No thanks, Frank

Ever since he was elected to Council in November 2014 with the most votes cast, Vice Mayor Frank Matarrese has done his darnedest to try to slow down the pace of residential development on the northern waterfront.

After last Tuesday’s meeting, when Mr. Matarrese couldn’t get a majority of his colleagues to agree to promulgate guidelines for “mixed use” projects, the Vice Mayor is batting 1-for-3.

What’s more, the Council discussion that preceded the failure to act on Mr. Matarrese’s referral underscored the importance of this November’s election:  if the firefighters’ union and its allies in the Inner Ring succeed in ousting Councilman Tony Daysog, the odds are that developers will be able to call the tune for the foreseeable future.

Mr. Matarrese’s analysis of the development issue was based on two simple, and indisputable, factual premises:

  • The Association of Bay Area Governments, exercising its delegated authority under state housing law to allocate regional housing needs among Bay Area cities, decreed that the City of Alameda needed to “make available” sufficient land to provide 1,723 new housing units between 2015 and 2023.
  • City staff prepared an inventory for the 2015-23 Housing Element showing that there were 18 sites available throughout the City whose “realistic capacity” for new residential development totaled 2,245 units.

The latter number, as Mr. Matarrese realized, in fact was unrealistically low.

For one thing, staff didn’t compute the “realistic capacity” for a site simply by multiplying the number of acres by the residential density for which that parcel was zoned.  It began with that computation – and then used 60% of the result for “mixed use” sites and 90% for “solely residential” sites.

Moreover, staff didn’t adjust the stated “realistic capacity” to reflect the effect of any “density bonus” potentially awarded to the developer – which could raise the total number of units built on the site by up to 35 percent.

So, for example, the Del Monte warehouse was listed in the site inventory with a “realistic capacity” of 200 units.  But, since the property was zoned at a density of 30 units per acre and the developer was awarded a 20 percent density bonus, the project proposed for the site actually contained 414 housing units.  (In a post-midnight session, the former Council cut the number to 380).

Mr. Matarrese himself did the math:  If all of the “mixed-use” sites listed in the inventory were developed at their stated density, and all of them received a density bonus, 3,736 new housing units would be built in the next eight years.

All of which led the Vice Mayor, quite logically, to ask:  If the state and regional pooh-bahs had ruled that Alameda needs 1,723 new housing units by 2023, was it really wise for the City to sanction construction of more than twice that many?

To him, the answer was:  No.  And his reason was a familiar one:  the impact of development, especially residential development, on traffic congestion.  Council needed to make sure, Mr. Matarrese told his colleagues at their first meeting after the 2014 election, “that we don’t gridlock the whole west end of the island, because most of these projects feed into the west end. . . .”

Having identified the issue, the Vice Mayor began coming up with ideas for addressing it.

His first suggestion was to impose a “moratorium” on density bonus applications till Council could determine whether to “adjust” the number of units permitted on the inventory sites.  In the meantime, a developer could go ahead with her plans – but she couldn’t build more units than the existing zoning allowed.

Unfortunately for Mr. Matarrese, the problem with his idea was that denial of density bonuses was illegal.

Density bonuses are a creation of state housing law.  If a developer includes a specified percentage of low-income units in her project, the statute entitles her to build more market-rate units than the zoning otherwise would permit (as well as provides her with other “incentives and concessions”).  If a city refuses to grant the requested bonus to a qualified applicant, the developer can sue, and, if she wins, the city will be ordered to pay her attorneys’ fees.

It didn’t take an appeal to its own innate fear of litigation for Council to conclude that Mr. Matarrese’s proposal was a non-starter.  Indeed, the Vice Mayor himself was forced to concede that a moratorium was “not a viable option.”  (He managed to save face by getting Council to direct staff to “clarify” the language in the ordinance implementing the density bonus law).

But Mr. Matarrese wasn’t done quite yet.

At the same meeting at which he withdrew his moratorium idea, the Vice Mayor returned to the notion of “adjusting” the number of units permitted on a site.

The site inventory in the Housing Element, he observed, created a “surplus” of “realistic capacity” (2,245 units) over the RHNA requirement (1,723 units) – i.e., 522 units.  Why not reduce the number of units permitted on one or more parcels to bring the two numbers closer together?  “As long as we’re working within the envelope of what we promised and the state certified,” Mr. Matarrese told his colleagues, “I think we do have some latitude to put some reasonable limits on the growth so that we can respect the constraints we’re under as an island.”

And the Vice Mayor had a particular site in mind:  the old North Housing parcel.

Owned by the U.S. Navy, this land had been used for Coast Guard housing but had been vacant since 2005.  Thereafter, the Navy declared its intent to “surplus” the property, which meant that it would be available for conveyance to third parties.  The City amended the Community Reuse Plan to provide for 435 new housing units at the site, including 90 units for homeless individuals and families.  The former redevelopment agency then entered into an agreement with a non-profit consortium to build the housing for the homeless.  Later, the agency contracted with Habitat for Humanity for 30 units of “self-help” housing.

