DATE: November 17, 2015
SUBJECT:
Title
BAE SYSTEMS PIER 1 NORTH DRYDOCK, ASSOCIATED REAL ESTATE AGREEMENTS AND REMOVAL OF COOLING TUNNELS PROJECT:
A) CONDUCT PUBLIC HEARING AND ADOPT RESOLUTION CERTIFYING THE FINAL ENVIRONMENTAL IMPACT REPORT FOR THE “PIER 1 NORTH DRYDOCK, ASSOCIATED REAL ESTATE AGREEMENTS AND REMOVAL OF COOLING TUNNELS PROJECT”, ADOPT FINDINGS OF FACT, ADOPT MITIGATION MONITORING AND REPORTING PROGRAM, AND DIRECT FILING OF THE NOTICE OF DETERMINATION
B) ADOPT RESOLUTION GRANTING CONCEPT APPROVAL TO BAE SYSTEMS SAN DIEGO SHIP REPAIR, INC. FOR THE PIER 1 NORTH DRYDOCK PROJECT
C) ADOPT RESOLUTION AUTHORIZING ISSUANCE OF A NON-APPEALABLE COASTAL DEVELOPMENT PERMIT FOR THE PIER 1 NORTH DRYDOCK PROJECT
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EXECUTIVE SUMMARY:
BAE Systems San Diego Ship Repair, Inc. (BAE), the project proponent/applicant, is a current District tenant that operates and maintains a shipyard at 2205 Belt Street, San Diego (Attachment A, Project Location Map). BAE provides non-nuclear ship repair, modernization, conversion, maintenance and overhaul for government, military and commercial contracts. BAE proposes to construct and operate a new floating drydock, the Pier 1 North Drydock, on the north side of its existing Pier 1 (Proposed Drydock Component). The U.S. Navy’s “Pivot West” campaign is anticipated to increase drydock demand, and the Proposed Drydock Component will add drydock capacity to support existing and future ship repair activities for both naval and commercial vessels. BAE estimates the overall cost of the new drydock and associated improvements to be approximately $104 million dollars.
The District, as the lead agency under the California Environmental Quality Act (CEQA), prepared an Environmental Impact Report (EIR) for the Proposed Drydock Component, as well as two additional project components - an amendment to BAE’s long-term lease and the removal of two underground water cooling tunnels (the Proposed Drydock Component, amendment to BAE’s lease and removal of the cooling tunnels is collectively referred to as the Proposed Project).
Specifically, the EIR analyzed extending BAE’s lease from 2034 to 2058 (e.g., an additional 24 years), and incorporating an adjacent 2-acre land parcel and 4-acre water parcel, currently occupied by BAE through and Tidelands Use and Occupancy Permit (TUOP) into its leasehold. While certification of the EIR for the entire Proposed Project is before the Board of Port Commissioners (Board) for its consideration, the terms of any proposed lease amendment or a new lease may be presented to the Board in the future and are not before the Board for its consideration.
In addition, the EIR analyzed the environmental impacts associated with removing the two underground water cooling tunnels. The subsurface cooling tunnels are remnants of the two-acre TUOP-landside parcel from when it was used by the San Diego Gas & Electric (SDG&E) as part of the Silvergate Power Plant, which has been closed since 2006.1 Neither BAE or SDG&E propose removal of the cooling tunnels at this time. However, to account for a worst-case scenario, the Draft EIR analyzed removing the cooling tunnels at the same time as the drydock is being constructed. Removal of the cooling tunnels will require subsequent action(s) by the Board and the issuance of a separate Coastal Development Permit (CDP). The proposed drydock and shoreline improvements will be constructed in such a way as to enable removal of the cooling tunnels at a later date.
The Draft EIR was circulated for public review from April 3, 2015 to May 20, 2015. The District received four comment letters on the Draft EIR from the following organizations and agencies: California Public Utilities Commission, California State Lands Commission, Environmental Health Coalition (EHC), and BAE.
