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2000-11-14 ARRA PacketThe Regular Meeting of the Alameda Reuse & Redevelopment Authority (ARRA) Scheduled for Wednesday, November 1, 2000 has been CANCELED A Special Meeting of the ARRA has been scheduled for Tuesday, November 14, 2000 AGENDA Special 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 1. ROLL CALL 2. Public Comment on Agenda Items Only. Tuesday, November 14, 2000 Meeting will begin at 5:00 p.m. City Hall will open at 4:30 p.m. Anyone wishing to address the Council on agenda items only, may speak for a maximum of 3 minutes per item. 3. ADJOURNMENT TO CLOSED SESSION OF THE ARRA TO CONSIDER CONFERENCE WITH REAL PROPERTY NEGOTIATOR Property: Alameda Point Negotiating parties: ARRA, United States Navy and Master Developer Under negotiation: Price and Terms 4. Announcement of Action Taken in Closed Session, if any. Adjournment Notes: • Sign language interpreters will be available on request. Please contact the ARRA Secretary, Lucretia Akil 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. AGENDA Special 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 Tuesday, November 14, 2000 Meeting will begin at 5:15 p.m. City Hall will open at 4:30 p.m. 1. CLOSED SESSION OF THE ARRA TO CONSIDER CONFERENCE WITH REAL PROPERTY NEGOTIATOR 5:00 p.m. Property: Alameda Point Negotiating parties: ARRA, United States Navy and Master Developer Under negotiation: Price and Terms 2. ROLL CALL 3. CONSENT CALENDAR 3 -A. Approval of the minutes of the regular meeting of September 6, 2000. 3 -B. Approval of the minutes of the special meeting of September 19, 2000. 3 -C. Report and recommendation from the Development Services Director to appropriate grant funds from the Environmental Protection Agency for technical services to explore potential environmental remediation designs for Sites 1 and 17 at Alameda Point. 4. ACTION ITEMS 4 -A. Recommendation to authorize the release of the Request for Qualifications and continue the solicitation process for a Master Developer at Alameda Point. 4 -B. Recommendation to Adopt the Golf Commission's Recommended "Alameda Point Golf Development 36 Hole Versus 18 Holes" Report and Direct Staff to Undertake Pre - development Activities for Development of an 18 -hole Championship Golf Course, Hotel, Conference Center and Spa on the 214.5 Acres Approved and Consistent With the Base Reuse Plan. ARRA Agenda - November 14, 2000 Page 2 5. ORAL REPORTS 5 -A. Oral report from APAC. 6. 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.) 7. COMMUNICATIONS FROM THE GOVERNING BODY 8. ADJOURNMENT This meeting will be simultaneously cablecast on channel 15. The next regular ARRA meeting is scheduled for Wednesday, December 6, 2000. Notes: • Sign language interpreters will be available on request. Please contact the ARRA Secretary, Lucretia Akil 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, September 6, 2000 The meeting convened at 5:30 p.m. with Chair Appezzato presiding. 1. ROLL CALL Present: Tony Daysog, Councilmember, City of Alameda Albert DeWitt, Councilmember, City of Alameda Beverly Johnson, Councilmember, City of Alameda Absent: Chair Ralph Appezzato, Mayor City of Alameda Barbara Kerr, Councilmember, City of Alameda 2. CONSENT CALENDAR 2 -A. Approval of the minutes of the special meeting of June 6, 2000. 2 -B. Approval of the minutes of the special closed session meeting of June 20, 2000. 2 -C. Report and recommendation from the Assistant City Manager, Community and Economic Development to approve the annual audit for fiscal year 1998 -1999. 2 -D. Report and recommendation by the Assistant City Manager, Community and Economic Development for approval of the FY 2000 -2001 ARRA Fund Budget. Member Johnson moved approval of the Consent Calendar. The motion was seconded by Member DeWitt and passed by the following voice vote: Ayes - 3; Noes - 0. Abstentions - 0. Discussion. Kevin Kearney, City Auditor voiced his concern over Agenda Item 2C. He stated there were a number of items that had to do with the internal control over the residential rental units. The City had lost out on some interest or investment revenue, because of Gallagher and Lindsey and has incurred more expense because the City has had to obtain outside auditors for additional work. Due to the lack of Gallagher and Lindsey transferring money in a timely manner, the City lost approximately $20,000 in interest. Mr. Kearney stated that if the City has contracts with vendors and they do not adhere to policy, then how can the City get its money back? 1 Assistant City Attorney Terri Highsmith stated the City Attorney's Office will review the Gallagher and Lindsey contract and advise Council. The ability to recover any extra expenses involved in the review of the auditors would need to have been addressed in the contract. Vice -Chair Daysog asked Attorney Highsmith is each situation based on individual contracts? Attorney Highsmith stated that it is a contractual issue. The City would have to go back to the consultant or the contractor the City is doing business with and if there is an expectation that there are additional expenses involved in an audit of the practice under contract, then we would have to look to the contract to determine if there is an ability to recover that. Member DeWitt stated we need to change our procedures to get some type of policy to ensure that the contracts are enforced and are done correctly. Member Johnson asked the City Auditor, Kevin Kearney has the City not developed adequate ways to deal with past problems or do we need to tighten up contracts for the future? Mr. Kearney stated he suggests that when the City enters into a contract with a vendor and there are problems with following the procedures including transferring money or payments of money, the City is put in a position where they could have had the money, made interest and if this does not happen, what is the recourse for the monetary detriment to the City? The procedures and policies are the concern. Vice -chair Daysog stated those were strong statements that not only apply to the Alameda Reuse and Redevelopment Authority, but for City Council to take a serious look at this to apply and enforce the contracts. David Berger, Assistant City Manager, CE &D, stated the staff report has concluded that all of the past audit exceptions, including areas where there has not been sufficient control, have been specifically addressed internally, as well as with Gallagher and Lindsey. Assistant City Manager Berger stated that staff along with the City Auditors are satisfied with this report and ask that the Board accept it. Member Johnson asked can we get an opinion from the City Attorney's office if the City's contracts are adequate to deal with these issues? Attorney Highsmith stated their office will look at the Gallagher and Lindsey contract and the form for all other standard consultant and contractor agreements. If necessary, the City Attorney's office will amend the standard consultant and contractor agreements to specify the costs in auditing the contract, and the consultant or contractor will have to bear those costs. In reference to what Mr. Kearney stated regarding the lack of following policy and procedures on the part of consultant contracts, that is a breech of contract issue. If the contractor or consultant is 2 violating some of the procedures contractually set forth in the agreement, then staff will review to determine if there has been a breech of contract and what damages would be appropriate. It may or may not justify getting back the lost interest. Member DeWitt stated he would like staff to take a further look at it and see if it should be pursued for further damages. 3. ACTION ITEMS 3 -A. Report from the Development Services Director recommending that the ARRA approve the disposition strategy of engaging a Master Developer for Alameda Point and to authorize staff to proceed with the selection process for such a Developer. Doug Yount, Development Services Director stated earlier this year in April, the ARRA hired a consulting team of Economic Planning Systems and Bascom Venture Partners to evaluate the question of the disposition strategy for Alameda Point. There was a multi -phase study that these consultants undertook, specifically to determine the capacity of the City to handle the redevelopment of the former Base, the appropriate role of the City in the redevelopment process and to assess market capabilities. They spoke with staff and developers in the market and after development of their recommendation, they spoke with APAC, the Chamber of Commerce and Business Consortium for Alameda Point. The staff report's recommendation is to move forward with a Master Developer and the role of the City as an Executive Developer. The report states bringing a recommendation of a developer and going through the selection process before the ARRA Board in March, 2001. It also recommends a two -step selection process, a Request for Qualifications /Vision Statement and a Request for Business Proposals and two community forums to gain input. The report recommends putting together a developer selection team listed on page two (2) of the staff report. Staff would like to return back to the ARRA Board in a special meeting on October 17, 2000 with a more detailed project timeline that goes beyond developer section into Exclusive Negotiating Agreement (ENA) areas and disposition and development agreement. Staff will have more detail on the foirnat of the community forums, membership for developer negotiation team versus development selection and further detail on the website, tour and information exchange. Assistant City Manager Berger recommended to the Board that since Chair Appezzato and Member Kerr were not present, that they hold off until a special ARRA meeting on September 19, 2000. 3 The public hearing was opened. Richard Neveln, 1328 Park Street stated the APAC and ARRA staff have done an excellent job of developing the property. Mr. Neveln expressed that a Master Developer would add another layer of bureaucracy, thereby isolating the community from the process. There would be a great cost attached to this process. Diane Lichtenstein, APAC Vice - chairperson stated APAC is in favor of a Master Developer for Alameda Point, with a few additional conditions, which includes the strong oversight of the City and the continued input of the community. Ms. Lichtenstein stated she is concerned that there would only be two community meetings and recommends that number be taken out of the report and instead, include more community action and meetings. Ann Mitchum, 732 Central Avenue stated she would like to see more emphasis on the community action. The individual parcels at Alameda Point should be allocated out to individuals rather than a Master Developer so that we can maintain the individuality of the Island and work with the Planning Department for basic services. Each individual should be allowed to pick an architect. Ms. Mitchum stated she is against having a Master Developer. The public hearing was closed for Authority discussion. Member Johnson stated that after the last step of community input, would a recommendation be made to the ARRA regarding the developer? Doug Yount responded yes, a recommendation would be made to the ARRA. Member DeWitt asked if the ARRA Board approves a Master Developer, then would we proceed with the strategy of a Master Developer? Doug Yount responded that is correct. Member DeWitt asked what would be the role of the CIC be in this process? Attorney Highsmith responded that since all of this property falls in a redevelopment area, any development of the property would have to be in compliance with the existing redevelopment plan or the redevelopment plan as amended. The CIC will be over - viewing any development plans that comes up within its redevelopment area. Anything that is developed within a redevelopment area must comply with redevelopment law, regarding issues of inclusionary housing and affordable housing. Member DeWitt asked will the ARRA Board be making all of the decisions in this process? Assistant City Manager Berger responded that the ARRA remains in existence because it will be the receiver of the property at Alameda Point, which is why recommendations are made to the ARRA Board. The implementation of the Board's decision would be the CIC, because there are functions under redevelopment law that must be carried out by the CIC to enter into the Exclusive Negotiating Agreement (ENA) that is outlined by the report and any follow up of disposition development agreement. There may also be City Council functions which staff has not gotten to. Member DeWitt stated the letter received from Renewed HOPE has debated the strategy of a Master Developer. There are individuals who feel that a Master Developer is not the right way to go, as the City has been doing a fine job. Will there be additional debate on the subject of whether there should be a developer or not? Doug Yount stated that is up to the Board. Member DeWitt stated Assistant City Manager Berger recommended that the other two Councilmembers be allowed to participate in this decision making process. Will the decision be delayed for another meeting? Member Johnson suggested a motion be made to continue this item and to leave public comment open since the other Board members are not present and there may be further public comments. Member DeWitt stated that some individuals feel the ARRA meetings are not as widely viewed as the Council meetings. Will the final decision be made by the ARRA or Council? Doug Yount responded that when it comes back to the ARRA Board on September 19, 2000, that will be a special joint meeting of the CIC /Council/ARRA meeting, which will be fully noticed. Assistant City Manager Berger stated staff encourages the entire community who is interested in this process to submit comments between now and September 19, 2000. The comments will be reviewed prior to the meeting. This process should be open and able to reach out to the community as much as possible. All questions and concerns should come forward so that the Board and staff are aware of them and can respond to them. Member Daysog stated staff should have a notice in the Alameda Journal in the Brief section or the Corresponding section in the Time Star. Alameda Point should be the model for base conversion as pointed out by President Clinton back in 1993. Member Daysog asked if the package concept plan several years ago jives with the current process? 