DATE:
September 17, 2024
TO:
Paul Buddenhagen, City Manager
FROM:
Chadrick Smalley, Community Development Director
SUBJECT:
Resolution Of The City Council Of The City Of Emeryville Authorizing The City Manager To Execute The 1) Property Conveyance Agreement (Wareham To City) Station Property; 2) Property Conveyance Agreement (City To Amtrak) Station Property And Platform Parcels; 3) Agreement For Encroachment Easement; 4) Access Easement Agreement; And 5) Agreement For Utility Lines Easement; And To Execute All Other Documents Necessary For The Acquisition And Disposition Of Real Properties Associated With The Emeryville Amtrak Station Pursuant To The National Railroad Passenger Corporation And City Of Emeryville Passenger Station Lease/Purchase Agreement; CEQA Determination: Exempt Pursuant To CEQA Guideline 15061(b)(3) Recommendation
Staff recommends that the City Council adopt the attached resolution authorizing the execution of five agreements associated with the acquisition and disposition of certain real properties associated with the Emeryville Amtrak Station and authorizing the City Manager to execute all documents necessary to effectuate property transfers pursuant to the National Railroad Passenger Corporation and City of Emeryville Passenger Station Lease/Purchase Agreement dated October 27, 1992.
Background
The purpose of this item is to request City Council approval of agreements to transfer several pieces of real property that are related to the Emeryville Amtrak Station. These agreements are necessary to fulfill obligations from longstanding agreements that created the transit facility, the background of which is described in further detail below.
Amtrak Station Parcel Ownership and Leasehold Interests The owner of the property on which the Amtrak Station is located (“Station Parcel”) is Emery Station West, LLC (known as “Wareham Development” or “Wareham”). There are four separate parcels underlying portions of the passenger platform adjacent to the Station Parcel. The owner of two of the platform parcels (Platform Parcels One and Two) is the City of Emeryville, and the owner of the remaining two platform parcels (Platform Parcels Three and Four) is the Successor Agency to the Redevelopment Agency (“Successor Agency”). In the early 1990’s, numerous real estate transactions were executed to facilitate the construction of the station building by Wareham and the leasing of the property to the National Railroad Passenger Corporation (i.e. Amtrak) for the operation of passenger rail service.
In March 1993, the former Emeryville Redevelopment Agency (“Redevelopment Agency”) purchased property, consisting of the Station Parcel, 59th Street Extension (subject to City right of way), and Platform Parcels Three and Four, from Chevron. The Redevelopment Agency then subdivided the property to create the Station Parcel, an air rights parcel above the Station Parcel, and Platform Parcels 3 and 4. The Redevelopment Agency then sold the Station Parcel and air rights parcel to Wareham for $1 and retained Platform Parcels Three and Four, and 59th Street Extension.
Wareham then developed the Station Parcel as a facility for rail passenger service to be provided by Amtrak. Wareham then leased the Station Parcel back to the Redevelopment Agency. However, the Redevelopment Agency never entered into a sublease with Amtrak. Rather, the City of Emeryville (“City”) entered into a lease/purchase agreement with Amtrak, despite not having a lease with the property owner, Wareham. The City’s lease/purchase agreement with Amtrak provides that the Station Parcel and all four Platform Parcels will be transferred to Amtrak upon expiration of the lease term, which occurred on October 15, 2018. The Redevelopment Agency’s lease with Wareham provides that Wareham will transfer the Station Parcel to the Redevelopment Agency upon expiration of the lease (also October 2018). That transfer did not happen for the reasons described below. 2018 Attempt to Transfer Station Parcel to Amtrak
In the fall of 2018, the City provided Amtrak with a proposed transfer agreement for the Station Parcel and all four Platform Parcels. Because the City and Wareham have a shared interest that the properties be used for a quality, intermodal public transit facility in perpetuity, that transfer agreement included an operating covenant, which required Amtrak to continue using the facility as an intermodal transit station in perpetuity (“Operating Covenant”). Amtrak rejected the Operating Covenant noting that no such term was included in its lease/purchase agreement with the City. In the absence of Amtrak’s agreement to the Operating Covenant, Wareham declined to transfer the Station Parcel. As part of the additional due diligence conducted during this time, the parties determined that Wareham’s obligation to transfer the Station Parcel was only to the Redevelopment Agency (now the Successor Agency), not the City. The City had the obligation to transfer the Station Parcel and Platform Parcels to Amtrak under its lease/purchase agreement with Amtrak. However, without any agreement between the City and Redevelopment Agency/Successor Agency, the City had no right to transfer the Station Parcel to Amtrak.
