pages: CityCouncil/2012-03-20.pdf, 9
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CityCouncil | 2012-03-20 | 9 | identified up front for planning; decision points and timelines are needed. The Chief Operating Officer - Alameda Point stated funds could be used for something else if Council decides to go in a different direction; there is flexibility. Councilmember Tam stated that she is suggesting using lease revenues and not going in debt. The City Manager stated the annual debt service payment would be $400,000 per year; cash flow would be strapped and reserves would need to be used to come up with $5 million over the next 24 months. Mayor Gilmore stated the City would be in the market to look for someone to build out Alameda Point; developers are in the business of making a profit; the project has to be entitled in such a way that the profit would justify the risk that a developer would take; the City will not get any takers if the profit does not justify the risk; financial feasibility needs to be broken down; any developer looking for financing would need to do their own due diligence; questioned whether 1,425 homes pencil out to be financially feasible; stated building residential first would generate more value for the rest of the property; everything needs to be penciled out; a developer will promise anything to get a foot in the door, a developer could tie up the land based upon what the City wants to build, and then find things that need changed; the community would look at the situation as another developer that came in and did a bait and switch. The City Manager stated the City would be subject to a bait and switch even more so without entitlements; a blank slate would be given and a developer would have control of the land; the City would be the development partner, regulator, and mediator between community interest versus the very real and unalterable pressure on the developer to meet a return on investment that would satisfy shareholders; the bait and switch problem exists any way the City goes; the way to control and mitigate the matter would be by controlling entitlements up front before selecting a developer. Mayor Gilmore stated that she needs to wrap her head around a financing plan and underwriting plan; inquired at what point would the City get a sense of the numbers; suggested running several financial models in order to know what is feasible; stated the City has looked at the northern area as a place to put houses; a development advisor might suggest putting houses in a different area with better views to get more bang for the buck. The City Manager stated staff would be looking for said answers from a development advisor; staff is trying to figure out a way to get all the benefits of a development team in terms of market knowledge without having profit motives. Mayor Gilmore inquired whether it would be possible to run financial models based upon information collected over the last ten years before shelling out money for the Environmental Impact Report (EIR) and other things. Regular Meeting Alameda City Council 9 March 20, 2012 | CityCouncil/2012-03-20.pdf |