Loading...
2008-02-06 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, February 6, 2008 Meeting will begin at 7:00 p.m. 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 Board or a member of the public. 2 -A. Approve the minutes of the Regular Meeting of January 2, 2008. 2 -B. Approve Comment Letter to the Navy on the Draft Feasibility Study Report, IR Site 24, Alameda Point. 2 -C. Approve an Environmental Testing Contract with Weston Solutions, Inc. to Support 2008 Dredging Not to Exceed $100,000 (to be reimbursed by MARAD). 2 -D. Approve Renewal of One -Year License Agreement for the Alameda Civic Light Opera at Alameda Point. 3. REGULAR AGENDA ITEMS 3 -A. Provide Negotiating Direction Regarding SunCal Companies' Request to Amend the Exclusive Negotiation Agreement to Provide a Time Extension of Mandatory Milestones. 4. ORAL REPORTS 4 -A. Oral report from Member Matarrese, Restoration Advisory Board (RAB) representative. 5. ORAL COMMUNICATIONS, NON - AGENDA (PUBLIC COMMENT) (Any person may address the governing body in regard to any matter over which the governing body has jurisdiction that is not on the agenda.) 6. COMMUNICATIONS FROM THE GOVERNING BODY 7. ADJOURNMENT This meeting will be cablecast live on channel 15. ARRA Agenda - February 6, 2008 Page 2 • Sign language interpreters will be available on request. Please contact the ARRA Secretary 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. G: \Comdev\Base Reuse& Redevp \ARRA \AGENDAS\2008\Feb 6 Regular ARRA. Agenda.doc AGENDA Special Meeting of the Governing Body of the Alameda Reuse and Redevelopment Authority, City Council, and Community Improvement Commission * * * * * * ** Alameda City Hall Council Chamber, Room 391 2263 Santa Clara Avenue Alameda, CA 94501 1. ROLL CALL 2. Public Comment on Agenda Items Only. Wednesday, February 6, 2008 Meeting will begin at 7:01 p.m. Anyone wishing to address the Board on agenda items only, may speak for a maximum of 3 minutes per item. 3. ADJOURNMENT TO CLOSED SESSION OF THE ARRA TO CONSIDER: 3 -A. CONFERENCE WITH REAL PROPERTY NEGOTIATOR: Property: Alameda Naval Air Station Negotiating parties: ARRA and Navy Under negotiation: Price and Terms Announcement of Action Taken in Closed Session, if any. 4. ADJOURNMENT Notes: • Sign language interpreters will be available on request. Please contact the ARRA Secretary 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. G: \Comdev\Base Reuse& Redevp \ARRA \AGENDAS\2008\Feb 6.Special ARRA (closed session).Agenda.doc APPROVED MINUTES OF THE REGULAR MEETING OF THE ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY Wednesday, January 2, 2008 The meeting convened at 7:33 p.m. with Chair Johnson presiding. 1. ROLL CALL Present: Chair Beverly Johnson Boardmember Doug deHaan Boardmember Frank Matarrese Boardmember Marie Gilmore Vice Chair Lena Tam 2. CONSENT CALENDAR 2 -A. Approve the minutes of the Regular Meeting of December 5, 2007. 2 -B. Authorize the Executive Director to Execute an Agreement with Russell Resources for Environmental. Consulting Services for Alameda Point for 12 Months in an Amount not to exceed $117,500. 2 -C. Approve Sublease for American Bus Repair, LLC at Alameda Point. Approval of the Consent Calendar was motioned by Member Matarrese, seconded by Member Tam and passed by the following voice votes: Ayes: 5, Noes: 0, Abstentions: 0 3. REGULAR AGENDA ITEMS 3 -A. Alameda Point Update -- Presentation of Quarterly Update of Project Master Schedule Prepared by SCC Alameda Point LLC. Debbie Potter, Base Reuse and Community Development Manager, gave a quick update of Alameda Point activities. On 12/12, SunCal met with the Navy to discuss their due diligence and progress on the project. On 12/13, SunCal conducted their second community meeting with over 200 community residents and business people in attendance. The community members participated in small workgroups and identified pros and cons of two broadly defined concepts for Alameda Point. SunCal will take the information and feedback from this meeting to put to use for the next community meeting. Ms. Potter introduced Pat Keliher, SunCal's Project Manager for the Alameda Point Project, to give the first quarterly update of the Project Master Schedule. Mr. Keliher summarized past public meetings, explaining that the public would like more specific feedback on multiple planning concepts. SunCal has aggregated most of the information and feedback and will present this to staff. To update the master schedule -- originally, SunCal's