Since 2018, staff undertook additional communication with both Amtrak and Wareham to determine how best to facilitate property transactions that fulfill the original obligations of all parties despite the discontinuity of contractual relations between the parties and to achieve the goal of ensuring continued high-quality, intermodal public transit use of the properties. Because the Station Parcel and Platform Parcels are held by different owners, including the Successor Agency, the path to solution was complex, however, through the mutual efforts of Amtrak, Wareham and the City, the requisite agreements have now been negotiated and finalized for execution. A geographical depiction of the transactions is attached to this report as a visual aid (Attachment 1).
DISCUSSION
Station Parcel
As noted above, Wareham owns the Station Parcel and leased it to the Redevelopment Agency, which lease included an obligation for Wareham to transfer the Station Parcel to the Redevelopment Agency at the expiration of the lease. The City of Emeryville leased the Station Parcel and Platform Parcels 1-4 to Amtrak, which lease included an obligation for the City to transfer the properties to Amtrak at the end of the lease term.
Although the Successor Agency (as successor to the Redevelopment Agency) has a contractual right to acquire the Station Parcel pursuant to the lease with Wareham, the Redevelopment Dissolution Law, Health and Safety Code (“HSC”) Section 34163(e), prohibits former redevelopment agencies from acquiring property by any means. Health and Safety Code Section 34173 grants to successor agencies all of the authority, rights and powers of a redevelopment agency except to the extent those powers are limited by the Dissolution Act. Though the Successor Agency cannot acquire the Station Parcel pursuant to the terms of the Dissolution Act, the assignment of the right to acquire the Station Parcel to the City would accomplish the original purposes of the lease. Moreover, HSC Section 34181(a) allows oversight boards to direct successor agencies to transfer ownership of assets that were constructed and used for a government purpose to the appropriate public jurisdiction pursuant to any existing agreements relating to the construction or use of such assets.
On January 18, 2022, the Successor Agency adopted Resolution No. SA03-22, and the City Council adopted Resolution No. 22-01, authorizing the execution of the Property Conveyance and Assignment Agreement (Successor Agency to City) Platform Parcels and 59th Street (the “Successor Agency-City Conveyance Agreement”), which assigns the Successor Agency’s rights to purchase the Station Parcel to the City. On January 19, 2022, the County of Alameda Countywide Oversight Board (“Oversight Board”) adopted Resolution No. OB-2022-05 which approved the Successor Agency-City Conveyance Agreement, and on May 2, 2022 the California Department of Finance (“DOF”) issued a letter approving the Oversight Board’s action. These approvals allow the City to acquire the Station Parcel directly from Wareham.
Wareham also owns the property directly to the east of the Station Parcel, namely the driveway serving the Station Parcel. In 2021, during the course of negotiations described above, Wareham recorded an easement allowing access across the driveway parcel to the Station Parcel, with the easement dependent upon the Station Parcel remaining in use as an intermodal public transit facility (the “2021 Easement”).
Additionally, and pursuant to the terms of the Redevelopment Agency’s lease agreement, in 2019 Wareham recorded a Declaration of Covenants Conditions and Restrictions Providing for Easements Supporting Air Space Parcel and Allocation of Development Rights (the “2019 CC&Rs”), which provides easements for support, access and utilities for future development of the air rights parcel above the Station Parcel.
