Island Worker Shortage
The developers of Alameda Point say the delay in construction is due to a labor shortage caused by the Bay Area housing boom.
Illustration by Gillian Dreher
In the two decades since the Naval Air Station closed, Alameda’s plans for redeveloping the ex-military base have faced a series of frustrating roadblocks and delays. There have been disputes over how many homes to build at Alameda Point and concerns about toxins left behind by the Navy. And, of course, the main financial backer of one of the redevelopment plans—Lehman Brothers—went belly up during the Great Recession.
Last year, however, it looked as if Alameda’s plans for the 1,560-acre base might finally be on track. The city council had greenlighted a multiphase housing and commercial development plan, with the first phase, known as Site A, scheduled to break ground in July 2016. But summer came and went, and now 11 months later, that 800-unit housing project still has yet to get started. And it might not begin until this fall.
This time the culprit for the delay is a sharp increase in construction costs in the Bay Area. According to industry analyst RSMeans, construction costs shot up 12.5 percent in the Bay Area, from January 2011 to January 2016.
And Alameda Point’s developers say prices are continuing to soar due to the fierce competition for construction workers in the current housing and commercial development boom in San Francisco, Silicon Valley, and Oakland. San Francisco has added 45,000 housing units and Oakland has 3,000 units under construction, plus up to 20,000 more in the residential pipeline.
“It’s a labor shortage,” said Joe Ernst of Alameda Point Partners, the development team behind the Site A proposal. Ernst said the cost of construction materials has remained mostly stable, while labor costs have skyrocketed.
The rise in costs has created financial problems for Alameda Point Partners and is causing the current delay. But the developer believes it can solve its financial problems by rearranging the timing of its construction plan. And the developer’s new draft plan promises to be good news for people desperate for new housing.
Under its original proposal, Alameda Point Partners planned to build 656 of the project’s 800 housing units in the first phase of the project. But under the revised plan, which Alameda Point Partners intends to present to the city council soon, the developer would build all 800 housing units, of which 200 would be affordable, in the first phase. “Even though it’s a bump in the road,” Ernst said of the current delay, “I think it’s going to get the city a bigger project sooner.”
courtesy of Alameda Point Partners
Frontloading the homebuilding will generate enough revenues for the developer to be able to finance the extensive infrastructure upgrades required on the former base. The housing includes townhomes, condos, and apartments.
Jennifer Ott, the city’s chief operating officer for Alameda Point, said the developer is not only required to put in new streets and fix existing ones but also must install sewage and electrical lines and build stormwater systems and levies to prepare for sea-level rise from climate change. She estimated that the developer’s total infrastructure costs will be about $40 million. “What they’re proposing makes a lot of sense in a lot of ways,” she said, referring to Alameda Point Partners’ plan to build all of the housing and infrastructure first.
In interviews, Councilmembers Marilyn Ezzy Ashcraft, Jim Oddie, and Malia Vella said that while they’re disappointed about the current delay, they still have confidence in the development team. “I don’t think you can deal with a project of this type of complexity and not expect some problems,” Ezzy Ashcraft said. “I think of this as a setback, but not a defeat.”
But any more delays on Site A will create a ripple effect for the other major housing development planned for Alameda Point: the Main Street Neighborhood Project. That proposal, which is to be built adjacent to Site A, near the estuary, calls for another 625 units of housing, of which 25 percent would be affordable units. In total, the two projects would produce 1,425 homes, with 356 of them being affordable (see “On Point,” December 2016). Ott said the city agreed to make 25 percent of the homes affordable on Alameda Point as a result of a settlement with Renewed Hope, a nonprofit that advocates for below-market-rate housing.
Ott noted that the Site A project will also create much of the infrastructure for the Main Street Neighborhood. She said the city is planning to issue a development bid for Main Street in September—but that timeline would have to be pushed back if Alameda Point Partners, or APP, continues to be delayed.
“It does concern me,” Oddie said of the delay. “But we’re still partners with APP. … I’m not ready to throw in the towel.”
In order to build all 800 units of housing in the first phase, APP plans to move the location of 144 units that were proposed for the second phase. The reason is that those 144 units were to be situated on polluted land that the Navy is still cleaning up. That property is full of volatile organic compounds and has groundwater contamination. APP has concluded that it makes more sense to use the polluted property for commercial development, rather than housing, after the Navy has cleaned it. APP plans to move the 144 housing units to the area of Site A where it intends to build the other 656 homes.
Vella said she’s hopeful that APP can make the project pencil out. “We need the housing,” she said. But she added that with 1,425 units slated for Alameda Point, plus hundreds more that have been proposed or are under construction, the city needs to revisit a proposal for building another West End crossing because of traffic concerns.
Some Island activists have been pushing for a new bike and pedestrian bridge between Alameda Point and Jack London Square (see “A Bike Bridge Too Far?” January 2017). Although city staffers have shown little interest in pursuing the bike bridge, Vella believes it’s worth exploring. “To close out on the bike and pedestrian option is to force people into their cars,” she said.
Published online on May 30, 2017 at 8:00 a.m.