Tell us about the public trust alternative for Alameda Point?
There are two points to consider with regards to the trust. The first is the legal structure, and the second is the land uses with the structure. Regarding the legal structure, there are valid criticisms of the legal structure of the San Francisco Presidio model and we don’t insist that the legal structure look exactly like that. But the point is that the Presidio was federal land like Alameda Point, and instead of being sold off to developers for private profit, it was put into a trust model to benefit the public. We can learn from the Presidio Trust and improve on that for Alameda Point. There are a myriad of ways that a trust for Alameda Point could be structured – it could even be structured at the municipal level, providing local control with representation from Alameda Point residents and business owners.
When it comes to land use, there are over 1,000 people employed at Alameda Point today, and dozens of existing businesses. Those businesses create jobs in Alameda and generate business-to-business sales tax. Why would we want to push those out to build housing which will require special tax levies to stay “fiscally neutral” with regards to the general fund? We want to hold to the genuine adaptive re-use principles for Alameda Point that were widely agreed upon by Alameda residents during the base closure process – re-use as many of the buildings as we can to re-create the jobs lost when the Navy moved out and not just minimum wage retail jobs, but jobs at the middle-class income level; bring in light industry to generate business-to-business sales tax revenue for the City; solar and wind farms to increase Alameda Municipal Power’s proportion of clean energy generation; create partnerships between private enterprise and public entities so we can provide internships with businesses for Alameda high school and college students and transfer technology from research labs to private enterprise for civilian commercial use. This sort of adaptive re-use for Alameda Point dovetails perfectly with President Obama’s vision of stimulative investment in green technology and cleantech to reduce our dependence on foreign oil. In fact, there was a plan very much like this for Alameda Point at the time of the base closure, but it’s been ignored by City officials.
What are the concerns about traffic related to housing development at Alameda Point?
In 2001, Debbie Potter herself, the City of Alameda’s Base Re-use manager, stated in an East Bay Express article that there was not enough capacity in the Webster and Posey Tubes to support the plan at that time for 1,600 homes, especially with the additional retail and commercial space. Now, she seems to think the capacity in the tubes is sufficient to support 4,500 homes in SunCal’s plan. SunCal’s plan for Bus Rapid Transit (BRT) will remove traffic lanes for automobiles, further increasing congestion and local automobile emissions. And they haven’t explained how they plan to secure BRT lanes though downtown Oakland, which is in a jurisdiction separate from Alameda. And the Personal Rapid Transit (PRT) is so far-fetched as to not even be worth discussing. Planners are notorious for over-estimating future mass transit use, and that’s what’s happening here. After SunCal gets their project built, and the traffic problems arise, they will have made their money and be long gone, leaving Alameda residents to clean up the mess. We already have a massive jobs-housing imbalance in the City of Alameda – of the residents of Alameda that work, 70% of them leave the island each day. We should be creating more jobs in Alameda to correct that imbalance.
What do you expect will be on the ballot from SunCal in November?
At the bare minimum SunCal will write language into the measure that changes Article XXVI of the City of Alameda’s Charter. That article is part of “Measure A” – Measure A also “lives” in the Alameda Municipal Code. SunCal claims they will be putting the whole project on the ballot, but no matter how they dress it up, there are some nuances that the public needs to understand. One, If SunCal manages to change Article XXVI of the Charter, we expect that will weaken Measure A for all of Alameda, and two, the full scope of the project, including the final amount of developer subsidies won’t be known to the public until mid-2010, when the final Disposition and Development Agreement (DDA) between SunCal and the City is signed, several months after the November 2009 ballot. So in reality, Alameda voters aren’t getting a chance to vote on the entire project, because the entire project won’t be final at the time of the vote. We have no reason to expect that the City Council will put the DDA to a citizen referendum – rather, it will be voted on only by City Council members.
How did you arrive at the $700 million figure for the SunCal subsidy for Alameda Point?
SunCal was very clear – in their draft master infrastructure budget for Alameda Point, which they delivered to the City in September of 2008, they indicated it would cost $679 million to replace infrastructure at Alameda Point to support their project. In their March 2007 response to a list of City of Alameda questions, SunCal clearly indicated they would seek tax-increment financing (i.e. redevelopment bonds) to subsidize infrastructure. Right now, in New Mexico, SunCal is lobbying the state legislature for $408 million of tax-increment financing subsidies for a project near Albuquerque. SunCal isn’t afraid to push for big subsidies for their projects.
