POTENTIAL SALE OF HBC
 
November 15, 2021
 
Dear HBC Member,
 
Recently we have been informed of several rumors, allegations, and misinformation regarding the current status of HBC that are circulating, via Emails, Newspaper articles, Letters to the City, Social Media etc., within HBC and the Community. As Ownership and Management, we thought it only appropriate that we respond to these communications and share with you where things stand from our side.
 
As most of you are aware the Covid-19 Pandemic has had a dramatic impact on businesses and specifically the Health & Fitness Industry across the Country, in the State of California and here within the City of Alameda. The Harbor Bay Club has not been immune to these impacts and forces, but decided to give it everything we could in order to survive and give HBC a fighting chance into the future.
 
The good news is that with some of you deciding not to terminate your memberships, (the majority of members did terminate), the use of Governmental Loans, Personal Funds and cooperation from our Lender, we were able to survive to this point in time. The bad news is that we are no longer able to continue to own and operate HBC and are looking to sell it to the right buyer for the right price under the right terms and conditions.
 
To date we have identified three (3) potential buyers that we have “pre-vetted” and have executed a Letter of Intent with one of those prospects. This particular buyer has extensive experience in owning and operating Clubs and developing real estate. Their current plan is to re-model and/or re-develop the existing club property and facilities to include a Club component and a Housing Element. The exact size, scale and scope of these two elements will be decided over time with input from Membership, the Community and the City.
 
As background, the Harbor Bay Club since it’s opening over 40 years ago has been able to achieve a dues paying membership level of between 1,500-1,600 in a good year. This is primarily due to its location with a limited market and the demographics of the people. The breakdown of the programs and services used by the Membership have historically trended as follows: 85% Fitness/Swimming, 10% Tennis, 5% Misc. with the majority or our memberships focused on Fitness programming. Any new plans for the property and facilities would use these facts in the new designs and plans.
 
At some level we understand the emotions and motivations of the people that are spreading rumors, stating misinformation and trying to redirect the City of Alameda. However, we do not want people to confuse efforts with results. We believe all of us working together and not divided will lead to a better solution for all.
 
We recently responded to the City Council and City of Alameda Senior staff regarding some of the rumors, allegations and misinformation and have included a copy of that correspondence for your information.
 
To share a few….
 
There is No Covenant that runs with the HBC property and facilities requiring that it remain Open Space or Recreational Space in perpetuity.
 
HBIA/HBC/Doric et al was not Exempt from having to pay any Taxes or Special Assessments over the years.
 
The Owners of HBC did not purposely ignore maintenance in order to “run down” the facilities and property. HBC has never been a big money maker and we have always done what we can, when we can, with what we had to work with. As a side note we disclosed financial information to the newly formed HBC Steering Committee, at their request, so they have first- hand knowledge. We have also kept them informed of our activities.
 
Most of you Members, Community of HBI Owners Association Members and City staff have all informed us that they understand that a redeveloped site with residential units and possibly a re-envisioned Club element to support the membership base is the “highest & best” use of the property.
 
In closing we would just like to re-state that we believe that working together we can accomplish a desired outcome that will be a benefit to the Members, the Community and the City of Alameda.
 
We will keep you all updated as things move forward and thank you in advance for your understanding and cooperation.
 
 
Harbor Bay Club Management



Letter to the City:
HARBOR BAY ISLE ASSOCIATES
200 Packet Landing Road, 2nd Floor
Alameda, CA 94502
November 10, 2021

Honorable Mayor Marilyn Ezzy Ashcraft and Members of the Alameda City Council
Attn: City Clerk, Alameda City Hall, 2263 Santa Clara Avenue
Alameda, California 94501-4477

RE: Recent Communications Regarding the Harbor Bay Club Site

Dear Mayor Ashcraft and Members of the Alameda City Council:
As President of Harbor Bay Isle Associates and Harbor Bay Club Associates, by this letter I am responding to recent communications you have received from Jeff Peterson and Mr. Petersen’s letter to the editor in the Alameda Sun that he forwarded to you regarding the Harbor Bay Club site on Packet Landing Road. Also, some of the issues raised by Mr. Petersen have been brought to our attention from a variety of other sources, including statements made at Planning Board meetings, and messages from Harbor Bay Club members and Community groups and other individuals on social media platforms. We think the timing is right for us to respond to some of the issues raised in these communications. It is clear from all of this activity that the future of the Harbor Bay Club and property is of interest to many. Therefore, we would like to share with you the following information:
 
Maintenance of the Facilities at the Harbor Bay Club.
As we are all aware, the COVID-19 Pandemic has had a dramatic impact on businesses all across the Country, in the State of California and here in the City of Alameda. The Harbor Bay Club was not immune to these forces, and we have worked extremely hard to keep the Harbor Bay Club alive. During this period we used all available resources, including personal funds, to maintain the Club at a level that allowed the Members to continue to access and use the Club facilities. Accusations that we purposely failed to maintain the Club are incorrect.
 
Current Status and Future of the Harbor Bay Club Site.
Unfortunately, also during this period of responding to the COVID-19 epidemic, the majority of the members of the Club elected to terminate their memberships, which presented us with significant financial challenges. Although our efforts have been successful in keeping the Harbor Bay Club alive, we now find ourselves at a point where we can no longer own and operate the Harbor Bay Club, and we must find a buyer to redevelop the property and take it into the next phase, whatever that turns out to be.
Also, during this same period, some Club members, other individuals, and community groups reached out to us to explore all options and possibilities. We shared with each and every one of these people detailed information on the financial and operational status of the Harbor Bay Club. We were then and continue today to be transparent with all the stakeholders.
We have disclosed that we have been in discussions with home builders, including one interested in possibly redeveloping the current Club site with a combination of a smaller updated recreational facility and some new homes.
 
