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.