Speaker 1: Including presentation on city council approval process, financing plan and fiscal impact analysis. And we're putting up the presentation.
Speaker 9: Good evening, mayor council members. My name's Jennifer Ott, chief operating officer for alameda point here for our may status report on Alameda Point. And while I'm going to touch very briefly on some pretty pictures, the real focus tonight is on the hard numbers here and starting to really look at some of the financial and fiscal pieces of the project and get into some of the. Nitty gritty and technical parts of that. So that's what I'm going to focus on tonight. The. This.
Speaker 1: You know, I mean.
Speaker 9: Just. Okay. I'm just going to turn this slide. Sorry. Excellent. So the presentation over here, I'm going to quickly go over the May 11th Planning Board actions. You know what took place last week. Review the upcoming June 16th City Council meeting documents and process. There's a lot that's going to be on that agenda. We've been kind of piecemeal in it, too, over time. But I just want to be really clear about what's what the recommendation, where we're headed that night. And then I'm going to present a summary of the city financing plan and then present an approach to fiscal neutrality and the summary of the aluminum point inside our fiscal impact analysis. First May 11th Planning Board action. So the on May 11th, the planning board took three actions. The first was to approve the development plan. I should say those actions were all unanimous. They approved the development plan. That's been all the pretty pictures that you've been seeing over the last several months. This is obviously an image of that. I have that here on the computer. So if there are questions about that and what got ultimately approved, I can pull that up as part of the questions and we can walk through that. I'm not going to go over that tonight. I'm going to focus on the numbers piece. Unless you have questions about it. We also they also recommended city council approval of the development agreement, not the disposition development agreement, which is really all the nuts and bolts of all the obligations related to land payment and developer obligations . But it is the development agreement related to kind of the city's hat that it wears as part of the regulatory agency and in kind of vesting some of the rights that they have under the development plan. So that also got recommended to the City Council for approval and then they provided some final comments on the team compliance strategy. June 16th City Council. What's what's coming is that disposition development agreement that I just mentioned that itself will be agreement that the majority of the pages will be a very lengthy document that will walk through all the development obligations, the terms of price, in terms of payment, the term of the agreement. I'm going to actually walk through a couple of provisions with you tonight, just things that you haven't heard yet. And then attached to it is all of this, along with a bunch of exhibits that are pretty immediate themselves. Some of them you've seen, some of them haven't. The first is the TDM compliance strategy. You've seen different iterations of that, an affordable housing implementation plan, which really is the agreement and kind of plan for implementing the the city's inclusionary housing ordinance, the density bonus ordinance, as well as the provisions of the Renewed Hope Settlement Agreement. All of that will be in an exhibit attached to the Disposition Development Agreement, a milestone schedule that lays out and I'm going to get into this in a second, the major milestones, progress milestones, so we can keep track of performance over time, making sure that the developer is performing and doing the things that they said they're going to do a phasing plan which looks at the phasing of development that was attached to the development agreement. And so that was in your packet for tonight. The infrastructure package, consistent with the master infrastructure plan, consistent with RFQ that was issued from developers. That $88 million package of infrastructure. It outlines the phasing of the infrastructure. That, too, was attached to the development agreement. A part of your packet for tonight leases for two of the buildings. That building 117 118. There are two lease commercial buildings that ultimately will be part of a phase three conveyance to the developer for commercial development . But the developer and we can talk about this in a second if there are questions about this that wants to have leases, we actually use those buildings for jobs and investment and commercial development before they take title to that land. So these leases allow them to use those buildings on an interim basis that a master Tidelands trust lease for building one 3113 and two restaurant pad. So part of the site falls in the state tidelands trust areas which we own, but we cannot sell and we own it and we keep it in trust on behalf of the state of California. And so it's highly restricted about what kind of uses occur there. We can't sell it. And so this will be a lease because there are parts of the the waterfront that they want to use for restaurants and reuse one of our buildings. And so this lease contemplates the use of those properties within the Tidelands trust areas and then a subdivision improvement or public improvement agreement that talks about the infrastructure construction and making sure that they're performance bonds so that ultimately the infrastructure gets once it gets started, it it gets ultimately there's a performance bond to make sure that the infrastructure gets built and then a license agreement for phase zero activities. The development agreement, which was attached to your staff report tonight, and then the multifamily housing waiver, which is required under the town center plan to allow the type of housing and the product types that are required under the town center is that there's a waiver of the multifamily housing prohibition pursuant to the density bonus ordinance. And so they've requested that those letters have been attached to a couple of different staff reports. So all of this will be this whole package of documents we're working madly and not just me, your city attorney's office, all the different departments are getting pulled in on various aspects of this. So we're all working very hard to put all these documents together and come to you on June 16th with a recommendation, I should say. The developer as well. We're working very closely with them on all of this. So now to the numbers part of this. Actually, I'm sorry, before that, I wanted to just mention this because this is a part of the DDA that we wanted to make sure that you understood going before we come to you with the DDA, the INA specify that the overall term of the DDA or this development, this disposition development agreement was 20 years. So if it's executed this year, that's 2035. The project milestone, the schedule that the developer has put forward is actually a 15 year development schedule. We were very appreciative that the developer did not max out the full timelines of the 20 years. So they've actually been very aggressive about their milestones, schedules and their performance and we appreciate that. And so what that project Milestone Schedule says is that the Phase three completion of the project, which is the the final phase, is expected to be complete in 2030. There are potential extensions to this, which I'm going to get to in the next slide. But that puts phase one, essentially each phase at about five years. It's a little less than five years. The potential extensions to the milestones schedule are only allowed on major milestones. So closing on the transfer of the land. Completion of infrastructure completes completion of vertical. And then there's these progress milestones. So for instance, design review or commencing infrastructure, we they're in a schedule. We want to keep track of those things because that's early indicators of whether or not the performance is likely to occur or not. But they're not events of default. So if they don't meet those project milestones, that doesn't have the same consequences. What we really care about is, are you closing on the land or are you completing the infrastructure, you're completing the vertical. And so those are what we have defined as major milestones, potential extensions to the milestones schedule. Overall, there's a cap, a ten year cap on extensions. So that puts us if you and that's from the milestone schedule. So 15 years, they're being very aggressive about their schedule. They get to ten year cap on all extensions and I'll outline what those are. So that puts kind of the outside date at 25 years of five years past the 20 year term that was contemplate in the in a only if certain thing only if they are able to to qualify for certain extensions, extension payments, they're allowed to take five extension extensions by paying the city for those extensions. Those extensions are much more expensive before phase one at 50% of phase one infrastructure, $50,000 an acre after phase one infrastructure that goes down to 10,000 acre. The thought there is really that once that phase one infrastructure, the phase one infrastructure is a very large amount of work. And so once they've made that investment, we believe their incentive is to build the project and get it done because so much money has gone into it. So we've kind of reduced the option payments so they have an elect they can elect to extend those major milestones, closing completion of infrastructure, completion of vertical by paying the city to extend. That's and that's limited to only five of the ten years. Then there are two other ways that the term well three other ways but economic force majeure which is if the economic there's an economic downturn, that there's a decrease in the home price index or a certain number of years that they can qualify for an economic force majeure extension, and that it's a very high bar. And so it's really comparable to what we experienced in the recent recession. We had our financial consultant, Wealden, who's here today, actually chart out that index over 20 years or something over 20 years. And the only two times we met that threshold was when there was a really severe recession. So we've kind of calibrated this index to recessions that have occurred in the past. So we feel comfortable that we're only going to be in that economic force majeure situation when we're really experiencing a significant downturn in the economy and then a standard force majeure, which is which is more standard, which is really things that, you know , major issues like a disaster or essentially water supply. There is no water supply or some major disaster, a war or some other thing where there are major issues outside of Alameda Point Partners and the Cities Control, then they would be allowed to take extensions. The last is a Navy delay. So that's if the city is doesn't get the land by the timeline. If we can't actually give them the land to develop it, they don't want to be punished or, you know, for us not being able to give them the land to develop the property, obviously it's very hard to develop the property without the land. And so we've allowed for this circumstances. So the city has in the milestones schedule certain dates by which it's expected to provide the land in order to meet all these timelines. And so there would be a delay related to that overall, except for the Navy delay, which isn't subject to the cap, all these other delays are subject to the ten year cap on extensions. And really the thought there is, you know, at some point, if we have ten years, for instance, a worst case scenario of some sort of standard force majeure or a war or something like that, we should probably all sit down and figure out whether or not this project still makes sense. I mean, this can't go on forever. And so we wanted to cap that. And again, that cap is on the 15 year schedule, not the 20 year term. So it, you know, really only puts the city's kind of outside liability in terms of extensions to the 25 years of the.
Speaker 0: Before you continue at 11:00, we need a motion to continue our meeting and it requires three votes.
Speaker 1: Okay.
Speaker 0: All those in favor.
Speaker 4: I.
Speaker 0: Oppose. Oppose passes 4 to 1.