pretense was that they would move forward with the Preliminary Development Concept (PDC), but over the course of the last few months, due to constraints, the PDC is not feasible. SunCal has communicated this to the Navy, to the public, and to staff, and the Project Master Schedule has been updated. Most of schedule triggers project description, which is still in process and will take several more months, but does not affect the two -year ENA period. Mr. Keliher discussed that the City hired an independent peer review team to evaluate SunCal's results and this peer review will continue over the next 12 -18 months. The conclusion of the peer review thus far is that there are issues for which SunCal will discuss the mitigation techniques. SunCal has met with multiple federal agencies, and their meeting with the Navy was to introduce them to the concept that the PDC didn't work, and, as the existing term sheet is predicated on the PDC, SunCal will come back to the Navy in Jan -Feb with an outline on their strategy. Mr. Keliher explained that the Alameda Point project is very complex, but nothing that is insurmountable. Member deHaan expressed concern with economics of the project and what issues SunCal was anticipating will be covered at the next public meeting. Mr. Keliher stated that it is SunCal's job to present more specifics on each of the different planning concepts, i.e., Measure A, non - measure A, or a hybrid of these two, etc. Member deHaan stated that the loose ends and driving force was the transportation issue. Mr. Keliher agreed that the transportation issue was a trigger and that it would take several years and a lot of different agencies involved to tie up this loose end. Member deHaan commented that the public meetings were well- received. 4. ORAL REPORTS 4 -A. Oral report from Member Matarrese, Restoration Advisory Board (RAB) representative. Member Matarrese attended the 12/6/07 meeting and the main agenda item was a summary handout of 2007 activities and a look - forward to 2008 with remediation at Alameda Point. He provided the handout, "Environmental Progress at Alameda Point" and requested that it be provided to ARRA members and posted on the City's website. He requested that the map identifying the sites be included with the handout. 5. ORAL COMMUNICATIONS, NON - AGENDA (PUBLIC COMMENT) There were no speaker slips. 6. COMMUNICATIONS FROM THE GOVERNING BODY none. 7. ADJOURNMENT Meeting was adjourned at 7:43 p.m. by Chair Johnson. Respectfully submitted, Glidden ARRA Secretary Alameda Reuse and Redevelopment Authority Interoffice Memorandum February 6, 2008 TO: Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority FROM: Debra Kurita, Executive Director RE: Approve Comment Letter to the Navy on the Draft Feasibility Study Report, IR Site 24, Alameda Point BACKGROUND On November 27, 2007, the Navy issued its Draft Feasibility Study Report, IR Site 24, Alameda Point, Alameda, California (FS) for review and comment by the Environmental Protection Agency, Department of Toxic Substances Control, and Regional Water Quality Board. Comments are due by February 27, 2008. IR Site 24 includes open water areas just south of the Seaplane Lagoon and three piers located within the break wall of Breakwater Beach. Sediment contamination is the primary environmental concern at this site. The remedial investigation concludes that potential adverse ecological impacts may be associated with the sediment shelf in the northeast comer of the site. This area is located beneath Wharf Road. Storm drain Outfall J discharges at this corner of IR Site 24, where sediment remediation is needed. Navy sediment sampling in 2005 and 2006 shows that the top two inches of sediment near Outfall J is about as contaminated as deeper sediment. It would be expected that sediment from stormwater discharges since the 2006 sampling should have covered over the historically contaminated sediments. Contaminated surface sediment in this area could be explained by either of two phenomena: 1) sediment in recent stormwater might not have settled out near the outfall, so the historically contaminated sediment is still at the surface, or 2) contaminated sediment still might be settling from stonuiwater Outfall J discharges. According to the FS, the storm drain line leading to Outfall J was cleaned and inspected in 1991. However, Naval Air Station Alameda closed in 1997, six years later. Further, the FS states that this drain line serves two parcels east of IR Site 