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2008-03-05 ARRA PacketAGENDA Special Meeting of the Governing Body of the Alameda Reuse and Redevelopment Authority * * * * * * ** 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, March 5, 2008 Meeting will begin at 6:00 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 (54956.8): Property: Estuary Park Negotiating parties: ARRA and Navy Under negotiation: Price and Terms 3 -B. CONFERENCE WITH REAL PROPERTY NEGOTIATOR (54956.8): Property: Alameda Point Negotiating parties: ARRA and SCC Alameda Point LLC 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. Special ARRA Closed Session Council Chamber, Room 391 March 5, 2008 6:00 p.m. Item 3 -A. This report is distributed to the Chair and Boardmembers under separate cover. Item 3 -B. This report is an oral report only. AGENDA Regular Meeting of the Governing Body of the Alameda Reuse and Redevelopment Authority * * * * * * ** Alameda City Hall Council Chamber, Room 390 2263 Santa Clara Avenue Alameda, CA 94501 1. ROLL CALL 2. CONSENT CALENDAR Wednesday, March 5, 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 February 6, 2008. 2 -B. Provide Building 24 for No Cost to the American Heart Association for a Fundraiser. 2 -C. Approve Sublease for NRC Environmental Services at Alameda Point. 2 -D. Approve Sublease for Pacific Fine Foods at Alameda Point. 2 -E. Accept the City of Alameda Homeless Needs Assessment Prepared by PMC in Support of the Homeless Screening Process at the North Housing Parcel. 3. REGULAR AGENDA ITEMS None. 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. 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. APPROVED MINUTES OF THE REGULAR MEETING OF THE ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY Wednesday, February 6, 2008 The meeting convened at 7:15 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 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. 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. Provide Negotiating Direction Regarding SunCal Companies' Request to Amend the Exclusive Negotiation Agreement to Provide a Time Extension of Mandatory Milestones Debbie Potter, Base Reuse and Community Development Manager, stated that staff received a letter from SunCal requesting a time extension for several of the mandatory milestones contained in ENA: submittal of the development concept and submittal of the draft master plan. On the original schedule, the development concept, along with an infrastructure plan and business plan, were due on March 19, with the draft master plan due on May 19. With the 6 month extension, the due dates would be September 19 and November 19, respectively. Staff recommends the extension be granted if several conditions are met: information and reporting of existing studies and future studies be conducted in the next 6 months, along with expenditure of funds to conclude some studies necessary to get SunCal to its development concept and draft master plan; and monitoring activities to make sure funds are being spent and work is being undertaken in an aggressive, efficient, and thoughtful way to move SunCal and the community to the development concept and draft master plan. Member Matarrese asked, for the public's information, the reason why SunCal was requesting an extension. Ms. Potter explained that SunCal requested the extension because they have concluded that the PDC is not a financially and physically viable land plan. Initially when the ENA was negotiated and the time plan was set in place, the time plan was predicated on the assumption that the PDC would be the land plan, and the work that SunCal would undertake would be to refine that PDC document and refine some of the due diligence work and move the PDC to the next step. With the conclusion by SunCal that the PDC is not a feasible land plan, they have indicated that they would request additional time such that they can use that time to work with the community, continue their due diligence, and come up with what they feel and believe is the best land plan based on financial viability, what the physical constraints of the site would require for a land plan, and what the community would find as a suitable land plan for Alameda Point. Given the research and due diligence that SunCal has done to date, staff is supportive of the notion that, based on their business model, and the assumptions they've made about engineering viability and risks they're willing to take as a company, that the PDC is not necessarily the appropriate land plan for them to carry out as our master planner, and that it makes sense for them to pursue other land plans that may be more feasible from their perspective, financially, technically, and from a market perspective. Staff recommends the time extension with conditions based on performance — that the ARRA Board and community should be comfortable that SunCal is undertaking work to advance the development concept and the draft master plan. Member deHaan expressed concern that the reports indicate that single family homes are what doesn't make economic sense, but would like to know about the rest of the project, and whether Suncal is satisfied. Ms. Potter explained that the focus of the analysis regarding the viability of the single family homes has been on the north east quadrant of the site, the area that SunCal has concluded single family homes aren't going to work from a technical and physical perspective, but that they are not ruling out single family homes in other areas of the property. The land plan they want to explore would include residential, commercial, adaptive reuse of the existing historic structures, and open space. SunCal is still evaluating the whole range of uses for Alameda Point to understand the proper mix of uses that makes sense and are not deviating from a mixed -use project Member Matarrese asked whether the peer reviewers concur on the technical reports conducted on the flood plains. Ms. Potter explained that the peer review is limited and focused on the existing conditions as documented by SunCal's consultants and the consultants who worked on the PDC, and the technologies that could be put into place to build the various types of development. What has been missing from the peer review to date is the cost estimates have yet to be prepared. What might need to happen by way of technologies and mitigations to allow development to go forward have not been costed yet, so we know a portion of the equation in terms of the issues that have been identified about liquefaction, seismic and slope stability. The challenge going forward for SunCal is their proposal on how they're going to mitigate those impacts and what they believe will be the appropriate development given the conditions. Ms. Potter clarified for Member Matarrese that our peer reviewers are in agreement with the assessment of the existing physical conditions. Chair Johnson called the public speakers. David Howard, Action Alameda, discussed density of homes and a cap of 2000 homes at Alameda Point. He also suggested that if the ARRA consider SunCal's extension request, that it should not extend beyond September 30th, expressing concerns that SunCal will use the extra time to fund a ballot initiative in the November election to exempt Alameda Point from Measure A. The next speaker, Bill Smith, spoke about below - market rate and affordable housing in other Bay Area cities. Following Mr. Smith was Ann Mitchum who discussed placing more accessible commercial and grocery stores at Alameda Point for low- income and disabled people living at Alameda Point. The final speaker, Beth Krase, Alameda Architectural Preservation Society, spoke in support of the time extension for SunCal to allow them more time to consider the potential reuses of historic buildings at Alameda Point. Member deHaan discussed the transportation solutions and housing density with Mr. Pat Keliher, SunCal's Project Manager for Alameda Point. Mr. Keliher affirmed Member deHaan's question on whether SunCal is comfortable with the ambitious schedule. Member Gilmore discussed that we should fully expect there will be additional information or refinement of information that may change circumstances going forward, and we should take the time to analyze new information and figure out if it changes the plan or timeline. The project is not a race and should be done right, rather than quickly. Member Matarrese motioned to provide negotiation direction to staff regarding SunCal's request to amend the ENA to provide a time extension of Mandatory Milestones. Member Tam seconded the motion and was passed by the following voice votes: Ayes — 5, Noes — 0, Abstentions — 0. 4. ORAL REPORTS 4 -A. Oral report from Member Matarrese, Restoration Advisory Board (RAB) representative. The RAB met on January 10`h with two key items on the agenda: 1) Site 24 Feasibility Study which outlined a range of plans for remediation which the Navy will evaluate, and 2) an update on sampling being done and remediation activities of Site 34 along the north west, bounded by the estuary. The next RAB meeting is Feb. 7. 5. ORAL COMMUNICATIONS, NON - AGENDA (PUBLIC COMMENT) There were no speakers. 6. COMMUNICATIONS FROM THE GOVERNING BODY Member deHaan requested a follow -up on the discussion regarding the improvements on the piers. Leslie Little, Development Services Director, confirmed that there will be feedback to the ARRA Board at a future meeting. 7. ADJOURNMENT Meeting was adjourned at 7:52 p.m. by Chair Johnson. Respectfully submitted, Irma Glidden ARRA Secretary Alameda Reuse and Redevelopment Authority Interoffice Memorandum March 5, 2008 TO: Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority FROM: Debra Kurita, Executive Director SUBJ: Provide Building 24 for No Cost to the American Heart Association for a Fundraiser BACKGROUND The American Heart Association is conducting a benefit dinner on April 27, 2008. Additionally, preparation for the event will require use of the facility from April 24 — 26. Area 51 Productions has been selected to host this event in Building 24 at Alameda Point and is familiar with the occupancy and conditions of the building use. DISCUSSION Area 51 Productions is donating its time and services for this event and is asking the Alameda Reuse and Redevelopment Authority (ARRA) to consider providing the building at no fee for three preparation days, and the actual event day. Area 51 Productions estimates that its time and services would equal $26,000. BUDGET CONSIDERATION / FINANCIAL IMPACT The regular License Fee for an event of this type would be $1,000 per day for set -up and $2,000 for the event day, totaling $5,000. RECOMMENDATION Provide Building 24 at no cost for this event. By: slie Little Development Services Director Nanette Ban s Finance & Administration Manager Alameda Reuse and Redevelopment Authority Interoffice Memorandum March 5, 2008 TO: Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority FROM: Debra Kurita, Executive Director SUBJ: Approve Sublease for NRC Environmental Services at Alameda Point BACKGROUND The Alameda Reuse and Redevelopment Authority (ARRA) governing body approve all Alameda Point subleases with a lease term greater than one year. The proposed sublease for NRC Environmental Services is for two years. DISCUSSION Attachment A describes the business terms for the proposed sublease for NRC Environmental Services for a portion of Building 527. The rent for NRC ENVIRONMENTAL SERVICES is $64,800 annually, or $0.90 per sq. ft. in the first year with a 3% increase each year in the subsequent years for the office use. Building 527 is in good condition. NRC Environmental Services has requested to start the lease in March 2008 and to begin paying rent on April 1, 2008. This period will be spent readying the space for their occupancy by installing furniture, telephone lines, and a Local Area Network. In accordance with the Exclusive Negotiating Agreement between the ARRA and SunCal Development, this lease has been discussed with representatives from SunCal and has their concurrence. BUDGET CONSIDERATION / FINANCIAL IMPACT The Lease will generate $59,400 in the first year. These funds will be retained by the ARRA. RECOMMENDATION Approve the proposed sublease agreement. Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority By: R lly submit -d, slie Little Development Services Director Nanette Banks Finance & Administration Manager Attachment: A. Proposed Sublease Business Terms B. Site Map March 5, 2008 Page 2 ATTACHMENT A PROPOSED SUBLEASE BUSINESS TERMS TENANT BUILDING SIZE (SF) TERM RENT NRC Environmental Services 527 6,000 2 yrs $5,400/mo. ATTACH ENT 1 0 ORIO 0 Ci) Alameda Reuse and Redevelopment Authority Interoffice Memorandum March 5, 2008 TO: Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority FROM: Debra Kurita, Executive Director SUBJ: Approve Sublease for Pacific Fine Foods at Alameda Point BACKGROUND The Alameda Reuse and Redevelopment Authority (ARRA) governing body approves all Alameda Point subleases with a lease teiiii greater than one year. The proposed sublease for Pacific Fine Foods is for five years plus a three year renewal option. DISCUSSION Attachment A describes the business terms for the proposed sublease renewal for Pacific Fine Foods in Building 42. The rent for PACIFIC FINE FOODS is $18,857 annually, or $0.53 per sq. ft. in the first year and a 3% increase each year in the subsequent years, including the option period, for food service use. Building 42 is in fair condition. Pacific Fine Foods has requested a renewal for five years plus a three year option to extend the lease. The lease includes language allowing the lease to be canceled with a 90 day written notice once the extension has become operative. In accordance with the Exclusive Negotiating Agreement, this sublease has been discussed with representatives from SunCal Companies and has their concurrence. BUDGET CONSIDERATION / FINANCIAL IMPACT The lease will generate $18,857 in the first year. These funds will be retained by the ARRA. RECOMMENDATION Approve the proposed sublease agreement. Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority By: Respectfully submitted, Leslie Little Development Services Director Nanette Banks Finance & Administration Manager Attachment: A. Proposed Sublease Business Terms B. Site Map March 5, 2008 Page 2 ATTACHMENT A PROPOSED SUBLEASE BUSINESS TERMS TENANT BUILDING SIZE (SF) TERM RENT Pacific Fine Foods 42 2,965 5 yrs + 3 yr option to renew $1,571/mo. / MONA- • ATTACHMENT 1 Alameda Reuse and Redevelopment Authority Interoffice Memorandum To: Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority 2 -F, From: Debra Kurita, Executive Director Date: March 5, 2008 Re: Accept the City of Alameda Homeless Needs Assessment Prepared by PMC World for the North Housing Parcel Screening Process BACKGROUND On November 5, 2007, the Navy declared an additional 42 acres at the former Naval Air Station Alameda (Alameda Point) as surplus. The property, referred to as the North Housing Parcel, was previously used by the Coast Guard. The surplus declaration triggers a legislatively prescribed screening process created by the McKinney -Vento Act. This act requires the Federal Government to prioritize any military surplus property to meet homeless needs for both housing and services. The screening process is used to solicit, evaluate, and accommodate homeless assistance requirements and then, subsequently, public uses in planning and implementing the reuse of the North Housing Parcel. The Alameda Reuse and Redevelopment Authority (ARRA), as the Local Redevelopment Authority (LRA), is responsible for conducting the screening process. As required, within 30 days of the Navy's surplus declaration, the ARRA published a Notice of Availability of Surplus Property on November 16, 2007. An informational workshop for homeless services providers and organizations eligible for Public Benefit Conveyances (PBCs) was held on December 6, 2007. Notices of Interest (NOIs) must be submitted by Friday, March 7, 2008. DISCUSSION When NOI's are received, the ARRA is obligated to consider and accommodate homeless providers' needs. These needs are balanced against other public and private economic development needs when determining the future reuse of the North Housing Parcel. A key component of evaluating requested homeless accommodations is understanding how well the proposed accommodation addresses a gap or un- served need in the continuum of care for the homeless. PMC World, an Oakland -based consulting firm, was retained to prepare a Homeless Needs Assessment (Needs Assessment) to support the screening/evaluation process. PMC's work on the Needs Assessment is also part of its consultant work being performed for the City with the Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority March 5, 2008 Page 2 update of the Housing Element. The Needs Assessment, on file with the City Clerk's Office, is also a resource for the Housing Element. The Needs Assessment is organized in eight sections: • Executive Summary • Introduction • Homelessness in the City of Alameda • Homeless Services and Housing Available in the City of Alameda • Identifying and Prioritizing Unmet Needs • Legislative and Programmatic Efforts to Eliminate Homelessness • Current Methods and Proven Practices to Address Homelessness • Conclusion For purposes of evaluating requests for homeless accommodations, the sections on Homelessness in the City of Alameda and Identifying and Prioritizing Unmet Needs, provide essential information. The sections on Existing Services and Housing, Legislative and Programmatic Efforts to End Homelessness, and "Best Practices" to address Homelessness provide the context for the priority unmet needs and the most effective ways to address those identified gaps in the continuum of care. Homelessness in Alameda Homelessness is typically viewed as a regional issue as the homeless population, by definition, is transient and the homeless often shift between jurisdictions for temporary housing and services. Therefore, homeless counts are done infrequently, and, when conducted, are usually at a regional level. A key challenge of understanding the needs of the homeless in Alameda is to identify the number of homeless people in the City, a sub - region of the County. PMC evaluated several quantitative and qualitative sources to establish a probable range of the number of homeless in Alameda in any given year. In addition to the U.S. Census data and the 2004 Alameda Countywide Shelter and Services Survey, current waiting lists for transitional, assisted and public housing in Alameda were considered. Based on these sources, PMC has estimated a homeless population between 828 and 1,062, with an average across all estimation methods of 961 homeless people in Alameda and the immediate Alameda region. For purposes of the screening process, a homeless person is defined in the Federal McKinney - Vento Act. The Act defines a homeless person as "an individual who lacks a fixed, regular, and adequate nighttime residence...." The Act has further defined homelessness for children and youth to include "children and youths who are sharing the housing of other persons due to loss of housing, economic hardship...living in motels, hotels, trailer parks...living in cars, public spaces, ...(or) substandard housing..." Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority March 5, 2008 Page 3 Homelessness is often equated with "street people" who can be seen living on the streets in urban areas. Numerous studies have found that this most visible sub -set of the homeless population is also the minority of the homeless population, totaling between 10 and 20 percent of homeless people. This hard -to -serve population is often referred to as the chronic homeless. The majority, between 80 and 90 percent, are typically homeless for short periods, utilizing temporary shelters or low -cost hotels, or moving from place to place staying with family, friends, or charitable organizations. An estimate of the number of homeless people in Alameda provides a yardstick for evaluating proposed homeless accommodations at the North Housing Parcel. It is an order of magnitude number that assists in determining the appropriateness of requests for the number of acres of land and number of residential units in individual NOIs and the cumulative total request contained in all NOIs. The requested homeless accommodations are evaluated along with other community needs. The end result is an amendment to the Community Reuse Plan for the reuse of the North Housing Parcel that balances the homeless accommodation, based in part on the identified number of homeless in Alameda, with economic development goals. Identifying and Prioritizing Unmet Needs The Federal Housing and Urban Development Department (HUD) makes the determination that the proposed accommodation contained in the amended Reuse Plan is appropriate given the estimated homeless population and gaps in the continuum of care. Therefore, identifying and prioritizing unmet needs is the second key factor in evaluating proposed homeless accommodations. PMC conducted two workshops in January 2008. Sixteen people, representing thirteen organizations, participated in the workshops. Participants from the County, City departments, homeless service organizations, and homeless housing providers were tasked with developing and prioritizing a list of unmet homeless needs in Alameda. Eight unmet needs were identified and are listed in the order of importance: • Permanent Supportive Housing • Protection of Existing Affordable Housing Stock • Access to Basic Amenities • Transportation • Educational Opportunities • Programs for Children and Young Adults • Economic Opportunities • Mentoring This list of prioritized unmet needs will be used to evaluate proposed accommodations. Federal regulations require that homeless services providers submit NOIs that specifically address identified unmet needs to be considered for an accommodation. Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority , March 5, 2008 Page 4 Completion of the City of Alameda Homeless Needs Assessment and its availability to interested homeless services providers as a technical study that documents the estimated number of homeless people and identifies and prioritizes unmet needs in Alameda is a key milestone in the screening process. Following ARRA acceptance of the Needs Assessment, interested homeless providers will complete and submit their NOIs on Friday, March 7, 2008. NOIs will be reviewed against the criteria described above, along with other criteria including organizational capacity and financial ability to implement the proposed accommodation. As the NOIs are being evaluated, the process to amend the Community Reuse Plan will commence. This community effort will involve several workshops to solicit the community's ideas for the reuse of the North Housing Parcel. Any proposed homeless accommodation will be presented to the community as part of. the Community Reuse Plan Amendment and will ultimately be integrated into the Amendment. Following the community effort, the Amendment to the Reuse Plan, including the homeless accommodation, will be presented to the ARRA at a public hearing for final approval. The ARRA- approved Amendment will then be submitted to HUD for its review and approval. BUDGET CONSIDERATION/FINANCIAL IMPACT Accepting the City of Alameda Homeless Needs Assessment does not impact the City's General Fund. The cost of preparing the Needs Assessment was paid from a Department of Defense - Office of Economic Adjustment grant. RECOMMENDATION Accept the City of Alameda Homeless Needs Assessment prepared in support of the screening process for the North Housing Parcel. Res • ectf , y submitted, eshe Little Development Services Director By: D ° bbie Potter Base Reuse and Community Development Manager G:\Comdev\Base Reuse& Redevp \ARRA \STAFFREP\2008 \03 - Mar 5\2 -E Homeless Needs Assess.doc CITY OF ALAMEDA • CALIFORNIA SPECIAL JOINT MEETING OF THE CITY COUNCIL, ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY (ARRA), AND COMMUNITY IMPROVEMENT COMMISSION (CIC) WEDNESDAY - - - MARCH 5, 2008 - - - 7:01 P.M. Location: City Council Chambers, City Hall, corner of Santa Clara Avenue and Oak Street. Public Participation Anyone wishing to address the Council /Board /Commission on agenda items or business introduced by the Council /Board /Commission may speak for a maximum of 3 minutes per agenda item when the subject is before the Council /Board /Commission. Please file a speaker's slip with the Deputy City Clerk if you wish to speak. 