Presentation Title
Second Line
August 15, 2016
1 City of Alameda
Study Session on the Future Development of
the Enterprise District
City Council
October 1, 2024
Enterprise District - Session Objectives
• Provide background on the vision for and history of
development of the Enterprise District in Alameda
Point.
• Discuss the real estate and market dynamics of building a large scale jobs-rich development.
• Review staff recommendations for advancing the
development process.
2 Land Use Visions approved by Council
3 2013 Concept Plan
107 acres for new high-quality
research and development,
industrial, manufacturing and
office uses.
New construction to
accommodate modern uses
and specialized industry
needs.
Maximum height of 100 feet
(40 feet near Main Street).
2014 Zoning Amendment
Office, research and
development, bio-technology,
high tech manufacturing, light
and heavy industrial, maritime,
commercial, community serving
and destination retail, on-line
sales, other uses.
Facilitate job growth and limit
intrusion of uses that would
(hinder) productive and
successful employment and
business use.
2014 Zoning Map Amendment
4 Enterprise District History
• Pre-2014 Planning efforts including zoning / EIR, concept plan, Waterfront/Town Center Precise Plan, Community Facilities District (CFD) and Transportation Management Plan, Master Infrastructure Plan
• 2014 Requests for Qualifications for “Site A” and “Site B” (Enterprise District) developers
– Determination to postpone Site B until Site A infrastructure commitments were achieved
– Developers did not want to commit to up front infrastructure • 2019 Request for Proposals for ~24-acre property in Enterprise District
– Held up by Surplus Land Act Changes and Tarry Refinery Waste 5 2018 Economic Development Strategic Plan
6 Economic Development is rooted in the 2018 Economic
Development Strategic Plan. Our focus for retention, expansion, and growth of businesses are in six major sectors:
1. Life sciences
2. Clean, green and high tech
3. Blue tech and maritime
4. Retail and restaurants
5. Tourism and hospitality
6. Artists and small
manufacturers
Current Tenants
7 Physical Considerations
8 Waterfront Conceptual Roles
9 Infrastructure Needs & 2019 Disposition Strategy
10 Source: CBG Civil Engineers, 2019,
updated 2024
Disposition Strategy:
• Developer pays for core
infrastructure improvements
required in Master Infrastructure
Plan (MIP).
• City provides parcel that is
appropriately sized to justify this
infrastructure cost.
• First developer catalyzes future
development (which may be done
differently).
• Est. cost: ~$40 million (was
estimated at $26 million in 2019)
NEW SEWER LINE
TO SITE A PUMP
STATION
NEW STORMWATER LINE
TO REPLACED OUTFALL
NEW EBMUD, OTHER UTILITIES
LOOPING TO CENTRAL AVE.
NEW
Status Since 2019
The City has addressed the 2019 barriers to development, but now faces a post-pandemic market reality.
Structural / Administrative Changes:
- AB 2319 (Bonta, 2022) addressed limitations of Surplus Land Act in Alameda Point
- City working with Chevron on Tarry Refinery Waste remediation plan - Initial Site A infrastructure completed
- Astra not as strong a consideration as in 2019
- Central Avenue Improvements underway
Market Changes:
- High interest rates / lower risk development climate
- Post-pandemic office vacancy rates
- High East Bay life science vacancy rates (37%)
- Land prices stable to declining
11 Market and Economic Trends
12 0
5 10
15 20
25 30
35 0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
Q1 2019 Q3 2019 Q1 2020 Q3 2020 Q1 2021 Q3 2021 Q1 2022 Q3 2022 Q1 2023 Q3 2023 Q1 2024 Q3 2024 Historical Tenants in the Market
Tenant SF # of Tenants
Life Science demand has cooled…
SOURCE: Cushman & Wakefield, 2024
Market and Economic Trends
13 0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
Q1-19
Q1-20
Q1-21
Q1-22
Q1-23
Q1-24
Vacancy Asking Rate (NNN)
While vacancy rates for life science space in the East Bay are very high.
SOURCE: Cushman & Wakefield, 2024
Market and Economic Trends
14 0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
Q1-19
Q1-20
Q1-21
Q1-22
Q1-23
Q1-24
Vacancy Asking Rate (NNN)
Vacancy rates for industrial space in the East Bay have also risen over the last year and rents have stabilized.
SOURCE: Cushman & Wakefield, 2024
Market and Economic Trends
15 0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
2019 2020 2021 2022 2023 H1 2024
Annual Leasing Activity in the East Bay (Sq. Ft.)
Industrial Life Science SOURCE: Cushman & Wakefield, 2024 Staff Conclusion: the City’s best opportunity today is to find a specific tenant looking to build a specialized campus, rather than pursuing speculative development.
Alternative Phase I Disposition - 2024
16 Source: CBG Civil Engineers, 2024
Alternative Disposition
Option:
• Same principal applies
(land as consideration
for infrastructure)
• Smaller property and
modified package to
reduce up front risk &
capital outlay
• Interim rehabilitation
solutions for
storm/sewer
• Est. cost: ~$27 million
Alternatives for Advancing Development
1. Competitive RFP, RFQ for Master Developer for Entire District a. Keep existing zoning
b. Allow for changes such as adding residential
2. Competitive RFP, RFQ for 10 or 24-acre areas shown
3. Competitive Marketing Approach similar to private sector Staff believe option 3 offers best approach for attracting a tenant and meeting the current market realities.
17 Staff Recommendation #1: Aggressive Marketing
Aggressive marketing in early 2025
• Staff & Broker team to spend last two months of 2024 preparing a marketing and information package with clear due diligence package & parameters (see #2) • Transparent core infrastructure package
• Finalize tarry refinery waste remediation with Water Board • In addition to standard brokerage marketing, will focus on:
• Local word of mouth & press
• Proactive industry engagement
• This is a more conventional, private sector approach
• This offer process is competitive but not time-bound (where typical RFP/Q has a deadline, usually 6-8 weeks min)
• Pursuing offers received remains at discretion of the City Council 18 Staff Recommendation #2: Development Parameters
Staff proposed parameters for development:
- Infrastructure Replacement:
- Development must pay for and build core infrastructure needed to support the project.
- The first development must be large enough to provide a meaningful core infrastructure to catalyze other projects.
- Zoning
- Current zoning is primary guardrail to enable and restrict development. - Timing
- City will not entertain speculative development at this time – must be a timeline for construction and viable financing and business plan resulting in short term project delivery.
- Preferred Uses
- 2018 Economic Development Strategic Plan Sectors are top priority. - Minimum job/people density of 1,000 square feet per person. - No storage, data center or other uses with few to no employees or visitors. 19 Process Upon Receiving an Offer
1. Staff would evaluate against the Development Parameters to ensure it meets the City’s vision.
2. Staff would conduct due diligence on:
• Financial viability of the offer
• Qualifications of Proposer to deliver
• Anticipated community / public process
• Likelihood / competitiveness of other offers
3. Meeting(s) with City Council to discuss, receive feedback and direction
4. Council considers Exclusive Negotiating Agreement processoffering time for transparent public outreach and review, due diligence, advancing concept, negotiating deal terms prior to Council considering Disposition and Development Agreement in public meeting
20