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1999-01-14 ARRA PacketAGENDA Special Meeting of the Governing Body of the Alameda Reuse and Redevelopment Authority * * * * * * ** Alameda City Hall Council Chamber, Conference Room 391 2263 Santa Clara Avenue Alameda, CA 94501 1. ROLL CALL Thursday, January 14, 1999 Meeting will begin at 5:30 p.m. 2. PUBLIC COMMENT ON AGENDA ITEM Anyone wishing to address the ARRA on this agenda item only may speak for a maximum of three minutes. 3. SPECIAL CLOSED SESSION OF THE ARRA TO CONSIDER: CONFERENCE WITH REAL PROPERTY NEGOTIATOR: Property: Alameda Naval Air Station Negotiating parties: ARRA and the U.S. Navy Under negotiation: Price and Terms Conference with Real Property Negotiator pursuant to Gov. Code Section 54956.8 4. ANNOUNCEMENT OF ACTION TAKEN IN CLOSED SESSION 5. ADJOURNMENT The next regular ARRA meeting is scheduled for Wednesday, February 3, 1999. AGENDA Regular Meeting of the Governing Body of the Alameda Reuse and Redevelopment Authority * * * * * * ** Alameda City Hall Council Chamber, Room 390 2263 Santa Clara Avenue Alameda, CA 94501 Wednesday, January 6, 1999 Meeting will begin at 5:30 p.m. City Hall will open at 5:15 p.m. 1. ROLL CALL 2. CONSENT CALENDAR 2 -A. Approval of the minutes of the regular meeting of December 2, 1998. 2 -B. Recommendation to appoint Planning Board Representative to the Base Reuse Advisory Group (BRAG). 2 -C. Recommending adoption of plans, specifications and estimates and authorization to call for bids for construction contracts to upgrade Building 23, No. P.W. 03- 98 -04. 2 -D. Resolution recommending that the City of Alameda Public Utilities Board proceed to recover its Stranded Assets due to closure of the Alameda NAS and FISC through a claim against the Federal Government outside of the BRAC process. 3. ACTION ITEMS 4. ORAL REPORTS 4 -A. Oral report from BRAG. 4 -B. Oral report from the Deputy City Manager (non- discussion items). 5. ORAL COMMUNICATIONS, NON - AGENDA (PUBLIC COMMENT) (Any person may address the governing body in regard to any matter over which the governing body has jurisdiction, or of which it may take cognizance, that is not on the agenda.) 6. COMMUNICATIONS FROM THE GOVERNING BODY ARRA Agenda - January 6, 1999 Page 2 7. ADJOURNMENT TO CLOSED SESSION OF THE ARRA TO CONSIDER: CONFERENCE WITH REAL PROPERTY NEGOTIATOR: 5:30 p.m. Property: Alameda Naval Air Station Negotiating parties: ARRA and the U.S. Navy Under negotiation: Price and Terms Conference with Real Property Negotiator pursuant to Gov. Code Section 54956.8 8. ADJOURNMENT This meeting will be simultaneously broadcast on cable channel 22. The next regular ARRA meeting is scheduled for Wednesday, February 3, 1999. Notes: • Sign language interpreters will be available on request. Please contact the ARRA Secretary at 864- 3400 at least 72 hours before the meeting to request an interpreter. • Accessible seating for persons with disabilities (including those using wheelchairs) is available. • Minutes of the meeting are available in enlarged print. • Audio tapes of the meeting are available for review at the ARRA offices upon request. APPROVED MINUTES OF THE REGULAR MEETING OF THE ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY Wednesday, December 2, 1998 The meeting convened at 5:35 p.m. with Chair Appezzato presiding. ROLL CALL Present: Chair Ralph Appezzato, Mayor, City of Alameda Barbara Kerr, Councilmember, City of Alameda Sandre Swanson, District Director, 9th Congressional District James Sweeney, alternate to Councilmember Karin Lucas, City of Alameda Mark Friedman, alternate to Wilma Chan, Alameda County Board of Supervisors, District 3 Kathleen Ornelas, alternate to Sheila Young, Mayor, City of San Leandro Absent: Tony Daysog, Councilmember, City of Alameda Jay Leonhardy, alternate to Elihu Harris, Mayor, City of Oakland Ex- officio: Lee Perez, Base Reuse Advisory Group (BRAG) CONSENT CALENDAR 2 -A. Approval of the minutes of the regular meeting of November 4, 1998. Speakers: None. Member Kerr moved approval of the Consent Calendar. The motion was seconded by Alternate Friedman and passed by the following voice vote: Ayes: 5. Noes: 0. Abstentions: 0; Absent: 3. ACTION ITEMS 3 -A. Report recommending authorization for the Executive Director to finalize and execute a ten -year sublease on Building 169 with the U.S. General Services Administration. Alternate Sweeney questioned whether there are any fixtures and if the building is just a vacant warehouse. ®recycled paper 1 h: \12- 2- 98.min Executive Director Miller indicated she cannot answer the question specifically, however, Staff Reports does indicate the total cost for building improvement would not exceed $10,000 dollars. Alternate Friedman moved, and Alternate Ornelas seconded the staff recommendation. The motion passed by the following voice vote: Ayes: 5. Noes: 0. Abstentions: 0. Absent: 0 3 -B. Report recommending authorization to finalize negotiations and execute an interim lease through the term of the Master Lease with Dignity Housing West for 30 West Housing apartment units. Executive Director Miller stated that this is an action similar to a number of actions the Board has taken in beginning to interim lease the housing units to members of the Homeless Collaborative. These leases are needed to be executed prior to the Record of Decision in order for these providers to go forward with their federal funding. Alternate Friedman moved, and Alternate Ornelas seconded the staff recommendation. The motion passed by the following voice vote: Ayes: 5. Noes: 0. Abstentions: 0. Absent: 0 3 -C. Report and recommendation by the Executive Director for approval of a six -month proposed 1999 budget for ARRA lease revenue. Executive Director Miller advised that Nanette Banks from ARRA Staff is available to answer any questions on the Staff Reports. Member Kerr inquired who is the environmental consultant. Executive Director Miller indicated they contracted through the City Attorney's office, through the same attorneys that they are using for the FISC negotiations, Shute Mihaly, with their subcontractor Peter Russell. The contract has been extended to include work for ARRA and, it is therefore, an efficient process because they are dealing with many similar issues on the FISC property. Member Kerr inquired on the 1999 ARRA fund balance projection. The ending balance on June 30, 1999, is down to $2,947.00, which is a little bit thin. Deputy City Manager Berger indicated that they did look beyond the ending period for the next six months, and in fact, the ending balance projected is $561,000. The reason that it is down to that level is because there is some front -end loaded cost related to matching the EDA grants for the entire year's worth of improvements. So the second six month's expenditures would not contain EDA matching amounts which equates to about $550,000 according to ARRA Staff Member Banks. The OEA grant is also funded for the entire year match at $650,000. The next six months did not include those figures. The fact is that we took the revenue and divided it by two but we could not do that with the expenditures because we had an obligation to put the full match for federal grants in the first six months. This is just the transition budgets so that we can do a fiscal year budget that matches the City's fiscal year budget. It will be much more efficient for the operation to have a fiscal year that matches the City's fiscal year. @recycled paper 2 h: \12- 2- 98.min Member Kerr questioned the requirement for the matching funds and whether they are actually paid by July 1. Deputy City Manager Berger deferred the question to ARRA Staff Member Banks. Staff Member Banks indicated that they are just budgeted, they are incumbered for that time period. Member Kerr remarked that there is actually money in the bank that has not been spent yet. Staff Member Banks indicated yes. Executive Director Miller noted that the ARRA Staff have had a lot of learning experience from operating one year of these revenues. With this experience under their belt, they have a better handle on where some of the cost and anticipated cost are going to be. The biggest unanticipated expenditures have been on building maintenance. Alternate Friedman moved, and Member Kerr seconded the staff recommendation. The motion passed by the following voice vote: Ayes: 6. Noes: 0. Abstentions: 0. Absent: 0. 