Resolution 13620 and Staff ReportCITY OF ALAMEDA RESOLUTION NO. 13 6 2 0
MAKING FINDINGS CONCERNING A PROPOSED BIO-
TECHNOLOGY INCUBATOR AT THE FORMER FLEET
INDUSTRIAL SUPPLY CENTER AND PLEDGING CITY SUPPORT
FOR THE PROJECT VIA A WAIVER OF CERTAIN
DEVELOPMENT IMPACT FEES
WHEREAS, the Alameda City Improvement Commission ( "CIC ") has committed
to sell a 3.44 acre site at the former Fleet and Industrial Supply Center to Catellus
Development Corporation, a Delaware corporation ( "Catellus ") for the development of
light industrial and office uses, including research and development, more particularly
described in that certain Development and Disposition Agreement between Catellus and
the CIC dated June 16, 2000, and as amended to date ( "the site" and "the DDA,"
respectively); and
WHEREAS, Catellus has indicated that current market conditions do not support
development of that site for those uses on a non - subsidized basis at this time and that it
has agreed to sell the site to Advancing California's Emerging Technologies, a California
non - profit corporation, ( "ACET ") for the purposes referenced in this Resolution; and
WHEREAS, ACET has obtained a $6.44 million grant from the United States
Economic Development Agency ( "EDA ") to relocate and expand its existing
biotechnology incubator from Alameda Point to a 35,000 square foot building ACET has
agreed to construct and maintain on the site as an incubator for emergent biotechnology
businesses ( "the grant" and "the project," respectively); and
WHEREAS, development of the project will trigger the investment of the $6.44
million grant in the City of Alameda, facilitate the goal of the City and the CIC to
establish a niche market in the City for high technology and biotechnology businesses,
and will catalyze the improvement and occupancy of the nearby Enterprise Landing
Business Park, and thereby contribute to the goals of the CIC redevelopment plan for the
site, the economic development goals of the City, and the public health, safety, and
general welfare; and
WHEREAS the EDA grant requires a 20% local match; and
WHEREAS, this 20% local match may be met by the provision of backbone
infrastructure to the site, a write -down of the purchase price of the site by the CIC, and by
the City's waiver of certain development fees with respect to the construction of the
project; and
WHEREAS, ACET has agreed to repay the CIC for any cost of providing
backbone infrastructure to the site which exceeds the sum of $1.2 million and to repay the
City the amount of any development impact fee waiver granted pursuant to this resolution
in the event that ACET fails to develop the project, to operate the project for twenty (20)
years, or sells the site or loses title to the site prior to the expiration of that time by
bankruptcy, foreclosure or otherwise; and
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WHEREAS, Catellus will convey the site to ACET, and ACET will convey to the
CIC and the City a second deed of trust, junior only to any security interest provided to
the EDA pursuant to the grant, to secure the contingent repayment obligations referenced
immediately above.
NOW THEREFORE, BE IT RESOLVED that the City Council does hereby find,
order and resolve as follows:
1. California Environmental Quality Act. The City Council makes the
following findings with respect to this project:
(a)
(b)
(c)
(d)
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The City Council previously certified a Final
Environmental Impact Report on May 31, 2000 for the
Catellus Mixed Use Development, State Clearinghouse
Number 1998112078 ( "the EIR "). The City Council made
findings regarding Catellus' proposed development,
including development of the site for uses as are proposed
by the project. The mitigation measures and mitigation
monitoring program adopted by this Council with respect to
the Catellus proposal are applicable to the project.
No substantial changes between Catellus' proposed use of
the site and the project exist, as both propose office and
research and development uses. Thus, there will be neither
new significant environmental impacts nor any substantial
increase in the severity of the previously identified
significant effects by virtue of the substitution of the
project for Catellus' earlier proposal for the site.
No substantial changes have occurred with respect to the
circumstances under which the project is to be undertaken
as compared to the circumstances analyzed in the EIR that
involve significant environmental effects or a substantial
increase in the severity of previously identified significant
effects.
No new information of substantial importance which was
not known and could not have been known at the time the
EIR was certified shows that the project will have
significant effects not discussed in the EIR, environmental
effects substantially more severe than shown in the EIR,
that mitigation measures previously found infeasible would
in fact be feasible and would substantially reduce one or
more significant effects of the project, or that mitigation
measures or alternatives to the project that are considerably
different than those analyzed in the EIR would substantially
reduce one or more significant effects of the project.
