On the (northern) waterfront

For the Council elected in 2012, the major housing/development issue was Alameda Point.

For the Council elected in 2014, it was the “rental crisis.”

For the Council to be elected this November, it’s likely to be the northern waterfront.

Within the next year, developers will be presenting plans for three projects in that area.  Each of them professes faithfulness to the goal stated in the northern waterfront general plan to “reconnect the community to the waterfront.”  To that end, each includes a variety of waterfront amenities like promenades along the shoreline and parks facing the Oakland Estuary.

But all of them also share another feature:  an emphasis on new residential construction. Taken together, the three projects would add 1,534 new housing units (375 units at the Alameda Landing waterfront, 589 units at Encinal Terminals, and 670 units at the Alameda Marina), only a fraction of which will be affordable by low- or middle-income households.  At the same time, at least in two of the projects, commercial and office uses will get short shift.

These common characteristics raise two key policy issues for the next Council:

  • Previously approved projects will enable the City to satisfy its state- and regionally determined requirements for new housing though 2023 without any of the three proposals being built.  Indeed, according to a staff report to Council this April, Alameda has a “surplus” of 720 “high-density” and 431 “low-density” units in its Housing Element.  Does the City truly need 1,534 more units of primarily market-rate housing?
  • As Assistant Community Development Director Andrew Thomas repeatedly reminds his audiences, Alameda’s jobs/housing balance already is one of the worst in the Bay Area.  Should Council throw the balance further out of whack by approving the proposals made by the three developers?  Or should it instead insist that they revise the mix to cut back on the residential aspects and concentrate on uses intended to preserve and create jobs?

If the two incumbents – Marilyn Ezzy Ashcraft and Tony Daysog – are re-elected, one might predict, based on their track records, how they will approach these questions.  And former Councilwoman Lena Tam, now running again for Council, pretty much showed her cards during her two prior stints on the dais.

But, of the two first-time candidates, only Jennifer Roloff has given voters any insight into her views toward development, devoting a page on her website to the subject.  “The kind of growth I support promotes a more aggressive, proactive approach to commercial development in Alameda,” Ms. Roloff writes. “Let’s keep our residents away from the bridges and tunnels and encourage more Alamedans to work on the island.”

By contrast, the firefighters’ union’s candidate, Teamsters lawyer Malia Vella, has stuck with what sound like consultant-crafted platitudes: on her website, she assures voters that she favors “quality” housing and “vibrant” neighborhoods.  Maybe she is choosing, as she did with the two competing rent control ballot measures, to remain “neutral” about development issues.

(One of the three developers who will be seeking Council approval for a project next year may have a better sense of Ms. Vella’s leanings than we do:  The limited liability company formed by Roseville-based residential developer Tim Lewis Communities to own Encinal Terminals contributed $5,000 a few days ago to “Alamedans United,” the union-backed organization supporting Ms. Vella and other presumably labor-friendly candidates, including Ms. Ashcraft, for local offices.)

Last April, Mr. Thomas conducted a workshop for Council on “mixed-use” development at which he specifically addressed the Encinal Terminals and Alameda Marina projects.  The Merry-Go-Round commends Mr. Thomas’s comprehensive discussion to our readers.  We can’t hope to improve on it, so we’ll just highlight a few specific issues that the next Council may confront about the three northern waterfront projects.

We’ll start with Alameda Landing.  For some, like Planning Board member Lorre Zuppan, it seems like déjà vu all over again.  The original “Catellus Alameda Master Plan” provided for 586 housing units and a 1.3 million square foot R&D/office park.  Catellus got entitlements for – and then sold – the residential portion, but then decided the rest of the plan no longer was financially viable.  So it came to Council in 2006 and successfully sought a revision to the master plan replacing the R&D/office park with 400,000 square feet of office space, 300,000 square feet of retail space and 300 new housing units.  Catellus built the retail part, and, once more, got entitlements for – and then sold – the residential portion.

But now Catellus has decided that the last phase of the revised master plan – the office space designated for the northern waterfront – is no longer . . . financially viable.  It wants to scrap this use altogether and instead build 10,000 square feet of “live/work” space; 15,000 square feet of retail space; a 124-unit hotel – and 375 new housing units (of which all but 44 will be priced at market rates).  If it is allowed to proceed, Catellus promises it finally will create the eight-acre waterfront park that was included in the 2006 revised master plan.