24. The FS does not disclose that Outfall J also drains most of the industrialized land south of Atlantic Avenue. Accordingly, the FS's implication that Outfall J is not an ongoing source of contaminants to sediment because it was cleaned and inspected may not be accurate. The FS evaluates five remedial alternatives: No Action, Institutional Controls (ICs), Monitored Natural Recovery (MNR) with ICs, Thin -Layer Capping with ICs, and Dredging to Remove Contaminated Soil. The MNR and Thin -Layer Capping alternatives include future sediment monitoring. However, the Dredging alternative does not. The FS's dredging alternative should Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority February 6, 2008 Page 2 include follow -up sediment monitoring to assure stormwater discharges from Outfall J do not recontaminate the area. DISCUSSION Surface Sediment Contamination Is Unexpected Stormwater runoff contains suspended particles (dirty and other matter) that rain picks up as it hits the ground and flows through drainages. Typically, when storm drain outfalls discharge into a water body, such as San Francisco Bay, water velocity slows dramatically and most of the particles settle to the bottom of the water body. This is the process by which deltas form at the mouths of rivers, and at stoun drain outfalls. If stomiwater coming out of Outfall J were clean, surface sediment outside the outfall should be clean too, unless the stormwater's sediment does not settle out for some reason. Possibly, wave action or some other energetic process prevents sediment buildup at this outfall. Unfortunately, the Navy decision documents do not offer any explanation in this regard. The Storm Drain System May Be a Continuing Source of Contaminants to Sediment Contaminated surface sediment at Outfall J also could be explained by contamination in the stoiuiwater. Contaminated sediment would still be present in Outfall J's discharge if the storm drain cleaning in 1991 was ineffective, or if the storm drain system became recontaminated after the cleaning was completed. As a practical matter, it is difficult to inspect a storm drain system thoroughly enough to rule it out as an ongoing source of contamination. It might be possible to analyze stormwater samples from Outfall J that are collected during large storm events to evaluate its source potential, but this would be dangerous. The best way to assure Outfall J is not the source of contamination to IR Site 24's sediment is to analyze future sediment samples. Add Future Sediment Monitoring to the Dredging Alternative The FS includes a comparative analysis of the five remedial alternatives for IR Site 24. The Dredging alternative scores very favorably in this analysis, suggesting it likely will be the selected remedy in the Record of Decision. However, the Dredging alternative does not provide for future sediment monitoring, even though several of the other alternatives do. Such sediment monitoring would evaluate whether future discharges recontaminate sediment at Outfall J, and provide the basis for further action on the storm drain system, if needed. Therefore, the focus of the draft comment letter is to encourage follow -up sediment monitoring to assure future stormwater discharges do not recontaminate the area following the initial dredging to remove contaminated sediment. FISCAL IMPACT/BUDGET CONSIDERATION There is no impact to the City's General Fund to submit comments on Navy environmental documents prepared for Alameda Point. RECOMMENDATION Approve the attached draft comment letter on the Navy's November 27, 2007, draft FS for IR Site 24. Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority February 6, 2008 Page 3 Res itted, Leslie Little Development Services Director //Y / By: Debbie P+tte Base Reuse and Community Development Manager Attachments: 1. draft comment letter on the Navy's November 27, 2007 draft FS for IR Site 24 G: \Comdev\Base Reuse& Redevp \ARRA \STAFFREP\2008 \02 - Feb 6\2 -B IR- 24.doc ATTACHMENT 1 February 6, 2008 Mr. Thomas L. Macchiarella BRAC Environmental Coordinator Navy BRAC Program Management Office 1455 Frazee Road, Suite 900 San Diego, CA 92108 -4310 Re: Comments on the November 27, 2007 Draft Feasibility Study Report, IR Site 24, Alameda Point, Alameda, California Dear Mr. Macchiarella: Thank you for providing the Alameda Reuse and Redevelopment Authority (ARRA) with a copy of the Navy's November 27, 2007 Draft Feasibility Study Report, IR Site 24, Alameda Point, Alameda, California (FS). IR Site 24 is an aquatic site just south of the seaplane lagoon and adjacent to, and including, the piers. The FS is a clearly written and well organized report. However, the FS also should address the likelihood that Outfall J is a continuing source of contamination to IR Site 24 sediment. Alternative 5 (Dredging to remove contaminated sediment) does not include long -term monitoring activities. If Alternative 5 were selected in IR Site 24's Record of Decision, follow - up sediment sampling should be conducted to verify that discharges from Outfall J do not recontaminate the sediments. Please modify Alternative 5 to include follow-up monitoring. Comments 1. Surface sediments are as, contaminated as deeper sediments. In 2005 and 2006, the Navy collected and analyzed sediment samples from three depths at each of 31 locations in IR Site 24: surface (0 to 2 inches), deeper (2 to 10 inches), and deepest (10 to 20 inches). FS Figure 3 -1 shows that four of these locations are within IR Site 24's AoEC (Area of Ecological Concern). FS Table 2 -2 presents analytical results for sediment samples from these locations. The results confirm that sediments within the AoEC are contaminated: AoEC sediment concentrations for 13 CoPECs (Chemicals of Potential Ecological Concern) are higher than at the reference location (PA C -12), which is outside of IR Site 24. For PCBs, tributyltin, cadmium, and lead, surface sediment concentrations are greater than the ER -M (effects range- median) at all four AoEC sample locations.) In the case of HPAH6, surface sediment concentrations exceed the ER -M at three of the four AoEC locations, and in the case of DDx, at two of the four locations. In IR Site 24's AoEC, surface sediment is about as contaminated as deeper sediment. Ten CoPECs are at least as contaminated in the surface sediment sample as in the corresponding 1 Final Remedial Investigation Report, IR Site 20 (Oakland Inner Harbor) and IR Site 24 (Pier Area), Alameda Point, California. Navy, August 30, 2007, Tables 4 -8 and 4 -9. (ER -M is not applicable to tributyltin. Table 4 -9 uses the value reported by Weston, 1996, as the threshold value for this substance.) deeper sample at two or more of the four AoEC sample locations. These CoPECs that are prominent in surface sediment are HPAH6, LPAH6, DDx, PCBs, tributyltin, cadmium, chromium, copper, lead, and zinc. Deposition of particulate matter causes sediment to build up in many aquatic environments, especially in the absence of high- energy forces such as strong currents or waves. The FS assumes these forces to be minimal at IR Site 24's AoEC. Thus, the widespread occurrence of surface sediment that is about as contaminated as deeper sediment is unexpected, because the FS states that source of contaminated particulate matter (the storm drain line leading to Outfall J) has been abated. Two possible explanations for contamination in the surface sediment are (1) the depositional environment at the AoEC is poorly understood, and (2) ongoing discharges from Outfall J continue to contain suspended contaminants that deposit as sediment in IR Site 24's AoEC. • The FS assumes deposition is occurring Site 24's AoEC. "The sedimentation rate at IR Site 24 is currently unknown; the sedimentation rate at nearby IR Site 17 (Seaplane Lagoon) has been estimated at approximately 0.6 to 0.7 inches (1.5 to 17 cm) per year (Battelle 2005). Monitored Natural Recovery (MNR) is considered appropriate for the AOEC at IR Site 24 because this area is protected from high- energy forces such as boat wakes, propeller scour, keel drag, or large -boat anchoring that would minimize the effectiveness of the natural sedimentation process. "(ES, p. 4 -8) Given the presence of contamination in surface sediment at IR Site 24's AoEC, it is difficult to account for ongoing sedimentation, except by contaminated particulate matter. At a sedimentation rate of 0.6 to 0.7 inches per year, at least six inches of clean sediment should have accumulated. This clean layer is not apparent in the sediment sampling results. In contrast to the FS's conceptual model, perhaps episodic, intense storms create high energy conditions at Outfall J that erode newly deposited surface sediment. Thus, the contamination in surface sediments that was observed in the 2005 and 2006 samples may have been deposited long ago, while the Navy was active at Alameda Point. Possibly, periodic storm- induced scouring prevented this historically contaminated sediment from being covered by