. Mr. Faye stated specific changes were made to State law that allowed Charter cities to do things a little differently; particular changes to the Municipal Code would have rendered the Measure B election unnecessary; that he is not disputing the actual existence of a density bonus provision but the applicability to Charter cities and the way Charter cities can modify the Charter. Mayor /Chair Johnson inquired whether Mr. Faye is stating that the City had not adopted a density bonus ordinance before because the City was exempt as a Charter city. Mr. Faye responded in the negative; stated that he is not disputing that density bonus provisions were in place; the issue is what Charter cities can and cannot do under the modified State law relative to density bonuses; it goes to the Council's new ability to modify its Charter without an election of the people which was not the case in Alameda prior to the adoption of the Code in the middle of December of last year. The City Attorney /Legal Council stated State density bonus ordinances have always pre - empted [City ordinances]; Charter cities are just as bound as General Law cities. Mr. Faye stated it is the way in which the City adopted implementing State law to address the City's Charter that deals with attached housing. Mayor /Chair Johnson inquired whether Mr. Faye agrees that the State density bonus law applied in Alameda even before December. Mr. Faye responded the State density law applied; the State density law that allows Council to modify its Charter, as opposed to having an election of the people to modify the Charter, did not exist in the City until the middle of December. Councilmember /Board Member /Commissioner Matarrese stated that he does not see any difference regarding density bonus between today and October or June; inquired whether the situation is the same; further inquired whether a density bonus application today is governed by the same rule of law as six months ago, to which the City Attorney /Legal Counsel responded in the affirmative. Mayor /Chair Johnson stated Mr. Faye is saying that the City can amend its Charter Special Joint Meeting Alameda City Council, Alameda 6 Reuse and Redevelopment Authority, and Community Improvement Commission April 20, 2010 without a vote of the people under the new revision of the law; inquired whether Mr. Faye would dispute that the State density bonus law applied in Alameda. Mr. Faye responded the issue is the implementation of the density bonus provisions; stated given the prohibitions on certain kinds of attached dwellings because of Measure A, Charter Article 26, the ability to modify the City Charter to implement the law was not enacted by the City until the middle of December; the election would have been moot had that been enacted sooner and had the State law provisions that caused the City to enact the modification to the Code in the middle of December. Mayor /Chair Johnson stated that the City has a fundamental disagreement with Mr. Faye; the City has a different understanding of the applicability of the State's density bonus law; Mr. Faye believes that the State density bonus law did not apply in Alameda until December. Mr. Faye stated that is not what he is saying; Measure A prevents certain kinds of attached dwelling units; in order to modify the City Charter, Council enacted an ordinance in the middle of December and implemented State law that permits the City Charter to be amended by Council, not requiring a vote of the people; the election would have been irrelevant had the particular provision of the Code been changed before the project proponents submitted signatures. Mayor /Chair Johnson inquired whether there is any difference in how State law would have been applied before December; requested an explanation from the City Attorney /Legal Counsel; also requested an explanation of the application of the State density bonus law. Councilmember /Board Member /Commissioner Tam stated when the Council discussed the density bonus in December, the City Attorney /Legal Counsel stated that State law nullified Measure A for the City and State law trumps the Charter. The City Attorney /Legal Counsel stated that she said State law pre -empts the Charter; density bonus is a matter of Statewide concern; it does not mean that Measure A is set aside; in order to implement bonus market rate units, someone could need and request a waiver of the multi - family restriction; the same was true before December and has been true for twenty years. Councilmember /Board Member /Commissioner Tam stated the ordinance was tailored to Alameda; discussions involved exempting the 15% requirement if there is inclusionary housing; inquired whether said issue was unique to Alameda. The City Attorney /Legal Counsel responded in the negative. Councilmember /Board Member /Commissioner Tam inquired whether said issue is in Special Joint Meeting Alameda City Council, Alameda 7 Reuse and Redevelopment Authority, and Community Improvement Commission April 20, 2010 State law; to which the City Attorney /Legal Counsel responded in the negative; stated the 15% versus 25% inclusionary housing issue is not in State law, is a separate issue and was a separate modification. Councilmember /Board Member /Commissioner Matarrese stated that he understands Mr. Faye is saying SunCal would have acted differently and not put Measure B on the ballot had the City enacted the ordinance earlier; nothing is different; the same outcome is possible today as six months ago without the ordinance; that he has a hard with taking that as a real answer. Mr. Faye stated that he tries to give real answers; the adoption by the City of the ability to modify the Charter through Council action versus an election of the people is very different