Ah, yes, the waterfront park.  It was the featured attraction in the pitch Catellus gave to the Planning Board in May.  Catellus showed the Board an assortment of what former City Manager John Russo used to call “pretty pictures” – see below – and extolled the many amenities planned for the park.  (It will even have a bocce ball court!)

alameda-landing-promenade

And then it got to the bottom line:  The wharves and adjoining shoreline where the park will be built are deteriorating.  (Indeed, according to Catellus executive vice president Tom Marshall, the soil is so bad the land is in danger of falling into the Bay.)  “World-class experts” estimate that fixing this problem will cost $90 million.  But if Catellus is forced to build out the 2006 revised master plan, it won’t be able to generate the revenue needed to pay these costs, since, according to Mr. Marshall, there is no demand for new office space anywhere in the East Bay.  So it has to be allowed to chuck the offices in favor of more housing.

And here’s the kicker:  Catellus contends that the Planning Board can green-light the change in land uses on its own – there’s no need for the developer to prepare a second revised master plan and obtain approval from Council.

That isn’t exactly how Mr. Thomas sees it.  True, he told the Planning Board, Catellus will not have to go to Council if staff determines that its proposed changes don’t exacerbate the environmental impacts – in particular, the impact on traffic – associated with the land uses identified in the 2006 revised master plan.  But if staff isn’t persuaded, it will require Catellus to submit a new EIR and another revised master plan, both of which will require approval from Council.

In any event, regardless of what documents must be submitted, Catellus isn’t going to be able to avoid Council scrutiny altogether.  In June, Councilman Tony Daysog submitted a referral requesting that Council hold a workshop to “discuss and understand” the existing plans for the final phase of Alameda Landing “and possible alternatives (or not).”  Although Council has not heard the referral, Mr. Thomas told us he intends to schedule a Council “study session” for this fall.

Nor is Catellus in any position to dictate the outcome.  The City still owns the land on which Catellus wants to build the additional housing (and the park).  Under the Disposition and Development Agreement, as amended, the City is not bound to convey that parcel unless, among other things, Catellus has performed, or “committed to perform,” the backbone infrastructure work “necessary to serve” the property.  Will the developer satisfy that condition if Council disapproves, formally or informally, its housing-centric plan?  If not, the City can keep the land and look for another developer with a more palatable idea.  Under those circumstances, Catellus just might decide that, even if it isn’t willing to build out the 2006 revised master plan in full, facilitating commercial use of more “developable acres” wouldn’t be so bad after all.

Like Catellus, Tim Lewis Communities, the developer for Encinal Terminals, is fond of touting the waterfront amenities its proposal will offer.  Tim Lewis’s “vision” for the property, the draft master plan proclaims,

is a future that is no longer a place of 18 wheeled trucks, warehouses, shipping containers, and chain link fences. Instead, Alameda residents and visitors will be able to walk, jog, stroll, and bicycle along the water’s edge, moving freely through the area to new waterfront promenades, parks, trails, and public facilities.

The master plan proposes to achieve this “vision” by constructing a “continuous public shoreline promenade” around the perimeter of the site as well as “central open space of over an acre with at least one side open to allow views to the Estuary.”

These waterfront improvements, of course, don’t come cheap.  Tim Lewis says it will cost $12 million just to repair the wharves, and that’s only for starters.  The more “community benefits” and “amenities,” the higher the cost.   And, according to Tim Lewis’ project director Mike O’Hara, the higher the cost, the greater the need for residential development.  Apparently, it will take no fewer than 589 new housing units, of which all but 79 will be priced at market rates, to do the trick.  (Commercial uses, including retail, will be limited to between 30,000 and 50,000 square feet).

Unlike Catellus, Tim Lewis has no hope of bypassing Council.  In fact, for the developer to be able to build out its master plan, it will have to convince Council to change the rules of the game in two ways.

