City Council Report
915 I Street, 1st Floor
Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-01160 June 28, 2022
Title: Railyards Infrastructure Grant Project Delivery Agreement for the California Department of Parks and Recreation Grant [Published for 10-Day Review 06/17/2022]
Location: District 3
Recommendation: Adopt a Resolution: 1) authorizing the City Manager or the City Manager’s designee to execute the Railyards Infrastructure Grant Project Delivery Agreement between the City of Sacramento and Downtown Railyard Venture, LLC, in an amount not to exceed $30 million; 2) rescinding Sections 2 and 3 of Resolution No. 2022-0002; 3) establishing the Sacramento Railyards Rehabilitation Project (T15225700); 4) authorizing the City Manager or the City Manager’s Designee to establish the revenue and expenditure budgets in the amount of $30 million (Other Capital Grants, Fund 3704) for the Sacramento Railyards Rehabilitation Project (T15225700).
Contact: Marco Gonzalez, Senior Development Project Manager, (916) 808-5757, [email protected]
, Leslie Fritzsche, Economic Investment Manager, (916)
808-5450, [email protected]; Office of Innovation and Economic Development.
Presenter: None
Attachments:
1-Description/Analysis
2-Railyards Infrastructure Grant Project Delivery Agreement 3-Project Scope
4-Resolution 2022-0002
5-Resolution
6-Exhibit A: Railyards Infrastructure Grant Project Delivery Agreement between the City of Sacramento and DRV
Description/Analysis
Issue Detail: As part of the Budget Act of 2021 (Senate Bill 129, Chapter 96), the State of California is providing the City of Sacramento with $30 million for the rehabilitation of the Sacramento Railyards (Railyards). On January 4, 2022, City Council approved acceptance of the $30 million grant from the State of California. These funds will be used to pay for a portion of the remaining infrastructure that must be built in the Railyards to catalyze development of the Railyards. The recommendation contained in this staff report is to enter into the Railyards Infrastructure Grant Project Delivery Agreement (Project Delivery Agreement, Attachment 2) with Downtown Railyard Venture, LLC (DRV), the majority property owner and master developer of the Railyards, to allow it to use the grant funds to construct the infrastructure improvements.
Using the grant funds, DRV will construct the Project Scope (Scope) (Attachment 3) in accordance with the Project Delivery Agreement and the Grant Agreement, including bid and award processes that are consistent with the State and City requirements. The Scope includes construction of roadway, transit, sewer, and drainage infrastructure for North B Street, 7 th
Street, Summit Tunnel Drive, 6th Street, Camille Lane, and Stevens Street, and south of the Tracks.
On January 4, 2022 the City Council approved Resolution 2022-0002 (Attachment 4) authorizing the City Manager or the City Manager’s designee to: 1) accept a $30 million grant from the California Department of Parks and Recreation for the rehabilitation of the Sacramento Railyards; 2) establish the Sacramento Railyards Rehabilitation Project (G02180310); and 3) establish the revenue and expenditure budgets in the amount of $30 million for the Sacramento Railyards Rehabilitation Project (G02180310, Fund 2702).
Section 1 of Resolution 2022-0002 will remain unchanged. The fund and project number referenced in Sections 2 and 3 of Resolution No. 2022-0002, however, need to be rescinded to identify the project as a capital project, for grant reporting purposes.
Execution of the Project Delivery Agreement, establishment of the Sacramento Railyards Rehabilitation Project along with budgetary adjustments are necessary to implement the Sacramento Railyards Rehabilitation Project.
Policy Considerations: The Sacramento City Code Section 4.04.020 and Council Rules of Procedure (Chapter 7, Section E.2.d) mandate that unless waived by a 2/3 vote of the City Council, all labor agreements, and all agreements greater than $1,000,000 shall be made available to the public at least ten (10) days prior to council action. This item was published for 10-day review on June 17, 2022, in compliance with the City Code.
Economic Impacts: Not applicable.
Environmental Considerations:
California Environmental Quality Act (CEQA): On November 10, 2016, the City Council approved the Railyards Specific Plan Update, KP Medical Center, MLS Stadium & Stormwater Outfall project and certified a subsequent environmental impact report (SEIR) (SCH 2006032058) along with adopting a mitigation monitoring and reporting program (MMRP) (Resolution No. 2016-0379). On November 14, 2016, Staff filed a Notice of Determination with the Sacramento County Clerk and the California Office of Planning and Research, State Clearinghouse. The subject activity seeks grant funding to support development associated with the approved Railyards Specific Plan Update, KP Medical Center, MLS Stadium & Stormwater Outfall project, which was included in the analysis conducted in the certified SEIR. No further environmental review required.
Sustainability: Not applicable.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: The funding from the state will support development of the Railyards and allow the City of Sacramento to accelerate development in the Specific Plan area, consistent with the 2035 General Plan. As the master developer of the Railyards, DRV has significant experience planning and implementing the construction of infrastructure in the Railyards. Partnering with DRV to deliver the Scope will catalyze development of housing, the Central Shops District, office, retail, and entertainment on the site.
