STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of January 24, 2023
TO: Mayor Walker-Griffin and Members of the City Council VIA: Dante Hall, City Manager
SUBMITTED BY: Michael Roberts, Public Works Director/City Engineer SUBJECT: Hercules Hub – Project Update, Contract Amendment No. 1 in the amount of $115,579 for Gray-Bowen-Scott to prepare a Federal-State Partnership for Intercity Rail Grant and Appropriation of $115,579 from the Capital Reserve Fund to fully fund said Amendment, Resolution of Support for a Transit and Intercity Rail Capital Program Grant, and Designation of $3M of Capital Reserve Funding for the Project RECOMMENDED ACTIONS:
It is recommended the City Council receive an update on the Hercules Hub and adopt resolutions:
Approving Amendment No.1 to Gray-Bowen-Scott’s contract in the amount of $115,579 to prepare a Federal-State Partnership for Intercity Rail Grant for a total, not to exceed contract amount of $590,332 and an appropriation of $115,579 from the Capital Reserve Fund to fully fund said amendment; and Approving a resolution of support for the filing of a joint Transit and Intercity Rail Capital Program Grant with the Capitol Corridor Joint Powers Authority (CCJPA) as the lead agency; and Designating $3M of Capital Reserve Funding as the City’s local match for future grants to fully fund the Hercules Hub Project.
FISCAL IMPACT OF RECOMMENDATION:
At the January 10, 2023, meeting, City Council allocated $5.5M to the Capital Reserve Fund for future infrastructure improvements, including the Hercules Hub Project. At that meeting, it was also discussed that the preliminary FY 22-23 available General Fund cash balance was $3.9M. In accordance with Council fiscal policy, 50% or approximately $1.95M of this surplus funding would also be allocated to the Capital Reserve Fund. The $115,579 for the Contract Amendment and $3M set aside as a match for future grants would be funded utilizing a portion of these Capital Reserve monies.
EXECUTIVE SUMMARY:
The Hercules Hub (The Hub) will create a regional, state-of-the-art housing and transportation community on the waterfront overlooking the San Pablo Bay. The Hub will connect thousands of housing units with a new train stop along the Capitol Corridor, bicycle and pedestrian pathways, bus routes, carpool options, and ferry service. To date, this new facility boasts $46M in capital improvements, and the City is fully engaged in securing the funding needed to design and construct the remaining infrastructure that will allow the Capitol Corridor train to serve the Hub. This grant funding is secured through the development and implementation of a Project Funding Plan, which will be presented tonight. In accordance with said Plan, the following steps are recommended to advance the Hercules Hub:
Execute an amendment with GBS to prepare a Federal-State Partnership for Intercity Rail Program grant application for design phase funding.
Support a joint “Transit and Intercity Rail Capital Program” (TIRCP) grant application for the Project’s design phase, with CCJPA as the lead applicant.
Designate $3M of Capital Reserve Funding for the Hercules Hub as the City’s local match for future grants to fully fund the Project.
DISCUSSION:
As one of the City’s top priorities, the Hercules Hub will achieve the vision of the Hercules Bayfront as a model transit-oriented community for the Bay Area and beyond. The Hub will connect thousands of homes with a new train stop along the Capitol Corridor, bicycle and pedestrian pathways, bus routes, carpool options, and future ferry service. The Project would relieve congestion on I-80 and reduce vehicle miles traveled (VMT) and greenhouse gas emissions. It also provides the community of Rodeo, an Equity Priority Community, with an easy sub-10-minute bike ride to the regional rail station via the Bay Trail.
The Project has NEPA and CEQA approvals and the City has completed the first three construction phases. In 2019, the City and the GBS team succeeded in advancing the Let’s Get I-80 Moving initiative, which resulted in the Capital Corridor Joint Powers Authority’s decision to grant Candidate Station Status to the Hub in Hercules. In 2020, the City completed the interim bus improvements on Bayfront Boulevard to allow buses to serve the area.