5 Jim Musbach, ARRA Consultant from Economic and Planning Systems responded that the package concept was developed as part the Business Plan for the EDC Application. The intent was to identify some logical sequencing of development for purposes of cash flow and financial feasibility analysis. Mr. Musbach further stated that it remained to be determined whether the development would be done by multiple developers or a Master Developer. Between Duke Bascom and Mr. Musbach, the conclusion is that pursing a Master Developer would be in the best interest of the City. In terms of the economics of the project, it is a different disposition framework that is being proposed now, as opposed to the original Business Plan. Member Johnson asked would a combination of package development and Master development be possible? Mr. Musbach stated that they are holding out the golf course and the conference center as a separate development, which the City could pursue on its own with a separate developer. The FISC property has already been pieced off and done separately with Catellus. Member Johnson asked if there are areas that can be developed more quickly than others, would it then make since to separate it? Mr. Musbach responded no, because the ownership would be fragmented and there will be people with different visions and courses. The best opportunity would be to create a cohesive package, which is advantageous for a variety of reasons. Member Johnson asked what kind of time frame would there be for a Master Developer in teems of actual development? Mr. Musbach responded it would be much sooner than what is stated in the Business Plan. The Business Plan development sequencing and phasing was based on market analysis. It would probably be a seven to ten year process. Assistant City Manager Berger stated the packages that were identified in the sequence, was prepared for purposes of submitting an the Economic Development and Business Plan to the Navy. Once the no -cost legislation was passed, it became moot. The Business Plan is now just an infoirnational document for reference. Member Johnson moved to continue the item and public comment at the next special meeting. The motion was seconded by Member DeWitt and passed by the following voice vote: Ayes - 3; Noes - 0; Abstentions - 0. 6 4. ORAL REPORTS 4 -A. Oral report from APAC Diane Lichtenstein, Vice - chair, stated the APAC has used most of its time working on the strategy of the Master Developer and will move onto other issues at their next meeting. 4 -B. Oral report from the Assistant City Manager, Community and Economic Development (non- discussion items). None. 5. ORAL COMMUNICATIONS, NON- AGENDA (PUBLIC COMMENT) Richard Neveln, 1328 Park Street stated that public participation that has gone on for the past seven to eight years has resulted in some very important documents, including the EBCRC Blue Print for base reuse and the Community Reuse Plan. Any developer discussions should align with the Community Reuse Plan. Bill Smith, 732 Central Avenue, #16 stated that if another party is going to be brought onto the base, the community should be included. The base should stand ready for any development. The individuals who speak about the community visions should be acknowledged and their vision should be carried out. Any Master Developer should provide documentation that they are an expert in their field. 6. COMMUNICATIONS FROM THE GOVERNING BODY None. 7. ADJOURNMENT The meeting was adjourned at 6:45 p.m. Respectfully, Lu6retia Akil ARRA Secretary 7 APPROVED MINUTES OF THE SPECIAL MEETING OF THE ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY ROLL CALL Present: Tuesday, September 19, 2000 Chair Ralph Appezzato, Mayor City of Alameda Tony Daysog, Councilmember, City of Alameda Albert DeWitt, Councilmember, City of Alameda Beverly Johnson, Councilmember, City of Alameda Barbara Kerr, Councilmember, City of Alameda 1. ACTION ITEMS 1 -A. Report from the Development Services Director recommending that the ARRA Governing Body approve the disposition strategy of engaging a Master Developer for Alameda Point and to authorize staff to proceed with the selection process for such a Developer. The public hearing was opened. Gary McAfee, Alameda Historic Complex (AHC) stated that the Master Developer process will not create employment. This effort is jeopardizing the economy of the Bay Area. Mr. McAfee requested that the Board accept AHC as a potential developer as the Board goes through individual developer selection process. Vince Mackel, Stay and Play in Alameda stated they have proposed a golf resort facility at Alameda Point. It was also recommended that a Master Plan be developed prior to the golf resort. The whole site should be planned as one unit. In the last four years, the City has given away approximately $200 million to the wildlife people and has not recovered anything in return. The Base is worth approximately $1.5 billion dollars of tax payer money. The City is now trying to acquire a Master Developer, while there is no master plan. A master plan needs to be developed by the City so when the City pursues a Master Developer, there is a set of criteria in place in which the City is in agreement with and can go forward. Chair Appezzato stated he is not aware of a $200 million loss to the City. Many of the decisions by the City regarding the National Wildlife Refuge are part of the Department of Interior and Fish and Wildlife laws, which takes some precedence over the City's decisions. The most difficult laws of the country are the protection of endangered species. Over the years, the Council has worked in compliance of the Federal laws and diligently with the Fish and Wildlife group, which gives the City 565 acres of dry land and open space and 300 acres of wetlands. The City did not give the Fish and Wildlife group $200 million. - 1 - Hugh McKay, Stay and Play in Alameda stated his concerns are that the general public are not aware of what is going on at the Naval Air Station. There is no master plan, only a Community Reuse Plan which is a draft and very confusing. Not many people have seen the Reuse Plan and are not aware of what is going on with Alameda Point. There has to be a way to get this information to the public. Peggy Doherty, 752 Taylor Avenue expressed her support of a Master Developer for Alameda Point. Ms. Doherty stated she has not seen anything that lists alternatives other than a Master Developer and she is interested in knowing what those pros and cons are. The public has not had much of an opportunity to read up on anything. According to the timetables in the staff reports, it does not appear that the public will have much opportunity to influence the content of an RFQ, not to mention a Master Developer. In significant projects such as a Master Developer selection, prevailing wages, responsible bidding, safety requirements and training should be part of the criteria in the selection process. Public Project Labor Agreement is a concept that has been used successfully in the Port of Oakland and the current work that is going on at the San Francisco Airport. These agreements provide a great deal of stability for both workers and employers and are helpful in preventing work stoppages. Ms. Doherty expressed that these options should be considered by staff and the ARRA Governing Board when they consider the selection process and Master Developer. William Smith, 2822 Bayview Drive stated he is neutral on the Master Developer process. Mr. Smith is a long time member of the Sierra Club and could not accept the previous comments made about the Fish and Wildlife Refuge. Many people in the City are enthusiastic about the Wildlife Refuge and have worked very hard to see it through successful completion. The master plan is a problem in the City due to difficulties in the planning process. Jobs and housing are hard to balance and the City is behind on its General Plan as well as a master plan, including the Kaufman and Broad and Tinker Avenue projects. Mr. Smith encouraged the Board to work hard on the planning process for the entire City. Diane Lichtenstein, Vice -chair of the APAC stated the community has had ten (10) general community meetings, including the BRAG and ARRA meetings. There was a lot of first page publicity in the Alameda Journal. Anyone in the City who had an interest, had the opportunity to find out what was going on. Since 1996, the planning for the implementation has not evolved much activity, which is now beginning. Nothing has been going on except at FISC and new issues are now surfacing. Ms. Lichtenstein stated that APAC is in favor of a Master Developer as long as the community is kept informed every step of the process and selection. One of the APAC's recommendations is that all efforts should be made to reach out to local employee professionals, developers, business and laborers in all capacities of the entire process. The City should be careful to exercise strong oversight on all phases, so that the citizens feel that the City is in control of the Master Developer. The public hearing was closed for Authority discussion. Chair Appezzato stated the Board is giving guidance to staff to proceed to investigate a Master Developer, without any decision being made now to sign on a Master Developer. If the majority of the Council does not agree in involving a Master Developer, there may be other alternatives which can be pursued. Mayor Appezzato stated his guidance to the staff is that they be alert to other options if the Master Developer does not work out. The Board and staff owe some loyalty to the existing leaseholders who have generated approximately $7.5 million dollars over the years and that their leases should be honored to the very end. As another option to the Master Developer, the City may want to parcel out the property and allow the City to be the developer of these parcels. The question is, does the Board want to give a Master Developer 100% of the base or just portions? There must be flexibility in this entire process. Member Daysog stated he agrees with Chair Appezzato with respect to looking at other options and being flexible. Segregating the residential west housing area, also known as Package "K" on Alameda Point may be an option. As individuals, the Board needs to clarify the qualifications each member is looking for. Member Daysog stated the process should work for everyone, not just those who qualify for market rate homes, including mixed housing of a variety other than what is standard. With regards to the bird sanctuary, staff and the Board did a good job in preserving every living being under God's sky. Clarification also needs to be made clear on what is up -front dollars. One of the selling points of a Master Developer is their ability to finance front -end costs. The base is about 1,500 acres. Are we expecting those lands, if turned over to a Master Developer, to be put on the property tax roles such that the City can begin to attain property taxes? Would this be an incentive for a Master Developer to go out and find sub - developers? These type of questions should be made clear to a Master Developer. We do not want to have a Master Developer that sits on the land and land -banks it. The three key points here are the mixed use housing (low and moderate), clarity on up -front dollars and clarity on not allowing any developer to sit on the 1,500 acres. Member Kerr asked when staff recommends choosing a Master Developer and the City is called the Executive Developer, does this mean that the City will retain title to the land or will the City sell the property? City Manager Jim Flint responded that the role of the Executive Developer versus the role of a Master Developer has been identified in the staff reports. As the property is conveyed to the City by the Navy, one of the roles as the Executive Developer, is that the City will sell that property to a Master Developer for whatever purposes that are identified in a master plan. The City has the role as the Executive Developer because the City will be the owner of the perspective property that will be for sale. Member Kerr stated she would like to see an up -front sale of the property, including a bidding process to determine what the property is worth. If there are developers who are willing to pay for the land as it is and take the responsibility for the infrastructure, could be an option for the City. The land should also be marketed to determine if there are bids that would be acceptable to -3- the citizens of Alameda. There should be competitive bidding throughout the process. On the FISC and East Housing there was a formal RFQ from the APAC for three (3) developers. The Council did not have any dollar amounts to deal with when they chose Catellus. There was never any competition for Catellus East Housing on the dollar level. Catellus was picked based upon their qualifications and then the City entered into an Exclusive Negotiating Agreement (ENA) without any competitiveness during the negotiations. The spirit in the sense of competition should be present during all of the negotiations with a Master Developer for Alameda Point. Catellus had such a lock on it through all the ENA, that when the final decision was made, there was no one else to negotiate with. There should always be other players throughout the negotiation so that the City gets the best possible terms. The developers should be well seasoned and experienced in design and the use of the property should be looked at