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Apr 23

Project Status Update - April 23, 2020

Posted on April 23, 2020 at 1:39 PM by Guy Bjerke

The City has not heard from anyone associated with Lennar since the Council meeting on March 24. On March 26 the City sent a letter formally relaying the Council’s decision not to extend the Exclusive Negotiating Agreement (ENA) and our commitment to return advanced funds and work cooperatively to end our agreements. The ENA expired on March 31. Project staff and the Finance Department are working to determine the balances in the Specific Plan/EIR Reimbursement Agreement account and Disposition & Development Agreement account with the intent of returning funds advanced by Lennar to them by the end of this month. The current estimate is that the combined accounts will return approximately $800,000 – consistent with the provisions of each agreement. 

The Navy is aware of the expiration of the ENA with Lennar and affirmed their commitment to continue to work with the City towards property transfer. The Navy is working to address a new request by the Environmental Protection Agency that the former Concord Naval Weapons Station be assessed for a new contaminant group known as PFAS. The Navy thinks this work – which must be conducted over the entire property, including our 1,200-acre First Transfer – will take two seasons (years.) So, First Transfer of property to the City is now not likely to occur before 2022.

State Surplus Lands Act
Project staff are working with our local legislators and our advocacy team (Townsend) to gain an exemption from legislation that was adopted last year – requiring the City to first make any City-owned surplus property available to affordable housing developers. The ENA with Lennar protected the Reuse Project’s Phase 1 from this legislation – but with the ENA having expired the entire project is now subject to it. The adopted Reuse Area Plan already makes a significant commitment to affordable housing and combined with the long-term nature of our planning effort our Project should be exempt. Once the Legislature reconvenes the exemption will either be sought in separate legislation or as part of a Budget trailer bill.

Selecting a new Master Developer or Team to complete Specific Plan/EIR
There are numerous issues and policy questions that need to be analyzed and considered by the City Council before moving forward in a new Master Developer selection process. Project staff and consultants are assembling a “lessons learned” document considering, but not limited to, issues surrounding the original selection process, term sheet clarity, and transparency of financial information.

Project staff will recommend a timeline for selecting a new Master Developer later this year. It will be important to wait until the Covid-19 crisis has stabilized, the lessons learned document has been prepared, and the City Council has publicly considered and provided direction on policies crucial to a successful selection.

Project Budget
The Reuse Project going forward will be funded by the remaining proceeds of previous loans from the City. No new loans or funding from the City will be requested. The goal will be to judiciously use the existing account balance to undertake essential tasks and work related to securing a new Master Developer. Project staff suspended most work on the Reuse Project on November 1, 2019. The loan account balance left to carry the Reuse Project forward as of March 31, 2020 is approximately $3 million. 

Coast Guard Property
The General Services Administration/Coast Guard responded negatively to the City/DeNova Home’s purchase offer made last December. The GSA has indicated their intent to put the property up for public sale at a yet to be determined time.