Financial Considerations: As part of the Budget Act of 2021 (Senate Bill 129, Chapter 96), the State of California is providing the City of Sacramento with $30 million for the rehabilitation of the Sacramento Railyards (Railyards). To support the continued rehabilitation of the Railyards, staff recommends executing the Project Delivery Agreement with DRV in an amount not to exceed $30 million, establishing the Sacramento Railyards Rehabilitation Project (T15225700) along with the revenue and expenditure budgets in the amount of $30 million in the Other Capital Grant Fund (Fund 3704).
Under the Project Delivery Agreement, the City of Sacramento may seek up to $750,000 in direct reimbursement from the State of California for costs related to administration of the grant. If the State determines specific costs incurred by the City are not eligible for reimbursement under the grant, DRV will be responsible for paying these costs.
Local Business Enterprise (LBE): Not applicable.
RESOLUTION NO. 2022-0002
Adopted by the Sacramento City Council
January 4, 2022
Accept and Appropriate $30,000,000 in Grant Funding for the Rehabilitation of the Sacramento Railyards as Provided in the 2021-2022 State Budget
BACKGROUND
A. As part of the Budget Act of 2021 (Senate Bi ll 129, Section 96), the State of California is providing the City with $30 million in funding for the rehabilitation of the Sacramento Railyards.
B. The purpose of this resolution is to authorize the City Manager or his designee to accept the $30 million in funding and take related budget actions.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The City Manager or the City Manager’s designee is authorized to accept the $30 million in grant funds from the State of California for the rehabilitation of the Sacramento Railyards.
Section 2. The City Manager or the City Manager’s designee is authorized to establish the Sacramento Railyards Rehabilitation Project (G02180310).
Section 3. The City Manager or the City Manager’s designee is authorized to establish the revenue and expenditure budgets in the amount of $30 million to the Sacramento Railyards Rehabilitation Project (G02180310, Fund 2702).
Resolution 2022-0002 Januar y 4, 2022 Pa ge 1 of 2
Adopted by the City of Sacramento City Council on January 4, 2022, by the following vote:
Ayes: Members Ashby, Guerra, Harris, Jennings , Loloee, Schenirer, Valenzuela, Vang, and Mayor Steinberg
Noes: None
Abstain: None
Absent: None
Attest:
_____________________________________
Mindy Cuppy, City Clerk
The presence of an electronic signature certifies that the foregoing is a true and correct copy as approved by the Sacramento City Council.
Resolution 2022-0002 Januar y 4, 2022 Pa ge 2 of 2
Mindy Cuppy
Digitally signed by Mindy Cuppy
Date: 2022.01.24 15:29:11 -08'00'
RESOLUTION NO.
Adopted by the Sacramento City Council
CALIFORNIA DEPARTMENT OF PARKS AND RECREATION GRANT FOR REHABILITATION OF THE SACRAMENTO RAILYARDS: APPROVAL OF PROJECT
DELIVERY AGREEMENT, ESTABLISH CAPITAL IMPROVEMENT PROJECT AND
BUDGETARY ADJUSTMENTS FOR THE SACRAMENTO RAILYARDS
REHABILITATION PROJECT (T15225700)
BACKGROUND
A. As
part of the Budget Act of 2021 (Senate Bill 129, Chapter 96), the State of California is providing the City of Sacramento with $30,000,000 for the rehabilitation of the Sacramento Railyards (Railyards). These funds will be used to pay for a portion of the remaining infrastructure that must be built in the Railyards.
B. On January 4, 2022, the City Council approved Resolution 2022-0002 authorizing the City Manager or the City Manager’s designee to: 1) accept a $30 million grant from the California Department of Parks and Recreation for the rehabilitation of the Sacramento Railyards; 2) establish the Sacramento Railyards Rehabilitation Project (G02180310); 3) and establish revenue and expenditure budgets in the amount of $30 million to the Sacramento Railyards Rehabilitation Project (G02180310, Fund 2702). Upon further consideration, staff determined that this should have been established as Capital Improvement Project.
C. The establishment of a Capital Improvement Project for the Sacramento Railyards Rehabilitation Project (T15225700) and the appropriation of funds will allow staff to complete a portion of the remaining infrastructure that must be built in the Railyards.
D. As the majority property owner and master developer of the Railyards, Downtown Railyard Venture (DRV) has significant experience planning and implementing the construction of infrastructure in the Railyards. Partnering with DRV to deliver the Scope will catalyze development of housing, the Central Shops District, office, retail, and entertainment on the site.
BAS
ED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. T he City Manager or City Manager’s designee is authorized to execute the Railyards Infrastructure Grant Project Delivery Agreement between the City of Sacramento and DRV in an amount not to exceed $30 million that is attached as Exhibit A.
S
ection 2. Sections 2 and 3 of Resolution No. 2022-0002 are rescinded.
S
ection 3. The Sacramento Railyards Rehabilitation Project (T15225700) is established as a new Capital Improvement Project.
Section 4. The City Manager or City Manager’s designee is authorized to establish the revenue and expenditure budgets in the Sacramento Railyards Rehabilitation Project (T15225700) in the amount of $30,000,000 (Other Capital Grants, Fund 3704).
Section 5. Exhibit A is a part of this resolution.
Table of Contents:
Exhibit A: Railyards Infrastructure Grant Project Delivery Agreement between the City of Sacramento and DRV
Exhibit A