pages: AlamedaReuseandRedevelopmentAuthority/2005-03-02.pdf, 4
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| AlamedaReuseandRedevelopmentAuthority | 2005-03-02 | 4 | Peter Lindh, representing the four boat yards came up to discuss the validity of the $34 million shortfall that his clients projected if the Nelson's Marine lease is approved. He stated that the $34M was based on the principles involved and that the actual lease terms themselves make the shortfall about $36M. Mr. Lindh explained that there were two specific flaws to the PM Realty (Mr. Jaber's ) argument. The first was that the two boatyards used in Mr. Jaber's analysis are not comparable (triple net versus gross analysis); it's not fair market value. The second flaw is the .45 cents that Nelson's is paying per square foot per month on maintenance. He stated the amount as inaccurate and reiterated that the Nelson rate is not fair market value. He discussed the cost of having a fixed rate - is $190,000 to the City of Alameda and stated that the only adjustment that PM has suggested in their counter proposal is reducing the lease term from 20 yr to 10 yrs. Mr. Lindh concluded and urged the Board, as a fiscal responsibility, to require PM Realty to reevaluate and come up with a proposal that is more consistent with economic reality and fair market value. Chair Johnson asked if the City is going to lose money on this lease. Nanette Banks, Finance and Administration Division Manager, Development Services, explained that the Nelson's lease renewal was brought to the ARRA governing body for approval and the four boat yard attorney raised questions about a $34M loss if we went forward with this lease. The ARRA Board directed PM Realty and Development Services to research this issue. Ms. Banks further explained that there hasn't been a counter offer, nor would there be, because according to the Nelson's lease, they have the first right to negotiate at 90% fair market value and the appraisal was to establish the fair market value. Chair Johnson and Boardmembers discussed the issue of the Nelson's lease creating some unfair advantage to other boat yards, and the original concern of the $34M loss. There were no counter proposals to the Nelson's lease. The Board approved the staff recommendation. Staff recommendation accepted and passed by the following voice vote: Ayes-4; Noes-0; Abstentions-0 4-B. Recommendation to approve a 5-year lease, with a possible (5-year) options with Nelson's Marine for 400 linear feet of Pier 1. No speaker slips. Recommendation approved and passed by the following voice vote: Ayes-4; Noes-0; Abstentions -0. 4 | AlamedaReuseandRedevelopmentAuthority/2005-03-02.pdf |