Small property at the heart of big dispute

Small property at the heart of big dispute

Michele Ellson

Updated at 8:48 a.m. Wednesday, September 4

Neptune Pointe occupies a relatively small sliver of Alameda, tucked away at the end of a narrow, crumbling lane obscured by a Foster’s Freeze restaurant and a thick row of leafy trees. But the 3.899-acre property sits at the heart of a massive dispute between a trio of public agencies that are warring over its fate.

The dispute – which one official involved in it characterized as a “three-ring circus” pitting the East Bay Regional Park District against the federal General Services Administration, which is selling the land to a private developer, and the city – has spawned one lawsuit, and the federal government says a second one is coming. Earlier this month, the GSA announced it plans to initiate proceedings to take ownership of McKay Avenue from the state, which effectively stalled the project by refusing to allow the developer to use it.

All three agencies are also vigorously making their case in the court of public opinion, with the park district accusing the city and federal government of engaging in questionable maneuvers for the benefit of a private developer and those agencies accusing the park district of manipulating the public and the court process to force the federal government to hand over the land. City leaders have pointedly claimed they are caught in the middle of a costly dispute between the GSA and the park district, at a time when they are in the midst of a sensitive series of land transfers at Alameda Point.

“What I want to be quoted saying is the following: This is not the city’s fight. The GSA is having a fight with the park district,” City Manager John Russo said. “The GSA owns the land and the park district didn’t want to pay the GSA what they thought the land was worth. That’s the beginning, the middle and the end for us.”

The outcome of this fight could have major implications for the city that stretch beyond what will or won’t be built at Neptune Pointe. The site was one of 10 the City Council chose to permit multifamily housing on as part of a state-mandated housing plan it okayed in 2012, in part to avoid a lawsuit from affordable housing advocates – a plan the parks district is challenging in court.

But parks backers say allowing the federal government’s decision to auction the property off to the highest bidder could also have broader implications for future efforts to retain publicly owned land for the public’s benefit.

“This means all of the local agencies are free to market public lands for private use – land goes out of the public domain, and it’s not available for public use in the future,” said Bill Smith, who originally advocated for the site’s inclusion in the city’s housing plan but has since renounced that position in favor of a park. “In the long run, this makes it more expensive for all the public agencies.”

Parks officials said they have long been clear about their desire to obtain the Alameda Federal Center property to expand Crab Cove, the state park they manage across the street, and they have questioned the federal government’s decision to auction it off to the highest bidder – homebuilder Tim Lewis Communities – and the decision city leaders made to permit homes to be constructed there, even as the park district made the city aware it wanted the land and that it had concerns about the impact homes could have on the park and Robert W. Crown State Beach.

“The bottom line for us is, we don’t understand why the city would support a developer over the concerns of an agency that has spent millions of dollars to make Alameda the wonderful city that it is,” parks district General Manager Robert Doyle said.

Doyle said that when the park district learned the federal government was getting rid of the parcel – one letter puts the date in 2006 –they vigorously sought to obtain it. He said the government typically first offers property it’s getting rid of to other public agencies through a surplus process – which often allows those entities to buy it at a below-market price.

A 2008 bond measure, Measure WW, contains $6.5 million to buy the property and expand the park. But that same year, federal government representatives told the park district they planned to sell the property, a June 13, 2012 letter Doyle wrote to Congresswoman Barbara Lee says – a move GSA reps said they made to recoup the $2.9 million cost of consolidating operations there. (In their letter, parks officials claimed the federal government planned to sell the land for condominium development; a GSA spokesperson said the federal government never stated that, noting that the auction was open to all bidders. The spokesperson said they told interested parties that the local community, and not the federal government, would decide how the land would be redeveloped after it was sold.)

The park district asked the GSA to give them the land and, failing that, sought to purchase it. A spokesperson said the park district could only offer full market value for the land – Doyle said they offered $1.5 million at the subsequent auction, $100,000 more than the park district’s appraiser said it was worth – but that the GSA wanted more.