3 -D. Report from the Executive Director recommending endorsement of ARRA's proposed grant proposal to the Office of Economic Adjustment for the 1999 -2000 fiscal year. Speakers: None Member DeWitt moved, and Member Kerr seconded the staff recommendation. The motion passed by the following voice vote: Ayes: 6. Noes: 0. Abstentions: 0. Absent: 0. ORAL REPORTS 4 -A. Oral report from the BRAG updating the ARRA on current activities. Speakers: Lee Perez, BRAG Chair, reported how very pleased he was with the open house. He publicly thanked the staff for all the work they did and particularly congratulated Andrine Smith, the Chairperson of BRAG Community Involvement Group and all of the volunteers under her. He added it was a very good experience and the open house offered an opportunity for the community to come in to see what is going on at Alameda Point. BRAG will continue to discuss how it sees its future role. There are some things that are still holding fire, such as the soon to be scheduled meeting of the Museum Task Force. Chair Appezzato noted how impressed he was with BRAG and the hundreds of volunteers who have contributed their time. Lee Perez, BRAG Chair, expanded in saying that this whole community is known for real involvement. Member DeWitt noted that he really liked this type of open house where each of the businesses open their doors where an individual can go in and observe what that business is about. He is interested in seeing this type of open house in the future. ®recycled paper 3 h: \12- 2- 98.min Diane Lichtenstein, BRAG Vice - Chair, added that the tenants were thrilled to have this opportunity where the public can see them and for them to get exposure. This is a good formula that they will do again. Member Kerr, noted it was an excellent forum because people were able to see what is going on in the Base by walking through the businesses. This type of open house goes a long way into familiarizing people of Alameda of what is going on at Alameda Point and getting them to see and appreciate it. ORAL REPORTS 4 -B. Oral report from the Executive Director (non- discussion items). Executive Director Miller indicated that there are a couple of items that need to be reported. The Board asked a number of the Boards and Commissions in the City to look at the golf course issue. In the interest of efficiency, the BRAG is hosting a joint workshop on the golf course issues and inviting the Golf Commission, the Parks and Recreation Commission, and the EDC, so that they can all be given information jointly, share and talk among and between their various groups. This will take place in December. They will not be taking formal actions but will be back in January or February with recommendations. Chair Appezzato asked if there are still discussions with the Port of Oakland about some kind of tipping fee for clean dredge spoils. Executive Director Miller indicated yes. Since the Water Resources Act did not pass the last congressional session, the project has been delayed. However, they have had very productive discussions with the Port and think there is an expectation that there is going to be a tipping fee. The U.S. Fish & Wildlife Services advised us verbally, and soon will be announcing their Refuge Management Plan. They expect to be circulating the document for public comment very shortly and hold a public meeting early in January. As soon as we have an official notice of that schedule, we will advise you formally. Tomorrow we will be officially submitting to the Navy our revised EDC application. We have, with your authorization, informally begun discussions with the Navy EDC Team about the major concept of the business deal. We will be meeting with their entire Navy negotiating team next week to start to get into the details of the business plan. Finally, I would like to say that this is my last official meeting with the Board as Executive Director. I have enjoyed this experience and enjoyed working with all of you. Thank you for the opportunity. ORAL COMMUNICATIONS, NON - AGENDA (PUBLIC COMMENT) Tom Paulseck, Restoration Advisory Board Committee (RAB), indicated that he was in a meeting last night where he was informed that the Big Whites and the CPO Housing at the ®recycled paper 4 h: \12- 2- 98.min Alameda Point have had the remediation completed but that the units were not ready for renting. This is a revenue producing item and would like to know when they would be available? City Attorney Terri Highsmith, indicated that they are still waiting for the Navy's contractor, IT Corp. to provide certification that the lead base paint abatement was properly done for each individual unit. We are in discussions right now with the Navy regarding the terms of the prime lease between the ARRA and the Navy regarding the liability the City will be assuming in accepting these properties. COMMUNICATIONS FROM THE GOVERNING BODY None ADJOURNMENT The meeting was adjourned by Chair Appezzato at 6:00 p.m. Respectfully submitted, ate )14Vtf--- Marites Ward ARRA Secretary ®recycled paper 5 h: \12- 2- 98.min Alameda Reuse and Redevelopment Author; Interoffice Memorandum December 10, 1998 TO: Honorable Members of the Alameda Reuse and Redevelopment Authority FROM: David A. Berger, Deputy City Manager Community and Economic Development SUBJ: Recommendation to appoint Planning Board Representative to the Base Reuse Advisory Group (BRAG) Background: Currently the Base Reuse Advisory Group consists of representatives from other Boards and Commissions. With the election of the BRAG Planning Board representative to the City Council, the Planning Board has selected Gary Bard to represent them on the BRAG. Discussion: The BRAG By -laws outline the procedure for replacing a representative from another City Board or Commission. The outside body must select a representative and the appointment of that person is ratified by the ARRA Governing Body. Fiscal Impact: None Recommendation: It is recommended that the ARRA Board, by motion, approve the appointment of Planning Board member Gary Bard to represent the Planning Board on the Base Reuse Advisory Group. Respectfully submitted, David A. Berger Deputy City Manager Community and Economic Development DB /nb /cb C:\MARITES\ARRA\AGENDA\BRAG 1--1. WPD Alameda Reuse and Redevelopment Authority Interoffice Memorandum December 28, 1998 TO: Honorable Members of the