After circulation of the Draft EIR, a Final EIR was prepared for the Proposed Project. The Final EIR includes minor technical clarifications to the Draft EIR, as well as the District’s responses to public comments. The information provided in the Final EIR does not constitute significant new information, nor does it change any of the Draft EIR’s conclusions. Therefore, under CEQA, recirculation was not required. The Final EIR also includes the Proposed Project’s Mitigation, Monitoring and Reporting Program (MMRP), which states the required feasible mitigation measures and explains how the District is going to enforce the mitigation measures necessary to reduce Proposed Project’s impacts to a a level of less than significance. In accordance with CEQA Guidelines Section 15091, the District has also prepared a Findings of Fact, attached to the proposed resolution for the Board’s consideration, which further substantiates how the mitigation measures identified in the Final EIR would avoid or substantially lessen significant environmental effects.
Pursuant to the District’s CDP Regulations, the Proposed Drydock Component requires issuance of a non-appealable CDP for the portions of the Proposed Drydock Component within the District’s jurisdiction. Staff has determined that the Proposed Drydock Component is consistent with the certified Port Master Plan. Additionally, concept approval is required for the Proposed Drydock Component.
RECOMMENDATION:
Recommendation
BAE Systems Pier 1 North Drydock, Associated Real Estate Agreements and Removal of Cooling Tunnels Project:
(A) Conduct public hearing and adopt resolution certifying the Final Environmental Impact Report for the “Pier 1 North Drydock, Associated Real Estate Agreements and Removal of Cooling Tunnels Project,” adopt Findings of Fact, adopt MMRP and direct filing of the Notice of Determination.
(B) Adopt resolution granting concept approval to BAE Systems San Diego Ship Repair, Inc. for the Pier 1 North Drydock Project.
(C) Adopt resolution authorizing issuance of a non-appealable Coastal Development Permit for the Pier 1 North Drydock Project.
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FISCAL IMPACT:
The proposed Board actions would retain the annual revenues that the District receives from BAE and would not result in any additional fiscal impact to the District. Currently, the District receives a combined annual rent of $1,141,104 from BAE comprised of $934,368 annually for its leasehold property2 and $206,736 annually for the property it is occupying as part of the TUOP with the District.
BAE would continue to be responsible for all applicable costs associated with the construction and operation of the Pier 1 North Drydock. Should the Board grant an amendment to the lease in the future with BAE, the rental amount may be modified when the terms of the lease amendment are finalized and brought to the Board for consideration.
Compass Strategic Goals:
The Proposed Project would enable an established tenant to modernize its ship-repair facility by adding drydock capacity for naval and commercial vessels, as well as remove remnant improvements (i.e., cooling tunnels) on the TUOP site.
This agenda item supports the following Strategic Goals.
• A thriving and modern maritime seaport.
• A Port with a healthy and sustainable bay and its environment.
• A financially sustainable Port that drives job creation and regional economic vitality.
DISCUSSION:
Background
BAE has been operating a ship repair facility at 2205 E. Belt Street since 1979.3 The landside area within its existing leasehold is approximately 9.8 acres and includes industrial facilities, including production shops, offices and other related utilities and infrastructure. The waterside parcel is approximately 16.6 acres and currently has three working piers (Pier 1, 3, and 4) to moor large naval and commercial vessels for the maintenance, repair, overhaul and conversion-related activities. BAE currently operates one floating drydock (Pride of San Diego), which is located between Piers 1 and 3 and has been in operation since 1984. Over the past five years, BAE has completed an average of four (4) drydockings per year. The overall number of vessels serviced at BAE’s San Diego facility averages between 10 and 15 annually.
BAE has been occupying a 2-acre land parcel and a 4-acre water parcel (collectively referred to as the TUOP parcel), as a subtenant to SDG&E, which was issued a TUOP for the site. As a result of the Clean-up and Abatement Order (CAO), which was issued by the Regional Water Quality Control Board (RWQCB) on March 14, 2012, remediation of San Diego Bay marine sediment along the eastern shore of the central San Diego Bay was required.4 This action became known as the San Diego Shipyard Sediment Remediation Project, which involved certification of a Program EIR by the RWQCB and a number of other responsible agencies. The San Diego Shipyard Sediment Remediation Project involved marine sediment that was located within BAE Systems leasehold and the TUOP site, as well as other properties in the vicinity.
When SDG&E’s TUOP with the District expired in November 2014, BAE entered into a 5-year TUOP directly with District. The TUOP to BAE allows for the premises to be used for ship-building repair and related marine industrial purposes, parking, storage, as well as implementation of the Remedial Action Plan (RAP), in response to the CAO. The TUOP was amended to allow sediment offloading and stockpiling and any other ancillary activities related to the RAP. Remediation activities are approximately 91% complete and have been ongoing since certification of the Final EIR and issuance of permits needed to implement the RAP from the District and other responsible agencies.
