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Report No:

Meeting Date:

Alameda-Contra Costa Transit District

STAFF REPORT TO: Planning Committee

AC Transit Board of Directors

FROM: Kathleen Kelly, Interim General Manager

SUBJECT: Real Property Leases

BRIEFING ITEM

RECOMMENDED ACTION(S):

Consider receiving a status report for District owned real property.

EXECUTIVE SUMMARY:

15-135

July 8, 2015

The District's real property inventory has evolved over the years and the need to track lease activities and manage the District's real estate portfolio continues. The District's holdings are comprised of four basic property types: operational facilities; park and rides; leased properties, and unused vacant parcels.

The Real Estate Department is currently evaluating several properties. The 66th Avenue property is being appraised to determine market valuation. An appraisal of the Newark property in February 2015 reported a valuation of $2,460,000. The Richmond Division 3 (D3) property has multiple aspects under consideration/execution, with an anticipated reopening planned for December 2016. An appraisal for D3 is in process and expected by the end of July 2015.

Three properties in the District's portfolio are considered sub-standard parcels due to size, configuration, and location, and are being evaluated for disposition : Walavista, Carlston, and Pinedale/Mission.

BUDGETARY /FISCAL IMPACT:

Expected annual rent revenue is approximately $669,000 with regular on-time payment of contract rents. Staff has collected over $31,400 in delinquent rents since the beginning of 2015 and is working with tenants to retain consistent payment patterns.

BACKGROUND/RATIONALE:

The District's real estate portfolio consists of approximately 26 parcels in six cities that together comprise over 3,330,000 square feet of land . Three properties have space leased to outside parties: 66th Avenue in Oakland, Adeline Street in Emeryville, and Sycamore Street/Central Avenue in Newark.

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Report No. 15-135 Page 2 of 3

The 66th Avenue property was acquired by AC Transit in July 2008. As of June 2015, there are six tenants occupying the 66th Avenue property; the Bus Rapid Transit (BRT) Project expects to occupy space beginning in September 2015 after necessary renovations are complete.

The Adeline Street property consists of two adjacent vacant parcels. A 75-year lease with Avalon Senior Housing, l.P. was executed in 1997 to provide parking for their adjacent residential complex. A historic marker was erected on the property acknowledging the "Key" transit system that ran on adjacent San Pablo Avenue.

The Newark property became inactive in the mid-1980's after a new Division 6 was constructed in Hayward. The property was leased in the mid-1990's to a private individual who refurbished the property and sublet portions of the building and property to various tenants. In 2004, the primary lease was terminated and the property returned to the District's management. As of June 2015, there are four tenants occupying this property.

PROPERTY CONDITION Properties are inspected twice per month to ensure compliance with lease terms. The inspections are intended to familiarize the Real Estate Manager with the properties, to establish a relationship with the tenants, and to address any issues identified that are not consistent with the terms of the contract. The properties are fenced, and improved with buildings that appear to be in good condition. Roof and sewer work has been completed on the 66th Avenue property to address needed minor repairs. A more comprehensive inspection and assessment of the buildings on the Sycamore/Central property in Newark will be performed with assistance from Facilities Maintenance, Capital Projects, and Chow Engineering.

PROPERTIES CURRENTLY UNDER ASSESSMENT FOR DETERMINATION The 66th Avenue property is being appraised to determine market valuation. An appraisal done on the Newark property in February 2015 reported a valuation of $2,460,000. It is currently being inspected by tradesmen for any necessary repairs to all roofing, electrical, plumbing, and mechanical components.

The Richmond D-3 property has multiple aspects under consideration/execution:

• Renovations are underway with anticipated reopening planned for December 2016 • An appraisal has been ordered to determine market valuation for potential

redevelopment • Initial discussions have taken place with Chevron for potential purchase of identified

parcel(s) for a D-3 replacement facility

Once the above properties have been appraised and requisite repairs identified, discussions can begin on how they can be utilized for the District's best interests.

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Report No. 15-135 Page 3 of 3

PROPERTIES UNDER EVALUATION FOR SALE Three properties in the District's portfolio are considered sub-standard parcels due to size, configuration, and location. None of these parcels are necessary for the District's operations and are therefore being evaluated for disposition: Walavista, Carlston, and Pinedale/Mission.

An appraisal done on the Pinedale/Mission parcel in February 2015 reported a valuation of $200,000. Restrictive zoning of this parcel by the City of Hayward limits the marketability of the property and recent efforts to market it have met with little interest. Several similar properties have been on the market for over 460 days.

The Carlston property is sandwiched between the backyards of Carlston and Portal Avenues and is only accessible via footpaths. It has very little potential value to anyone other than adjoining parcel owners whose rear property line abuts the property. Recommendations for its disposal would be to contact the adjoining parcel owners and attempt to find a willing buyer amongst them. The cost to have it appraised would potentially exceed its value.