Alameda Reuse and Redevelopment Authority FROM: Kay Miller, Executive Director SUBJ: Report from the ARRA Executive Director recommending adoption of the plans, specifications and estimates and authorization to call for bids for construction contracts to upgrade building 23, 2401 Monarch St., No. P.W. 03 -98 -04 Background: On May 5, 1998, the ARRA governing board awarded a contract to Muller & Caulfield Architects to prepare plans and specifications to upgrade to Building 23. These upgrades are required to make the building code compliant and suitable to lease. Building 23 is scheduled to be leased by the Alameda Reuse & Redevelopment Authority to Zebra Motors, an electric car manufacturing company. The term of the lease will be 5 years. Prior to the execution of this lease, life safety and code upgrades must be completed. Discussion: The improvements include re- striping parking, upgrades to comply with Americans with Disabilities Act (ADA), upgrades to the heating and ventilation system, provision and/or upgrades to utility services (gas, electricity, and water), installation of a fire alarm system, abatement of hazardous materials in the path of construction, waterproofing, modification of the sprinkler system. Estimated cost to upgrade this hangar is $700,000 to $850,000. Architectural and engineering plans and specifications are available for review at the City of Alameda Public Works office during normal business hours. The Planning Board determined the project is categorically exempt from CEQA and approved a use permit on December 16, 1998. This action is subject to Council review of this same recommendation. It is scheduled for their January 19, 1998 meeting. Bid solicitations will be advertised after Council approval. Fiscal Impact: These improvements are required to comply with code requirements and allow the building to be occupied. EDA grant funds will cover 75% of construction costs. The required local match to cover the remaining 25% of construction costs will be paid from ARRA lease revenues. Recommendation: It is recommended that the ARRA governing body, by motion, authorize adoption of the plans and specifications and authorize a call for bids for construction contracts to upgrade building 23 at Alameda Point, No. P.W. 03- 98 -04. Respectfully submitted, Kay Miller Executive Director I I: \M ENSLEY \ARRA \STAFFREP\ 1998 \BLDG23. Alameda Reuse and Redevelopment Authority Interoffice Memorandum TO: FROM: DATE: SUBJECT: Honorable Members of the Alameda Reuse and Redevelopment Authority David A. Berger, Deputy City Manager Community and Economic Development December 30, 1998 Proposed ARRA resolution supporting the Alameda Bureau of Electricity pursuing reimbursement for stranded investment costs from the U.S. Navy. I have received the attached memo from Alameda Bureau of Electricity General Manager Tom Evans. I concur with his recommendation and forward it to the Board for your consideration. Respectfully submitted, David A. Berger Deputy City Manager Community and Economic Development @Recycled paper City of ALAM El)A Bureau of ELLC'I'II.ICI'I'Y Inter - department Memorandum DA'Z'E: December 28, 1998 TO: David A. Berger, Deputy City Manager Community and Economic Development FROM: Thomas P. Evans, General Manager B f El ureau o ectricity SUBJECT: Alameda Bureau of Electricity - U.S. Navy Contract Background: The summary of this issue is: ► The Alameda Bureau of Electricity (Bureau) made significant long -term, capital investments in power plants in response to the U. S. Navy's (Navy) requirement to provide power at the Naval Air Station (NAS). ► The closure of the NAS has resulted in a significant portion of those capital costs becoming stranded investments. • The value of the stranded investments made on behalf of the Navy has been calculated to be approximately $22 million. ► The Bureau's remaining customers are now paying rates which are 6.5 percent higher as a result of the Navy's stranded investment. Thomas P. Evans, General Manager, Bureau of Electricity, discussed the issue of collecting stranded costs from the Navy with Mr. Bill Chandler, State Director for Senator Diane Feinstein, and with Mr. Sandre Swanson, State Director for Congressmember Barbara Lee. Both Congressmember Lee and Senator Feinstein's offices are interested in helping lend support to the City of Alameda in resolving this issue with the Navy. Mr. Chandler believes it is important that the process be clearly supported by ARRA, and the Bureau not be perceived as pursuing this independently. Thomas P. Evans has discussed this issue with David A. Berger, Deputy City Manager, and David Brandt, Deputy City Attorney. They both concur that it is important to pursue recovery with the Navy and that the Bureau it is the logical department of the City to do so. Thus, we are requesting that ARRA adopt the attached resolution which will clearly indicate to everyone that the Bureau is pursuing this issue with the full support of the ARRA Board. chal Paper Discussion: The City of Alameda, California has its own municipally -owned electric utility, the Bureau of Electricity. The Alameda NAS was by far the Bureau's largest single customer, constituting approximately 30 percent of the Bureau's sales of electricity prior to its closure in 1997. Electricity sales at the NAS site, now called Alameda Point, are now only about one -tenth of that amount. This has resulted in significant consequences for the City of Alameda. The fixed costs of generating resources which were put in place by the Bureau to serve the NAS are now, in part, stranded investments. The share of the stranded investments attributable to the NAS totals nearly $22 million. The Bureau served the NAS's electricity requirements since its inception in 1940. The Navy's electrical requirements increased continually over the years and, in 1982, a modification' of the service contract' was executed for provision of 50 million volt - amperes (MVA) to the NAS, a significant jump in the requirement.' The Navy contractually agreed to contribute funds in aid of the construction of local transmission facilities to help supply the increased load.' The Navy also required that the entire 50 MVA level of power supply be available at all times.' °5 This level of service was required by the Navy in order to supply the "cold iron" loads of two nuclear - powered aircraft carriers and other ships at the piers in addition to the other loads on the base. Although actual consumption increased considerably with the presence of the aircraft carriers,' the expected 50 MVA load level never fully materialized and, over the next few years, the Bureau worked closely with the Navy to reduce their forecast commitment to a more realistic level.7'8 From that time until the announced closure of the NAS, the Bureau utilized the Navy's forecast commitment as a guide in planning for the combined requirements of the City and the NAS and in developing or contracting for power supply. Stranded Investment Electric generating resources are very capital- intensive facilities which require long planning and lead times for construction and have service lives extending over many decades. The Bureau's contractual 'Contract modification P00018. 2Contract No. N62474 -67 -3 -0160. 3The requirement was previously 30 MVA. 4Contract modifications P00018, 21, 22, 23, and 27. 