later sedimentation. • The FS discounts the possibility that Outfall J could be a continuing source of contamination. "The storm drain line leading to Outfall J was cleaned and inspected in 1991 (TtEMI 1996); this line served buildings located east of IR Site 24 in Environmental Baseline Survey (EBS) Parcels 154 and 201. The largest buildings in EBS Parcels 154 and 201 are Buildings 166 and 167, which were historically used as aircraft maintenance hangars. Activities conducted in these buildings reportedly included painting, resin mixing, parts washing in solvent dip tanks, metals machining, paint stripping/sandblasting, aircraft defueling and refueling, and replacing or filling of lubrication and hydraulic fluids. The open spaces of EBS Parcels 154 and 201 were historically used for aircraft parking and maintenance and for chemical, equipment, and material storage, which included hazardous material storage yards and an industrial dust silo (BEI 2007b). It is suspected that industrial wastewaters and potentially contaminated surface runoff from the parcels may have discharged through storm drain lines leading to IR Site 24 (TtEMI 2006b). Further evaluation of the northern portion of EBS Parcel 154 near Building 167, as well as evaluation of the sediment in the storm sewer segment that originates south of Building 167, was recommended in a site inspection report that was completed in August 2007 (BEI 2007b). No further evaluation, beyond an evaluation of the aircraft parking and staining areas, was recommended for EBS Parcel 201 (BEI 2007b)." (FS, p. 2 -2, emphasis added) The further evaluation recommended in BEI 2007b is warranted, but this work cannot rule out Outfall J as a continuing source of contaminated surface sediment to IR Site 24's AoEC. Even if the storm drain line leading to Outfall J was flawlessly cleaned and inspected in 1991, Navy operations at Naval Air Station Alameda continued beyond that date, until 1997, during which time recontamination of the storm drain system could have occurred. Thorough cleaning, inspection, and sampling sometimes can justify the inference that a storm drain line is free of contamination. However, when persuasive information to the contrary exists, such as contaminated surface sediments at the outfall, the inference is unreliable, and further assurance is needed. Recommendation: Revise the dredging alternative (Alternative 5) to include a surface sediment monitoring five wet - weather seasons after dredging of the AoEC is completed. 2. The area drained through Outfall J is very large and the condition of its storm drain lines is not completely known. The FS' implies that the storm drain line discharging through Outfall J serves EBS Parcels 154 and 201 only. (For example, see the underlined passage in the quote in Comment 1, from FS page 2 -2.) This implication is very misleading. According to the Alameda Point storm sewer study, the storm drain lines that discharge through Outfall J serve a much greater area.3 Lands tributary to Outfall J include much of OU -2A and OU -2B: specifically, Outfall J serves all of IR Sites 13, 19, and 22; most of IR Sites 4, 9, 23, and 27; and a portion of IR Sites 3, 11, and 35. Additionally, Outfall J drains all or portions of EBS parcels 134, 138, 139, 141, and 164, which are not within IR sites. The same heavy metals, PAHs, and PCBs that are found in surface sediment at Outfall J are principal contaminants in many of these IR sites. According to the Alameda Point storm sewer study, the condition of some storm drain line segments discharging through Outfall J is unknown. The FS should objectively discuss the 2 Final Site Inspection Report, Transfer Parcel EDC -12, Alameda Point, California. Navy, October 10, 2007, pp. 7 -4 to 7 -6. (The original quote cites the draft final version of this document.) 3 Storm Sewer Study Technical Memorandum Addendum and Response to Agency Cotnments on the Draft Final Storm Sewer Study Report, Alameda Point, Alameda, California. Navy, August 30, 2001, Figure 1. likelihood that former storm sewer inspection and cleaning completely removed all contamination from the storm drain lines upstream of Outfall J. Recommendation: Revise the FS to disclose that Outfall J drains a much greater area of former industrial activity than EBS Parcels 154 and 201, and that the condition of some segments of the storm drain lines upstream of Outfall J is unknown. Summary Surface sediments at IR Site 24's AoEC are contaminated with heavy metals, PAHs, PCBs, and