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Council to consider fire cleanup bill

Submitted by on 1, May 19, 2009 – 5:50 am11 Comments

101-300x225The City Council is being asked to okay $1.6 million in contracts to demolish and haul away the remains of a medical records depot on the Navy’s former Fleet Industrial Supply Center, which burned on March 29.

The contractors – FERMA Corporation and Vista Environmental Consulting – are the same ones that Catellus, which was slated to develop the FISC site, had planned to use to demolish the building themselves, before their plans stalled.

The bulk of the money will be paid with Alameda Point and FISC lease revenues. The Point generates about $12 million in lease revenues a year. Catellus would pay the money back if they proceed with development plans for the FISC site, according to this staff report.

Officials from Catellus, whose development plans stalled out along with the company and the economy, have told the council they are pursuing plans to build a standalone Target on the site.

The council will sit as one if its alter egos, the Alameda Reuse and Redevelopment Authority board, to make the decision.

The board is being asked to approve the contracts without a competitive bid because city staff has determined that a public emergency exists at the site, requiring quicker action than would be allowed by a regular bidding process.

The Bay Area Air Quality Management District has ordered the city, which owns the property, to clean up the fire debris because it could contain hazardous materials. The building was known to contain asbestos and lead.

Oh, and on a arely related subejct, I know a few folks had asked if they could get a copy of the just released consultant’s report on fire operations. The city just posted it.


  • Irene says:

    "Catellus would pay the money back IF they proceed with development plans for the FISC site, according to [the] staff report.”

    I do not understand the "if" part. Does this mean that Catellus could walk away? Also could we eventually be in this same predicament with SunCal? (i.e., an incomplete development project with the city carrying the liability)

    • Hi Irene,

      What I do know about the Catellus/FISC situation is this: Catellus had made plans to demolish the building when it was actively seeking to develop the FISC property. But those plans have stalled for the time being, save (possibly) a Target. Since they are not now actively engaged in developing the property, they don't encumber the demo costs for the remains of the building. But if they do proceed with developing the site, they would pay the city back.

      By way of explanation, Catellus was also slated to contribute to the cost of building the Willie Stargell extension, but they are not contractually obligated to pay until they start developing the FISC property. The city, in an effort to hold on to state transportation money that they have a limited window of time to use for development of the Stargell extension, has pulled $3 million out of the sewer fund to cover some of the costs. If Catellus starts development work at FISC, the city will get money back. (If they do a standalone Target, which is where I think they last left it, the city would get a pro rata share of the money they were supposed to pay, based on the amount of development that they do.)

      Catellus and SunCal are two separate entities looking to do two separate projects here in town. And SunCal doesn't yet have a contract with the city to do any development at the site, just an exclusive negotiating agreement. Without an actual development deal, I don't know that we have a complete picture yet of what the city's exposure would be to the risks you are asking about.

  • David Kirwin says:

    How long can Catellus just hold rights of development with doing anything? How much do they pay the city for their ability to hold the land until it is worth more? Did the City just allow them a "free" investment portfolio?

    As I recall the city even guaranteed an 18% profit margin to Catullus.

  • Irene says:

    To clarify, Catellus was chosen to develop both residential and commercial property. It has completed only the residential part (Bayport). There has been continuous delays on the commercial end and it sounds like there are no time constraints to complete the project. In the meantime, the city is liable for the property damage as long as Catellus lets it rot (doesn't do anything). With a caveat that the city gets reimbursed for property damage only IF Catellus finishes developing the site gives the impression Catellus can walk away.

    What if the Target Store doesn't pan out? Now it makes me wonder if the city can force them to leave for nonperformance.

  • David Kirwin says:

    How long can Catellus just hold rights of development with doing anything?

    Please edit to read:

    How long can Catellus just hold rights of development without doing anything?



  • Read the Docs says:

    Yes, Alameda Landing was a seperate contract with Catullus than BayPorrt.

    Did Doug deHaan get any answers?

  • Irene says:

    Mr. "Read the Docs," Since you've read the documents, can you answer the question: "How long can Catellus just hold rights of development without doing anything?"

    Perhaps you've also read the SunCal initiative/development agreement. Can you answer the question: "Could we eventually be in this same predicament with SunCal?"

  • Read the Docs says:

    The SunCal ballot initiative changes everything in a way I can't follow. That's why I'm asking for help here.

    But yes I agree – I don't think SunCal cares if their plan bankrupts Alameda, and unfortunatly Alameda can't just turn around and spin off another new company from the ashes of failure the way SunCal Companies has done so many times.

  • AD says:

    Suncal Development Agreement, Exhibit F, Section 2.9:

    "Nothing in this Development Agreement is intended to create any affirmative development obligations to develop the Alameda Point Project at all or in any particular order or manner, or liability in Developer under this Development Agreement if the development fails to occur."

  • David Kirwin says:

    Anybody think that the Mayor and CC has read this?

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