1. ROLL CALL - City Council, ARRA, CIC 2. AGENDA ITEM 2 -A. Recommendation to approve first amendment to Alameda Point Exclusive Negotiation Agreement between the City Council, Alameda Reuse and Redevelopment Authority, Community Improvement Commission, and SCC Alameda Point, LLC to extend the timeline for several mandatory milestones and create a new Developer Consultant Costs account. (Development Services) 3. ADJOURNMENT - City Council, ARRA, CIC Beverly Jo ns. Ma or Chair, Alam o +. us and Redevelopment Authority and Community Improvement Commission - CITY OF ALAMEDA Memorandum To: Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority Honorable Chair and Members of the Community Improvement Commission Honorable Mayor and Members of the City Council From: Debra Kurita Executive Director/City Manager Date: March 5, 2008 Re: Approve First Amendment to Alameda Point Exclusive Negotiation Agreement Between the Alameda Reuse and Redevelopment Authority, Community Improvement Commission, City of Alameda, and SCC Alameda Point, LLC, Extending the Timeline for Several Mandatory Milestones and Creating a New Developer Consultant Costs Account 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 site investigations; held two community meetings; and met with local, regional, State, and Federal stakeholders, including the United States Navy (Navy). The ENA set forth a multi-year timeline and included a schedule of mandatory performance milestones outlined in Exhibit B-1 of the ENA ("Schedule of Performance"). The Schedule of Performance assumed that SunCal would implement the Alameda Point Preliminary Development Concept (PDC), which served as the basis for the 2006 final draft Conveyance Term Sheet with the Navy. During its evaluation of the PDC, SunCal conducted site investigations and technical analyses and determined that the PDC is not financially feasible. SunCai's due diligence indicates that the previous costs to mitigate the site's flood and geotechnical conditions were underestimated, and that revenues from certain portions of the site would not support these increased costs. As a result of these circumstances, SunCal wants 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 outlined Agenda Item #2-A ARRA/CIC/CC 3-5-08 Honorable Chair and Members of the Alameda Reuse and March 5, 2008 Redevelopment Authority Page 2 of 5 Honorable Chair and Members of the Community Improvement Commission Honorable Mayor and Members of the City Council in the ENA. As a result, SunCal has requested that the ARRA approve a six -month extension of five Mandatory Milestones in the Schedule of Performance, including the submission of the Development Concept (and its related plans) and the Entitlement Application, to September 19, 2008, and November 18, 2008, respectively. SunCal did not request an extension of the ENA's overall 24 -month timeline. On February 6, 2008, the ARRA considered SunCal's request for a time extension and directed staff to negotiate an amendment to the ENA to provide such an extension subject to specific terms and conditions. The recommended First Amendment to the ENA ( "Amendment ") is attached. In addition to the new information regarding the site conditions at Alameda Point, the housing and credit markets have continued to decline dramatically in recent months. A number of SunCal projects within California are now seriously financially distressed and, since mid- December, SunCal has significantly scaled back its planning and pre - development activities with regard to the Alameda Point project. SunCal has informed ARRA staff that it has significant outstanding invoices due and owing to its consultants. DISCUSSION In response to SunCal's request for an extension of its project milestone schedule, the ARRA Board directed staff to negotiate an ENA amendment that provides SunCal the additional time to re -plan the project to accommodate the newly discovered site conditions. However the ARRA Board also directed staff to negotiate additional ENA provisions to more fully ensure that sufficient developer investment is made to achieve the deferred milestones. The following provides an overview of the terms and conditions that were requested by the ARRA and how those issues are addressed in the negotiated ENA Amendment: 1) Document Delivery. The ARRA requested SunCal to provide copies to ARRA staff of specific, important components of its work so that ARRA staff can gauge the level of effort required by both parties to meet the extended Mandatory Milestones. The "Document Delivery" condition requires that SunCal, within 15 days of the approved Amendment, provide to ARRA staff copies of the following work conducted to date: Adaptive Reuse. Historic preservation and adaptive reuse technical analyses; ii. Market Studies. Market reports or studies of land uses considered for Alameda Point; and Project Pro Forma. Most current drafts of Project Pro Formas. All proprietary work will be transmitted directly to ARRA's consultants. Honorable Chair and Members of the Alameda Reuse and March 5, 2008 Redevelopment Authority Page 3 of 5 Honorable Chair and Members of the Community Improvement Commission Honorable Mayor and Members of the City Council SunCal agreed to those provisions, and they are included in the proposed amendment. 2) Negotiating Costs Account. The existing ENA provides that SunCal must deposit $342,000 each quarter into a Negotiating Cost Account in order to fully fund ARRA's costs. SunCal made its first two quarterly deposits in July and October of 2007, but has not paid its January 2008 payment. Currently, there is a fund balance of approximately $425,000 in the ARRA's Negotiating Costs Account, partially because of the slowdown in activity with SunCal. The ARRA suggested that accumulated balances over the $342,000 base amount would be more efficiently dedicated towards SunCal's technical consultant costs. The Amendment allows this balance to be applied in the following manner: $342,000 towards SunCal's outstanding January 18, 2008, quarterly deposit to the Negotiating Costs Account; and $83,000 to SunCal to pay a portion of third - party costs consulting costs incurred to date. Subsequently, SunCal will be obligated to replenish the Negotiating Costs Account to ensure that at the commencement of each new quarter, there is a full $342,000 in the account, as shown in the attached Payment Schedule. SunCal agreed to these provisions, and they are included in the proposed amendment. 3) Developer Consultant Costs Account. To ensure that there would be a transparent source of funding to pay for the necessary project planning activities, the ARRA required that a new account be created to ensure that SunCal will spend the funds necessary to achieve the extended Mandatory Milestones. It is also important to avoid SunCal contractually controlling Alameda Point over the next nine months without making progress on entitling and redeveloping the land. To ensure that work is undertaken, SunCal will deposit additional funds into a new "Developer Consultant Costs Account" and expend a sufficient amount of these funds each month so that SunCal meets the extended Mandatory Milestones. The ARRA proposed that the Developer Consultant Cost Account be fully funded within ten days of the date of the ENA amendment. SunCal has requested that the Account not be funded until April 19, 2008, the date of the next ARRA Negotiating Cost deposit. The following summarizes the parameters of the new Developer Consultant Costs Account: Quarterly Deposit. Beginning in the second quarter of 2008 (April 19, 2008), SunCal will make quarterly deposits of $350,000 over the remaining term of the Amended ENA to a new account that will be held in a separate escrow account established, paid for, and used by SunCal for Honorable Chair and Members of the Alameda Reuse and March 5, 2008 Redevelopment Authority Page 4 of 5 Honorable Chair and Members of the Community Improvement Commission Honorable Mayor and Members of the City Council any third -party consultant or legal expenses incurred after the effective date of the Amendment. As described previously, the first quarter 2008 (January 19, 2008 — April 19, 2008) funds will be used by SunCal to pay for third -party work conducted to date. These first quarter funds consist of $83,000 of surplus funds currently in the ARRA's Negotiating Costs Account and $267,000 from SunCal, for a total $350,000 expenditure. ii. Payment Rate. SunCal will be obligated to expend at a minimum monthly rate of $117,000, which is the monthly average of the quarterly deposit on third -party consultant expenses over the term of the Amended ENA. Failure to expend the full $350,000 at the end of each quarter is a default pursuant to the ENA. iii. Termination or Default. If SunCal terminates or defaults on the Amended ENA, any remaining funds in the Account would revert to the ARRA. Staff concurs with SunCal's proposal to defer its initial Developer Consultant Costs Account deposit to April 19, 2008. The proposed Amendment contains this approach. 4) Monthly Reporting. The ARRA also required that a mechanism for monitoring the monthly progress and expenditures of SunCal be created, as it conducts the work necessary to meet the extended Mandatory Milestones. This will help ensure that activity is underway on redevelopment of Alameda Point. SunCal will be required to provide a monthly report to the ARRA, which includes the following information: 1. Task Descriptions. A reasonably detailed narrative of the tasks accomplished and activities undertaken related to predevelopment of Alameda Point. 2. Invoices. Copies of all invoices from third -party consultants for work expended against the Developer Consultant Costs Account. 3. Expenditures. Accounting of the monthly and cumulative expenditures of the Developer Consultant Costs Account. SunCal agreed to these provisions, and they are included in the proposed Amendment. BUDGET CONSIDERATION /FINANCIAL IMPACT Honorable Chair and Members of the Alameda Reuse and March 5, 2008 Redevelopment Authority Page 5 of 5 Honorable Chair and Members of the Community Improvement Commission Honorable Mayor and Members of the City Council There is no financial impact to the General Fund, CIC, or ARRA budgets. The required deposits, along with a cost recovery provision in the ENA, ensure that the selected developer pays for ARRA staff costs and consultant expenses. RECOMMENDATION Approve the First Amendment to the Alameda Point Exclusive Negotiation Agreement with SCC Alameda Point, LLC (Sun Cal), extending the timeline for several Mandatory Milestones and creating a new Developer Consultant Costs Account. Respect 13/ submitted, 44, e Leslie . Little Development Services Director B : ebbie Potter mmunity Programs Division By: J: nif r Ott R dev lopment Manager LAUDP/JO: Attachments: 1. First Amendment to Alameda Point Exclusive Negotiation Agreement 2. Payment Schedule for SunCal's Quarterly Deposits to Negotiating Costs Account and Developer Consultant Costs Account A I I ACHMENT 1 FIRST AMENDMENT TO ALAMEDA POINT EXCLUSIVE NEGOTIATION AGREEMENT THIS FIRST AMENDMENT TO ALAMEDAP,QINT EXCLUSIVE NEGOTIATION AGREEMENT ( "First Amendment ") is made as of Pi ox (k , 2008 (the "Effective Date "), by and between ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY, a Joint Powers Authority established by the City of Alameda and the Community Improvement Commission under the California Joint Exercise of Powers Act and a public entity lawfully created and existing under the State of California (the "ARRA "), the COMMUNITY IMPROVEMENT COMMISSION OF THE CITY OF ALAMEDA, a public body corporate and politic ( "CIC "), and the CITY OF ALAMEDA, a municipal corporation (the "City ", and together with ARRA and CIC, "Alameda ") and SCC Alameda Point LLC, a Delaware limited liability company ( "Developer "). Alameda and Developer are individually referred to as a "Party" and collectively referred to as the "Parties ". RECITALS This First Amendment is entered upon the basis of the following facts, understandings and intentions of the Parties. A. The Parties entered into that certain Alameda Point Exclusive Negotiation Agreement, dated as of July 18, 2007 (the "Original Agreement "), which shall be amended by this First Amendment. B. Developer has requested an extension of the Mandatory Milestones set forth in Exhibit B -1 of the Original Agreement pursuant to Section 4.2.1 of the Original Agreement. C. The Parties hereto now desire to amend the Original Agreement on the terms and conditions hereinafter set forth. D. The Original Agreement, as amended by this First Amendment, shall hereinafter collectively be referred to as the "Agreement ". AGREEMENT NOW, THEREFORE, in consideration of the mutual terms, covenants, conditions and promises set forth herein, the ARRA, the CIC, the City and Developer agree as follows: 1, Definitions. All capitalized terms used herein shall have the definitions given in the Original Agreement, unless otherwise expressly stated herein. 