Fremont City Council Meeting: 01/09/24 07:00 PM
3300 Capitol Avenue Div/Dept: Planning
Fremont, CA 94538 Category: Agreements and Contracts
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5072) DOC ID: 5072
Updated: 1/5/2024 12:01 PM by Susan Gauthier Page 1
FREMONT-DECOTO LAND DEVELOPMENT PLAN PROJECT MANAGEMENT SERVICE AGREEMENT – Authorize the City Manager or Her Designee to Execute a Service Agreement with WestGate Ventures for Project Management Services to Prepare a Land Development Plan for the City-Owned Parcel at the Corner of Fremont Boulevard and Decoto Road; Reallocate Funding
Contact Persons:
Name: Mark Hungerford Dan Schoenholz
Title: Senior Planner Community Development Director
Div/Dept: Planning Community Development
Phone: 510-494-4541 510-494-4438
E-Mail: [email protected] [email protected]
Executive Summary: Following certification of the Housing Element in March 2023, staff- initiated tasks to implement Program 63, which includes preparing the 9.59-acre City-owned Fremont-Decoto site for development and future sale. To accomplish this task, staff issued a Request for Qualifications (RFQ) seeking a local land developer to serve as project manager and to guide staff effectively through the land development planning process. From the RFQ process, staff is recommending WestGate Ventures (WGV) to serve in this project management role.
Staff recommends that the City Council authorize the City Manager or her designee to execute a service agreement with WGV to provide land development project management services in an amount not-to-exceed $320,000, and to reallocate $570,000 from PWC8520, Downtown Project, to PWC9112, Fremont-Decoto Land Plan, to fund the WGV service agreement as well as staff time needed to complete the land development planning process.
BACKGROUND: In the 2023-2031 Housing Element, the City-owned property located on Decoto Road, southwest of Fremont Boulevard, was identified in Implementation Program 63 as a surplus, underused property that is no longer needed for current or foreseeable public operations. The site is identified as having a realistic carrying capacity of 307 residential units based on site zoning, general lack of constraints, its location within a high resource area, having frontage along the City’s major transit corridor (Fremont Boulevard), and being of sufficient size to accommodate a variety of housing types. Entitling the site prior to sale provides the City with greater control over the site development compared to a sale of unentitled land. It will also increase the value of the property, as buyers will avoid the entitlement costs and the land carrying costs associated with unentitled property.
Housing Element Implementation Program 63 requires the City to commit to designating the Fremont-Decoto property for residential development, including an on-site affordable housing component, during the eight-year Housing Element planning period.
Redevelopment of the site would balance maximizing affordable housing, economic return, and community benefits. To that end, the services of a land development plan project manager is to direct the planning process in close coordination with staff.
Council Staff Report (ID # 5072) Meeting of January 9, 2024 Updated: 1/5/2024 12:01 PM by Susan Gauthier Page 2
DISCUSSION/ANALYSIS: A Request for Qualifications (RFQ) for project management services was published in July 2023. The scope of services identified in the RFQ included the following tasks:
• Property due diligence, including environmental characterization and analysis of site constraints;
• Market rate demand analysis and assessment of current and projected market conditions for the land use and density options found appropriate for the site; • Leading public outreach and stakeholder engagement efforts; • Determining viable, optimal, highest, and best uses for the site in accordance with City objectives, including adopted regulations, policies, plans and State laws; • Providing a detailed pro-forma which shows the basic project details and commercial/unit mix, sources and uses, development cost (include soft and hard costs), and potential income/cash flow statement; and
• Designing, entitling, and environmentally clearing the Project for repositioning of the site in the market for future sale.
Following the close of the RFQ submission period, a total of six Statements of Qualifications (SOQs) were received. An SOQ review panel consisting of Community Development and Public Works management staff reviewed the submissions for RFQ responsiveness and strength of qualifications. The two top scoring firms were subsequently interviewed.
Following interviews with each firm, WestGate Ventures was selected based on its relevant experience, make-up of the project team, understanding of project objectives, and competitive pricing.
Since 1998, the WGV project team has entitled and/or developed 16 projects totaling 1,009 residential units within the City. Notable projects include the 105-unit Rosewood Planned District (40230 Laiolo Road), the 56-unit Centerville Junction project (3550 Peralta Boulevard), the 209-unit Vintage Grove Planned District (SW corner of Mission Boulevard and Antelope Drive), and the 38-unit Parasol Planned District (34826 Fremont Boulevard).
Acting as the City’s project manager, WGV will analyze, plan, and entitle a development plan that will include an affordable housing component. The City, in turn, will sell t he entitled property at some future date. The land development planning process is expected to take about 2.5 years to complete.
Following execution of this agreement, WGV will complete a number of due diligence tasks (e.g., market analysis/pro forma, land constraints), as well as coordinating with City staff to solicit a Request for Proposals (RFP) in Spring 2024 to hire technical consultants (e.g., civil engineer, architect, CEQA/environmental) to inform and develop the land development plan.
Service agreements with these other consultants will follow this subsequent RFP process.
Also included in the WGV scope of services is community outreach and stakeholder engagement efforts. Outreach will be central to development of the land plan to be sure that the community has ample opportunity to participate. Specific dates for outreach have not yet been scheduled, but staff will maintain a City webpage about the land development planning progress (at https://www.fremont.gov/government/departments/community- development/planning-building-permit-services/fremont-decoto-land-development-plan) for ready access to its status, outreach efforts, draft planning documents, and future public hearing actions.
Council Staff Report (ID # 5072) Meeting of January 9, 2024 Updated: 1/5/2024 12:01 PM by Susan Gauthier Page 3
FISCAL IMPACT: The WestGate Ventures service agreement will have a not-to-exceed amount of $320,000, which includes a 10% contingency. Staff costs associated with th is project are estimated at $250,000. The costs of preparing the Fremont-Decoto property for sale can be funded from the Downtown project, PWC8520-501, which has been used for the sale of other City properties and currently has an unallocated fund balance of $1.2 million.
Consequently, staff recommends that the City Council reallocate $570,000 from PWC8520- 501 to the Fremont-Decoto Land Plan (PWC9112-501).
Additional funding will be required for the technical consultants, described in the Executive Summary. WGV will assemble a technical consultant team following a Request for Proposals that will include a civil engineer, architect, landscape architect, geotechnical engineer, traffic engineer, environmental engineer, and CEQA/environmental consultant. The anticipated cost for the technical team is estimated to be $750,000 but won’t be definitive until the proposals are received and final costs negotiated. The additional funding, as well as approval of the associated service agreements, will be requested in 2024.
Staff estimates that the costs associated with entitling the property will be more than offset by the net increase in sale price that entitling the property will bring.
ENVIRONMENTAL REVIEW: Environmental review is not required as the resultant service agreement is not a project pursuant to California Environmental Quality Act (CEQA) Guideline Sections 15061(b)(3) and 15378(b). It can be seen with certainty that there is no possibility that authorization of this agreement will have a significant effect on the physical environment. The project that WestGate Ventures would design and entitle would be subject to a separate CEQA environmental review that would be completed before Council is requested to take action on it.
ATTACHMENTS: None.
RECOMMENDATIONS:
1. Authorize the City Manager or her designee to enter into a service agreement with WestGate Ventures in a not-to-exceed amount of $320,000; and
2. Reallocate $570,000 from PWC8520-501 to PWC9112-501 to fund the WestGate Ventures service agreement and $250,000 in estimated staff costs.