(e) Accordingly, pursuant to Public Resources Code Section
21166 and Section 15162(a) and (b) of the State CEQA
Guidelines, the City Council hereby determines that no
further environmental documentation is required with
respect to the project and that the project shall be subject to
the applicable mitigation measures and the mitigation
monitoring program adopted upon certification of the EIR.
2. ACET's Consideration. The concessions granted to ACET by the CIC and
the City, namely the facilitation of sale of the site at less than its fair market value, the
provision of backbone infrastructure to the site by the CIC, the waiver of development
fees by the City, and the forgiveness of the contingent liability to repay infrastructure
costs incurred by the CIC in excess of $1.2 million and to repay the waived development
fees upon twenty (20) years' operation of the project by ACET on the site are made in
consideration of the following benefits of the project and are, for those reasons, not a gift
of public funds: (a) Development of the site for ACET's expanded incubator will trigger
the investment of the $6.44 million grant in the City of Alameda, benefiting the City,
other businesses in the City, and the residents of the City. (b) That development will
advance the goal of the City and the CIC to establish a niche market in the City for high
technology and biotechnology businesses. (c) That development will catalyze the
improvement and occupancy of the Enterprise Landing Business Park. (d) For each of
these reasons, the project will contribute to the goals of the CIC redevelopment plan for
the site, the economic development goals of the City, and the public health, safety, and
welfare.
3. Accordingly, the City hereby agrees, on the conditions noted in paragraph
4 below, to waive development impact fees due under the Alameda Municipal Code with
respect to the project in an amount not exceed $210,000. It is the City's intent in so
agreeing that the bargain sale of the site to ACET, the waiver of development fees, and
the provision of backbone infrastructure by the CIC shall collectively constitute adequate
local match for the EDA grant referenced above.
4. The City Clerk shall certify the passage of this resolution, enter it in the
official records of the City, and provide a certified copy to ACET and to the EDA.
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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 special meeting assembled on the
22nd day of July, 2003, by the following vote to wit:
AYES: Councilmembers Daysog, Matarrese, and Mayor Johnson - 3.
NOES: Councilmember Kerr — 1.
ABSENT: None.
ABSTENTIONS: None.
IN WITNESS, WHEREOF, I have hereunto set my hand and affixed the official seal of said City this
23rd day of July, 2003.
Lara Weisiger, City
City of Alameda
City of Alameda
Inter- department Memorandum
July 18, 2003
To: Honorable Mayor and Members of the City Council
Honor . . le Chair and Members of the Community Improvement Commission
Fro
Re:
Flint
er /Executive Director
ion of the City Council Making Findings Concerning a Proposed Bio-
Incubator at the Fainter Fleet Industrial Supply Center and Pledging City
he Project via a Waiver of Certain Development Impact Fees; 2) Resolution
C Making Findings Concerning a Proposed Bio- Technology Incubator at the
Former Fleet Industrial Supply Center and Pledging CIC Support for the Project via
Below Market Sale and Provision of Backbone` Infrastructure to the Site
BACKGROUND
In August, 2002, Advancing California's Emerging Technologies (ACET) received a $6.44 million
grant from the federal Economic Development Administration (EDA) for land acquisition and
construction of an approximately 35,000 square foot bio- technology incubator. ACET currently
operates a 15,550 square foot incubator at Alameda Point. The EDA grant will allow ACET to
construct a larger facility. ACET has identified a 3.44 acre site at the former FISC that it would like
to purchase for the new incubator facility. The attached resolutions waiving certain development
impact fees and pledging the land sale and construction of backbone infrastructure that are before the
City Council and CIC have been requested by EDA prior to EDA disbursing any funding for the
proj ect.
DISCUSSION /ANALYSIS
EDA grants require a 20% local match. The local match for the incubator project is in the form of a
land write -down. The DDA between the CIC and Catellus establishes a land sales price of $8.18 per
square foot for R &D property (or approximately $1.22 million for the 3.44 acre parcel). In addition,
the DDA requires the CIC to construct all necessary backbone infrastructure (the current Engineer's
Estimate for the cost of backbone infrastructure is approximately $1.2 million for the 3.44 acre
parcel). The appraised value of the land, once all of the backbone infrastructure is installed, is
approximately $19.53 a square foot, or $2.93 million. Catellus will be selling the land to ACET for
approximately $1.5 million (the difference in land price will cover Catellus' brokerage commissions,
due diligence and legal work, etc.). The difference between the purchase price of $1.5 million and
the appraised value (once the backbone improvements are in) of $2.93 million ($1.43 million)
constitutes the local match.