Speaker 9: So that's that's kind of I wanted to to highlight this. If you've got questions about this, it's kind of we've gone over with the NRA, had a lot of information on the terms the price in terms of payment. We've talked about that a lot. We haven't really talked about this. We've kind of recently come to an agreement on this. I wanted to put this out there as quickly as possible so that you're not you know, you're getting exposed before the 16th to a lot of the major issues so that there aren't, you know, any major surprises on June 16th. So that's why I'm raising it now. Happy to answer questions tonight or moving forward. But I wanted to highlight these issues to you, to the council and the public. So the next thing is really the site, a financing plan. What that and what that is is really what they've provided is required in the NRA, that they provide us a financing plan that shows how this project is going to work. The finances of they provided that to us in the form of a land development cash flow analysis. I am going to explain what that is. But really as the city, being the landowner and entering into a public private partnership where you're essentially selling the land to private entity to come in and develop it, it's very important for the city to understand the economics of the deal so that it understands that it's not selling the land for too little or that there are the understands that their what what the developers committing to in terms of infrastructure, that you're creating parameters around the economics of the deal and that the city is making sure it's protecting its financial interests. And so the developer provided us their project perform our cash flow analysis, which is an accounting and a comparison of sources and uses of funds. So it's just kind of really just means revenues and expenses over time. And we have that. We had our financial consultant review all the assumptions in that to make sure that it's been vetted independently, that we're not just taking the developer's word for it, and that's really broken out. I'm going to walk through each of these so that people understand how this works with the sources of funds or revenues include mainly land sale proceeds. So because it's a land development proforma, it has all the revenue is related to selling land and getting land ready for improved land ready for sale. So the land sale proceeds are essentially the way you calculate these is by looking at how much you think you're going to build or sell something or rent something for. So how much you're going to sell the townhomes for, for instance, how much is it going to cost you to build them? What is the difference between how much you'll sell them for versus cost? What's that difference? The difference is the land value. It's called a residual land value. That is what's used to determine the land sale proceeds in this model. That's very standard for this type of situation. And then you do that for every product type and it's based on market assumptions about rents. And we're going to I'll talk about those in a sec about sales prices, rents for retail, rents for commercial. And so you had in your packet assumptions about all of those things as well, because it's important for in order to value land, you need to understand what ultimately the land is going to be used for and the value of it. And so that's all built into this model, the other revenue source. To tell me that I'm going too fast. But, you know, slow down if I'm going too fast or I'm not explaining something clearly, I want to make sure everyone understands this. But the other revenue is a public financing mechanism. It's called community facilities district bond or district bond proceeds. You just recently approved this for Alameda Landing. This is a very standard way to you, basically leverage the value of the land to secure bonds, to pay for infrastructure, and then property owners in that area pay a special tax essentially in the special taxes. What's used to pay back those bonds for infrastructure? We do assume that in this case that there will be bond proceeds for infrastructure. The also developed equity, although not a true it's not really a revenue, it's a source of funds. But any time in the proforma that you see that there's a negative so that it revenue or, you know, expenses exceed revenue and there's a negative the developers potentially using equity to pay for those shortfalls in those years. So there is money that the developer, they're writing checks to cover shortfalls in years. And so that's part of their are a source of funds to to pay for the development or for the land development uses of funds, essentially expenses. They include pre-development costs. So all the costs of the developer spending out on the development plan, on the negotiation of the DDA, all of the design review applications, you know, the architecture expenses to put the design review applications together and go through the planning process, all those will be considered pre-development costs and they're just what they sound like, all the costs that kind of gets you to the point where you can actually develop something and get it entitled that you actually allow and permitted, that you're now allowed to actually build something are considered pre-development costs, land payments. Those are in the the staff report. Those are the $5 million for the sports complex, the $10 million ferry terminal payment, $15 million land payment phase, zero activities, site preparation. So this means demolition of buildings. It means any geotechnical remediation to make sure that you mitigate any settlement issues or seismic issues in the land, any grading that has to occur then the infrastructure costs. So those those are when we've talked about the $88 million, that's all those parks, the 15 acres of parks, all the roads, all of those infrastructure costs are counted here, professional services, the cost it'll take to actually design the infrastructure and then developer overhead to essentially kind of manage that effort is also included. So that's kind of the one on one on land development, cash flow and how it works and what was in your packet. And this is the tool that we use to really try to assess the the economics of the deal continued there's we also want to make sure, as I mentioned, that the city's getting a good deal. So how do we determine feasibility of the project? How do we determine whether or not we're getting a fair price for the land and we. We talk about return requirements. So we're and so what we've essentially built into the agreement is the city at some point we agree. Developer you're taking all this risk, a lot of risk building a lot of infrastructure. You're doing all these things. There's a lot of complexity. So you should be essentially you get the market rate of return, not a guarantee, but you should achieve a market rate of return on your investment. And we have to talk about what that market rate of return is. Of course, that's subject to negotiation. But ultimately, the city, at some point, once you've reached your market rate of return, the city wants to participate. This is our land. We've invested a lot of money in the air, the other entitlements, staff time. So we want to start participating. Once you've reached that threshold of market rate return, we want to participate. And so but it's really intended to be a windfall protection. The city it's in staff's approach to this. We have tried to negotiate a lot of upfront infrastructure. So the sewer line or the ramp, you know, Ralph, our Bazardo extension, try to frontload as much of that because from our standpoint, getting built improvements in early parks, for instance, all those things, Bill Early actually gives us something concrete that the community, not just people live in Alameda but all of Alameda can enjoy. So we don't see this as a way to make a ton of money for the city. What this is intended to do is, hey, if you are wildly successful developer, you shouldn't just run away with all these profits. We need to share too, because we've taken risks, we put in money, it's our land. So we need to have some kind of recognition that you're putting in this investment. You get to meet your rate of return. But ultimately, we want to participate in any in any profits above a certain above a certain threshold. So that's what this contemplates, is called profit participation. It's again, it's intended to be a windfall protection. Well, we have talked about this is what we're proposing as city shares and profits. Once our main point partners obtains market rates of return of two returns, an 18% internal rate of return and a 1.6 cash flow index. And I'll explain what those are. You want me?
Speaker 4: May I just ask explain what a 1.6 cash flow index is.
Speaker 9: Yes. So I'm going to let me start with the internal rate of return, because not everyone may know what that is either. And these are going to be kind of high level explanations. And I can if you have other detailed questions, I are consultant here to explain. But that idea with an internal rate of return as a way to measure profitability over time and essentially taking into consideration the time value of money. So this is kind of one of the only I shouldn't say only one of the most typical way to kind of recognize the fact that a dollar that you get next year is not worth the same as a dollar today that there. And so you sort of be able to measure profitability over time is essentially what the internal rate of return return does. And we have said, the developer said and we agree that, you know, given the risk of this project and a lot of the uncertainties you're going to, you know, will allow you to reach an 18%. That's a market rate of return of 18%, internal rate of return before we participate. But we also recognize is that they they want to achieve both an 18% internal rate of return and a 1.6 cash flow index. And the castle index is a way to essentially compare profitability to equity. So how much they make versus how much they've had to invest, that's a very high level. But that's basically is this kind of really recognizing the relationship between profit and equity investment on the developer's part. And so that's what that cash flow index measures. And so they in order for the city to start participating, the developer has to meet both of those threshold returns. Now, I want to be clear, there's no guarantee the city is not guaranteeing that they get these all the and that's part of why they get the, you know , these rate of returns. And they are what they are is because there's a risk, there's a chance they don't meet those at all. And that risk that something goes wrong and they've invested all this money and, you know, something does happen and they don't get those returned. The city isn't guaranteeing that they get those returns in any way, but once they do, then the city starts participating kind of at an increasing share of the profits. So starting at 18%, assuming they meet the 1.6 cash flow index, the city would start participating about 10% of the profits, and then that goes up over 20%. It's 20% profit position, 20 to 30. And then when they hit the 25% IRR, the city would start. Every dollar would be split essentially between the developer and the city. Again, this is all in the DDA. It's it's probably more than people want to know. But it's it's a want you to understand that we have tried to really protect the city's interest in terms of making sure the developer doesn't, you know, use the land and develop it and then run off with a bunch of profits. And this will all all of these detailed provisions are in the DDA.
Speaker 5: And I just want to say quickly that that's an important point that you just mentioned, because if you take a look at the way that it's structured, I mean, one can conceivably. I envision a scenario where. Where someone hits the air threshold at 22% and suddenly say. I don't want to give 30% of the profit. And so there has to be some mechanism where we can evaluate the amount of investment, equity and all that kind of stuff. So that's what we're looking. Among other things.
Speaker 9: And I did forget to say that we have kind of analyze, ah, so what is, is this we've kind of looked at their performance, their cash flow and determined three main things that I think are important to mention. One is that they do show that they're achieving a 22% IRR that is, we believe, a feasible project. So we believe that what they're proposing is feasible financially given the assumptions that are that are in there. We also think it's important to mention that, you know, we don't we don't think there's a excess land value. I mean, there's kind of methods that they're given. We've kind of maxed out with the infrastructure that's being proposed here in the land. But the $15 million land payments, what's it showing is that there is an excess land value that we're kind of leaving on the table. And then the last thing is that based on what the numbers that are in there, we would not be receiving any profit participation based on this. They're very close to meeting the 1.6, but haven't quite yet. And so we're not what they're showing is we think we have a feasible project, but we've kind of maxed it out in terms of infrastructure and land payments, and there really isn't any windfall at this point. That doesn't mean there won't be. These are all just assumptions, right. And so ultimately, it's going to be based on what did they actually sell things or how much did it cost to build? And those will get plugged into the analysis as we move forward with development. So so that we'll be keeping track of that. Every phase will be keeping track of what did you how where did your revenues come out? Where did your costs come out? Let's look at that. Do you owe us any money? Do not. And if after a given phase, it shows that they are meeting those two thresholds and there are excess profits, then we will actually be putting those funds into an account. We we don't it doesn't mean we get that money necessarily because you got to kind of wait till the end of the project to figure out if how did it all turn out. But we do want is we want those funds segregated into a separate account so so that we don't they don't think of it as their money. It's really our money until it's kind of proven that that it's not ours anymore. And so it's just kind of keeping it separate, making it being thought of as is different than money that they're able to use for other things. So that's how, how we've structured that. So I want to I know there's been a lot of questions about rents and monthly rental rates, and so I wanted to touch on this. I put this table together. I thought it would be helpful. But you look at it's a lot of numbers, but the intent is to really show convert different based on the area median income and it varies by household size what the rents would be for very low, low moderate. And then the estimated market rents I'm just going to go through these quickly is assuming someone has an income of about 32 to $38000, they'd be paying $854 a month for one bedroom if they met that kind of very low category. And then it goes up the bigger the household size. And so you see for a three bedroom, we are assuming a four person household size that's about $46,000 income. They'd be paying a little over 1100 dollars in rent. And obviously that goes up there. The project is providing about is providing 16% and these very low, low categories, 9% in the moderate and then the rest as both this is rental rates, but obviously there's townhomes as well, we believe. And what you see here is, I mean, when you look at the moderate incomes at 120% of the area, median income, someone making about, you know, anywhere between 78 and $90,000 would be paying about 2000 their market rent based on the rents that are in the performa that we have peer reviewed and looked at would be paying about 20 $600 a month, you know, in a one bedroom apartment. The townhomes obviously are more expensive. The townhomes are looking at more in the $900,000 per unit range. The condos in the second phase are looking at closer to about $700,000 range. So, you know, we believe this shows you that there is kind of a spectrum of housing that's being provided to a lot of different income categories.
Speaker 0: Before we move on. Yes. When you look at this chart, how in order to qualify, for instance, of first category below 50%. How many people are in your families for these different categories? Isn't it based on existing households?
Speaker 9: So I made certain assumptions that the one bedrooms would be one in two person households. This would be 2 to 3 person households. And then they are I'm sorry, this is 3 to 4 and then this is four. So I had to make those assumptions because the way that the area median income is calculated is based on household size. So I made the assumption that again, one bedroom is a 1 to 2 person household, two bedroom is a 3 to 4 and then three bedroom is a four person household and they don't have anything beyond
Speaker 0: . Four as a five.