1 2. Document Delivery. Notwithstanding anything to the contrary in Sections 3.8.1 pertaining to completion and internal review by Developer, and consistent with Section 3.8.3 of the Agreement, on or before the date which is fifteen (15) days from the Effective Date of this First Amendment Developer shall deliver to Alameda copies of the following technical and financial information prepared or commissioned by Developer for the Project and/or the Project Site: (a) all technical feasibility analysis conducted on the historic preservation /adaptive reuse program for the Project; (b) third -party market reports or studies of land uses considered at the Project Site completed in connection with securing financing, including, without limitation, the market study prepared by the Concord Group; and (c) the most current draft Project Pro Forma (in pdf form) for high density and low density alternatives. Developer may provide confidential or proprietary information directly to Alameda's consultants. 3. Amended Section 6. Section 6 of the Agreement is hereby amended as follows: a. Amended Heading. The Section 6 heading is hereby deleted and replaced with the following: "Section 6. Alameda Cost Recovery /Reimbursement; Developer Consultant Costs Account." h. Amended Section 6.2. Section 6.2 of the Agreement is hereby amended to add the following: "Alameda shall provide monthly invoices or timesheets, as appropriate, to Developer for Pre - Development Costs to be reimbursed by Developer pursuant to this Section 6." c. Amended Section 6.3. Section 6.3 of the Agreement is hereby amended to add the following: "Alameda shall have the right without Developer's consent to adjust line item amounts shown in the Annual Budget so long as such adjustments do not exceed the Annual Budget. By way of example, such adjustments may include adding new consultants, or adjusting funds allocated to staff to consultants or vice versa. if Alameda makes such adjustments, Alameda shall provide the adjusted Annual Budget to Developer within thirty (30) days of completion of such adjustments." d. Amended Section 6.3.1.1. Section 6.3.1.1 of the Agreement is hereby deleted in its entirety and replaced with the following: 6.3.1.1 On the ninetieth (90th) day following the Approval Date, Developer shall deposit additional funds into the Negotiating Costs Account equal to twenty -five percent (25 %) of the Annual Budget (each a "Quarterly Deposit "). Commencing as of April 19, 2008, Developer shall deposit sufficient funds into the Negotiating Costs Account to have a beginning balance of twenty - five percent (25 %) of the Annual Budget (e.g., if twenty -five percent (25 %) of the Annual Budget equals Three Hundred Forty - Two Thousand Two Hundred Four Dollars ($342,204) and there is a beginning balance of One Hundred Thousand Dollars ($100,000), Developer shall deposit Two Hundred Forty -Two Thousand Two 2 Hundred Four ($242,204)). Developer shall continue this process for each ninety (90) day negotiating period until this Agreement is terminated; provided, however, that in any twelve (12) month period, Developer shall not be responsible for reimbursement of Pre - Development Costs in excess of the Annual Budget as attached hereto or as revised as provided below, however, such excess costs shall be shown as an accrued deficit in the Negotiating Costs Account Ledger. e. Amended Section 6.3.1.2. Section 6.3.1.2 of the Agreement is hereby deleted in its entirety and replaced with the following: 6.3.1.2 (a) If a deficit of greater than ten percent (10 %) of the pro -rated Annual Budget has accrued in the Negotiating Costs Account Ledger for three (3) successive quarters, or for three (3) quarters in any calendar year, Developer and Alameda shall meet and confer in good faith to assess the sufficiency of the Annual Budget amount, and may upon the written consent of each, adjust the Annual Budget accordingly. Thereafter, Quarterly Deposits shall consist of twenty -five percent (25 %) of the Annual Budget as revised, plus any deficit accrued in the Negotiating Costs Account Ledger. (b) The Parties may, upon the written consent of each, adjust the Annual Budget. If Alameda determines that an increase in the Annual Budget is necessary and Developer does not agree, then Alameda shall have no obligation to perform, or cause to be performed, any Pre - Development Work for which such increased amount is necessary, pending resolution of the dispute. f. New Section 6.3.2. Section 6 of the Agreement is hereby amended to add the following new Section 6.3.2: 6.3.2 Use of Negotiating Costs Account Funds Accrued as of the Effective Date of the First Amendment. The Parties acknowledge that as of the Effective Date of the First Amendment, the Negotiating Costs Account balance equals Four Hundred Twenty -Five Thousand Thirty -Seven Dollars ($425,037). Alameda shall apply the balance as follows: (a) Three Hundred Forty Two Thousand Two Hundred Four Dollars ($342, 204) shall be applied as the Quarterly Deposit due on January 18, 2008; and (b) Alameda shall reimburse to Developer the surplus funds in the amount of Eighty -Two Thousand, Eight Hundred Thirty -Three Dollars ($82,833). 3 g. New Section 6.4. Section 6 of the Agreement is hereby amended to add the following new Section 6.4: 6.4 Initial Deposit; Developer Consultant Costs Account Ledger. 6.4.1.1 On or before April 19, 2008, (a) Developer and Alameda shall jointly establish an escrow account (the "Developer Consultant Costs Account ") with First American Title Company at its office located in PIeasanton, California ( "Escrow Holder ") solely for purposes of paying consultant and legal fees and costs of Developer's third -party consultants and attorneys incurred solely from work on the Project on and after April 19, 2008 (collectively, "Developer Consultant Costs ") except as provided in Sections 6.4.1 and 6.4.5 below, (b) Developer shall deposit cash in the amount of Three Hundred Fifty Thousand Dollars ($350,000) into the Developer Consultant Costs Account (the "Initial Developer Consultant Deposit "), and (c) Developer shall provide a list of consultants Developer has engaged, or intends to engage, to work on the Project (the "Consultant List "). Developer shall have the right to update and/or revise the Consultant List. 6.4.1.2 Interest earned on funds in the Developer Consultant Costs Account shall accrue to that account. Developer shall pay all escrow fees related to the Developer Consultant Costs Account, which may be paid out of the funds in that account. 6.4.1.3 All invoices and charges for Developer Consultant Costs made against that account (including invoices and charges paid pursuant to Section 6.4.2 below) shall be recorded on a separate ledger (the "Developer Consultant Costs Account Ledger "). 6.4.1.4 If Developer's actual Developer Consultant Costs for such ninety (90) day period exceed the Initial Developer Consultant Deposit, Developer shall fund such costs from its own sources. 6,4.1 Federal Transportation Authority Grant. Alameda has obtained a Federal Transportation Authority ( "FTA ") grant for transportation feasibility analyses. Matching funds in the amount of Sixty Thousand Dollars ($60,000) are required for the release of the FTA grant funds, Immediately upon deposit of the Initial Developer Consultant Deposit into the Developer Consultant Costs 4 Account, Developer shall instruct Escrow Holder to pay to Alameda Sixty Thousand Dollars ($60,000) of the Initial Developer Consultant Deposit, which Alameda shall apply as the matching funds for the FTA grant. 6.4.2 Mechanism for Funding Ongoing Developer Consultant Costs. On July 19, 2008 and each ninetieth (90th) day thereafter, Developer shall deposit additional funds into the Developer Consultant Costs Account equal to Three Hundred Fifty Thousand Dollars ($350,000) (each a "Developer Consultant Cost Quarterly Deposit "). Developer shall continue this process for each ninety (90) day negotiating period until this Agreement is terminated. Any extension of this Agreement as provided herein shall extend the procedures set forth in this Section 6.4.2. Section 6.4.3 Monthly Reporting. Commencing on April 19, 2008 and every thirty (30) days thereafter, Developer shall provide a report (the "Monthly Report ") to Alameda. The first Monthly Report shall cover the period commencing on the Effective Date of the First Amendment through April 19, 2008 and shall include payments made pursuant to Section 6.5.2 below as part of the documentation required pursuant to this Section 6.4.3. The Monthly Report shall, at a minimum, include: (a) a narrative of the tasks accomplished and activities undertaken by Developer's consultants and attorneys on the Project; (b) updates and/or revisions to the Consultant List, if applicable; (c) copies of all invoices for Developer Consultant Costs paid pursuant to Section 6.5.2 below (solely as part of the first Monthly Report); (d) copies of all invoices for Developer Consultant Costs billed to the Developer Consultant Cost Account; and (e) a tally of monthly and cumulative expenditures paid pursuant to Section 6.5.2 below and from the Consultant Cost Account. If Alameda disputes any invoice or charge to the Developer Consultant Costs Account, Alameda shall notify Developer, and if the Parties so agree that an invoice or charge has been inappropriately charged against the Developer Consultant Costs Account, Developer shall promptly replenish the Developer Consultant Costs Account in the amount of the inappropriate invoice(s) or charge(s). Section 6.4.4 Payment Rate. Developer shall pay Developer Consultant Costs from the Developer Consultant Costs Account at a rate of One Hundred Seventeen Thousand Dollars ($117,000) per month plus or minus ten percent (10%). If Developer satisfies all of the Mandatory Milestones (except to the extent the Mandatory Milestone for the Project Pro Forma has been waived by Alameda pursuant to Section 4.2.2 above) on or before the submission and completion dates provided on Exhibit B -1 attached hereto, the Parties shall meet and confer in good faith to re- evaluate the amount and/or rate to be expended by Developer thereafter pursuant to this Section 6.4.4 based on mutually acceptable projections and shall revise Section 7.1.7 below to reflect any mutually agreed upon amount and/or rate adjustment consistent with mutually agreed upon revisions to this Section 6.4.4. 