First, the northern waterfront general plan limits building heights to 60 feet (i.e., about five stories).  Tim Lewis wants to bust those limits and put up one or more seven-to-eight story buildings – and a 24-story “high rise” on the northwest corner.  The layout in the master plan is shown below (the structures in the E, F, H, I, and M sub-areas can go as high as 90 feet; those in the K sub-area can reach 250 feet):

base-concept-subarea-plan

We don’t hold a realtor’s license, but we’re pretty sure, based on what we know about the east side of Manhattan and the north shore of Chicago, that residential units at the top of tall buildings command higher prices than units closer to the ground.  But not once in three meetings with the Planning Board and one with Council did Tim Lewis say it wanted to build taller residential buildings so that it could make more money.  No, the motive was entirely selfless:  by “consolidating” the 589 housing units in fewer (but taller) buildings, the developer would “free up” land for non-residential uses beneficial to the community like – you guessed it – “public open space.”  Mr. O’Hara even produced a scale model on which he moved around blocks to demonstrate his point.

We’ll see how well this argument flies with the members of the next Council.  But unless they amend the general plan, Tim Lewis will be stuck with the 60-foot height limit.  In that case, according to Mr. O’Hara, the developer would build only 474 housing units;  if the residential buildings were limited to three stories, he said, the number would fall to 350.

The building height limit isn’t the only obstacle Council will need to remove in order to allow Tim Lewis to implement its master plan.  The Encinal Terminals site really consists of two parcels:  13.5 acres of land owned by Tim Lewis and six acres of “Tidelands property” owned by the City in trust for the State.  No residential uses are permitted on Tidelands property, which creates a problem for the developer, since the land is located squarely in the middle of the site.  (See the left-hand diagram below.)  So Tim Lewis is proposing that the City “swap” the existing Tidelands property for land owned by Tim Lewis around the perimeter of the peninsula.  (See the right-hand diagram below.)

tidelands-configuration

This transaction involves the exchange of real estate by the City, which ordinarily requires a super-majority vote by Council.  Moreover, the State Lands Commission also must sign off on the trade.  If the city and state authorities don’t approve, Tim Lewis says it will fall back on a “no swap alternative plan,” but it’s probably fair to say its heart won’t be in it.

As a practical matter, Council can use its control over the general plan and the Tidelands property as leverage to get a better deal from Tim Lewis.  (Say, for example, an agreement to include housing units affordable by middle-income families – we understand the au courant lingo is “workforce housing” – in the development.)  Mr. Thomas himself has recognized as much.  “Let’s decide what we want on this site,” he told the Planning Board in January.  “And then let’s use the swap to help make that project feasible.  Let’s use the swap also maybe to negotiate some other things.”

Neither Council nor the Planning Board has had the benefit of a dog-and-pony show by the developer of the Alameda Marina project, Bay West Development.  But Mr. Thomas outlined the project for Council in April and Bay West filed a draft master plan in July.

On the surface, the Alameda Marina project resembles the other two northern waterfront proposals in two ways.  Like them, it promotes “waterfront access”:  4.5 acres along the shoreline featuring an “aquatic park,” a “maritime boardwalk,” and a “harbor view park.”  And like them, it contains a substantial residential component:  a total of 670 units, consisting of 285 rental units, 225 for-sale units, and a 160-unit “senior affordable” complex.

But the Alameda Marina project differs from the other two projects in one important respect:  its commercial-use component.  The project will provide 150,000 square feet of commercial space, of which 115,000 square feet will be “dedicated” to maritime uses.  According to the draft master plan, the commercial space will be centered around a “Maritime Core” and will “include the preservation and repurposing, if feasible, [of] a few of the existing buildings on-site (one them being the Alameda Marina building) for old and new maritime businesses.”

Here’s a diagram of the land-use plan:

alameda-marina-site-plan

We’ll have to wait for the developer’s presentation to the Planning Board to see just which “existing buildings” and “old” maritime businesses will be saved.  For example, what does Bay West have in mind for Svendsen’s Boat Works, which services and repairs commercial and private marine vessels?  Or for Deep Ocean Exploration and Research, which builds small submarines (and tests them in the Oakland Estuary)?  The draft master plan mentions neither outfit by name.  Nor does the accompanying letter from Bill Poland, spokesman for the developer.

