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Home My WebLink AboutREAL ESTATE, ENVIRONMENTAL & PLANNING ACTION SUMMARY 03-11-14rim 9 REAL ESTATE, ENVIRONMENTAL & PLANNING COMMITTEE ACTION SUMMARY Chair Nejedly Member McGill Tuesday, March 11, 2014 3:00 p.m. Executive Conference Room 5019 Imhoff Place Martinez, California Flom BOARD OF DIRECTORS: DAVID R. WILLIAMS President MICHAEL R. MCGILL President Pro Tern PAUL H. CAUSEY JAMES A. NEJEDLY TAD J. PILECKI PHONE: (925) 228 -9500 FAX: (925) 372 -0192 www.centralsan.org PRESENT: Chair Jim Nejedly, Member Mike McGill, Director of Operations Curt Swanson, General Manager Roger Bailey, Provisional Senior Engineer Nathan Hodges, Associate Engineer Daniel Frost, Provisional Associate Engineer Melody LaBella, Senior Engineer Thomas Brightbill, Senior Engineer Tom Godsey, Communication Services Manager Michael Scahill (left after Item 3.), Mike McCoy of Mesa Outdoors (left after Item 3.), Senior Administrative Technician Christina Gee 1. Call Meeting to Order Chair Nejedly called the meeting to order at 3:00 p.m. 2. Public Comments None. *3. Consider commercial proposal from Mesa Outdoors for billboards on District property Communication Services Manager Michael Scahill distributed additional information (attached), and Mike McCoy from Mesa Outdoor outlined his proposal, stating that Highway 4 advertising had the potential to generate revenue for public purpose. Member McGill stated that, in general, he was not in favor of billboards on freeways; however, if there were to be a billboard on District property, it should be screened for Real Estate, Environmental & Planning Committee Action Summary March 11, 2014 Page 2 value and a possible informational element, similar to the educational billboards Mt. View Sanitary District erects some months out of the year. Chair Nejedly stated that revenue should be maximized, there should be oversight as to the billboard's message and design aesthetics, and signs located on the Kiewit property need to be coordinated with the Buchanan Field Airport, because the property has many constraints, due to its location in the flight approach zone. Another potential location that might be considered is the District's "Triangle property," which is subject to coordination with CalTrans, and, lastly, the mobile home park near the District's property should be consulted (which would be undertaken by staff, if the other issues are found acceptable). Chair Nejedly preferred that the billboard location not be on the dirt or at the plant. COMMITTEE ACTION: Directed Mr. McCoy to perform additional research and bring back findings to the Committee, without discussing financials yet. 4. Receive report on possible partnership with Seth Adams of Save Mount Diablo and Jim Townsend of East Bay Regional Park District who would like to extend the Iron Horse Trail through District -owned properties General Manager Roger Bailey reported that this item was previously discussed with the Committee, and the East Bay Regional Park District (EBRPD) has since decided to move in a different direction. COMMITTEE ACTION: Received report. 5. Update on recycled water options for the drought Provisional Associate Engineer Melody LaBella stated that most water agencies, including East Bay Municipal Utility District (EBMUD), are currently in "voluntary" water conservation mode requesting up to twenty percent reduction, in accordance with the Governor's drought declaration in late January 2014. Contra Costa Water District (CCWD) is currently under voluntary conservation, but has not set a target percentage. Ms. LaBella noted that a suggestion made by Chair Nejedly to truck recycled water directly to users would not yield revenue for the District because of the limited amount of water each truck could carry and the significant amount of District staff time required to administer the program. However, if the Committee's goal is to help with the drought (over revenue being the driver), then perhaps the District should consider not charging for recycled water for truck filling during the drought, as is the current practice at EBMUD. Staff did not receive a positive reaction from landscape companies for watering residential lawns with recycled water, but there could be interest for larger homeowners associations and possibly golf courses. Staff will continue to follow up on the idea and keep the Committee apprised of conservation measures by the water districts in the District's service area. Member McGill commented that anything showing the value of recycled water is valuable in itself. Real Estate, Environmental & Planning Committee Action Summary March 11, 2014 Page 3 Chair Nejedly stated that he believed there would be interest from users who would not want to lose their yard to the drought. Ms. LaBella also reported that there was currently no indication that Contra Costa Water District (CCWD) or East Bay Municipal Utility District (EBMUD) would be pulling their portable potable water hydrant meters, but staff would continue to keep the Committee apprised. Ms. LaBella also noted that EBMUD is currently planning to evaluate drought impacts