6.4.5 Termination. As part of the establishment of the Developer Consultant Costs Account pursuant to Section 6.4.1.1 above, the Parties shall instruct Escrow Holder that upon termination of this Agreement any surplus funds in the Developer Consultant Costs Account remaining after (a) the completion of the ninety (90) day negotiating period during which this Agreement was terminated, and (b) payment of Developer Consultant Development Costs incurred by Developer after the Effective Date of the First Amendment and prior to such termination, shall be paid either to Alameda pursuant to a termination pursuant to Section 8.1 of this Agreement, or to Developer pursuant to a termination pursuant to Sections 8.2 or 8.3 of this Agreement. Alameda shall have no obligation whatsoever to pay any Developer Consultant Costs, whether incurred prior to or after termination of this Agreement. This Section 6.4.5 shall survive the expiration or termination of this Agreement. h. New Section 6.5. Section 6 of the Agreement is hereby amended to add the following new Section 6.5: Section 6.5 Payment of Consultants. 6.5.1 July 18, 2007 through Effective Date. Developer represents and warrants that it shall pay within thirty (30) days of the Effective Date of the First Amendment, all unpaid Developer Consultant Costs incurred during the period from July 18, 2007 to the Effective Date of the First Amendment, except to the extent any such Developer Consultants Costs are subject to dispute between Developer and the applicable consultant. 6.5.2 Effective Date through April 19, 2008. Commencing on the Effective Date of the First Amendment, 6 Developer shall pay Developer's costs incurred solely from work on the Project (including consultant and legal fees and costs of Developer's third -party consultants and attorneys) incurred during the period from the Effective Date of the First Amendment to April 19, 2008 at a rate of One Hundred Seventeen Thousand Dollars ($117,000) per month plus or minus ten percent (10%) (prorated for the partial months). i. Amended Section 7.1.2. Section 7.1.2 of the Agreement is hereby deleted in its entirety and replaced with the following: 7.1.2 Failure of Developer to Make Requested Deposits. 7.1.2.1 In the event Developer fails to make the Initial Deposit or any Quarterly Deposit pursuant to the procedure set forth in Section 6 of this Agreement, Alameda shall have the right to give written notice thereof to Developer specifying the amount of the deposit which was not made. Following the receipt of such notice, Developer shall have fifteen (15) business days to make the required deposit and Alameda shall have the right to suspend all Pre - Development Work being performed by third parties paid by Alameda during such cure period. If Developer has not then made the required deposit, Alameda shall have the right to terminate this Agreement by written notice to Developer. 7.1.2.1 In the event Developer fails to make the Initial Developer Consultant Deposit or any Developer Consultant Cost Quarterly Deposit pursuant to the procedure set forth in Section 6 of this Agreement, Alameda shall have the right to give written notice thereof to Developer specifying the amount of the deposit which was not made. Following the receipt of such notice, Developer shall have fifteen (15) business days to make the required deposit. If Developer has not then made the required deposit, Alameda shall have the right to terminate this Agreement by written notice to Developer. j. New Section 7.1.7. Section 7 of the Agreement is hereby amended to add the following Section 7.1.7: 7.1.7 Failure of Developer to Pay Developer Consultant Costs. 7.1.7.1 If at the end of the thirty (30) day period following each Developer Consultant Cost Quarterly Deposit, Developer has failed to expend Three Hundred Fifty Thousand 7 Dollars ($350,000) (subject to the ten percent (10 %) tolerance provided in Section 6.4.4 above) during the prior quarter, then such failure shall be a Developer Event of Default and Alameda shall have the right to terminate this Agreement by written notice to Developer. 7.1.7.2 If as of April 19, 2008, Developer has failed to expend One Hundred Seventeen Thousand Dollars ($117,000) per month plus or minus ten percent (10 %) (prorated for the partial months) required by Section 6.5.2 above), then such failure shall be a Developer Event of Default and Alameda shall have the right to terminate this Agreement by written notice to Developer. 4. Amended Exhibit B -1. Exhibit B -1 to the Agreement is deleted in its entirety and replaced with Exhibit B -1 attached hereto. 5. Amended Exhibit B -2. Exhibit B -2 to the Agreement is deleted in its entirety and replaced with Exhibit B -2 attached hereto. 6. Amended Exhibit C. Exhibit C to the Agreement is deleted in its entirety and replaced with Exhibit C attached hereto. 7. Authority. The persons signing below represent that they have the authority to bind their respective party, and that all necessary board of directors', shareholders', partners', redevelopment agency's or other approvals have been obtained. 8. Counterparts. This First Amendment may be signed by different parties hereto in counterparts with the same effect as if the signatures to each counterpart were upon a single instrument. All counterparts shall be deemed an original of this First Amendment. 9. Agreement in Full Force and Effect. Except as otherwise expressly modified by the terms of this First Amendment, the Agreement remains unchanged and in full force and effect. [Remainder of page intentionally blank.] 8 IN WITNESS WHEREOF, the Parties have executed this First Amendment as of the day and year first above written. ARRA: Alameda Reuse and Redevelopment Authority, a joint powers authority formed under California law By: Name: Title: CIC: Approved as to form: By: Name: voe- >A A.A &or € Title: A - ,‘s'tAT &EKTeR -AG. Chu 10 SE Community Improvement Commission of the City of Alameda, a public body, corporate and politic By: Name: Title: CITY: City of Alameda, a municipal corporation Approved as to form: eosa L, #)kw-n*--. CowAR/ By: Name: Title: By: Approved as to form: Name: By: Title: Name: Title: 9 /OM, DEVELOPER: SCC Alameda Point LLC, a Delaware li ted liablity company By: Name: Title: V , CJ 10 !3. 3 1 Exhibit B -1 Schedule of Performance (Mandatory Milestones) All defined terms not defined herein shall have the respective meanings ascribed to them in the Agreement to which this Exhibit B -1 is attached. Unless otherwise provided, all Mandatory Milestones are measured from the Effective Date of the Original Agreement (July 18, 2007). A. Mandatory Milestone Submission Date 1. Master Project Schedule Thirty (30) business days; updated quarterly thereafter 2. Development Concept September 19, 2008 3. Infrastructure Plan September 19, 2008 4. Business Plan September 19, 2008 5. Entitlement Application November 19, 2008 B. Mandatory Milestone Completion Date 1. Project Pro Forma November 19, 2008 11 Exhibit B -2 Schedule of Performance (Non - Mandatory Milestones) All terms not defined herein shall have the respective meanings ascribed to them in the Agreement to which this Exhibit B -2 is attached. Unless otherwise provided, all Non - Mandatory Milestones are measured from the Effective Date (for example, eight (8) months means the date which is eight (8) months after the Effective Date). Non - Mandatory Milestones described below are good faith estimates by the Parties of the time required to complete the Transaction Documents. Non- Mandatory Milestone Completion Date 1. EDC MOA Amendment 24 months a. Submit EDC application 19 months b. Finalize EDC MOA Amendment 24 months 2. NEPA Supplemental Environmental Impact Statement (SEIS) 24 months a. Project scoping 14 months b. Circulate Draft SETS 19 months c. Hearings and comments 19 -24 months d. Finalize SEIS 24 months 3. Section 106 Memorandum 24 months a. Revise historic resources report 13 months b. Complete economic study on buildings 15 months c. Finalize Section 106 Memorandum amendment 24 months 12 13 4. USFWS/NMFS Biological Documents 24 months a. Biological Assessment /reinitiate Section 7 consultation with USFWS 12 months b. Finalize new Biological Opinion with USFWS 24 months c. Predator Management Agreement 24 months d. Determine if NMFS Biological Opinion necessary /conduct Biological Assessment 18 months e. Finalize NMFS Biological Opinion 24 months 5. Early Transfer Documents 24 months a. Finalize Draft Navy Term Sheet 18 months b. Draft ETCA 15 months c. Draft Administrative Order (AOC) with Environmental Protection Agency (EPA), Department of Toxic Substances Control, Regional Water Quality Control Board 17 months d. Draft FOSET 18 months e. Public Comment/Finalize ETCA, AOC, FOSET, submit to Governor/EPA 21 months f. Approval by Governor /EPA 24 months g. Final remediation contract and environmental insurance policies 24 months 6. CEQA Documents 24 months a. Project scoping 14 months b. Notice of Preparation 15 months c. Circulate Draft Environmental Impact Report (EIR) 19 months 13 d. Hearings and comments /finalize EIR 24 months 7. CAA/DDA 24 months a. CAA executed 14 months b. Draft DDA 18 months c. Public hearings 18 -24 months d. Approval of DDA 24 months 8. Development Agreement/Entitlements 24 months a. Submit Entitlement Application 16 months b. Public hearings /approvals 18 -24 months c. Development Agreement finalized and approvals granted 24 months 9. Tidelands Trust Exchange Agreement 24 months a. Submit draft Tidelands Trust Exchange Agreement to California State Lands Commission (CLSC) 12 months b. Reach agreement on language with CLSC staff 18 months c. Obtain approval of CLSC 24 months 10. Public Planning Process 24 months a. Introductory meetings/ constraints analysis 3 months b. First round public planning charrettes 4 -6 months c. Second round public planning charrettes 6 -14 months d. Development Concept public review 14 months 14 15 review e. Historic Preservation Plan public 14 -16 months f. Focused topic community meetings 14 -18 months g. Hearings and comments on E1R /DDA /enti t] emen is 18 -24 months 15 T Exhibit C Annual Budget [Attached] r 1 16 N:\A\Alamc\AP■Docs\w-ENA (Alameda Point) (1st Amend) (2-12-08) uj 0. 2 -3 z CO 0 0 0 CC 15 0 z U3 .1.,4 ,.. ',.. =, ,:." ai ci b/ Ea To; 2 TT) N: c4 aS ui cn cv oS ,-- to V) CO 61 61 VT •-• (f) to ....„, c7) 64 gi ••-•• to csi 64 69 g Z4 E4 2 ;-; — , , 1.; 0 , - [ 12 -Month Duration .a. iTi A ..1.t. iz ",2 c0. cv.. —.. (0 — , . c.i. N. a c' u) z; § 8 § § 8 N t-, CO - .- 2) P. 2 2 ,9 ,... " o r.... 01 . ..- v.: d ," 4 ,- CI 1- cif a Crl "-- CV N ..- v- 1-■ 64 64 CA VI (.4 69 61 8 6 6 g lli q tri ui tn. q ci a 1 § . a § § . - Ei § § § gi 8 r.. 0 d .q g g g (') g z-ii - .C, Subtotal Consultant/Legal Services $ 880,229 TOTAL S 1,368,817 Salary Benefits Total CO in °R. 4 co On Lc) d a ..-,-, co °5 (0 .a 0.) co co n co r .. •,- co co 0 K ‘:f tci ai or; o5 r-• co co co 67, 1; 40 49 0 N. .4. Ft N._ CO (0 WP • • - - c5 ci d a a a 4 0 Lo r... co " 01 ti si os l'■ 0) 0 up, a a 61 0) 61 6 N .,... .-- CV 0 00 0o c`J. '4'.. 0.1 °J 07 ''-' 8. •••-• co d cv La* c; T 6 9 ff 3 a a 61 6 9 a g tn. 2 17: 544 tli s Pt VI 0 In CP) r. § to- •••-• co, o5 ,-. ad 4 NZ' g a a 2 2 tS1 2 a D) . . _, ,M.t .• cto N - . t1"o -- t'r uo r,-. ,.., .- F, cO ..- a a a a 61 a a a City Staff Salary and Benefits ta co c M O hi o) gu i.-. .e.3 -t- Y' r 6'4 . ;) *th. E 0 64) E -c m a. a) 0 co ,... .8 co co co.2 ccg ,,., E occ-a) c cE : a° 2 ‘•-• Li c) E 0 CD "0 g ow -8 -'. 8 t - es ., oc 0 E5 g 2 a. .- '5 • -o E 2)3 g 'el !ft c c c k. .-- ,-.4 @ m a, 'ILI 8 tlip,, a •g 2 b 6 co 1— b 2 E5 Subotal Salary and Benefits Consultant/Legal Services Fragner, Seifert, Pace and Winograd (CAA, DDA Shute, Mihaly & Weinberger (Tidelands Trust, CE Contractual a a 1 ATTACHMENT 2 Proposed SunCal 2008 Payment Schedule ACCOUNT I Max. Total 0 N (N1 O) (0 0 N N. 0) (0 0 N N 0) (0 ft SunCal Consultant Account (New) 000 000 000 000 to 01 LO CO 10 CO ARRA Cost Recovery (Existing) $342,2041 $342,2041 $342,2041— QUARTER April 19 — July 19 July 19 — Oct. 19 Oct. 19 — Jan. 19 0 0 0 0 0 0 a) 0 Tis0 0 .5) 0 Cl) 0 0 0 Nt= co 0 0 0 0 0 0 0 t 0. cs) c 0) 0 ›, 1.. 