Final Passage of Ordinance Approving a Lease and an Option to Purchase and Authorizing the City Manager to Execute Documents Necessary to Implement the Terms of a 10-Year Lease and Option to Purchase with 707 West Tower Avenue, LLC., a California Limited Liability Company, for Building 9 Located at 707 West Tower Avenue at Alameda Point. [Requires four affirmative votes] (Base Reuse 819099)
L is final passage of ordinance approving a lease an option to purchase authorizing the city manager to execute documents necessary to implement the terms of the ten year lease and option to purchase with 651 West Tower Avenue for Building 91 located at 61 West Tower Avenue, Alameda Point. All right. So the staff have a presentation for this? Yes. It's up to you. I'm Jennifer, our chief operating officer. From the point I'm happy to make a presentation or respond to some comments or questions you may have. So I pulled these items because at the last this is for the second read. And at the last council meeting, I had noted that there was not mention in regard to the heading, for instance, that this included a purchase, an option to purchase these buildings, that both of these leases include options to purchase and or not. And and they were both silent in regards to other than the the purchase price. Any substantiation of how that was arrived, whether it meets the how how the city is able to recommend that that whether or not that meets the market value of the properties any. Any discussion as to the purchase price. And when this came back, I greatly appreciate that the heading was modified to add that it's a purchase of the building and these are buildings that are at Alameda Point that are the city's buildings that the city is selling. So the city is essentially now granting the option to sell off its assets. And as such, it does rise to a higher level of scrutiny by all of us and that it requires four votes to pass. And I believe that that it also requires that there be written discussion in the documentation that the public can read and see for themselves the analysis of arriving at the purchase price that was not included last time when it came back. I was expecting it to be addressed. It's it's there's still no discussion of it in the written documentation. And as such, I cannot support it. I think it's appropriate to have it return and have there be discussion of the purchase price. And I appreciate that sales prices can be can be discussed and negotiated in closed session. However, when it comes to the public, I think it's important to include a discussion about the sales price and not just state what it was. So that being said, if anyone else wants to make any comments to me or make a motion. I move that we approve final passage of both items. I think I have a second. All right, so I just. I. I think that the presentation and the discussion last time highlighted that the fact that these these buildings are in need of great investment. And we've had past discussions about particularly the commercial potential commercial zones of Alameda Point having a term called negative value because of the lack of of infrastructure and and and the need for renovating and modernizing these buildings. I think the negotiation was fair. And there's also it's an option to buy and there'll be a decision and an opportunity to discuss that and great deal when when that option is about to be exercised. So I think we should move forward on this and seize the opportunity at this time. And, Madam Mayor, for me, yes. I mean, I would just add that when back several years ago, in the last administration, when the the majority of Alameda point was conveyed from the Navy, I remember the saying we had back then is that we wanted to let especially the business community know that Alameda point is open for business . And we want to show people that this is a good place to come, take a risk, because if you've spent any time traveling around Alameda Point, you know, it's in pretty deplorable condition. So the folks who are making these first steps, I would like them to pioneers. It's it's a leap of faith. But I think they're going to make the journey that much easier for those who follow because they'll be able to show people this is what's possible. We started out with something that was in its dilapidated, deteriorating condition, and this is what was done with it. We have a report a little later about an award that was given for our Brownfield Development of Alameda Landing. And this is Alameda Landing and then some just because of the magnitude. So I completely and wholeheartedly second the vice mayor's motion because the longer we leave those buildings out there, the more at risk the city is not only have increasing costs of maintaining that, but, you know, people can be injured just from those sorts of businesses and hazards really remaining in our in our city. So thank you for that motion, vice mayor. I remember days. Ago. Thank you very much. As I was two weeks ago, when we first reviewed this matter, I am satisfied with the business terms that we're entering into because that's what this is about. This is about starting up a project based upon our direct negotiations with an entity who, with a number of partners, many of whom are locally based, approached Alameda with an idea of bringing two buildings that are, at this point, in substandard state. And that's an important point because so much of Alameda point is that way, not just the buildings, but the infrastructure underneath the ground. And what that means is when we're redeveloping Alameda Point, it's very different from, say, redeveloping a building over at Harvard I'll or building at Marina Village or in other business parks like Bishop Ranch and San Ramon. You know, those places while certainly marina villages built out that are very you know, those places have land on which, you know, you can just build and not worry about what's underneath anymore. But that's different in Alameda. So there's there's a certain amount of risk and some might even say incredible risk. But that doesn't mean that city staff or city council members are just going to give away the property. You know, we're going to do our due diligence. We're going to take a look at comparables when it comes to getting value or if or we're going to use other ways to to understand that we're getting the value that that the taxpayers expect of us. One of the another way of valuing land is taking into account the costs that have to go in to improving a certain site, something called a residual land value analysis, blah, blah, blah. So when you look at it on those terms, I think the city staff have exercised due diligence that everyone expects of them to. And the fact that a number of the partners are locally based with exciting products and services, I think this is something that we can all be excited about. But I think one of the points that the Mayor has expressed is something to keep in mind that as we move forward with the this and other real estate transactions , that we, you know, convey that information in an easily digestible manner, you know, what the per square foot sales price, etc.. You know, how does it you know, how did we arrive at the market value, things like that. But I am satisfied that that our staff and the Council has exercised a proper due diligence in terms for this transaction. A member, Odie. Thanks, Ben. Two quick questions, Massoud, if you. So without repeating everything that my three colleagues said. Everything. I agree with everything they said. But if you can. I think my notes were for for building nine. The developer was going to pour $33 Million into renovations and improvements. And for building 91, it was 6 million. Right now it's actually you've got 29 million going into building nine and then 9 million going into building 91. 