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2004-09-01 ARRA PacketAGENDA Regular Meeting of the Governing Body of the Alameda Reuse and Redevelopment Authority Alameda City Hall Council Chamber, Room 390 2263 Santa Clara Avenue Alameda, CA 94501 1. ROLL CALL 2. CONSENT CALENDAR Wednesday, September 1, 2004 Meeting will begin at 5:30 p.m. City Hall will open at 5:15 p.m. 2 -A. Recommendation to approve a 20 -year lease agreement with Nelson's Marine for Building 167. 2 -B. Recommendation to approve a five -year lease, with a possible 3(5 -year) options, with Nelson Marine for 400 linear feet of Pier 1. 2 -C. Recommendation to authorize the Executive Director to direct P.M. Realty, acting as property manager, to enter into a contract with Urban Waterproofing Inc. to waterproof City Hall West (Building One) in an amount not to exceed $547,541. 3. PRESENTATION 3 -A. Presentation /update on Alameda Point Navy Negotiations and Land Use Planning. 4. REGULAR AGENDA ITEMS None. 5. ORAL REPORTS 5 -A. Oral report from APAC. 5 -B. Oral report from Member Matarrese, RAB representative. 5 -C. Oral report from the Executive Director (non- discussion items). ARRA Agenda — September 1, 2004 Page 2 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 that is not on the agenda.) 7. COMMUNICATIONS FROM THE GOVERNING BODY 8. ADJOURNMENT TO CLOSED SESSION OF THE ARRA TO CONSIDER CONFERENCE WITH REAL PROPERTY NEGOTIATOR: 8 -A. Property: Negotiating parties: Under negotiation: Alameda Naval Air Station ARRA, Navy, and Alameda Point Community Partners Price and Terms Announcement of Action Taken in Closed Session, if any. 9. ADJOURNMENT This meeting will be cablecast live on channel 15. The next regular ARRA meeting is scheduled for Wednesday, October 6, 2004. Notes: • Sign language interpreters will be available on request. Please contact the ARRA Secretary, Irma Frankel at 749 -5800 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. Alameda Reuse and Redevelopment Authority Interoffice Memorandum August 19, 2004 TO: Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority FROM: Jim Flint, Executive Director SUBJ: Recommendation to Approve a 20 -year Lease Agreement With Nelson's Marine for Building 167 Background Nelson's Marine is one of the original tenants at Alameda Point, operating a boatyard in Building 167. Building 167 is a structure located in the Tidelands Trust property; Nelson Marine is a compatible use for the site. The lease commenced in June 1997 and expired in September 2002. In July 2002, APCP, acting as property managers, executed a lease amendment for a month -to month lease at $16,000 /month and began renegotiating a 20 -year lease for Building 167. Under the existing lease, the tenant has the first right to negotiate a new lease for the premises at 90% of fair market value upon expiration of the initial term. Discussion The current lease with Nelson allows the ARRA and Nelson to share the cost of an appraisal to determine the correct "market value" for the lease. As a result, the financial terms of the Nelson Marine lease are based on a rental survey /appraisal performed by Dunn & Associates. The appraisal was initiated and managed by P.M. Realty Group, the ARRA's property manager. The appraisal looked at several lease structures, including a percentage rate lease, in which the landlord receives a percentage of the gross annual sales. The appraisal recommended a straight per square foot rate lease in order to avoid fluctuations in the market. The appraiser also felt that the Nelson Marine site was not a "prime" location for a boatyard as it's not easy to access from a vehicle. However, the new lease with Nelson does allow for the ARRA to collect a percentage of sales, when 6 percent of Nelson's gross annual sales exceed their current rent. Therefore, Nelson would have to exceed approximately $3.4 million in annual gross sales before the ARRA would receive its 6 percent profit share. P.M. Realty will require quarterly sales reports from Nelson. Fiscal Impact The proposed base rent for the property is: Years 1 -5: $16,943 $203,316 /annually Years 6 -10: $18,637 $223,644 /annually Years 11 -15: $20,501 $246,012 /annually Years 16 -20: $22,551 $270,612 /annually Dedicated to Excellence, Committed to Service Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority Recommendation August 19, 2004 Page 2 The Executive Director recommends that the Alameda Reuse and Redevelopment Authority approve the proposed Nelson Marine lease. PB /SP/NB:dc Respectfully submitted, Stephen Proud Alameda Point Project Manager �?. By: Nanette Banks Finance & Administration Manager Attachments: Dunn & Associates Rental Survey /Appraisal G: \Comdev\Banks\ARRA Staff Reports\2 -B Nelson 20 -Year Lease Approval - Building 167.dec Dedicated to Excellence, Committed to Service Dunn & Associates REAL ESTATE APPRAISERS AND CONSULTANTS RENTAL SURVEY OF NELSON'S MARINE 53,785 SQUARE FOOT WAREHOUSE ON A 4.29 ACRE SITE 1500 Ferry Point Alameda, California For Mr. Mike Hampen Property Manager PM Realty Group Real Estate Services 2175 Monarch Street Alameda, California 94501 As of June 10, 2004 1657 N. California Blvd., #208 • Walnut Creek, CA 94596 • Phone: (925) 472 -5850 • Fax: (925) 472 -5855 June 11, 2004 Mr. Mike Hampen Property Manager PM Realty Group Real Estate Services 2175 Monarch Street Alameda, California 94501 Re: NELSON'S MARINE 53,785 SQUARE FOOT WAREHOUSE ON A 4.29 ACRE SITE 1500 Ferry Point Alameda, California Dear Mr. Hampen: 04 -05 -52 At your request and authorization, I have been requested to estimate the market rental rate for Nelson's Marine located at 1500 Ferry Point, in the City of Alameda, California. The subject improvements consist of a 53,785 square foot warehouse built -out with 19% office space on a 4.29 site indicating a site coverage of 26 %. The office portion of the subject property is two -story and located on the west side of the property. In addition to the main structure, the leasable area includes a boat launch facility and a 400 linear feet of pier located across Ferry Point. The yard area is enclosed with a cyclone fence and is accessed from the northwest corner of the property facing West Oriskany. The subject is located on property which was previously the Alameda Naval Air Station at the northernmost point of the City of Alameda. The purpose of the rental survey is to estimate the market rental rate of the subject property. The function of the rental survey is to assist in establishing the market rent for use by PM Realty Group for internal decision purposes. Identification: The subject improvements consist of a steel frame structure with a wood frame exterior warehouse with an approximate 32 foot clear height. The property is accessible by slide doors located on both the north and south sides of the building. There are windows located around the perimeter of the structure, which provide ample interior natural light. The structure is improved with a flat roof with composition cover which is assumed to be in average condition. The interior of the warehouse is improved with concrete floors, open beam ceilings with overhead sodium vapor lighting as well as skylights. The warehouse area is used for boat repair as well as a showroom DUNN & ASSOCIATES Rental Survey: 1500 Ferry Point, Alameda Page 1 for newer, smaller vessels. The interior of the office space consists of painted sheetrock walls and ceilings with carpet flooring and overhead fluorescent lighting. There are restrooms on each floor of the office space. The improvements consist of 53,785 square feet consisting of 43,600 square feet of warehouse and 10,185 square feet of office space. The improvements cover 26% of the site and the improvements are built out with 19% of office space. The warehouse is accessed by side sliding doors which are atypical of the market and lack utility. The overall layout of the improvements is ideal with the two -story office space and warehouse at the rear which makes the property highly useable for an alternative user, for both single and multi - tenant occupancy. Ownership: United States of America Alameda County Assessor's Parcel No.: Zoning: Improvement Size: Area Data: 074 -0891 -001 M2 /G, Industrial Manufacturing- Government 53,785 square feet The subject property is located at the southwest corner of Ferry Point and West Oriskany in the old Alameda Naval Air Station area of the City of Alameda. The City of Alameda is located approximately fifteen miles southeast of San Francisco, between the San Francisco Bay and San Leandro Bay. The city encompasses 12.4 square miles and had a population of 74,400 as of January 1, 2004, making it the eighth largest city in the county. Over the last 22 years, the city has experienced moderate growth. Census and State Department of Finance figures indicate that the city's population increased by 11,148 from 1980 to 2004, an increase of 0.64% per year on an average annual rate. Reasons for this relatively low growth rate include the city's limited availability of land for potential development for residential uses. DUNN & ASSOCIATES Rental Survey: 1500 Ferry Point, Alameda Page 2 According to the Alameda Chamber of Commerce, there are approximately 28,000 of jobs in the City of Alameda. The local economy is dominated by service sector jobs with manufacturing employers leading all employment sectors. Some of the largest employers in the City of Alameda include Ascend Communications with 620 employees, the Alameda Hospital with 456 employees, Alameda Unified School District with 446 employees, City of Alameda with 718 employees and Wind River Systems with 282 employees. Other major employers in the City of Alameda include Faralon Computing, Weyerhouser Company, Roach Molecular Systems, Cybex, Kaiser Foundation, Lucky Stores and Intrepid Systems. Transportation systems near the City of Alameda include Highways 580 and 880 to the west in the City of Oakland. These highways provide access throughout Alameda County in the north/south direction. In addition to the freeway service, air transportation is available at the Oakland International Airport and approximately 30 miles west at the San Francisco International Airport. In general, expectations for the City of Alameda are that the city will continue to experience slow growth and be reasonably well supported by a diversified economic base. The city's centralized location and well educated population in close proximity to the major employment hubs of the cities of Oakland and San Francisco has enhanced the attractiveness of the city as a residential community. DUNN & ASSOCIATES Rental Survey: 1500 Ferry Point, Alameda Page 3 PROPERTY DESCRIPTION Site Description: Location: 1500 Ferry Point Alameda, California Site: 4.29 acres, or 187,000 square feet Shape: Rectangular Topography: Level Utilities: All standard utilities are available to the site, delivered above and underground by the following: Utility Provider Electricity Alameda Power and Telecom Gas Alameda Power and Telecom Water East Bay Municipal Utility District Sewer City of Alameda Telephone AT &T Police City of Alameda Fire City of Alameda Street Improvements: The subject property is located at the southwest corner of Ferry Point and West Oriskany Avenue in the Alameda Naval Station, across from Piers 2 and 3, which is the docking location of the USS Hornet. Both streets consist of two lanes of traffic, one in each direction. The streets are asphalt paved and have no concrete curbs, gutters nor sidewalks. DUNN & ASSOCIATES HP CHANNEL A • Naval Air Station Property Acquisition Map 2 .S! 92.24-101 See 81k. 890 0 N 103 E.0011 OCHION 7irD NarrON AVE. 905 110.2044.1 U. S.A. 0 255.809 A. 475 .41,47 OF OM 1.11. HUSH j 377. 480 I /40 480 __ PACIFIC AM 482 (19440.4.) --r ,105a =7,1ER 3 oval Air Station- Property Mop (CASE n oR.1-50 ec. of Sur. of Copehort Quoriers-200 Unit (RS. Bk.4 PI.54) EC, e f SIM- (RiS. BA,/ 27.42) 890 mended Rec. of Sur.