Council balks at latest Point strategy
Council balks at latest Point strategy
A deeply divided Alameda City Council may end up walking away from the city’s latest proposal to prepare Alameda Point for development, with some council members saying they think the city should focus on existing tenants and forget about moving forward with new development plans for a few years. The development strategy has been in the works since the council fired former master developer SunCal in July 2010.
After a failed vote to implement the proposed strategy and another to focus on existing tenants, Vice Mayor Rob Bonta asked city staff to come back with a revised version of the strategy, which calls for taking out $5 million in bonds backed by lease revenues to cover the cost of creating entitlements that would lay out what can be built at the Point, how much, and where, and also the environmental review required before development can move forward.
“I don’t want to throw this out, that’s not what I have been saying. I’m saying it needs some tweaks in certain areas,” Bonta said at the council meeting Tuesday night.
But City Manager John Russo, who called the suggestion “demoralizing” for city staffers who were on their third presentation of the plan to the council, said the scaled-down version of the proposed strategy Bonta requested wouldn’t push Point development efforts forward and could end up costing the city more money in the long run.
“If you’re asking whether we think that will succeed, we don’t think it will succeed,” Russo said.
Councilwoman Beverly Johnson and Councilman Doug deHaan supported the plan, saying they want the Point ready for developers when the economy picks up and that short of hiring another master developer to proposed and manage development plans for the entire Point, they don’t see another good alternative for revitalizing it. Johnson said she feared the Point would “rot away” if the plan weren’t approved.
“This is the big prize,” deHaan said. “I beg of you that you got to move in this direction this evening.”
Johnson said the plan would give the community control of the development process and would ensure backbone infrastructure is uniform and where it needs to be, citing piecemeal development at Fort Ord in Monterey as an example of the perils of developing a former military base bit by bit.
Mayor Marie Gilmore and Councilwoman Lena Tam said they thought the strategy was too risky, saying they didn’t want to spend $5 million on a proposal that wouldn’t pencil out financially according to a preliminary analysis and is predicated on state legislators creating at least one new mechanism to direct future tax dollars toward former redevelopment efforts like the Point. They said they’re concerned the city will spend $5 million and have nothing to show for it, and they would rather see the city find a developer who will share some of the cost of the predevelopment work.
“I as much anybody else want to jump on the fact that we are going to get this large chunk of land we’ve been sitting on for 17 years,” said Gilmore referring to the Navy’s plans to transfer much of the base to the city by the end of this year. “But if we can’t afford it, we can’t afford it.”
Gilmore and Tam said they want the city to focus on existing Point tenants for the next year or two, and to pursue other development opportunities as they become available.
Russo and Alameda Point Chief Operations Officer Jennifer Ott, who worked with developers to prepare the strategy, said preparing entitlements and an environmental review for the whole site would remove a major stumbling block to developing the Point, and doing it now would allow the city to have the Point ready for development when the economy picks up again. They said a developer is not likely to be willing to help the city pay those costs and even if they were.
Ott said other projects, like Mission Bay in San Francisco, looked poor on paper at first but saw the value of the project improve as work got underway. She and Russo said the prep work would draw developers to the site because providing entitlements and a completed environmental review would provide them highly desired certainty. And Russo said the city will end up paying the entitlement costs whether they move forward with this plan or another to redevelop the base.
Russo said slow absorption rates for multi-tenant commercial buildings – which were hit especially hard by the recession – were dragging down the Point’s financials, though budget estimates showed that a residential project could make money. The three-pronged approach for developing the Point includes areas for homes, commercial development – a major campus user or build-to-suit opportunity is envisioned – and adaptive reuse of existing buildings.
Another expense: A community “wish list” of projects that Russo said the proposed strategy was designed to allow city leaders to discuss with the community.
“If these are the economic facts of life, then really, there’s no future for the base,” Russo said.
He had suggested the city use reserves dedicated specifically to Alameda Point to pay for some or all of the development strategy, an idea Johnson, deHaan and Bonta backed.
The discussion and vote marked the latest twist in the complicated Point development saga. After the original consortium of developers backed out of developing the project due to a declining economy, a divided council voted to hire SunCal to serve as the master developer for the Point, with Tam, Gilmore and deHaan voting in favor of retaining the Irvine-based developer over other candidates. When that developer asked to go beyond the 2,000 homes contemplated by a community-developed reuse plan, the council balked at asking voters for an exception to development-limiting Measure A needed to make that happen, instead asking SunCal to handle that task.
City leaders subsequently moved back to the 1996 reuse plan, a move that helped them convince the Navy to take the $108.5 million price tag off the Point. Under the deal, the Navy would collect an additional $50,000 per home developed at the Point beyond the 2,000 mark.
But a few months after that, the state’s highest court voted to eliminate California’s redevelopment program, taking with it the city’s ability to use future property taxes to pay some of the infrastructure costs associated with developing the Point, which are estimated at as much as $774 million. City staffers are working with legislators in an attempt to recoup the ability to collect at least some of that money again.
The proposal is slated to come back to the council on June 6.