29, nine. Okay, so that's $38 million and then, you know, an additional probably 8 million if. If they actually do the purchase because one is, what, 5.5 and the other. One's three, so $8.5 million, right. So we have someone who's willing to put in, you know, close over $45 million in two buildings that, you know, as my colleague said, were pretty dilapidated and will attract jobs. So I think that's a good thing. One last question, though, on this option to purchase, if they do do an option to purchase, does that come back to the council? No, it does not. Okay. So I appreciate your last question. It does not come back to us that for both of these documents provided merely Building nine has a current option to purchase for $5.5 million. The option can be exercised upon the completion of a subdivision parcel map. Staff is working on the creation of the subdivision maps and will be presenting them to the Planning Board and City Council next year. That's going to be happening momentarily. That does not renegotiate the price the prices declared right here. That's what the council is agreeing to. That's all it says is what the total price is. And for building 91, it's exactly the same language, except it's 5.5 million. What I believe needs to be included here is not just what is decided in the back, behind closed doors, a negotiated price, but something more than that that shares with the public how this is arrived at to justify that this is in fact a fair market value and long term what the impact is to the city. For instance, on one of these, there's a monthly rent of $18,000. However, when it becomes that the purchase at 3 million, there will be a shift in revenue coming to the city instead of having a monthly revenue stream of, for instance, on that piece of property approximately 20,000 per month, the city will will receive the money, the 3 million, and then they're going to receive a property tax. And there should be my opinion set forth here what the property taxes and a comparison and how we're going to move forward as a city because we have expenses to incur five years down the road, ten years down the road, 20 years down the road. And we are making a choice now to sell off the people's property. And all we are telling them is this one set price. And so as much as there's these questions that go back and forth here, I think it's very important to be put in writing so that the public has the opportunity to review it and that it truly is transparent. And I don't think we are meeting that and I think it truly has to hold up to scrutiny by the public. I don't think it's appropriate to bring new slides as much as I appreciate that. But in the middle of the meeting, I think our our I know our community is entitled to when we are selling the community's assets to more because we're not putting the this is another difference. We're not saying we're going to be selling this building. Anyone can come and bid on it. What we are in fact doing is negotiating a lease that happens to have an option to purchase with that one person. That's that one entity that's doing the lease as opposed to having the building for sale at market value. So there is not going to be the competition, for instance, that occurs when any of us go to try it, try to buy a home or rent a piece of property. And none of that happens here. It's all negotiated. And then there is nothing set forth as part of this. The documents that we have intentionally looked at, the fiscal analysis moving forward and the differences of how a lease impacts versus a purchase. So all of that's what I'm looking for when it comes back to us. But I do appreciate that the heading was changed, that it now includes a purchase and option to purchase. But I really think it should be more than that. And in fact, that's something that we get called out for historically is the deal too negotiated behind closed doors and that the public doesn't really know how we arrive at those figures and that needs to happen, in my opinion. So that being said, did you want to respond? I did want to respond. And what I want to just to offer is that all of last year, Miss Ott did essentially what you're talking about, the analysis regarding the infrastructure, how much was it? Each building's fair share. That analysis is available. It's on our website and I and I, so I understand that. And it is our fault and I think our our job to make sure that we continue to provide that information for new councilmembers and for the public as these things move forward. But much of that analysis has been done that was done last year, prior to prior to these things coming coming forward. But I think your point is well taken and will be sure to make sure that those individual items are identified on each of our staff reports moving forward. Madam Chair. And let me real quick respond to her and say I appreciate that. And and I say I do agree with you that headings should encompass include all the information. But I also am going to take a little bit of exception about the way at least I'm interpreting you, talking about deals negotiated behind closed doors. There are certain topics that by law are discussed in closed session, and real estate transactions are one of those. And the reason for that is that if we were out there in the open bargaining for real estate prices and with negotiating in public, then we would be showing our hand and not getting as good a deal as we might. And so we all are aware that in closed session the council met with staff, including Ms. Odd and we gave authorization for parameters within which to carry out these negotiations, and that was done. So I mean, at some point certainly the sales price comes out and the lease prices come out and become public. That's what's in these items that are before us today. But it's not a matter that we're trying to hide something from the public. We are abiding by the law. And that's that's part of our responsibility as council members. So I appreciate that. However, it's my understanding, and I'm happy to use our counsel here, it's my understanding that even when we negotiate a deal, that when it comes forward that we should be able to be held up to scrutiny by the public in regards to that number. Yes, that that is correct. Once the deal has been has been arrived at with the developer purchasing party. It has to come before the council and it is all public. The terms of the deal are all made public and the analysis and scrutiny then is is available at that point in time before council would actually vote to approve the transaction. So that's what I'm asking for, is more than just the purchase price, but the analysis be made public. Thank you. All right. So that being said, I'm going to call it a question. All those in favor. I oppose. I oppose. Motion carries a 4 to 1. Thank you. And now. And I apologize. We have one speaker, said Mr. Ernst. Five. Did you want to come and speak? Apologize for that. We have another item that was pulled 5mm. Final passage ordinance approving a lease and authorizing the city manager to execute documents necessary to implement the terms of a ten year lease with and navigation company for building 167 located at 1500 Ferry Point. Alameda Point.