5February 25, 1983 letter from A.H. Studebaker, Department of the Navy, to Jack R. Shepard,Alameda Bureau of Electricity. 6Peak load increased from approximately 25 MW to 35 MW. The average monthly peak demand increased from the low 20s to nearly 30 MW. 7Short -term Load Forecast Commitments - Contract Modification P00025. $The average monthly peak demand forecast was reduced to approximately 31 MW. 2 commitment to the Navy required it to acquire generating resources to reliably serve the NAS. A principal goal was to do so at the lowest possible cost so the Naval Aviation Depot, a major industrial tenant of the NAS, would be cost - competitive. As a result, the Bureau participated in the construction of a number of power plants and long -term purchase contracts.9 In the main part, these were capital intensive renewable resources which were entered into with the encouragement of the U.S. Department of Energy. With the closure of the NAS, the Bureau finds itself with substantial outstanding debt and other obligations, not only in the local transmission upgrades which the Navy helped finance, but much more significantly in the amount of generating resources which the Bureau has put in place or contracted for on a long -term basis to reliably and economically meet the previously expected requirements of the NAS. The Navy no longer contributes its fair share of the cost of those generating resources. The generating plants were financed by the issuance of bonds which the Bureau is obligated to pay off over the financial life of the projects. Due to the reduced consumption at the NAS site, a significant portion of the Bureau's generating capacity has become excess to its requirements. Because the market for this power is currently depressed, and is expected to continue to be relatively low over the next several years, the Bureau has experienced stranded cost due to the base closure which has been calculated to be $21,895,000 on a net present value basis. As the electric load at the NAS declined, the remaining customers in Alameda have paid higher rates to cover the costs for power supply resources that were acquired for the Navy. It is estimated that the Bureau's customers pay 6.5 percent more for electricity than they would if the Navy were to pay its share of the stranded cost. In addition, the amount of money that can be transferred to the City's general fund has been greatly reduced as a result of the Bureau's compromised competitive position. Specifically, the transfer has been reduced from a high of $3.6 million in Fiscal Year 1996 to $2.4 million in Fiscal Year 1999. The majority of this reduction, approximately $1 million, can be attributed to loss of sales at the NAS. Fiscal Impact: The ARRA has submitted an Economic Development Conveyance application to the Navy. The application states that if the Bureau of Electricity is unsuccessful in obtaining reimbursement from the Navy through the P.L.85 -804, that the stranded costs should be considered in the terms of the Economic Development Conveyance. Recommendation: Adopt the attached resolution Recommending that the City of Alameda Public Utilities Board Proceed to Recover Its Stranded Assets Due to Closure of the Alameda NAS, and FISC Through a Claim Against the Federal Government Outside of the B.R.A.C. process. 9lncludes participation in Northern California Power Agency geothermal, hydroelectric and combustion turbine projects. 3 ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY RESOLUTION NO. _ RECOMMENDING THAT THE CITY OF ALAMEDA, PUBLIC UTILITIES BOARD, PROCEED TO RECOVER ITS STRANDED ASSETS DUE TO CLOSURE OF THE ALAMEDA NAS, AND FISC THROUGH A CLAIM AGAINST THE FEDERAL GOVERNMENT OUTSIDE OF THE B.R.A.C. PROCESS WHEREAS, the City of Alameda Bureau of Electricity has provided electric power under contract to the U.S. Navy (Navy) for over forty years; and WHEREAS, the city of Alameda, Bureau of Electricity, invested in generation facilities solely to supply the requirements of the Navy; and WHEREAS, the current value of that "stranded" investment which cannot be recovered through sales of electricity to the Navy due to the closure of the Alameda Naval Air Station (NAS) is approximately $22 million; and WHEREAS, the Economic Development Conveyance application prepared by the Alameda Reuse and Redevelopment Authority currently does not include this $22 million liability in the valuation of the former Alameda NAS. NOW, THEREFORE, BE IT RESOLVED by the Governing Board of the Alameda Reuse and Redevelopment Authority that the Alameda Public Utilities Board is urged to pursue reimbursement or relief from this existing liability through a claim against the Navy under Public Law 85 -804, through special legislation or through some other negotiated settlement with the Navy or the U.S. Department of Defense or other means as may be appropriate and necessary to obtain full and adequate relief. G: \USERS\ALLSHARE\DUNCAN\ARRA.TPE 4 CO'' SPONDENCE/ MISCELLANEOUS BARBARA LEE 9111 DISTRICT, CALIFORNIA comm1TTLEs BANKING AND FINANCIAL SERVICES SCIENCE REPLY TO OFFICE CI IECKED' 0 2108 RAYBURN H.O.B. WASHINGTON. DC 20515 (202) 225-2661 0 1301 CLAY STREET SUITE 1000 N OAKLAND, CA 94612 )510) 763-0370 Olongreos of the 31initeb *tees ?Amon of ittortoentottuto illoobington, BAIL M515-8509 November 24, 1998 Ms. Kay Miller ARRA 950 West Mall Square Alameda, CA 94501 Dear Ms. Miller: WASHINGTON OFFICE CARLOTTIA A. W. SCOTT t.1-.1)N15TR,=[S1STAN'. DISTRICT OFFICE SANDRE R. SWANSON DISTRICT DIRECTOR ROBERTA CHEFF BROOKS ASSISTANT DISTRICT DIRECTOR REC DEC 1 1998 CITY OF At A (IEDA I write to congratulate you upon your receipt of a grant of $500,000.00awarded on November 23, 1998 by the U.S. Department of Commerce. This grant will be used to conduct engineering studies and prepare plans and specifications for construction of an extension of Tinker Avenue to allow improved access to Alameda Point. I congratulate you upon your having been chosen by your peers to receive this support. I wish you the best in your endeavors. BL:th Sincerely, arbara Lee Member of Congress c 6ATE9 O( UNITED STATES DEPARTMENT OF COMMERCE The Assietunt Secr- tery D *valcsp:rert Washington, D.C. 20230 DEC 1. 1998 DEC 0 7 1998 In reply refer to: Award No.: 07 -49 -03852 Ms. Kay Miller Executive Director Alameda Reuse and Redevelopment Authority • 950 West Mall Square Alameda, California 94501 Dear Ms. Miller: Congratulations on the approval of your application for an Economic Adjustment Program Grant. I want to offer my sincere good wishes for the success of your project. The grant supports the efforts of your organization to conduct environmental studies and engineering for the Tinker Avenue extension. EDA shares your expectations regarding the impact of this project. When successfully completed, we are confident that your project will be an integral part of your community's plans for local economic development and will assist in achieving lasting improvement for your community. Sincerely, lrt czeit/w+tM Phillip A. Singerman lilt Assistant Secretary for Economic Development 1..0 ....., co 0 t4 0 C4 00 t4 -4 t'..) O'N t4 VI t4 4D. t4 t./4 1‘4 t4 t4 ..... t4 0 0 00 -.I 0 LA 40. 