Blogging Bayport Alameda

January 15, 2010

DDA? What DDA?

So I’ve only gotten through a small portion of the Joint School Board and City Council meeting but from what I have watched, it appears that most staff were given the direction to try to not talk about the existence of the Disposition and Development Agreement in detail and gloss over it as much as possible.

Because as I’ve mentioned previously, the DDA is where everything happens.  While folks have surmised that if the Development Agreement is adopted as is, SunCal has the ability to transfer its vested rights to whomever it sees fit, the unspoken detail that is missing is that those vested rights come with nothing.

That’s right no land.

That’s because the thing of value, the land, all hinges on the DDA being negotiated between the Alameda Redevelopment and Reuse Authority (ARRA) — which is technically the City Council, but by law a completely separate entity — and SunCal.   Something that — if the City was acting in good faith –should have made clear to the voting populace but was conveniently glossed over during the entire meeting.

That was until Amy Freilich, SunCal Senior vice president of land use, acquisitions, and entitlements,  came up to the mic.

But before her comments, the notion that anyone would be interested in purchasing encumbered vested rights and having to go through the trouble of negotiating the land sale with the City just doesn’t make any sense.   While yes, hypothetically, SunCal could sell their vested rights, but who would be interesting in buying?   No one.

But back to Amy Freilich, who had this to say:

For those who prefer a narrative version:

I think what’s important to understand about the Initiative and then the DDA and particularly going to the last point — I will address your school mitigation — but the issue raised by the City Manager that “we’re not sure if anything’s enforceable,” and the reality is that the Development Agreement in the Initiative and the Initiative as a whole relate only to the City.   They don’t relate to the redevelopment agency, they don’t bind the redevelopment agency.  They don’t relate to the school district and they don’t bind the school district.  Those are independent agencies created by state law and they have full authority under state law to enter into any agreement that they choose.

The critical thing here that nobody’s said and I think is really important to say is that the redevelopment agency is not going to sell us this land unless they’re happy with the deal. And unless the deal makes sense. And what we have here is an initiative that, if granted, is only part of the deal.  And we’re very clear on that, we’ve been clear on that from day one.  We think the Exclusive Negotiation Agreement is very clear on that issue.  And I think what’s really critical to understand here is that everything we’ve done, we’ve done assuming that we’re going to sit down in the future and negotiate with the redevelopment agency who are going to tell us, yes, you have a right to this land, here are the conditions we are going to impose.  And similarly with the school district.  We assume and we do this all over the state that we are going to enter into a School Mitigation Agreement.   And we’re going to figure out, if we can, how to actually build these schools in advance of when they’d be required.

I think another really critical point to make clear is that on the two percent cap goes away when the end user, the homeowner, buys the land.   The Development Agreement doesn’t bind a homeowner, it doesn’t bind a future retail owner.  It doesn’t bind a future commercial owner.  It’s in place for the term in which this Development Agreement is in place.   So if the City decides it wants to vote in a 5% parcel tax to make really wonderful schools there’s no restriction on the residents of the homes in this location imposing that upon themselves.  All we’ve said that in order for us to be able to sell this development on the first round we have to be able to not exceed in our infrastructure development costs the 2% because that is really the reasonable dollar amount that applies statewide, as Pat said over which people will not expend dollars.

I’m struggling, as Pat is, with where to start on all this.  A typical School Mitigation Agreement would address here land being dedicated and provided to the school district.  It would address infrastructure which we’ve fully budgeted to provide to the school district  as a part of the other infrastructure we’re providing.  It addresses the $25 million that we’ve estimated which we understand is less than the current cost for your most recent school construction as an equivalent school to what we’ve programmed today.

So we’re really struggling with where the gap is, but our goal is to sit down and meet and talk about these issues and to resolve them and we assume this group of people is not going to let us go forward and develop this until we’ve resolved those issues and those are DDA and school mitigation issues. [emphasis added]

Lots more to talk about on this meeting, and a lot more footage to clip out.  But one thing to point out because this was one of the City’s concerns about how the DA tied the City’s hands.   On the subject of the 2% property tax cap– which the Interim City Manager sort of talked around the whole subject at the meeting — Amy Freilich points out something that no one in the City has brought up during these discussions which is an important point.   The 2% cap only exists under the Development Agreement.  Once property is sold to the end user (homeowner, business owner, etc.) the Development Agreement no longer applies.   So while the ICM has brought up scary scenarios of what happens if we find, down the line, that we need additional assessments on property owners out at Alameda Point to do that fiscally neutral thing, because the DA no longer exists, the cap is meaningless.