Speaker 9: There's no five person household, so they only.
Speaker 0: Calculated two bedroom. You said 3 to 4, there's 3 to 4. And that's because it's overlapping the numbers.
Speaker 9: These are overlapping just because they don't they don't have a five person house. So once you hit the four person household, that is.
Speaker 0: Okay. So when I'd like this chart to include but the household members to qualify for these numbers when we see this again. Sure. And then your prices for the condos. But what did you say they were the condos.
Speaker 9: They started phase two. So they're priced at about 700,000 per unit. Okay. And this is what's in the performance. I want to be clear on that. Market rents and market prices is that these are market rents and market prices. So if the economy goes down, this could be less as the economy continues to go the way it is, these could be more. So I want to disclose that this isn't they're not guaranteeing these rents at these prices. This is what's in the performa. We have reviewed those versus what we looking at the market. Our independent consultant has looked at them. We think these are reasonable, honestly high end for for what you're seeing in Alameda now. But we believe these are reasonable assumptions to have in the financing plan.
Speaker 5: And I thought I heard you say that we're building in the old Warren Buffett margin of error just in case something goes wrong and the rents go down. So that because we have fixed allocations and the rents go down or the property values go down, we still want the sports complex and all that. So. We factor that in?
Speaker 9: Well, I think what this for the sports complex and the ferry terminal payment, once we transfer the phase one land to the developer, that $50 million is nonrefundable.
Speaker 5: Okay.
Speaker 0: So the on the condos are those one and two bedrooms. But but what you're describing is a condo. Or how many square feet? You know.
Speaker 9: I don't know if it's on my head.
Speaker 0: All right. So that's something else I'd want to know is on condos. What we're talking about?
Speaker 9: Sure.
Speaker 0: How many square feet? One one. One two bedroom. What is what is being described as a condo? Oh, okay. And then the three bedrooms. Those are townhomes. Is that what you don't know?
Speaker 9: The estimated? We didn't do any for sale on this. I'm just doing because I know there were a lot of questions about rent, so I just didn't rents. I didn't include all I meant when I was talking about the townhomes and condos was to show you that those are those are obviously for people making you know, those are given the mortgage payments for a $900,000 townhome. All I meant was that I kind of think of this as this kind of increasing kind of spectrum of housing product that that once after these market rents for apartments, you're getting into people who can afford essentially townhome or condos so that you're providing different product, housing, product or a mix of incomes. From the very low to the person who can afford a 900,000 square foot are 9000 $900,000 townhome. Okay. So now. Oh. Okay. So approach to fiscal neutrality. The city in 2003 adopted a fiscal neutrality policy that says we need to make sure that Alameda point essentially doesn't become a burden to the general fund that we that we analyze and make sure that the revenues are balanced with the expenses. And these are tax revenues versus city expenditures. So our approach to fiscal neutrality, you know, we have to be thinking talk about this is this is the first development we're not take we're not doing a big master developer for the whole thing . So we need to be thinking how do we structure this now for this space is, you know, let's set up let's figure out a approach that makes sense that we're going to take and be consistent to take with every development as we go, since we're taking a more incremental approach to development. So we, James Edison and Will, Dan and myself were keeping that in mind as we kind of went through this is let's let's create a methodology essentially for how we evaluate projects out there to make sure we're complying with this and that we're mitigating any impact. So I'm going to go over a couple of these are more of a high level kind of approach, and then I'll get into the actual numbers. But obviously let's comply with the policy. Second, we need to actually analyze the net fiscal impacts of Alameda Point. So that means estimate revenues, estimated expenditures when you compare them, are there any adverse or negative impacts when you compare them? We are taking this approach of fiscal neutrality and we are going to be setting kind of mitigations that are going to be kind of set. And so what we want to do, whereas we did an analysis on the fiscal impacts of when we did the entitlements for the entire Alameda point, it was for the entire development envelope. What are the impacts in this case? We think is very important to be very fiscally prudent and use reasonably conservative assumptions in setting this, because we don't you know, we don't know exact these are projections. We don't know exactly what's going to happen over 20 years. So we want to be on the the conservative side in terms of making our assumptions. So we're so and I'll talk about some of those conservative conservative the biggest conservative assumptions we made in this analysis. And then ultimately we need to mitigate the negative impacts through special taxes and or developer payments. And I'll talk about that in a second. But special tax is basically you approved this recently for Alameda Landing. It's a community facilities district for services. And that means that property owners are paying more in addition to the 1% property tax that goes towards essentially will go toward to the general fund in the road funds to pay for maintenance of roads, to pay for fire, to pay for police, and then develop a consistent approach for each incremental development. So developers are kind of clear how this works and the rationale behind it. So what did we do? First, we determine the net fiscal impacts of the entire Alameda Point project with all the planned facilities using conservative assumptions. So all plan facilities means a new fire station. It means all of the parks that are out there. And we made one pretty major conservative assumption, which is the entire entitlement value. Me point is five and a half is 1425 housing units. Five and a half million square feet of commercial commercial is beneficial to the the to the to the fiscal mainly because you have impacts that your residents are there both during the day and the evening. And so they tend to have bigger impacts. And so what we didn't want to do is assume, you know, over 20 or 30 years, we don't know are we going to get 3 million square feet of commercial? Four and a half, five and a half. So let's be concerned where we are shooting to get as much jobs as possible. But four, since we're setting special taxes and we're trying to be fiscally prudent, let's assume something more conservative. So we actually assumed a three and a half million square feet of commercial and the 1425 housing units. Obviously, if we get five and a half million square feet of commercial, that is better for the general fund and will be will be a benefit to the general fund. But since we're setting these special taxes now, we want to be careful because they're not easy to change. So we want to be careful to have conservative assumptions built into how we estimate them. So that result, when we did that analysis, was a $900,000 deficit, mainly not to the general fund. The general fund was a surplus, but the road fund, a significant new road, Miles. And so when you combine all of the funds that we looked at, the overall deficit was $900,000. Okay? So now we know we've got it. We've got an issue when we're using conservative assumptions that we need to mitigate because we need to meet that fiscal neutrality policy. So we need to assign every development, their fair share of that deficit. And the site, a fair share of the 900,000 is $311,000 that they that they have agreed to essentially create a special tax that will generate, at buildout $311,000 annually to the general fund to mitigate their portion of these impacts. And those. So that's the second step. The third step. Biz Well, what about in the beginning years when you might have some facilities but not all the development paying revenues and paying the special tax? Are there kind of temporal impacts or impacts in the beginning and over time? So let's do another analysis and let's look. In this case, we estimated the net fiscal impacts of each incremental development, obviously in this case site a by phase. And so what we looked at was phase one, face to face three. In phase one, there are negative impacts even after they pay their share of special tax.
Speaker 4: Yashar Can I ask you quick question just before you get to the the different phases? So in the I'm in that paragraph in the staff report, it's on page seven and the section is Results of Fiscal Impact Analysis. And in the first paragraph down near the bottom is the sentence that so it talks about the development in Alameda point is actually expected to generate a net positive impact on the city's general fund of a certain amount, net positive impact on the city's library fund and a net adverse impact on the city's street related funds of $1.2 million. And my question was. Explain why the city's street related funds are negatively impacted if the developer is paying so much in backbone infrastructure costs.
Speaker 9: Well, because those are what they're paying for. And background infrastructure costs are the capital. This is the cost to maintain the roads and to keep them at a certain level maintained at a certain level. And there are a lot of roads there. There are a lot of bike facilities or a lot of roads. And so we've estimated all of the different kind of road miles and sidewalks, linear feet and all of that, and determine what it would cost to maintain all those roads. And there aren't when you look at the street funds, there aren't a lot of dedicated street revenues to to do that. And so in this case, when you combine all those little bridges.
Speaker 4: No toll bridges.
Speaker 9: Yeah, exactly. So it is an impact. So you've got a lot of facilities and not a lot of dedicated revenues to that. So it creates it creates an impact, I think.
Speaker 5: So Councilmember Odie and I were just talking about the the net impact and we were just basically distributing the net impact of $300,000 in number to over 800 units. Granted that it's also going to be distributed over commercial as well. But just just for math sake, right. That comes out to be $375 to which for residents to which I, I thought that the reason why it's kind of low is because you're distributing the net impact over 800. Whereas if you distributed the total impact, it'd be something else.
Speaker 9: Correct. Right. I mean, if you because you're mainly netting out all your other revenues. And so it's not just the cost, but you're saying the general funds going to your property tax for sure. You're going to get transfer tax over time. You get sales tax. We take into consideration all those revenues as well and then compare and then essentially compare them to costs. And how do those compare?
Speaker 5: And the reason why that's important to mention is because the Bayport. They're paying $1,000 a year on for MSD. Mm hmm. And all you need to do for those who are so interested in the Internet, just go to their county assessors and you'll see that there's $1,000 for each residents. And that's the that's basically the CFD MSE for, for Bayport, whatever it is for Alameda landing. I don't know. But.
Speaker 3: And you know, I guess my question was, you know, what do we estimate? You know, each parcel that annual tax is going to be or do we not know that now or.
Speaker 9: We don't know that exactly. I mean, we ultimately it's it's. Yeah. I don't know. I mean, we, you know, we it's hard because you can it does depend on how you allocate it to commercial versus residential and how we do that. And the developer, in some cases, commercial development is actually much more sensitive to special taxes than than residential. The way that we kind of structured is that what we said to the developer, we went through an $11,000 a year. We're going to you're going to have a special tax. Certainly your townhomes are going to have those on them. You know how you figure out how you apportion that special tax. We're going to figure out and you're going to come tell us because we're going to end up approving a CFD ultimately for that. But what we what we care about most is that we're assured that $311,000 a year.
Speaker 5: Yeah, I just was, I think one, I want to clarify one thing. So I think the situation where Bayport was that and this is the genesis of the fiscal neutrality policy is that Bayport at the time was part of redevelopment area where the or the baseline was zero or pretty close to zero. So everything was was basically tax increment. So that's why you had to capture the for the full value. Whereas I think you're doing your analysis where, where there's some property tax that's coming down Alameda solar so that the 1% ad valorem and the Alamo is 25% share is coming to us. That's right. But then there's still there's still a discrepancy and that's why we add the brackets.