(R.S.Bk.4P0.86) " (RS. BA5 Pg.18) 4 10 ------ T I 22 :2 - Sec-10 1 025 1310 / Plat Map DUNN & ASSOCIATES Rental Survey: 1500 Ferry Point, Alameda Page 5 Site Improvements: Building Description: The uncovered portion of the site consists of asphalt and concrete paved yard area which is enclosed by a cyclone fence. The subject improvements consist of a steel frame structure with a wood frame exterior warehouse with an approximate 32 foot clear height. The property is accessible by slide doors located around the perimeter of the structure. There are windows located on the west and east sides of the warehouse as well as along the two story office space consisting of single pane windows which provide ample interior natural light. The structure is improved with a flat roof with composition cover which is assumed to be in average condition. The interior of the warehouse is improved with concrete floors, open beam ceilings with overhead sodium vapor lighting as well as skylights. The warehouse area is used for boat repair as well as a showroom for newer, smaller vessels. The interior of the office space consists of painted sheetrock walls and ceilings with carpet flooring and overhead fluorescent lighting. There are restrooms on each floor of the office space. The improvements consist of 53,785 square feet consisting of 43,600 square feet of warehouse and 10,185 square feet of office space. The improvements cover 26% of the site and the improvements are built out with 19% of office space. The warehouse is accessed by side sliding doors which are atypical of the market and lack utility. The overall layout of the improvements is ideal with the two -story office space and warehouse at the rear which makes the property highly useable for an alternative user, for both single and multi - tenant occupancy. Condition/Utility: The subject property was built in 1960 and has an actual age of 44 years old. The structure is somewhat atypical of the market compared to other warehouse buildings that are generally equipped with overhead grade level doors. In addition, most competing warehouse space is either concrete tilt up or metal exterior. Overall, the subject property is considered to be in average condition. DUNN & ASSOCIATES 225 T. 1 218 FT. NELSON'S MARINE 1500 FERRY POINT BUILDING DIAGRAM DUNN & ASSOCIATES Rental Survey: 1500 Ferry Point, Alameda Page 7 VIEW OF SUBJECT PROPERTY LOOKING SOUTH ACROSS THE INTERSECTION OF FERRY POINT AND WEST ORISKANY (PHOTO NO. 1) VIEW OF SOUTH SIDE OF SUBJECT PROPERTY LOOKING WEST (PHOTO NO. 2) DUNN & ASSOCIATES Rental Survey: 1500 Ferry Point Alameda Page 8 VIEW OF EAST SIDE SUBJECT PROPERTY LOOKING NORTH (PHOTO NO. 3) INTERIOR VIEW OF WAREHOUSE SPACE USED FOR BOAT REPAIR (PHOTO NO. 4) DUNN & ASSOCIATES Rental Survey: 1500 Ferry Point, Alameda Page 9 INTERIOR VIEW OF WAREHOUSE AREA USED FOR BOAT SALES (PHOTO NO. 5) VIEW OF LAUNCHING RAMP ACROSS FERRY POINT (PHOTO NO. 6) DUNN & ASSOCIATES Rental Survey: 1500 Ferry Point, Alameda Page 10 VIEW OF 400 FEET OF PIER AREA ACROSS FERRY POINT (PHOTO NO. 7) INTERIOR VIEW OF OFFICE SPACE (PHOTO NO. 8) DUNN & ASSOCIATES Rental Survey: 1500 Ferry Point, Alameda Page 11 Zoning: According to Dave Valeskas, in charge of federal facilities, the subject property is zoned M2 /G, Industrial Manufacturing /Government. Permitted uses under the general industrial zoning include box and cooperage manufacturing, breweries, cork production manufacturing, dye casting, electrical equipment manufacturing, foundries, furniture manufacturing, and other manufacturing uses. According to Mr. Valeskas, there are no anticipated changes negatively impacting the subject property. DUNN & ASSOCIATES Rental Survey: 1500 Ferry Point, Alameda Page 12 VALUATION In order to estimate the market rental rate for the subject property I have obtained rental information from both recently executed industrial leases in the subject's market, as well as boat yard lease comparables throughout the Bay Area. I will first analyze the industrial lease comparables followed by the boat yard lease comparables. Industrial Lease Comparables I have obtained eight recently executed lease comparables which range in size from 20,000 to 233,640 square feet, reflecting an unadjusted rental rate range of $0.20 to $0.26 per square foot on a triple net expense basis. The comparables are summarized on the following page. The comparables reflect office build -outs ranging from 1.8% to 5.7% and were leased with no tenant improvements. The comparables reflect site coverages ratios ranging from 9% to 30 %. The comparable leases were executed on terms ranging from 26 months to 120 months. All of the comparable leases were executed within the last 12 months under similar market conditions. All of the comparable leases represent arms- length transactions and warrant no adjustments. The real estate market for industrial space over the last 12 months has been fairly consistent, and all of the comparable leases were executed within this time frame, and warranting no adjustment for market conditions (time). Typical tenant improvements for industrial space within the subject market consists of no contribution by the lessor. None of the comparables were granted tenant improvements therefore warrant no adjustment. As previously indicated, the comparable leases reflect office build -outs ranging from 1.8% to 5.7 %. All of the comparables have an inferior office build -out to the subject property, therefore warranting upward adjustments. The comparables reflect site coverages ranging from 9% to 30 %. The subject property as a site coverage of 29 %. Comparable Nos. 1, 4 and 6 reflect site coverages ranging from 30% to 30.3% which is similar to the subject property and warrant no adjustments. Comparable Nos. 2, and 5 reflect site coverages, of 20.4% and 8.7 %, respectfully, therefore warranting downward adjustments. Comparable No. 3 has an estimated site coverage of 80% which is inferior to the subject property, therefore warranting an upward adjustment. DUNN & ASSOCIATES COMPARABLE INDUSTRIAL LEASES Oakland, California G14 (I) v) ) 0 a) o z eu 0 z tu 0 z a> 0 z a> 0 z COVERAGE est. 30% C g e‘l <.1.:' C) tn a> e 'c■ en g,' oc; CD ...: En a> EXPENSE BASIS Z R R i R i STARTING RENT /SF •tt" CV 6 GS C,1 N 0 GS vo N co; GS C> N c; GS tr) N 6 GS % .0 ....-■ c; GS SI 1..4 CI) 2.14% o cn 1 %L'S %8't 0 o 0 • N 1 "I' 01 c: tn • rn •—• N en"-, gE. G.4 Z .., VD N 0 ,..C) 0 VD •■1' N 0 VD VD cn F.4 1-4 "at , N en o - en co - ,--, m c> - ,—, m o VD,--■ LOCATION Penn Logistics Citcom Evolution Furniture Eagle Bay Xyan Printing Gold Coast Warehouse ,c. csi vi - DUNN & ASSOCIATES Rental Survey: 1500 Ferry Point, Alameda Page 14 This analysis estimates the industrial rent of the subject warehouse, including the amenity of its boat launch facility and pier rights. After adjusting the comparable leases for their various differences in comparison to the subject property, I have concluded with an adjusted rental rate range of $0.30 to $0.35 per square foot on a triple net expense basis. In consideration of the subject property's size, average location on the naval air station in the City of Alameda, age and average condition of the improvements, 29% site coverage, 19% office build -out, 32 foot clear height and overall site utility, I have concluded with a rental rate in the higher end of the adjusted range, or $0.35 per square foot. Therefore, the estimated market rental rate based on the industrial lease comparable, as of June 10, 2004 is: 53,785 square feet x $0.35 = $18,825 per month DUNN & ASSOCIATES Rental Survey: 1500 Ferry Point, Alameda Page 15 Boatyard Lease Comps As previously stated, I have also analyzed boatyard lease comparables from the Bay Area in order to estimate the market rental rate for Nelson's Marine as reflected on the following page. The comparable leases of the boat yards are atypical of the market given that they are generally current rental rates and the details of the leases were difficult to obtain and were confirmed when possible by both the lessee and the lessor. Comparable Lease No. 1, the Berkeley Marine Center is a 50 year lease that started in 1978 and expires in 2028. The tenant is currently paying $1,700 per month versus 5% of gross sales. This lease is adjusted every five years and in addition has a percentage sale of 2.5% on alcohol sales. This is a triple net lease. The property consists of 4.5 acres and is a ground lease which has been improved with approximately 8,000 square feet of improvements. This lease was confirmed by Cliff Marchetti with the City of Berkeley. This comparable has fair access and is in average condition. Comparable Lease No. 2 is Svendsen Marine located in Alameda, California. This represents a twelve year lease which commenced in 2001 and expires in 2013. The tenant is currently paying $31,065 per month for a 1.78 acre yard and 26,000 square feet of improvements plus an additional $1,531 per month for nine slips, indicating a total rent of $32,596 per month. This is a gross lease with lessor paying taxes, insurance and maintenance. This lease was confirmed by Sean Svendsen, operator. This comparable has average access and is in good condition. Comparable Lease No. 3 is the Mariner BoatYard located at 2021 Alaska Packer Place in Alameda, California. I was informed by Rochella, the operator's assistant, that the improvements consist of one shop and three offices estimated area of 20,000 square feet. The property is leased for 6% of gross sales plus $14,000 per month. She was unable to provide any other details on this lease. We have pulled county records to indicate that this site is 1.6 acres. This comparable has fair access and is in average condition. Comparable Lease No. 4 is the San Francisco Boat Works leased by Mike Denmen from the Port of San Francisco. According to Rich Ravetti, representative with the Port of San Francisco, this is a 20 year lease that began in 1987. It is a triple net lease with the tenant paying $10,000 per month versus 8% of alcohol, and bar sales, 6% of food sales, 20% of boat storage, 10% of any sub - leasing and 10% of all other uses. There are adjustments every five years on this lease. The operator, Mr. Mike Denmen, indicates that he is in overage rent 9 out of 12 months per year. This comparable has good access and is in average condition. DUNN & ASSOCIATES z VA((FI~ EL. 54 Marin- wood F1. 350 Wooctacro 20 SC EL. 120 Fairfax CS, ;61 San AnseImo nosS L . 45 Et.. 23 Kentfleld MiT. EL.12 \ It)F MALPAIS Larkspur 1A „i3 YNl EL Corte Madura MITI Valley • l San Geronimo EL. 300 IPAL , �v TER TRIG/. no 7 10 ELL/ Bel Marin, Keys /11„1/;;;,"f, -1,17 j:). cc �. lY /ll L.. VVlLIJL II'L: Ylf:l'VU1: V�l 0 Sail Pablo 11 12 1 Santa 1 Venetia,/ CHINA CAMP r PK. son. lch 18 Mlin- N i 11,. , %'0N,, Arr. ?AAIALPAIS S1. EL /0 Et ..14 Sane el • Ili .1%1 Y_.Y.v Vallejo 5 El.. 40 \\Isittndt',` CO. dat IF MMARI1IMEt ACAD. (C.S.U.) a �xr C��. ✓ El. 16 Roc l'tPinola ,�\ L. 7D� P note, �c San ,�;�. Pablo; o . 'Pt. San PUdlo I ? 20`tY Y� Greenbrae Pt. San Pablo I ) a, , L 1.11 7 San�:s;.. +► Quentin 131 PRISONTINI, 10 1) € 1 EL. 54 1 Richmond Et )0 ' Drooks Is. ; Marin City.. Mtl r l EL. 13eacil \ GOLDEN E;,rri: (:L. 10 W/'L. DEC. 6 \ItRL'A t r Pr. ncNIrA _ Pt. LIoniiu tICIIIIIIOUSE 1 10 ' Land's 1 MILE ROCK t End r i LIGHT S1A -3 t' -(10 l; CU 'tINC; 11 Tiburon ANGEL u, ISLAND l n.., ST.PARK , Alban vode'rEj �y.l EL. O 47 t:AS1 Sf 101? STATE S .. 7 Q PARK Et.. 1 1roasura 1Emoryvill w"' Ncalltu Is(ltwd NVISIAYL Is, ( 1 , 7E.L.43 (ittlt' . F 1. "Y POIN•1' s. paAiARITIII /E 9N 11.s. 11.57: 1'1(. ' 80 7 JI: I11•N /G1A ilNrly, t ;; EL. 33 `)Y\ ttt Benicia sr. HI:O. I rl� �E�POi rocke t DE NIUA 'T 'Co r1 a',C C E1..118. CAPITOL. S.1 ?.R y Hercules 2)1E1,4/4, `17 -)Sobrgn o a1-1 c`'M , :L..0 WILT )CAT % ANYON El C rrito FL. 71 Kel sin ton, "SC OU San Francisco\ EL 61 •l�' w C7 111012N ION STALE DEACiI ti 1 GENIY a1. G(A.OEN y_t� (1 f K L. 15�� 101 Daly,, City) EL. 4001 Pacifica EL. 90 um -Brisb rio olma ' • 4101 sew oftui'o MIN. sr— —1*r 11".? IMK r Oyster ? '►1 So,' an Francisco.- re PACIFIC O a k' f'AI ( - • 5ublect U.C.. 1LDEN DEG. :re�BBEll . K. OBerkeley.- EL, 15'2. 1 nd amine El:'16fi r 13 Jt)IIN 11111/11 NATL. !DST SITES • \JPLLEY a Pacheco EL. 25 %ICy4. fin,(, 'BRIONl:S 1 c(4 REGIONA . r PARK �o /' :j•� it -9- Vhf. EL. 485 Orinda 11,;' 90 Pie mont Afutigx 13 �1. `-, ern\ Alameda I EL. 30 ( Do t� OAKLANQ) 1�1p INTL. AIRPORT (\ 3'A K rtluntats Pl. U iriANOLESIICK Pr G\ ell: DEO AREA .... , r.. , 11 PACIFICA { SIA1 E BEACH. Son Pedro PL .) GIL'W 1Y11ALC- GOVT: SIA(EHEACH AIONIAHA SIATEIIL'ACIH Montara EL. 100 - Pr'S ONIA/MAk LIGH111OUSE I IAL r MOON DAY AIRPORT ', 11 I.rtl:i:... . / / EL. 100 I l Moss +Irt ,Lrrti•; ; Beach I a. 80 , (: t.. 2114', EL. 64 EL. 41 San Bruno • .& (SAN FRANCISCO , INTL. AIRPORT Ink 1 t,'o �Q4 G EL. 2; L 1fayf .1 "I EL.:'490 UPI f`sy Moraga REDWOOD CANYON Elk EG. ' < .ii, 1rI//I' i / J `Yppp fv ; l , irur .cee `\1 ANT !ON ,iowoT\ ittw .t %te: /EL. � . r' Sa n 9 #)\ 169 9a ,• EL. 36 • :�, 'CY., San Lorenzo °\► A C_4 .'1, `4 HAYWARD -4 02 t Ci f \Y TERMINAL \AIR �y �Gi C) a. •'Millbrae EL. 48 7 Burlingame EL. 3.1' •1. tiCJhS.in - Mateo i�1. 21) ( )EI Granada F.L. 48 \l. 4 r - EVEN tr LANDING t ` ECOL. HES. 'v EL. 5 C^i \,• .. J , D Foster. City" DpN 101) 3 W 3AN CAfiL(SS -.,, EDIA(ARD ;00‘ IE 1 L Comparable Leases BOATYARD LEASE COMPA. Alameda and Berkeley, California DETAIL 4.5 Acres, ground lease approx. 