Title
Adopt a Resolution to Approve and Authorize the City Manager to Execute a Memorandum of Understanding to Facilitate the sale, transfer and construction of the Eden Road paving project resulting in No Costs to the City’s General Fund
Staffreport
SUMMARY AND RECOMMENDATIONS
Staff recommends that the City Councill authorize the City Manager to execute the attached Memorandum of Understanding (MOU), which will facilitate the future sale and transfer of Eden Road coupled with a paving and long-term maintenance program that ensures public access to Eden Road and cost-savings for the City.
BACKGROUND & ANALYSIS
According to available City records, the existing unimproved roadway located at the western edge of San Leandro, commonly known as Eden Road, was plotted via a parcel map approximately 70 years ago. At the time of its creation, it was located in unincorporated Alameda County, and the adjacent Alco Iron & Metals business was issued a Conditional Use Permit by the County of Alameda in approximately 1953. Alco Iron & Metals has been in continuous operation since that time. This entire area was later annexed into the municipal boundaries of the City of San Leandro.
At the time of its creation, Eden Road was a privately-owned unimproved access road intended to provide access to adjacent parcels located west of Doolittle Drive. Eden Road has remained unimproved since that time. According to available City records, the City of San Leandro eventually acquired title to Eden Road approximately 20 years ago, with the intent of incorporating it into the City’s road network and paving it using funds from the City of San Leandro Redevelopment Agency that existed at the time. Following the statewide dissolution of Redevelopment agencies in 2012, the funding source envisioned to off-set the costs of paving the road became unavailable. According to recent estimates developed by the City’s Public Works Department, the construction of a modern paved road that meets current standards could cost greater than $5 million, funding for which has not been identified or appropriated.
The City of San Leandro 2035 General Plan also contains the following codified goals for this location:
• “As funding becomes available, complete the Eden Road improvement project including paving and sidewalk improvements.”
• “Improve Eden Road/West Davis area in a manner that attracts higher value industrial land uses and improves the appearance and image of this area. This should include paving of Eden Road and frontage improvements on adjacent properties.”
As part of its efforts to achieve these goals, the City explored various concept proposals to facilitate the construction of the road, which is believed to be the last municipally-owned unpaved road in Alameda County. As part of a previous project iteration that envisioned connecting Eden Road to Davis Street via a new perpendicular road segment, the City acquired a nearby property, 2512 Davis Street. After the acquisition of this property, the City later determined that connecting Eden Road to Davis Street could create significant challenges such that the perpendicular project design element was eliminated.
The City-owned property at 2512 Davis Street is located immediately adjacent to the City’s Water Pollution Control Plant (WPCP). Due to new and emerging state and regional water quality control regulations, the WPCP is concurrently facing the need to acquire additional lands in order to facilitate an expanded operational footprint. The acquisition of 2512 Davis Street for the WPCP’s exclusive use using money derived from the WPCP Enterprise Fund would provide an opportunity to achieve this goal.
In an effort to achieve the City’s codified goals referenced above, for the past several years the City of San Leandro has engaged in active negotiations with Alco Iron & Metals, and the parties have now reached consensus on a proposed Memorandum of Understanding (MOU) that would facilitate the project and be of direct benefit to the San Leandro community and adjacent property owners. The key provisions of the MOU are as follows:
• Alco Metals develops and submits an application for construction of Eden Road.
• City processes grading permit to ensure conformity with codes and regulations.
• Alco Metals provides a public access & services easement.
• Alco Metals submits surety bond or letter of credit to guarantee project completion.
• City sells unpaved Eden Rd to Alco Metals for $1.00 “as-is, where-is”.
• Following completion of the above, City transfers $1M from Eden Road project. account in the Capital Fund to Alco Metals.
• Alco Metals builds the road in compliance with City standards and passing of inspections (Alco Metals to pay all inspection fees).
• To off-set purchase price of 2512 Davis Street, WPCP transfers $2M in enterprise funds to General Fund, which will then be appropriated to the Eden Road project account in the Capital Fund.
• WPCP takes control of 2512 Davis Street.
• City transfers $2M from the Eden Road project account in the Capital Fund to Alco Metals for public & emergency access rights.
• WPCP Enterprise Fund to reimburse Alco Metals towards 10% of future ongoing maintenance costs to ensure WPCP emergency access/egress.
Current Agency Policies
• Maintain and enhance San Leandro’s infrastructure.
Previous Actions
• On March 3, 2008, by Resolution No. 2008-022, the City Council approved an agreement with Keir and Wright for design of the Eden Road project.
Applicable General Plan Policies
• “As funding becomes available, complete the Eden Road improvement project including paving and sidewalk improvements.”
• “Improve Eden Road/West Davis area in a manner that attracts higher value industrial land uses and improves the appearance and image of this area. This should include paving of Eden Road and frontage improvements on adjacent properties.”
Environmental Review
The Eden Road project was determined to be categorically exempt from CEQA as an existing facility, per CCR 14 Sec. 15301(c).
Fiscal Impacts
No impact to the General Fund.
The Eden Road project will cost approximately $5,000,000 including design and construction. Under the terms of the proposed MOU, all costs of funding the project will be borne by the private parties that are signatories to the MOU. In exchange for an easement that would ensure public and emergency access rights across the entire length of Eden Road, the City will pay the project applicants a total of $3 million in two tranches. The first payment of $1 million will be derived using funds from the existing, previously appropriated Capital Improvement Program project account. The second payment of $2 million will be derived from the WPCP Enterprise fund, in exchange for the WPCP’s exclusive access rights for 2512 Davis Street.
Budget Authority
Eden Road:
Account No. Reso., Appropriation Dates & Source Amount
210-38-900 Reso 2016-002 SA $1,000,000
Account No. Reso., Appropriation Dates & Source Amount
WPCP Enterprise Fund 593 $2,000,000
Attachments to Related Legislative File
• Attachment A - Resolution
• Attachment B - MOU
• Attachment C - Exhibit (project site plan)
PREPARED BY: Eric Engelbart, Deputy City Manager, City Manager’s Department