than isolating and focusing on the density bonus provisions; it is very interesting for the City Attorney /Legal Counsel to point out that density bonus provisions have been in State law for a long time, which is correct; the ability to implement that was limited in Alameda by the City Charter; until the middle of December, the Municipal Code was not modified to comply with State law to allow for modifications to the City Charter to accomplish the density bonus provisions in State law relevant to Measure A. Mayor /Chair Johnson stated that is where there is a fundamental disagreement on the interpretation and application of State law. The City Attorney /Legal Counsel stated the City's density bonus did not modify Measure A; only a vote of the citizens can modify Measure A; Council does not have the authority to make an amendment or modification to Measure A; the density bonus ordinance simply implements existing State law and creates the opportunity for a developer entitled to a density bonus to place or site additional market rate units that comprise the bonus; Council has to grant a waiver if the developer shows that it is necessary to waive the multi - family restriction under Measure A in order to fit the development, including the new market rate units, on the site. Mayor /Chair Johnson inquired whether that would have applied in June before the ordinance was passed in mid December. The City Attorney /Legal Counsel responded in the affirmative; stated the ordinance just makes it easier, more reader friendly and makes the process consistent so that the community does not get a different answer from the Community Development Department. Mayor /Chair Johnson stated the issue that needs to be really clear is that the Council action in December did not really change that; even June or two years before, the same thing could have been done by any developer under State law that was not tailored to Alameda laws. Special Joint Meeting Alameda City Council, Alameda 8 Reuse and Redevelopment Authority, and Community Improvement Commission April 20, 2010 The City Attorney /Legal Counsel stated the City had one application for density bonus under State law before the City had an ordinance on the books. Councilmember /Board Member /Commissioner Gilmore stated that she does not think Council thought passing the density bonus ordinance changed Measure A. Mr. Faye stated the ordinance in mid - December specifically allows a developer to submit an application that not only increases density with providing affordable housing but also grounds Council the ability to consider a waiver of Measure A, which was new. Mayor /Chair Johnson stated the record needs to be very clear that the State density bonus law would have allowed the same thing; changing Measure A is not necessary; Council did not do anything in December that is different than State density bonus law; Council did not amend Measure A; amending Measure A is not necessary to use the density bonus ordinance; the State density bonus law has been in place for many years and could have been used by SunCal at any time with the same affect essentially as the City's density bonus ordinance passed in December which only reflected a few changes for Alameda. Mr. Faye stated bringing back the ordinance at the next meeting might be appropriate; that he thinks there was material changes. Mayor /Chair Johnson stated the question is whether SunCal had the ability to use the density bonus ordinance before December and the answer is yes. Mr. Faye stated the answer to the question, as to whether SunCal was able to get a waiver to Measure A under the Code absent a vote of the people, changed in mid December. Mayor /Chair Johnson stated the question is whether SunCal was able to get an effective change to Measure A under State density bonus law; the City Attorney /Legal Counsel would say yes; inquired whether said statement is correct. The City Attorney /Legal Counsel responded in the affirmative; stated Council would have had the obligation under State density bonus law to consider a request for a waiver of the multi - family configuration restriction if necessary to site additional market rate units granted through the bonus, which is what the law says; Council would have been obligated to consider that even prior to the ordinance. Mayor /Chair Johnson stated that she is getting the sense that Mr. Faye is saying that it is the City's fault that SunCal had to put Measure B on the ballot because the City did not do a density bonus ordinance until December, which is not the case. Mr. Faye stated that he is not what he is saying; there is a difference between the Special Joint Meeting Alameda City Council, Alameda 9 Reuse and Redevelopment Authority, and Community Improvement Commission April 20, 2010 implementation of the density bonus provisions for affordable housing that have existed in State law and the ability to modify the City Charter absent a vote of the people; Council changed that in the middle of December; the dialogue that SunCal had was that the only way to implement a change to Measure A was to have a vote of the people; when the Code was modified, SunCal looked into whether the election could be pulled, but there is no ability to do so under the Elections Code. Mayor /Chair Johnson stated SunCal's attorney and the City Attorney /Legal Counsel should both provide a brief on whether the City fundamentally changed SunCal's ability to request a density bonus under State law by anything the City did in December; SunCal did not need an amendment to Measure A to request a density bonus and to get what is entitled to under a density bonus ordinance. Mr. Faye stated that is a good solution. Vice Mayor /Board Member /Commissioner deHaan stated SunCal went to