The Alamedan

The head of the East Bay Regional Park District is threatening to sue the city over a decision to allow housing development on a piece of federal property across the street from the Crab Cove Visitors Center, which the park district had hoped to acquire for a parking lot and other uses.

The lawsuit threat is the latest twist in the park district’s six-year battle to acquire the 3.899-acre property known as Neptune Pointe and to fend off residential development there. And city staffers fear it could put a dent in the city’s recently won state approval of its plan to address Alameda’s affordable housing needs.

A series of letters provided by the park district and the city shows that in addition to threatening to sue the city, top park district officials have accused the federal agency that owns the land of altering its bid process to favor the developer that ultimately won it and asserted that the street that runs alongside it is state property and that a future developer would be prohibited from improving it to accommodate new residents.

A representative for the developer, Tim Lewis Communities, said in a letter that the company wants to build 48 single family homes on the site, though the city's top planner told The Alamedan on Tuesday that its application hasn’t been submitted yet. The city’s housing strategy calls for up to 95 homes there, including homes for very low and low income residents; a city staffer said that 15 percent of the homes that would be built on the site would need to be affordable to low-income residents.

The park district’s general manager, Robert E. Doyle, said he thinks the property offers “one of the last remaining opportunities” to expand Robert W. Crown State Beach, which it manages for the state and the city; he said the district’s leaders had hoped to obtain the property to expand Crab Cove visitor center and increase recreational programs and parking.

Doyle originally threatened to sue the city in late August, claiming the city didn’t do an adequate environmental review of a newly approved “housing element” for its general plan, which rezoned the former General Services Administration property to allow housing development. In an October 4 letter, Doyle claimed the city failed to provide adequate notice of its plan to discuss the zoning changes as part of its effort to gain state approval of the housing element.

“Had the City engaged the Park District in discussions regarding the rezoning of the Property, the Park District could have identified its concerns, and alternative, more suitable sites could have been identified,” Doyle wrote. “The Park District is now in the unfortunate position of having to undertake litigation as perhaps the Park District’s only meaningful opportunity to protect Crown Memorial State Beach from the impacts of development.”

City Manager John Russo denied the claims in an October 17 letter and said the city would mount a vigorous defense if the park district chose to sue. He said the zoning changes were needed to comply with state housing law and have been under consideration since 2008, and that the park district had ample opportunity to comment on them – and that any project proposed for the site would undergo additional public review.

“The Park District’s complete failure to monitor this public process is not only bewildering to us, given your apparent interest in the site, it also would be a bar to the lawsuit you threaten,” Russo wrote.

In his October 4 letter to Russo, Doyle said the park district had been expressing interest in the property since 2006, when staffers there learned the GSA was considering consolidating its operations and disposing of it. The agency informed the park district it was planning to sell the land – which is adjacent to a service yard – in 2008, and parks officials tried but failed to persuade the agency to hand over the acreage for free.

City staffers, meanwhile, had begun efforts to rewrite the housing element of the city’s general plan so that it complied with state law that requires the city to demonstrate it has enough properly zoned land to meet its affordable housing needs. The GSA planned to sell the site for condominium development, according to the park district’s telling, and city staffers included it in their draft inventory of places where homes could be built.

The park district offered to buy the property, but a GSA official said in a separate letter that their offer was less than the $2.9 million it cost the agency to consolidate its Alameda operations. So it chose to put the property up for auction and told the park district it could participate.

In a February 4, 2010 letter, the park district’s then-general manager, Pat O’Brien, asked the GSA to reconsider a plan to put the property up for auction that April. Invoking Measure A and the two-day-old defeat of developer SunCal’s Alameda Point development initiative, O’Brien noted that city-approved zoning changes would be needed for the residential development he said the GSA anticipated there and said it was “unlikely” that a knowledgeable buyer would purchase the land for development.

“Building residential condominiums in Alameda would require the City to approve a land use change AND the residents would need to vote for a one-time exemption of Measure A,” O’Brien wrote. “This is a high bar, as we saw recently when the developer SunCal sought a voter-approved exemption for development at Alameda Point.”

The GSA received five bids for the property when it put it up for auction in June 2011, and Sacramento-based developer Tim Lewis Communities was the winning bidder. But its $1.8 million bid was less what it cost the agency to consolidate its Alameda operations, so it worked out a deal giving the developer 18 months to come up with $3.075 million to purchase the property.

Doyle challenged the deal in a July 13 letter to Congresswoman Barbara Lee, saying the park district was prepared to make a “bona fide offer” under the terms of the auction, which required an upfront cash payment for the land, “but at the 11th hour GSA mysteriously changed the terms of sale, substituting an 18-month escrow period for what had been the advertised closing date of 60 days after the acceptance of the bid. We believe that this maneuver was meant to assist the successful bidder Tim Lewis Communities (TLC) by allowing extra time to obtain the necessary entitlements.”

In response to questions posed by Lee and Congressman Pete Stark, D-Fremont, about the claims, a GSA representative said the deal was handled properly.

“When bids fail to meet our appraised fair market value at the end of a public sale, GSA affords the high bidder an opportunity to raise its bid price … TLC was asked to raise their bid and they agreed to do so in return for an 18-month closing period. GSA agreed to these terms,” Regional Administrator Ruth F. Cox wrote in an October 3 letter.

Tim Lewis Communities asked the city to rezone the property for medium density residential development, and the housing strategy approved by the City Council listed it as one of 10 sites with an exemption from Measure A’s multifamily housing ban. Doyle said the city failed to notify the park district that the strategy was being discussed, a claim Russo and the city's top planner, Andrew Thomas, denied.

In Doyle's October 4 letter, he claimed city staffers told the park district it would have several opportunities to comment if a developer sought approvals on any project there, citing a November 17, 2011 e-mail from Community Development Director Lori Taylor.

In the e-mail, which is attached to Doyle’s letter, Taylor said city staffers had looked at the Neptune Pointe property as one that could be used to meet the city’s housing needs and that multiple approvals would be required before any project went forward.

“During each phase of the review, public comments are welcome and you will be encouraged to share your concerns,” Taylor wrote.

Doyle has also corresponded with the developer’s representatives. In an October 3 letter to Tim Lewis’s James Meek, a park district official expressed the district’s plan to oppose residential development “as part of the City’s review and processing of a project on this site” and told Meek the district’s leaders had won the park district board’s approval to sue the city.

In the letter, the park district’s assistant general manager for its land division, Nancy H. Wenninger, also said Tim Lewis won’t be permitted to improve McKay Avenue or locate utilities underneath it to serve homes on the Neptune Pointe site.

Thomas said that if the parks district is successful in its quest to obtain the land or to force the city to rezone it so housing is not permitted there, city staffers would need to show the state they’ve got other places where affordable housing could be built.

“Our plan is to provide housing at the state’s request,” Thomas said. “Instead you want us to unwind that so you can build a parking lot?”