As an aside, since we’re on the subject of SunCal executives, from what I understand Bruce Elieff, SunCal’s president, met with some folks from the City government this week in an official capacity.   I don’t know who or what the point of the meeting was, if I did, I would tell you all.   Will be interesting to see what the result of that visit brought.

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14 Comments

  1. If the initiative and DA are indeed so subordinate to the DDA, why did they bother to delineate such specific terms? If DDA negotiation is the trump card, all the initiative really required was the abrogation of Measure A.

    Comment by David Hart — January 15, 2010 @ 6:20 am

  2. I think the point being made is not that one document trumps the other, but they cover different aspects of the development process. DA vests rights and freezes existing rules and regulations. The DDA covers the land sale, timing, and financing issues.

    Some of the issues that have been raised as causes of concern by opponents thus far have been issues that would be resolved in the DDA, not DA.

    Comment by Lauren Do — January 15, 2010 @ 6:42 am

  3. dda rules!

    Comment by Jack Richard — January 15, 2010 @ 8:54 am

  4. Below is a summary of the problem outcomes for Alameda citizens if Measure B passes. Renewed Hope Housing Advocates identified these problematic outcomes in a report titled “Doubtful Promises: A Report to the Alameda Community on the SUNCAL/SHAW Hedge Fund Initiative.”

    As the Vice-President of Renewed Hope and coauthor of the report along with former Berkeley planner Eve Bach, I will periodically post excerpts from the report as they relate to issues raised during the Measure B campaign. The full report is available for downloading by searching for “Doubtful Promises” at AlamedaPointInfo.com, or directly at URL http://alamedapointinfo.com/documents/doubtful-promises-report-alameda-community-suncalshaw-hedge-fund-initiative-renewed-hope-s.

    Below is a summary of the problem outcomes from Measure B that SunCal, Councilmember Lena Tam, and others proponents of the Initiative claim can be addressed in the subsequent DDA (Disposition and Development Agreement). A follow-on post will highlight constraints in Measure B, especially the DA (Development Agreement) included in that Measure, that would tilt the table in favor of the developer (almost certainly SunCal) when the City and the Developer negotiate the DDA, should Measure B pass. These constraints would make it very difficult for the City to avoid many of the problem outcomes of the Measure listed here.

    PROBLEM OUTCOMES SHOULD MEASURE B PASS

    The initial developer (almost certainly SunCal) and all subsequent developers would

     have the right to decide the overall project‟s size, mix of uses, open space plan, public facilities, transit options, and timing.

     have the right to decide the size, density, mix of uses, open space plan, transit options, timing and other major characteristics of the development within each district

     lock in a process of ministerial (i.e., no city discretion to modify or reject) approvals that prohibit the public, the Planning Board, and the City Council from reviewing or appealing permit approvals, with few exceptions

     fail to guarantee delivery of any specific public benefits or improvements, including those listed in the initiative

     divert scarce city and redevelopment resources from the rest of Alameda to the Alameda Point project and make it prohibitively expensive for the city to refuse to provide the project with redevelopment (tax increment) funds

     allow the developer, to sell off Alameda Point piece by piece with these extremely valuable entitlements in place to developers it selects. The city would be obligated to honor the development agreement with developers falling short of the city‟s minimum financial, competence, and design qualifications

     undermine environmental review by postponing it until after the developer would already be in possession of full development rights that would hinder the city‟s ability to require mitigations or project alternatives and

     prohibit amendments to correct any of the initiative‟s problems without the approval of the initial and subsequent developers, for at least 30 years.

    Comment by William Smith — January 16, 2010 @ 7:14 am

  5. This deal stuff added in yesterday at the 11th hour is just too little, too late.

    SunCal and DE Shaw just do not belong in Alameda.

    Comment by Bob — January 16, 2010 @ 10:12 am

  6. Frankly, since you’re repeating last year’s schtick, I find this more compelling:

    “You’re my only HOPE September 29 2009 Lauren Do

    I’m not going to go into detail on the Renewed HOPE’s analysis of the Alameda Point initiative right now, maybe some other time, but I did want to acknowledge its existence. First though, I just want to preface my statements by saying that I have nothing but respect for the folks at Renewed HOPE and the work that they do advocating for affordable housing issues. Long time readers will know that affordable housing issues is a topic that I am passionate and interested in and anyone doing good work around affordable housing advocacy will always have my respect.