differently than what it was in the Community Reuse Plan, as that was done several years ago. Chair Appezzato asked staff with regards to the Catellus project, did they not go out competitively with an RFQ and get seven (7) responses and then narrow it down to the three (3)? Was that not a competitive process? Jeff Bond, Development Manager responded that there were approximately seven (7) responses and that list was shortened to three (3) developers. Chair Appezzato asked were their financial plans included with those developers? Jeff Bond responded yes there were. Member Kerr stated that they were all successfully and thoroughly revised during the ENA process. Chair Appezzato responded that he just wanted clarification for the record. Member Kerr responded that the BRAG came forth and recommended three (3) developers, which resulted in three (3) developers for the RFQ for the Catellus East Housing project. Chair Appezzato responded that there was a competitive process and there were financial plans submitted. Member Daysog stated that it is not unusual while going through the ENA process with one developer that the local government can choose to change the process and start all over again. Competition had been there with respect to the Catellus project and East Housing. However, it is up to Council to make a decision through the ENA process to go forward or not. Member Daysog asked that when a Master Developer is pursued, is the Master Developer expected to develop the entire 1,500 acres of land or are we expecting the Master Developer to find sub - developers to develop different parcels of the land? -4- City Manager Jim Flint responded there are a couple of options the Council could choose. The Council ultimately will decide as to what will be included in the land to be developed, in terms of the specific sites that will be available for development. Secondly, a Master Developer will work with the community in developing a plan for the property and may sub -out portions of the land to other developers. The Master Developer must be able to develop the property in accordance with a Master Plan developed by the community and approved by the City Council. Member Johnson stated she agreed with the Chair Appezzato that the process should be open and flexible and that the Board is not making a specific commitment at this time. This is a huge undertaking for the City of Alameda, which needs careful consideration. Member Johnson expressed that the Board should go forward with this process, with special consideration to Parcel K, which is primarily residential which contains some historic housing and should be preserved. It is in the area with some existing residents at the base and should be compatible with the historic housing and the residents who are there. There should be a very high quality development, versus squeezing for the best price. There should be quality development that Alameda residents will be proud of fifty years from now. All of the land should be developed, whether it is sold or developed by a Master Developer. The City will have a higher degree of control if there is a Master Developer. It is appropriate to get the process started, while remaining flexible. The developer should be made aware if there are certain restrictions on areas that the City does not want developed, for example the golf and sports complex areas and Parcel K. The design should reflect the City of Alameda. All disclosures should be made prior to acquiring any Master Developer. Member DeWitt stated he agreed with Chair Appezzato and the other Board members that special consideration should be given to the housing, golf course and some of the existing leaseholders. The staff report presented for this item, outlines and lists six (6) benefits of a Master Developer, but also indicates other alternatives, other than a Master Developer. Member DeWitt moved approval of the recommendation. The motion was seconded by Member Johnson and passed by the following voice vote: Ayes - 5; Noes - 0; Abstentions - 0. Discussion. Chair Appezzato stated that the City does not have the resources to have a daily newspaper for updates to the base, only the Alameda Journal does the updates. Chair Appezzato stated staff and the Board will try to keep everyone as informed as possible. Chair Appezzato thanked Congresswoman Lee's office and Alameda County Board of Supervisor Wilma Chan for their contribution and efforts to make this process thus far a successful effort. Member Kerr stated the City has control of the zoning, no matter what option is undertaken. The City controls the money and planning. Member Kerr stated that although the City should pursue the best financial deal, we should not loose sight of a good general plan and the citizens of Alameda should have a say in the quality of high design at Alameda Point. -5- ADJOURNMENT The meeting was adjourned at 10:05 p.m. Respectfully, Lucretia Akil ARRA Secretary Alameda Reuse and Redevelopment Authority Interoffice Memorandum November 8, 2000 TO: Honorable Members of the Alameda Reuse and Redevelopment Authority FROM: Doug Yount Development Services Director 3 -C SUBJECT: Report and recommendation from the Development Services Director to Appropriate Grant Funds from the Environmental Protection Agency for Technical Services to Explore Potential Environmental Remediation Designs for Sites 1 and 17 at Alameda Point Background: As reported to you in an off - agenda report in July 21, 2000, the ARRA has been awarded a $100,000 Superfund Redevelopment Demonstration grant by the Environmental Protection Agency. The Agency awarded grants to localities and states for assisting local input to provide opportunities for local communities to participate in decisions that will affect land use on contaminated sites. The purpose of this report is to provide the background and scope of work for this grant, and request the ARRA governing body to appropriate the funds. A scope of work and preliminary budget is attached. (Attachment 1). A cooperative agreement between the ARRA and EPA was signed in August to allow contracting to begin. Discussion: The purpose of the grant is to obtain technical expertise from consultants in order to acquire the information necessary to participate effectively in the environmental remedy selection process for two distinct areas of Alameda Point: 1) Navy Installation Restoration Site 17, the former Seaplane Lagoon, and 2) Site 1, a landfill on the western tip of the island. These sites are proposed in the Reuse Plan for redevelopment as a Marina and a golf course, respectively. The city has hired an environmental engineering consultant to help review the Navy's environmental remediation plans. The Navy is also subject to oversight by the Restoration Advisory Board (RAB), which is composed of interested citizens and agency representatives. The RAB provides a monthly public meeting to hear the comments of the general public and to obtain information from the Navy and regulatory agencies regarding the environmental remediation program for the base. Staff will use the EPA grant to helping acquire the technical expertise to effectively participate in the Navy's remedy selection for sites 17 and 1. Remedy selection will have bearing on the ultimate implementation of the Reuse Plan for sites 17 and 1. 1. Site 17. The former Seaplane Lagoon is located on the south- central portion of the base, adjacent to the proposed USFWS refuge. The Seaplane Lagoon, which is a man -made feature approximately 15 feet deep, provides feeding areas for the federally - listed endangered California least tern. The sediments on the bottom of the lagoon are contaminated by polychlorinated biphenyls (PCBs) and polynuclear aromatic hydrocarbons (PAHs), with elevated concentrations of heavy metals. The Community Reuse Honorable Members of the November 8, 2000 Alameda Reuse and Redevelopment Authority Page 2 Plan proposes a marina facility of approximately 900 boat slips. The construction of the marina is dependent on obtaining certain water depths to allow larger pleasure craft to navigate into and dock at the Marina. So far, the Navy's suggested remedies do not provide the developable area and depth anticipated in the conceptual plan for the Marina. The high cost of disposing of dredge spoils has driven the Navy's concepts on remediation of the Lagoon. Investigating the reuse of those spoils might make dredging a more affordable solution for the Navy, leaving the Lagoon with less restrictions for development. The development of the Marina is integral to the reuse plan, because it is envisioned as the focus of the area's development, with commercial and public uses surrounding it. The goal is to develop an acceptable remedy by obtaining professional recommendations from a marina designer, working with the Navy, the regulators, and the public through the RAB, that will meet the development parameters of the business plan and protect the endangered species. 2. Site 1. The former landfill site is located at the westernmost tip of the island of Alameda. A feasibility study conducted by the ARRA in 1998 determined that the northwestern 240 acres of the base, including the northern portion of the former airfield and the landfill, would support a world - class, tournament -level golf course that could serve as an economic draw for the island for major tourism and service markets. This potential is dependent on developing a remedy for the landfill that allows the course to be contoured to meet the challenging standards of play, while providing the necessary amenities and required public recreational access to the shoreline. Additional constraints result from the need to evaluate barriers between the landfill and waters of the proposed wildlife refuge, which provides feeding areas for the endangered California least tern, as well as the desire to retain and recirculate irrigation drainage onsite. The golf course feasibility study also proposed using sand dredged by the Port of Oakland as a component of the project. The golf course designer who assisted the City with the feasibility study, Kyle Phillips, was identified in the proposal to EPA to assist the City, as was the current environmental consultant, Northgate Environmental, in order to build on their experience with this particular site. It has been suggested that the dredged materials from the Seaplane Lagoon be used to cap the landfill, in addition to using the Port's sand to contour the golf course. This concept will be explored, and a public participation program conducted with the RAB will help determine the acceptability of such a remedy design. The goal is to participate in the Navy's design of the remedy at Site 1 so that the proposed golf course will be both feasible and successful. Fiscal Impact: None. Revenue from the government is $100,000. No matching funds are required. Recommendation: It is recommended that the ARRA Governing Body appropriate the $100,000 in grant funds from the Environmental Protection Agency for technical services to explore potential environmental remediation designs for Sites 1 and 17 at Alameda Point. Honorable Members of the November 8, 2000 Alameda Reuse and Redevelopment Authority Page 3 oug • unt Development Services Director By: Elizabeth Johnson Alameda Point Reuse Planner DY/EJ /laa Attachment 1 C:\ LAKIL \ARRA \STAFFREP\2000 \EPASPR. W PD Attachment 1 Workplan for Superfund Redevelopment Initiative Pilot Program, Alameda, California. Alameda Reuse and Redevelopment Authority (ARRA) is the designated Local Reuse Authority for the planning and reuse of the former Naval Air Station Alameda. The Alameda City Council sits as the ARRA. The City Council and the Planning Board will ultimately determine how the property is used. The Planning Board provides land use jurisdiction concurrent with the U.S. Navy. Transfer of the site is occurring in stages as property is cleaned. The ARRA has prepared a land use plan for the base, the Community Reuse Plan (January 1996) and a Business Plan. The Reuse Plan will be incorporated in to the City's General Plan. The challenge facing the city is the ability to influence cleanup decisions to meet the uses specified in the plan without in- house technical staff. Goal: to bring design and environmental expertise to allow the City /ARRA to participate in discussions of alternative remedies in order to make sure the Navy selects a remedy that allows the Seaplane Lagoon to be converted to a profitable and beneficial pleasure craft marina, as well as the remedy that provides the most feasibility for the construction of a golf course above the landfill. It has been suggested that by reusing dredged materials from the Seaplane Lagoon onsite, that alternative could avoid the environmental impacts of transporting dredge to another disposal site, or potential adverse effects on the aquatic environment. It is anticipated that technical expertise provided by this grant would be used in the actual design phase of the selected remedy for Site 1, in the fall of 2000. This effort would also involve the unique permitting agencies for construction adjacent to San Francisco Bay, particularly the Regional Water Quality Control Board, which has monitored similar golf course sites around the Bay Area and has concerns about infiltration into the landfill, as well as runoff into the Bay. Interested parties, such as the Audubon Society and the Friends of the Alameda National Wildlife Refuge, as well as the local residents, will still need to be incorporated in the decision - making process to develop acceptable solutions to the remediation of contaminated sediment at NAS Alameda. The proposed uses for these areas of the base are the result of a long, intensive Base reuse planning project that had a large public involvement component. We anticipate involving the community in a workshop or forum in which we can share the professional recommendations we develop for the remedies, and receive their input on a range of alternatives. This is envisioned as a supplemental activity to the CERCLA process. In addition, the City will explore the wide range of other groups that have an interest in participating in alternatives screening for the two sites. Technical expertise will be provided by Russell Resources, Inc., the company currently providing environmentally consulting to the city. The golf course remedy design will involve Kyle Phillips Golf Course Design, who prepared the original feasibility study for this golf course site for the City. A consultant for Marina design has not yet been selected. City oversight will be provided by Elizabeth Johnson, Alameda Point Reuse Planner. 