0 0 00 -1 01 LA .P t....) ts4 PROJECTED FUTURE EMPLOYMENT I CURRENT EMPLOYMENT OCCUPIED BUILDING SQUARE FOOTAGE NO. OF PROPERTIES CURRENTLY OCCUPIED [Love Center Ministries IWA Engineers (Steel Fabrication) Housing Units (31) !Home Auto Repair Forty Plus (Career Counseling) Forem Metal Manufacturing Emerg. Svcs. Network (Homeless Coll.) Dunavant of California (Storage) Door Christian Fellowship Church Delphi Productions (Exhibit Displays) CyberTran International (Test Track) City of Alameda (Tennis Courts) City of Alameda (Soccer Field) City of Alameda (Public Works) City of Alameda (O'Club) City of Alameda (Gym & Pool) City of Alameda (Ferry Terminal Parking) City of Alameda (Dog Run Park) City Garage Carstar (Vehicle Painting) Cellular One (Cell Site) CALSTART (Test Track) CALSTART (Electric Vehicle Incubator) Bureau of Electricity (Storage Yard) Bobac (Warehouse) Bay Ship & Yacht (Ship Repair) !Antiques by the Bay (Collectibles Faire) (Altair Marine (Ship Repair) Alameda Unified School District Alameda Point Storage (Mini Storage) AC Hornet Foundation ACET (Environmental Tech. 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IN.) 4=. ..... 41. 0 l....) 1/40 I...4 00 tr4 -4 c..4 0 t...4 LA (...4 .A. t..4 t.•4 L,.■ r4 1Woodmasters (Cabinetry) United Indian Nations (Homeless Coll.) Trident 3M Services (Port Mgmt.) iTower Aviation Simmba Systems (Records Storage) ,Richard Miller Photography Piedmont Soccer Fdn. Piedmont Baseball Fdn:, Pacific Fine Food, Inc. (Crepe Mfg.) Nelson's Marine (Boat Storage /Repair) Navigator Systems (Furniture Mfg.) Marine Sanitation Maritime Administration Maritime Administration Marathon Pallet (Polyethylene) Manex Entertainment Manex Entertaiment Signed Leases & Licenses long term long term long term 0 00 CD long term long term 1 year ..... CD long term � long term long term long term long term long term 1 0 GO CD g long term long term 0.3 .1 0 = 4D.. .-. • ... ■—• 0£S 621 soccer field1 cn 0 ...-. CD 0.. 421 ■-■ g° !It • ;4 co -P. CP , --6. .-- oo -0 — cn ■■•■• •■ is.) r....) 3981 c....) tV t0 G • S CP1 4t ,..I.C1 N.) ■-■ ' 4 = , . 0 0 00 .... CD 01 0 L.4 1OSZ`Z8 ,.0 t•.) 00 - -4 10LL`S 3,0001 VI 4D. VI 0 4 0 tA 0 0 0 ■—• ■-•-■ I..-` ---3 0 4 a 0 .- 0 0 •—• 0 O a 0 34,5401 -4 Bldg. Sq. Ft. I Bldg. Sq. Ft. en s ■.6 34,5401 0 o 0 0 — CZ --, 1,000 40,0001 0 r) kri 0 0 m 0 s N ,r," 92,8171 0 kr, N N's co (fl 0 ■-0., ■0 --• 0 c." ,:t. N c, ec -. tr," qt 4 .... , , N en oo rn Piers 1, 2, 3 168 --, ■•0 14 167 & piers 42 "0 t.r... = ... 4...,A 0 In soccer field --. V) 0 0 m•-, tel kr) CPO units', long term long term "long term long term long term long term 11ong term long term long term 1 year 1 year long term long term 1long term long term Ilong term long term 1 Signed Leases & Licenses 1 Manex Entertainment 1Manex Entertainment Marathon Pallet (Polyethylene) !Maritime Administration Maritime Administration Marine Sanitation Navigator Systems (Furniture Mfg.) Nelson's Marine (Boat Storage/Repair) Pacific Fine Food, Inc. (Crepe Mfg.) Piedmont Baseball Fdn. Piedmont Soccer Fdn. Richard Miller Photography Simmba Systems (Records Storage) Tower Aviation Trident 3M Services (Port Mgmt.) United Indian Nations (Homeless Coll.) Woodmasters (Cabinetry) N en en rn vt m kr) m ■0 en S en oo en C en 0 *I- -■ ,t N *I- m 'I- ..:1- .4* kr) "et ■0 -,4- S "zr 00 •zt er C.9) 0.0 0 ,e1 4r1, ken ,... 0 en •ch c",1 ,.... 0 0 r (5. __, 4,8801 0 0 0 0 NO ri (5 ,-.4 - 0 0 1/40, 0 ■0 0 0 'cr — 26,9271 0 kr) "ki" 00 kr) 0 kr) kr) C\ N 17,0001 0 0 0 c)^ --, -.4 0 0 1/40, 00 170,0001 0 0 1/40, .1- 0 0 0 0 i005`tt 0 0 — ....., 47,177' Ln •-■ cn" ,--4 0 0 00 00 "I' ,...■ CZ ■0 en CV , CD 00 v-I III 00 e-i It oz .... = =1 C-- Pier 3 near Bldg. 530 258 tarmac & 405 292 Bldg 2 FISC C.) 4.4 C' . 24, 25 76 & 134''. 0 ,.0 r-- v, m 0, m .,:t k-o kr, () up ,.. ra. bi) "C) 01:1 m — ko ,:h — — 0 as Cr■ kr, -4. m — _ N — E long term long term long term long term long term long term long term long term long term long term 6 months long term long term Hong term long term long term long term long term long term long term short term long term long term long term "long term o.) bi) C 0 long term long term long term 1 long term 6 months NO. OF PROPERTIES CURRENTLY OCCUPIED OCCUPIED BUILDING SQUARE FOOTAGE Signed Leases & Licenses ACET (Environmental Tech. Incubator) AC Hornet Foundation Alameda Point Storage (Mini Storage) Alameda Unified School District Altair Marine (Ship Repair) Antiques by the Bay (Collectibles Faire) Bay Ship & Yacht (Ship Repair) Bobac (Warehouse) Bureau of Electricity (Storage Yard) CALSTART (Electric Vehicle Incubator) 1 CALSTART (Test Track) Cellular One (Cell Site) City Garage Carstar (Vehicle Painting) City of Alameda (Dog Run Park) City of Alameda (Ferry Terminal Parking) City of Alameda (Gym & Pool) City of Alameda (O'Club) City of Alameda (Public Works) City of Alameda (Soccer Field) City of Alameda (Tennis Courts) CyberTran International (Test Track) Delphi Productions (Exhibit Displays) Door Christian Fellowship Church Dunavant of California (Storage) Emerg. Svcs. Network (Homeless Coll.) Forem Metal Manufacturing Forty Plus (Career Counseling) Home Auto Repair Housing Units (31) IWA Engineers (Steel Fabrication) Love Center Ministries CURRENT EMPLOYMENT PROJECTED FUTURE EMPLOYMENT 1 -- N en ci- ,f) ,0 N 00 ON 0 --. •-■ -, CV --. en -4 "ti" -4 kel ,--, 1/40 •-• l", --. 00 -• 0 -4 0 N )--. N N N rn CV <I- r4 ken CV '.0 eV N CV 00 N 0•% N 0 en --. en Interim Leasing Status Report Premises: Runway 251 N taxiway taxiway 5A Bldgs. 11/12/400A1 N bb 1 Pool' park N Pier 3 Bldg. 231 Bldg. 251 Bldg. 241 Bldgs. 24/25 0¢ taxiway' �--� 0 col roadway' ^t N N Completed Sublicenses: Acad. of Model Aeronautics Alameda Recycling (Storage) AREA 51 Productions (TV Show) AREA 51 Productions (Custom Car Show) AREA 51 Productions (Auto Mfg. Survey) AREA 51 (Rehearsal Studio) ATL /Interscope Communications (Film Co.) ATL/Interscope Communications ATL /Interscope Communications 1Boy Scouts of America Chamber of Commerce /Bur. of Elect. (Trade Expo) CINCPAC (Fleet Week '97) CALSTART/Bur. of Elect. (EV Expo) 1997 & 1998 Clubhouse Pictures (Film Co.) Disney Studios Great Benefit Productions (Film Co.) Industrial Light & Magic (Film Co.) Industrial Light & Magic (Film Co.) Mass Illusions (Film Co.) Microsoft Nadel Productions (Film Co.) Off Duty Productions (Film Co.) Rosebud Touring Co. (Rehearsal Studio) Rysher Entertainment (Fillm Co.) TOTAL COMPLETED SUBLICENSES: --� N M et WI lC N 00 CT 0 •-. ^' N .-. M .-. d' vl •-. lC •-. N .-. 00 .� Cl ,--. 0 N -� N N N M N d' N Use Permit Approved >< >< >< >< >< 4 0 0 0 0 0 0 vt -- .0 M N 0 0 0 oo .-. 44,800. 265,000 ,.0 00 0\ 0 0 0 0 41 C^ 0 vl 00 N 0 V1 et 0 0 O v1 t� 0 v 0 t 0 N M CT ,-. 0 h IT ^ 0 0 0 r 0 0 t M N 0 N N — 0 0 0 O [� N 0 vl 0 06 N 0 00 d' C\ --+ 0 0 00 tV 0 0 vn vi s. sO N O\ --+ N O O. M tSA "CS '= CA SOLI �' 77 N NOL 64 ..■ N vl 494 Cans ~ CG ,-, Cl l� .-. .0 Z t a. 102 N* v .-. b .-. 531, 532, 533 N- .-■ N TOTAL PENDING SUBLEASES /SUBLICENSES Pending Subleases & Sublicenses ACET (Environmental Tech Incubator) ACET (Office Area Only) Alameda Naval Air Museum Altamont Technologies (Equip. Mfg.) Alternative Storage AREA 51 (Special Event Productions) Calif. State Univ. (Research Station) City of Alameda (Offices) City of Alameda (Fire Department) City of Alameda (Police Department Container Storage Container Works (Storage) Doctors' Group for Elderly Housing Dynamic Marine Boatworks Fribel Internat'l. (Concrete Mfgr.) General Svcs. Administration Harbor Bay Maritime (Storage) Influence Communications (Mktg.) Jim Bustos Plumbing Manex Entertainment Miller & Sons (Contractor) Orbit Development (Property Mgmt.) 1 San Leandro Womens' Shelter U.S. Customs Service Waters, Caldwell (Environ. Services) Zebra Motors (Electric Vehicles) TOTAL SQUARE FOOTAGE: •-■ N M d' vl V^ N 00 ON 0 ••• .