“It is clear now that the GSA was looking at a targeted purchase price … which we now know is substantially more than the parcel’s market value … to recoup costs they overspent on the property while they owned it,” Assistant General Manager Carol Johnson said.

A GSA spokesperson said the agency offered to sell the park district the land prior to putting it up for bid, but that it couldn’t give it away or offer it at a discount because the agency was required to recoup the cost of consolidating operations on the McKay Avenue property.

“We agreed to (the park district’s) request to postpone a public auction in order for (them) to obtain an appraisal. However, (they) declined to make an offer because they believed that the property had little to no value,” the agency said in a background document provided to a reporter.

Tim Lewis Communities won the auction with a bid of $1.8 million – over $1 million less than the federal government hoped to earn. After the auction was over, the GSA went back to the developer to ask for more money – a move the agency has said was made to cover its consolidation costs and avoid the expense of holding another auction but one the park district has characterized as “shady.”

The developer raised its bid to more than $3 million – in exchange for an extended closing period (the sale still has not been closed). The park district said the original rules off the auction called for a 60-day closing period.

The park district’s leaders fired off letters to members of Congress to protest the sale, saying the federal government changed the rules to benefit the developer after the auction was over. They also noted the fact that the land wasn’t zoned for housing – a change they had told both the GSA and later, the developer, that they were unlikely to get.

But after the sale agreement was signed, Tim Lewis’s reps reached out to the city to seek a zoning change to permit housing to be built on the site – a change city staff said they would work to obtain from policymakers, e-mails obtained by The Alamedan show.

Parks leaders say the city was working behind closed doors to negotiate the changes, and that they failed to communicate those efforts despite the district’s requests to be kept in the loop. And they note that the developer’s plans don’t call for any of the multifamily housing envisioned in the housing plan the site was included in. (The plan calls for up to 126 housing units on the site; Tim Lewis wants to build 45 single-family homes.)

But Russo said the city did nothing wrong.

“We’re entitled to answer questions from people in contract and looking to do projects in our city,” he said. “There’s nothing nefarious about it.”

The parks district’s November 2012 lawsuit claims the city failed to provide proper notice of its plans to rezone the Neptune Pointe property; city staffers have said they mailed a notice of the proposed change to the park district’s address and posted it on the property, which Russo said park staffers have to drive by to get to the park’s maintenance yard.

“They have to protect and watch their interests. They are not to expect that anyone’s going to get a special phone call,” he said.

When asked how they missed a crucial public hearing to determine the fate of a property the park district cares so much about, Doyle conceded the district is “not perfect.” But he said the notice the city mailed went to a post office box owned by a separate state agency and that the rezoning was buried in a broader housing plan that drew public criticism because it was offered to the City Council the day before the July 4 holiday.

“It’s great (for the city) to say, ‘Well, we followed the law.’ But we have spent millions of dollars providing services to this city,” Doyle said. “For them to not make an effort to contact us either at our main office or directly down there (at Crab Cove) … that just doesn’t cut it.”

The suit also claims the city failed to conduct a proper environmental review of the zoning changes, a claim the city denies. Doyle said the city and developer agreed to conduct a review of the project’s potential impacts only at the park district’s urging; Russo has said that zoning or no, any projects put forward to the city would receive such a review.

In February, a judge upheld a city motion to drop the case, though the judge allowed the park district to amend its complaint. That amended complaint is pending.

Three months later, the state weighed in, saying McKay Avenue – which the state owns – couldn’t be used for the benefit of a private developer. The federal government had maintained that its rights to use the road would pass to Tim Lewis when the sale closed. But without them, the developer’s housing project stalled.

Earlier this month, GSA said they’d ask a federal court for permission to take the road – which they said they gave to the state in 1961 – through eminent domain. The suit has not yet been filed, they said in the background document provided to The Alamedan.
In the document, they said they want the road in order to work with Tim Lewis to modernize it and install utilities. The GSA said it also wants ownership of the road to maintain storm sewers and sewers underneath it, install security improvements and preserve the value and marketability of the property it still owns there.