Moreover, stressing maritime uses may please those, like Vice Mayor Frank Matarrese, who have been urging a revival of Alameda’s maritime industry, but it remains to be seen what will happen to the existing non-maritime businesses now operating on the site.  According to the grassroots citizens’ group, Save Alameda’s Working Waterfront, the 84 companies now doing business on the Alameda Marina property include software firms, a martial arts school, and a golf shop.  The draft master plan submitted by Bay West doesn’t seem to make any provision for continuation of these enterprises.  Nor does Mr. Poland’s letter address them.

If we had our druthers, we’d like to see each of the Council candidates take a stand on the appropriate scope and nature of development along the northern waterfront.  We’d be satisfied with responses to the two overarching policy questions we raised at the outset.  But we’d really prefer project-specific answers to questions like these:

  • Should the City allow Catellus to change the mix of uses so dramatically from office to residential for the last phase of the Alameda Landing project?
  • Should the City amend the northern waterfront general plan to permit Tim Lewis to put a 24-story high-rise and a couple of seven-story apartment buildings on the Encinal Terminals site?
  • Should the City allow Bay West to put existing non-maritime enterprises at the Alameda Marina out of business?

The tendency among Inner Ringers (and their spear carriers) is to label a candidate either “pro-” or “anti-development” depending on the extent to which she (or – not to forget Mr. Daysog – he) concurs with the wisdom of Those Who Know Best.  We think voters would be better served by considering how the candidate responds to specific questions about specific issues.  And, despite what City Attorney Janet Kern may believe, the California Supreme Court has made it clear that a candidate may state an opinion without risk of disqualification in a later vote.  Is there anyone running for office willing to take up our challenge?

Sources:

Tim Lewis affiliate campaign contribution: alamedans-united-497-6

Staff report on mixed-use development: 2016-04-19-staff-report-re-mx-zoning

Alameda Landing: 2016-05-23-staff-report-to-pbalameda-waterfront-plans-current

Encinal Terminals: 2016-05-23-staff-report-to-pb-re-supplemental-eir2016-06-22-staff-report2016-06-22-ex-2-to-staff-report-draft-master-plan

Alameda Marina: mp-draft-2016-07-082016-07-11-poland-letter-to-mayor

About Robert Sullwold

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

6 Responses to On the (northern) waterfront

  1. The council will only be able to focus on these issues if Measure M passes. Then the rent crisis will pass to the new elected rent board freeing the City Council to do other important work. If M does not pass then the on going displacement of Alameda citizens will remain on the City Council agenda and we will continue to see meetings with packed chambers going deep into the night.

    • dave says:

      Even if M passes, the inevitable legal challenges, the election of a new rent board, etc will still likely dominate the next council’s agenda.

    • MP says:

      Sounds like a filibuster

    • RJS says:

      So – we should pass M1 so that we can deal with other issues? Seems like you caused the problem in the first place by not letting the ordinance passed by the City Council in March go to work. You were one of those disappointed enough in the community action that created Ordinance 3148 to put M1 on the ballot, so don’t complain now about the problem it causes now. Seems like a disingenuous concern to me. More like using any opportunity to pitch M1, right?

  2. David says:

    Glad to see that you caught and reported on the Tim Lewis contribution to the firefighters/UFCW sponsored PAC “Alamedans United…”

    In the Bay area, it’s always been Democratic party candidates in bed with the developers – Ron Cowan, Michael Ghielmetti (Signature Properties), SunCal, etc. and it’s no different in Alameda.

    The firefighters union, and UFCW, via Mike Henneberry and his spouse, Solana, on the AUSD board (And Gray Harris, romantic partner to the local firefighter union president) have thrown their lot in with the East Bay democratic machine, and with the build, build, build at any expense crowd.

    Voting for any of the candidates backed by Alamedans United is a vote for more traffic problems to make you late for work in the morning.

  3. Bill Ingalls says:

    These proposed developments ALL need some element of downsizing for a number of reasons. The City’s housing goals have been met. The Northern Waterfront has historically been a working maritime environment. Finally, adding the propsed number of units and people and cars is totally untenable for our traffic infrastructure.

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