1 Phase/Task One. Background information collection and assessment. All consultants would participate in a kick -off meeting with the regulators, city and Navy to review the first steps and information required. The consultants will consult current documents and meet with Navy personnel to determine existing conditions for the Seaplane Lagoon and Site One Landfill. Quantities of material to be moved or encapsulated in the Seaplane Lagoon will be evaluated, with a ecological risk assessment to be performed, as well as analysis of the potential for human exposure, both based on existing data. Existing cleanup concepts developed by the Navy will be evaluated by the environmental consultant and the marina designer, and recommendations whether to further analyze these will be made. The amount of material available for use as a landfill cap will be identified. Assistance will be provided by our current environmental consultant to coordinate the effort with the Navy and EPA and other responsible agencies on the development of remedies for the Seaplane Lagoon and the landfill, with oversight by City staff. Deliverables: Kick -off meeting, Navy research meeting, and background report. Costs: City staff and process: $2,000 Marina designer: $5,000 Golf designer: $6,000 Environmental eng. $4,000 Community involvement facilitator $1,000 Subtotal: $18,000 Task 2. Landfill capping analysis. The golf course designer and environmental engineer will evaluate the proposed remedy for Site One and provide additional recommendations for drainage and construction type to coordinate best with golf course construction. The ability of the landfill cap to accept any material designated in Task One will be evaluated. Deliverables: Landfill design evaluation report and recommendations. Costs: City: $2,000 Golf designer: $15,000 Environm. Eng.: $3,000 Subtotal: $20,000 Task 3. Marina design alternatives. The Marina designer, working with the environmental engineer, will propose at least two alternative conceptual designs for the marina which meet the city's goals for developing the marina, including the 900 slips. Phasing to accommodate cleanup and reference the city's business plan will be assessed. The costs of achieving the cleanup necessary for each alternative will be estimated and presented. The Environmental consultant will review and provide appropriate input to these concepts. 2 Deliverables: Marina design alternatives and costs Costs: City staff and process: $2,000 Marina designer: $20,000 Environmental eng. $2,000 Subtotal: $24,000 Task 4. Public involvement. City staff and the community involvement facilitator will work together to identify stakeholders and solicit public and stakeholder participation in the process. A fact sheet will be prepared about the project to inform potential participants of the process. Interviews with key stakeholders will provide key issues to be taken into consideration in the technical evaluation and development of alternatives. Deliverables: Stakeholder list, mailing of an announcement/fact sheet, and interview reports. Costs: City: $5,000 Community involvement: $2,500 Subtotal: $7,500 Task 5. Community workshop. The team will conduct a workshop to present the preliminary findings of the study, and provide immediate feedback to interested parties' questions and suggestions, and to select further refinements to the alternatives. The community involvement facilitator will assist the City in determining the appropriate format for the process, including mailings, production of background information, and presentation materials. The facilitator would help achieve consensus on which alternative concepts would be acceptable, and determine what refinements could be made based on the input of the group and consideration of their concerns. It is anticipated that a follow up session would be held to present the finalized recommendations to the original group. Deliverable: Public meeting and workshop, meeting record. Costs: City staff and process, printing materials: $6,000 Community Involvement: $5,000 Marina designer: $2,500 Golf designer: $4,000 Environmental eng. $500 Subtotal: $18,000 3 Task 6. Follow up presentation. The results of the community workshop will be presented, alternatives concepts will be refined, and recommendations for alternatives to submit to the Navy will be made. Costs: City $2,000 for staff and printing Golf designer: $5,000 Marina designer: $2,500 Facilitator $1,500 Environmental eng. $500 Subtotal: $11,500 REPORTING Quarterly Progress Reports. The City will provide a quarterly progress report to EPA describing the activities under each task for that reporting quarter. In addition, the City will prepare a final report detailing the use of fund and the experience of the Project Team. The final report will include an evaluation of the design recommendations and the data assessment, the feasibility of combining remedies for Sites 1 and 17, and the extent of public participation and concerns with the reuse plans and the potential combining of remedies. Cost: City staff, plus printing and mailing: $1,000 C: \LAKIL\ARRA \STAFFREP\2000 \SOW 1004.ATT 4 Alameda Reuse and Redevelopment Authority Interoffice Memorandum November 8, 2000 TO: Honorable Chairman and Members of the Alameda Reuse and Redevelopment Authority FROM: Doug Yount, Development Services Director ) / SUBJ: Recommendation to Authorize the Release of the Request for Qualifications and Continue the Solicitation Process for a Master Developer for Alameda Point. Background: Since May, the ARRA has been discussing alternative approaches to guide the redevelopment of Alameda Point. Consultants were hired to interview city staff and determine the city's capacity to handle large scale development projects. Next, the consultants met with eleven developers to understand the private sector's approach to redevelopment of Alameda Point. From this two -step analysis, the consultant recommended that selecting a master developer was the best option for Alameda. The consultant presented the recommendation to use a single prime developer to stakeholders in the community, including the Alameda Point Advisory Committee (APAC), the Economic Development Commission (EDC), and the tenants association. Each group approached by the consultants endorsed the concept. At a special meeting of the ARRA Governing Body on September 19, 2000, the Alameda Reuse and Redevelopment Authority (ARRA) authorized staff to begin the solicitation process for a master developer. ARRA also asked staff to return with a draft RFQ, further detail on website, tours and information exchange, project timeline and format of community forums. Discussion: The key objective of the developer selection process is to identify a developer with the vision and experience to carry out base reuse and the resources and willingness to make a substantial up -front financial commitment to the redevelopment of Alameda Point. The financial commitment will be necessary to not only fund significant infrastructure and environmental remediation costs but fund necessary planning work, including: 1. Detailed land use and design master plan, reflecting the community's goals and objectives for Alameda Point; 2. Detailed utility engineering/infrastructure financing master plan, ensuring the public infrastructure is complete and well coordinated; 3. Bringing closure with environmental regulators and the Navy in defining the timing and nature of remediation; and 4. Engaging the master developer in at least an advisory capacity in leasing and asset management to ensure synergy between interim leasing and the long term development program. Request for Qualifications The process approved by the ARRA in September is a two -step approach that begins with the issuance of a request for qualifications (RFQ). The RFQ document asks the developer to: ► Describe the qualifications of their team to develop a project the size and complexity of Alameda Point; Honorable Members of the November 8, 2000 Alameda Reuse and Redevelopment Authority Page 2 ► Describe their vision for redevelopment of Alameda Point (in conformance with the Reuse Plan); ► Describe their technical ability and process for reaching out to the community; and ► Provide evidence of financial resources and commitments. The RFQ document also incorporates the comments and suggestions provided by ARRA Board members on September 19, 2000. Because the RFQ is a national solicitation for a developer, to ensure fairness in the selection process, the ARRA will review the draft RFQ in closed session. Subject to ARRA approval, the final RFQ is targeted to be released to the public and distributed to interested developers on approximately November 22, 2000. Project Timeline Based on the responses to the RFQ, the selection committee will recommend that the ARRA approve a short list of development teams best qualified to carry out base redevelopment at Alameda Point. From the short listed developers, ARRA will seek much more detailed information in a Request for Business Plan (RFBP) including a description of the roles of the City, the Master Developer, and other entities involved in redevelopment of Alameda Point. From the review of the responses to the RFBP, the selection committee will make a recommendation to the ARRA on the selection of a master developer in which to enter into exclusive negotiations. The final decision on the terms and conditions which the ARRA would enter into an agreement with a master developer would be made at the end of the exclusive negotiation period. A detailed schedule is provided in Attachment 1. Public Involvement Process The attached schedule anticipates returning to the ARRA in early 2001 with a recommendation for short- listed developers and later in Spring 2001 with a recommendation for a single master developer. Within the schedule, there are numerous opportunities for public involvement including: ► Formation of a broad -based selection team; ► Community forums; ► Wide- spread public dissemination of documents; and ► Creation of a project -based website. The recommendation to the ARRA on a short list of developers would be made by a selection committee composed of : Alameda Point Advisory Committee (APAC), Chairperson; Economic Development Committee, Chairperson; Planning Board, Chairperson; Public Transit Committee, Chairperson; Chamber of Commerce Designee; Alameda Unified School District (AUSD), Representative; and up to five selected City senior management team members. In response to a request from APAC (Attachment 2) and other community members to expand community representation on the Selection Team, the Team Honorable Members of the November 8, 2000 Alameda Reuse and Redevelopment Authority Page 3 has been increased to include the Chairperson of the Public Transit Committee, Chamber of Commerce designee and a representative from AUSD. The Selection Team will prepare an evaluation matrix based on the criteria listed in the RFQ and provided in Attachment 3. Each respondent will receive a score resulting in a short list of potential developers. The City intends to retain outside consultants with experience in evaluating developer qualifications to provide technical support to the selection team and to ensure objective analysis. Developers will be asked to participate in two community forums. The first forum will be an "open house" format that will give the community an opportunity to interact directly with the interested developers, ask questions and react to each developers vision for Alameda Point. A professional facilitator will organize and coordinate each meeting. The community input received at forums will be made available to the Council and the community on the project website and public places of review before the ARRA approves the developer short list. After the City receives the business plans from the short- listed developers, the community will have another opportunity to interact with the developers at a second forum. The second forum, will be more of a traditional "presentation" format, allowing the developers to speak specifically about their financial approach toward base reuse and provide the community the opportunity to examine which vision accompanied by a financial proposal is best for Alameda. Again, the input received at the forum will be made available to the ARRA and to the community on the project website and public places of review before a final ARRA decision. The RFQ and all developer responses will be available in the City Clerk's Office, City Hall West, City libraries, and posted on the Internet at the project website. All development documents will be made available for purchase at Copymat. As previously mentioned, the project website will contain a copy of the RFQ, all staff reports to ARRA, a copy of all developer submittals, a community message board to post comments from the public, and regular updates from the City on latest information on selection process. The City will update the website regularly, so that the community will have current information on the selection process. Fragmented Development At the September 19th meeting, the ARRA Governing Body directed staff to move forward with the immediate action steps to select a master developer. There was, however, discussion about carving additional acres of the base from the master developer scope of work each as existing housing. Separating