    With that said, I will say that I was highly disappointed in the analysis in the report itself. The first sign was the usage of the “rebranded” name as opposed to what the actual initiative is called. If there is anything that immediately says “biased report” it’s renaming something that you think will be cute. So throughout the entire report rather than call it the Alameda Point Revitalization Initiative, it’s the “SunCal/Shaw Hedge Fund Initiative.” Except for the fact that the company is D.E. Shaw, not just Shaw.

    This could be a small error, but it speaks to a larger issue with fact checking and providing supporting evidence for assertions made throughout the document. In fact, the most frustrating parts of reading the document is that it skips from sourcing the Development Agreement to the Specific Plan to the Initiative language without any real consistency.

    It appears that the biggest issue that the authors had with the entire Initiative itself is that they simply do not trust the developer to build what they have said they are going to build. This is fine as an opinion, but to build an analysis around it ends up in a document that looks like the Renewed HOPE document. With contradictory statements such as saying that the ceiling SunCal has set on the amount of development is “unreasonably high,” (p. 8 on the reader) but yet warning that because this cap is too high and because the Initiative does not spell out a minimum level of development (p.9 on the reader) that it might mean that the developer will build single family tracts rather than the multi-family housing promised. In fact, they are concerned that the medium residential neighborhood (30 – 70 du/ac) will end up looking like a “suburban tract development more than walkable neighborhoods.”

    This all goes to an issue of trust, not an issue of deficiencies in the Specific Plan or Development Agreement or the Initiative language. Which again, not trusting a developer is fine, we all have varying levels of cynicism which I can respect. But what I guess I find ironic in the grand scheme of Renewed HOPE being against — not just the Initiative itself in the vein on the Chamber of Commerce — but being against the plan itself is that this is one of the best chances that I personally think will get a good number of affordable housing units built on the Island. That a major affordable housing advocacy group is working against that effort instead of agitating for what they want within that effort is puzzling.”

    Comment by Jack Richard — January 16, 2010 @ 11:50 am

  7. Re: #6
    Jack Richard, nothing you or Lauren Do have said goes beyond innuendo to address the substance in the report from Renewed Hope Housing Advocates titled “Doubtful Promises.”

    John Knoxwhite asked some substantive questions, to which we at Renewed Hope addressed satisfactorily without changing the substance of the report.

    The report, John’s questions, and our responses are all posted on AlamedaPointInfo.com and can be found by typing “Doubtful Promises” into the search box in the upper left hand corner.

    If Lauren is going to go into detail on the analysis in our report, time is running out for her analysis to be anything but a historical exercise.

    The report remains relevant, because in it we correctly anticipated most of the issues that have arisen recently in the campaign. I’ll be addressing these individual issues as they arise on the blogs.

    Comment by William Smith — January 17, 2010 @ 1:17 pm

  8. 7.
    First, the “PROBLEMS” you list are pure agenda driven speculation at best. How do “ADVOCATES” from your organization know what the “OUTCOMES” of the Initiative will be? And you accuse others of “innuendo”? My speculation is that the Initiative, if passed, will make the Point and the city better.

    Comment by Jack Richard — January 17, 2010 @ 4:51 pm

  9. #8: Well, apparently other people don’t think so.

    Here’s a link to the Ballot Arguments and a list of major endorsements:

    http://alamedapointinfo.com/alameda-point-topics/Ballot-Arguments

    What organizations and elected officials have taken a position on Measure B?

    Proponents:
    Councilmember Lena Tam
    East Bay Regional Park District Board Vice President Doug Siden
    Alameda Unified School District Board Vice President Mike McMahon
    HOMES (Housing Opportunities Make Economic Sense)

    Opponents:
    Mayor Beverly Johnson
    Vice Mayor Doug deHaan
    Councilmember Frank Matarrese
    City Treasurer Kevin Kennedy
    City Auditor Kevin Kearney
    Alameda Unified School District Board Member Tracy Jensen
    Alameda Unified School District Board Member Trish Spencer
    State Assembly Member Sandré Swanson
    Alameda County Supervisor Alice Lai Bitker
    Alameda Chamber of Commerce
    Renewed Hope Housing Advocates
    Alameda Architectural Preservation Society
    Alameda County Central Labor Council
    Alameda County Building and Construction Trades Council
    Alameda County Democratic Party
    Alameda Republican Women Federated
    Oakland Chinatown Coalition

    Comment by dlm — January 17, 2010 @ 6:59 pm

  10. #8.
    Fair enough, Jack, to ask us how we know what the Outcomes will be. The Outcomes that we list are facts, taken from the Initiative. That these outcomes will bring problems is based on the many decades of experience that Renewed Hope members have accumulated in building thousands of units of affordable housing throughout the East Bay, serving on City planning staffs, sitting on County Planning Commissions, and managing transit villages.