Doyle said he’s shocked by the move, which he called an “intimidation effort.” He said the park district has no issue with any fixes the GSA wants to make for the government’s benefit.

“We just are so perplexed about why two other agencies are doing so much to help a developer and so little to help us, particularly after we went to a vote of the public to get this project,” Doyle said. “The only purpose of this taking is to perfect the rights for a developer to do a development. And the public should be outraged by that.”

Russo, meanwhile, accused the park district of using the courts to bully the city into backing down.

“What they want us to do is to inappropriately and unethically use the land use permitting process to make it impossible for the federal government to do anything but give them the land,” Russo said. “They want us to twist our process so that it falls into the park district’s lap.”

He accused the district of using the public’s love of parks and hatred of “bureaucrats” to turn public opinion in their favor.

“The regional park district throughout this dispute has been less than ethical,” he said. “Their approach to mislead the public, to lie and to misrepresent the facts has been astonishing in its boldness.”

Doyle said he didn’t want to comment on those claims and that the park district is “just trying to do our job to protect the state park.” He said the property is the last piece the district can add to the park, to expand its cramped visitor center and provide more space for the school buses that visit to turn around.

“We still want to buy this property and we’re going to continue to pursue that,” he said.

Comments

Submitted by Irene D. on Fri, Aug 30, 2013

Here is a timeline of events leading up to the lawsuit:
http://islesay.wordpress.com/2012/12/20/neptune-point-timeline-events-le...

Submitted by Richard Bangert on Fri, Aug 30, 2013

..."the agency [GSA] was required to recoup the cost of consolidating operations on the McKay Avenue property." How would they have been able to do that if the city had rezoned the property to open space in, say, 2009 AFTER the property had been declared surplus, and AFTER voters had declared they wanted it added to Crown Beach? An open space zoning would have preempted an auction to developers.

The internal cleanup of the GSA that was supposed to be happening under the new director recently appointed by the President doesn't seem to have reached to the San Francisco office.

Submitted by Anonymous (not verified) on Fri, Aug 30, 2013

“What they want us to do is to inappropriately and unethically use the land use permitting process to make it impossible for the federal government to do anything but give them the land,” Russo said. “They want us to twist our process so that it falls into the park district’s lap.”

The above quote is not the whole story.

City Manager Russo and Mayor Gilmore both met with EBRPD officials (EBRPD GM Robert Doyle and Board member Doug Siden) before the rezoning took place and were made aware of the districts' long-held plans to use the GSA property to expand the park.

Unfortunately, neither one of them spoke to planner Andrew Thomas, who claims he would "never" have added "Neptune Pointe" to the multifamily overlay if he had been aware of EBRPD's expansion plans.

I think our city manager needs to explain why he never communicated the EBRPD's vital, clearly-expressed, and potentially game-changing desires to the city staff responsible for the Housing Element.

Of course, why EBRPD never contacted Thomas about their plans or attended any of the hearings on the Draft Housing Element is also a mystery...

Submitted by Jon Spangler on Fri, Aug 30, 2013

“The regional park district throughout this dispute has been less than ethical,” he said. “Their approach to mislead the public, to lie and to misrepresent the facts has been astonishing in its boldness.”
--Alameda City Manager John Russo

Our city manager is not telling us that he heard about EBRPD's long-held desire to expand Crown Beach/Crab Cove directly from top EBRPD officials but Russo did not share that information with the community or with the city officials responsible for the new (then-draft) Housing Element.

Had Russo shared what he had heard in at least one face-to-face meeting with his city staff and the community, the property would have been excluded from residential zoning and this whole lawsuit might have been prevented.

If our city manager would spend less time being antagonistic--and vilifying a long-time friend and ally of Alameda (the East Bay Regional Park District)--and more time working for a constructive resolution of this dispute, I think our city would be better served. Not every conflict needs to be approached like a street brawl--verbal or otherwise.

