Point Developer Asks for Some More Time
At its Tuesday, Jan. 17 meeting the City Council will likely take the first step in passing an ordinance that would allow Alameda Point Partners, LLC, (APP) additional time to complete itsdue diligence and line up some supplementary funding. The move would require a change in the Disposition and Development Agreement (DDA) with APP.
To protect its interests, the city can only amend the DDA by way of an ordinance. If passed the ordinance would extend the Phase 1 closing date from Dec. 12, 2016 to April 11. APP requested the amendment prior to last month’s deadline. The additional 120 days would allow APP time to complete property investigations and secure additional financial commitments.
Members of the new City Council could move forward based on the recommendation of City staff. In her report to the Council, City Manager Jill Keimach pointed out the importance of resolving the items “before transferring the property out of City ownership.”
In her recommendation, Keimach reminds the City Council that “APP has invested significant financial and staff resources into the predevelopment of Phase 1 of Site A, demonstrating a solid commitment to implementing the Site A Project successfully.” APP has already spent $13.6 million in equity funds on predevelopment efforts, including money on planning and permitting of the Seaplane Lagoon Ferry Terminal.
The staff report points out the complex infrastructure and environmental issues that APP faces at Alameda Point. These include the need to upgrade deteriorating infrastructure that dates to the Navy’s creation of its air station in 1940. The developer also faces complex environment issues related, in most cases, to the Navy’s presence, but in some cases to existing environmental conditions.
According to the staff report, APP has already secured “significant financial commitment from its parent company, Trammell Crow Residential.” APP has also been working with UDR, a New York Stock Exchange-listed investment trust involved in all aspects of the real-estate process. APP hopes to involve UDP in the financing and development of Site A infrastructure and in the construction of Blocks 9, 10 and 11 at Alameda Point.
The City has also inherited several open petroleum sites from the Navy. Some lie within Phase 1 boundaries. At its Feb. 2, 2016, meeting the City Council learned the complications involved in cleaning and closing some 160 petroleum sites with almost 300 fuel storage tanks, piping, sumps and more. The Navy plans to clean and close all these sites. The San Francisco Bay Regional Water Quality Control Board adds another layer of bureaucracy to this already difficult process.
“While APP has taken a leadership role in assisting the Navy in obtaining closure for several of these petroleum sites from the Water Board, the closure process is complicated and requires additional investigation and negotiation of covenants with the Water Board,” Keimach stated in her report.
“While these items are very close to being resolved, it is important to have a few more months to complete these due diligence items before transferring the Phase 1 Site A property to APP,” she stated.
The City Council meets at 7 p.m., Tuesday, Jan. 17, in the Council Chambers, City Hall, 2263 Santa Clara Ave.