Wareham offered to transfer the Station Parcel to the City of Emeryville, subject to the 2021 Easement and the 2019 CC&Rs, for purposes of the City transferring the Station Parcel to Amtrak consistent with the terms of the lease/purchase agreement between the City and Amtrak. As part of that offer, Wareham requested that the transfer include the City/Successor Agency granting certain easements as described in the 59th Street Extension section of this report, below.
Both the 2021 Easement and the 2019 CC&Rs contain terms and conditions that were not agreed to nor acceptable to Amtrak, consequently Amtrak indicated it would not accept the Station Parcel subject to those exceptions to title. Amtrak and Wareham have since negotiated and agreed to amended and restated versions of these agreements which will be recorded in conjunction with the transfer of the Station Parcel from the City to Amtrak.
In summary, the Successor Agency will assign its right to acquire the Station Parcel to the City; Wareham will transfer the Station Parcel to the City; and the City will transfer the Station Parcel to Amtrak, at which point the amended and restated easements allowing for 1) access to the Station Parcel from the driveways, and 2) access to the air rights parcel across the Station Parcel, will be recorded.
This transaction is effectuated by the previously-approved Successor Agency-City Conveyance Agreement, which assigns the Successor Agency’s right to purchase the Station Parcel to the City; the “Property Conveyance Agreement (Wareham to City) Station Property” (Exhibit A to the Resolution) which transfers the Station Parcel from Wareham to the City; the “Property Conveyance Agreement (City to Amtrak) Station Property and Platform Parcels” agreement (Exhibit B to the Resolution) which transfers the Station Parcel from the City to Amtrak, the “Amended and Restated Grant of Easements and Agreement Pertaining to Intermodal Transportation Station Facility” (Attachment 2) and the “Amended and Restated Declaration of Covenants, Conditions and Restrictions Providing for Easements Supporting Air Space Parcel and Allocation of Development Rights” (Attachment 3), which amend and restate the 2021 Easement and 2019 CC&Rs.
Platform Parcels One and Two
The City owns Platform Parcels One and Two. Platform Parcel One extends from 62nd Street south to the north side of EmeryStation West, and Platform Parcel Two extends from the north side of EmeryStation West to the center of 59th Street. As the City owns these presently, the City may transfer these properties to Amtrak without intervening steps. Platform Parcel Two would be subject to a pedestrian bridge encroachment as described below in the 59th Street Extension discussion.
In summary, Platform Parcels 1 and 2 will be transferred directly from the City to Amtrak, subject to the pedestrian bridge encroachment easement described below. This transaction is effectuated by the “Property Conveyance Agreement (City to Amtrak) Station Property and Platform Parcels” agreement (Exhibit B to the Resolution) and the “Agreement for Encroachment Easement (Exhibit C to the Resolution) Platform Parcels Three and Four
The Successor Agency owns Platform Parcels Three and Four. Platform Parcel Three extends from the center of 59th Street south to the north side of the Station Parcel, and Platform Parcel Four extends from the north side of the Station Parcel to the south side of the Station Parcel. The Successor Agency Board, City Council, Oversight Board and DOF approvals described above also included approval of the Successor Agency’s transfer of Platform Parcels 3 and 4 to the City. Platform Parcel Three would be subject to a pedestrian bridge encroachment as described below in the 59th Street Extension discussion.
In summary, Platform Parcels 3 and 4 will be transferred from the Successor Agency to the City, then from the City to Amtrak subject to the pedestrian bridge encroachment easement described below.
This transaction is effectuated by the previously-approved Successor Agency-City Conveyance Agreement which transfers the Platform Parcels to the City; and the “Property Conveyance Agreement (City to Amtrak) Station Property and Platform Parcels” agreement (Exhibit B to the Resolution) which transfers the Platform Parcels from the City to Amtrak, and the “Agreement for Encroachment Easement” (Exhibit C to the Resolution). 59th Street Extension
The remainder of 59th Street from Horton to the eastern boundary of Platform Parcel Three is currently owned by the Successor Agency, subject to City right of way across the street parcel. This is a holdover from the original acquisition of the properties in this area by the Redevelopment Agency. Platform Parcel Three was created by deed out of the end of 59th Street abutting the railroad tracks and is owned by the Successor Agency. The remainder of 59th is still held by the Successor Agency as well.