Speaker 9: Right. And. Yeah, exactly. And I think we actually ran a sensitivity because the state has approved things like the infrastructure financing districts. And so we actually ran a sensitivity. If you we don't assume any of these or infrastructure financing districts for that, which is really a reapportionment of that 1% ad valorem tax, if you did this impact would be much bigger and you'd have to mitigate a much bigger amount. And again, I mean, this these are conservative assumptions that we tried to make throughout the analysis. If you were to if you if we're successful getting five and half million square feet of commercial, there won't be any impact. I mean, that's what we estimate. There wouldn't be any where we want to be conservative, make sure we're being fiscally prudent. And so we've assumed something that we think's more realistic in the 20 year time frame, the three and a half million square feet. So let me let me just keep going, but feel free to interrupt. And this is good. It's. So number three is to estimate the net fiscal impact of each incremental development by phase. So for let's just look at side eight and let's look at what facilities are actually built at the time CIDA is built. So we're not going to assume the fire station. The fire station is not part of the project. It's not necessary. So we're not going to penalize them. The full costs are or pro-rata share of the fire station. They do have to pay an average cost of fire expenditures because they're using fire services. But we're actually going to just look at the facilities that are actually there inside A to to to try to estimate whether or not there are any kind of incremental or temporal impacts on the general fund that we need to mitigate. And these would be mitigated through some sort of you know, it wouldn't be through a special tax, be some sort of payment or source because it's kind of a temporary impact. We did this and then we also compared it to one offset it with one time revenues, which are really property transfer taxes. And I'll show you the analysis on this, but based on pretty significant property transfer tax on just the ownership residential really offsets those impacts in that first year and I'll show you the numbers. But so we we start recommendation is there's no additional mitigation that's required for site A and then we also, you know, this is something that happens in other cities is if is there a single user that generates a significant amount of tax revenue that could present risk that if it does, it gets delayed or doesn't happen. So for instance, you know, a major retail user in this case, we have no kind of single user retailer that's huge. That would be generated. But like it out in L.A. would be like a target or something like that. Here we don't have that, but we do have a hotel and hotels generate pretty significant transient occupancy tax. So we did actually take the hotel out and it build out. You know, there are no there's no there's no impact. There's still site is positive. And I should say our number three overall a build out site A is positive. It generates more revenue to the general fund than it does expenditures. So I want to make that clear.
Speaker 4: Yeah. May I take you back to number one under this approach to fiscal mitigation? And so that was determine the net fiscal impacts of the entire on midpoint development. And at the end, it says fiscal analysis in exhibit nine estimates its impact will be a negative annual impact of 871,000 at build out. Mm hmm. How how how many years is this estimated deficit expected to last? Is that just the year we get to build out?
Speaker 9: Or when it when it's at build out, it means build out. So it means kind of the assumption is, you know, that that could be going forward. Going forward. But that doesn't I mean, again, there are a number of factors that could influence that. The more commercial you get, the more retail sales tax. If there's a major business to business user, you know, there are other factors that could play in here. But we've tried to be conservative in our assumptions. And so that's where that's right. That that's kind of at build out what the impact would be.
Speaker 4: And and.
Speaker 9: The annual impact.
Speaker 4: Okay. I appreciate that. Is this a deficit page from the general fund? Where is it? Where does it come from?
Speaker 9: So the deficit. So let me go to the next slide. So the the deficit, if you take all those funds revenues, the property tax, sales tax, utility users tax, we've estimated all of those expenditures, fire, police, everything. When you kind of net those, you know, compare those, you've got a deficit of the 900,000 that you're talking about that is and then site A has to mitigate its fair share. And so it's actually paid through a special tax so the general fund. Every development is going to have to pay their fair share of that 900,000. So every development that comes into the city, we're going to say, all right, here's the impacts. You pay your fair share. The idea is and the methodology is that at the end of the day, once it's all developed, you're going to have sufficient funds to cover any deficit. So that there would be no impact. Our hope is that everything's wildly successful and all the taxes are even more than we think. And, you know, you're collecting honestly. I mean, you're collecting special tax revenue and you're not having a negative impact because it's much. But since we don't know and we have to determine it now, we want to be conservative and use conservative protections going forward.
Speaker 4: Thanks.
Speaker 9: So this is the summary of the.
Speaker 0: Oh yeah. Member already.
Speaker 3: Oh, I'm sorry. Thank you. So. See if I just understand this correctly. So we're expecting transfer tax and property tax in. The transient hotel tax. And so we're expecting that to come in, in, you know, 17 or 18 or whatever. We're starting to do all this. And we've already pretty much assigned that revenue to expenditures already. That kind of.
Speaker 9: Well, it's just that it comes you know, it's not is some of these revenues you can track to to a specific property like a property tax you kind of know. But it just starts your revenues will start going up your expenses, too, because you'll be having more calls for service. So things are it's it's not going to happen overnight. Right. But you're going to. Sure, you're going to I mean, probably what you're going to see first are the revenues, right? Because you're going to really start to see a hit and you're going to get property transfer tax revenues. When all those first townhomes get sold right away, you're going to get a big hit and you'll see the numbers that we've estimated. And then once they once the property tax get on the rolls, you start to see increases in property tax. But over time, you're going to start to see increases in calls for service and other things and expenditures. So it's not that it's a sign, it's just that you're going to gradually have increases in revenues and increases in expenditures.
Speaker 3: And then just for my. Newness at this. So is that going to just sit in the general fund or are we segregating that in like the base re-use or.
Speaker 9: No, it will be the general fund. Right.
Speaker 3: So we have to be very careful when we get this in that we don't spend it because we know that, you know, it's pretty much spoken for, I guess.
Speaker 9: Right. I mean, it's going to the general fund and we need to be aware that there are going to be increases in expenditures over time as well. Absolutely.
Speaker 2: Okay.
Speaker 9: So this is I know this is a big tale, but I want to walk through it quickly. So this is the analysis of site. So this was kind of the overall how do we set that special tax? Because we're going to set that special tax. And it's very difficult to change it once it's kind of in place. And so we're going to require that this amount that they are obligated to pay this amount at build out every year. Then we say again, going back to our methodology. Let's look at what are the impacts on a temporary basis are. Well, let's look at it by phase by phase for site. When you look at site in total, we're expecting with mitigation that the impacts will be positive to the general thought about $700,000, but they're still paying the 311 every year. But we think their project, based on the facilities that are in place now or at the end of phase of site, there will be some benefits to the general fund over time. But let's look at it by phase, because things, services and facilities are kind of lumpy. And so you do see that in that first phase there is kind of a net impact of 500,000. The fiscal mitigation we're estimating would be 200,000. So you've got a temporal impact in that first year phase one, but you're collecting $1.1 million in transfer taxes and then the transfer taxes in phase two. And this is just for for sale residential. So you may there may also be transfer taxes for other uses, but those are speculative because they may just hold some of those the commercial properties they'll probably hold and not transfer. So we just assumed, you know what, no transfer tax from that, just the townhomes, essentially, and then the condos and townhomes in the second phase and you get a pretty big hit. And so staff's recommendation is that this these hits and transfer tax more than cover any temporal or temporary deficits that you may have in some of the earlier phases.
Speaker 0: Before you move on. Vice Mayor.
Speaker 2: This. I just want to make a comment that phase three kind of aligns with the purpose smoothing problems that we have. When we go back to the our general fund discussions back a couple of weeks ago. So one of the questions I had is, did your estimates? To set the tax, anticipate or graduate at the same rate that is driving. When we look at the general fund projections on a downward slope.
Speaker 9: So that the special tax is estimated to escalate CPI every year and it has to be tied it's tied to actual cost of maintenance or expenditures of maintenance. So and it will escalate over time.
Speaker 2: But not the municipal service tax.
Speaker 9: So the municipal service tax will escalate at the CPI.
Speaker 2: So it has I'm not going to say an inherent structural defect built in in a way that it doesn't track at the same escalation.
Speaker 9: Right. So it.
Speaker 2: Doesn't contributions.
Speaker 9: Well, right. The the inflation factor will be CPI as opposed to, you know, a city municipal expenditure rate or something like that. It'll be tied to CPI, is that correct?
Speaker 0: And Brody.
Speaker 3: I think you had Amir. One more. What kind of request? Phase one is 15 through 19, right?
Speaker 1: Mm hmm.
Speaker 3: And then it looks like the bulk of the sales are in 17. I mean, is there some way when when we look at this, we can kind of see, you know, by by fiscal year what the estimated impact on on our general fund is as opposed to buy phase?
Speaker 9: Yes. So we can we can break it out. I mean, we can do that. It's a it's we just make assumptions by year. The only reason we didn't do that was just because we didn't want to give a sense, a little bit of false precision, because some of it is, you know, you know, but we can do it. And if it's analysis you guys would like to see, we're happy to do it. We just, you know, in some ways. Exactly, you know, trying to estimate exactly what's going to be in every year. It starts to get a little, you know. Well, based on those assumptions.
Speaker 3: I mean, two and three, you know, that's going out way far in the future. But I think for for phase one, which is, you know, the first five years, which yeah, you know, we're going to be, you know, this council's going to be setting the budget for. So it would just be helpful.
Speaker 9: Yeah. And we can do that. And we can also show you that the transfer taxes, kind of the one time transfer taxes for the for those years as well. So, sure, we can. Absolutely. Thank you.
Speaker 0: And I'm wondering what are your assumptions on your for sale residential? How many of the units are for sale? The residential?
Speaker 9: What's in the proforma? So it's, you know, I can pull up the numbers but it's anyone, remember. So I don't remember the exact number but it's whatever is in the perform I think it's.
Speaker 3: The 39 townhouse down home.
Speaker 2: How many? 139 townhomes. That value sale of 888,000 range. Mm.
Speaker 3: Or that's.
Speaker 5: It's the Willesden report.
Speaker 0: So.
Speaker 5: Exhibit 10 to.
Speaker 9: 70. So 270 for sale. For sale 274 sale.
Speaker 0: Total of. Is about. And that's your phase one. Or is that just overall 270.
Speaker 9: Overall for yourself. But but we and we assumed value in tax from all of the units and all the commercial. The only place we kind of limited to for say residential is on the property transfer tax because those are the ones.
Speaker 0: So that's what I'm looking at and trying to figure out how you made that calculation.
Speaker 9: Yes.
Speaker 0: And this is not below market rate, then this is all market rate, right?
Speaker 3: Yeah, but that has to be a transfer tax on the the rental building because someone will buy it.
