Blogging Bayport Alameda

July 3, 2017

Hold the line

Filed under: Alameda — Lauren Do @ 6:03 am

Right now the development at Alameda Point is at a crossroads yet again.  The current developer Alameda Point Partners was unable to meet their deadlines and moved into default based on the Development Agreement.  The reason?  The rise in the cost of construction, from the staff report:

APP stated that they could not close on the Phase 1 Property because APP could not underwrite a financially feasible project due primarily to the extraordinary escalation and volatility in construction costs since execution of the DDA without commensurate revenue appreciation.  In other words, the projected proceeds from land sales (the difference between development revenues and costs), especially for the apartment rental blocks (Blocks 9 and 11), were narrowing to such an extent that there was significant risk that these revenues would not sufficiently cover the cost of Site A’s complex infrastructure needs. More detailed information is provided below regarding the financial status of the Site A Project.

TL;dr: because of the huge infrastructure costs, the revenue earned on the rental apartment would not be enough to cover the costs.

So the City Council — which makes policy decisions — can decide whether to allow APP to cure the default which they have indicated that they want to, or start afresh.  And just so we’re clear “starting afresh” would probably mean yet another delay on developing Alameda Point which means that projects like the Alameda Point Collaborative’s new buildings for their residents to get out of the old, failing housing they are currently in will be set back as well because the larger market rate developer would be responsible for getting infrastructure to APC’s new site.

From the Staff report regarding the fallout if the City Council decides to not allow APP to cure:

If the DDA terminates, the Site A Project would not move forward and City staff would most likely recommend seeking interest from new developers.  If the City Council decided to move forward with a new developer selection process, it may take 2-4 years to reach the point the City is with APP today assuming no delay related to an economic downturn over that time period.  During this time, the existing substandard wastewater (sewer), storm drainage, and drinking water, and transportation facilities would continue to deteriorate. The delay would also represent a major setback for the funding of the Alameda Point Ferry Terminal, since $10 million of the funds are being supplied by APP upon closing of the first phase.  Additionally, staff would expect that a new developer will likely experience similar cost challenges and may also require changes to the design, uses, amenities and type of housing currently planned as part of the Site A Project. To bridge the financial shortfall, a new developer may propose more townhomes and/or single family homes, fewer apartments, less rehabilitation and reuse of existing structures, and/or fewer waterfront amenities.

TL;dr: infrastructure will still be broken for however long it takes to find a new developer and longer since they have to have a viable plan, oh and they might tell you that they need more SFH to make any plan at Alameda Point viable.

A lot of the changes that the developer is requesting is around the phasing of the housing units and moving the housing units from land with environmental restrictions.  If our City Council is committed to actually helping the people and businesses that are currently at Alameda Point, they’ll continue the course with the current developer.  If they’re only concerned about halting housing development at any cost — even at the cost of infrastructure for vulnerable Alameda Point residents and the more exciting and innovative businesses in Alameda — they’ll hold the line at a “no” vote.  City Council hearing is on Wednesday, should not be a vote because it’s just a public hearing staff is recommending a vote to approve at the meeting after the public hearing is held.

Advertisements

2 Comments »

  1. Does anyone know whether the Council approved or denied the request to amend the DDA?

    Comment by dya — July 6, 2017 @ 1:35 pm

    • The Council approved the requested amendment to the DDA about 11 p.m. Wednesday evening. The vote was 4-1, with the Mayor dissenting. Mayor Trish Spencer, said that the developer needed to provide a bond or other legal commitment to provide assurance that the sports complex and commercial space now delayed until Phase 3 would actually be built.

      Comment by William Smith — July 6, 2017 @ 7:03 pm


RSS feed for comments on this post.

Say what you want

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Create a free website or blog at WordPress.com.