DDx. Possibly, this contamination is in historically contaminated sediment that has not been covered by more recent sedimentation. However, another likely explanation is that the storm drain system tributary to Outfall J is a continuing source of contamination to sediment at IR Site 24's AoEC. It is impractical to prove that the storm drain line system, that Outfall J serves is not a continuing contaminant source. An effective way of assuring that no future sediment contamination from Outfall J would be to modify the Alternative 5 (Dredging) to include follow - up sediment sampling. Surface sediment sampling should be conducted five wet - weather seasons after the dredging of IR Site 24's AoEC has been completed. Thank you for considering ARRA's comments. If you have any questions or need additional information, please contact Dr. Peter Russell, the ARRA's, environmental consultant, at (415) 902 -3123. Sincerely, Debbie Potter Base Reuse and Community Development Manage cc: Anna - Marie Cook, USEPA Dot Lofstrorn, DTSC John West, Water Board Peter Russell, Russell Resources, Inc. Alameda Reuse and Redevelopment Authority Interoffice Memorandum February 6, 2008 TO: Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority FROM: Debra Kurita, Executive Director RE: Approve an Environmental Testing Contract with Weston Solutions, Inc. to Support 2008 Dredging in an Amount Not to Exceed $100,000 BACKGROUND The Alameda Reuse and Redevelopment Authority (ARRA) is proposing to dredge the navigational entrance channel to Alameda Point to accommodate MARAD vessels and dispose of the dredged material at the Alacatraz Environs In -Bay disposal site. The Alameda Point entrance channel is located in the eastern portion of San Francisco Bay, at the west end of the City of Alameda. Attachment 1 provides a vicinity map depicting the relative locations of the proposed dredge and disposal area. The proposed maintenance dredging episode involves the removal of accumulated sediment in order to return the channel to a depth that would allow unencumbered maneuvering of commercial and recreational vessels over its entire length. The proposed dredge depth is —34 feet below Mean Lower Low Water ( -34 feet MLLW) with a two - foot over dredge tolerance, two feet deeper than previously performed dredge activities. Weston Solutions, Inc. performed baseline testing to detetinine dredge depth and channel conditions as a subcontract to the Moffatt & Nichol engineering contract in 1995. This work must now be updated to provide accurate information about current channel conditions. DISCUSSION Ordinarily, the contract for environmental testing would be done as a subcontract to the ARRA's existing Moffatt & Nichol engineering contract. However, the 2008 dredging event will require more extensive and deeper testing because the depth of the dredging is being increased from 32 feet to 34 feet. In addition, as a result of the November 2007 San Francisco Bay oil spill, regulators are asking communities planning to dredge to do additional testing to determine if oil is still present in the Bay. The need for increased testing raised the contract amount and requires the approval by the ARRA Governing Body. Honorable Chair and Members of the February 6, 2008 Alameda Reuse and Redevelopment Authority Page 2 of 2 Furthermore, the depth of the dredge has been changed because of MARAD's plan to reduce the number of ships at Alameda Point and replace them with larger ships that draft slightly deeper. The MARAD Ready Reserve Fleet recently acquired a new larger class ship and will reassign berthing spaces of its existing fleet to accommodate the new ships. MARAD wants to reduce the number of dredging events required in the Bay by dredging deeper and removing shoaled areas not cleared in the previous event. For that reason, MARAD will reimburse the ARRA for the costs of the testing. Once the testing is done, bid documents for the dredge can be developed and advertised. The contract award will require ARRA action in late summer. BUDGET CONSIDERATION / FINANCIAL IMPACT The contract amount will not exceed $100,000 and will be reimbursed by MARAD. The final contract amount will be determined by the amount of testing required. There is no impact to ARRA lease revenue or the General Fund. RECOMMENDATION Approve an Environmental Testing Contract with Weston Solutions, Inc. to support 2008 dredging in an amount not to exceed $100,000. Respectfully submitted, �L°eslre.ittle Development Services Director