the ballot for Measure A, a specific plan, and a development agreement; SunCal was aware of density bonus before. Mr. Faye stated most voters were in favor of the plan; however, most voters were opposed to the process; voters felt the effort was to usurp Council's ability to do its job; that he hopes the debate will be about the plan /plans and not about a discussion of process; now the process is normal. Vice Mayor /Board Member /Commissioner deHaan stated SunCal went to the ballot for Measure A [amendment], a specific plan and a development agreement; Mr. Faye is saying none of that would have been done if the City had a density bonus ordinance; density bonus was discussed leading up to Measure B; SunCal was aware of density bonus. Mr. Faye stated polls showed most voters were in favor of the plan, but opposed to the process; the debate now should be about the plan, not the process. Vice Mayor /Board Member /Commission deHaan stated that his own polling indicated that the reasons the Measure was defeated were SunCal's financial inabilities, with 29 bankruptcies, transportation and traffic impacts, elimination of historical buildings, Measure A, density, environmental remediation, ballot box initiative deal, specific plan and environmental impact study; the back page of his handout has the Exclusive Negotiating Agreement (ENA) proposal the SunCal agreed to, which spells out the requirements and what the City was looking for: 1,735 new homes and 3.4 million square feet office space; said criteria was set; SunCal came back continually saying that it does not pencil out. Mr. Faye stated SunCal came back in response to new information. Special Joint Meeting Alameda City Council, Alameda 10 Reuse and Redevelopment Authority, and Community Improvement Commission April 20, 2010 Vice Mayor /Councilmember /Commissioner deHaan inquired whether Mr. Faye is referring to the flood plane, which was identified in the Preliminary Development Concept. Mr. Faye stated there were a number of physical changes to the real property and there continue to be a number of changes to the condition of the real property; new information continues to come forward which affects costs; cost affects the need for revenue; costs and revenue are what derive project profit and internal rate of return. Vice Mayor /Board Member /Commissioner deHaan inquired whether SunCal would release information regarding infrastructure, public amenities and the cap, which SunCal documents ran up to $700 million. Mr. Faye responded all information would be released; stated the cost cap was removed two months before the election. Councilmember /Board Member /Commissioner Matarrese noted even though SunCal lifted the cap two months before, the cap was in the initiative; if it had passed, the initiative would have been the law of the land. (10 -182 CC /ARRA/10 -22 CIC) Election Costs and Request for Reimbursement The Interim City Manager /Executive Director gave a brief presentation. Councilmember /Board Member /Commissioner Matarrese inquired whether half of the Interim City Manager /Executive Director's salary has been paid by SunCal, to which the Interim City Manager /Executive Director responded that she does not charge anything to SunCal. Councilmember /Board Member /Commissioner Matarrese requested future clarification of the matter; stated the matter should be sorted out and posted. Councilmember /Board Member /Commissioner Tam stated the actual draws need to be posted. Mayor /Chair Johnson stated SunCal needs to understand what they are paying for. The Interim City Manager /Executive Director stated that she is willing to disclose everything but the City cannot go as fast as SunCal; continued the presentation. Mr. Faye stated that he is not disputing the budget; the Deputy City Manager — Development Services indicated that the City Attorney /Legal Counsel is not billing time, which is correct according to timecards; SunCal was advised that the Interim City Special Joint Meeting Alameda City Council, Alameda 11 Reuse and Redevelopment Authority, and Community Improvement Commission April 20, 2010 Manager /Executive Director's time is being billed; timecards show otherwise; SunCal requested clarification. Mayor /Chair Johnson stated responses should be received before addressing issues in public in order to avoid confusion. Vice Mayor /Board Member /Commissioner deHaan stated hopefully, there has been no misappropriation of funds; inquired how the Interim City Manager /Executive Director's charges are spread out to accounts. The Interim City Manager /Executive Director responded staff is fully funded wherever allocated; that her salary is split: a little bit in redevelopment and a little bit in the General Fund; stated staff time is budgeted to programs; staff's hours are charged to the SunCal account; that her salary and the City Attorney /Legal Counsel's salary are not spread to individual projects. (10 -183 CC /ARRA/10 -23 CIC) City Web Page - SunCal Updates and Repository The Deputy City Manager — Development Services gave a brief presentation. (10 -184 CC /ARRA/10 -24 CIC) City Response to SunCal's Modified Optional Entitlement Application The Interim City Manager /Executive Director gave a brief presentation; stated a letter requesting further qualification and clarification of the application will go out tomorrow; the City Attorney /Legal Council will send out a letter with respect to reservation of rights tomorrow. Speakers: Nancy Gordon, Alameda; and Gretchen Lipow, Alameda. AGENDA ITEMS None ADJOURNMENT There being no further business, Mayor /Chair Johnson adjourned the meeting at 11:48 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 12 Reuse and Redevelopment Authority, and Community Improvement Commission April 20, 2010