in April to determine if additional water conservation measures may be required. Provisional Senior Engineer Nathan Hodges stated that the Concord Landscape Project was underway and customers without backflow issues will be the first group of customers to be connected. Staff was still in the process of evaluating those with backflow issues. General Manager Roger Bailey reported that he intends to reach out to Jerry Brown, General Manager of the CCWD, regarding their most recent cost estimate for installing backflow preventer assemblies to determine if CCWD would be willing to offer any in -kind services to help facilitate these connections in the time of drought. The high cost for backflow prevention is delaying the ability to connect some Concord Landscape users to the recycled water system. Mr. Hodges also reported that CalTrans has asked questions of District staff to anticipate future recycled water use in the area, particularly at the Concord Naval Weapons Stations site. Associate Engineer Dan Frost reported that staff is exploring the possibility of installing a recycled water hydrant at the Kiewit property, which would serve future development at the property, and would have good visibility to all the trucks visiting the County Quarry. COMMITTEE ACTION: Received update. *6. Receive presentation on Potential for Algae to Biofuel project [Continued from 2/11/14 meeting.] Mr. Frost gave a presentation on algae as a possible technology to provide both treatment and energy benefits. Interest in algae has piqued in recent years because of its ability to absorb nutrients, produce a higher yield of oil than other crops, and some algae strains can be processed to generate high value health products. Energy from algae can also reduce greenhouse gas emissions by offsetting fossil fuel demand and energy required for mechanical treatment, which could avoid or reduce cap and trade costs. However, there are numerous technical challenges to overcome such as costly and complex operations for photobioreactors and biofuel production, land area requirements for high rate ponds, and seasonal performance. In addition, harvesting the algae efficiently is costly. An internal Feasibility Study found that the Real Estate, Environmental & Planning Committee Action Summary March 11, 2014 Page 4 cost for an algae system treating 6.6 MGD of secondary effluent would require roughly 100 acres and have a capital cost of $5 to $25 million; an Operations and Maintenance (O &M) savings of up to over $400,000 per year; and a simple payback period of 12 years or more depending on a wide range of assumptions. Staff recommended continuing to track algae research and development, assessing interest from local refineries, and considering algae for sidestream treatment as part of the Treatment Plant for the Future. COMMITTEE ACTION: Received presentation. 7. Announcements a. Next meeting scheduled for Tuesday, April 8, 2014 at 3:00 p.m. b. Ms. LaBella announced that, by invitation, she spoke about proper pharmaceutical disposal at the March 11, 2014 Contra Costa County Board of Supervisors meeting, in support of their resolution declaring the month of March "Prescription Drug Abuse Awareness Month." C. Senior Engineer Thomas Brightbill announced that staff has negotiated a new three -year lease with existing tenant, Mendocino Glove Company, for Bay 10 at a rate of $1 per square foot, for 2,150 square feet. This is the same rate they currently pay for Bay 8. 8. Suggestions for future agenda items Member McGill asked staff to follow up with Rich Seithel at Contra Costa County, regarding his request for assistance in locating a local fuel cell site, which would need to be an industrial site requiring connection to a natural gas line. Mr. Brightbill and Environmental Services Division Manager Danea Gemmell will follow up with Mr. Seithel. Chair Nejedly requested that staff prepare a brief informational item regarding the Outfall pipe going through Acme Landfill. He suggested that Nick Ferris be contacted to assess the feasibility of Acme Landfill relocating and replacing the District's outfall pipe to obtain more landfill capacity. Member McGill also asked what types of agenda items would be considered by the Real Estate, Environmental & Planning Committee, versus the Engineering & Operations Committee for example, with regard for planning for the Plant of the Future and resource recovery. 