No Covenant by Ron Cowan that the Site Would Remain a Recreational Club Forever.
Because of a claim raised by Jeff Peterson that there was a covenant made by Ron Cowan that the Harbor Bay Club site would remain a recreational club in perpetuity, we researched our files and found no record of any such covenant. We reviewed Title Reports issued for the property over the years, and there is no record of such a covenant.
 
Review of City’s Actions on Applications for Development of the Harbor Bay Club.
Further, we reviewed the City’s actions on Applications filed by Harbor Bay Isle Associates for development of the Harbor Bay Club and found no promises or requirements that the site remain a recreational facility forever.
In mid-1976, the land now occupied by the Harbor Bay Club became available. Prior agreements among the Alameda Unified School District, the City of Alameda and Harbor Bay Isle Associates provided for the reservation of approximately 24 acres of land along Packet Landing Road and extending southerly from the Bay Farm Island Bridge for future public schools on Bay Farm Island. In mid-1976, the Alameda Unified School District decided that it did not need approximately 9 acres of Harbor Bay Isle Associates’ land nearest the Bay Farm Island Bridge for a future public school, and as a result that property became available for an alternate use. Harbor Bay Isle Associates began to consider whether a private commercial athletic and fitness club would be an appropriate and viable use of that portion of the land it owned, because such a recreational facility would support the developer’s marketing plans to attract new home buyers to Harbor Bay Isle.
On October 18, 1976, the Alameda Planning Board approved a Planned Development Application No. 76-10 for a private reactional complex, the Harbor Bay Club. There was no condition imposed in the City’s approval that the site must remain a recreational facility in perpetuity. In fact, in the Planning Staff Report on this Application acknowledged that the initial management program for the Harbor Bay Club might not continue as originally established: “Harbor Bay Isle Associates should specify their intentions regarding ownership of the Club or possible sale at some future time.”
On December 8, 1976, the Alameda City Council by Ordinance No. 1834 reclassified and rezoned Harbor Bay Isle Associates’ parcel on Packet Landing Road near the Bay Farm Island Bridge from R-1-PD (Single Family Residential, Planned Development District) to C-2-PD (Commercial Business, Planned Development District). The underlying zoning district of Commercial Business would allow for the construction and operation of a commercial health and fitness club on the property, including one with snack bars, a restaurant, and a bar serving liquor to customers. There was no condition imposed that the site must remain a recreational facility in perpetuity.
Subsequent Planned Development Amendment Applications for the Harbor Bay Club approved by the Planning Board in May of 1978 (PDA-78-4 approved by Planning Board Resolution No. 972), in October of 1982 (PDA 82-6 approved by Planning Board Resolution No. 1281 on October 13, 1982), and in April of 1991 (PDA-90-26 approved in Planning Board Resolution No. 2134 on April 8, 1991) contained no conditions that the site must remain a recreational club in perpetuity.
The 1989 Development Agreement between Harbor Bay Isle Associates and the City of Alameda shows the Harbor Bay Club in its location on the Description of the Harbor Bay Project which was Exhibit B in the Development Agreement. The Development Agreement does not contain any commitment by HBIA or any requirement by the City that the Harbor Bay Club site must remain a recreational facility in perpetuity.

HBIA Not Granted An Exemption from Paying Assessments on Harbor Bay Club Site.
Assertions made in recent communications that HBIA was granted an exemption from paying assessments on the Harbor Bay Club site for the original Assessment Districts that funded the initial infrastructure at Harbor Bay Isle are simply not true. HBIA formed a Mello Roos District for Village 5 that provided for assessment payments, but the Harbor Bay Club site was not located within Village 5. HBIA formed Assessment Districts to fund improvements in the Harbor Bay Business Park but not for the portion of Harbor Bay Isle where the Harbor Bay Club is located. The Bay Farm Island Dike Assessment District formed for future levies of assessments for costs and expenses related to repairs required in the event of a “major failure” in the perimeter dike around the shoreline edge of Harbor Bay Isle covers all property within Harbor Bay Isle except public streets and public-school lands, so the Harbor Bay Club site would not be exempt from any such levy of assessment. Further, the Property Taxes currently paid by the Harbor Bay Club for its property at 200 Packet Landing Road contain assessments for public services and for public school measures.

Legal Issues with Request that City “Down Zone” to site for “recreation only.”
           While the City of Alameda has the legal right of control over the zoning of properties in the City, any changes to the existing zoning classification of properties must be done in compliance with the policies and regulations in the City’s Zoning Ordinance. The City’s Zoning Plan was adopted for various purposes, including “To protect and elevate the character and the social and economic stability of residential, commercial, industrial, recreational, and other areas within the City, and to assure the orderly and beneficial development of such areas.” (Alameda Zoning Ordinance, Article 1, Section 11-112(c)). The call-in recent communications for the City Council to rezone the Harbor Bay Club site to “recreation only” so that a newly formed committee can gain control of the property as a “community owned asset” should be rejected by the City Council, because following that path would expose the City to vulnerability to a legal challenge for an unjustified “taking” of property without just cause.

           We hope that this information and our explanations will be useful to you in dealing with these requests to rezone the Harbor Bay Club site to “recreation only.”

Sincerely,

C. Timothy Hoppen

cc:     Eric Levitt, Alameda City Manager
Yibin Shen, Alameda City Attorney
Elizabeth Makenzie, Chief Assistant City Attorney
Andrew Thomas, Chief City Planner, Community Development Department
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200 Packet Landing Road
Alameda, CA. 94502 (google maps)

Phone: (510) 521-5414