Plans could enrich city coffers with millions of dollars

City staff has focused on facilitating near-term construction at Alameda Point, especially in light of the strong regional economy and favorable market conditions. Many of the existing leases at Alameda Point are the result of favorable responses by city staff to inquiries from interested businesses and developers. “These start to make the community’s vision for Alameda Point a reality,” said City Manager John Russo.

When city staff issued requests for qualifications from developers for two important pieces of the Alameda Point puzzle, they received responses that will go before City Council at its meeting next Tuesday, July 15. 

Councilmembers will consider entering into two separate exclusive negotiating agreements (ENA) with the same company: Zhen Zhen Li’s Alameda United Commercial LLC (AUC). Li will bring architect Salvatore Caruso’s company, the Salvatore Caruso Design Corporation, on as her partner.

If the City Council approves, Li and Caruso would draw up plans to convert the long-shuttered 500,000-square-foot Bachelors Enlisted Quarters (BEQ) to assisted- and independent-senior housing, student housing and office space. If they get the City Council’s nod for the second ENA, Li and Caruso would build a hotel-and-condominium complex on the old taxiways on the north shore of Seaplane Lagoon. 

The BEQ once served as home to unmarried Air Force enlisted personnel, providing them places to sleep and a mess hall where they shared meals. 

The Navy shuttered the building when it closed the Naval Air Station in 1997. The centerpiece of the complex is the Quadrangle, which currently serves as a soccer field. If all goes as planned, AUC would purchase the 20-acre BEQ site for $388,000 an acre or $7.76 million.

The hotel and condo complex along Seaplane Lagoon would consist of two hotels with rooms for 250 guests and a 200-unit condominium complex. The developer has offered to purchase the 5.5-acre property for $7.5 million and pay an additional $56,000-per-unit fee for all market-rate residential condo units for a total of $18.62 million if all units sold at market rate. The city would also collect hotel tax from the hotel rooms.  

According to a report submitted to City Council by Jennifer Ott, Alameda Point’s chief operating officer, each of the two ENAs require Li to put up a $250,000 deposit for city staff and consultant costs. In addition Li must submit statements of her company’s qualifications within 30 days of the ENAs’ effective dates.

The statements must include a description of significant relevant project experience, including photos and site plans, along with financial information, staffing and references of completed projects. 

Caruso’s experience restoring historic buildings includes the 1906 Hicks Mansion in San Jose’s Willow Glen neighborhood. According to the company’s website Caruso and his team “designed the new interiors and home additions to complement the period of the home’s historic style.” He also had a hand in restoring the Los Gatos Opera House and the 124,587-square-foot Shanghai 22 building on Shanghai, China’s Huangpu River waterfront. 

Last year Li and Caruso submitted plans to build a 7,425-square-foot condominium building with six units at 405 Curtner Ave. in Palo Alto. Those plans are still under review. 

Russo and his staff will have 30 days to review Li and Caruso’s statements. If he and his staff find the statements insufficient, the city would terminate the ENAs and return the deposits. 

AUC’s responsibilities during the ENA process include establishing a fair, effective and collaborative partnership with the city and the community, as well as negotiating and obtaining approval of agreements as to price and terms of payment for the land and development obligations for both the BEQ and the hotel-condo complex. The developer must also prepare and obtain approvals of development plans for both projects.

City staff expects this process to take six months with completion in January 2015. The agreements allow Russo to grant up to two three-month extensions.

The Tuesday, July 15, City Council meeting begins at 7 p.m. in the Council Chambers at City Hall, 2263 Santa Clara Ave. 

Richard Bangert contributed to this story.