The next three phases to be implemented are the utility relocations, the track and platform improvements, and the station work. There is currently a unique window of opportunity to pursue grant funding for the completion of the Hub as an unprecedented amount of federal and state grant funding for pandemic relief, economic stimulus, and infrastructure investment is becoming available on a competitive basis. Having received approximately $46M, the Hub is highly competitive and continues to score well on grant criteria.
In August 2022, the City hired GBS for continued services to advance the Hub for grant funding and project readiness. This staff report will update the Project’s progress and recommend actions to secure phase funding.
Progress to Date
The team rebranded the Project to The Hercules Hub and updated the Project messaging to highlight its alignment with the Bay Area’s focus on investing in transit-oriented communities. A new logo and messaging capture the realized and potential housing and employment development at the site, communicating the benefits and features of the Project to gain support from elected officials, commission members, opinion leaders, and the general community. The team produced outreach materials with the new brand and messaging including an update to the City’s project webpage and a leave-behind brochure.
The team has continued to focus on developing the Project’s funding plan. Several meetings with staff at MTC, CCTA and CCJPA aided in refining applicable Federal, State, and Regional grants for which the Project would be competitive. As part of the funding plan development, the team has escalated the Project cost estimate to the year of expenditure as is required by funding agencies. The team will present the updated Project Cost and associated Funding Plan details tonight, including near-term recommendations to pursue design phase funding.
The team identified a current opportunity to apply for design phase funding through the State’s “Transit and Intercity Rail Capital Program” (TIRCP). The team has been working closely with Jim Allison, Manager of Planning at CCJPA, to develop a joint application that includes multiple station projects and two planning projects. As they have successfully done in the past with joint applications, CCJPA would be the lead applicant with the various project sponsors as partner agencies. Applications are due on February 10, 2023, and awards are expected to be announced in April 2023. This arrangement has grant awards for every CCJPA application in the previous cycles of the TIRCP. The team recently met with the California State Transportation Agency (CalSTA), who awards the grants, to discuss competitiveness of the joint application. A key outcome of the meeting was that CalSTA staff indicated that a joint application with the identified projects could be a strategic way to expand eligibility into multiple categories of TIRCP funding. The adoption of a resolution of support is a requirement for the City to be eligible to apply jointly with CCJPA for a TIRCP grant.
The team and CCJPA have been working to reengage Union Pacific Railroad (UP) in the project’s design review process. This has been a challenge for the project to navigate as project delivery procedures and standards have changed at CCJPA and UP over the last several years. Having acknowledged the long history of the project and their previous engagement, the UP has recently outlined a proposed path forward for the final design of the project that includes a series of exceptions to their standard practice and is valid only for the Hub project. The team will be working with CCJPA to move the project forward in collaboration.
As part of the Funding Plan, staff recommends the following for consideration by the Council:
Support for a joint “Transit and Intercity Rail Capital Program” (TIRCP) grant application for the Project’s design phase, with CCJPA as the lead applicant.
Authorization to execute an amendment with GBS to prepare a Federal-State Partnership for Intercity Rail Program grant application for design phase funding.
Allocation of $3M of Capital Reserve Funding for the Hercules Hub as the City’s local match for future grants to fully fund the Project.
Next Steps:
The Project Team anticipates the following crucial activities over the next few months:
The team will prepare and submit a joint TIRCP grant application with CCJPA for design phase funding.
The team will prepare and submit a grant application for the Federal-State Partnership for Intercity Rail for design phase funding.
The team will confirm Project eligibility and, if eligible, apply for One Bay Area Grant (OBAG) 3 Regional Hub grant.
The team will develop a branded, cutting-edge Project webpage accessible via the City’s existing website.
The team will hold Project expenditures to the necessary minimum while awaiting word on awards from the grant applications.
ATTACHMENTS:
Resolution to Execute GBS Amendment
Resolution of Support for Joint TIRCP Grant Application Resolution Designating $3M to the Hercules Hub
Power Point Presentation
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