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Your City Council Report
for August 16, 2011
8/17/11 By Katy (ADQ) Miessner
Special Meeting – can they all end this fast? A wee bit of normal business took place: super-fast don’t-blink-your-eyes consent calendar contained the second reading of the Fire Enhancement we heard about last week and was approved 7-0. And then: Mare Island Studios. Last week’s “RFP” (request for proposals) was changed to an “RFQ” (request for qualifications). In response to Councilmember Schivley’s question, why the change, Vallejo’s new Economic Development Director, Ursula Luna-Reynosa responded that an RFP is costly for developers who aren’t interested in participating in a “dog & pony show” and an RFQ allows Vallejo to know who the City intends to partner with, and once a partnership is created, a vision can be created together. (RFQ seems like a better process, but as one attendee stated after the meeting, Vallejo needs to create its own vision first and then find someone who shares it.)
In the RFQ, the City indicated they are interested in plans that create jobs and that increase our tax base. Luna-Reynosa described the RFP process as a “beauty competition” with pretty pictures, and often times the choice results in an unqualified developer selected that does not have the capacity to carry out their proposal, and the proposal never gets built, or it’s becomes a “bait & switch”. Sort of sums up about every single developer Vallejo has ever had, not just on Mare Island but all over town. Although some developers are treated quite differently than others: some have long been booted out, while some linger on. It’s all who you know, but that’s another story! The change from an RFP to an RFQ was to encourage developers to apply, who have the means to develop: applicants – experienced developers –will have to present their financial statements and other qualifications, such as experience with projects similar to what Vallejo is looking for on Mare Island, as well as experience with regulating agencies such as BCDC (Bay Conservation & Development Commission). A conceptual development plan would be required from applicants, one aligned with the RFQ. The City’s goal is to create a short list of chosen developers who would then be qualified to respond to an RFP, and the city would know they are capable since they would have already been vetted through the RFQ process. RFQ applicants have 30 days from tonight—August 16—to submit responses. 30 days should be sufficient since applicants supposedly will already have the necessary required pieces: financial statements, proof of experience, etc. So………Mare Island Studios, where does that leave them? Charles Ansbach, who described himself as working on the corporate/social responsibility side, said that he has been with Mare Island Studios for many years, “since its inception” (he later said they had attempted to locate the studio in another city but the decline of the housing market made that plan unworkable). MI Studios’ plans are to work with Vallejo, and he thanked the Council for their patience, said it has been difficult, working with financiers, creating packages, projects with great care greater than ever before in this financial climate. He said the film industry is doing well and classically does well in this environment, and the Studio would partner with amenities that would surround the project. Apparently a package was distributed to council members regarding financiers – Ansbach mentioned a folder that has in it, their requirement on how MI Studios would move forward. He asked that council work with thes a very small amount longer and that they appreciate Council’s efforts. Dan Dolinar, Senior Vice President of Rudolph and Sletten Construction’s Northern California Operations said that he has been involved with the project for the last 11 months, he said the council hasn’t seen “a lot of product” but his company has spent time and energy already to create plans, and have already “interfaced” with Cal Trans, BCDG, working on freeway approaches, the main entrance to Mare Island, hired a biologist to walk the western shore and plot high tide, and they’ve worked with the Navy. They presented and described plans for the north end of the island, working on Railroad & Walnut Avenues, creating a grand tree-lined boulevard parallel to the straight with walking & biking trails. Their plans for the main entrance of the studio would include a large green space with a water feature, three office buildings designed to fit in with spirit of island’s historic architecture. And production studios would be built behind these buildings, with 22 sound stages against Azuar. He estimated the plan would create $1.2 billion (with a B) in construction spending, and to launch the project, they estimate $60 million for road and utility infrastructure. Dolinar described it as a good plan, with a good architectural team including SWA architects and they just need the Council’s support for a little longer. Robert Naylor, their attorney, noted that councilmembers were given a packet that contained amongst other things, a letter indicating Fluid Capital Ltd of Great Britain is willing to invest $300 million, providing they have the 30 days to work out financing, subject to negotiations. Also included was a draft lease purchase that has not been signed, but represents the product of negotiations and they want to maintain that as basic framework. They are ready for the CEQA process but Naylor said they still need 30 more days. He also said that a notion that a casino would be a good alternative to the MI Studios is far-fetched, saying that was as kind as he could be. He mentioned the casino slated for Rohnert Park (only 30 minutes from Vallejo) and the one already in San Pablo, and that Indian Casinos are not friendly to labor, and he reminded council that MI Studios would be an all labor project; they have made that commitment. If this were to go forward, demolition would start in a matter of a few months because it would only require a negative declaration. MI Studios has spent $2.5 M so