The Walavista property, located in the same tract as Carlston, is more advantageously situated at the junction of Carlston, Balfour, and Walavista Avenues. Similar properties have sold in recent years at an average price of $40.00/square foot. This yields a value of approximately $120,000. Sales figures were pulled from the Multiple Listing Service for East Bay Regional Data of Alameda and Contra Costa Counties.

Staff will return to the Board for further direction before proceeding with any sale or disposition of these properties.

ADVANTAGES/DISADVANTAGES:

This report does not recommend an action.

ALTERNATIVES ANALYSIS:

This report is provided to inform the Board of the status of District owned real property leased to others. Therefore, there are no alternatives associated with this report.

PRIOR RELEVANT BOARD ACTIONS/POLICIES:

None

ATTACHMENTS: 1: Property Management Parcel Inventory 2: Map with Property Locations 3: Aerial view of Parcels for Disposition & Leased (with photo of Historic Marker)

Executive Staff Approval:

Prepared by:

James D. Pachan, Interim Chief Financial Officer/Chief Operations Officer Lois C. Rawlings, Interim Real Estate Manager

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Address (number/street) City County

1 1600 Franklin Oakland Alameda

2 0 Carlston Ave Oakland Alameda

3 0 Walvista Ave Oakland Alameda 4 905 66th Ave Oakland Alameda 5 6235 Tevis St Oakland Alameda

6 1040 Seminary Ave Oakland Alameda

7 0 35th Avenue Oakland Alameda

8 8630 International Bl Oakland Alameda

9 3134 E. lOth Street Oakland Alameda

10 0 lOSth Ave Oakland Alameda

11 0 International Bl Oakland Alameda

12 10626 International Bl Oakland Alameda

13 0 Tucker Street Oakland Alameda

14 0 Adeline St Emeryville Alameda

15 0 Adeline St Emeryville Alameda

16 1177 47th St Emeryville Alameda

17 0 47th St Emeryville Alameda

18 4301 Doyle St Emeryville Alameda

19 37650 Sycamore St Newark Alameda

20 6821 Central Ave Newark Alameda

21 20234 Mack St Hayward Alameda

22 0 W. Winton Ave Hayward Alameda

23 0 Mission Bl Hayward Alameda

24 34805 Ardenwood Bl Fremont Alameda

25 34805 Ardenwood Bl Fremont Alameda cC ·.-::..:.'.-·.<' . "'=' - :·' ,-. " " .•· .... . ':· .·" ·, .. ,:c.,.;,. .·,.-,

26 2016 MacDonald Richmond Contra Costa

Square Facility Footage

GO 43,560

2,369

3,042

66th Ave 264,844

66th Ave 173,804 D-4 569,329

BRT 10,931

BRT 7,749

BRT 1,138 CMF 48,351

CMF 9,528

CMF 357,627

CMF 6,398

Avalon 6,340

Avalon 9,607

D-2 105,415

D-2 134,600

D-2 150,282

99,752

42,002

D-6 884,703

D-6 8,985

Pinedale 9,268

36,895

88,426

D-3 255,697

Total SF 3,330,642

County Parcel number

008-0624-028-02

011-0862-034-03

011-0862-034-05

041-4056-004-03

041-4056-005

041-4058-001

033-2124-03401

043-4582-010

025-0692-005

047-5519-004-03

04 7-5519-005-01

04 7-5519-006-01

04 7-5596-001

049-1024-005-01

049-1024-005-02

049-1178-003

049-1179-001

049-1180-001

092-0072-002-05 092-0072-004

432-0114-034-01

432-0114-035

444-0030-025-02

537-0521-031

537-0521-032 - - .....

514-031-003-7

Comments

6 -tenants +BRT 1- tenant

75 year ground lease

75 year ground lease

3 - tenants 1 - tenant

Park & Ride

Park & Ride en JJ

Ut I ....

(,.)

Ut

> -! ;-1 ....

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139

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SA 15- 135 ATT.3

3 Vacant Parcels for Future Disposition

Property location : corner of Pinedale Court & Mission Blvd. in Hayward

9268 square feet

Zoned: M BCS (Mission Blvd. Civic Space)

Property location : Centered between Carlston Ave. & Portal Ave. in Oakland 2369 square feet Zoned: RD-1 {Residential Detached 1 unit)

Property location : Terminus of Walavista Ave. @

Carlston Ave. in Oakland

3042 square feet Zoned: RD-1 {Residential Detached 1 unit)

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3 Leased Parcels

Property location : 905 66th Ave. in Oakland

In conjunction with Tevis St.,

adjacent to D-4 @ rear

Property location : 2 adjacent vacant parcels

Between Adeline Street & San

Pablo Ave., in Emeryville

Property location : 37650 Sycamore St.

in conjunction with 6821 Central

Ave. in Newark

(Union Pacific Railroad parcel (red)

is leased by AC Transit)

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Historic Marker

Located at 3850 San Pablo Ave., Emeryville