-1 N .-. M v.. d' .-. U1 .-. ■O .. t-- .-. 00 .-. CT 0 .-• N — N N N M N d' N Vl N ■C N A1uueda. Reus and iedeveloprneu.t Authority Alameda Point Redevelopment Center 950 W. Mall Square, Rm. 159 Alameda, CA 94501 Governing Body Ralph Appezzato Chair Mayor, City of Alameda Sandre R. Swanson Vice - Chair. District Director for Ronald V. Dellums 9th Congressional District Wilma Chan Supervisor, District 3 Alameda County Board of Supervisors Henry Chang, Jr. Oakland Councilmember serving for Elihu Harris Mayor, City of Oakland Ellen M. Corbett Mayor City of San Leandro Tony Daysog Councilmember City of Alameda Albert H. DeWitt Councilmember City of Alameda Barbara Kerr Councilmember City of Alameda Karin Lucas Councilmember City of Alameda Kay Miller Executive Director Recycled paper December 30, 1998 To: Ralph Appezzato, Chair and Members of the Alameda Reuse and Redevelopment Authority From: Teresa L. Highsmith General Counsel (510) 864 -3400 Fax: (510)521 -3764 Re: Alameda Reuse and Redevelopment Authority Closed Session Meeting January 6, 1999 - 5:30 p.m. - Real Estate Negotiations Attached is a memo from Kay Miller, Executive Director, Alameda Reuse and Redevelopment Authority, addressing the homeless collaborative accommodations and impacts on the sale and reuse of portions of Alameda Point and a proposed solution of this matter. Please contact me if you have any questions or require additional information. Teresa L. Highsmith General Counsel Attachment bee: Steve Belcher, David A. Berger, JohnsDoll, Jim Flint, Mike Pucci, Jim Musbach yq,s CONFIDENTIAL Alameda Reuse and Redevelopment Authority CLOSED SESSION MEETING - REAL ESTATE NEGOTIATIONS TO: Honorable Members of ARRA Board FROM: Kay Miller, ARRA Executive Director Vy' " SUBJECT: Recommended accommodation with the Homeless Collaborative for 125 Barracks Units * Family Housing in East Housing Area DATE: December 30, 1998 Background: ARRA and City staff have been negotiating with representatives from the Homeless Collaborative regarding two issues: 1) an accommodation for the remaining 125 barracks units committed to in the Standards of Reasonableness, and 2) moving 97 family housing units from East to West Housing. The 125 barracks units had been assigned to Operation Dignity for use by homeless veterans. The Community Reuse Plan listed several options for meeting this obligation. Among the options were 125 rooms at the Bachelor Officers Quarters (BOQ) or 125 rooms at the Bachelor Enlisted Quarters (BEQ). Originally, these two issues were being negotiated separately. However, both negotiation teams decided to combine the two issues and look for a "package" solution which addresses both these issues. The Homeless Collaborative "team" consisted of John Brauer and Jack Shepherd who were selected by the Homeless Collaborative Steering Committee and empowered to "make a deal," subject to ratification by the Steering Committee. The ARRA/City negotiation team consisted of myself and Nanette Banks from the ARRA, and John Doll representing the CIC's interests on East Housing and FISC, plus legal counsel from Assistant City Attorney, Terri Highsmith. [Note the CIC is the Community Improvement Commission...the City redevelopment agency). The team was assisted by a large resource team consisting of: Marti Buxton, and her housing development colleagues from Catellus; Steve Belcher, the City's Housing Development Manager, Mike Pucci, Executive Director of the City Housing Authority; Jim Musbach and David Zehnder from Economic Planning Systems (EPS) who provided 1 CONFIDENTIAL numbers on infrastructure fees, land values, etc.; and Marc Mihaly, outside counsel to the City Attorney's office assigned to provide legal assistance on the Catellus project for the FISC. The impetus for the negotiations was the desire to "free up" the BOQ and BEQ and other NAS facilities from any "claim" by Operation Dignity or the Homeless Collaborative for 125 barracks units. Both the BOQ and the BEQ have had substantial market interest. EPS attributes value to the BOQ based on revenue projections at $2.8 million; they value the BEQ at $4.6 million, using similar methodology. The interest in asking the Homeless Collaborative to consider moving their 97 units from East to West Housing was to enable the desired development to occur in the FISC/East Housing Catellus project, which would also encourage a higher land value in the sale of the property to Catellus. Catellus and City Staff agreed that planning an integrated new neighborhood with appropriate infrastructure would be seriously impeded by the presence of 97 units of existing housing. Finally, it should be noted that the ARRA has an obligation to accommodate the Homeless Collaborative because of federal law. The commitments made to the Homeless Collaborative are reflected in the adopted Community Reuse Plan and the Standards of Reasonableness. If this obligation is not met, it could jeopardize the conveyance of NAS, and indirectly the FISC. Discussion: The need to reach agreement on an acceptable alternative accommodation for the barracks and East Housing family units is being driven by two factors. 1) Both Operation Dignity and UA Housing have received federal funding to begin the rehabilitation of their family housing units. They have a statutory deadline of January 23, 1999, at which time they have to be able to demonstrate "site control" of the specific units they plan to rehabilitate. In order to substitute West Housing apartment units for East Housing units, the ARRA Board will need to agree to the terms of this substitution and authorize a lease for the West Housing units by the January 23rd deadline. 2) Catellus and the City staff agree that in order to allow the planning for the FISC /East Housing property to proceed, and to complete the DDA negotiation, the issue of the 97 East Housing Homeless Collaborative units must be resolved. Because of the aforementioned deadline demands, the negotiating teams have undertaken an accelerated meeting schedule in order to bring a recommended solution to the ARRA Board and CIC. The ARRA/City negotiating team and the resource team have all had input into and reviewed the proposed alternative accommodation. The Homeless Collaborative negotiation 2 CONFIDENTIAL team has assured us that the Homeless Collaborative will accept this as an alternative to the accommodation agreed to in the Standards of Reasonableness. Both teams believe this is a win - win solution for these key reasons: ► Satisfies the Community Reuse Plan Homeless Accommodation without adverse effect. ► Counts towards Catellus and APIP LMI obligation. ► Satisfies Catellus Inclusionary requirement without in -lieu fees. ► Helps fulfill Guyton decision very low income unit production goal. ► Opportunity for Housing Development and/or LMI subsidy to preserve Catellus residual land value to the City. ► Allows creation of a new residential neighborhood at East Housing/FISC annex that will integrate with the surrounding residential community. ► Allows an opportunity to lease and eventually sell the BOQ and BEQ, generating substantial revenue to the City. Summary of the Proposal A. Elimination of the 125 Barracks Units