9. Adjournment — at 4:23 p.m. * Attachment 3, 0 October 15, 2012 Mr. Mike McCoy Mesa Outdoor 582 Market Street, Suite 1508 San Francisco, CA 94104 Re: Static Billboard on City ofAntioch Property Dear Mr. McCoy: As you are aware, Donna Desmond Associates ( "DDA ") prepared an analysis for the City of Antioch (the "City ") of a Mesa Outdoor proposal to erect a digital billboard on City owned property. Mesa Outdoor ( "Mesa ") has determined that it is currently not economically feasible to develop a digital billboard at the site. Mesa would now like to now propose erecting a double faced static billboard at the location, with the option to upgrade the faces to LED technology if warranted by the market. In conjunction with development of the billboard, Mesa would also construct a "Welcome to Antioch" monument sign as a construction bonus. You have asked that 1 opine on a fair market ground rent for the property assuming a static structure. Static billboard ground rents vary considerably and are typically tied to factors related to the quality of the location. These factors include traffic count, visibility and demographics /economics of the target market. Other factors are also often considered in determining an appropriate percentage such as size of advertising face(s), cost of building the structure, cost of maintenance (if unusually high), market coverage in the surrounding area and proposed term of the lease. Rents for leases with long terms, (ten years or greater) are typically higher than rents for leases with shorter terms. Market sources, including real estate representatives for Lamar, Regency Outdoor, Clear Channel Outdoor and CBS Outdoor indicate that percentage ground rents for static billboards in California are typically within the range of 25% to 30% of sustainable net income. We have reviewed hundreds of ground leases throughout California and the western United States for billboards located on both private property and publicly owned right of way. Our review of these leases confirms this range, with most lease rates approximating 25% of sustainable net advertising income. Ground leases can be set on a percentage of annual net advertising income, with a monthly or annual base rent, or as a flat monthly or annual rent. Advertising rates for freeway proximate billboards of similar quality to the proposed board range from $5,000 to $8,000 per four week period. There are few competing billboards along Highway 4. However, Clear Channel has a board immediately adjacent to the proposed site. According to Mr. Mike McCoy October 15, 2012 Page 2 market sources, this board is generating approximately $8,000 per month per face on a net basis. This board has excellent visibility and read -time for both the right hand and left hand reads (traffic traveling in both directions on Highway 4) due to its proximity to the right -of -way fence line. It is my understanding that the Mesa board will be set back 145 feet from the right -of -way fence line. If this is correct, the board's visibility will be less than ideal. Therefore, it is likely that the proposed static faces will obtain sustainable rates closer to the midpoint of the range. Assuming a sustainable net rate per face of $6,500 per four week period and an 85% occupancy rate, the annual net income that a double faced static board could generate at the site would be $143,650 ($6,500 x 2 faces x 13 periods x 85% occupancy). A ground lease rate equivalent to 25% of sustainable net advertising income would indicate a fair market annual ground rent of $36,000. If the rent were to be established as a base rate with a revenue share component, then a base equivalent to 20% of sustainable annual net advertising income, or $29,000, would be appropriate. The revenue share component would be included at 25% to be paid against the base rate. New ground leases for static signs do not typically include a signing bonus. If Mesa constructs a city welcome sign, then the cost of the sign could be considered an offset of future rent. If the welcome sign cost $40,000 to construct, then this cost could be amortized over the life of the sign. A monument sign's life would probably not exceed fifteen years. Applying a straight -line amortization of $40,000 over a fifteen -year period would indicate an annual rental offset for years one through fifteen of $2,667. Deducting this from the annual fair market ground rent of $36,000 indicates a net market rent of $33,333. This deduction would only be taken during the first fifteen years of the ground lease. Please feel free to contact me with any questions you may have on the forgoing. Respectfully submitted, DONNA DESMOND ASSOCIATES Donna Desmond, ASA DONNA DESMOND ASSOCIATES oe i County Regulations: `�"`� . Placing billboards on Heavy Industrial properties is a well - established land use right in Contra Costa County. Mt. View Sanitary District has two billboards on its Heavy Industrial property fronting 1 -680, and last year Mesa Outdoor successfully developed a billboard on a privately owned Heavy Industrial property fronting 1 -680 between the Arthur Road and Marina Vista exits. However, the planning process for a new billboard project in Contra Costa County is especially time consuming, expensive, and risky. With the mitigation measures and county relationships we developed in our past project, and with the public benefit to CCCSD ratepayers, we believe we could make a very compelling case for approval. We look forward to working with CCCSD and to making this project a success Respectfully, Jkyekq'� Mike McCoy Mesa Outdoor 582 Market Street, Suite 1508 1 San Francisco, CA 94104 3/9/2014 F -1 MESA Preliminary Site Map: The preliminary site map above shows two possible billboard locations drawn in red. These locations meet all state and county spacing requirements from other signs and on /off ramps. The signs would be located