Alameda Landing – After 20 years of setbacks, $1 billion East Bay waterfront project to start construction
San Francisco Business Times
March 20, 2018
After two decades of setbacks – and final delays in the past three years – the $1 billion Alameda Point Site A waterfront project will break ground this month.
Developers closed last week on a land transfer on the 30-acre first phase from Alameda. The entire 68-acre project will transform part of the former Alameda naval base, which closed in 1997, into 800 housing units, including 200 affordable homes, 600,000 square feet of commercial space, 15 acres of parks and a new ferry terminal to San Francisco that will open in 2020.
The project is the largest of multiple Alameda waterfront projects that will add thousands of new homes to the island, including the 589-unit Encinal Terminals and 670-unit Alameda Marina, both of which could receive approval this year. The development boom is a sharp reversal for the city, which banned apartments bigger than a duplex for 39 years and has grappled with a housing shortage along with the rest of the Bay Area.
Alameda Point’s developers include Trammell Crow Residential, commercial builder srmERNST Development Partners, retail landlord Madison Marquette, nonprofit affordable developer Eden Housing and financial partner Cypress Equity Investments. The project was approved in 2015 with broad support, but work stalled as costs went up.
“The biggest hurdle was construction costs,” said Joe Ernst, principal of srmErnst. The developers saw annual increases of six to 10 percent, which required changes to the plan approved in 2014.
Those included the city’s removal of restrictions on the timing of market-rate housing construction and designating 70 units of affordable housing for teacher housing, which opens up financing through a school district bond.
“Through this process, we didn’t step away from the community benefits, the 25 percent affordable. We kept the project design, which was very well received by the community, intact,” said Ernst. “Long-term, we feel very good about the project and the location.”
The development partnership received the city land for free, but resold the land to individual partners and an outside developer, Trumark Homes (see below), to generate around $60 million for infrastructure and other public benefits, including $10 million for the new ferry terminal, $3 million for affordable housing and $1 million for a sports complex.
“The land transfer immediately provides $14 million in funding for the projects that matter most: affordable housing and new transportation improvements, like the new ferry terminal, and paves the way for construction to begin in the next month, resulting in 2,500 construction jobs,” stated Jennifer Ott, the city’s director of base reuse and transportation, in a statement.
Infrastructure work for the $500 million first phase, including new streets, water, sewage and electrical lines, will start construction this month and cost around $80 million. The first phase’s 673 housing units, will start construction by the end of the year and first homes will open in 2021, three years later than the original schedule of 2018. The land transfers for the remaining two phases are scheduled for 2024 and 2025. The entire project will take around a decade to complete.
Ernst said the 600,000 square feet of commercial space will target maker tenants and retailers, rather than traditional office uses. The area is already home to breweries and a flea market, so the project will build on that concept, he said. A commercial broker hasn’t been selected because the focus has been housing development, but commercial marketing will ramp up next year, said Ernst.
“The base closed over 20 years ago and several attempts to redevelop it failed. Due to extensive infrastructure requirements, this is a very complicated development,” said Bruce Dorfman, managing director of Trammell Crow Residential, in a statement.
“We were always optimistic. Fundamentally it’s good real estate. The ferry will be a game-changer,” said Dorfman in an interview. “You look at new transit hubs in the Bay, and they’re not creating many.”
Alameda Point includes another development area, the 82-acre Site B, which is approved for commercial development. A developer hasn’t been selected, and Ernst said he is interested in pursuing that site as well.
The Site A first phase’s land sales and housing parcels include:
- Block 6: Sold to Trumark Homes will build 123 townhomes and has an option for Block 7. Moran & Co. was the sales broker.
- Block 8: Sold to Eden Housing will develop 70 units of affordable housing for families and 60 units of affordable housing for seniors
- Block 9: Sold to Cypress Equity Investments, which will build 200 apartments and 10,000 square feet of commercial space
- Block 11: Sold to Trammell Crow Residential and Cypress Equity Investments, which will develop 220 apartment units and 15,000 square feet of retail and commercial space.