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December 24, 2008 > Chabot Las Positas Community College to establish campus in Union City

Chabot Las Positas Community College to establish campus in Union City

By Simon Wong

Union City Council passed three Redevelopment Agency (RDA) resolutions on December 9, 2008, to allow Chabot Las Positas Community College District (the District) to establish a campus at Union Square within the City's Intermodal Station District.

The Community College District is developing "Education Hubs" at Union City BART and close to Dublin/Pleasanton BART. The rationale is that many BART riders can benefit from education centers that are easily reached. Besides the degree and professional education programs for which the District is known nationally, these Hubs would deliver language and computing courses, employee-training developed with local businesses and community education/adult learning classes.

The RDA acquired a two-acre parcel with three buildings known as 1320, 1328 and 1330 Decoto Road in a two-part transaction. The purchase of one building and parking space enabled construction of the Decoto Connector. Union Square, acquired on November 14, 2008, consists of 1.4 acres and is designated as Block 7 in the Intermodal Station District.

The Community College District is the only respondent to the RDA's June 2006 Request for Proposals. The RDA has entered into a Memorandum of Understanding (MOU) with the District to issue a Request for Qualification (RFQ) to build office and classroom space. Interested developers will have forty-five days to respond.

A developer will be required to construct a 60,000 sq. ft., two- to eight-story office building, designed to LEED's Gold Standard. A minimum of 10,000 sq. ft. will be classroom space and a minimum of 40,000 sq. ft. will be commercial ground floor retail/office space. The developer must also consider providing 20,000 sq. ft. to accommodate a college/public library, subject to adequate funding. The City's library has outgrown its existing location next to City Hall.

The stipulated parking ratio is one space per 300 sq. ft. of office space which is unlikely to meet the intense parking needs actually required by educational facilities. Public paid parking is available in the Intermodal Station District to accommodate any excess demand.

The RDA will enter into a one-year Exclusive Negotiating Rights Agreement (ENRA) with the developer. If an Environmental Impact Report or a Mitigated Negative Declaration is required, then the ENRA will be extended. The developer will be expected to obtain entitlements before the ENRA expires and prepare a funding plan for its proposed development and will then have twelve months to arrange permits and financing.

When the developer is ready to apply for permits and has proved that construction is fully funded, title to the Union Square property will pass from the RDA to the District, gratis. In turn, the latter will grant a thirty-year land lease to the developer at no cost. When the lease expires, the latter will convey the building to the District, gratis.

During the lease, the developer will allow the District to use 10,000 sq. ft. of classroom space, rent-free.

Neither Union City nor Alameda County will be required to pay rent for the library, if it is built.

The developer will receive commercial rents to cover operating expenses, service the construction loan and provide a return on its investment.

The State Architect must review the construction contract because the building includes classroom space. The project will be subject to the City's Entitlement Process and ordinances, as per the MOU. The developer will pay property taxes, which the Alameda County Assessor's office will determine, on the improved property. The RDA needs to collect Tax Increment from the improvements in return for providing the District free land.

The District would like to enter into an interim, three-year lease agreement to establish a presence in the Union City Intermodal Station District before construction begins. The term of the RFQ, Entitlement Process and preparation of drawings is likely to last for three years. 4,677 sq. ft. of space in vacant buildings at Union Square could be rented as interim classrooms at $0.75 per square foot, which is half the comparable market rent. This will cover the RDA's utilities, contract management and buildings maintenance costs. The District is not eligible for relocation benefits. It is hoped to commence classes in June 2009.

If the RFQ does not elicit a response or the developer does not construct classroom space, the lease will be cancelled automatically and renegotiated.

The RDA will appoint Professional Commercial Office Management, Inc (PCOM), the former owner and manager of Union Square, to manage the property for $1,250 per month. PCOM will collect rents, arrange buildings maintenance, pay utilities and deposit net rental receipts from the Union Square property into an Intermodal Station Reserve bank account opened by the RDA. PCOM will be an authorized signatory to be able to pay bills and will submit reconciled statements of account each month.

The new building will generate an estimated $5 million to $6.7 million of additional tax revenue over thirty years. The RDA will receive a nominal $1 from the District if the Union Square property is sold. Union Square tenants, including the Chabot Las Positas Community College District, will generate an estimated net rental income of $9,000 per month.

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