outside of the flight path used by Buchanan Field and would meet the airport's height and safety requirements. Project Economics: Highway 4 is a local highway with very few billboards and approximately 88,000 travelers per day. Strong advertiser demand and lack of available inventory on Highway 4 has resulted in higher than average billboard rates along the route compared to 1 -680. We propose adding two static billboards to CCCSD's property fronting Highway 4 to better serve local businesses and to create value for CCCSD and our company. Mesa Outdoor has recently engaged an independent expert on billboard ground leases to provide their opinion on fair deal terms for a billboard lease agreement on city property fronting Highway 4 between Mesa Outdoor and the City of Antioch. Based on this determination, we believe CCCSD could expect to receive approximately $3,000 per month per structure in a billboard lease agreement. We attached the full details of the expert's opinion, and we are willing to engage an expert to analyze CCCSD's property at the district's request. 582 Market Street, Suite 1508 1 San Francisco, CA 94104 3/9/2014 MESA Central Contra Costa Sanitary District Billboard Proposal CCCSD Benefits: • $72,000 per year revenue stream to benefit ratepayers and support district initiatives. • Free public messaging for CCCSD announcements and initiatives. • Litter removal on Highway 4 sponsored by CCCSD and administered by Adopt -a- highway. • Highest development standards for new static displays in the state of California. o 100% solar generation, LED lighting, Ipe wood skirting and center panel, Sagebrush pole wrap. • Increase in property value of approximately $720,000. • Local business stimulation. 582 Market Street, Suite 1508 1 San Francisco, CA 94104 3/9/2014 r,!;- 05-, 1 Algae Wastewater Nexus Opportunities and Challenges REEP Committee Meeting March 11, 2014 Dan Frost, PE Associate Engineer Chair of WEF Algae Technologies Task Force CI Protecting Public Health and the Environment L, 1 of 12 2of12 Why Talk about Algae? • Rising energy costs ($100 /bbl) -> Rising alternative fuel demand • Algae provides higher productivity than other crops • Nutraceuticals, therapeutics, antioxidants /anticancer agents • Spi ru l i na -$44k /ton of biomass • Red carotenoid astaxanthin pigment ~$10M /ton ($:100k/ton biomass) • Requires water supply, nutrients ($$$) 3of12 Algae Wastewater Treatment Nexus • Abundance of water and nutrients available (resource recovery potential) • Offset mechanical treatment costs (BOD, N, P removal) • Reduce GHG emissions by offsetting fossil fuel demand /energy for mechanical treatment • Resource recovery again (water, digestion, biofuels, etc.) Sun CO2 N I 02 Organics (e.g. BOD) • CN 2 I Reduce District GHG Emissions? Algae: Wastewater: A C:N:P = 50:8:1 C:N:P = 20:8:1 dd COZ (flue gas) ..j V/0000�� Reduce GHG Emissions (depends) Avoid /Reduce Cap and Trade Costs Partial /Complete Nutrient removal 7of12 A WS, ial 8of12 Every Opportunity Comes with aChallenge.:- • Closed Loop Photobioreactors are complex and expensive to operate and maintain (require water for cooling) • Open High Rate Ponds require a lot of land ( >10 acres /MGD) • Biodiesel processing is complex and expensive (Industry less focused on biodiesel, more focused on ethanol/ neutraceuticals) • Energy savings from algae digestion depend on dewatering / hauling cost • Efficient algae harvesting is costly F- Achilles heel 9of12 CCCSD — Feasibility Study Findings • 100+ acres available (wet weather basins) • 6.6 MGD system (HRPs, harvesting, digesters, etc.) Economic evaluation depends on R &D break - throughs and reasonable assumptions! • Capital Cost = $5M to $25M • 0 &M Savings =None to $400,000 + /year • Simple payback is >12 years (or never) 10 of 12 Assumptions Impact Costs • Reduction in wet weather storage acceptable • Pond liner vs. native soil for high rate ponds • Harvesting technology used (bioflocculation vs. DAF) • Biomass productivity achieved (seasonal performance) • Basis for secondary treatment offset costs • Solids handling/disposal/reuse options • GHG Cap and Trade offset costs (impacts by landfill gas availability) 11 of 12 CCCSD — Feasibility Study Challenges • Economic evaluation depends on assumptions used • Reduces wet weather storage capacity •Treatment limited to 6.6 mgd (10 -15% N removal from plant influent) • Available CO2 supply may limit size of algae system (open ponds have 15 -30% CO2 transfer efficiency) • 0 &M complexity (operating parallel treatment system) • Odor potential • Reliability concerns (seasonal, weather - dependence) 12 of 12 Next Step Recommendations • Continue to track algae R &D and grant funding for research • Assess interest from local refineries • Reconsider algae for treating digester digestate (Treatment Plant of the Future ?) • Consider technoeconomic evaluation if major issues are resolved (e.g. reduced wet weather storage) - $31,000 • Pilot study if technoeconomic evaluation looks promising - $95,000 (materials and consulting only) Regional High Rate Pond Algae Production Farms? Photobioreactors for Community Enhancement? -(-. Ai- e-