CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
12/12/2022
1 SUBJECT:
Public-Private Partnership Feasibility Analysis Next Steps RECOMMENDED ACTION:
Hear a presentation on the results of a conceptual public-private partnership feasibility analysis involving the City’s corporation yard on Milagra Avenue and the Pacifica School District’s administrative offices on Reina del Mar Avenue, and provide direction to the City Manager about next steps.
STAFF CONTACT:
Kevin Woodhouse, City Manager
(650) 738-7409
[email protected]
BACKGROUND/DISCUSSION:
During City Council’s consideration and approval of the Civic Center Campus renovation project in 2021, Councilmember O’Neill expressed interest in evaluating the feasibility of a publicprivate partnership involving aging City facilities, Pacifica School District facilities, and affordable housing. Understanding the complexity and long timeline for such public-private partnerships compared to the immediate and more urgent timeline for renovation of the Civic Center, the City Council supported the idea of exploring whether another aging and inadequate City facility - the municipal corporation yard on Milagra Avenue - might be a candidate for a partnership with the Pacifica School District (PSD) and their administrative offices on Reina del Mar Avenue, to create new PSD administrative offices and affordable housing units at the Milagra site and a combined PSD and municipal corporation site and City Public Works Department-Field Services offices at the Reina del Mar site.
On October 25, 2021, City staff, Pacifica School District (PSD) staff, Councilmember O’Neill, Mayor Pro Tem Bier, and PSD Board Trustees Bredall and Brocchini met via Zoom to discuss the concept of such a potential public-private partnership project. Although PSD representatives communicated that seeking new Administrative Offices was not the highest priority at that time for them compared to responding to COVID-19 variant challenges and focusing on their Oddstad Avenue workforce housing project, they generally expressed support for beginning to explore the concept, understanding that public-private partnerships are complex and take many years to assess and structure.
At the January 24, 2022 City Council meeting, the City Council approved an item to direct the City Manager to solicit consultant services for a low-cost (up to $15,000) preliminary feasibility assessment based on initial basic information about the City and PSD properties and operational needs. The preliminary scope of work would be focused to assess basic assumptions and financial feasibility of a potential project in order for the City Council and the PSD Board of Trustees to make a more informed decision about next steps. PSD was Pacifica City Council 2
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supportive of conducting this assessment, however due to COVID-19 variant response, other priority PSD projects, and upcoming annual budget development, their preference was to pursue this assessment during an August to December timeframe. Therefore, during summer 2022, City staff developed a Request for Proposals with PSD input to solicit consultant services for this assessment.
The City received two responsive proposals and selected Willdan Financial Services for the assessment. Willdan’s Draft Conceptual PPP Feasibility Analysis is provided in Attachment A.
Willdan’s work began in November and included meetings with City and PSD staff, affordable and market rate housing developers, and analysis of site characteristics and the range of practical and legal issues necessary to understand the broad feasibility of the contemplated land transaction and the extent to which private development on the City site could assist with the funding of improvements, such as District Offices on the City property and the new/renewed corporation yard on the District property. Their analysis addresses specific details and constraints of each of the properties, identifies policy and practical considerations, discusses current residential development economics, identifies three basic development alternatives for the City site, discusses the District site, and concludes with a list of outstanding issues, potential next steps, and rough order of magnitude identification of timeline factors for future steps.
In summary, Willdan concludes that “based on this rough analysis the development of the City site appears to be feasible as an affordable housing and District office project.” However, there are many variables that need to be addressed with further analysis, the first being a “fit study” by an architect or similar professional to understand the City site in more detail and how residential, office, and parking could be accommodated, number of units, etc.. This information would further inform financial feasibility for an affordable housing developer as well.
Willdan representatives will present the results of their analysis at the City Council meeting.
Following the presentation, questions and answers from the Council, and public comment, the City Manager is seeking direction from the City Council on next steps. Because the PSD Board of Trustees has not yet discussed this analysis, the City Manager recommends that the City Council’s direction include, and be contingent on, the PSD Superintendent receiving affirmative interest from the PSD Board of Trustees to continue this analysis into the next “fit study” phase.
It is anticipated the City would pay for the estimated up to $10,000 cost of the next phase, however the City Manager is also seeking Council input on this point.
ALTERNATIVE ACTION:
A second phase of this assessment is not currently on the City Council Priorities list for Fiscal Year 2022-23. The City Council could choose to defer its decision on funding a second phase of this study to Council’s goal-setting for FY2023-24 priorities and FY2023-24 budget development.
RELATION TO CITY COUNCIL GOALS AND WORK PLAN:
A public-private partnership with Pacifica School District concerning City and PSD facilities and affordable housing relates primarily to the Council’s goals of Fiscal Sustainability and Strong City Workforce Infrastructure.
FISCAL IMPACT:
Approval of a second phase of this assessment, an architectural “fit study,” is estimated to cost Pacifica City Council 3
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up to $10,000 depending on the rigor of the analysis and complexities that may arise.
ORIGINATED BY:
City Manager's Office
ATTACHMENT LIST:
Willdan Financial Services Draft Conceptual PPP Feasibility Analysis (PDF)