As noted above, the City proposes to grant three easements to Wareham across this parcel: 1) an easement for the encroachment of the existing pedestrian bridge from the access tower to the EmeryStation West garage; 2) an access easement to the air rights parcel above the Station Parcel; and 3) a utility access easement to the air rights parcel above the Station Parcel.
In summary, the 59th Street Extension will be transferred from the Successor Agency to the City, subject to the three easements described above. This transaction is effectuated by the previously-approved Successor Agency-City Conveyance Agreement which transfers the 59th Street Extension to the City, and the “Agreement for Encroachment Easement” (Exhibit C to the Resolution), “Access Easement Agreement” (Exhibit D to the Resolution), and “Agreement for Utility Lines Easement” (Exhibit E to the Resolution)
ENVIRONMENTAL REVIEW
The actions authorized by the proposed resolution is exempt from environmental review under California Environmental Quality Act Guideline 15061(b)(3), the common sense exemption. The resolution authorizes actions intended to preserve the status of quo by maintaining the subject properties as part of an intermodal transit center. The proposed actions will not authorize any construction or other activities that could potentially impact the environment.
Fiscal Impact
Over the course of the lease, Amtrak paid the City (and the City transferred to the Successor Agency) $2,250,000 in rent under the terms of the lease/purchase agreement. Execution of the agreements described in this report fulfills longstanding obligations of the Successor Agency and City to transfer the Amtrak Station Parcel and Platform Parcels to Amtrak.
Staff Communication with the Public
Staff has not had any communication with the public on this item.
Conclusion
Staff recommends that the City Council adopt the attached Resolution authorizing the execution of all agreements necessary to complete the property transactions described below:
Station Parcel: The Successor Agency assigns its right to purchase the parcel to the City, the City accepts the parcel from Wareham, and City transfers the parcel to Amtrak subject to the amended and restated access easement and amended and restated covenants, conditions and restrictions.
Platform Parcel 1: The City transfers the parcel to Amtrak.
Platform Parcel 2: The City grants an easement for the encroachment of the pedestrian bridge above Platform Parcel 2, and transfers the parcel to Amtrak.
Platform Parcel 3: The Successor Agency transfers the parcel to the City, the City grants easements for the encroachment of the pedestrian bridge above Platform Parcel 3, and transfers the parcel to Amtrak.
Platform Parcel 4: The Successor Agency transfers the parcel to the City, and the City transfers the parcel to Amtrak. 59th Street Extension: The Successor Agency transfers the parcel to the City, the City grants easements for the encroachment of the pedestrian bridge, access and utilities.
PREPARED BY: Chadrick Smalley, Community Development Director Approved and Forwarded to the
City Council of the City of Emeryville:
Paul Buddenhagen, City Manager
Attachments
Attachment 1: Map of Parcels to be transferred
Attachment 2: Amended and Restated Grant of Easements and Agreement Pertaining to Intermodal Transportation Station Facility Attachment 3: Amended and Restated Declaration of Covenants, Conditions and Restrictions Providing for Easements Supporting Air Space Parcel and Allocation of Development Rights Draft Resolution, including
Exhibit A: Property Conveyance Agreement (Wareham to City) Station Property Exhibit B: Property Conveyance Agreement (City to Amtrak) Station Property and Platform Parcels Exhibit C: Agreement for Encroachment Easement
Exhibit D: Access Easement Agreement
Exhibit E: Agreement for Utilities Lines Easement
The City acquired Platform Parcels 1 and 2 from other entities later.
Amtrak Station and Related Parcels
| September 17, 2024
City of Emeryville
CALIFORNIA
MEMORANDUM