far, and he doubted that the RFQ, would result in a clear financial commitment close to MI Studios’ size and with their job quotient. He ended by saying they fear that if 30 days is not granted, MI Studios will not be able to get the financing, with this kind of a cloud hanging over. He again thanked the council for their patience and asked for 30 days before the RFQ was issued. Councilmember Wilson—ignoring the entire presentation and their pleas—offered the resolution for a vote. Councilmember Schivley asked that if MI Studios financing problem is taken care of in the next 30 days, could the City cancel the RFQ – which the answer was yes, the language in the RFP is that Vallejo doesn’t have to accept any proposals. Schivley went on to wonder why the City seemed to be in a big rush to put out this RFQ and based on comments by Councilmembers in the paper, wanted to know if there are other interested parties out there – is anyone else ready to propose something? Luna-Reynosa said the RFP hasn’t been noticed yet so she wouldn’t know due to her limited time in Vallejo, Development Analyst Annette Taylor indicated that prior to 9/28/10 action to withdraw a former RFP there were some interested parties. City Manager Phil Batchelor—responding to Schivley’s request for the names of those interested parties—indicated that before the MI Studios ERN, the city spoke to a number of people and was approached by several people who “asked not to be noticed publicly” who want to respond to an RFP. Schivley reminded the Council of difficulties with the downtown, that there were also “other interested parties” who have never surfaced. Councilmember Gomes who said she was always supportive of the Mare Island Studios project appreciated it for dreaming big, and Mare Island needs dreaming big; not dreaming low, and a casino is dreaming low. Gomes did acknowledge that in the past year, there has been a lack of performance on the part of Mare Island Studios, and that the speakers acknowledged that as well, but thought the economy was responsible. She went on to say if (speaking of Casinos) she were a betting person, she saw no support for the Mare Island Studios from the council. She said she would support the RFQ but requested that the studio submit, and participate, in the process as well. And she did not understand why the City of Vallejo would turn away a potential billion dollar project. Mayor Davis – ready to move on – said that he did not want to give any RFQ applicants the idea that “we’d pull the rug out from under them” if something else (MI Funding) came along. Even though it feels like he and council majority are doing just that: pulling the rug from under the Mare Island Studios proposal when they say they only need 30 more days. Councilmember Hannigan agreed with Davis, that it would send a mixed message; she did not want to have MI Studios as a placeholder who can “pull out pretty pictures”, but have not met the goals in the ERN. She saw the RFQ as an opportunity for others to come forward; those who have the funding and backing can participate. Councilmember Brown said she agreed with Hannigan, and said she had a whole list of “less-generous” things to say, but left it that she was very discouraged with what’s happened with the MI Studios since January. Her remarks were rather stern. She said she welcomed MI Studios to participate in the RFQ process if they are prepared to apply. It is a competitive process to vet all proponents. It was a 7-0 vote, that Schivley and Gomes indicated they’d go along if the RFQ can be cancelled if MI Studios can secure funding in 30 days. 7-0 Afterwards, I asked Robert Naylor if MI Studios would respond to the RFP and he wasn’t sure. Dan Dolinar—whose construction company has built casinos, made it very clear how difficult a casino is to build: to be legal, it has to be an Indian casino. A casino has to be vetted through the Bureau of Indian Affairs and the State. Richmond has been trying to get a casino for 5 years and still doesn’t have approvals. And, the other powerful tribes who own nearby casinos would not be fond of competition in Vallejo, especially with a Rohnert Park casino opening, and they could keep Vallejo from getting a casino approved. The staff report stated that the City’s engagement with Mare Island Studios did not result in a viable project and that previous proposals for the North End(ever since the Navy Yard closed!) were also unsuccessful. Although an RFQ process seems like a better process than an RFP, it’s not apparent how an RFQ will attract viable proposals that a myriad of RFPs were not able to do. If they are out there, they haven’t come forward before. Mare Island has had very few ERNs but mostly it just has sat there. Will an RFQ all the sudden bring all these great proposals out of the woodwork? And I wonder as Schivley does: why the rush? Have developers with wads of cash been pounding on our doors? Has staff and/or council been courting other ideas? The city was supposed to abide with the ERN (note “exclusive” part of the acronym) so entertaining other proposals would be a no-no, breach of contract. Unfortunately, all the closed session stuff and lack of transparency combined with council majority’s refusal to allow just 30 more days (“just a thin mint”?) leads to suspicion. And sadly, the outline of the Mare Island reuse plan in the RFP just doesn’t compare with the Mare Island Studio proposal. Here’s what the RFQ says: “light industrial, warehouse, and office uses in a contemporary office park, with a commercial area to serve primarily office park users at the entrance” and “buildings configured as a warehouse/distribution district or office park.” Warehouses? Office Park??? When comparing the two, one is perplexed why council couldn’t give MI Studios the 30 more days they requested, and, now if MI Studios goes away, Council will always be blamed. I asked Mr. Ansbach if, in the event they cannot build in Vallejo, would they go somewhere else and he said they want to build somewhere and prefer Vallejo, but they’ll go somewhere else.
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