Now back to Alameda. A City of Alameda staffer, who’s salary is paid for by SunCal, has suggested that the City would provide no more than $184 million in tax-increment financing for SunCal. The first problem with this is that, if it’s true, it leaves a roughly $500 million financial gap in the business plan that hasn’t been explained – the City of Alameda has refused our request to release the details of SunCal’s pro-forma financial plan for Alameda Point. Second, we’ve been told that the $184 million figure comes from projecting housing tax-increment revenue for Alameda Point out over 30 years. However, by our calculations, that figure seems ridiculously low. Depending on the average tax-increment figure per housing unit, and the total number of housing units, the tax-increment revenue can easily approach $700 million in the 30 year life of a redevelopment project, and can exceed it in a 40 year project. And that’s not including commercial property tax revenue. And the tax-increment for Alameda Point will be very high, because the land is currently owned by the federal government and they don’t pay property taxes. So we believe that the City of Alameda is deliberately low-balling the estimate when they talk about the $184 million figure – it’s a bait-and-switch technique to fool voters in advance of the ballot in November.
Speaking of tax-increment financing (redevelopment), what’s wrong with it?
SunCal says it doesn’t increase taxes for existing residents, but that’s a lie. It takes away property tax revenue that would otherwise go to the General Fund. Instead of robbing the bank (the General Fund) the redevelopment mechanism – and the developer – robs the stagecoach carrying the property tax revenues to the bank. It’s “fiscally neutral” to the General Fund only because it steals property tax revenues before they arrive instead of writing a check against the General Fund. Over time, as general fund expenses rise, and property tax income falls due to redevelopment, the City is left with no choice but to go to the voters with parcel taxes, or land transfer taxes like we saw with Measure P. Studies by the Public Policy Institute of California and the California Commission on Local Governance for the 21st Century confirm this. The existing redevelopment projects in Alameda are already sapping property tax revenue from the City’s General Fund, and that’s one of the reasons the City asked voters to pass Measure P last year. And we hear rumblings of another special property tax levy on the ballot this June.
You can see how this works but looking at the City of Alameda Comprehensive Annual Financial Report for the year ended June 30, 2008. There’s a chart at the back that shows how much property tax money the redevelopment agency is taking in. The revenue keeps going up, but the debt service is flat – the redevelopment machine keeps taking in revenue even though it is not needed to re-pay debt. According to the City Treasurer, roughly 27% of the property tax revenue that goes to redevelopment (The Community Improvement Commission of the City of Alameda) would otherwise go to the general fund. For the fiscal year 2007-2008, we estimate the increase in that amount alone over the previous year at more than $500,000. We estimate the total amount of property taxes diverted from the General Fund to redevelopment in FY 2007-2008 to be between $3.5 and $4 million.
What do you think about SunCal’s plans to deal with sea-level rise?
They’ve talked about bringing in a levee system if the water rises by more than 18 inches. But what are they going to do? Build a levee around the entire island of Alameda? Or just around their development at Alameda Point? Any child playing in sand at the beach knows how water fills in available space. Alameda is surrounded by water – a proper levee system would need to encircle the entire island. We couldn’t have a levee just along the shoreline of Alameda Point and leave the system open at Main Street. And what is the cost of their imaginary levee system? How much does it add to the cost of the total development, and how much do they expect the City to subsidize? I think this is just a lot of hand-waving by SunCal to try to dismiss a legitimate concern about sea-level rise and a serious flaw in their project.
Where do you stand on the idea of a Veterans Administration facility at Alameda Point?
We support the idea in principle, realized through one of the alternate proposals presented by the V.A. late last year on the Hornet. We, in fact, would go further and suggest that the V.A. facility occupy land not on the “wildlife sanctuary” portion of Alameda Point, but rather on some portion of land currently allocated to SunCal to build houses. We believe the wildlife and the V.A. facility can co-exist at Alameda Point if it’s done well. And the V.A. facility provides other opportunities for public-private partnerships consistent with our public trust theme – working hand-in-hand with Alameda Hospital for example, and providing another medical facility for nursing school students to intern with. There’s a growing shortage of nurses nationwide, and a V.A. facility in Alameda could facilitate a career path into nursing for our young people, by partnering with our high schools and junior college. Tens of thousands of troops are going to be returning stateside over the next several years and they are going to need physical treatment as well as mental health treatment – marriage counseling, therapy for PTSD, anxiety, depression and so on. Alameda should be a part of the rehabilitation and re-integration process for our veterans.