0 (I) C O N C.) C Er)- V) O 0) O 0 0 < CC 1:3 CC 0 < CD I@ • cr w s- c13 (1) cr 0 as a) 'a O c LL - G: \Comdev \Base Reuse& Redevp \SunCal\2008 SunCal Payment Scheduie.doc CITY OF ALAMEDA • CALIFORNIA SPECIAL JOINT MEETING OF THE CITY COUNCIL, ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY (ARRA), AND COMMUNITY IMPROVEMENT COMMISSION (CIC) WEDNESDAY - - - MARCH 5, 2008 - - - 7:01 P.M. Location: City Council Chambers, City Hall, corner of Santa Clara Avenue and Oak Street. Public Participation Anyone wishing to address the Council /Board /Commission on agenda items or business introduced by the Council /Board /Commission may speak for a maximum of 3 minutes per agenda item when the subject is before the Council /Board /Commission. Please file a speaker's slip with the Deputy City Clerk if you wish to speak. 1. ROLL CALL - City Council, ARRA, CIC 2. AGENDA ITEM 2 -A. Recommendation to approve first amendment to Alameda Point Exclusive Negotiation Agreement between the City Council, Alameda Reuse and Redevelopment Authority, Community Improvement Commission, and SCC Alameda Point, LLC to extend the timeline for several mandatory milestones and create a new Developer Consultant Costs account. (Development Services) 3 ADJOURNMENT - City Council, ARRA, CIC Beverly Jo ns* Maor Chair, Alam o +. us and Redevelopment Authority and Community Improvement Commission CITY OF ALAMEDA Memorandum To: Honorable Chair and Members of the Alameda Reuse and Redevelopment Authority Honorable Chair and Members of the Community Improvement Commission Honorable Mayor and Members of the City Council From: Debra Kurita Executive Director/City Manager Date: March 5, 2008 Re: Approve First Amendment to Alameda Point Exclusive Negotiation Agreement Between the Alameda Reuse and Redevelopment Authority, Community Improvement Commission, City of Alameda, and SCC Alameda Point, LLC, Extending the Timeline for Several Mandatory Milestones and Creating a New Developer Consultant Costs Account 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 site investigations; held two community meetings; and met with local, regional, State, and Federal stakeholders, including the United States Navy (Navy). The ENA set forth a multi-year timeline and included a schedule of mandatory performance milestones outlined in Exhibit B-1 of the ENA ("Schedule of Performance"). The Schedule of Performance assumed that SunCal would implement the Alameda Point Preliminary Development Concept (PDC), which served as the basis for the 2006 final draft Conveyance Term Sheet with the Navy. During its evaluation of the PDC, SunCal conducted site investigations and technical analyses and determined that the PDC is not financially feasible. SunCal's due diligence indicates that the previous costs to mitigate the site's flood and geotechnical conditions were underestimated, and that revenues from certain portions of the site would not support these increased costs. As a result of these circumstances, SunCal wants 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 outlined Agenda Item #2-A ARRA/CIC/CC 3-5-08 Honorable Chair and Members of the Alameda Reuse and March 5, 2008 Redevelopment Authority Page 2 of 5 Honorable Chair and Members of the Community Improvement Commission Honorable Mayor and Members of the City Council in the ENA. As a result, SunCal has requested that the ARRA approve a six -month extension of five Mandatory Milestones in the Schedule of Performance, including the submission of the Development Concept (and its related plans) and the Entitlement Application, to September 19, 2008, and November 18, 2008, respectively. SunCal did not request an extension of the ENA's overall 24 -month timeline. On February 6, 2008, the ARRA considered SunCal's request for a time extension and directed staff to negotiate an amendment to the ENA to provide such an extension subject to specific terms and conditions. The recommended First Amendment to the ENA ( "Amendment ") is attached. In addition to the new information regarding the site conditions at Alameda Point, the housing and credit markets have continued to decline dramatically in recent months. A number of SunCal projects within California are now seriously financially distressed and, since mid- December, SunCal has significantly scaled back its planning and pre - development activities with regard to the Alameda Point project. SunCal has informed ARRA staff that it has significant outstanding invoices due and owing to its consultants. DISCUSSION In response to SunCal's request for an extension of its project milestone schedule, the ARRA Board directed staff to negotiate an ENA amendment that provides SunCal the additional time to re -plan the project to accommodate the newly discovered site conditions. However the ARRA Board also directed staff to negotiate additional ENA provisions to more fully ensure that sufficient developer investment is made to achieve the deferred milestones. The following provides an overview of the terms and conditions that were requested by the ARRA and how those issues are addressed in the negotiated ENA Amendment: 1) Document Delivery. The ARRA requested SunCal to provide copies to ARRA staff of specific, important components of its work so that ARRA staff can gauge the level of effort required by both parties to meet the extended Mandatory Milestones. The "Document Delivery" condition requires that SunCal, within 15 days of the approved Amendment, provide to ARRA staff copies of the following work conducted to date: i. Adaptive Reuse. Historic preservation and adaptive reuse technical analyses; ii. Market Studies. Market reports or studies of land uses considered for Alameda Point; and iii. Proiect Pro Forma. Most current drafts of Project Pro Formas. All proprietary work will be transmitted directly to ARRA's consultants. Honorable Chair and Members of the Alameda Reuse and March 5, 2008 Redevelopment Authority Page 3 of 5 Honorable Chair and Members of the Community Improvement Commission Honorable Mayor and Members of the City Council Sun Cal agreed to those provisions, and they are included in the proposed amendment. 2) Negotiating Costs Account. The existing ENA provides that Sun Cal must deposit $342,000 each quarter into a Negotiating Cost Account in order to fully fund ARRA's costs. Sun Cal made its first two quarterly deposits in July and October of 2007, but has not paid its January 2008 payment. Currently, there is a fund balance of approximately $425,000 in the ARRA's Negotiating Costs Account, partially because of the slowdown in activity with Sun Cal. The ARRA suggested that accumulated balances over the $342,000 base amount would be more efficiently dedicated towards Sun Cal's technical consultant costs. The Amendment allows this balance to be applied in the following manner: $342,000 towards Sun Cal's outstanding January 18, 2008, quarterly deposit to the Negotiating Costs Account; and $83,000 to Sun Cal to pay a portion of third- party costs consulting costs incurred to date. Subsequently, Sun Cal will be obligated to replenish the Negotiating Costs Account to ensure that at the commencement of each new quarter, there is a full $342,000 in the account, as shown in the attached Payment Schedule. Sun Cal agreed to these provisions, and they are included in the proposed amendment. 3) Developer Consultant Costs Account. To ensure that there would be a transparent source of funding to pay for the necessary project planning activities, the ARRA required that a new account be created to ensure that Sun Cal will spend the funds necessary to achieve the extended Mandatory Milestones. It is also important to avoid Sun Cal contractually controlling Alameda Point over the next nine months without making progress on entitling and redeveloping the land. To ensure that work is undertaken, Sun Cal will deposit additional funds into a new "Developer Consultant Costs Account" and expend a sufficient amount of these funds each month so that Sun Cal meets the extended Mandatory Milestones. The ARRA proposed that the Developer Consultant Cost Account be fully funded within ten days of the date of the ENA amendment. Sun Cal has requested that the Account not be funded until April 19, 2008, the date of the next ARRA Negotiating Cost deposit. The following summarizes the parameters of the new Developer Consultant Costs Account: i. Quarterly Deposit. Beginning in the second quarter of 2008 (April 19, 2008), Sun Cal will make quarterly deposits of $350,000 over the remaining term of the Amended ENA to a new account that will be held in a separate escrow account established, paid for, and used by Sun Cal for Honorable Chair and Members of the Alameda Reuse and March 5, 2008 Redevelopment Authority Page 4 of 5 Honorable Chair and Members of the Community Improvement Commission Honorable Mayor and Members of the City Council any third -party consultant or legal expenses incurred after the effective date of the Amendment. As described previously, the first quarter 2008 (January 19, 2008 — April 19, 2008) funds will be used by SunCal to pay for third -party work conducted to date. These first quarter funds consist of $83,000 of surplus funds currently in the ARRA's Negotiating Costs Account and $267,000 from SunCal, for a total $350,000 expenditure. ii. Payment Rate. SunCal will be obligated to expend at a minimum monthly rate of $117,000, which is the monthly average of the quarterly deposit on third -party consultant expenses over the term of the Amended ENA. Failure to expend the full $350,000 at the end of each quarter is a default pursuant to the ENA. iii. Termination or Default. If SunCal terminates or defaults on the Amended ENA, any remaining funds in the Account would revert to the ARRA. Staff concurs with SunCal's proposal to defer its initial Developer Consultant Costs Account deposit to April 19, 2008. The proposed Amendment contains this approach. 4) Monthly Reporting. The ARRA also required that a mechanism for monitoring the monthly progress and expenditures of SunCal be created, as it conducts the work necessary to meet the extended Mandatory Milestones. This will help ensure that activity is underway on redevelopment of Alameda Point. SunCal will be required to provide a monthly report to the ARRA, which includes the following information: 1. Task Descriptions. A reasonably detailed narrative of the tasks accomplished and activities undertaken related to predevelopment of Alameda Point. 2. Invoices. Copies of all invoices from third -party consultants for work expended against the Developer Consultant Costs Account. 