8.000 sf building Direct water access Confirmed: CliffMarchettc. City of Berkeley l.7 Acre yard 26,000 sf Buildings Direct water access 9 Slips ($1.531 /month) Confirmed: Sean Ss•endsen. Operator cst. 1.6 Acres est. 20,000 sf bulling Direct water access Confirmed: Rochella. assistant est. 4.0 acres est. 7.000 sfbuilding Direct water access Boat yard and Restaurant Confirmed: Mike Derunen. operator and Rich Ranetti. Port of S.F Facility Handles 9 Dry Dock Boats Direct water access 2 -3 Boats in water est. 4.000 sf building Confirmed: Phil ifestcon. Operator 2 -3 acres est. 6,000 sf improvements Direct water access Confirmed: Ron Anderson. operator EXPENSES R Taxes - Lessor Insurance - Lessor Maintenance - Lessor RENT $1,700 /mo. vs. 5% of gross sales Adjusted every 5 years 2.5% based on sales $31,065 /month Slips $1,53lhnonth Total $32,596 /month Escalations: Annual CPI 6% of gross sales plus $14,000 /month for land $10.000/Month verses 8% alcohol and bar sales, 6% food sales, 20% boat storage, 10% sub - leases, 10% all others Monthly rent Annual escalations Monthly rent Annual escalations Monthly Rent TERM (MONTHS) 50 Year Lease 1978 -2028 2001 -2013 14,000 sfstructure and land 2000 -2005 2 small buildings Not Available 20 Year lease Short Term 3 Years Month/Month Short Tenn TENANT Berkeley Marine Center Spinnaker Way Alameda, California Mariner Boat Yard 2021 Alaska Packer Place San Francisco, California San Rafael, California Sausalito, California Sausalito, California ,i r•; 4 v.; s4,-: x: Rental Survey: 1500 Ferry Point, Alameda Page 17 In addition to the four boatyard lease comparables, I was able to obtain general information on three other boat yards within the Bay Area. According to Phil Westcott, the operator of Westmore Marine located at 145 Third Street in San Rafael, he is currently paying a monthly rental rate with annual escalations. He has room for nine boats for dry dock and two to three boats in the water. He has direct water access and a small shop area. This boatyard has good access and is in average condition. Bayside Boat Works located at 2360 MarinShip Way, Sausalito, California is on a month -to -month lease with annual escalations. This facility has room for eight to ten boats for dry dock and two to three boats in the water and has minimal shop space. This lease was confirmed by Mike Winder, operator. This boat yard has average access and is in fair condition. According to Ron Anderson, operator for Anderson's Boatyard, he is currently leasing his facility on a short term lease. Mr. Anderson is paying a monthly triple net rent. This boat yard has average access and is in good condition. In general, three of the comparable boatyard comparable leases were leases on a percentage rent and four were leased on a base monthly rent basis. Given that the subject property consists of a 53,785 square foot warehouse built -out with 19% office space with a 26% site coverage, its average location, average condition, indirect access to the water, and use of 400 linear feet of pier area. I have concluded with a base rent of $0.35 per square foot, or $18,825 per month versus a percentage rent of 6% of all annual gross sales based on a typical lease term of ten years. Assuming a 10% escalation in the 61st month of the lease. This is a triple net lease with the lessee paying all expenses. DUNN & ASSOCIATES Rental Survey: 1500 Ferry Point, Alameda Page 18. If major improvements were required, which would be necessary for the lessee to amortize the improvements over the term of the lease, a longer lease would be considered. I do not see that there were any major improvements necessary for the current operation. Respectfully submitted, DUNN & ASSOCIATES Michael E. Dunn, M I, CCIM Certified General Real Estate Appraiser State of California #AG002882 DUNN & ASSOCIATES ADDENDUM Exhibit A. Photographs of Comparable Industrial Leases Exhibit B. Photographs of Comparable Boatyard Leases Exhibit C. Engagement Letter Exhibit D. Zoning Ordinance Exhibit E. Qualifications EXHIBIT A PHOTOGRAPHS OF COMPARABLE INDUSTRIAL LEASES PHOTO OF COMPARABLE LEASE NO. 1 PHOTO OF COMPARABLE LEASE NO. 2 PHOTO OF COMPARABLE LEASE NO. 3 PHOTO OF COMPARABLE LEASE NO. 4 PHOTO OF COMPARABLE LEASE NO. 5 PHOTO OF COMPARABLE LEASE NO. 6 EXHIBIT B PHOTOGRAPHS OF COMPARABLE BOATYARD LEASES PHOTO OF COMPARABLE LEASE NO. 1 PHOTO OF COMPARABLE LEASE NO. 2 PHOTO OF COMPARABLE LEASE NO. 3 PHOTO OF COMPARABLE LEASE NO. 4 I 1 1 • §?4,....... ,: •.•-tA,Z1 ,.. "i". '. • • •-•'-'... • 4.---..{. ..... '.:'-.'•-.7. —.:.,145.:. • -•:?.,..-, ,---It-,-;,'.. ''.. 1 , . „ . ....""..- . -;.:?....e........1: r.."......., .:, .. .. •--.... . , w .74:54.v:.:.--.:.z.:t.r..: .. . ....• owirmvorrcras.4vfor,-.' ;;;.-f4kr-,,,,,-;.: 1 •., PHOTO OF COMPARABLE LEASE NO. 5 4rrezremnii-,7. PHOTO OF COMPARABLE LEASE NO. 6 - r -%sly '1►� .. ,c_r . �.�_ fiic. PHOTO OF COMPARABLE LEASE NO. 7 EXHIBIT C IM Realty Group REAL ESTATE SERVICES May 13, 2004 Mike Dunn Dunn & Associates 1657 N. California Blvd., Ste 208 Walnut Creek, CA 94596 Dear Mr. Dunn: This letter will confirm the telephone conversation between David Jaber, Regional Vice President PM Realty Group, and yourself held Tuesday, May 11, 2004, to engage your company to conduct an MAI appraisal of lease rates at Nelson's Marine located at 1500 Ferry Point, Alameda, CA 94501. The scope of work to be provided is a current market rate lease appraisal of the above building, the surrounding yard area and associated private marina space. Once begun, the appraisal shall be conducted and a report prepared in a three (3) week time frame. The agreed upon cost for this work is Four Thousand and No /100ths Dollars ($4,000). Please signify your agreement to the terms described herein by affixing your signature below and returning to my office at 2175 Monarch St., Alameda, CA 94501, Attention: Mike Hampen. If you have any questions, please contact me by telephone at (510) 749 -0304 or by electronic mail at mhampen(a7pmrealtygroup.com. Sincerely, Realty Group as agent for eda Reuse and Redevelopment Authority MIMI IWO ike Hampen roperty Manager I hereby agree to the terms describ like Dunn 2175 MONARCH STREET ALAMEDA, CA 94501 510/749 -0304 FAX: 510/749-1095 HOUSTON LOS ANGELES CHICAGO SAN FRANCISCO ATLANTA DALLAS DENVER DETROIT ORLANDO PHOENIX NEW YORK HONOLULU NEWPORT BEACH WASHINGTON DC CINCINNATI SEATTLE LAS VEGAS pmrealtygroup.com EXHIBIT D MAY 26 2004 12:25PM CITY OF ALAMEDA PLANNING 5107476804 p.1 http: / /www.ci.alameda .ca.us /govimunicipal_code.html Chapter 30, Section 30 -4 Subsection 30 -4 -17 G, Special Government Combining District. a. General, The G District classification shall be combined with the district classifications applied to all lands in the ownership of the U.S. Government or the State of California. b. Prior to the use of any lands by any private or public entity other than the United States or State of California, through purchase or pursuant to lease from the U.S. Government or State of California, rezoning procedures shall be completed to remove the G classifications and to consider further appropriate district classification changes. c. Notwithstanding the provisions in subsection (b) herein, interim uses by private or public entities other than the United States or State of California of lands owned by the U.S. Government or State of California may be allowed, subject to a Use Permit, pursuant to subsection 30 -213, if the following additional findings can be made: 1. The interim use is approved for a limited time, not to exceed the maximum time frame set forth in the interim leasing program criteria; 2. The interim use utilizes existing facilities and does not require substantial new development; 3. The interim use will not disrupt on- going operations of the governmental entity should the interim use occur concurrent with continuing operations by a governmental entity; 4. The interim use will not be detrimental to the ultimate redevelopment of the property or the potential resumption of use of the property by the governmental agency; and 5. The interim use is consistent with an interim leasing program adopted by the City. d. An interim leasing program shall be adopted by the City prior to interim use, as provided in subsection (c) herein. The interim leasing program shall be for a specific parcel or parcels, shall specify permitted land uses, consistent with the underlying zoning district, and shall specify the maximum time frame for which a Use Permit may be granted. In the absence of an adopted interim leasing program, all interim leases shall require rezoning. (Ord. No. 2658 N.S. §1: Ord. No. 535 N.S. §11 -1374; Ord. No. 1277 N.S.) Post -it° Fax Note 7671 t i Co. /Dept. Phone # Fax #C3 $ 47Z, S— 5.re Page 1 of 1 Dates/2404f Agtes ► 3 FromGtik1 0 PAL-iviePP' Co. Phone #7' - 7`hSrO Fax # MAY 26 2004 12:25PM CITY OF ALAMEDA PLANNING 5107476804 p.2 http:// www. ci. alameda .ca.uslgov /municipal_code.html Chapter 30, Section 30 -4 Subsection 30 -442 M -2, General Industrial (Manu - facturing) District. a. General. The following specific regulations and the general rules set forth in Section 30 -5 shall apply in all M -2 Districts as delineated and described in the zoning map(s). It is intended that this district classification be applied in areas suitable for the least restricted use of land within the City and that the restrictions applied shall be those necessary for the public health, safety and general welfare. b. Uses Permitted. 1. Any use as permitted and regulated in the M -1 District. 2. The following and similar uses from which noise, smoke, dust, noxious fumes and gasses, glare, heat and vibration are confined within the premises or held to volumes, intensities and levels at the perimeters of individual properties which are no greater than those in the general area, and in which disposal of all waste matter and material is in conformity with local and State standards and regulations, and in which all operations are conducted principally within buildings, except that other operations will be permitted within enclosures under conditions consistent with the intent of this article if approved by the Planning Board. (a) Box or cooperage manufacturing, (b) Breweries, (c) Cork products manufacturing, (d) Die casting, (e) Electrical Equipment manufacturing, including heavy motors (one (1) horsepower and over), switch gear, transformers, turbines and similar items, (f) Enameling works, including ferrous enamel, panels, cast iron or pressed steel, sanitary ware and similar items, (g) Foundries - ferrous and nonferrous, (h) Furniture (wood or metal) manufacturing, (I) Match manufacturing (safety machines only), (j) Metal products manufacturing or processing, structural, fabricated, (k) Metal shipping drum, barrel manufacturing, (1) Paperboard container product manufacturing and processing, (m) Pickle or vinegar manufacturing, (n) Pipe and pipe fitting manufacturing, (o) Planing mill, (p) Plumbing fixture manufacturing, (q) Poultry or rabbit killing and dressing, (r) Prefabricated houses or wood structural member manufacturing, (s) Textile manufacturing, including canvas, cloth and similar items, (t) Tool manufacturing - machine, hand, (u) Transportation equipment manufacturing, (v) Wood preservation processing, (w) Trash Transfer Station. Hours of operation limited from 8:00 a.m. to 5:00 p.m. Trash burning or storage of hazardous materials is prohibited. 3. Uses customarily incidental to any of the above uses when located on the same premises, including an attached or detached residence for an on- premises watchperson or manager and his or her family, subject to provision of two hundred forty (240) square feet of private useable open space immediately adjacent to and accessible from the residence. Open storage of materials and equipment shall be permitted only within an area enclosed on all sides with a solid or open grill type wall, or a chain link `fence and gates, all not less than six (6') feet in height and in a manner consistent with the intent of the section except that no wall or fence shall be required on the side that a property abuts a railroad right - of -way, the Estuary or U.S. Tidal Canal. A solid wall or fence not less than six (6') feet high shall be required where the proposed use adjoins property in an R District. 