Consistent with the TUOP, BAE currently uses the TUOP parcel for parking, movement of vehicles and equipment in support of ship repair activities pierside, temporary storage of materials and movement of materials in support of ship repair activities pierside, staging areas in support of pierside activities, and implementation of the RAP. No expansion of these uses are proposed by BAE.
Proposed Drydock Component Need and Purpose
There is currently a shortage of drydocking capacity in San Diego Bay, which is likely to be exacerbated as a result of the U.S. Navy’s “Pivot West” campaign. Between 1984 and 2010, BAE operated two drydocks. In 2010, one of its drydocks was sold and relocated to south San Diego Bay. In 2013, the drydock was sold again and removed from San Diego Bay. Over the next several years, the Navy estimates that new ships may be brought to San Diego.
Acquiring additional drydock capacity is essential to ensuring that San Diego can continue to support the maintenance and repair of the Navy’s fleet. Not having the capacity to support the Navy’s mission may result in the Navy having to seek other ports that offer these services. Therefore, BAE proposes to site a new drydock on the north side of its Pier 1, to support the current and future home-porting of additional U.S. Naval Ships in San Diego. The proposed drydock would replace an existing wet berth, which is a higher priority given the regions drydocking needs.
Proposed Project
The Proposed Project consists of the following three proposed components: (1) the Proposed Drydock Component (Pier 1 North Drydock), (2) Associated Real Estate Agreements (new or amended lease), and (3) Removal of Underground Cooling Tunnels (Attachment B, Project Site Plan). A brief summary of the three project components, and the relationship among them, is provided below.
1. Proposed Drydock Component (Pier 1 North Drydock)
The Proposed Drydock Component would replace an existing wet berth with a new drydock on the north side of BAE System's Pier 1 facility (Attachment C, Drydock Site Plan). The proposed drydock would increase BAE Systems’ capacity to facilitate required maintenance of existing and future naval assets and commercial vessel drydock needs that cannot currently be met by the existing drydock. Drydocks are used to conduct repair and maintenance activity which cannot normally be conducted when the vessel is waterborne in a wet berth. These activities generally include exterior hull repair, preservation (abrasive blasting and/or hydro-blasting and painting), shaft repair, propeller and rudder repair, and repair/replacement of valves and fittings below the waterline. As part of its corporate sustainability strategy, BAE also incorporated the following two project design features to help reduce criteria pollutants and GHG emissions: (1) Installation of two electric cranes and light-emitting diode (LED) fixtures at the drydock; and (2) Installation of zero-discharge salt pumps with smart controllers that minimize usage by utilizing pumps based on actual demand.
Although the majority of the new drydock would be located within the District’s jurisdiction, approximately 350 feet of the proposed facility would extend beyond the U.S. Pierhead line. As a result, approvals from the California State Lands Commission (CSLC) and the California Coastal Commission (CCC) will be required. The CSLC and CCC will need to review and consider the information contained in certified Final EIR for the Proposed Project before taking any action.
The necessary physical components and activities associated with the Proposed Drydock Component are listed below:
• Drydock: The proposed drydock dimensions would be 205 feet by 851 feet with aprons on each end, measuring approximately 174,455 square feet in total. It would be located on the north side of BAE’s existing Pier 1 and would replace an existing wet berth at this location. The south side of Pier 1 could continue to be used as a wet berth. The new drydock will have the capacity to lift 55,000 long tons.
• Pier 1 Protection Improvements: To prevent undermining of the existing Pier 1, an underwater wall and cantilever king pile system would be installed along the north side of the pier.
• Apron/Ramp Wharf: A ramp wharf designed for accessing the drydock is proposed adjacent to and westward of the bulkhead. The ramp wharf will include a southern, intermediary and northern structure. To enable removal of the cooling tunnels at a later date; however, the northern ramp wharf and intermediary structures will be installed after the cooling tunnels are removed. In the interim, a temporary, pedestrian-only access ramp on the north side of the drydock would be used.