parcels from the master development process would significantly jeopardize redevelopment of the base and raise the following issues: • Cost of reinvestment in infrastructure - In current dollars, the initial capital investment to develop the infrastructure is significant. If housing for example, were developed as a stand alone package, it is estimated that approximately $18,000,000 alone will need to be invested. (This estimate, derived from the Alameda Point Business Plan, is conservatively low because it assumes the water system and storm drain can be rehabilitated, and do not need complete replacement). It is unlikely smaller fragments of property alone can support the cost of reinvestment in infrastructure. Honorable Members of the November 8, 2000 Alameda Reuse and Redevelopment Authority Page 4 • Coordination of infrastructure design - Even if the package development approach were financially feasible, the design of the infrastructure would have to be coordinated with the remaining $130+ million in infrastructure improvements across the Base. The coordination of infrastructure design cannot be achieved until the City reaches agreements with a master developer. Advancing the development of one segment of Alameda Point before identifying the cumulative infrastructure costs could result in an inconsistent distribution of the burden of infrastructure costs. • Inconsistency with Reuse Plan - Offering parcels separately could lead to proposals to develop other packages separately. Ultimately the result could be fragmented development of Alameda Point, which would be inconsistent with the Reuse Plan's objective of coordinated development. In addition, fragmented development could potentially leave the City and master developer with the properties less viable for development yet with the financial and administrative responsibility for the coordination of all Alameda Point infrastructure. • • • Development Phasing and Environmental Remediation -- The Alameda Point property will be conveyed to the City in phases, either as the Navy completes cleanup, or as a developer accepts responsibility for accelerating cleanup (e.g., "early transfer "). A Master Developer is needed in order to optimize development opportunities and capture economies of scale in remediation costs for all of Alameda Point. Remediation issues are extraordinarily complex and expensive; lack of coordinated response to remediation across all parcels could leave many parcels economically unviable and jeopardize their reuse. Affordable Housing -- Segmentation of development may jeopardize the effective integration of affordable housing into the overall development plan for Alameda Point. In particular, the administrative cost of implementing and monitoring affordable housing increases significantly as the number of developers increases. Transportation Capacity -- The successful achievement of an effective transportation system management (TSM) program will require careful phasing and mix of land uses. Segmented development would result in a division of responsibility between the various developers. Staff is recommending approval of the RFQ process for one master developer for all of the parcels coming to the ARRA, except the golf course. The golf course is proposed to be an exception to this approach because it is geographically separated from the parcels that would be available to the master developer and because it is anticipated the City would retain ownership to the golf course. A golf course may also be the highest and best use of property with surrounding geographical constraints of the estuary, bay and wildlife refuge. The Master Developer would be responsible for integrating the golf course into the overall design and development plan for the base. Team Based Development Honorable Members of the November 8, 2000 Alameda Reuse and Redevelopment Authority Page 5 It is expected that the master developer will assemble teams of development partners, consultants and subcontractors to meet the many challenges at Alameda Point. It is expected that there will be many opportunities for local or regional development firms, consultants and other businesses to be included in development teams. In addition, once development plans are realized, there will be new opportunities for local and regional developers, builders, consultants, and real estate professionals to participate in development packages bid out by the Master Developer. FiscaUBudget Impact: Staff recommends that each developer applicant pay a non - refundable application fee of $10,000. These funds will be used to cover the initial expense related to the selection process. Previously, the ARRA budgeted $50,000 to support the initial selection process. The additional funds will cover the production costs for the documents, legal fees, and additional consultant services needed to review the submissions in detail to identify the most qualified short list of developers. It is expected to be necessary to seek additional funds for the short- listed developers to cover expenses related to reviewing business plans. Recommendation: It is recommended that the ARRA Governing Body authorize the release of the Request for Qualifications and continue with the solicitation process for a master developer for Alameda Point as outlined in this report. Respectfully submitted, Doug Yount Development Services Director cc: David A. Berger, Assistant City Manager, Community & Economic Development Attachments: (1) Schedule (2) APAC Recommendation • (3) General Selection Criteria C:\ LAKIL\ARRA \STAFFREP\2000 \MASDEV P. WPD Attachment CO Q Lt) N CO .0 LO . N co 7 Nr a Li_ — w N N G — to �- ti E � • M 0 — O N a) a N Qom' E (0. o Z rn N N N U) .a co 0 U 0 aster Developer Selection Schedule 1 October 1 November 1E N N N CUM t of M - 1. r.__.�_e- ......� External Tasks Rolled Up Split Project Summary Rolled Up Milestone Wed 11/8/00 Page 1 Attachment 2 Recommendation to the ARRA from APAC regarding the Master Developer Selection process The success enjoyed in the Alameda Naval Base Closure Transition has been due to the strong and total community Involvement throughout this complex socio- economic process. Now we have reached one of the most important milestones in this process. We all know that the Master Developer /City /Community relationship will have to be a long and enduring one, since it will span twenty or more years. With this in mind, the APAC continues to support strong ongoing community involvement as part of the Master Developer Selection process, including broader representation from the community. The FISC Selection Team and the Community Reuse Plan are excellent examples. The community had strong commitment and Involvement throughout the process of both of these projects: Many people were actively involved in the final result, and thus the community feels that it has "ownership" and will be much more inclined to support the final decisions. Therefore, APAC recommends that the Team be expanded to include an increased number of community representatives. October 2000 Attachment 3 General Selection Criteria The Developer Selection Team will recommend to the ARRA board the selection of a Master Developer with the experience, commitment, financial ability, technical competence and vision necessary to successfully redevelop Alameda Point. The following elements will be part of the Developer Selection Team's review: • Vision for redevelopment of Alameda Point and consistency with reuse goals and objectives • Evidence of relevant experience with a wide range of land uses as well as experience addressing the development considerations described in the RFQ. • • Evidence of financial resources and commitments, including ability to access and obtain amounts private equity and debt necessary to implement the team's vision for Alameda Point. Demonstrated technical ability to complete the project, including identification of the roles of team members and description of prior successful collaboration of team members on other recent projects • Understanding of the issues associated with redevelopment of Alameda Point and demonstration of the ability to create and implement innovative approaches • Community outreach program Responsiveness to the RFQ requirements ?z?s 1mi cA J) 0 yrT) I a P-11 Z CA 0 5 p4 --N) w � W Q P-q 4•1 Prq � W � Q cf) Asa4 • N.,4 4) 0 ai CA 4,4 "IFI • cam, c� p ta • N(+ &oral c-4--q cf) N g=4 CC3 va)., .r, 0 • Ct 0 0 Stimulate the local economy Improve community urban form • Improve the local tax: base • Role of Master Developer C� a) cu ;..4 '.° 5 v ,cd o c.4--i P .+4 t bi) (1) 0 E ,.,. v-4 .1-4 .,.-4 "Ci E ct .. Ov c� .4 0 czt -.42 -la' Tid c9 . 5 �•�E 5 po cd 7-i p, 0 la) (1) 75 tr::41 E 71) Ili 0 ,c 0 — � v-c 1) '4 z i 71).i 4) �--+ .i.' 5 t , (1) r--+ ct p . ro v� O O ) ' v� v� b� v • !--4 .5 2 "6 m 0 ;.••4 (I) Team based development V1 (i) N • a) g:4 cz1 • ;••., a) • Qualifications and..:. experience 74-5-) 0 a, a, a) E U •-� 0 '7 N -4a4 r-q 0 U � tin '-4 O a) � Financial resources and commitments Responsiveness to RFQ requirements Alameda Reuse and Redevelopment Authority Interoffice Memorandum November 7, 2000 TO: Honorable Mayor and ARRA Board FROM: Dana Banke General Manager, Golf SUBJ: Doug Yount Development Services Director 4 -B Recommendation to • Adopt the Golf Commission's recommendation to develop a high quality 18 hole golf course at Alameda Point; • Direct Staff to Undertake Pre - development Activities for Development of an 18 -hole Championship Golf Course Consistent With the Intent of the NAS Alameda Community Reuse Plan; • Approve distribution of an RFQ for a Golf Course Architect; • Approve distribution of an RFP for an EIR Consultant; • Direct the Executive Director of ARRA to oversee retention of a Financial Analyst; • Direct the Executive Director of ARRA to oversee retention of a Dredge Engineer; and • Direct the Executive Director of ARRA to oversee retention of a Golf Course Project Manager. BACKGROUND In 1998 the Alameda Reuse and Redevelopment Authority (ARRA) commissioned a study to determine the feasibility of developing a golf course in the northwest territories of the former Alameda Naval Air Station (Alameda Point). The study identified a significant demand for a high end golf course in the Bay Area region. Specifically, the study recommended that an 18 -hole championship golf course be developed on 214.5 acres on the northwest territories of Alameda Point. In addition, the study confirmed the viability of using dredge spoils to contour the golf course as proposed by the Port of Oakland. Not only would the site be used by the Port to dispose of the sand, thus lowering costs for the Port, there is a possibility costs for receiving the material could be paid by the Port to Alameda. The feasibility study was presented to ARRA in July 1998.1 In September, 1998 a local resident presented an alternative 36 -hole golf course concept including a replica of St. Andrews Golf Course in Scotland. This alternative idea would require more land than the 214.5 acres allocated and approved for the golf course project. To accommodate the alternative proposal, the Sports Complex, previously approved by ARRA and designated in the Community Reuse Plan, ' On file in the Golf Administration office and the City Clerk's office. Honorable Mayor and November 7, 2000 ARRA Board would need to be relocated. On November 4, 1998, ARRA directed the Golf Commission to research the best possible direction to take in developing the Golf Course. In response, Economic and Planning Systems and the Golf Research Group (EPS & GRG) were retained and produced "Alameda Point Golf Development 36 Holes versus 18 Holes Report" (Attachment 1). On September 20, 2000, the Golf Commission unanimously accepted the report and recommended that the ARRA continue work on developing the initially- conceived 18 hole golf course. DISCUSSION /ANALYSIS SIZE OF GOLF COURSE To accommodate a larger, 36 -hole golf course facility, more acreage would be required. The only other land available would be 57 acres, previously approved by ARRA for a Sports Complex, a contradiction of the Community Reuse Plan. This site was selected as the most ideal location for the Sports Complex through development of a Sports Complex Master Plan and in 1997 was endorsed through a community participation process, including various recreational and sports - related groups. The proximity to existing facilities, such as the gymnasium and baseball field also makes this location favorable for the Sports Complex. Because the site is Tideland Trust property, use of this land is limited but does allow placement of a sports complex. If the sports complex were moved, it would have to be located on more marketable property. This loss of marketable land could have a significant detrimental effect on the master development of the project. According to the EPS & GRG study, moving the Sports Complex would cost an additional $25 -35 million in lost reuse and development related revenues or proposed infrastructure costs at Alameda Point. This loss could jeopardize the financial viability of future redevelopment of Alameda Point. Additionally, the land gained (57 acres) would be insufficient to build a high caliber 36 -hole facility and the limited space would require a golf course design that would threaten customers' safety due to double greens and overlapping fairways. As a result, the impact of utilizing the 36 -hole alternative concept jeopardizes the feasibility of a golf course development. In October, 2000, APAC made recommendation to ARRA to support the 18 hole course (Attachment 2). TIMING The urgency for beginning this project is connected to meeting the Port's dredging schedule. The Port of Oakland plans to begin the 50' channel dredge project in March 2001. For the City to receive the dredge materials, the Port is requiring the City conduct a full Environmental Impact Report (EIR). As a result, an EIR consultant, a golf course designer, a financial analyst and a project manager need to be engaged as soon as possible. The project manager will have professional experience in developing golf courses of similar scope and quality. Currently, Staff does not have the experience nor capacity with existing workload. In addition, an engineer knowledgeable of the dredging process also needs to be retained for assistance in negotiating with the Port and planning for acceptance of dredge material. Attachment 3 provides an estimated time table for the project. 