In order to eliminate the 125 barracks units completely from the homeless accommodation (thus freeing up both the BOQ and BEQ for revenue generating lease and potential future sale), it is necessary to "buy out" both Operation Dignity's interest in the units as well as the Homeless Collaborative's interest in assignment of the units to another provider. The "buy out" is as follows: • To Operation Dignity: $310,000 cash: $260,000 to be paid in a lump sum within 90 days after an agreement memorializing the deal is executed, and the remaining $50,000 paid over two years time for specific invoices that Operation Dignity has incurred for rehabilitation of affordable housing at an off -site location; • To the Collaborative: waiver of infrastructure "fees" and waiver of public service fees. The combined cost of this aspect of the "proposal" is $310,000 up front, most of which is payable within 90 -days of approval of the proposal. The "waiver" of fees is estimated to be valued at approximately $4 million, according to EPS. The value to the ARRA/City of having the BOQ & BEQ available for lease and /or sale is estimated to be 3 CONFIDENTIAL over $7 million ($2.8 million for the BOQ + $4.6 million for the BEQ in 1998 dollars). B. Moving 58 Units From East Housing to West Housing One matter that was not negotiable was Operation Dignity and the Homeless Collaborative's insistence on maintaining some units in East Housing as a "presence" to be planned into the Catellus development. In order to move some of Operation Dignity's units and all of University Avenue's (UA) units to West Housing, the Collaborative insisted on payment of a differential in value of the units of $15,000 /unit; this value difference is not disputed, especially given the further deterioration of West Housing units with seasonal rains. . Additionally, the two providers demanded a "match" of existing grant funds to begin their rehabilitation. The APIP would receive inclusionary housing credit for substantial rehabilitation of all 58 units. This component of the proposal is summarized as follows: • 30 U.A. family housing units move to West Housing and payment of an amount not to exceed $850,000 (combined valuation difference plus grant match) to be paid beginning September 30, 1999 over 6 months time to substantially rehabilitate the units; • 28 Operation Dignity units move to West Housing and change in use from family housing to transitional housing for veterans, and payment of $713,500 (combined valuation difference plus grant match) to be paid beginning September 30, 1999 over 6 months time to substantially rehabilitate the units. Note that the 28 units, which could be satisfied by 7 four- plexes in West Housing, would provide 3 -4 beds per unit, or transitional housing for up to 112 veterans. The combined cost of moving all 58 units going to West Housing is estimated to be $1.56 million, payable between September 30, 1999 and March 31, 2000 (or by the end of the rehabilitation project). Funding for this substantial rehabilitation is available from a variety of affordable housing development and redevelopment 20% set -aside funds. As a prerequisite to the ARRA's obligation to pay this funding, the Record of Decision must first have been reached, and the ARRA have entered into a contract of sale with the Navy for the property. C. Building a New39 Unit Housing Authority Development in East Housing Of the remaining 39 Operation Dignity units, (67 unit original accommodation, minus 28 moved to West Housing) it is proposed that these units be relocated to an approximately 2.5 acre portion of the FISC property adjacent to the Coast Guard Housing and next to the Business Park proposed by Catellus. The 39 units would be built as a new Housing Authority multi - family 4 CONFIDENTIAL complex under the Housing Authority exemption provided by Measure A. These units would be built sometime in 2001 -2002 after Navy clean -up and conveyance of the site. The project would be owned by the Housing Authority and operated in a joint venture with Operation Dignity and the Red Cross to provide permanent family housing. The APIP would receive inclusionary housing credit for the new 39 multi - family units. If for any reason the City did not take title to the FISC and East Housing property and this project could not proceed, then 39 existing units in East Housing will be reassigned to Operation Dignity. The estimated cost to build such a project is $5.7 million, to be spent in 2001 -2002. (This assumes that the FISC land is conveyed at no cost from the Navy to the City). The Homeless Collaborative would contribute $1 million to the project. The balance of $4.7 million could be funded by the increased value in the land sale of East Housing to Catellus (by freeing up a net 9 -10 acres by moving 97 units from the original East Housing site), and monies from the 20% set -aside fund and other development funds within the City. As a prerequisite to the City or Housing Authority's obligation to build these 39 units, the FISC property must have been conveyed to the City and the City must have entered into a sales agreement with the Navy for Alameda Point (including East Housing). The Benefits of the Proposed Solution to the ARRA /City, CIC, and City Housing Authority 1. The elimination of the 125 barracks units accommodation "frees up" both the BOQ and the BEQ to be leased at market rates and perhaps eventually sold by ARRA. Staff is currently in serious negotiations with a group of Alameda physicians who propose to renovate the BOQ for an assisted living facility for seniors. EPS values the BOQ at $2.8 million given its projected income stream. They value the BEQ at $4.6 million (buildings 2 and 4 plus the galley). The 125 barracks units would have occupied approximately 30% of the facility. There has been substantial interest also in the BEQ. A number of educational users have looked at the building and ARRA Staff are developing a proposal to convert, one wing of the facility into a hi -tech "accelerator" (the next stage of an incubator). Having the 125 barracks units in the BEQ would likely limit the marketability of the property. 2. The elimination'of the 97 Homeless Collaborative family units in the East Housing area will allow Catellus and the City to plan and build a highly marketable development on the FISC /East Housing property. Eliminating the 97 units will likely make the property more marketable and enhance its value. The Catellus project will serve as the "entrance" to Alameda Point and that development can set the tone for the redevelopment of all of Alameda Point. The 97 Homeless Collaborative units in East Housing not only are an impediment to 5 CONFIDENTIAL the establishment of a new integrated neighborhood in the Catellus project, but would seriously complicate the infrastructure and street plan for the development. 3. The removal of the 97 units in East Housing makes an additional net of approximately 10 acres available in the Catellus project area. (The 39 multi- family units will occupy approximately 2.5 acres of property adjacent to the FISC business park site). Depending on the final square footage value of the property, that additional acreage could produce between $2 -1/2 million to $4 -1/2 million in additional revenue for the CIC. For purposes of this analysis, we are assuming $3 million in additional revenue. 