Speaker 10: I'm James Edison from Will, then financial services consultant to the city. So what we assumed was so for the recent offer sale, which I think some of the moderate or also some of the moderate or for sale and then the market rate for sale, those are the only units we assumed in what we assumed was a the city's transfer tax rate, you know, the 12, $12 per thousand valuation. The reason it's a big hit in is because when the first sale happens, every single unit has a transfer tax. After that, it happens as that as a unit. So it just depends on people's lives. And, you know, that can vary quite a bit. But when when the initial sale happens, when that first family moves in, that means every single unit results in transfer tax. And so it's a it's a big number right out of the gate, but it only happens once. It's not annual. I mean, it's annual in a sense. It it may occur over several years, but we've calculated for the phase that's sort of a one time payment essentially on the commercial. It really depends on the disposition of the property. You know, if someone purchases the property, I mean, you can have a transfer tax at that point. But then if they didn't develop it from there and, you know, build their building and do the rest of it, their assessed value will change. You know, a reassessment will happen, but there won't be any transfer necessarily. So you won't have a transfer tax. You may see those. But in the interest of being conservative, we didn't assume any because they might not happen.
Speaker 9: When I was a counselor, you asked about we did assume in the annual cash flow. So this is I mean, those are the one time expenses this row here. When we calculated the model, we do assume a certain amount of all the units in the commercial transfer every year. But it's a small percentage here. You're talking about all of them, 100% of the for sale units transfer. So you get that big hit over time over on the model, we assume every year some portion of the unit, some portion of commercial turns over and you do get a transfer tax revenue. You just don't get that big hit like you do in the beginning. So we do assume property transfer tax revenue over time as well.
Speaker 0: Thank you.
Speaker 9: So I think that's it. I'm happy to answer any any question I have, Joe. I think Joe answered with important point partners wants to just say a couple of things. And then if you have more questions about the fiscal, though, or the financial, you know, I can answer those now. Yes.
Speaker 4: So thank you. And is that so. Let's see. Down on the. Um. Page eight. There's the reference that the tax. My question. Let me just find it. Well, my question is, why is the tax burden higher for residents than for commercial 1.9% versus 1.8%?
Speaker 9: All right. That's a good a good question. And so when negotiating the in and the term she was attached to the NRA, there's commercial uses tend to be much more sensitive to special tax, special taxes and whereas residences, you know, honestly, we all I mean, we don't it's it's just a reality where people don't pay as much attention and they're just not as sensitive to how much of a tax burden there is. And so you're allowed you're able to burden residential users a little more without seeing an impact to value. And again, we kind of use these numbers that are in there, the 1.8, 1.9 to do the analysis. But the end of the day, what we care about is now that we've done all the technical work we care about, is it $311,000 if they decide they want to kind of prepay that on some of the commercial because they want to lower the burden and they want to put more on the residential. You know, we can you know, we're kind of allowing some flexibility because now we've kind of done the analysis to figure out what we think those amounts should be. And then and it's not just the municipal services special tax, but it's the team plan and the operations and transit services that they're funding. It's flood control maintenance, flood control reserve. So there are a number of different things that the city is saying. Our priorities that we want to be collecting funds for from this development to make sure that we're being prudent about maintaining the resources we have out there and providing the services that are so key to the transportation program
Speaker 1: . Thanks.
Speaker 0: Okay. Well, we don't have any speakers.
Speaker 9: Which I think I think.
Speaker 0: You want to sites with a search.
Speaker 9: Yes. Sorry. Thank you.
Speaker 5: Good evening, members of the council. Joe Ernst with Alameda Point Partners. We're very pleased to get our planning board approval last week.
Speaker 2: Having 29 supporters with varying messages.
Speaker 5: A lot of new faces, you know, and we will continue that outreach with the community. There's been a lot of talk about housing, but I want to be clear. You know, we haven't lost our focus about a lot of the things we've heard from the community from the very outset about what the community wants. Clearly, jobs and the things businesses need, you know, the the parks, the amenities, the housing, the rental, you know, those are things, you know, business. I think this project, you know, we've talk about jobs, but it's also important what it will do for creating jobs at the base, affordable housing. We have Linda Mammoliti here tonight. I'd like to get her to say a few words, too, about some of the affordable housing.
Speaker 2: You know, with the housing.
Speaker 5: Again, you know, there's enough here to support the goals to pay for a lot of the things that are in this proforma, that, you know, the things we want. You know, there will be a diversity of housing types. There's been a lot of questions about different housing types. But we have a, you know, enough here. You know, we using, you know, size of product, you know.
Speaker 2: To.
Speaker 5: To target a lot of different parts.
Speaker 2: Of the market between affordable and market rate.
Speaker 5: We've clearly tried to tailor this to, again, demographic that, you know, is going to support transit, that we want to support the retailers, the amenities which are so critical to attracting business. And it's very resource efficient. You know, certainly in our time here of water shortage, I think what's very important with the with site is the.
Speaker 2: Capital investment and the message they.
Speaker 5: Will send and the importance of of this project.
Speaker 2: You know, we've had a chance now to.
Speaker 5: Meet with all the businesses out at the point and talk to them about their business and their futures. We've talked to other businesses that have expressed interest in.
Speaker 2: You know.
Speaker 5: Our project and other things we're working on. You know, it's very clear that a lot of the businesses out there, from Nortel to a county power even right speed.
Speaker 2: A new tenant, you know, making very minimal.
Speaker 5: Investments in their buildings. And it's largely due to uncertainty about infrastructure. And so I think this, you know, getting city underway is going to send a real strong message to the capital markets, going to send.
Speaker 2: A real strong message to these companies.
Speaker 5: It's going to send a real strong message to good businesses that we want to locate here. I think, you know, the housing is going to support good transit, both infrastructure and services. And we want to be a catalyst for expanding this throughout the rest of the city. Again, I'm going to have Elinda talk a little bit about affordable. But, you know, we really want to realize what renewed hope, you know, has achieved with the 25% affordable housing. We've done some preliminary jobs analysis here. And, you know, with site development, we're looking at about 3700.
Speaker 2: Construction jobs.
Speaker 5: That will translate into about 185.
Speaker 2: Million in wages. And, you know, we have in.
Speaker 5: The.
Speaker 2: In our DDA, you know, we're targeting.
Speaker 5: 25%.
Speaker 2: Minimum, you know.
Speaker 5: Toward, you know, local Alameda residents, Alameda County, and also going to be working with the collaborative for apprenticeships. So, you know, we hope to see a lot of those wages stay right here. You know, permanent jobs, you know, based on the mix of businesses, hotel.
Speaker 2: Retail and, you know, the innovation, especially manufacturing.
Speaker 5: Looking at about 1700 permanent jobs, of course, sales tax. TOTTY Given the blend of commercial uses, we are making good progress on a project labor agreement with the building trades and we're hopeful we'll have that wrapped up in the next week or so. And you know, is part of our commitment to bringing jobs.
Speaker 2: You know.
Speaker 5: Through the lease structures that we've negotiated as part of the DDA, we are committing to at least getting one of those buildings that are in phase in our phase three, getting that redeveloped and activated with phase one.
Speaker 2: Building 117, about just under 100,000 square feet.
Speaker 5: So again, want to, you know, and a lot of talk about the housing, but clearly want to.
Speaker 2: Talk about the.
Speaker 5: Many benefits that come from this project. And so with that, I'd like to turn it over to Linda mann Bellini with Eden Housing to say a few words about the affordable.
Speaker 4: Thank you, Joe. Thank you, Madam Mayor.
Speaker 1: Members of the council. As Joe said, I'm the president of Eden Housing. I'm happy to be here. I think this is actually in Eden's long term history, one of the best projects that we've been able to participate in. And I want to tell you why we don't often get asked to be in developments like this in this percentage. Frequently, the other inclusionary ordinances that we work with have 10 to 15%. They never have 25%. And I think the percentage of affordable housing here is actually quite exciting and really exceptional. And I would applaud the city for that and for that agreement. We're very excited because we can serve a range of affordability with this development and we can serve those who are most in need at the low end, but also take the rents up. As you saw in the slide that Jennifer put up, we have the ability to create create apartments that are significantly more affordable than the market can provide. And we think it's actually very important that these be rental. And that's largely because the developer here is investing a lot in the infrastructure. Eden could never be in a project like this and pay for that kind of an infrastructure investment. So the fact that we get to piggyback on that is really important, but it also gives us the opportunity when we do rental housing to leverage the new funds that might be coming from the state. And I want to say a very special thank you for the yes endorsement vote tonight on 1335 and 35. Both of those are very likely. Both of them are sources that are going to be directed in large part to rental housing and that they will be able to be leveraged on a project like this. Cap and trade also has a requirement for affordability that is significant. And so we think that it's really important that the affordable be mostly rental housing because we think that that's really the thing that's going to be the most successful financially. We also.
Speaker 4: Think it's the best use.
Speaker 1: Of what is in essence subsidy from the larger land development. We can serve more households by doing rental housing than you could if you were doing single family. So for example, if you were to sell a house at $900,000 and make that house affordable to someone at $300,000, the subsidy for that one house would be $600,000 for one household. For Eden, I could build three houses for that kind of subsidy and maybe four if they were one bedroom. So I think it's just a better use of the subsidy dollars coming from the developer for for us to to do rental. And so I did want to comment on that because I know there were some questions about that in other places and we're really excited about this. Honestly, I Eden won the Jack Kemp Award from ULI nationally last year for a big master planned development. And I'm now judging this year for that same competition. And I would tell you this is that kind of a development. It is the kind of development that will get national attention that really has a wide range of affordability. It affords the folks at the lowest end of the spectrum the opportunity to participate in all of the amenities that you're building. And that's really important. A lot of the developments that we work in, a lot of other communities, they'll take a check from the developer and go build it somewhere else. But this is really important to be built here. And so I just want to thank you for that because I think this is a really important aspect of the project, and I'm happy to answer any questions about affordability because I know there have been some. So thank you.
Speaker 0: Are there any other speakers point f it down with the presentation now. All right. Council members, vice mayor.
Speaker 2: Um, you know, I'll start out by saying that I've never been a fan of a town center. Um, I think I've been clear about that. One of the considerations, though, that I do have, and I wanted to make sure that we can verify that other action of the Planning Board was to take the old north housing and return the housing that's allocated to north housing to what was agreed with in the Navy in 29 at 415 units. And I just want a quick confirmation that when is that going to be? Fortified and established.
Speaker 9: Yeah. So that will be coming back to the Council on June 16th.
Speaker 2: At the same time. And that has a net effect of taking 800 units off the northern waterfront.
Speaker 9: Right.