4. Signs: Those pertaining to the permitted and accessory uses on the property, poster panels and painted bulletins, all as regulated further in Section 30 -6 of these regulations. Page 1 of 2 MAY 26 2004 12:25PM CITY OF ALAMEDA PLANNING 5107476804 c_ Uses Requiring Use Permits. It is the intent of this paragraph that the following uses shall be reviewed by the Planning Board for their appropriateness in a specific location, or for such other factors as safety, congestion, noise, and similar considerations. L Auto wrecking yards, 2. Outdoor amusements, 3. Veterinary clinics and/or veterinary hospitals upon the same terms and conditions set out in subsection 30- 4.10c, 4. Any existing dwelling use as regulated by subsection 30 -4.11 c, 5. Airport and related facilities, aircraft landing areas, 6. Asphalt batching plants, including hot mix, 7. Concrete products manufacturing, batching plants, 8. Lumberyard (wholesale), kiln, 9. Railroad yards, 10. Shipbuilding and repairing (over one hundred (100) tons), 11. Shipping terminals, 12. Permitted uses which are not conducted within an enclosed building or structure, 13. Commercial marinas subject to the requirements of subsection 30- 4.9c.15, 14. Columbariums and crematoriums, 15. Liquor stores, 16. Convenience stores located within three hundred (300) feet of any residential zoning district, 17. Hazardous materials processing, as defined by subsection 30 -2(b) of the Alameda Municipal Code, and subject to the terms and conditions of Subsection 30- 21.3(e) thereof, 18. Work/live studios subject to the requirements of Section 30 -15. d. Minimum Height, Bulk and Space Requirements. 1. Lot Area: None. 2. Lot Width: None. 3. Maximum Total Building Coverage, including accessory buildings: Eighty (80 %) percent. 4. Building Height Limit: One hundred (100') feet. 5. Front Yard Five (5') feet minimum. 6. Side Yards: None, or where a side yard is desired, a minimum of twelve (12') feet shall be provided; provided further, that in the event the use is adjacent to an R District, a minimum of twelve (12') feet shall be maintained. 7. Rear Yard: None required, except that in the event the use is adjacent to an R District, a minimum of twelve (12') feet shall be maintained. 8. Off -Street Parking and Loading Space: As regulated in Section 30 -7 of these regulations. (Ord. No. 535 N.S. § §11- 1349 - -11 -1352; Ord. No. 1277 N.S.; Ord. No. 1356 N.S.; Ord. No. 1400 N.S.; Ord. No. 1802; Ord. No. 2174 N.S.; Ord. No. 2289 N.S.; Ord. No. 2407, N.S., §9; Ord. No. 2422 N.S. §2; Ord. No. 2671 N.S. §5; Ord. No. 2700 N.S. §4; Ord. No. 2727 N.S. §2; Ord. No. 2784 N.S. §4) Page 2 of 2 p.3 EXHIBIT E Dunn & Associates REAL ESTATE APPRAISERS AND CONSULTANTS PROFESSIONAL QUALIFICATIONS MICHAEL E. DUNN, MAI, CCIM PROFESSIONAL EXPERIENCE Dunn & Associates, Walnut Creek, California, established July 1991. Provide appraisal and consulting services for a variety of improved and vacant real estate products. Appraisal Experience appraising various residential and income producing proerties, both existing and proposed, including commercial, industrial, office buildings, apartments, shopping centers, hotels and motels, subdivisions, mixed use properties, RV parks, schools, restaurants, multi -plex theaters, assisted living facilities, live /work complexes, and vacant land. In addition, have appraised various agricultural properties including vineyards and wineries, as well as orchards, row and field crop lands, and grazing land. Appraisals have been prepared for investment, disposition, mortgage lending, loan workout, trust, condemnation and litigation support purposes. Consultation Acquisitions, dispositions, arbitrations, mediation, competitive market analysis, highest and best use studies, project feasibility, market rent surveys, and lease negotiations. Mr. Dunn holds the MAI designation from the Appraisal Institute, a CCIM designation from the Commercial Real Estate Institute. He has been re- certified under the voluntary program of continued education of the designated members of the Appraisal Institute. Mr. Dunn is certified by the State of California Office of Real Estate Appraisers as a Certified General Real Estate Appraiser ( #AG002882) and has ben appraising commercial real estate since 1986. • EDUCATION BS, Agriculture Business Management Major, June 1985 California Polytechnic State University, San Luis Obispo, California 1657 N. California Blvd., #208 • Walnut Creek, CA 94596 • Phone: (925) 472 -5850 • Fax: (925) 472 -5855 Appraisal Institute Courses Standards of Professional Practice Real Estate Appraisal Principals Basic Valuation Procedures Capitalization Theory and Techniques, Part A Capitalization Theory and Techniques, Part B Case Studies in Real Estate Evaluation Report Writing and Valuation Analysis Commercial Investment Real Estate Institute CI 101 Financial Analysis for Commercial Real Estate CI 201 Market Analysis for Commercial Real Estate CI 301 Investment Analysis for Commercial Investment Real Estate PROFESSIONAL ASSOCIATIONS AND MEMBERSHIPS Member (MAI), Appraisal Institute ( #9671) Certified General Real Estate Appraiser, State of California ( #AG002882) Member (CCIM), Commercial Investment Real Estate Institute ( #8538) Member, International Right of Way Association Affiliate Member of the National Association of Realtors (NAR) California Real Estate License ( #01029164) Currently serving as the Assistant Regional Member for Region 1 of the Ethics Administration Division of the Appraisal Institute. DUNN & ASSOCIATES Alameda Reuse and Redevelopment Authority Interoffice Memorandum August 19, 2004 TO: Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority FROM: Jim Flint, Executive Director SUBJ: Background P''"moved > Se>✓ It'1`b�C AFA A e tq (4-) Recommendation to Approve a 5 -year Lease, With a Possible 3(5 -year) Options With Nelson Marine for 400 Linear Feet of Pier 1 Nelson's Marine is one of the original tenants at Alameda Point, operating a boatyard in Building 167 with an adjacent 400 linear feet of pier space on Pier 1. The pier has served as a marina for small boats. Nelson Marine has operated a boat yard and marina at Alameda Point since June 1997. Discussion Nelson Marine pier is an existing use at Alameda Point. The premises are used for storage, repair and sales of boats. Fiscal Impact The proposed base rent for the pier is $5 per linear foot, which is $2,000 monthly or $24,000 annually. The ARRA will have a 50 percent profit share opportunity should the tenant assign or sublet pier space with prior landlord approval. Recommendation The Executive Director recommends that the Alameda Reuse and Redevelopment Authority approve the proposed pier lease with Nelson Marine. PB /SP/NB:dc Respectfully submitted, Stephen Proud Alameda Point Project Manager Nanette Banks Finance & Administration Manager Dedicated w Excellence, Committed to Service G: \Comdev \Base Reuse& Redevp \ARRA \STAFFREP\2004 \9 September \2 -C Nelson Marine 5 -Year Lease.doc Alameda Reuse and Redevelopment Authority Interoffice Memorandum August 24, 2005 TO: Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority FROM: Jim Flint, Executive Director SUBJ: Recommendation to Authorize the Executive Director to Direct P.M. Realty, Acting as Property Manager, to Enter Into a Contract with Urban Waterproofing Inc. to Waterproof City Hall West (Building One) in an Amount not to Exceed $547,541. Background Last year City Hall West had several capital projects: installation of an elevator and a complete re- roofing. The roofing project was the first phase of preventing water intrusion into the building. The second phase involves water sealing the outside and re- caulking the windows. City Hall West (Building One) is a 37,084 square foot building constructed by the Navy in 1939. The exterior concrete walls have an area of approximately 36,000; there are approximately 350 windows. City staff began occupying the building in August 1997. Since the negotiation of the ARRA Property Management Agreement, building maintenance for the exterior of "City- controlled" buildings has been transferred to the contract property management company. Therefore, the sealing project for City Hall West has been managed by P.M. Realty Company (PM). Discussion In December, PM engaged Wiss Janney, Elster Associates, Inc (WJE) to provide a scope of work for the sealing project. Levine, Fricke (LFR) provided the scope of work for asbestos abatement and paint preparation on lead- contaminating paint. After a thorough examination of the structure, the detailed scope of work included: ■ Abatement: Removal of existing coating putty and sealant from concrete walls and windows; • Installation of scaffolding to access building to perform repairs; • Concrete patching — both repair and spall repair; • New sealant installation; • New elastometric coating installation; • Waterproofing at canopies • Wood window surface preparation, recoating and reputtying; and • Replacement of 10 existing downspouts. Bids were solicited from the following contractors: Western Waterproofing (San Rafael), Giampolini Courtney (San Francisco), Rainbow Waterproofing & Restoration (San Francisco), Urban Waterproofing (San Rafael), Alpha Restoration & Waterproofing (South San Francisco). Bids for Environmental Contractors were solicited from: Bluewater Services, Inc. (San Leandro), Complete Decon, Inc. (Benecia), F. Scott Industries (Richmond), and LVI Environmental Services, Inc. (San Leandro). The bid walk- Dedicated to Erceiience, Committed to Service Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority August 24, 2004 Page 2 through took place with all of the waterproofing and environmental contractors on August 4, 2004. Bids were received from five contractors on August 16, 2004 from: Western Waterproofing - $573,900; Giampolini Courtney - $475,760; Rainbow Waterproofing & Restoration - $474,378; Urban Waterproofing $436,979; and Alpha Restoration & Waterproofing - $448,883. In order to keep costs down and to better coordinate schedules, the environmental contractor will be a sub - contractor to the waterproof contractor. After reviewing and clarifying bid information, PM is recommending that we contract with Urban Waterproofing, Inc. because they were the lowest bidder and could complete the project in a timely fashion (Attachment 1). The total estimated cost includes a 3 percent construction management fee for PM, and 7 percent project contingency. Fiscal Impact ARRA lease revenue will be used to fund this project. PM Realty already has identified $233,000 of new income (not included in the 2004 -05 revenue projection — new leases - licenses /sale of personal property) projected for this fiscal year. Additionally, the year -end ARRA fund cash balance is larger than projected due to conservative spending in the last quarter. Therefore, the remaining funds ($314,540) can come from the fund balance. No General Funds will be used for this project. Recommendation The Executive Director recommends that the Alameda Reuse and Redevelopment Authority authorize the Executive Director to direct P.M. Realty, acting as property manager, to enter into a contract with Urban Waterproofing Inc. to waterproof City Hall West (Building One) in an amount not to exceed $547,541, recommended in a form substantially in the form attached (Attachment 2). PB /SP/NB:dc Respectfully submitted, Stephen Proud Alameda Point Project Manager By: Nanette Banks Finance & Administration Manager G: \Comdev \Base Reuse& Redevp\ARRA \STAFFREP\2004 \9 September\2 -D Bldg 1 weatherproofing.doc Dedicated to Excellence, Committed to Service Project: ■M Realty Group R. E A L. E S - A v I T S E R v1c°::ES Project Cost Summary Alameda Point Building 1 Exterior Facade Repair / Repaint ATTACHMENT 1 Date: August 23, 2004 Prepared by: Rick Jones, PMRG VP - Construction Based on: bliss Janney Elstner (WJE) Distribution: Nanette Banks (w/ attach for approval) and Levine Fricke (LF) Specifications David Jaber (w/ attach) Shayna Eskew (w/ attach) Manny Moreno (w /attach) Environmental Consultant - Levine Fricke Analysis, evaluation, specification and air monitoring Waterproofing Consultant - bliss Janney Elstner Inspection evaluation, specifications, and construction observation Abatement, Waterproofing, Repainting - Urban Waterproofing Inc. Based on low net bid, reference attached bid analysis Landscape Trimming for Access - Allowance Electrical Removal / Replacement - Allowance Subtotal PMRG Const. Mgmt. Fee ($0- $100,000 @5 %, $100 ,001 - $500,000 @4 %, > $500,000 @3%) Contingency @ 7% Total Estimated Cost $ 25,100.00 $ 25,300.00 $436,979.00 $ 1,000.00 $ 4,000.00 $492,379.00 $ 20,695.16 $ 34,466.53 $547,540.69 CONTRACTOR AGREEMENT No. XXXXXXXX THIS AGREEMENT, entered into this XXth day of August, 2004, by and between PM REALTY GROUP, L.P. ( "Manager "), as agent for the Alameda Reuse and Redevelopment Authority, a Joint Powers Authority Established by the City of Alameda and the County of Alameda Under the California Joint Exercise of Powers Act (hereinafter referred to as "ARRA "), whose address is 2175 Monarch St, Alameda, CA 94501, and , a whose address is (hereinafter called "Contractor "), in reference to the following: RECITALS: A. ARRA has an interest in certain real property and improvements known as Alameda Point located in Alameda, California, on behalf of the ARRA (the "Project "). B. PM Realty Group, L. P., a Delaware limited partnership, has been appointed as the manager of the Project and is authorized to enter into this Agreement as "Agent" for the APCP. C. Manager and Contractor desire to enter into an agreement for sealing /waterproofing repairs and environmental remediation in accordance with Specifications, Special Provisions and Plans as attached in "Exhibit A." NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. TERM: The Contractor shall begin work within five (5) working days after receiving notice from the Manager to commence the work, and shall diligently prosecute the work to completion before the expiration of thirty (30) consecutive working days from the date of receipt of notice to begin work. 2. SERVICES TO BE PERFORMED: Contractor agrees, at its own cost and expense, to furnish all labor, tools, equipment, materials, except as otherwise specified, and to do all work strictly in accordance with Specifications, Special Provisions and Plans, which Specifications, Special Provisions and Plans are hereby referred to and expressly made a part hereof with the same force and effect as if the same were fully incorporated herein. 