3. Expenditures. Accounting of the monthly and cumulative expenditures of the Developer Consultant Costs Account. SunCal agreed to these provisions, and they are included in the proposed Amendment. BUDGET CONSIDERATION /FINANCIAL IMPACT Honorable Chair and Members of the Alameda Reuse and March 5, 2008 Redevelopment Authority Page 5 of 5 Honorable Chair and Members of the Community Improvement Commission Honorable Mayor and Members of the City Council There is no financial impact to the General Fund, CIC, or ARRA budgets. The required deposits, along with a cost recovery provision in the ENA, ensure that the selected developer pays for ARRA staff costs and consultant expenses. RECOMMENDATION Approve the First Amendment to the Alameda Point Exclusive Negotiation Agreement with SCC Alameda Point, LLC (Sun Cal), extending the timeline for several Mandatory Milestones and creating a new Developer Consultant Costs Account. Respec submitted, Leslie . Little Development Services Director B ebbie Potter an 'ger, Base Reuse By: J nif r Ott R dev lopment Manager mmunity Programs Division LAUDP/JO: Attachments: 1. First Amendment to Alameda Point Exclusive Negotiation Agreement 2. Payment Schedule for SunCal's Quarterly Deposits to Negotiating Costs Account and Developer Consultant Costs Account ATTACHMENT 1 FIRST AMENDMENT TO ALAMEDA POINT EXCLUSIVE NEGOTIATION AGREEMENT THIS FIRST AMENDMENT TO ALAMEDA P,DINT EXCLUSIVE NEGOTIATION AGREEMENT ( "First Amendment ") is made as of 1 1 e i- , 2008 (the "Effective Date "), by and between ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY, a Joint Powers Authority established by the City of Alameda and the Community Improvement Commission under the California Joint Exercise of Powers Act and a public entity lawfully created and existing under the State of California (the "ARRA "), the COMMUNITY IMPROVEMENT COMMISSION OF THE CITY OF ALAMEDA, a public body corporate and politic ( "CIC "), and the CITY OF ALAMEDA, a municipal corporation (the "City ", and together with ARRA and CIC, "Alameda ") and SCC Alameda Point LLC, a Delaware limited liability company ( "Developer "). Alameda and Developer are individually referred to as a "Party" and collectively referred to as the "Parties". RECITALS This First Amendment is entered upon the basis of the following facts, understandings and intentions of the Parties. A. The Parties entered into that certain Alameda Point Exclusive Negotiation Agreement, dated as of July 18, 2007 (the "Original Agreement "), which shall be amended by this First Amendment. B. Developer has requested an extension of the Mandatory Milestones set forth in Exhibit B -1 of the Original Agreement pursuant to Section 4.2.1 of the Original Agreement. C. The Parties hereto now desire to amend the Original Agreement on the terms and conditions hereinafter set forth. - D. The Original Agreement, as amended by this First Amendment, shall hereinafter collectively be referred to as the "Agreement ". AGREEMENT NOW, THEREFORE, in consideration of the mutual terms, covenants, conditions and promises set forth herein, the ARRA, the CIC, the City and Developer agree as follows: 1. Definitions. All capitalized terms used herein shall have the definitions given in the Original Agreement, unless otherwise expressly stated herein. 1 2. Document Delivery. Notwithstanding anything to the contrary in Sections 3.8.1 pertaining to completion and internal review by Developer, and consistent with Section 3.8.3 of the Agreement, on or before the date which is fifteen (15) days from the Effective Date of this First Amendment Developer shall deliver to Alameda copies of the following technical and financial information prepared or commissioned by Developer for the Project and/or the Project Site: (a) all technical feasibility analysis conducted on the historic preservation /adaptive reuse program for the Project; (b) third -party market reports or studies of land uses considered at the Project Site completed in connection with securing financing, including, without limitation, the market study prepared by the Concord Group; and (c) the most current draft Project Pro Forma (in pdf form) for high density and low density alternatives. Developer may provide confidential or proprietary information directly to Alameda's consultants. 3. Amended Section 6. Section 6 of the Agreement is hereby amended as follows: a. Amended Heading. The Section 6 heading is hereby deleted and replaced with the following: "Section 6. Alameda Cost Recovery/Reimbursement; Developer Consultant Costs Account," b. Amended Section 6.2. Section 6.2 of the Agreement is hereby amended to add the following: "Alameda shall provide monthly invoices or timesheets, as appropriate, to Developer for Pre - Development Costs to be reimbursed by Developer pursuant to this Section 6." c. Amended Section 6.3. Section 6.3 of the Agreement is hereby amended to add the following: "Alameda shall have the right without Developer's consent to adjust line item amounts shown in the Annual Budget so long as such adjustments do not exceed the Annual Budget. By way of example, such adjustments may include adding new consultants, or adjusting funds allocated to staff to consultants or vice versa. If Alameda makes such adjustments, Alameda shall provide the adjusted Annual Budget to Developer within thirty (30) days of completion of such adjustments." d. Amended Section 6.3.1.1. Section 6.3.1.1 of the Agreement is hereby deleted in its entirety and replaced with the following: 6.3.1.1 On the ninetieth (90th) day following the Approval Date, Developer shall deposit additional funds into the Negotiating Costs Account equal to twenty -five percent (25 %) of the Annual Budget (each a "Quarterly Deposit "). Commencing as of April 19, 2008, Developer shall deposit sufficient funds into the Negotiating Costs Account to have a beginning balance of twenty - five percent (25 %) of the Annual Budget (e.g., if twenty -five percent (25 %) of the Annual Budget equals Three Hundred Forty - Two Thousand Two Hundred Four Dollars ($342,204) and there is a beginning balance of One Hundred Thousand Dollars ($100,000), Developer shall deposit Two Hundred Forty -Two Thousand Two 2 Hundred Four ($242,204)). Developer shall continue this process for each ninety (90) day negotiating period until this Agreement is terminated; provided, however, that in any twelve (12) month period, Developer shall not be responsible for reimbursement of Pre - Development Costs in excess of the Annual Budget as attached hereto or as revised as provided below, however, such excess costs shall be shown as an accrued deficit in the Negotiating Costs Account Ledger. e. Amended Section 6.3.1.2. Section 6.3.1.2 of the Agreement is hereby deleted in its entirety and replaced with the following: 6.3.1.2 (a) If a deficit of greater than ten percent (10 %) of the pro -rated Annual Budget has accrued in the Negotiating Costs Account Ledger for three (3) successive quarters, or for three (3) quarters in any calendar year, Developer and Alameda shall meet and confer in good faith to assess the sufficiency of the Annual Budget amount, and may upon the written consent of each, adjust the Annual Budget accordingly. Thereafter, Quarterly Deposits shall consist of twenty -five percent (25 %) of the Annual Budget as revised, plus any deficit accrued in the Negotiating Costs Account Ledger. (b) The Parties may, upon the written consent of each, adjust the Annual Budget. If Alameda determines that an increase in the Annual Budget is necessary and Developer does not agree, then Alameda shall have no obligation to perform, or cause to be performed, any Pre - Development Work for which such increased amount is necessary, pending resolution of the dispute. f. New Section 6.3.2. Section 6 of the Agreement is hereby amended to add the following new Section 6.3.2: 6.3.2 Use of Negotiating Costs Account Funds Accrued as of the Effective Date of the First Amendment. The Parties acknowledge that as of the Effective Date of the First Amendment, the Negotiating Costs Account balance equals Four Hundred Twenty -Five Thousand Thirty -Seven Dollars ($425,037). Alameda shall apply the balance as follows: (a) Three Hundred Forty Two Thousand Two Hundred Four Dollars ($342, 204) shall be applied as the Quarterly Deposit due on January 18, 2008; and (b) Alameda shall reimburse to Developer the surplus funds in the amount of Eighty -Two Thousand, Eight Hundred Thirty -Three Dollars ($82,833). 3 g. New Section 6.4. Section 6 of the Agreement is hereby amended to add the following new Section 6.4: 6.4 Initial Deposit; Developer Consultant Costs Account Ledger. 6.4.1.1 On or before April 19, 2008, (a) Developer and Alameda shall jointly establish an escrow account (the "Developer Consultant Costs Account ") with First American Title Company at its office located in Pleasanton, California ( "Escrow Holder ") solely for purposes of paying consultant and legal fees and costs of Developer's third -party consultants and attorneys incurred solely from work on the Project on and after April 19, 2008 (collectively, "Developer Consultant Costs ") except as provided in Sections 6.4.1 and 6.4.5 below, (b) Developer shall deposit cash in the amount of Three Hundred Fifty Thousand Dollars ($350,000) into the Developer Consultant Costs Account (the "Initial Developer Consultant Deposit "), and (c) Developer shall provide a list of consultants Developer has engaged, or intends to engage, to work on the Project (the "Consultant List "). Developer shall have the right to update and/or revise the Consultant List. 6.4.1.2 Interest earned on funds in the Developer Consultant Costs Account shall accrue to that account. Developer shall pay all escrow fees related to the Developer Consultant Costs Account, which may be paid out of the funds in that account. 6.4.1.3 All invoices and charges for Developer Consultant Costs made against that account (including invoices and charges paid pursuant to Section 6.4.2 below) shall be recorded on a separate ledger (the "Developer Consultant Costs Account Ledger "). 6.4.1.4 If Developer's actual Developer Consultant Costs for such ninety (90) day period exceed the Initial Developer Consultant Deposit, Developer shall fund such costs from its own sources. 6.4.1 Federal Transportation Authority Grant. Alameda has obtained a Federal Transportation Authority ( "FTA ") grant for transportation feasibility analyses. Matching funds in the amount of Sixty. Thousand Dollars ($60,000) are required for the release of the FTA grant funds. Immediately upon deposit of the Initial Developer Consultant Deposit into the Developer Consultant Costs 4 Account, Developer shall instruct Escrow Holder to pay to Alameda Sixty Thousand Dollars ($60,000) of the Initial Developer Consultant Deposit, which Alameda shall apply as the matching funds for, the FIA grant. 6.4.2 Mechanism for Funding Ongoing Developer Consultant Costs. On July 19, 2008 and each ninetieth (90th) day thereafter, Developer shall deposit additional funds into the Developer Consultant Costs Account equal to Three Hundred Fifty Thousand Dollars ($350,000) (each a "Developer Consultant Cost Quarterly Deposit "). Developer shall continue this process for each ninety (90) day negotiating period until this Agreement is terminated. Any extension of this Agreement as provided herein shall extend the procedures set forth in this Section 6.4.2. Section 6.4.3 Monthly Reporting. Commencing on April 19, 2008 and every thirty (30) days thereafter, Developer shall provide a report (the "Monthly Report ") to Alameda. The first Monthly Report shall cover the period commencing on the Effective Date of the First Amendment through April 19, 2008 and shall include payments made pursuant to Section 6.5.2 below as part of the documentation required pursuant to this Section 6.4.3. The Monthly Report shall, at a minimum, include: (a) a narrative of the tasks accomplished and activities undertaken by Developer's consultants and attorneys on the Project; (b) updates and/or revisions to the Consultant List, if applicable; (c) copies of all invoices for Developer Consultant Costs paid pursuant to Section 6.5.2 below (solely as part of the first Monthly Report); (d) copies of all invoices for Developer Consultant Costs billed to the Developer Consultant Cost Account; and (e) a tally of monthly and cumulative expenditures paid pursuant to Section 6.5.2 below and from the Consultant Cost Account. If Alameda disputes any invoice or charge to the Developer Consultant Costs Account, Alameda shall notify Developer, and if the Parties so agree that an invoice or charge has been inappropriately charged against the Developer Consultant Costs Account, Developer shall promptly replenish the Developer Consultant Costs Account in the amount of the inappropriate invoice(s) or charge(s). Section 6.4,4 Payment Rate. Developer shall pay Developer Consultant Costs from the Developer Consultant Costs Account at a rate of One Hundred Seventeen Thousand Dollars ($117,000) per month plus or minus ten percent (10 %). If Developer satisfies all of the Mandatory Milestones (except to the extent the Mandatory Milestone for the Project Pro Forma has been waived by Alameda pursuant to Section 4.2.2 above) on or before the submission and completion dates provided on Exhibit B -1 attached hereto, the Parties shall meet and confer in good faith to re- evaluate the amount and/or rate to be expended by Developer thereafter pursuant to this Section 6.4.4 based on mutually acceptable projections and shall revise Section 7.1.7 below to reflect any mutually agreed upon amount and/or rate adjustment consistent with mutually agreed upon revisions to this Section 6.4.4. 