Speaker 2: And that and project labor agreement, I think are two key, key things for me. I do have some other other questions and not questions, more comments and direction and things I'd like to see. One of them is I appreciate in-house in coming up here and being a participant in this, but. I was reading the affordable housing section in the overview of the DDA and that is separate and it's not incorporated in and what we see here in the and these are from our numbers and there is a term in there that talks about their ability or their maximize their potential for obtaining financing. And I'd like. The risk of them not obtaining sufficient financing not to be on the city. But to be on the developer because part of the promise and we when we hear the input from people part of the promise of this is to deliver 25% of the 800 units as affordable units. 128 of those are at Eden. And if they're depending on other other sources of of revenue to build these, including state funds. I don't want to get to the end of phase one and they don't have the funds and we not deliver the housing. So I think that risk should be on the developer and the city can do everything it can to help. But this is this is the promise. And that's what a lot of the support where a lot of the support is coming from. I'd also like to see. A little more meat behind the leasing and inclusion of jobs in phase one with some milestones because people are going to be living. One thing that's clear is they're going to be townhouses built. There's going to be an apartment built or apartments built, and eventually they'll be condos built. People will be living there. And one of the best ways to mitigate those people not driving up to the tube or trying to take a bus through the tube or a BRT is to have jobs close by. On the. The issue of. Having. The ferry. And I've seen that the ferry over the period of this discussion has been reduced to $10 million. And whether or not that's enough to build a ferry terminal. And then whether or not the fairies will come if we build the terminal, I think is still a risk because that's a promise that's out there that we're going to have a fairy. But I haven't seen a commitment yet from Wheaton to run a fairy. If we build a terminal and I don't know if $10 million can build the terminal, it doesn't sound like it. So that's another risk that we have in front of us that I'd like to push the push in another direction and it falls under transportation. There are a couple of things that we have to make sure that we do reality based transportation demand management. And I think one of that demands that we address the issue that keeps popping up, that there is only going to be one additional cars through the tubes at peak time. And whether or not that's true or not. I don't think it's true. But we have to get some numbers that are bona fide that say what what it's like today so that we can project it out on what we have to mitigate as these units become populated. And I think that is extremely important to have credibility when we're charging people who are going to be buying these units a substantial amount of money to transport them. Off the island if they have to work off the island. And then lastly, I mentioned the project labor agreement. I think it's very important to have these jobs local and I'm glad progress is being made. And that truly is a condition, I think that we have to stand by because it's public land. It's been used for this project. So those those are my comments and my input for tonight.
Speaker 0: All right. Member Ashcraft.
Speaker 4: I have a clarifying question on the statement about the reality based transportation planning and beside of you come up. Okay. I have definitely read in the newspaper from a local commentator that somewhere it said that Alameda Point development is only going to put one more car through the tube. Wasn't my understanding of what the report actually said. Is it not something more like the capacity only has room for one more to one more car through the tube? Do you want to state it?
Speaker 9: Yeah, I do.
Speaker 4: Completely that I am.
Speaker 9: Sure. I mean, the Aluminum Point Environmental Impact Report studied, I think 32 intersections, the impacts to 32 intersections in in Alameda and then a number in Oakland as well. And what it showed was that there will be, you know, with or without made a point, there are going to be significant impacts given all the regional growth. Aluminum point, as you know, there are impacts that Alameda Point contributes to. There are significant impacts. No one is saying that there's only one Alameda point generating one car. That's just not right. Absolutely. Will be generating cars. What happens is what that what that person. Kind of taking data. What it shows is that the tubes are essentially what kind of confirms and in a lot of ways what a lot of us know already, which is the tubes are generally essentially reaching capacity. Now, when you add more cars, what ends up happening, this is what you see in the analysis that was done is when you add more cars on the Western people that are driving from the, you know, the middle of the island or Eastern don't go into the tubes anymore. The tubes are capacities. What we would all do if you know intuitively they're going to they now then go to intersections on the East End. And so where you actually see a lot of the impacts in the traffic impact analysis are on the eastern around the Park Street Bridge, around the other crossings because people who would be kind of driving into the tubes today, let's say as the regional growth occurs, other growth occurs in Alameda, the tubes are going to reach capacity . And that's what the models are saying, is that your tubes only have so much traffic, you know, in there. And so what you see is they actually have spreading of traffic and then traffic that's diverting to other parts of the island.
Speaker 4: And thank you for that clarification, because it upsets me every time I see this reported in the newspapers, not so much reporting, but sometimes as an opinion piece and sometimes it gets front page coverage. But I just want us on the council when we're talking to the public to to have an understanding of what that means. And, of course, it ties into so much of what we've discussed already tonight about the need for getting the funding that we have the ability to apply for through the Alameda County Transportation Commission, both the federal grants and the state matching grants. And we're not burying our head in the sand. We're saying we do need to look at another model, which is giving people the opportunity to live and work in the same area and getting people who work out of the area, out of their single occupancy vehicles and on to public transit. But we have to make that possible. And we heard some very good opportunities tonight that are coming to us the best rapid transit and increased funding for ferry and other public transportation. Thank you there for that clarification.
Speaker 0: And I just.
Speaker 5: Want to add on that very important point about the increase of traffic from Alameda point as it flows, particularly through the outbound Posey Tube in the morning. On the when we decided the air, we actually discussed and evaluated that. And it was largely because when I was looking at the appendices, I did, in fact take a look at the circles that they had, the schematics and kind of said, okay, look, there's there seems to be something odd about the certain number of of cars going through the posi tube in one scenario relat. And then when you look at the cars going through the Posey tube, in another scenario, there didn't seem to be that much and there wasn't that much for the reason given by MZ Art this afternoon. This evening. And it was given back then when we discussed the air. Now, what we also did, though, is we also did back then when we discussed the air and said.
Speaker 6: Well, what.
Speaker 1: If we're.
Speaker 5: Wrong? So back in 2014, what we did in accepting the air and also doing the MIP or the mast master infrastructure plan for Alameda Point, we also had a failsafe just in case something didn't happen, didn't go as we had wanted to. So that is part of the discussion. That is part of the of the things that came out of the whole nip in the air for Alameda point discussion for that happened in 2014. So let it not be said that this council did not evaluate that very specific information that that is now, you know, gaining currency here in 2015. We discussed it in 2014 and however imperfectly, we made some policy decisions with regard to that. So if I maybe I'll just continue with some of my points. Okay. My points for tonight based upon this is again on transportation. Thank you very much for the changes that I saw. Once again, I love that 15 minute headway for the shuttle. I know it's not this answer to everything. And I know, you know, consultants said not to not to glom onto it, but I did. But also, the other changes that that were made was to make sure that, you know, we'll talk about three things about the shuttle possibly stopping at one or some other place. So I'm glad to see that language in the in the team. I think in going through the materials for this evening, I think that the my quick notes that I had was make sure that we have language that protects us and our interests. And our interest, for example, are like the sports complex. Make sure that we have a language that protects us in our interests in this development in the event of a recession. Now, everything that is had indicated tonight is that that will be part that is part of the DDA. So remember, she talked about, you know, economic force majeure and all those kind of things, because we do have however the project goes in terms of the sales, whether the commercial sales or whether the rental or whether the single family I mean, the the sales for those are subject to the markets at the time and markets at the time could be down. So however, the on the revenue side, those things go. We ourselves as a city want to see some cost that we want. We want to see costs like that, like the sports complex. So we don't want to do you know, we don't want to sacrifice those. And I think every everything that MDOT has indicated is that we've taken that into account. We also want to take into account the fact that, you know, we're going to hire more police officers, we're going to have more more fire people. And we might even, one assumes, some of those costs ahead of time. For example, you can't have half a half of a fire station. Right. So so, you know, you have to make a decision. So as we assume these costs, we want to make sure that we've factored in, you know, well, what if, you know, all of the property values go down because we have all these assumptions with regard to how revenues offset the costs and we have all these assumptions with regard to the impact fee that we're going to use. So but everything that to me suggests that they they're modeling that into into a DDA. Okay. Land banking, as always. One of the big issues that we learned from the Bay Port Alameda landing. So hopefully that will make sure to have a discussion about that things that I also want to take a look at a. Flushing out the corporate entity of who will be working with. A lot of times you want to know, you know, the corporate entity with who you're working with just in case things go wrong and you know, you just want to know things. And I like the that the extension payments that Miz was talking about. I just I think the question that I just wrote here was, are they automatic, though? And if we could just flesh that out later on. And also the mechanism, as I indicated earlier, kind of understanding the mechanisms for how we're going to score the IRR , because a lot of that is a function of, you know, what we think are the costs that the developer or whomever is assuming as an equity investment need of a project. So, you know, I mean, we got we got to make sure that we understand that. And I guess the last thing I have in mind is from the outset is I had indicated a variety of things that we're going to be deciding on on June 16th. One of the things that we as a council might want to think about is including the development plan itself. And the only reason why I would include the development plan, which was discussed by the planning board and voted on by the planning board. The only reason I would raise the possibility of including the development plan as part of the June 16th discussion is if for no other reason, for its ceremonial reasons. I mean, it is after all, you know, it's a it's a development plan for a key part of Alameda Point, which has taken us decades literally to get to this point. So from a ceremonial perspective, you know, to say hats off to former Mayor Withrow, former mayor opposed to former Mayor Johnson and and Maria Gilmore and all the previous councils, it's altogether possible that maybe we should have the council at least vote on the development plan as opposed to leaving it just to the Planning Board as part of our June 16th discussion. So largely for ceremony reasons, I get that that the development plan would probably be woven into the DDA. I understand that, you know, but we might have it. Think about that if for no other reason than ceremonial reasons as to why it should be included. Well, as my comments.
Speaker 0: Member, Ashcroft.
Speaker 4: Thank you, Mary Spencer. I want to thank the missus and the other presenters in Ms.. Madeleine. If I'm saying your name correctly, that was really inspiring to hear from you. And to that, the project we're aspiring to do at its site is it sets the bar high, even by the projects you've seen. And I like that. I we got a lot of external correspondence from various people actually supporting one of the letters. I was really impressed with and I'm just going to read it tonight. So it's, it's in their record in heard by the public because I think it really sums up a lot of of why we're doing what we're doing. So it says my husband Dan Corea and I are Olympians and retired employees of NASA Alameda. I was on the first brand committee for years working to decide what the best could and should become after closure. Dan worked his last year performing hazardous waste cleanup around the base. I spent my last years in the active center in building one or one, helping people find and apply for new jobs. Dan and I recently went on a tour of what is planned for the Seaplane Lagoon site. We were filled with hope at what could be done with this tired old base of ours. I remember. I remember when it seemed that the task of bringing the base back to life was just too daunting. Now we see that not only can new life happen, but this plan for society could honor our former base. Incorporation of existing buildings into the development plan would allow our history to continue into the future. At the same time, we have been watching as too much development seems to be changing. Alameda from the community we once knew. We think we have gone too far in changing neighborhoods that were not seeking their change. But we still think that the one place that does cry out for development is our old base. The proposed development there will not take away from what Alameda is. It is development that is sorely needed to allow that crumbling base to become something better than it is now. This is a plan for new life. We endorse it. Carol Fairweather and Dan Corea. Thank you.