3. COMPENSATION TO CONTRACTOR: Contractor shall be compensated for services performed pursuant to this Agreement in the amount and manner set forth in Contractor's bid, which is attached hereto as "Exhibit B" and incorporated herein by this reference. Payment will be made in the same manner that claims of a like character are paid by the Manager, with checks drawn on the treasury of the ARRA, to be taken from the operating fund. Payment will be made within thirty (30) days by the Manager in the following manner: On the first day of each month, Contractor shall submit a written estimate of the total amount of work done the previous month. Payment shall be made for 90% of the value of the work. The Manager shall retain 10% of the value of the work as partial security for the completion of the work by Contractor. Retained amounts shall be paid to Contractor within 15 days of acceptance by the Owner of the project. Payment shall not be construed as acceptance of defective work. No interest will be paid to Contractor on retained funds. 4. TIME IS OF THE ESSENCE: Contractor and Manager agree that time is of the essence regarding the performance of this Agreement. It is agreed by the parties to the Agreement that in case all the work called for under the Agreement is not completed before or upon the expiration of the time limit as set forth in paragraph 1 above, damage will be sustained by the Manager, and that it is and will be impracticable to determine the actual damage which the Manager will sustain in the event of and by reason of such delay. It is therefore agreed that the Contractor will pay to the Manager the sum of $500.00 (five hundred dollars) per day for each and every day's delay beyond the time prescribed to complete the work; and the Contractor agrees to pay such liquidated damages as herein provided, and in case the same are not paid, agrees that the Manager may deduct the amount thereof from any money due or that may become due the Contractor under the Agreement. It is further agreed that in case the work called for under the Agreement is not finished and completed in all parts and requirements within the time specified, the Manager shall have the right to extend the time for completion or not, as may seem best to serve the interest of the Manager; and if it decides to extend the time limit for the completion of the Agreement, it shall further have the right to charge the Contractor, his or her heirs, assigns, or sureties, and to deduct from the final payment for the work, all or any part, as it may deem proper, of the actual costs and overhead expenses which are directly chargeable to the Agreement, and which accrue during the period of such extensions. The Contractor shall not be assessed with liquidated damages during any delay in the completion of the work caused by an act of God or of the public enemy, acts of the Manager, fire, flood, epidemic, quarantine restriction, strikes, freight embargoes, and unusually severe weather or delays of subcontractors due to such causes; provided that the Contractor shall, within one (1) day from the beginning of such delay, notify the Manager in writing of the causes of delay. The Manager shall ascertain the facts and the extent of the delay, and its findings of the facts thereon shall be final and conclusive. 5. STANDARD OF CARE: Contractor agrees to perform all services hereunder in a manner commensurate with the prevailing standards of like professionals in the San Francisco Bay Area and agrees that all services shall be performed by qualified and experienced personnel who are not employed by the Manager, or ARRA, nor have any contractual relationship with Manager or ARRA. 6. INDEPENDENT PARTIES: Manager and Contractor intend that the relationship between them created by this Agreement is that of employer- independent contractor. The manner and means of conducting the work are under the control of Contractor, except to the extent they are limited by statute, rule or regulation and the express terms of this Agreement. No civil service status or other right of employment will be acquired by virtue of Contractor's services. None of the benefits provided by Manager to its employees, including but not limited to unemployment insurance, workers' compensation plans, vacation and sick leave are available from Manager to Contractor, its employees or agents. Deductions shall not be made for any state or federal taxes, FICA payments, PERS payments, or other purposes normally associated with an employer- employee relationship from any fees due Contractor. Payments of the above items, if required, are the responsibility of Contractor. 7. IMMIGRATION REFORM AND CONTROL ACT (IRCA): Contractor assumes any and all responsibility for verifying the identity and employment authorization of all of its employees performing work hereunder, pursuant to all applicable IRCA or other federal, or state rules and regulations. Contractor shall indemnify and hold Manager, and ARRA harmless from and against any loss, damage, liability, costs or expenses arising from any noncompliance of this provision by Contractor. 8. NON - DISCRIMINATION: Consistent with the Manager's policy that harassment and discrimination are unacceptable employer /employee conduct, Contractor agrees that harassment or discrimination directed toward a job applicant, a Manager or City of Alameda employee, or a citizen by Contractor or Contractor's employee on the basis of race, religious creed, color, national origin, ancestry, handicap, disability, marital status, pregnancy, sex, age, or sexual orientation will not be tolerated. Contractor agrees that any and all violations of this provision shall constitute a material breach of this Agreement. 9. HOLD HARMLESS: Contractor shall indemnify, defend, and hold harmless Manager, Alameda Point Community Partners, ARRA, the City of Alameda, its City Council, boards, commissions, officials, employees, and volunteers ( "Indemnitees ") from and against any and all loss, damages, liability, claims, suits, costs and expenses whatsoever, including reasonable attorneys' fees ( "Claims "), arising from or in any manner connected to Contractor's negligent act or omission, whether alleged or actual, regarding perfoilliance of services or work conducted or performed pursuant to this Agreement. If Claims are filed against Indemnitees which allege negligence on behalf of the Contractor, Contractor shall have no right of reimbursement against Indemnitees for the costs of defense even if negligence is not found on the part of Contractor. However, Contractor shall not be obligated to indemnify Indemnitees from Claims arising from the sole or active negligence or willful misconduct of Indemnitees. 10. INSURANCE: On or before the commencement of the terms of this Agreement, Contractor shall furnish Manager with certificates showing the type, amount, class of operations covered, effective dates and dates of expiration of insurance coverage in compliance with paragraphs 10A, B, C and D. Such certificates, which do not limit Contractor's indemnification, shall also contain substantially the following statement: "Should any of the above insurance covered by this certificate be canceled or coverage reduced before the expiration date thereof, the insurer affording coverage shall provide thirty (30) days' advance written notice to ARRA by certified mail, "Attention: Risk Manager." It is agreed that Contractor shall maintain in force at all times during the performance of this Agreement all appropriate coverage of insurance required by this Agreement with an insurance company that is acceptable to Manager and licensed to do insurance business in the State of California. Endorsements naming the United States Department of the Navy, Alameda Reuse and Redevelopment Authority, City of Alameda, Alameda City Council, their respective Boards, Commissions, Officers, Employees and Agents, Alameda Point Community Partners, LLC, PM Realty Group, their Officers and Employees as additional insured shall be submitted with the insurance certificates. A. COVERAGE: Contractor shall maintain the following insurance coverage: (1) Workers' Compensation: Statutory coverage as required by the State of California. (2) Liability: Commercial general liability coverage in the following minimum limits: Personal Injury or Death: $3,000,000 each occurrence Property Damage: $1,000,000 each occurrence If submitted, combined single limit policy with aggregate limits in the amounts of $3,000,000 will be considered equivalent to the required minimum limits shown above. (3) Automotive: Comprehensive automobile liability coverage in the following minimum limit: Combined Single Limit: $1,000,000 each occurrence B. SUBROGATION WAIVER: Contractor agrees that in the event of loss due to any of the perils for which it has agreed to provide comprehensive general and automotive liability insurance, Contractor shall look solely to its insurance for recovery. Contractor hereby grants to the ARRA, APCP, Manager, or the City of Alameda on behalf of any insurer providing comprehensive general liability, and automotive liability insurance to either Contractor or ARRA, APCP, Manager, or the City of Alameda with respect to the services of Contractor herein, a waiver of any right to subrogation which any such insurer of said Contractor may acquire against ARRA, APCP Manager, or the City of Alameda by virtue of the payment of any loss under such insurance. C. FAILURE TO SECURE: If Contractor at any time during the term hereof should fail to secure or maintain the foregoing insurance, Manager shall be permitted to obtain such insurance in the Contractor's name or as an agent of the Contractor and shall be compensated by the Contractor for the costs of the insurance premiums at the maximum rate permitted by law and computed from the date written notice is received that the premiums have not been paid. D. ADDITIONAL INSURED: The United States Department of the Navy, Alameda Reuse and Redevelopment Authority, City of Alameda, Alameda City Council, their respective Boards, Commissions, Officers, Employees and Agents, Alameda Point Community Partners, LLC, PM Realty Group, their Officers and Employees shall be named as an additional insured under all insurance coverages, except worker's compensation insurance. The naming of an additional insured shall not affect any recovery to which such additional insured would be entitled under this policy if not named as such additional insured. An additional insured named herein shall not be held liable for any premium, deductible portion of any loss, or expense of any nature on this policy or any extension thereof. Any other insurance held by an additional insured shall not be required to contribute anything toward any loss or expense covered by the insurance provided by this policy. E. SUFFICIENCY OF INSURANCE: The insurance limits required by Manager are not represented as being sufficient to protect Contractor. Contractor is advised to consult Contractor's insurance broker to determine adequate coverage for Contractor. 11. BONDS: Contractor shall furnish the following bonds from a bonding company acceptable to the ARRA's Risk Manager: A. Faithful Performance: A bond in the amount of 100% of the total contract price guaranteeing the faithful performance of this contract, and B. Labor and Materials: A bond for labor and materials in the amount of 100% of the total contract price. 