Despite these agreements, the site inventory in the 2015-23 Housing Element listed the North Housing property with a “realistic capacity” of 806 units.  In fact, since the parcel was one of those tagged with the “multi-family overlay” permitting a density of 30 units per acre, it potentially could accommodate 1,121 units.  And if a developer was awarded a 35 percent density bonus, the total number of units on the site would grow to 1,514.

This was where Mr. Matarrese came in.  “Why not go back to the 435 units in the Community Reuse Plan?” he suggested.  If the City imposed a 435-unit cap on new residential development at the North Housing site, at least 686 fewer new units would be permitted there.  (Under a density-bonus scenario, the difference would rise to 927 units).  Citing statistics on traffic congestion at the tubes, he argued that such a move “will help us respect the constraints we have as an island.”

Moreover, the City could impose a 435-unit cap on the North Housing site and still remain in compliance with the RHNA requirement.  The limitation would result in a net reduction of 371 units in the site inventory, but the City already had a 522-unit “surplus” to play with.  Plus, the approval of the Del Monte project for more units than it was listed for in the site inventory (380 compared to 200) could be seen as having added 180 units to the cushion.

One might imagine that the housing advocates would howl at any cutback in potential residential development, and a few of them did.  But, unlike most of the other sites on the northern waterfront, the North Housing parcel had no developer waiting in the wings with a project.  Indeed, the Navy still owned the land, and it hadn’t even begun the auction process.  So the “injury” caused by the cap was only hypothetical.

More importantly, there were political reasons for the pro-development crowd to go along with the proposed cap.  At the time, Council had yet to approve the Site A project at Alameda Point, which would require four votes from Council.  There were some who feared that Mr. Matarrese might vote against the proposal for Site A – but, maybe, if he got what he wanted for the North Housing property, he would be more inclined to support it.

No one, of course, specifically mentioned any quid pro quo.  But a couple of Planning Board members came close.  “I don’t want to call this a Faustian bargain,” Inner Ringleader John Knox White said.  “We’re going to take a leap of faith that our Council is not going to reject Site A and approve this cap. . . .  I don’t think our Council would do that.”

And so Mr. Matarrese got his cap for the North Housing site.  (And, oh, BTW, he voted for the Site A project, too).  But even with the change, the site inventory still showed greater “realistic capacity” than the RHNA required.  And, if one computed the number of potential new housing units using the permitted densities and applying a density bonus, the excess was even greater.

Take, for example, the three locations – Alameda Marina, Encinal Terminals, and Shipways – zoned for “mixed use” with a multi-family overlay.  These three sites were shown in the site inventory as having a total “realistic capacity” of 776 units.  But, assuming 30 units per acre and a 20 per cent density bonus, a total of 1,551 new housing units potentially could be built on them.

This is where Mr. Matarrese next focused his attention.

On March 1, the Vice Mayor submitted a referral asking Council to consider directing staff to revise the “mixed use” zoning designation.  Among other things, the referral stated, “[c]onsideration should be given” to “establish[ing] proportions of commercial use to residential use.”  The more a “mixed-use” project focused on providing jobs, Mr. Matarrese contended, the greater the benefit to the local economy and the lesser the impact on traffic congestion.

Again, there was more going on than met the eye.  In fact, the referral was prompted by the announcement of development plans for the Alameda Marina, which, in addition to the marina itself, was home to 84 companies, most of them small businesses, employing an estimated 250 people.

The original plan called for re-configuring the site for 11.5 acres of commercial and industrial use, two acres of retail use – and 10 acres of housing.  It was unclear how many, if any, of the existing businesses would be allowed to remain.  But, according to one op-ed writer who attended the kick-off meeting held by the developer, a total of 394 new townhomes, condos, and apartments were slated for the site.

Naturally, the housing advocates were delighted.  “This is a great opportunity to pursue the Alameda Home Team’s approach to development,” enthused the group’s president, Helen Sause.  Equally naturally, the proponents of economic development were appalled.  “What jobs will exist if the developer gets his way?” one op-ed writer asked.  “They will be minimum wage, light retail and coffee house barista type jobs.  Do you want to see Alameda send actual living wage jobs away to replace them with yet more people who can’t afford to live where they work?”

Mr. Matarrese’s referral appeared to represent an effort, if not to nip these plans in the bud, at least to shape them in a particular way.  But he didn’t follow through by offering any specific development standards for the Alameda Marina or any other mixed-use site.  Likewise, City planning staff treated the referral like an unwelcome homework assignment.  For the Alameda Marina, the recommended “guidelines” required that the master plan include maritime, multi-family residential and open-space uses without proposing any ranges for each use.  For the Encinal Terminals, staff simply cut and pasted the verbiage in the current General Plan.