Speaker 0: Member, Odie.
Speaker 3: Thank you, Madam Mayor. I'll try to be brief, because I think almost every comment that I've wanted to say has been said already. So she ate my my colleague's comments. I just want to focus on a couple of things. One, I'm glad that there's progress on the play, and hopefully I'd like to see that resolved by now. But I hope that you're getting into the nitty gritty of the negotiations and are able to report back soon that that's been taken care of. I was encouraged by the the acceleration of the commercial development. The point was made about we need to make sure we get jobs there sooner rather than later. And that I don't think we can underestimate the importance of the north housing realignment of of housing in our in a housing element. And I think I really want to commend the vice mayor for his leadership on this issue, because what it what this allows us to do is to consider this project in a way such a way that, you know, we're not adding housing to our housing element, where we're going to be able to consider this within the context of our housing element and not go over and build. You know, I guess I would call extra housing. So again, very, very strong and effective leadership on that issue by our vice mayor in bringing this this whole realignment idea to the council and to the staff back early in the year. So. That's basically my my comments. I'm glad that we've finally seen the financials. You know, we we saw the pro forma and closed a while ago. But I'm glad that, you know, the public now has an opportunity to review those. And, you know, this is, you know, where other projects have struggled when the public has had an opportunity to drill down and pick apart the financials. So I hope they they take the time. I mean, we've had 12 days already, but hopefully the public will continue to look at these critically and, you know, provide comments to us . I still have yet to hear a speaker at council opposed to this. So if you're out there, hopefully we don't hear someone come and say we need more time. You know, we haven't talked about this enough because there has been ample opportunity both at the planning board, other commissions and council, you know, to voice concerns. So I hope we don't we don't see a parade of people telling us that, because I think that's a little disingenuous after after all the hard work is that you have done and staff has done. So that's kind of my thoughts where we are right now. Thank you.
Speaker 0: And I appreciate the comments and the presentation. And I have received emails from people that are adamantly opposed to any housing, especially on because that would flow through the two. I think they are out there and I and and.
Speaker 2: I.
Speaker 0: Personally in regards to traffic, that is a big issue of mine. When I look at this, though, it's things that the prior counsel gave this exclusive negotiate an agreement to this company with the 800 homes, which means. I am looking for how the traffic will be addressed. I see this property as a gift to our meetings large. As much as I want jobs and to have something done at the point, I think that at the end this has to benefit all our meetings. A comprehensive transit has to be addressed. I'm concerned that, you know, I voted against hiring a consultant to look at that. I think we have to address this bus shuttle transit. And I know we have our business allies that have already said this sooner rather than later. The traffic through the tube is too much. This cannot within our ability, it cannot contribute any more to that. And yes, it does flow across the island all the way across the island. It is a serious problem. So how do you put an 800 homes and have it have as low impact as possible on our roads? And I think we have to be very mindful of that. And I'm not sure we're there. I'm just going to raise these issues and I'm hoping everyone can be thinking about this. How are we really doing this? Barry The ferry. Okay. I checked Richmond. They said their ferry was 42. They were just. That just happened 40 to 50 million. And that's on line is what they're estimating for their terminal. And we're talking about 10 million. I don't know what the deal is. And then we have our dredging costs of I feel like that is very immature unless in there's someone's got this information. What is the deal is we they're going to put in how much money. How much is the dredging? Is this 10 million going to make a difference? And then I'm going to ask this question of staff, how much parking is being said, set aside for the ferry right there by the ferry. How many spaces are there?
Speaker 9: 400 spaces.
Speaker 0: 400? Okay. How many cars do we think? Well, I'm going to compare that to Harbor Bay. Do you know how many spaces are there or how many? We have a big problem at the Harbor Bay Ferry right now. Do you have any idea how many spaces are there?
Speaker 9: I don't know. Do you know?
Speaker 0: Or the main street ferry? Do we know how many cars?
Speaker 9: Main Street? I think it's like 700.
Speaker 0: Okay. So if Main Street is 700 and this is 400, then that's significantly less.
Speaker 9: Than it is. But we're expecting a lot of people to actually live and walk to the ferry or ride their bikes to the ferry and other things. So we're while we're one of the reasons we're putting it in the seaplane lagoon, at the heart of the development is to try to get all the, you know, people moving there that want to take ferries so that they won't be driving. It doesn't mean the people.
Speaker 0: There.
Speaker 9: Will be people driving. And we don't I'm not saying that no one's going to drive at all. It's just that we're hoping to really maximize the the.
Speaker 0: Okay. So I like to I appreciate that. So I'd like to know how many parking spaces that Harbor Bay. And I know we've got an excess of cars that use that one and I.
Speaker 4: Appreciate their main street ferry terminals will be open to.
Speaker 0: Correct, but I am concerned about building a ferry that serves just this area. Why? Because when I look at the housing, I think we are not building what I want to call workforce housing. I think you've got below market rate and I think you have a majority of higher end and. And and this is at least $10 million. I, I think it's going to cost. I don't know what the deal is, where the rest of the money is going to come from. I don't think 10 million is going to cover it at all. So. But. Okay, the sports complex, what is the total cost for the sports complex? We're getting 5 million from this development. What's the rest of it?
Speaker 9: We have in the master infrastructure plan is $20 million.
Speaker 0: Okay. And where is that? Where's the other 15 million going to come from?
Speaker 9: From other phases of development.
Speaker 0: So when will that be? What's the time like before we actually have families that get to use the sports complex.
Speaker 9: Well, you mean when will we get the rest of the money first? Right.
Speaker 0: When is it going to be built? Because this is for our community. You're setting aside 5 million for something that I think truly will benefit our community at large. Mm hmm. And where's how. What's your timeline? I'm going to want to this one.
Speaker 9: On the red. It's going to depend on the timeline for the rest of the development that's really subject to the city council desire to dispose and develop plan. So. Okay.
Speaker 0: So if we don't have any estimate for that, then I sounds like we shouldn't be holding our breath for when we're going to actually get a sports complex. They may be putting up the $5 million, but we're not going to see anything. And.
Speaker 1: But if I may, similar to other park projects, it's also feasible to do things in stages, and we've talked about that with the sports complex. So for example, that's something I'm doing with Estuary Park will be doing phase one and phase two. Sweeney Park will be probably 4 to 5 phases.
Speaker 6: So it's not that we necessarily need to raise the entire.
Speaker 1: 20 million before we even begin building and opening to the public.
Speaker 0: So I will be looking for more information in regards to how we're going to have something that the public can use. I think that's very important. And and I see the sports complex, at least at this point. Do we know how many parking spaces and will be at the sports complex and what that really we have any idea about when we say sports complex, what that is?
Speaker 1: We've not done any detailed design on the sports complex.
Speaker 0: Okay.
Speaker 1: We have it'll depend on how many fields, what type of fields, what types of amenities.
Speaker 6: So there's it's it's really.
Speaker 1: 44 acres of blank space for us to work within at this point.
Speaker 0: Okay. So I think that our community does feel like we have a shortage of sports fields and that that is a big concern for our community. I don't know if our community at large thinks that we need actually, I have been talking to people about the theory and I thought a good comment that came up was we have a ferry at Harbor Bay and we already have one at the point, but we have nothing in the middle and that's actually a big part of where our residents live. So if we were pulling back and we were thinking where to serve Alameda and would we want a if we wanted another ferry, where would we want it to be? I'm not sure we would want it a mile, a mile and a half from an existing ferry. And I'm hoping that we can come up with. So so when I look at this, I'm thinking that this goes to our meetings. A large and the sports complex may very well be a better use of the money so that we actually get something. And I and I know there's. Apparently people that live in these homes. And, you know, we're trying to encourage people to ride their bikes all over, but to ask them to ride their bike a mile or a mile and a half, maybe out of the equation, that they need a ferry that they can just quickly ride their bikes to or watch. And I'm not sure that that's correct. Actually, I would submit that's not correct. So I'm not sure that that's really the need. Overall, workforce housing, there is a need for what I'm going to call housing for middle income people, whatever that is. I'm not sure that that is being addressed here, and that is a big issue in regards to whatever type of jobs are being put here. Is this the housing that will support those people, whatever if we're doing retail? And I would I would submit that they're not going to be able to afford most of this housing. So whatever I think, if possible, the jobs that are brought in should match a line with the housing because that will in fact reduce your traffic . If the we don't have to have people driving on and off of the island driving, they can work. I think that's ideal. We're looking for people that can work and live there. Okay. The percentage and the water issue, that's a big issue. But I appreciate the work that's been done on that because we all know we're in a drought and Allen meetings are being impacted by that. So that's that. I appreciate that work. The percentage of these homes that are being leased as opposed to by now, the comments in this report go to there hasn't been that much new rental housing built. But I've noticed what I think happens is that we have single family homes that are sold and then some people turn around and lease them. So they did not initially get put out to be leased. But that's what happens. And you have many if you look at Bayport, for instance, there are people there that are that are renting. It didn't start as a rental. But what is nice about that for a city is that when a Prop 13 benefits or for IT owners of property long term because they're they don't have a change they're able to have a corporation hold the rental property and they may change on people that are working there or whatnot. But over time they're still holding that corporation, still holding the property, which means the value is not being reassessed. That occurs when the property is sold and when an individual eyes a house, then they rent it out. Then then the property is going to have more turnover and that benefits our community. Time and the timing of the property long term in a long in a lease situation like that when we're talking about such a high percentage . That concerns me. And I and I disagree with the suggestion that you don't have new rentals just because you're not doing a rental apartment building. We have many people that rent homes and or we don't really have that many condos, but they rent homes. And in fact, I think we have overall higher percentage of rentals in our community compared to other communities in the Bay Area. And yet this is correct, and that we don't have that many apartment buildings, but we have lots of rentals regardless. Okay. The roads, what they're going to actually look like. I recently had the opportunity. Thank you to the bicycling enthusiasts to meet one of the mayors from Copenhagen who talked about how they do designing of roads and and they don't they don't actually don't do cycle tracks they try to do the same direction as the cars, but they do but they design it intentionally so that you have roads that accommodate your drivers as well as a lot of bicyclists and walk and people that are walking different modes of transportation. And I think that if someone can look at what they're doing, actually that's what this meeting was about. The many of a few of us had the opportunity, including staff. I think we have to be more focused on trying to make it work when we have our bicyclists and our walkers and our cars, cars sharing the same roads, senior housing that continues to come up, how will this housing accommodate seniors? And that also goes to universal housing. One thing I have noticed with tri level homes over by target is that the washer and dryer can be on the top floor, which and there'll be a room on the whatever floor you enter on if it's the first floor, the second floor. But I think it's important to have the washer and dryer on whatever the main floor is with that bedroom so that your person that is limit has limited mobility can actually exist on one floor of a tri level home, if that's what we're doing. Trial of a home's. Chuck routes I'd like to see and that may be in here exactly how our truck routes are going to be set up because we have that read a maintenance facility. Where the roads are going to be cutting across through this development if they're coming across this development at all. To get the field to the wheel building and hopefully they don't have to go through this housing development to get their. Okay. And when I looked at the overall chart, I think it was exhibit 11, which I appreciate. The single family homes, 125 of them, 850,000 was the number here. And this is beyond your development. But in regards to staff and it does connect to this development because 125 of the homes, single family, 850,000 townhomes, 300 800, 795,000. That's 425. But I'm going to call high end homes out of. 497 homes to buy their condos. 72 condos, 72 condos, 300 townhomes, 100,000, 72 condos or 540. Okay. That could be in the middle that I'm going to call middle, but that's only 72. You've got 425 that are 800,000 or higher. That's approximately 85% of what to buy is what I'm going to call high end or luxury overall. I don't think that's going to reflect our jobs. I don't think that reflects our community. I see that as a problem. The apartments. You've got 400, 526 apartments. That are not the low and very low, the low and very low apartments. I can understand and appreciate the comments that we need those to be apartments to provide the services and make it work, and then that benefits the people that are living there. I'm not sure that this division of. 425 high end.