12. PROHIBITION AGAINST TRANSFERS: Contractor shall not assign, sublease, hypothecate, or transfer this Agreement, or any interest therein, directly or indirectly, by operation of law or otherwise, without prior written consent of Manager. Any attempt to do so without said consent shall be null and void, and any assignee, sublessee, hypothecate or transferee shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. However, claims for money by Contractor from Manager under this Agreement may be assigned to a bank, trust company or other financial institution without prior written consent. Written notice of such assignment shall be promptly furnished to Manager by Contractor. The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Contractor, or of the interest of any general partner or joint venturer or syndicate member or cotenant, if Contractor is a partnership or joint venture or syndicate or cotenancy, which shall result in changing the control of Contractor, shall be construed as an assignment of this Agreement. Control means fifty percent (50 %) or more of the voting power of the corporation. 13. SUBCONTRACTOR APPROVAL: Unless prior written consent from Manager or ARRA is obtained, only those people and subcontractors whose names are listed in Contractor's bid shall be used in the performance of this Agreement. Requests for additional subcontracting shall be submitted in writing, describing the scope of work to be subcontracted and the name of the proposed subcontractor. Such request shall set forth the total price or hourly rates used in preparing estimated costs for the subcontractor's services. Approval of the subcontractor may, at the option of Manager, be issued in the foul' of a Work Order. In the event that Contractor employs subcontractors, such subcontractors shall be required to furnish proof of workers' compensation insurance and shall also be required to carry general and automobile liability insurance in reasonable conformity to the insurance carried by Contractor. In addition, any work or services subcontracted hereunder shall be subject to each provision of this Agreement. 14. PERMITS AND LICENSES: Contractor, at its sole expense, shall obtain and maintain during the term of this Agreement, all appropriate permits, certificates and licenses, including a City of Alameda Business License that may be required in connection with the performance of services hereunder. 15. REPORTS: Each and every report, draft, work product, map, record and other document reproduced, prepared or caused to be prepared by Contractor pursuant to or in connection with this Agreement shall be the exclusive property of the ARRA. No report, information or other data given to or prepared or assembled by Contractor pursuant to this Agreement shall be made available to any individual or organization by Contractor without prior approval by the ARRA, or Manager. Contractor shall, at such time and in such foiin as the ARRA, or Manager may require, furnish reports concerning the status of services required under this Agreement. 16. RECORDS: Contractor shall maintain complete and accurate records with respect to sales, costs, expenses, receipts and other such information required by Manager that relate to the perfamiance of services under this Agreement. Contractor shall maintain adequate records of services provided in sufficient detail to permit an evaluation of services. All such records shall be maintained in accordance with generally accepted accounting principles and shall be clearly identified and readily accessible. Contractor shall provide free access to such books and records to Manager or ARRA at all proper times, and gives Manager or ARRA the right to examine and audit same, and to make transcripts there from as necessary, and to allow inspection of all work, data, documents, proceedings and activities related to this Agreement. Such records, together with supporting documents, shall be kept separate from other documents and records and shall be maintained for a period of three (3) years after receipt of final payment. If supplemental examination or audit of the records is necessary due to concerns raised by the ARRA, or Manager's preliminary examination or audit of records, and the ARRA, or Manager's supplemental examination or audit of the records discloses a failure to adhere to appropriate internal financial controls, or other breach of contract or failure to act in good faith, then Contractor shall reimburse The ARRA for all reasonable costs and expenses associated with the supplemental examination or audit. This section limits the records available to payroll, invoices, contracts, or manufacture correspondences to the project covered under this Agreement. 17. NOTICES: All notices, demands, requests or approvals to be given under this Agreement shall be given in writing and conclusively shall be deemed served when delivered personally or on the second business day after the deposit thereof in the United States Mail, postage prepaid, registered or certified, addressed as hereinafter provided. All notices, demands, requests, or approvals from Contractor to Manager shall be addressed to Manager at: Alameda Reuse and Redevelopment Authority c/o PM Realty Group L.P. 2175 Monarch St. Alameda CA 94501 Attention: Property Manager All notices, demands, requests, or approvals from Manager to Contractor shall be addressed to Contractor at: 18. SAFETY REQUIREMENT All work performed under this Agreement shall be performed in such a manner as to provide safety to the public and to meet or exceed the safety standards outlined by CAL -OSHA. Manager reserves the right to issue restraints or cease and desist orders to Contractor when unsafe or harmful acts or conditions are observed or reported relative to the performance of the work under this Agreement. Contractor shall maintain the work sites free of hazards to persons and/or property resulting from his or her operations. Any hazardous condition noted by Contractor, which is not a result of his or her operations, shall immediately be reported to Manager. 19. REQUIREMENT TO PAY PREVAILING WAGE Contractor shall comply with the City of Alameda Labor Compliance Program and all other requirements set forth in Labor Code section 1770 et seq. The Manager shall require payment of the general rate of per diem wages or the general rate of per diem wages for holiday and overtime work. Contractor will submit monthly certified payroll records to the Manager or all employees and subcontractors in a pre- approved format or a City of Alameda provided form. Any delay in remitting certified payroll reports to the Manager upon request from the Manager will result in either delay and/or forfeit of outstanding payment to Contractor. 20. URBAN RUNOFF MANAGEMENT: The Contractor shall avoid creating excess dust when breaking asphalt or concrete and during excavation and grading. If water is used for dust control, contractor shall use as little as necessary. Contractor shall take all steps necessary to keep wash water out of the streets, gutters and storm drains. The Contractor shall develop and implement erosion and sediment control to prevent pollution of storm drains. Such control includes but is not limited to: A. Use storm drain inlet protection devices such as sand bag barriers, filter fabric fences, block and gravel filters. (Block storm drain inlets prior to the start of the rainy season (October 15), in site de- watering activities and saw - cutting activities; shovel or vacuum saw -cut slurry and remove from the site). B. Cover exposed piles of soil or construction material with plastic sheeting. All construction materials must be stored in containers. C. Sweep and remove all materials from paved surfaces that drain to streets, gutters and storm drains prior to rain as well as at the end of the each work day. At the completion of the project, the street shall be washed and the wash water shall be collected and disposed of offsite in an appropriate location. D. After breaking old pavement, Contractor shall remove all debris to avoid contact with rainfall or runoff. E. Contractor shall maintain a clean work area by removing trash, litter, and debris at the end of each work day. Contractor shall also clean up any leaks, drips, and other spills as they occur. The objective is to ensure that the City and County of Alameda County -Wide Clean Water Program is adequately enforced. These controls should be implemented prior to the start of construction, up- graded as required, maintained during construction phases to provide adequate protection, and removed at the end of construction. These recommendations are intended to be used in conjunction with the State s Best Management Practices Municipal and Construction Handbooks, local program guidance materials from municipalities, Section 7.1.01 of the Standard Specifications and any other appropriate documents on storm water quality controls for construction. Failure to comply with this program will result in the issuance of noncompliance notices, citations, project stop orders or fines. The fine for noncompliance of the above program is two hundred and fifty dollars ($250.00) per occurrence per day. The State under the Federal Clean Water Act can also impose a fine on the contractor, pursuant to Cal. Water Code ' 13385. 21. COMPLIANCE WITH MARSH CRUST ORDINANCE: Contractor shall perform all excavation work in compliance with the City of Alameda's Marsh Crust Ordinance as set forth at Section 13 -56 of the Municipal Code. Prior to performing any excavation work, Contractor shall verify with the Building Official whether the excavation work is subject to the Marsh Crust Ordinance. Contractor shall apply for and obtain permits from Building Services on projects deemed to be subject to the Marsh Crust Ordinance. 22. TERMINATION: In the event Contractor fails or refuses to perform any of the provisions hereof at the time and in the manner required hereunder, Contractor shall be deemed in default in the performance of this Agreement. If such default is not cured within a period of two (2) days after receipt by Contractor from Manager of written notice of default, specifying the nature of such default and the steps necessary to cure such default, Manager may terminate the Agreement forthwith by giving to the Contractor written notice thereof. Manager shall have the option, at its sole discretion and without cause, of terminating this Agreement by giving seven (7) days' prior written notice to Contractor as provided herein. Upon termination of this Agreement, each party shall pay to the other party that portion of compensation specified in this Agreement that is earned and unpaid prior to the effective date of teiuiination. 23. COMPLIANCES: Contractor shall comply with all laws, state or federal and all ordinances, rules and regulations enacted or issued by The ARRA, City of Alameda, or Manager. 24. CONFLICT OF LAW: This Agreement shall be interpreted under, and enforced by the laws of the State of California excepting any choice of law rules which may direct the application of laws of another jurisdiction. The Agreement and obligations of the parties are subject to all valid laws, orders, rules, and regulations of the authorities having jurisdiction over this Agreement (or the successors of those authorities.) Any suits brought pursuant to this Agreement shall be filed with the courts of the County of Alameda, State of California. 25. ADVERTISEMENT: Contractor shall not post, exhibit, display or allow to be posted, exhibited, displayed any signs, advertising, show bills, lithographs, posters or cards of any kind pertaining to the services perfoinied under this Agreement unless prior written approval has been secured from The ARRA or Manager to do otherwise. 26. WAIVER: A waiver by the ARRA or Manager of any breach of any term, covenant, or condition contained herein, shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition contained herein, whether of the same or a different character. 27. INTEGRATED CONTRACT: This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions hereof. Any modification of this Agreement will be effective only by written execution signed by both Manager and Contractor. 28. INSERTED PROVISIONS: Each provision and clause required by law to be inserted into the Agreement shall be deemed to be enacted herein, and the Agreement shall be read and enforced as though each were included herein. If through mistake or otherwise, any such provision is not inserted or is not correctly inserted, the Agreement shall be amended to make such insertion on application by either party. 29. CAPTIONS: The captions in this Agreement are for convenience only, are not a part of the Agreement and in no way affect, limit or amplify the terms or provisions of this Agreement. 