2 Honorable Mayor and November 8, 2000 ARRA Board PRE- DEVELOPMENT TASKS At Staff's request, the consultant team GRG & EPS prepared a separate report (Attachment 4) describing and recommending activities on how to proceed with the project. Those recommendations were utilized in developing a list of pre- development tasks necessary during the next six months (Attachment 5). At the conclusion of these tasks, ARRA would hear a presentation on the proposed method of financing, constructing and operating the golf course as well as the market viability and financial feasibility of a hotel/resort/conference center spa, which could be adjacent to the course. Additionally, ARRA and the Golf Commission would be presented with preliminary drawings and plans for the golf course. DECISION POINT A key issue needs to be decided during the pre - development phase of the project: • How to proceed with development of the course - -A balance must be found between financial reward and risk, based on a full understanding of what will be required for successful development and operation of the golf course. A financial analysis of the project needs to be conducted to determine the financial viability of operating and development, the need for using a developer to execute the project and timing for constructing the clubhouse and the viability of a future hotel/resort/conference center. Staff estimates that by May or June, 2001, the financial analysis would be completed, preliminary negotiations would have been mostly completed with both Fish and Wildlife for the EIR and with the Port regarding dredging. Also, the architect would have information on dredge material and drainage issues and would have completed a preliminary site plan and drawings for the golf course. At this decision point, Staff would be able to recommend to ARRA the model for development and operation of the course and the feasibility for development of an adjacent hotel/conference center /spa. FUNDING PRE- DEVELOPMENT TASKS Total pre - development activity cost is estimated today at approximately $300,000 which would be needed during the balance of this fiscal year. Staff will return to the ARRA Board at the decision point in the Spring with a request, if necessary, for additional pre- development expenses. Honorable Mayor and November 8, 2000 ARRA Board ESTIMATED PRE - DEVELOPMENT COSTS PROJECT INITIAL PRE - DEVELOPMENT EXPENSES (FY 2000 -01 6 MONTH ) EIR $100,000 Golf Course Architect $ 90,000 Financial Analyst $ 40,000 Dredge Engineer $ 25,000 Project Manager $ 45,000 Total $300,000 NEXT STEPS Subject to approval of recommendations, Staff will distribute the RFQs for the Architect, Financial Analyst, Project Manager, Dredge Engineer and the RFP for the EIR Consultant. Following review of qualifications and proposals, selection teams will interview top candidates and prepare recommendations (Attachment 6 outlines the selection process). A loan and budget appropriation proposal will be brought to Council and to ARRA at a joint meeting on January 2, 2001. Also at that time, recommendations for entering into contracts with an EIR consultant and the Golf Course Architect will be brought to ARRA for approval. BUDGET /FINANCIAL IMPACT There is no impact on the General Fund. On September 20, the Golf Commission recommended the Council loan the ARRA $300,000 from the Golf Course Enterprise Account to be repaid as soon as other funding becomes available through potential bonds for development of the course. Staff will return in January 2001 with this appropriation request. RECOMMENDATION It is recommended that ARRA initiate pre - development activities for the proposed Alameda Point Golf course as follows: 1. Adopt the Golf Commission's recommendation to develop a high quality 18 hole golf course at Alameda Point; 2. Direct staff to undertake pre - development activities as described above for development of an 18 -hole championship golf course, and feasibility study for hotel, conference center and spa; 4 Honorable Mayor and ARRA Board November 7, 2000 3. Approve distribution of an RFQ for the Golf Course Architect; 4. Approve distribution of an RFP for the EIR Consultant; 5. Direct the Executive Director to oversee retention of a Financial Analyst; 6. Direct the Executive Director to oversee retention of a Dredge Engineer; and 7. Direct the Executive Director to oversee retention of a Golf Course Project Manager. Attachment cc: APAC City Council EDC Golf Commission Parks and Recreation Department Zenda James, Director of Finance 5 ana Banke Golf -ral Manage Doug Y.unt, Development Services Director Honorable Mayor and November 7, 2000 ARRA Board bcc: Dana Banke Jeff Bond David Brandt Cynthia Eliason Marc Fontes Darrell Handy Teri Highsmith Elizabeth Johnson Kathleen Kelley Bruce Knopf Ed Levine Doug Yount etc. C: \LAKIL\ARRA \STAFFREP\2000 \GOLF. WPD 6 ATTACHMENT 1 Alameda Point Golf Development 36 Hole Versus 18 Holes Report Colin Hegarty, Golf Research Group David Zehnder, Economic & Planning Systems Golf Research Group 1880 California Street Suite 10 San Francisco CA 94109 Tel: 415 441 5247 Fax:415 673 4674 www. go if -re search. com 1 Introduction There exists a choice of two land use plans for the proposed golf development at Alameda Point. The first plan calls for an eighteen -hole golf course on 214 acres plus a sports complex on 57 acres. The second plan proposes 36 holes of golf on 271 acres with the sports complex relocated to an alternative site elsewhere in the base re- development. The purpose of this report is to examine the feasibility of the 36- hole proposal. Feasibility Of Sports Complex Relocation The proposed 36 hole "St Andrews" configuration would require more land than has been allocated to the golf course under the Reuse Plan as well as subsequent financial plans. In order to accommodate this type of golf course, the City sports complex would need to be relocated to some other part of the Alameda Point property. This section explores the feasibility of relocating the sports complex, including an evaluation of the likely impact on the overall Alameda Point Reuse Program. There are two major issues associated with relocating the sports complex to another part of Alameda Point. The first is the issue of Reuse Plan consistency (as well as consistency with conveyance application already made). The second is the economic impact on the feasibility of the Reuse Plan. Overview: Proposed Sports Complex The sports complex is envisioned as a citywide facility including outdoor softball and soccer fields, a pool complex, tennis courts, indoor request sport/multi -use facilities, a gymnasium, weights /fitness equipment, and other standard components of such facilities, as described in the "Sport Complex Master Plan". In order to accommodate the sports complex, the City has identified approximately 57 acres of land adjacent to the Oakland Estuary and east of the proposed golf course (see Figure II -1 on the next page). The sports complex was added to the community reuse plan as an amendment in 1997. Accordingly, the City intends to receive this property under a Public Benefit Conveyance (PBC) from the Navy. The cost estimate for the sports complex was estimated to be approximately $21.7 million (in 1997 dollars), comprised of a $10.2 million initial phase and an $11.5 million second phase. It is assumed in this analysis that sports complex development will not be initiated within the next five years. 2 FROM GOLF RESEARCH GROUP FAX NO.-: 415 673 4674 Jul. 12 24700 01:03PM P3 Sports Complex Relocation Alternatives Based on a review of available development opportunities at Alameda Point, there are three alternative locations for relocating the sports complex on the Alameda Point property. These locations are shown in figure II -1 on the previous page and are discussed below. 1. Business /technology park development area east of the Seaplane Lagoon (portion of areas B,C,D and E). 2. Permanent building reuse district. For example, a portion of areas J and H could be cleared for purposes of relocating the sports complex. 3. West housing areas (Area K). However, the sports complex would interfere with existing commitments of housing in the area, and is clearly inconsistent with the Reuse Plan's vision for housing in the area, and is therefore not considered as an option in this analysis. Revenue Impact: Sports Complex Relocation Through 2012, the Alameda Point property is estimated to generate net development proceeds (revenues less expenses) over the period of $20 to $15 million. However, this surplus is needed to ensure that debt service related to initial water, roadway, and other capital expenses can be funded, as well as to provide a reserve for unanticipated expenses. As described in the preceding section, there are two major options for relocating the sports complex that, arguably, may be consistent with the Reuse Plan. The estimated revenue impact of each is described below. It should be noted that this analysis assumes the sports complex would require essentially the same infrastructure improvements as commercial development. Alternative l: Business Park Land Reduction Presently, the area located to the east of the Seaplane Lagoon, as represented by Areas B, C, D, and E, is an area of warehouse and industrial buildings under interim leases. The Reuse Plan envisions this area to include new mixed -use development. Accordingly, this area is the centerpiece of the new development component of the Business Plan, and will be instrumental in realising the successful reuse of NAS Alameda. The improved value of land in areas B,C,D, and E is estimated to be approximately $11.00 per square foot, including an unimproved land value of $7.50 per square foot, plus an infrastructure cost burden of approximately $3.50 per square foot. The conversion of 57 acres of this land to a sports complex therefore translates into a loss in private sector land sales and infrastructure contributions of $27.3 million. Moreover, the loss of such a large land area would likely reduce the feasibility of the remaining commercial development opportunities at Alameda Point. Alternative 2: Long -Term Building Reduction 4 Although the sports complex could potentially be located on multiple sites within areas J,F,H, and G, this analysis analyses the economics of developing the facility in areas J and H. These two areas are representative of the intensity of development present throughout the long -term reuse area, are the closest to the current planned location of the sports complex, have enough acreage to accommodate the sports complex, are largely served by existing infrastructure, and are not complicated by conveyances to public or no -profit institutions. Conversely, areas F and G are not evaluated here because of parcel configuration and public benefit conveyance constraints that preclude the relocation of the sports complex in these locations. The Reuse Plan envisions the reuse of Areas J and H as part of a newly developed Civic Core. Due to transportation constraints and the value of the interim leases in certain portions, including "hangar row "', the area is presently programmed to retain existing structures to take advantage of their lease revenue generation capacity. In the long -term, in the event that a new estuary crossing is constructed, this area could become an important redevelopment site per the vision established by the Reuse Plan. It is assumed the sports complex would not be initiated until 2005. Over the 2005 -2012 period, buildings slated for long -term reuse in Areas J and H are forecasted to generate $48.4 million in revenue. However, the long -term asset value (i.e., reversion value) of these buildings must also be taken into consideration. Assuming that Year 2012 leases are capitalised at 10 percent, estimated total asset value in these areas is $111.8 million in nominal dollars, of $81.6 million in constant dollars. Averaged over this 150 -acre area, the land and building asset value is about $12.50 per square foot of land. In addition, locating the sports complex in this area would require building demolition. Because the amount of building area requiring demolition would depend on the precise location of the sports complex, this analysis uses a simplifying assumption by utilizing the average density of the areas J and H. Under this approach, assuming that a 57 acre area would include 870,000 square feet of built space2 and a demolition cost of $5.00 per square foot, demolition would be $4.25 million , or $0.65 per square foot of land. Adding the loss of asset value (12.50 per square foot) and the demolition cost ($0.65 per square foot) yields a sports complex impact of $13.15 per square foot of land in this area. Therefore, the total estimated financial impact of the 57 acre sports complex is $32.6 million. Summary Of Impacts Financial impacts in the $25 to $35 million range described above would jeopardise the financial feasibility of the Alameda Point Reuse Plan. The precise impacts associated with a sports complex relocation depend on the specific area selected and the intended uses of that area. The above referenced scenarios are intended to be representative of two major areas that would be likely candidates for such a relocation based on acreage requirements and possible consistency with the Reuse Plan. 1 "Hangar Row consists of over a dozen major structures, generating nearly $2 million per year in lease revenue, which is presently being utilized to secure a revenue bond issued to cover capital improvements on Alameda Point. 