Re: Resolution Item #3 -AFB
Special Joint Council
CIC Meeting 7/22/03
Dedicated to Excellence, Committed to Service
Honorable Mayor and Members of the
City Council and Community Improvement Commission
July 18, 2003
Page2
Once EDA is assured that the local match is in place, it will disburse 80% of the appraised value of
the land, or $2.3 million dollars to ACET. EDA has informed the CIC that it needs a resolution
pledging the sale of the 3.44 acre parcel to Catellus for construction of the ACET project and
pledging construction of the required backbone infrastructure. The CIC resolution will confirm the
local match obligation enabling the release of EDA funds to purchase the property. Work on the
required backbone infrastructure will commence following completion of the land transaction with
Catellus.
The City of Alameda has a variety of fees that are required as part of pulling a building pe.u�iit. A
number of these fees are impact fees (i.e., the fees acknowledge that new development will impact
certain limited resources (e.g., affordable housing, police, fire, etc.) and that new development
should pay a fee to offset these impacts). Impact fees are not standard across cities and counties and
therefore, they are fees not typically allowable under EDA construction grants. It is estimated that
the impact fees for the ACET project will not exceed $210,000. EDA is not prepared to cover these
fees as part of its grant to ACET; however, it has agreed to count the value of the fees ($210,000) as
local match if the City agrees to waive the fees.
The $6.44 million grant EDA has awarded to ACET is the largest EDA grant in the country. The
construction of a 35,000 square foot bio technology incubator and the infusion of cash into the
Alameda economy is an important economic development activity. The incubator is consistent with
a major economic development initiative to cultivate the high tech/bio tech business niche in
Alameda. In addition, the incubator may be a major catalyst for the Enterprise Landing business
park. Based on the economic development goals that will be achieved with the incubator, it may be
appropriate to waive the impact fees, as well as commit to the land sale and construction of the
backbone infrastructure.
The City can take an additional step to protect its investment in the incubator project by requesting,
through ACET, that EDA allow the City to secure the value of the fee waiver ($210,000) and any
amount in excess of the Engineer's Estimate spent on the backbone infrastructure against the land
and improvements in the form of a second trust deed. The second trust deed would permit the City
to be reimbursed for these costs in the event that ACET voluntarily, or through foreclosure, sells to a
third party. The request for a second trust deed has been made informally to EDA, and EDA has
asked for a letter on this matter from ACET. It may take EDA 45 -60 days to respond to the request;
however, in a July 10, 2003 meeting at EDA headquarters in Seattle, EDA staff did not identify any
problems associated with processing and approving a second trust deed at this time.
FISCAL IMPACT
There is no impact on the general fund to sell the land to Catellus and install the backbone
infrastructure. The infrastructure improvements will be funded with Catellus project revenues (land
sale proceeds, tax increment, etc.). There is an indirect cost to the general fund for waiving the
impact fees (up to $210,000). However, the economic development benefits of the incubator project
will outweigh any negative impact associated with the collection of reduced fees as part of issuing
the building permit.
Dedicated to Excellence, Committed to Service
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Honorable Mayor and Members of the
City Council and Community Improvement Commission
RECOMMENDATION
July 18, 2003
Page 3
EDA has indicated that once the CIC approves the attached resolution pledging the land sale and
completion of the backbone infrastructure in support of the ACET project, it will release funds to
ACET to purchase the land and begin design, and other due diligence work. City Council approval
of the attached resolution waiving the impact fees will also formally constitute a portion of the local
match for the EDA project. The attached resolutions are drafted such that the fee waiver and pledge
to unconditionally complete the backbone infrastructure require the consent of the EDA to record a
second trust deed on the property to secure the value of the fee waiver and any cost of providing
infrastructure in excess of engineer's estimate.
The City Manager recommends that the City Council approve the attached resolution making
findings concerning a proposed bio- technology incubator at the former Fleet Industrial Supply Center
and pledging City support for the project via a waiver of certain development impact fees.
The Executive Director recommends that the CIC approve the attached resolution making findings
concerning a proposed bio - technology incubator at the former Fleet Industrial Supply Center and
pledging CIC support for the project via below market sale and provision of backbone infrastructure
to the site.
JF/PB/DP :la
Res ctfully submitted,
/' /
aul Benoit
Development Services Director
By: ! -bbie Potter
Base Reuse and Redevelopment Manager
Dedicated to Excellence, Committed to Service
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