30 SEVERABILITY If any term or provision of this Agreement shall be held to be invalid or unenforceable, the remaining teinis and provisions of this Agreement shall be valid and enforceable to the fullest extent permitted by law. IN WITNESS WHEREOF, the parties have caused the Agreement to be executed on the day and year first above written. CONTRACTOR MANAGER: PM REALTY GROUP, L.P., as agent for the Alameda Reuse and Redevelopment Authority. By By: Title Title: Exhibit "C" Utilities Contractor shall pay all charges for fuel, gas, water, electricity, telephone services and any other utilities necessary to carry on the operations of Contractor. Exhibit "D" Nuisance Contractor shall not maintain, commit, or permit the maintenance or commission of any nuisance in connection with the performance of services under this Agreement. Exhibit "E" Safety Requirement All work performed under this Agreement shall be perfoiuied in such a manner as to provide safety to the public and to meet or exceed the safety standards outlined by CAL -OSHA. City reserves the right to issue restraints or cease and desist orders to Contractor when unsafe or harmful acts or conditions are observed or reported relative to the performance of the work under this Agreement. Contractor shall maintain the work sites free of hazards to persons and/or property resulting from his or her operations. Any hazardous condition noted by Contractor, which is not a result of his or her operations, shall immediately be reported to City. Exhibit "F" Hours of Operation Contractor shall be allowed to operate only for the hours of has been secured from City to do otherwise. a.m. to p.m. unless prior written approval Presentation to the ARRA Board root `-t Jaqui das tpcz lsany uo f upooTAT dnoJD oApnooxa Reviewed Action Items and Schedule IS II It > t' 't E" t: '").:V PD CD ,i • c, cm p I 'ci c.4 ...i Pci ▪ :--? • ca CJ P ~• L CAD CID • � CD r-r� � C c) 1 ° CD o o 0 CD • n � o 4 CM CD C �C 0 "ti CD O Z C cn ` r—►- CD 4 ° n v bd 0 0 v) 0 v) Reviewed Draft of "Base Case" Land Use Plan with Navy Overview of August ARRA/N avy Meetings c 1 E P9 ,4 N O CD c) H E CD r�- P • 0 cr N ei- P Do H CD CD • c 0 uompuop ssnosTa utq ssamsna uem asa pull muatuuoatAug cip • .,-. i .- ' .i.: ' ' '), . : ' . ,, • ' '. t .---" ',-7 '•,-;•:- _" 1.-- i: ' • • 1 '''...A'•-•'.' , ' r'''' - +. .' t.'t ' ..,,..,• -: , - , • : ' •-..° 7'. '' - ' '" i: ,..' .', -‘4..S ". - '." ‘''', ‹kt4 . ' , t ' .:'. , '. ''', : :, ' . . ' ' .' ',' ' • ' ' ' ' 1 . ....‘i 1, , , A,.. . ' 7 7 ,,, „, ,,,,,„ . ■ • , ' .,, _ ' ; " ' ', 1 \ ' k ' • ' • 0 ,-...7 ( i .' „ ,' i ' ' - , , c,.. ! ■VS. ' ' I ' ! I ■ 1 ' ''' I t ' , , . ■ 1 ; r • ' CITY OF ALAMEDA•CALIFORNIA SPECIAL JOINT MEETING OF THE COMMUNITY IMPROVEMENT COMMISSION AND HOUSING AUTHORITY BOARD OF COMMISSIONERS WEDNESDAY - - - SEPTEMBER 1, 2004 - - - 5:40 P.M. Time: Place: Wednesday, September 1, 2004, 5:40 P.M. Council Chanibers, City Hall, corner of Santa Clara Avenue and Oak Street. Roll Call Public Comment Anyone wishing to address the Commission/Board on agenda items only may speak for a maximum of 3 minutes per item. Consent Calendar Consent Calendar items are considered routine and will be enacted, approved or adopted by one motion unless a request for removal for discussion or explanation is received from the Commission/Board or a member of the public. 1. Recommendation to approve First Amendments to the Owner Participation Agreements between the Community Improvement Commission, Housing Authority and Resources for Community Development for Development of 52 Units of Affordable Rental Housing and Ten Units of Affordable For-Sale Housing at the Former Fleet Industrial Supply Center. Regular Agenda Items None. Adjournment Beverly Johnson, Chair, Community Improvement Commission and Housing Authority Board of Commissioners Housing Authority of the City of Alameca 701 Atlantic Avenue - Alameda, California 94501-2161 - TEL: (510) 747-4300 - FAX: (510) 522-7848 - TDD: (510) 522-8467 IF YOU WISH TO ADDRESS THE BOARD: 1. Please file a speaker's slip with the Executive Director, and upon recognition by the Chair, approach the rostrum and state your name; speakers are limited to 3 minutes per item. 2. Lengthy testimony should be submitted in writing and only a summary of pertinent points presented verbally. 3. Applause and demonstrations are prohibited during Board of Commissioners meetings. AGENDA SPECIAL MEETING OF THE BOARD OF COMMISSIONERS DATE & TIME Wednesday, September 1, 2004, 5:35 PM LOCATION City Hall, Council Chambers, Room 390, 2263 Santa Clara Ave., Alameda, CA Welcome to the Board of Commissioners of the Housing Authority of the City of Alameda meeting. Regular Board of Commissioners meetings are held on the first Tuesday of each quarter in the Council Chambers at City Hall. Public Participation Anyone wishing to address the Board on agenda items or business introduced by Commissioners may speak for a maximum of three minutes per agenda item when the subject is before the Board. Please file a speaker's slip with the Housing Authority Executive Director if you wish to address the Board of Commissioners. PLEDGE OF ALLEGIANCE 1. ROLL CALL - Board of Commissioners 2. CONSENT CALENDAR Consent Calendar items are considered routine and will be approved or accepted by one motion unless a request for removal for discussion or explanation is received from the Board of Commissioners or a member of the public. 2-A. Approval of First Amendment to the Ground Lease between the Housing Authority and Resources for Community Development for Construction of 52 Units of Affordable Housing. "Dedicated to Excellence, Committed to Service." Board of Commissioners Meeting September 1, 2004 Page 2 3. AGENDA None. 4. ORAL COMMUNICATIONS, Non-Agenda (Public Comment) 5. COMMISSIONER COMMUNICATIONS, (Communications from the Commissioners) 6. ADJOURNMENT * * * Note: • Sign language interpreters will be available on request. Please contact Carol Weaver, Secretary, at 747-4325 voice or 522-8467 TDD 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 large print. • Audiotapes of the meeting are available on request. • Please contact Carol Weaver at 747-4325 voice of 522-8467 TDD at least 72 hours prior to the meeting to request agenda materials in an alternative format, or any other reasonable accommodation that may be necessary to participate in and enjoy the benefits of the meeting. Dedicated to Excellence, Committed to Service. City of Alameda Memorandum August 26, 2004 To: Hono w le Chair and Members o e Housing Authority Board of Commissioners From: Flint ecutive Officer Subject: Reco endation to Approve a First Amendment to the Ground Lease Between the Housin _ Authority and Resources for Community Development Backgroun In March 2003, the Housing Authority Board of Commissioners authorized the Chief Executive Officer to negotiate and execute a long -term lease with Resources for Community Development (RCD) for construction and management of 52 units of affordable housing at a portion of the former East Housing/FISC site (See attached site map.). The lease was executed on March 14, 2003. Discussion Execution of the lease provided RCD with the necessary site control to apply for State Multi - Housing Program (MHP) funds. RCD was awarded $3 million in MHP funding in July 2003. In Fall, 2003, RCD also received tax credit financing for the 52 -unit project. Receipt of tax credit financing requires formation of a tax credit partnership to implement the housing project. The tax credit partnership, The Breakers at Bayport, L.P., has been formed. RCD is the general managing partner and the tax credit investors are the limited partners. Pursuant to the Lease, RCD intends to assigns its interest in the lease to the Limited Partnership. However, there are several technical revisions to the lease that must be made to comport with requirements of Federal Tax Credit law. These technical revisions are made as part of the First Amendment to Ground Lease Agreement on file in the City Clerk's Office. The revisions include amending the definition of "Foreclosure Transferee "; modifying the rental, sale and occupancy requirements to provide more flexibility in the allowable range of incomes to be served by the project; and clarifying certain noticing and other requirements in the event the "Foreclosure Transferee" becomes the legal owner of the leasehold estate. In addition, the First Amendment to Ground Lease Agreement reduces the amount of land subject to the ground lease. When the initial lease was executed, it included the property where the ten affordable for -sale units will be built. Dedicated to Excellence, Committed to Service Honorable Mayor and Members of the Housing Authority Board of Commissioners August 26, 2004 Page 2 The City Council has subsequently approved a subdivision map to create twelve legal lots. The 52- unit project will be built on lots 11 and 12 and the ten units will be built on lots 1 -10. Therefore, the ground lease as amended will only cover lots 11 and 12. Fiscal Impact There is no fiscal impact to approving the First Amendment to Ground Lease. Recommendation The Chief Executive Officer recommends that the Housing Authority Board of Commissioners authorize the Chief Executive Officer to execute the First Amendment to Ground Lease Agreement. On file with the City Clerk: First Amendment to Ground Lease Agreement Attachment Respectfully submitted, Michael T. Pucci Executive Director By ebbie Potter Base Reuse and Redevelopment Manager G: \Comdev \Base Reuse& Redevp \DebbiePotter \Staff Reports\HA -RCD 1st Amendment 8- 26- 04.doc Dedicated to Excellence, Committed to Service nu6, L , LUU4 HAILE STREET No, 3335 P. 1 ROTH LANE NEPTUNE GARDENS AVENUE FIFTH STREET City of Alameda Memorandum August 26, 2004 To: From: Subject: Background Honorable air and Members of the Housing Authority Board of Commissioners Honorab Chair and Members of the Community Improvement Commission tion to Approve First Amendments to the Owner Participation between the CIC, Housing Authority and Resources for Community De •pment for Development of 52 Units of Affordable Rental Housing and Ten Units of Affordable For -Sale Housing at the Former Fleet Industrial Supply. Center. On December 16, 2003, the Housing Authority Board of Commissioners (HABOC) and the Community Improvement Commission (CIC) approved an Owner Participation Agreement (OPA) with Resources for Community Development (RCD) for the construction of 52 affordable rental units at the former Fleet Industrial Supply Center (FISC). On June 15, 2004, the HABOC and the CIC approved an OPA with RCD for the construction of 10 affordable for -sale units at the former FISC property. Both projects have been moving forward and escrow is scheduled to close on each property by early September, 2004. Financing for both projects is completed. Key financing sources for the 52 -unit project include State Multi- Housing Program funds and equity raised through the Federal affordable housing tax credit program. Wells Fargo is providing the construction loan for the 10- unit project and Catellus affordable housing fees will provide the borrower equity for the Wells Fargo loan. Both OPA's require technical revisions to meet lender /funder requirements. These revisions are contained in proposed first amendments to each OPA on file in the City Clerk's Office. Discussion 52 -Unit Affordable Rental Housing Project: The primary proposed revision to the OPA is a statement clarifying Section 7.7 of the original OPA (Loan Forgiveness). The First Amendment acknowledges that the CIC loan will not be forgiven, but rather, if the loan is assumed by another person or entity, RCD shall be relieved of its obligation to repay the CIC loan. 10-Unit Affordable For -Sale Housing Project: The First Amendment to the OPA provides a new Section 4.9, Performance Under Loan Documents. The new section requires RCD to assume all Dedicated to Excellence, Committed to Service Honorable Mayor and Members of the Housing Authority Board of Commissioners and Members of the Community Improvement Commission August 26, 2004 Page 2 of the Owner's (Housing Authority's) obligations under the construction loan that may be required by the lender. Fiscal Impact Approving the First Amendments to the 52 -unit and 10 -unit OPA's as described above has no fiscal impact. Recommendation The Chief Executive Officer recommends that the Housing Authority Board of Commissioners authorize the Chief Executive Officer to execute the First Amendments to the Owner Participation Agreements between the Housing Authority, CIC and Resources for Community Development for development of 52 units of affordable rental housing and ten units of affordable for -sale housing at the former Fleet Industrial Supply Center. The Executive Director recommends that the Community Improvement Commission authorize the Executive Director to execute the First Amendments to the Owner Participation Agreements between the Housing Authority, CIC and Resources for Community Development for development of 52 units of affordable rental housing and ten units of affordable for -sale housing at the former Fleet Industrial Supply Center. On file with the City Clerk: First Amendment to Owner Participation Agreement (10 Unit Project) First Amendment to Owner Participation Agreement (52 Unit Project) Respectfully submitted, Ze,re At � /ter Leslie Little Development Services Director Michael T. Pucci Executive Director Debbie Potter Base Reuse and Redevelopment Manager G: \Comdev\Base Reuse& Redevp\DebbiePotter \Staff Reports \CIC -RCD 1st Amendment 8- 26- 04.doc Dedicated to Excellence, Committed to Service COX, WOOTTON, GRIFFIN, HANSEN & POULOS, LLP TERENCE S. COX RICHARD C. WOOTTON* MITCHELL S. GRIFFIN RUPERT P. HANSEN, JR. GREGORY W. POULOS FREDERICK J. CARR *ALSO ADMITTED IN HAWAII ATTORNEYS AT LAW 190 THE EMBARCADERO SAN FRANCISCO, CALIFORNIA 94105 TELEPI-IONE: (415) 438 -4600 FACSIMILE: (415) 438 -4601 WEBSITE: http: / /www.cwghp.com August 31, 2004 MARC T. CEFALU LYNN L. KRIEGER LAURA A. SCALES MAX LEE KELLEY GALIN G. LUK ROBERT A. SCHWARTZ ARRA HEARING SEPTEMBER 1, 2004 SUBMISSION REGARDING AGENDA ITEMS 2 B & 2C PROPOSED TERMS OF LEASE RENEWAL WITH NELSON'S MARINE TO: FROM: SUBJECT: Honorable Chair and members of the ALAMEDA REUSE AND REDEVELOPMMENT AUTHORITY Four Concerned Bay Area Boatyards, on behalf of themselves And the Public Interest Terms of the Proposed Lease which are Detrimental to Fair Market Competition in the Boatyard Industry and are Detrimental to the Public Interest DISCUSSION: Four reputable San Francisco Bay Area Boatyards 1 have reviewed the proposed terms of the ARRA's renewal of its sublease to Nelson's Marine. They unanimously share the concern that the proposed terms will be detrimental to fair market competition in the marine repair industry and will be detrimental to the Public Interest by depriving the taxpayers of the City of Alameda of tens of million of dollars in lost revenue over the proposed 20 year term of the sublease. The boatyards' primary concerns all derive from the City's assumptions combined with the Appraisal [entitled "Rental Survey "] performed by Dunn & Associates applying flawed methodology in arriving upon the current Fair Market Value of the subleased property. The boatyards' concerns are: 1 The boatyards are: (1) Keefe Kaplan Maritime, Inc, in Richmond; (2) Mariner Boat Yard in Alameda; (3) Berkeley Marine Center in Berkeley; and (4) San Francisco Boat Works in San Francisco. Cox, Wootton, Griffin, Hansen & Poulos, LLP September 13, 2004 Page 2 (1) The ARRA is bound by the sublease terms to apply the "Fair Market Value" The Sublease provides at Paragraph 2.3 regarding extensions: "....At ninety percent of the then existing fair market value of the Leased Premises. "The fair market value shall be based upon the highest and best use of the Leased Premises." [See Sublease Excerpts, highlighted, as EXHIBIT ONE] That provision is obviously mandatory. A failure to follow that mandate would constitute an abuse of this Authority's power, subjecting it to review. (2) The Staff Recommendation Contains a Fundamental and Factually Unsupported Conclusion which is Contrary to the Known Facts The Executive Director's Memorandum dated August 19, 2004 states: "The appraiser also felt that the Nelson Marine site was tzot a prime location for a boatyard as it's not easy to access from a vehicle." No such language appears in the Appraisal itself. The Appraisal instead describes the Leased Premises as being located at a transportation hub of the East Bay [at Page 2]. More importantly, Nelson's Marine itself has emphasized the location of the Leased Premises as being "perfect" for the business of a boatyard. Staff presumably considered the article reporting upon the flaunted success of Nelson's Marine contained in the August 2003 edition of Boat & Motor Dealer [See copy of article, EXHIBIT TWO, highlighted]. Carl Nelson, the owner of Nelson's Marine, is quoted as stating: "If you had to design a facility for a boatyard, I think an airplane hangar is the perfect thing..." The article speaks of "a steady stream of customers at the complex" and that the immediately surrounding area "includes a 800 slip marina to be built in the same lagoon as the boatyard's docks...This plan will bring housing and many more boaters to the area." The cover to the magazine refers to "A Waterfront Service Mecca" with the article's subheading speaking of the business `flourishing" and as a "service giant" and as "a marine complex that is one of the largest in California." Not a negative comment is to be found as to the boatyard currently suffering from an "access" problem. If the terms of the proposed sublease approved by this Authority were to be premised upon the Executive Director's factually inaccurate assumption, it once again would be an abuse of discretion subject to review. Cox, Wootton, Griffin, Hansen & Poulos, LLP September 13, 2004 Page 3 (3) The Appraisal Contains the Following Critical Oversights and /or Flaws (a) Only the Structure and Not the Entire Leased Premises Have Been Appraised The Appraisal describes the "Subject Property" as consisting of the warehouse and office space [Pages 1 and 2] and barely mentions the 4.62 acres, or 201,275 square feet, of land that is subleased with those structures, which include the Finger Piers of 400 sq. ft. and the North side of Pier 1 400' in length described in the Sublease; The Appraisal not only fails to contain a single word or reference to those acres' intrinsic monetary value, such as the growth potential and sublease income that Nelson's Marine has been and will continue to generate from its own subtenants, but its Evaluation omits any mention of the that enormous square footage when it states its Conclusion [see Appraiser's Conclusion, EXHIBIT THREE] It should be noted that Nelson's Marine referred to the enormous pier frontage as being one of the Leased Premises' attractive qualities that it selected to promote its business among the pictures included in the magazine article. Nelson's Marine is currently paying $.06 per square foot for the Leased Premises while it has been reportedly subleasing portions of the premises for in the range of $1.00 per foot to other vendors in the boatyard industry. Nelson's has therefore been substantially profiting every year from its own subcontracts on the acreage that has not been properly appraised, with none of that income inuring to the benefit of the public. If the unimproved acreage is not adequately appraised, the Authority will be granting Nelson's Marine a free license to operate as a real estate landlord, with an unbridled ability to profit at the City's expense. As Carl Nelson astutely stated in the magazine article: "The rare privilege of having surplus space has not been lost on Carl..." There would appear to be no logical reason why the Authority would wish to waive that potential income on behalf of the public. (b) The "Comparable" Lease Terms Have Not Been Correctly Analyzed The Appraisal recommends that the renewed sublease begin at the flat rate of $16,943, or $203,316 annually, based upon comparable leases. The City would logically be the most interested in making comparisons with those leases entered into by boatyards doing business within the City limits, which are the Svendsens Boat Works, Inc. and Mariner Boat Yard leases [see Appraisal at Pages 15 & 16]. Cox, Wootton, Griffin, Hansen & Poulos, LLP September 13, 2004 Page 4 By analyzing those two leases it quickly becomes apparent that the appraiser's analysis is objectively flawed, which would result in a shockingly high loss of revenue in the range of $34 million to the City over the proposed 20 year term of the sublease [See EXHIBIT FOUR, "Summary of Loss "]. The most glaring oversights are: (1) The appraisal analyzed several lease structures and selected a straight per foot rate. The appraisal identifies the Building at 53,785 sq. ft (Lease states 55,400). The appraisal recommends a rate of $.35 per sq. ft. for the entire Building. Comparable boatyards in Alameda are paying an average of $.72 per sq. ft.. After the Tenant is allowed a deduction of 10% of the fair market value a comparable rate would be $.65 per sq. ft. Based on the correct size of the Building this equals $36,120 per month or $432,120 per year. (2) Comparable boatyards in Alameda are paying an average of $.23 per sq. ft. for unimproved land such as the open acreage, finger piers and North side of Pier 1. After the Tenant is allowed a deduction of 10% of the fair market value a comparable rate would be $.21 per sq. ft. Based on the 201,275 sq. ft. of unimproved land rented this equals $42,267 per month or $507,204 per year. (3) The 400' of linear dock space, which is listed separately on the Agenda as item 2 -C should not logically be excluded from this same comparative analysis. Comparable boatyards in Alameda are paying an average of $5,83 per linear ft. After the Tenant is allowed a deduction of 10% of the fair market value a comparable rate would be $5.25 per lineal ft. Based on the 400 linear feet of dock space rented this equals $2,100 per month or $25,200 per year. (4) The above components of the Leased Premises, when analyzed in a truly comparative fashion and added together, result in a total comparable value of the sublease equaling $80,377 per month or $964,524 per year [See EXHIBIT FIVE, "Comparable Alameda Boatyards" and EXHIBIT SIX, "Comparable Boatyard Capacities'''. (5) The flawed analysis becomes equally dramatic when one calculates the amount of rent that Nelson's would be paying if it were to pay the same rate per square foot for its subleased property that Svendsen's Boat Works, Inc. and Mariner Boat Yard are currently paying on their leases. Cox, Wootton, Griffin, Hansen & Poulos, LLP September 13, 2004 Page 5 Svendsen's leases a structure that is approximately 1/2 the square footage of Nelson's structure an open unimproved land that is just over 114th the size of Nelson's acreage. Yet Svendsen's is currently paying $32,596 per month in comparison to the $16,943 being proposed for Nelson's. If Nelson's were to pay the same rate per square foot for its Leased Premises that is currently being paid by Svendsen's, it would be paying $91,366 per month [over 5 and 1/2 times the monthly rental rate that the Appraisal recommends]. Similarly, the Mariner Boat Yard leases a structure that is a little over 1115th the size of Nelson's structure and its unimproved acreage is a little over 115th the size of Nelson's unimproved acreage. Yet Mariner is currently paying $14,000 per month plus 6% of its gross revenues. Even excluding the City's income from the gross revenues, which it can retrieve from its own records, if Nelson's were to pay the same rate per square foot that is currently being paid by Mariner, it would be paying $88,230 per month [again, over 5 times the monthly rental rate that the Appraisal recommends]. (6) The need for the proposed 20 year term is unexplained and adverse to the interests of the City and the public; the existing sublease was structured in 5 year increments with yearly increases. There is no apparent reason why the City would relinquish its right to have the sublease adjusted every 5 years in the future to `fair market value at the highest and best use," just as was done in the original sublease. (7) The proposed sublease contains no "carry over" provision; commercial leases typically provide that once a new fair market value has been determined, the tenant will retroactively pay the landlord for the difference between the old lease rate and the new fair market value from the date upon which the original lease expired [as a strong incentive for the tenant not to drag out renewal negotiations and to allow the landlord to recapture lost revenue to which it should be entitled]; had the sublease included a carry over provision with the original sublease having expired approximately 2 years ago, and if the City were now to establish a fair market value of $88,230 per month, the City would have been able to recapture $1,673,802 in past due rent. Cox, Wootton, Griffin, Hansen & Poulos, LLP September 13, 2004 Page 6 The competing Bay Area boatyards simply want to see: (1) a fair competitive playing field within their specialized industry; and (2) the taxpayers of the City obtain a fair return for the value of the Leased Premises. They look forward to detailing at the Hearing more reasons which will support the Authority in arriving upon terms to the sublease that will serve the best interest of the public. Respectfully Submitted, Terence S. Cox Exhibits: (1) Excerpts from Nelson's Marine Sublease [highlighted] (2) Boat & Motor Dealer article, August 2003 [highlighted] (3) Appraiser's Conclusion [highlighted] (4) Summary of Loss (5) Comparable Alameda Boatyards Based on Square Feet Rented (6) Comparable Boat Yard Capabilities