2 Uses the average density of buildings in areas J and H, which is a floor area ratio of 0.35. 5 Viability Comparison This section compares the viability of the 36 hole proposal on a 271 acre site versus the 18 hole proposal on a 214 acre site. It is only physically possible to increase the area available to the golf development by relocating the proposed sports complex to an alternative site. This relocation provides an additional 57 acres for the golf development increasing the site from 214 acres to 271 acres. The table below provides clear demonstration that the expanded 271 acre site is still insufficient for a 36 hole development. Seven additional space requirements on the site act to reduce the land available for golf: The 214 acre plan is reduced by 84.5 acres leaving 129.5 acres of available space for the golf. In similar fashion the 271 acre proposal is reduced to 172 useable acres for golf. An eighteen hole golf course can be laid out on the 129.5 acre site but it is a tight fit. It is not possible to fit a thirty six hole course of any reasonable quality on a 172 acre site. The average size eighteen hole courses built today is 150 acres. A site with 300 acres of space available for golf would be required in order to create 36 holes of quality golf. Land Use Requirements It is noted that 129.5 acres is sufficient space to develop a world class eighteen hole golf course. 214 Acre Plan 271 Acre Plan Total Acres 214.0 271.0 Additional Lan Requirements Shoreline Trail and Parking for Trail 20.0 23.0 Golf Practice Range 10.0 10.0 Maintenance Facility and Material Storage 2.0 2.0 Water Retention Basin and Drainage 5.0 6.5 Hotel Development Site 15.0 15.0 Entry Road to Course and Shoreland Park 6.5 7.5 20% Set Aside Requirement for Natural Grasslands 26.0 35.0 Land Available for Golf 129.5 172.0 It is noted that 129.5 acres is sufficient space to develop a world class eighteen hole golf course. Seven Additional Space Requirements There is a requirement for a shoreline trail open to the public along the bay shore. The addition of this trail not only takes up space in itself, but additional space is required to create a safety buffer between members of the public walking the trail and the golf. Adding to this is the need to create space for parking for trail users. In total, this trail will occupy 20 acres in the smaller plan and 23 acres for the longer shoreline trail in the larger plan. 2. The golf practice range will occupy 10 acres on both plans. 3. The maintenance facility with space for storage of materials and turning space for turf care machinery will occupy 2 acres on both plans. 4. There is a requirement to create a water retention basin and a drainage system to bring all surplus water on the site into this basin so that there is no run -off from the golf course into the bay. This drainage system will occupy 5 acres on the smaller plan and 6.5 acres on the larger plan. This system is necessary in order to insure that there be no run -off of nitrates, pesticides or any other form of chemical residue from the golf course into the bay or into the wildlife refuge. 5. A 15 acre hotel development site is scheduled for the north west territory of Alameda Point. 6. The entry road for the golf course and the shoreline park will occupy 6.5 acres in the smaller plan and 7.5 acres for the longer access road in the larger plan. 7. There is an environmental requirement imposed by USFWS for 20% of the site developed as golf course to be maintained in areas of natural grassland. This requirement is in place in order to ensure that a diversity of habitat be created across the golf course. This grassland set aside will occupy 26 acres in the small plan and 35 acres in the larger plan. It is possible to omit two of the above space requirements: the hotel site and the practice range. Eliminating these two features releases an additional 25 acres for the golf, which could create 197 golf acres for a golf course on the larger plan. Eliminating the hotel and the range are expensive to the project. The range will be highly profitable in its . own right; in addition a practice range is normal and somewhat integral to a quality golf course. The hotel site will be of very significant value. An estimate is currently being developed for the likely freehold sale price or leasehold income that may be generated. Even with the loss of the range and the hotel 197 acres remains insufficient space for a 36 -hole course. Safety Requirements Safety is a significant issue in golf course design and operation. Golf balls travel in excess of 100 miles per hour and have the potential to cause serious injury or death. Accidents do occur on all courses. If when an 7 accident occurs a case can be developed that the accident was due to poor operation of the course, or poor design of the course, the facility operator risks substantial liability. The proposal to construct a replica of the "Old and New Course At St Andrews" on the Alameda Point golf development site raises concerns with regard to safety. The old course was created over 400 years ago. The design does not conform to any of the minimum safety standards for golf design currently in use. These safety standards are expressed in minimum distances separating from line of play fairways, greens, tees, footpaths and roads. There are three key areas were very serious breaches of safety standards occur on "The Old Course ": 1. The "Old Course At St Andrews" has many shared greens. This results in players hitting into a green while others players are putting out. 2. Many of the holes have shared greens and tees. The tee for the next hole being part of the green. Again this results in players hitting into a green while other players are still on that tee /green teeing off. 3. On many of the holes players walk back into the face of play when leaving a green to reach the next tee. These are all examples of gross breaches of safety current safety rules. Such breaches do lead to accidents on "The Old Course" and would with certainty lead to accidents on a replica "Old Course" should it be developed at Alameda Point. 8 Golf Cars There are no golf cars on "The Old Course at St Andrews" and due to the very tight nature of this design it would not be possible to add paths for golf cars to the "The Old Course ". Should paths be added they would need to be constructed beyond the boundary of the current course. The proposed 36 -hole layout at Alameda Point does not include space beyond the footprint of the replica "Old Course" for the addition of paths for golf cars. It would be inconceivable to operate a course at Alameda Point without golf cars for two reasons: 1. The income from golf cars is significant and a critical aspect of the financial viability of the course. 2. American golfers expect and demand golf cars. 9 ATTACHMENT 2 Recommendations to the ARRA Governing Body on the Alameda Point Golf Course, Resort and Conference Center from the Alameda Point Advisory Committee (APAC) 1. We recommend that the City design and develop a destination resort complex, including a high end golf course. We accept the recommendation of the consulting team that an 18 hole course is probably the best fit on the currently available land. We further recommend that the City seek to maximize the amount of land available by whatever means possible, including currently allocated land use. 2. The 18 vs 36 hole report omits a conference center. We strongly recommend that this facility be included. Furthermore, we recommend that the golf course, resort and conference center complex be planned and designed at the sarre Development could be done in stages. 3. Another design consideration is that the water views be maximized and that the links design be rethought for safety reasons and marketability. 4. The report also states that the USFWS has imposed a 20% set aside for natural grasslands. This Is 26 acres separate from the golf course. We recommend that this acreage should be part of the golf course. 5. The ARRA struck from the January 1999 BRAG recommendation the phrase "highest and best revenue generator" and replaced it with "highest and best use ". We continue to believe that revenue also needs to be part of the goal. 6. The original feasibility study understates what fees could be charged on a high -end course. We hope that we are truly aligned on the vision. A definition of "high -end quality" course is needed. A very profitable golf course could provide funding for the sports complex. 7. Doug Yount stated that a developer has no incentive to develop if he cannot own or operate the golf course. This then means that the City would work with a team of golf course architect, financial advisor, etc. Does the City have the background and expertise to plan, develop and manage the golf course project? If not, how will they get these skills? We think that the assumption that the City will own and operate should be rethought. The costs and revenues to the City with the different scenarios must be determined and reviewed using more current assumptions (city retains ownership, sell, 50 year lease, etc). 8. Do other like cities have a good track record In managing golf courses of this scale and complexity? Aren't some cities actually privatizing their municipal courses? We don't want to miss the opportunity for an incredible win for Alameda. This is not another municipal course. 4 -7J 8 5 5 4 5 5 5 2 5 5 ,§ 4 5 5 ID 0 Task Name Request fuming from Golf Request funding & contract for EIR Consultant • ARRA/Councll 8 42 Issue Draft EIR 6 8 5 E 3 nt activities from ARRA ng 8 contract ream-AMU - ARR Design Gott Course Design negotiations for EIR .5 3 2 3 3 8 Retain Consultant 8 DECISION POINT - Development Model Project Manager Retain Consultant Strategy Implementation through opening day Negotiate early transfer pinked to the end date 01E1111 ATTACHMENT 4 Alameda Point Golf Development Recommendations Report Colin Hegarty, Golf Research Group David Zehnder, Economic & Planning Systems Golf Research Group 1880 California Street Suite 10 San Francisco CA 94109 Tel: 415 441 5247 Fax:415 673 4674 www.golf-research.com Overview The City of Alameda seeks to develop a high- quality public golf course at Alameda Point. The City has two key objectives: 1. To maximize both financial and non - financial benefits for the City; 2. To bring prestige to the City by basing redevelopment on the creation of a world class golf facility. This evaluation sets forth a preliminary framework for the disposition and development of the proposed golf course including potential approaches to construction and operation. In addition, a recommended sequence of implementation steps is provided. Overall, the City would like to strike a balance between financial reward and risk, based on a full understanding of what will be required for successful development and operation of the golf course, and a realistic assessment of the City's capabilities. While the City would like to avoid a situation where a private golf course operator makes a large profit at the expense of the City, it is also recognized that the City may lack the requisite expertise and administrative structure to effectively develop and operate a course without private sector outsourcing at some level. Project Phasing The proposed golf course project can be broken down into three distinct phases; 1) Pre - development Activity, 2) Development /Construction, and 3) Management/Operation. Each of these phases has its own set of issues and requires distinct choices from the City's decision - makers. Predevelopment Activity Predevelopment activity involves preparing a preliminary design, providing more detailed cost estimates, finalizing a development pro - forma, initiating environmental review and development entitlement and preparing recommendations on development /construction and management /operations options. It is recommended that the City obtain the services of a golf course architect/designer, a financial consultant and an environmental consultant to assist in the predevelopment phase. It is not recommended that the City elect to transfer this project to a private developer at this time. The key determinations regarding the costs and benefits of having the City perform the Construction/Development and Management /Operations (versus providing those opportunities to a private developer /operator) will be determined during the Predevelopment phase. The consultants believe the City will obtain a more unbiased analysis if it maintains control during this initial phase. It is estimated that the City's predevelopment costs will be as follows: 2 Architect/Engineer - $110,000 (through predevelopment) Financial Consultant - $70,000 Environmental Consultant - $120,000 (through Draft EIR and U.S. F &WS consultation) Development/Construction Options The two basic options for development of the course are outlined below. Various hybrid options are then discussed followed by an outline for a recommended development path. 1. Selection Of Private Developer Through RFP Through a Request For Proposals (RFP), select a private golf course developer (and possibly a golf course operator) to develop the golf facility. Due to the high quality of the Alameda Point location and site, there would be considerable interest from the private sector to develop and operate this golf project. Within the same market area the management of the golf facility at The Presidio was recently put out for RFP. Over 140 private companies entered the RPF process. A similar level of interest would be expected if an RFP process was conducted for the development and operation of the Alameda Point golf development. The advantage of this option is low risk. Much can go wrong when developing golf courses - many new golf courses fail. A private company with a proven track record of success in golf development brings reduced risk. In addition the private developer may be held to performance gnarantees thus eliminating risk to the City. The disadvantage of bringing in a private developer is loss of revenue and control to the City. The private developer, in return for absorbing risk, will seek to draw considerable profit. Private developers will typically seek a 25 to 30 year lease. 