    If the market for housing, retail and commercial space remains strong for the next 25 years and financing is readily available, our informed speculation will likely be proven wrong, and you correct. If the market is soft for more than a year or two during this period, or a developer gets into financial trouble and has to raise cash fast, we will likely be proven correct.

    Comment by William Smith — January 17, 2010 @ 8:44 pm

  11. Sunday, January 17, 2010 (SF Chronicle)

    Alameda’s Measure B is off base

    Twelve years after the U.S. Navy abandoned its air station in Alameda,redevelopment of those 1,000 acres remains as elusive as ever. The causes are many, from the Navy progressing slowly on cleanup and breaking its promise to turn over the land for free … to a reflexive resistance to change on the island that seems to paralyze the city’s leadership. Now
    comes yet another setback: The developer enlisted by the city to oversee the transformation has put an initiative on the ballot that would severely constrain the city’s influence on, and revenue from, a project bringing
    more than 4,300 homes, 350,000 square feet of retail and 3.1 million square feet of commercial operations.

    If Alameda voters reject Measure B in a Feb. 2 special election – as they should – the city probably will be looking for another master developer when its exclusive agreement with SunCal expires in July.

    The regrettable part of this episode is that SunCal had come up with a decent vision for what has become known as Alameda Point. Its proposed mix of homes and businesses – blended with marinas, a school, a library, bike trails, sports fields and 145 acres of parks and open space – generally
    embodies the type of “smart growth” this region should be encouraging.

    It was known all along that the creation of a mixed-use development of this sort would involve residential densities that would require an exemption from a 1973 Alameda ballot measure that prohibited the construction of anything larger than a duplex, or placement of more than one housing unit per 2,000 square feet of land.

    These growth restrictions engender near-religious devotion among some
    Alameda residents, and the City Council balked at putting that proposed exemption on the ballot – arguing that a change in a citizen initiative should be put on the ballot by another citizen initiative, not by City
    Hall.

    If SunCal had limited its initiative to the issue of multifamily housing – and perhaps asked voters to sign off on the concept of its plan – we may
    well have supported it. But the developer went much further, presenting voters with an up-or-down decision on a highly detailed, nearly 300-page
    development agreement that would provide it with a huge hammer over the city in future negotiations.

    Alameda voters should guard their wallets, and their say in the city’s future, by defeating Measure B. One-way deal

    Examples of how Measure B clearly benefits the developer – but not the city of Alameda.

    — Public benefit. Limits the amount the developer must contribute to pledged “public benefits” – parks, ferry, library, trails, off-site transit improvements – to $200 million, well below city’s cost estimate.

    — Fee limits. Identifies which city fees the developer must pay, leaving out about $80 million that would ordinarily be required. Locks in rates on the fees the developer will pay.

    — Control. Changes to the nearly 300-page initiative would require a
    public vote – unless the developer asks for them.

    Comment by William Smith — January 17, 2010 @ 10:35 pm

  12. 10

    “The outcomes that we list are fact…” Yes, I do not doubt they are fact in non-profit’s outcome based evaluation. But, I do not believe that special interest groups’ advocacy should be the driving force which determines the Measure B outcome.

    The #9 list of dlm’s B Opponents and Proponents (most, no doubt, have their own agenda) may or may not conincide with what’s best for Alameda’s long term well being. I hope each voter takes a reasonable view of what they want for the future of the base and vote accordingly. If they like what they see now and prefer to keep that view, so be it.

    Comment by Jack Richard — January 18, 2010 @ 9:23 am

  13. 12

    Jack, I and my colleagues in Renewed Hope agree with you that we do not like what we currently see at Alameda Point. Based on our experience, though, we are confident that there are viable alternatives to Measure B,(for me at least, if not my Renewed Hope colleagues, still including SunCal), for implementing the Alameda Point Vision that I believe you and I share for Alameda Point.

    You’ll definitely be hearing from us after the election, especially if Measure B fails. Alternatives to Measure B that do not require intervention by the courts will require the support of a broad cross section of Alamedans, including Measure B supporters. More on this after the election results are in.

    Comment by William Smith — January 18, 2010 @ 9:45 am

  14. 13
    “You’ll definitely be hearing from us after the election, especially if Measure B fails.”

    Thanks Mr. Smith, I hope I especially don’t hear from you…but come what may, I’m always willing to listen.

    Comment by Jack Richard — January 18, 2010 @ 10:20 am


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