Speaker 1: Homes.
Speaker 0: 72 condos, and then 526 apartments that are relatively expensive because we're not going to be able to we will not have rent control there ever. That will always be market rate per state. We would have to change something at the state level, which means that's a high percentage that we can't we can't control. Now, if we did moderate, if we did more condos change this up somehow, then I think you have a better chance of taking care of people. But then middle income, how many cars will actually be generated from this project? It's going to be a significant number. They will be driving through that tube. They will not all take the ferry. You take the ferry to get to San Francisco. You don't take the ferry to go to Oakland. Yes, some people will be riding their bike to Oakland, not currently through the tube there. Not not very many cars will be generated. Okay. To me, the only reason it makes sense to have to offset this traffic that I see is a big issue is if in fact we're addressing some of the issues that Alameda INS have and I'll and what I hear is Alameda instead of being pushed out of this town because they cannot afford to stay here which means this housing somehow has and seniors. Somehow I think that. Okay there's your balance. If the housing that we're producing will address the needs of our maidens or mere the jobs somehow so that we're not just ending up with housing for people that. Well are your high, high income families or individuals because that does not reflect Alameda. And when I hear about the ferry, I'm thinking that's your ferry that aligns with your high end housing. And then what about the people in the middle? How does this project help them? Those are my concerns. Yes.
Speaker 5: I think if I could just comment quickly in terms of the current housing scenario, I think the 5000 feet picture of as to why Joe Ernst and Company or even if you look at Bayport, why Bayport turned out the way it is. And, you know, you need to take a look at, for example. Ron Cowans Project Alpha at Harbor Bay Isle or when Dawn Parker started. Marina Village. You know, back in the seventies, these guys were rebuilding. I mean, Dawn Parker, when he put together Marina Villas, they were building basically on, you know, areas where there was really nothing . Marina Village was kind of a dump. What's it called? Harbor Bay was, you know, just kind of open land. It's like, you know, Bay, before we was a farm. I think the challenge for any developer, whether it's Joe Ernst or Catalist or whomever, when it comes Alameda point, is that this is important for the public to understand is that we're basically doing brownfield development. And what that means is that, you know, there's a certain amount of investment that's created that's required just to get to the gate, just to get the property to the to be developable state. So right off the bat, that almost doubles the cost of of of whatever project that you're involved in because it's not only laying down the infrastructure that's required to support development, but it's actually tearing out the awful stuff that's already there on the ground. And by virtue of that, you know, that doubles the cost. You're going in, you're tearing it out, and then you're going to put back, you know, things that that are needed. So in order to deal with kind of this brownfield development that, say, Ron Cowen didn't have to deal with over at Harvard or or Don Parker didn't have to deal with over at Marina Village. Don Parker, by the way, was our first R.A., our executive director. In order to deal with these on the revenue side, on the revenue generating side, you do have to have a certain program that does that does entail, you know, $800,000 homes, townhomes. I mean, those are expensive, no doubt. And I couldn't afford it. I mean, I'm glad I can afford what I have. But, you know, that's the challenge of doing Alameda point, of dealing with very real infrastructure related problems. And on top of that, dealing with the social issues that we as a city have decided to embrace. One of those social issues being the 25% set aside for affordable housing, for very low income people and low income people. And that by virtue of that, as the representative from Eaton Housing said, you know, the city of Alameda is making these decisions that have implications with regard to how you develop the rest of Alameda point to deal with these social cost issues, to deal with infrastructure cost issues, to deal with the transportation issues. So, you know, I understand, you know, a lot of people have concerns about housing and they want to see workforce, moderate income housing. I understand that. And I think we have in Joe Ernst and SRM and all the different partners. Sorry, I don't mean to just always say Mr. Ernst, but we do have people who are, you know, struggling mightily to to meet the objectives, the many varied objectives that we, as the residents have indicated that we want. But, you know, there's there's so much give that the project can take, can give. And and I think, you know, the effort that MBS art has done in putting together the staff and the and the Fiscal Impact Analysis Report indicates that, you know, this is a very tight project and we're at a late portion of this development process where it's very, very difficult to load on new objectives. You know, in terms of dealing with the rental housing crisis of right now, you know, I'm not going to oversell the argument. I'm not going to say just because you build more rental housing. Therefore, you know, as the typical market based approach says, you know, that the supply of rental housing and everything is going to be great, that, you know, equilibrium, market equilibrium is going to reach a certain point and suddenly housing be affordable once again.
Speaker 1: Maybe it won't work.
Speaker 5: Out like that. I mean, other people have different theories. The guy who does Case-Shiller, you know, he says, you know, sometimes the market doesn't work that way. So. I think we're doing a yeoman's effort here, not just SRM, but also all the people who brought us to this this point in dealing with the infrastructure cost related issues and dealing with the transportation issues. And by virtue of that, there are real life implications in terms of the program that that one we're putting together, that that type of housing. And at some point in time, we're going have to make a decision and finally move forward, because it's been 21 years now.
Speaker 0: And member Ashcroft.
Speaker 4: Thank you. And if I could just add, I appreciated Councilmember de Suggs remarks, and I think there's a temptation when we're creating this new project just for creating something out of nothing or a lot of, you know, really bad things that have been cleaned up and remediated and whatnot. And there is a tendency to want to solve all of our problems in one fell swoop with this this project. And we're not going to be able to do that for a number of reasons. Can we get closer to solving some of the problems and the issues before us and in contributing to this community? Sure. And that's where the recreational opportunities come in. And the transit dollars and I, I and I appreciated Mr. Aldrich's comments about we can phase parks. That's what she does for a living. She creates parks and she's seen that it doesn't all happen at once, but you can still create some in a recreational area. But if we don't do this at all, all of that is off the table. So, you know, we have to to weigh carefully what it is we we preserve and what it is we throw away if we decided not to go down this path. But I think we also shouldn't lose sight as a council of the kinds of solutions we can work closer toward right now. And for instance, we've talked a lot about affordable rents and, you know, people being priced out of this town because they can't afford their rents. I hope that soon the rental ordinance that we contemplated and was sent back for some tweaking, I hope that'll come back to us soon and I hope it will be passed unanimously by this council because I really feel bad for the folks who were hoping that we would have passed it back when it came to us before . But that's something we can make a dent in now, is to at least make sure that people are not being priced out of their home there, their rental units, without at least some fair hearing to to see whether or not that's a just increase and have some attempt at having their case heard. So there's some things we can actually do now that are right in front of us. There's some great things out there potential in the future. But we I agree. When Mr. De Sykes said we just have to resist the temptation to load on more and more expectations of this because I think we've loaded quite a bit on already. But anyway, I I'm really appreciative of every time this comes before us for an update, we've got more detail and it'll help us make that much more an informed decision next month. So thank you.
Speaker 0: Vice Mayor.
Speaker 2: One more comment. The negotiations are not over. I mean. The D-Day is in front of us. So I'm hoping that our input is being. I'm sure it is. It's being heard. And I think the mayor raised some points of basically stretching the envelope of what the mix would be. And we need to hear what comes back from that. I, I think I added some on trying to load risk of if in housing can't get their financing, we're still going to deliver the 128 units and we're not going to deliver it. I must I want to see what we can negotiate that the developer delivers it and that in that failsafe scenario. So I think these are all points that have to be carried back to the bargaining table and the the mix has to be stirred so that we can, again, get get this thing delivered, but delivered to fulfill a promise that is that it offers.
Speaker 0: So we are, as I understand, this comes back June 16th, right? Okay. Is this the last meeting before it comes back to us or will there be another meeting?
Speaker 1: I think this is the final meeting.
Speaker 0: Okay. So in regards to whether or not my council members think this is good or bad, I appreciate anyone that wants to weigh in and explain why you think it's a great idea. I tried to be very honest, but my concerns have been I've been raising these concerns for a long time, and I continue to think that we have to address more than the people at the below market and the people at the high. And that's all I'm doing is I'm putting it out there is at the end of the day, there needs to be four people that agree to this project. All right. Any other comments? So that's now number seven, City Manager Communications. Right.
Speaker 1: We have none.
Speaker 0: All right. Number eight. And we don't have any other public comment. We have number nine, council referrals. And number ten, council communication.
Speaker 7: Mr. Horn, remind the.
Speaker 1: Audience here.
Speaker 7: For the street bridge is closed. So trying to leave the island, you have to take alternative means.
Speaker 0: Thank you. All right. Appreciate that. Council communications member Odie.
Status Report on Site A Development at Alameda Point, including Presentation on City Council Approval Process, Financing Plan, and Fiscal Impact Analysis. (Base Reuse 819099)