2. Development /Construction By The City The City of Alameda may develop the Alameda Point golf development itself. The City has considerable experience and expertise in performing and managing major public works projects including recreational facilities. The skills and services necessary to develop a golf course are substantially the same as are required to construct any major recreational facility. The City may be able to deliver the proposed golf course at a lower cost and will certainly have more control over the construction process if it develops the course itself. Issues which effect the choice of the Development/Construction Option 1. Cost - The 1998 Golf Course Feasibility Study estimated that cost of constructing an 18 -hole golf course at Alameda Point would be approximately $15 million. This cost could vary depending upon a number of factors including the amount construction "outsourced" by the City. 2. Availability of Dredge Spoils from the Port of Oakland - The Port has indicated a willing ness and desire to provide the project with suitable dredge spoils from its —50' Dredging project as well as from 3 its ongoing maintenance dredging. The Feasibility Study indicated that the Golf course would need at least 1 million cubic yards of dredge material and could absorb as much as 3 million cubic yards. However, the quantity and quality of the dredge spoils, which might be available for the project, as well as the timing of availability is currently unknown. 3. Revenue from Tipping Fee - To offset the costs of construction of the golf course, the Feasibility Study assumes revenue coming to the City from the Port of Oakland in the form of a "tipping" fee. The Alameda Point site is attractive to the Port of Oakland because it eliminates the costs of transport of dredge spoils to more distant alternative sites, however, the Port has made no commitment regarding tipping fees and will most likely negotiate for a zero tipping fee. 4. Disposition and remediation of Navy property — The site on which the golf course is proposed to be developed consists of parcels that are currently owned by the U.S. Navy. There are two known Installation Remediation sites within the proposed golf course project sites. The property cannot be transferred to the City of a third party until the IR sites are deemed suitable for transfer. The Navy currently does not have a remediation plan for these sites or an accurate date for transfer of the property. In any case, the information provided through the predevelopment phase of the project will better inform the City's decision regarding the eventual construction of the facility. Management /Operations Options 1. Contract with a private operator The City may opt to have the golf course facility operated by a private firm with experience operating premiere golf course developments. Contracting with a private operator would avoid the necessity of retaining additional permanent City staff and may bring economies to the golf course operations that the City could not provide itself 2. City operations and management The City has a track record of success in the operation of Chuck Corica Golf Complex. The advantage of operating the course in -house is that all revenue is retained and controlled by the City. The risk is that the City may not achieve the same level of financial performance as a private operator. Further, the City's current operating experience of golf operations at Chuck Corica is of a high volume, low cost facility. The proposed Alameda Point facility will be a premium daily fee facility. Given the passage of time since the 1998 feasibility study and the change in market conditions since that time, it is estimated that the achieved fees at the course could be in the range $100 to $175 for an eighteen hole round of golf. Issues which effect the choice of Management /Operation option . Financing — The golf course development project could potentially be financed with either taxable or tax - exempt bonds. The management /operation of the of the golf course by a private operator could trigger "private use" restrictions which could prevent tax exempt financing. 4 2. Tidelands Trust restrictions - The site for the proposed golf course development is entirely on property which is or will be subject to the restrictions of the Tidelands Trust. The most salient of these restrictions is that revenue generated from activities on trust properties must be spent on activities or improvements that benefit Trust property. Recommendation It is recommended that the City of Alameda initiate predevelopment activities for the proposed Alameda Point Golf course and defer the specific decisions regarding the development /construction and management/operation of the facility until the conclusion of the predevelopment stage. At that time the City should have the necessary information regarding the need for "gap" financing, availability of dredge spoils and projected revenues, to make a more infoimed decision regarding whether to bring in private sector development and/or operations partners. 5 Honorable Mayor and November 8, 2000 ARRA Board ATTACHMENT 5 PRE - DEVELOPMENT TASKS FOR THE NEXT 6 MONTHS During the next six months, ARRA needs to complete the following nine key tasks in order to negotiate dredge materials from the Port of Oakland, and to obtain the information necessary to decide how best to proceed with development and project financing. 1. Golf Course Design -- Develop a design for placement and rough grading of dredge material from the Port of Oakland. 2. EIR -- Develop a conceptual golf course design sufficient to allow ARRA to evaluate the proposed project for an Environmental Impact Report (EIR), under CEQA requirements. 3. Financial Plan-- Prepare an analysis and evaluation of development cost and financing including all sources and uses of funds through construction and stabilized operation proformas. 4. Operating Proforma -- Prepare a proposed operating proforma and proposed details regarding the structure of the operation and management of the golf course (City owned and operated). 5. Dredge Fees -- Develop information for negotiating with the Port for dredge fees. 6. Potential Early Transfer of property-- Negotiate with the Navy for early transfer of property at Alameda Point to ARRA. 7 Environmental Remediation -- Undertake the necessary remediation activities to comply with environmental requirements related to reuse of the site and transfer of dredge materials. 8. Hotel /Conference Center /Spa -- Determine the viability and financial feasibility and timing for development of a Hotel/Conference Center /Spa. To complete these tasks, the use of the following contract services would be necessary: Golf Course Architect- -The architect would provide preliminary designs sufficient to develop the EIR and conduct negotiations with Fish and Wildlife. EIR Consultant- -The EIR consultant would draft the EIR and will incorporate any design changes or mitigation measures resulting from negotiations with Fish and Wildlife. Financial Analyst - -The financial analyst would report and recommend the financial feasibility of developing the golf course, options related to the viability of utilizing a developer, management and operation structure and proformas and hotel /conference center /spa feasibility. Honorable Mayor and November 8, 2000 ARRA Board Dredge Engineer- -The Dredge Engineer would provide technical information related to dredging and receiving materials from the Port of Oakland and will design the necessary drainage and weir facilities. The engineer will also coordinate with the financial consultant in developing the analysis and the golf course architect for moving materials to optimal locations. Project Manager- -The Project Manager will be knowledgeable of all aspects of golf course development and will be the primary coordinator of the project. While Staff will provide guidance and oversight, the Project Manager would have expertise in this highly specialized role necessary for the successful implementation of the project. Honorable Mayor and November 7, 2000 ARRA Board ATTACHMENT 6 GOLF COURSE ARCHITECT AND EIR CONSULTANT SELECTION PROCESS The process for selecting a Golf Course Architect will involve: 1. Formation of a panel to review RFQ submittals and recommend an architect, including: • a Golf Commission representative (the Commission's designee to Base Reuse Activities), • APAC representative • The Development Services Director; • The Golf Complex General Manager; and • The Director of Public Works, and/or their designees. 2. ARRA approval of contract with recommended architect. The process for selecting an EIR Consultant will involve: 1. Formation of a panel to review RFP submittals and recommend a consultant, including: • The Planning Department Director or designees; • The Development Services Director or designees; and • The Public Works Director, and /or designees. 2. ARRA approval of contract with recommended consultant. The City Manager and Staff will negotiate and retain services of a Financial Advisor, Dredge Engineer and Project Manager. 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San Leandro Shelter (Homeless Collab) Simmba Systems (Records Storage) Studio 35 Trident Port Services Trident Management Trident Management ....- .._....... _. __.__ -_. United Indian Nations (Homeless Collaborative University Avenue Housing Waters,Caldweil& Assoc. (Environ.Consultant) West Coat Novelties West Coast Seaworks (Marine Construction) Woodmasters (Woodworkers) Forem Metal Manufacturing Forty Plus (Career Counseling) NO. OF EMPLOYEES i Gen. Svcs. Admin. (Maritime Museum Storage) (0 . 4- 'V (0 v. 0) v 0 in r- cn CV 40 CI (0 stt 0 0 LO CO (4)44) I, LIO 0 00 (4) 0 CO CO CO V CD CO CO "ef 0 0 0 (0 (0 I,- (0 CO CO 01 CD 0 Ise .-- N oi N el I, v. 4- In N co t•-• 4'.. N co ts 0)0 N (0 .r. (0 01 CO VI 40 et (0 10 03 0) r) 0 v. er C4 V O sILI. 1 Building Sq. Ft. 15,5501 o o N ai 32,000 0 CV a oo 130,035 Ground Lease 0 0 0 oi (0 0 CO CO oi (0 0 0 co ,-- (0 0 (Y) ..4- a .r- 10,550 4,880 1000'9 0 0 0 cci (0 0 0 N 0 0 0 r: gr- 0 0 0 ..u. 0 0 0 0 6 N••• 0 0 (0 6 0 Ground Lease! 0 0 V. N 58,4501 0 LO CO CV 0 0 0 NZ c- 26,9271 0 0 0 CC •■••• 0 0 0 a 01 0 0 V v- 0 0 CO co- 0 0 0 6 Is- 0 0 0 -tr' 46,133 0 0 (0 -4' N- 0 11) oo 0 0 07 co" CO 0 0 sLY ui 4k 0) C -15 .— = Da F- Pier 3 398 0 co 0 41 &77 1 Near Bldg. 530 C4 0) Y- 0 y- at FISC 162 East 258 585 Tarmac & 405 527 West CV Cs4 2921 25 (Bay 1)1 0 V' Bldg 2 FISC) co CV Near Bldg. 360' ...- along estuary along estuary' 522' 76 &1341 0 (0 et 0) sl- r- CD CO east of Bldg 360 west of O'Ciub 24 -Bay3 co CsI CI 0) VI 117 West' v (o 0 Bldg 2 FISC c", .-- (0 v. <- •■••• o 0 co CO 0 CO v.- 459( Signed Leases & Licenses ACET (Environmental Tech. Incubator) AC Homet Foundation [Advanced Flooring (dba: Pacific Union Flooring) Alameda Aerospace (Advanced Turbine Tech.) Alameda Aerospace (Tower Aviation) Alameda Naval Air Museum Alameda Point Storage (Mini Storage) Alameda Point Collaborative (Warehouse) 1Alameda Point Collaborative (Office, etc.) Alameda Power & Telecom (Storage Yard) Alameda Power & Telecom Alameda Unified School District (Child Care Cntr) Alternatives in Action (HOME) Antiques by the Bay (Collectibles Faire) 'Apelon (formerly Lexical) IAVTS (Audio Visual Technical Services) Bay Ship & Yacht (Ship Repair) Bay Ship & Yacht (Ship Repair) 0 E co 1... 8 '0 c E z 'o CD CO Bobac (Warehouse) CALSTART (Electric Vehicle Incubator) Cellular One (Cell Site) City of Alameda (Administration) City of Alameda (Dog Run Park) ,City of Alameda (Ferry Terminal Parking) City of Alameda (Fire Dept Training) -3 0 n. E >, CO lg E 0 < 15 >. r-I (..) City of Alameda (O'Club) City of Alameda (Police Department) City of Alameda (Public Works storage) City of Alameda (Soccer Field) City of Alameda (Tennis Courts) Coach Specialties (formerly NB Industries) Container Storage (Cans) Delphi Productions (Exhibit Displays) Delphi Productions Dignity Housing (Homeless Coll.) Door Christian Fellowship Church Dunavant of Califomia (Storage) Emerg. Svcs. Network (Office) Forem Metal Manufacturing Forty Plus (Career Counseling) Fribel Internat'I. (Concrete Statuary) Gen. Svcs. Admin. (Maritime Museum Storage) Home Auto Repair scs (‚4 (0 'IS lil CD Iss. 03 CO 0 V. ''"* " V I V (t) CO V ts V (00) V C4 CV CV e CV Mt CV C CV 1, N (00) C4 01 0 CI VI 01(0 01 4.1 CO to r) 03 () I, 4.1 (0 el 0) r) 0 v. er C4 V O sILI. sr 0 '1 Revised InterimLease.xls November 10, 2000 (nrn JL ;lO :38 Mayor Ralph Appezzato, Chairman Honorable Members of the Board Alameda Reuse and Redevelopment Authority (ARRA) 2263 Santa Clara Avenue Alameda, CA 94501 Hugh G. McKay Associates A MANAGEMENT GROUP • INTERNATIONAL RE: Alameda Point Golf Development 36 -Hole Versus 18 -Hole Dear Mayor Appezzato: Ericlosed is our response to the above report by Colin Hegarty, Golf Research Group, San Francisco. We have addressed: (a) BRAG LAND USE Report — Re -Use Plan Consistency 1. Recommendation for a Resort Hotel/Conference Center and two 18 -hole Golf Courses. (b) FEASIBILITY OF SPORTS COMPLEX RELOCATION 1. Recommendation by Paul Tuttle, Consultant NAS for a single location adjacent to E.B.R.P. (c) LAND USE REQUIREMENTS 1. Illustrating 272 Acres is sufficient for development of a Destination Resort Complex. (d) SAFETY REQUIREMENTS 1. "Old" St. Andrew's is not a "safety" concern. (e) GOLF CARS 1. Modern design of "Old" St. Andrew's does allow for the use of golf cars. We trust this may meet your approval with regard to the future development of ALAMEDA POINT INTERNATIONAL DESTINATION RESORT, as well as the long term vision of the citizens of Alameda, who support tourism and tax revenues for the City of Alameda. Yours very truly, HUGH G. MCKAY .DISSOCIATES H .h G. McKay Director Enclosure P.O. Box 14286 • Oakland. CA 94614 • 510/749 -9062