When the referral got before Council, it died aborning.  No one (other than Mr. Matarrese himself – and we’re not even sure about him) supported revising the mixed-use zoning designation or even adopting any “guidelines” for applying it.  Mayor Trish Spencer didn’t want to “put something in writing and vote on it.”  Councilman Tony Daysog, speaking, as usual, in metaphors, didn’t want to “limit the colors” in the “palette” that would “paint the best possible picture that Alamedans can be proud of.”  Councilman Jim Oddie opined that guidelines were “premature” and – oddly – that those drafted by staff were “a little too prescriptive.”

But, from a political standpoint, the most interesting comments came from Councilwoman Marilyn Ezzy Ashcraft.  No changes should be made to the current development review process, she stated.  “Otherwise, what’s the message we’re sending to developers?  You came to us with certain expectations and were willing to work within the system and go back and back and back trying to refine your project, and now we’re going to tie your hands even further.”  A few seconds later, she continued:

We expect a lot from our developers, and they do help us fund our affordable housing, our open space, well-needed refinements to infrastructure.  And I think we need to play fair at the same time.  That’s not to say that you throw up your hands and say you can do whatever you want to do, far from it, but I don’t think you change the rules in the middle of the game.

No one, of course, had advocated changing any of the rules, and the game hadn’t even begun.  But how else could a developer take Ms. Ashcraft’s comments other than as guaranteeing a sympathetic ear when it comes time to present an actual proposal?

And it got worse.  With the certitude of a true Inner Ringer, Ms. Ashcraft proclaimed that, “I don’t think anyone who’s been paying attention to the hours and hours of testimony we’ve heard before this Council in the last year, almost two years now, can think that we don’t have a housing shortage.”  In fact, what anyone who paid close attention to the testimony heard was that the City had a shortage of rental units affordable by low- and middle-income households.  Yet, except for including a handful of low-income units to comply with the inclusionary housing ordinance or to qualify for a density bonus, the residential projects approved and proposed thus far for the northern waterfront do absolutely nothing to alleviate that shortage.

Only Mayor Spencer, and maybe Councilman Daysog, seem to grasp the distinction.  But if Mr. Daysog gets booted from the dais this November, the candidate voted into office to replace him will hold the cards.  By joining with Ms. Ashcraft (whose re-election we take as a given) and Mr. Oddie (who wagged his finger Tuesday at City Planner Andrew Thomas for even using the word “surplus”), she can ensure that the developers will get their projects approved by a Council majority intent on slaying a mythical dragon.

And who might fill that slot?  Well, if we were John Murphy of Bay West Development (Alameda Marina) or Mike O’Hara of Tim Lewis Communities (Encinal Terminals), we’d be looking for an Inner Ring wannabe who’d be ecstatic about adding the support of the pro-development crowd to her backing from organized labor.  (Endorsed by both Jeff DelBono and John Knox White?  How could she possibly lose?)  We might even agree to commit to a Project Labor Agreement to seal the deal.  Mr. Murphy and Mr. O’Hara, you might want to check out this website.

Sources:

2015-2023 Housing Element: 2014-07-15 Ex. 1 to staff report- 2015-2023 Housing Element

March 10, 2015 staff report re density bonus: 2015-03-10 staff report re density bonus

June 16, 2015 staff report re North Housing: 2015-06-16 staff report re North Housing

March 1, 2016 referral: 2016-03-01 Submittal

April 19, 2016 staff report re MX zoning & exhibits: 2016-04-19 staff report re MX zoning2016-04-19 Ex. 3 to staff report – Alameda Marina Planning Guidelines2016-04-19 Ex. 4 to staff report – Encinal Terminal General Plan Policies

About Robert Sullwold

Partner, Sullwold & Hughes Specializes in investment litigation
This entry was posted in City Council, Development, Housing and tagged , , , , , , , , , , , , . Bookmark the permalink.

4 Responses to No thanks, Frank

  1. Steve Gerstle says:

    When did Malia Vella move to Alameda? Her website implies that she was born and has lived her entire life in Alameda. Which Alameda schools did she attend?
    “a native Alamedan who was born in Alameda Hospital; her grandfather was stationed at the Naval Air Station.”

    • David says:

      I’m guessing Malia moved to Alameda right around the time the IAFF started recruiting her to run for counsel.

      Apparently she worked for Bill Quirk in AD 20, which is south of Alameda, and for a law firm with offices in Sacramento and Long Beach.

  2. Denis says:

    Malia Vella’s web site also implies that she is already a member of Alameda’s City Council (upper left corner of her web page). Since when???????

    • David says:

      I’ll neither be supporting nor voting for Malia Vella, but I don’t take away that implication from her website.

Leave a Reply

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