Submitted by Bill Smith (not verified) on Fri, Aug 30, 2013

I was surprised to see Mr. Russo's comment that the East Bay Regional Park District] is "not to expect that anyone’s going to get a special phone call”, a call to insure that the Park District had an opportunity to review the details of a pending zoning change for the federal property on McKay Avenue. The City and the Park District have long been good neighbors as Park District has managed more than a mile of the southshore beach for the City for many decades. Mr. Russo relies on the Park District maintenance facilities adjacent to the property in dispute to maintain that City beach.

If Mr. Russo won't be a good neighbor and insure that a government agency he relies on, the Park District, is aware of City actions that would impact them, what can individual citizens expect of our City government when Mr. Russo disagrees with one of us?

Submitted by Jane Sullwold on Fri, Aug 30, 2013

While I’m not surprised by the vitriol in the remarks of City Manager John Russo, having witnessed it before in other contexts, I am still appalled by the substance of his message: Alameda did nothing wrong, and should not be in the middle of the fight between the (evil) Park District and the (only doing its job) GSA.

Here is the point that Mr. Russo deliberately leaves out, and which is the reason for my decision to support the Park District on this issue: In 2008, the citizens of Alameda, with the prior endorsement of City Council, voted to incur debt in order to support the Park District’s plan to purchase federal land at Neptune Point to expand the Crown Beach park. The voter pamphlet that Alameda citizens considered when deciding which way to vote on Measure WW listed the acquisition of this land as a specific project for which bond measure funds would be used. Nevertheless, for reasons that have never been adequately explained, in 2009 City staff put the 3.9 acre Neptune Point parcel on a preliminary list of properties available for residential development in order to comply with the State’s housing element.

I believe that the City’s inclusion, even preliminarily, of the Neptune Point property as part of the housing element was the key factor in encouraging Tim Lewis Properties to outbid the Park District in the GSA auction that took place in 2011. Tim Lewis Properties was able to take into account a potential rezone to residential, while the Park District was constrained by the existing zoning. Hence the City was complicit in the deal that resulted in a potential transfer of property that should have been parkland to a for-profit developer. And what is ironic (and has also never been explained), the City decided to designate the Neptune Point property in the final version of the housing element as “very low/low” income housing, even while it was fully aware that Tim Lewis intended to build market rate homes on the land. Disingenuous is the word that comes to mind.

Submitted by Richard Bangert on Fri, Aug 30, 2013

April 30, 2012 Emerson Critical of GSA Spending
"GSA is a rudderless agency with clear issues of accountability for taxpayers. This latest revelation demonstrates the urgent need for reform, and it severely undermines the agency's relationship with Congress and the American people. The lack of common sense extends from examples like this one to substantive concerns about how GSA uses its budget, from abuses of eminent domain to needless cost overruns on construction projects to an impenetrable method of assigning costs to federal leased space to the inability to properly dispose of excess federal properties," Emerson said.
http://votesmart.org/public-statement/688767/#.UiEZY-AmXWE

Submitted by Alli (not verified) on Thu, Oct 17, 2013

Too bad John Russo isn't an elected official, he'd be outta this town in a heartbeat. His comment “They want us to twist our process so that it falls into the park district’s lap.”. How is a $1M offer from EBRPD for the land twisting the process or letting it fall into their lap? If anyone is a twister here it's Russo. Regarding the comment about Andrew Thomas, Planner Director, "who claims he would "never" have added "Neptune Pointe" to the multifamily overlay if he had been aware of EBRPD's expansion plans", he must not live in Alameda if he never heard of or voted on Measure WW (which passed overwhelminly to fund EBRPD's Crown Beach expansion plans), or maybe his head was in the sand at Crab Cove? Please lend your support to getting Neptune Pointe rezoned back to parkland and expand Crown Beach. Sign up to be a Friend of Crown Beach at friendsofcrownbeach.com or send an email to friendsofcrownbeach@gmail.com and check out our page on Facebook too!

Submitted by TO (not verified) on Fri, Nov 1, 2013

I am appalled with the callousness and smoke screens from John Russo. Jane Sullwold sure hit the nail on the head with her thoughtful comments. I also agree with all of the commenters. Talk about calling the kettle black...now who's the bully here?

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