4. The 39 units of multi - family housing within the Catellus project serves multi - purposes: • The units can be counted as meeting the requirement for 40% of the 15% inclusionary housing requirement to serve a very low income population. • The proposal provides an opportunity for the Housing Authority to construct 39 units of affordable housing that can also be counted as new units under the Guyton Court Order. • Depending on timing of construction, the new units may be able to be counted toward meeting the City's "fair share" of affordable housing goals in a revised Housing Element within the general plan. • Incorporates affordable housing within the Catellus project which is an issue with affordable housing advocates. 5. The 58 units of "substantially rehabilitated" housing in the West Housing area can be counted toward the 15% inclusionary requirement in the APIP (Alameda Point Improvement Project). Units which will serve very low income population are the most costly for a developer to construct. Housing Development staff notes that these units can be available for meeting future inclusionary needs within the APIP and can, in a way, be "banked ". Subject to CIC review and approval, a developer can "draw" from the "bank" of existing very low income units for a future residential project by a cash payment or in -kind investment to the new ( "in lieu fees ") project which has up to the equivalent value of the cost of developing a very low income unit. It is estimated that these types of units have an approximate value of $100,000 /unit. The net effect of this would be to raise the value of other residential property at NAS because the very low inclusionary housing requirement has been already fulfilled by the City. 6 CONFIDENTIAL Funding Sources to Finance the Proposal The proposal will require approximately $1.87 million in the next two years to Operation Dignity and to U.A. Housing and to provide the funding to upgrade and provide the necessary match for the rehabilitation of the 58 units plus buyout of the 125 barracks units. The construction of the 39 new multi - family units is projected to cost approximately $5.7 million, payable in 2001 -2002. It is expected that $4 million of the 39 new unit project costs could be paid from grant contributions from the Homeless Collaborative ($1 million), and $3 million in the increased land sale proceeds from East Housing, leaving a funding gap of $1.7 million. Staff has identified approximately $4.9 million over a period of 5 years of uncommitted (i.e. not budgeted) housing funds which could be used to make up the $3.57 million gap in funds ($1.87 million up -front plus $1.7 short fall in 2001 and 2002) for new housing. All of the $1.87 million early costs as well as the new multi - family housing should be eligible for these monies if properly matched. Housing fund sources include the Affordable Housing Unit/Fee Fund, the Community Development Block Grant Program (CDBG), 20 percent set -aside funds from the BWIP (Business Waterfront Improvement Project) and the Federal HOME Program. In addition to these dedicated housing funds, there could be monies available from land sale proceeds, and there will be monies available in the APIP 20 percent set -aside fund which can be used for those purposes. It should be noted that there are a number of actions necessary to make these funds available including: match source of funds to specific need and availability; "findings" resolution authorizing redevelopment funds to be used from one project area to another project area; review regulations governing each funding source and prepare necessary documents or legislative changes if necessary; verify compliance with the APIP Inclusionary Housing Plan and Homeless Collaborative accommodation; and review for Guyton compliance. These requirements are not considered barriers to creation of a financing plan to fund these affordable housing projects. RECAP OF HOMELESS NEGOTIATION COSTS AND AVAILABLE FUNDING RESOURCES Proposal Item 1. "Buyout" of 125 Barracks Units in BOQ/BEQ a. Operation Dignity off -site units rehab assistance b. Collaborative infrastructure contribution waiver 2. Move 58 Unit Substantial Rehab from East to West Housing 3. Build New 39 Unit AHA Project on FISC site Total Cost $ 310,000 (see note 1) 1,560,000 5,700,000 $7,570,000 7 CONFIDENTIAL Funding Resources 1 Homeless Collaborative grant contributions $ 1,000,000 2. Increased Catellus Land Sale Value 3,000,000 3. Uncommitted City Affordable Housing Unit/Fee Fund, CDBG, BWIP 20% set - aside, federal HOME grant 4,900,000 Total $8,900,000 Note 1: No cost item, since Homeless Collaborative's $4 million infrastructure cost share and in- lieu tax waiver, is more than offset by $7 million in projected BOQ/BEQ lease revenues with homeless accommodation at those facilities eliminated. Fiscal Impact: Various sources of funding for this proposal have been identified which will not jeopardize the projected cash flow upon which the Alameda Point Financing Plan and EDC application were predicated. Most of the funds identified exist to promote affordable housing needs. The proposal may be funded on a "pay as you go" basis, which would substantially deplete current balances in existing affordable housing funds, or could be funded through borrowing against these funds and the future value of the 20% set aside fund for the APIP. Depending on the extent to which existing housing funds are required for the project, there may be an impact on ongoing planned projects and programs. However, additional affordable housing funding should also be available from the WECIP and from the impact fees from the Catellus commercial development. The Housing Authority is exploring the feasibility of acquiring some poorly maintained properties which would need HOME and/or affordable housing funds for purchase and rehabilitation. Both the Down Payment Assistance and the CASA Homeownership programs are now making loans and will need additional funds in order to continue in the future. Over the next five years, these programs will need an estimated $260,000 from AHUF, $507,000 from HOME and as much as $500,000 from BWIP. The City Council has referred the Ad Hoc Homeownership Committee report to the Housing Commission to work with the committee for a report to Council on implementation. Proposed implementation activities, if adopted by the City Council, would require some housing funds. It should also be noted that there is significant work involved in implementing the proposed deal as well as preparing agreements and monitoring city funded projects. This work should be incorporated into the mid -year budget adjustment. 8 CONFIDENTIAL Staff Recommendation ARRA and City staff are recommending that the ARRA Board approve this proposal in concept and authorize staff to finalize a written agreement with the Homeless Collaborative. Staff further recommends that the ARRA Board authorize staff to execute an interim lease with Operation Dignity for 28 apartments in West Housing and for 30 apartment units in West Housing with U.A. Housing. The term of the lease would be for the maximum allowable term of the ARRA's prime lease with the Navy, approximately 13 years. This lease would be identical to a number of other interim leases the Board has authorized for other providers which has served to demonstrate site control for their federal funding. c: \homlesco.wpd 9