6.4.5 Termination. As part of the establishment of the Developer Consultant Costs Account pursuant to Section 6.4.1.1 above, the Parties shall instruct Escrow Holder that upon termination of this Agreement any surplus funds in the Developer Consultant Costs Account remaining after (a) the completion of the ninety (90) day negotiating period during which this Agreement was terminated, and (b) payment of Developer Consultant Development Costs incurred by Developer after the Effective Date of the First Amendment and prior to such termination, shall be paid either to Alameda pursuant to a termination pursuant to Section 8.1 of this Agreement, or to Developer pursuant to a termination pursuant to Sections 8.2 or 8.3 of this Agreement. Alameda shall have no obligation whatsoever to pay any Developer Consultant Costs, whether incurred prior to or after termination of this Agreement. This Section 6.4.5 shall survive the expiration or termination of this Agreement. h. New Section 6.5. Section 6 of the Agreement is hereby amended to add the following new Section 6.5: Section 6.5 Payment of Consultants. 6.5.1 July 18, 2007 through Effective Date. Developer represents and warrants that it shall pay within thirty (30) days of the Effective Date of the First Amendment, all unpaid Developer Consultant Costs incurred during the period from July 18, 2007 to the Effective Date of the First Amendment, except to the extent any such Developer Consultants Costs are subject to dispute between Developer and the applicable consultant. 6.5.2 Effective Date through April 19, 2008. Commencing on the Effective Date of the First Amendment, 6 Developer shall pay Developer's costs incurred solely from work on the Project (including consultant and legal fees and costs of Developer's third -party consultants and attorneys) incurred during the period from the Effective Date of the First Amendment to April 19, 2008 at a rate of One Hundred Seventeen Thousand Dollars ($117,000) per month plus or minus ten percent (10 %) (prorated for the partial months). Amended Section 7.1.2. Section 7.1.2 of the Agreement is hereby deleted in its entirety and replaced with the following: 7.1.2 Failure of Developer to Make Requested Deposits. 7.1.2.1 In the event Developer fails to make the Initial Deposit or any Quarterly Deposit pursuant to the procedure set forth in Section 6 of this Agreement, Alameda shall have the right to give written notice thereof to Developer specifying the amount of the deposit which was not made. Following the receipt of such notice, Developer shall have fifteen (15) business days to make the required deposit and Alameda shall have the right to suspend all Pre- Development Work being performed by third parties paid by Alameda during such cure period. If Developer has not then made the required deposit, Alameda shall have the right to terminate this Agreement by written notice to Developer. 7.1.2.1 In the event Developer fails to make the Initial Developer Consultant Deposit or any Developer Consultant Cost Quarterly Deposit pursuant to the procedure set forth in Section 6 of this Agreement, Alameda shall have the; right to give written notice thereof to Developer specifying the amount of the deposit which was not made. Following the receipt of such notice, Developer shall have fifteen (15) business days to make the required deposit. If Developer has not then made the required deposit, Alameda shall have the right to terminate this Agreement by written notice to Developer. j New Section 7.1.7. Section 7 of the Agreement is hereby amended to add the following Section 7.1.7: 7.1.7 Failure of Developer to Pay Developer Consultant Costs. 7.1.7.1 If at the end of the thirty (30) day period following each Developer Consultant Cost Quarterly Deposit, Developer has failed to expend Three Hundred Fifty Thousand 7 Dollars ($350,000) (subject to the ten percent (10 %) tolerance provided in Section 6.4.4 above) during the prior quarter, then such failure shall be a Developer Event of Default and Alameda shall have the right to terminate this Agreement by written notice to Developer. 7.1.7.2 If as of April 19, 2008, Developer has failed to expend One Hundred Seventeen Thousand Dollars ($117,000) per month plus or minus ten percent (10 %) (prorated for the partial months) required by Section 6.5.2 above), then such failure shall be a Developer Event of Default and Alameda shall have the right to terminate this Agreement by written notice to Developer. 4. Amended Exhibit B -1. Exhibit B -1 to the Agreement is deleted in its entirety and replaced with Exhibit B -1 attached hereto. 5. Amended Exhibit B -2. Exhibit B -2 to the Agreement is deleted in its entirety and replaced with Exhibit B -2 attached hereto. 6. Amended Exhibit C. Exhibit C to the Agreement is deleted in its entirety and replaced with Exhibit C attached hereto. 7. Authority. The persons signing below represent that they have the authority to bind their respective party, and that all necessary board of directors', shareholders', partners', redevelopment agency's or other approvals have been obtained. 8. Counterparts. This First Amendment may be signed by different parties hereto in counterparts with the same effect as if the signatures to each counterpart were upon a single instrument. All counterparts shall be deemed an original of this First Amendment. 9. Agreement in Full Force and Effect. Except as otherwise expressly modified by the terms of this First Amendment, the Agreement remains unchanged and in full force and effect. [Remainder of page intentionally blank.] 8 IN WITNESS WHEREOF, the Parties have executed this First Amendment as of the day and year first above written. ARRA: Alameda Reuse and Redevelopment Authority, a joint powers authority formed under California law By: Name: Title: CIC: Approved as to form: By: Name: o- >A An�o►�>Ey' Title: A t tAT CpE R-A L. Cev� Community Improvement Commission of the City of Alameda, a public body, corporate and politic By: Name: Title: CITY: City of Alameda, a municipal corporation By: Name: Title: 9 Approved as to form: eir ,psa L' #-)s/74 a)WAE,q By: Name: Title: Approved as to form: By: � /44/ Name: Title: cci7 106, DEVELOPER: SCC Alameda Point LLC, a Delaware li 'ted liability company By: Name: Title: V kL& V (jK CS.,,A-it, Cg,ck, i 10 Exhibit B -1 Schedule of Performance (Mandatory Milestones) All defined terms not defined herein shall have the respective meanings ascribed to them in the Agreement to which this Exhibit B -1 is attached. Unless otherwise provided, all Mandatory Milestones are measured from the Effective Date of the Original Agreement (July 18, 2007). A. Mandatory Milestone Submission Date 1. Master Project Schedule Thirty (30) business days; updated quarterly thereafter 2. Development Concept September 19, 2008 3. Infrastructure Plan September 19, 2008 4. Business Plan September 19, 2008 S. Entitlement Application November 19, 2008 B. Mandatory Milestone Completion Date 1. Project Pro Forma November 19, 2008 11 Exhibit B -2 Schedule of Performance (Non - Mandatory Milestones) All terms not defined herein shall have the respective meanings ascribed to them in the Agreement to which this Exhibit B -2 is attached. Unless otherwise provided, all Non - Mandatory Milestones are measured from the Effective Date (for example, eight (8) months means the date which is eight (8) months after the Effective Date). Non - Mandatory Milestones described below are good faith estimates by the Parties of the time required to complete the Transaction Documents. Non - Mandatory Milestone Completion Date 1. EDC MOA Amendment 24 months a. Submit EDC application 19 months b. Finalize EDC MOA Amendment 24 months 2. NEPA Supplemental Environmental Impact Statement (SEIS) 24 months a. Project scoping 14 months b. Circulate Draft SETS 19 months c. Hearings and comments 19 -24 months d. Finalize SEIS 24 months 3. Section 106 Memorandum 24 months a. Revise historic resources report 13 months b. Complete economic study on buildings 15 months c. Finalize Section 106 Memorandum amendment 24 months 12 13 4. USFWS/NMFS Biological Documents 24 months a. Biological Assessment /reinitiate Section 7 consultation with USFWS 12 months b. Finalize new Biological Opinion with USFWS 24 months c. Predator Management Agreement 24 months d. Determine if NMFS Biological Opinion necessary /conduct Biological Assessment 18 months e. Finalize NMFS Biological Opinion 24 months 5. Early Transfer Documents 24 months a. Finalize Draft Navy Term Sheet 18 months b. Draft ETCA 15 months c. Draft Administrative Order (AOC) with Environmental Protection Agency (EPA), Department of Toxic Substances Control, Regional Water Quality Control Board 17 months d. Draft FOSET 18 months e. Public Comment/Finalize ETCA, AOC, FOSET, submit to Governor/EPA 21 months f. Approval by Governor /EPA 24 months g. Final remediation contract and environmental insurance policies 24 months 6. CEQA Documents 24 months a. Project scoping 14 months b. Notice of Preparation 15 months c. Circulate Draft Environmental Impact Report (EIR) 19 months 13 d. Hearings and comments /finalize EIR 24 months 7. CAA/DDA 24 months a. CAA executed 14 months b. Draft DDA 18 months c. Public hearings 18 -24 months d. Approval of DDA 24 months S. Development Agreement/Entitlements 24 months a. Submit Entitlement Application 16 months b. Public hearings /approvals 18 -24 months c. Development Agreement finalized and approvals granted 24 months 9. Tidelands Trust Exchange Agreement 24 months a. Submit draft Tidelands Trust Exchange Agreement to California State Lands Commission (CLSC) 12 months b. Reach agreement on language with CLSC staff 18 months c. Obtain approval of CLSC 24 months 10. Public Planning Process 24 months a. Introductory meetings/ constraints analysis 3 months b. First round public planning charrettes 4 -6 months c. Second round public planning charrettes 6 -14 months d. Development Concept public review 14 months 14 15 review e. Historic Preservation Plan public 14 -16 months f. Focused topic community meetings 14 -18 months g. Hearings and comments on EIR /DD A /entitlements 18 -24 months 15 Exhibit C Annual Budget [Attached] 16 N:\A\Alamc\AP\Dons \w -ENA (Alameda Point) (1st Amend) (2- 12.08) w Q a 2 0 V J U Z N `. y c9iWmWMP i9 ttgcdmo r6mv3vaIENi.,� a2a ww066,06N9i9� 8ry814! um tri bs di x }F 12 -Month Duration N Cp. CA N 01NQ)CCD re4-- 401 NrO cct�. _ . . Cp. 69 CND 69 NW N N G N N m 69 n a 6q f9 69 H 69 69 4 69 gg°pgg gggs8ggg Nr mm^ r�� rr�C�M U! pp plpp 49 §§§ 1n O Cp. N 6 m - a N El w to O Ce�f. i O N gyp!!. g§ 69 Subtotal Consultant/Legal Services $ 880,229 TOTAL $ 1,368,817 Salary Benefits Total N Call d3 10 M w CR Mn CO W ea aCl tCtp4 Ln C)n C4 9P cNNNV m m NO� Np <mtNN�l(� ! bf4 m W49 NN CD I' a) Q0 R 694, 6969 a lt4,, 4, pp h (DD V C.p(�! 10 t' 1* INS M(1N�! (Vl1)r- 64960 (069 H (64n44,4,4C4, C, 9. Fr, a r 2 2 g 4 CO W lei f: (1) 0 11) N —6_10— 4w4Ra TilT0 ;46!)!9; 'City Staff Salary and Benefits it`! d c, 2 • `y `° s� 1 R 6,0.. E+-� tR m Bogo¢ a g�i ...,2w8,-..: c N E r m a w O E of 00) g a Q ° O Eo g .°� Q " ..._ c m E v g x�?acg2a o¢ > e U E d oUd aa! v EP �' C 'O E w a 1° b a s � , (. 1 a 2 u N l�a o c'E a° m° ygwasPg'g cool -o O ISubotal Salary and Benefits !Consultant/Legal Services Legal Eliman Burke Hoffman & Johnson (CAA. DDA) Fragner, Seifert. Pace and Winograd (CAA, DDA Shute, Mihaly & Weinberger elands Trust. CE Contractual ATTACHMENT2 Proposed SunCal 2008 Payment Schedule Oct. 19 — Jan. 19 0 0 48 "6" ct 0) c a) "Ei) Q) as cn a) .c C .0 (ti as .o ci as cr cs) 0) c\J > o • - C‘I 69 o • o < cr -o cC < -o a) a) as CD Cr = as a) co 0 O c IL G: \Comdev \Base Reuse& Redevp \SunCal\2008 SunCal Payment Schedule.doc