By: Nanette Banks Finance & Administration Manager G: \Comdev\Base Reuse& Redevp \ARRA \STAFFREP\2008 \02 - Feb 6\2 -C. Weston.doc Alameda Reuse and Redevelopment Authority Interoffice Memorandum February 6, 2008 TO: Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority FROM: Debra Kurita, Executive Director 2 -D SUBJ: Approve Renewal of Two One -Year License Agreements for the Alameda Civic Light Opera at Alameda Point BACKGROUND The Alameda Civic Light Opera (ACLO) was issued a 19 -month license agreement from June 2005 to January 2007 for the use of Building 35, located at 2450 Pan Am Way, as rehearsal and production space. The license was extended for an additional year in January 2007. In May 2006, the ACLO was issued a 12 -month license to use a portion of a second building, Building 91, located at 651 W. Tower Avenue, for set storage and construction. That license was extended an additional year in June 2007. Both licenses are at no cost. DISCUSSION The ACLO has requested another one -year license agreement for each building at no cost. As the ACLO's use of these properties appears to be ongoing, this no -cost license agreement is being recommended to the Board for consideration and approval. BUDGET CONSIDERATION / FINANCIAL IMPACT There has been little if any demand for the space that the ACLO has licensed in the past. However, if these buildings were to be available for a market rate lease, the ARRA would ask for $1,718 per month ($0.62 per square foot) for the space in Building 35 and $2,700 ($0.27 per square foot) for the space in Building 91, or a combined rent of $53,016 annually. RECOMMENDATION Approve the proposed license agreements. Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority By: Attachment: Site Map Reupe, fully submitted i slie Little Development Services Director Nanette Banks Finance & Administration Manager February 6, 2008 Page 2 G: \Comdev\Base Reuse& Redevp \ARRA \STAFFREP \2008 \02 - Feb 6\2 -D ALCO.doc Z SNTNHDVIIV Alameda Reuse and Redevelopment Authority Interoffice Memorandum To: Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority From: Debra Kurita, Executive Director Date: February 6, 2008 Re: Provide Negotiating Direction Regarding SunCal Companies' Request to Amend the Exclusive Negotiation Agreement to Provide a Time Extension of Mandatory Milestones BACKGROUND On May 8, 2007, the Alameda Reuse and Redevelopment Authority (ARRA) selected SunCal Companies as its Master Developer for Alameda Point and established a 60 -day due diligence and Exclusive Negotiation Agreement (ENA) negotiation period. The due diligence period was completed, and the ENA between SCC Alameda Point, LLC ( SunCal), a SunCal entity, and the ARRA, Community Improvement Commission (CIC), and City was executed on July 18, 2007. Since the ENA approval, SunCal has continued its due diligence and conducted extensive site investigations; held two community meetings; and met with local, regional, State, and Federal stakeholders, including the United States Navy (Navy). DISCUSSION The ENA sets forth a multi -year timeline and included a schedule of mandatory performance milestones outlined in Exhibit B ( "Schedule of Performance "). The Schedule of Performance was predicated on the assumption that SunCal would implement the Alameda Point Preliminary Development Concept (PDC), which served as the basis for the final draft Conveyance Term Sheet with the Navy. Since ENA approval, SunCal has conducted site investigations and technical analyses and determined that the PDC is not financially feasible. SunCal's due diligence indicates that the previous costs assumed for the PDC related to the site's flood and geotechnical conditions were underestimated, and that the revenues from the sale of single - family homes on certain portions of the site would not support these increased costs. Additionally, SunCal reports that it has been pleased with the community's initial reaction to alternative development concepts that consist of higher housing densities than those envisioned in the PDC. Due to these changed circumstances, SunCal would like to pursue new and distinct development concepts for the site. However, SunCal does not believe that it can fully explore alternative development concepts within the Schedule of Performance currently outlined in the ENA. As a result, SunCal has formally requested that the ARRA approve a six -month extension of five mandatory milestones in the Schedule of Performance, including the submission of the Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority February 6, 2008 Page 2 Development Concept (and its related plans) and the Entitlement Application, to September 19, 2008 and November 18, 2008, respectively (see attached letter from SunCal). SunCal did not request an extension of the ENA's overall 24 -month timeline. ARRA staff recommends granting the extension of the Mandatory Milestone Schedule subject to conditions that protect the ARRA's interest in the successful and timely redevelopment of Alameda Point. The following provides an overview of the general conditions that would be recommended by ARRA staff: 1) Information Update. SunCal shares with ARRA staff and/or its consultants' technical and financial information gathered to -date and going forward. 2) Predevelopment Expenditures. SunCal commits to the expenditure of predevelopment funds sufficient to successfully achieve its extended mandatory milestones. 3) Monitoring. SunCal reports its ongoing progress and expenditure of funds to the ARRA on a regular basis. ARRA staff recommends that the time extension and any proposed conditions on the extension be discussed in greater detail with the ARRA in a closed session. BUDGET CONSIDERATION / FINANCIAL IMPACT There is no financial impact on the General Fund, CIC, or ARRA budgets. The cost recovery provision in the ENA provides that SunCal pays for ARRA staff costs and consultant expenses. RECOMMENDATION Provide negotiating direction regarding SunCal's request to amend the ENA to provide a time extension of Mandatory Milestones to ARRA staff in closed session. fully submitte By: Leslie Little Development Services Director Base Reuse and Community Development Manager Attachment: 1. Letter from SunCal Companies to the ARRA, dated January 30, 2008 orj Sun Cal Companies January 30, 2008 Mr. David Brandt Deputy Executive Director Alameda Reuse and Redevelopment Authority 2263 Santa Clara Ave Alameda, California 94501 Dear Mr. Brandt: OAKLAND OFFICE 300 FRANK H. OGAWA PLAZA, SUITE 342 OAKLAND, CA 94612 MAIN 510 251 0711 FAX 510 251 0744 WWW.SUNCAL.COM SunCal Companies entered into an Exclusive Negotiation Agreement (ENA) with the Alameda Reuse and Redevelopment Authority (ARRA) on July 18, 2007. The ENA outlines a multi -year pre - development period during which SunCal, the ARRA, the Alameda community and numerous State and federal agencies must work together to finalize a development plan and implementation program. To achieve this end, the ENA set forth a number of mandatory and non - mandatory milestones. The milestone schedule set forth in the ENA was negotiated under the mutual assumption that the Master Developer would proceed with the ARRA's Preliminary Development Concept (PDC) with at most only minor modifications. However, after six months of rigorous site investigation and feasibility analysis, many meetings with community stakeholders and two initial community meetings, SunCal has concluded that the PDC cannot be feasibly implemented without fundamental revisions. Specifically, SunCal's analysis indicates that the PDC was developed based on assumptions of costs for flood, seismic and other geotech mitigation requirements that were significantly underestimated. These changes in the estimated site preparation costs have led SunCal to conclude that single - family residential development is not appropriate in a substantial portion of the PDC footprint where single - family development had been indicated. In addition, SunCal has been pleased by the enthusiasm shown by the community to the potential exploration of a development plan which has residential densities in excess of those called for under the PDC. Given these changed circumstances, SunCal does not believe that compliance with the existing milestone schedule set forth in the ENA will result in the preparation of the best development plan for Alameda Point. SunCal would like the opportunity to fully explore and work through the development potentials of Alameda Point with the community. To achieve this goal, pursuant to Section 4.1.2 of the ENA, SunCal would propose to amend Exhibit B (the "Approved Time Schedule ") of the ENA to extend the milestone dates for the submission of a Development Concept (and associated plans and documents) and subsequent Master Plan by six months to September 19, 2008 and November 19, 2008 respectively. During that period of time SunCal would determine the highest and best development at Alameda Point. Sincerely, l Pat Keliher VP Operations