Economic Development – Alameda Point Environmental Report

Chevron’s tardy cleanup could lose Pacific Fusion deal for Alameda

Cleaning up buried tar left behind by an oil refinery at Alameda Point in the early 1900s did not appear to be a top priority until startup company Pacific Fusion came to City Hall in 2024 with a proposal to purchase about 12 acres of land, including the area where the old refinery was located. The proposal involves building a demonstration research facility, with $900 million in investment capital to back them up.

Two years earlier, in 2022, the Regional Water Quality Control Board (Water Board) had reached a voluntary agreement with Chevron, which bought the refinery in the early 1900s and subsequently closed it down, to clean up the site to meet regulatory standards. But Chevron’s two deadlines for producing a cleanup plan, the first on February 28, 2025, and the second on July 18, 2025, were not met.

Nuclear fusion energy company eyeing Alameda Point property

More cutting edge green energy research and development may be coming to Alameda Point. A startup company called Pacific Fusion was formed in 2023 with the goal of commercializing new energy production technology. The company wants to purchase property at Alameda Point to research, develop and build their demonstration fusion energy machine.

Unlike conventional nuclear power, fusion energy technology seeks to fuse together atoms, rather than split them. The energy is considered a clean, safe, and affordable form of nuclear power that would revolutionize energy production. It has been only in the last two years that U.S. Department of Energy research labs have finally proven on their equipment that fusion energy is possible.

Tidelands designation frustrates development of Alameda Point

Assemblymember Mia Bonta may again need to be called upon to fix a problem land use designation in Alameda.

There is a major strip of land, dubbed the Central Corridor, through the center of Alameda Point that is designated state “tidelands,” even though the open water tidelands were filled in by the Navy 80 years ago. According to the California State Lands Commission, tidelands are to be held in trust for the people of the entire state, allowing only maritime, resource protection, or visitor serving uses. “Uses that do not accommodate, promote, foster or enhance the statewide public’s need for essential commercial services or their enjoyment of tidelands are not appropriate uses for public trust lands,” states this Overview of Public Trust Doctrine.

Currently, City Hall West, two blocks of lawn, a fire station, a hangar, some buildings of limited value, a parking lot, and an empty block of tarmac occupy the “tidelands” corridor and serve no Tidelands purposes.

Alameda Point economic development is stuck in the past

It is no secret that the only way for the city to build the necessary new infrastructure at Alameda Point is by selling its property. Nevertheless, city leaders drag their feet, unable to let go of the broken strategy of leasing buildings to startup companies. It does not matter how promising or green a business is. Leasing will never pay for infrastructure.

Yet Building 11, a valuable hangar that sits at a key intersection for surrounding infrastructure upgrades, has been listed for lease rather than for sale. It is indicative of the city’s lackadaisical approach for redeveloping Alameda Point.

City Revisits Leasing vs. Selling Strategy for Alameda Point

During its regular meeting on Tuesday, March 7, City Council will hold a work session to discuss the pros and cons of leasing versus selling buildings at Alameda Point in the area designated for repurposing old buildings for reuse.

The designated Reuse Area is a large swath of real estate extending from the aircraft hangars to Main Street near the ferry terminal. The work session was spawned by the Council expressing concern that it had no policy guidance upon which to make decisions on whether to lease a building or sell it.

Ready reserve ships vacate Alameda Point

The Alameda Point waterfront that was once full of ships is looking different.

In mid-July, the last of the Maritime Administration (MARAD) Ready Reserve Force of ships left Alameda Point for new berths. The fleet, owned by the U.S. Department of Transportation, left Alameda because of the costs associated with dredging the channel. MARAD ships are on-call for transporting military supplies and providing humanitarian relief.

City staff will be seeking direction from the City Council in the near future on how to proceed with tapping the revenue potential at the vacant piers. Staff will also be seeking funding to repair severely deteriorated concrete support piles under Pier 2 and other deferred pier maintenance.

New housing law hampers economic development at Alameda Point

A new state law that took effect in January 2020 has stymied the City’s plan for commercial development on a plot of land at Alameda Point. Assembly Bill No. 1486 requires cities, counties, special districts, and the state to first offer any and all “surplus” land to affordable housing developers before it can be leased for more than one year or sold. This legislation amended the Surplus Lands Act and, unbeknownst to the city when they supported the bill, swept in former military bases.

The city had received proposals from 10 commercial developers as a result of its marketing campaign in 2019. Each applicant was willing to pay at least the minimum listing price of $36.5 million for 22 acres in the Enterprise District and provide a construction timeline. The acreage is within the larger commercial and light industrial zone adjacent to Main Street, and includes the self-storage facilities. This new law meant that the City was unable to proceed with the selection process.

“It’s ironic,” said Nanette Mocanu, Assistant Director of Base Reuse & Community Development. “The City is a proponent for affordable housing and supported this legislation. We and many other communities were caught off guard when the legislation was applied to leasing and base reuse properties,” said Mocanu. “Cities across the state are working to find solutions to the unintended consequences of this legislation.”