• Mooring Dolphins: To accommodate mooring of the drydock, two mooring dolphins are proposed. Dimensions of the western mooring dolphin will be approximately 26 feet by 33 feet, and include a 4-foot thick concrete deck. The eastern mooring dolphin will be incorporated into the deck of the existing Pier 1 and strengthened to account for adjacent drydock sump dredging and retrofitted with a drydock gripper.
• Dredging: Approximately 395,000 cubic yards of dredging is planned to provide sufficient depth to submerge the floating drydock. The drydock and the aprons will require a bay bottom elevation of −65 Mean Lower Low Water (MLLW). Additionally, some minor dredging may be required at the end of the dock and the Bay channel to provide a route to enter the drydock.
• Beneficial Reuse of Dredged Materials: To offset the drydock's impacts related to shading and eelgrass grass habitat, the project would reuse a portion of the dredged sediment for the creation of subtidal habitat in San Diego Bay. The mitigation requirement involves raising the bottom elevations of previously dredged areas to depths suitable to support approximately 3.96-acres of eelgrass habitat. Two potential mitigation sites were identified in the Final EIR. The northern site would be located just west of the Sweetwater River Flood Control Channel within the San Diego Bay National Wildlife Refuge. The southern site would fill a portion of the former South Bay Power Plant in-take channel. Both sites would be approximately 10-acres in size, and have the potential to generate substantially more habitat than required by the project (Attachment D, Mitigation Sites for Eelgrass and Bay Coverage Impacts).
2. Associated Real Estate Agreements
Pursuant to Board Policy No. 355 (BPC 355), the Pier 1 North Drydock investment is estimated to cost approximately $104 million, which qualifies BAE for lease term extension. Additionally, in August 2012, the Board granted concept approval for BAE’s Pier 4 project of approximately $12 million. While no real estate agreement is being considered by the Board at this time, the EIR analyzed potential impacts associated with amending its real estate agreements. Staff and BAE are currently working on amending the existing lease agreement to account for the qualifying capital investments for lease term extension, and to update any other applicable terms. The proposed amended lease could also include incorporation of the TUOP parcels into the master lease, thereby eliminating multiple agreements between the District and BAE. The terms of the real estate agreement may be presented to the Board at a future date.
The EIR found that modifying the terms of BAE’s real estate agreements would not result in any potentially significant impacts. The EIR analyzed extending BAE’s lease from 2034 to 2058 (e.g., an additional 24 years), and incorporating the adjacent TUOP parcel into the leasehold premises. The proposed lease amendment would restrict the uses on the TUOP parcel to those currently existing. Specifically, the TUOP parcel could only be used for (1) activities associated with the RAP prepared to comply with the CAO No. R9-2012-0024,5 and/or (2) parking, movement of vehicles and equipment, temporary storage and movement of materials, and other staging activities in support of pier-side activity. Therefore, if the Board grants a subsequent real estate agreement, a restriction in uses to the former TUOP area will be limited to only those uses and activities that are occurring today, as part of the site's baseline activity.
3. Removal of Cooling Tunnels
The TUOP parcel currently includes two underground intake/discharge tunnels that were previously installed by SDG&E and used as a cooling mechanism for its Silvergate Powerplant. However, the tunnels have not been used for cooling since 2006, when the power plant closed. As a condition of its former lease and TUOP with the District, SDG&E is required to remove the underground cooling tunnels. The removal of the cooling tunnels would require excavation of soil, installation of a cofferdam, dewatering, installation of shoring to protect the excavation, demolition and removal of the tunnels (e.g, concrete), and backfill with clean structural fill. At this time, it is not known when the cooling tunnels will be removed. However, removal of the cooling tunnels will require issuance of a separate non-appealable CDP and separate Board approval.
(A) Environmental Impact Report
The “Pier 1 North Drydock, Associated Real Estate Agreements and Removal of Cooling Tunnels Project” EIR (UPD #EIR-2014-31; SCH #2014041071) has been prepared in accordance with the CEQA (Public Resources Code Section 21000 et seq.), the State CEQA Guidelines and the District’s CEQA Guidelines. The Final EIR consists of four volumes and Errata, which is organized as follows:
• Volume 1 contains the Final EIR, which includes the executive summary; project level environmental impacts and mitigation measures; errata and revisions; a list of public agencies, organizations and persons commenting on the Draft EIR; comments received on the Draft EIR and the District’s responses to the comments; and the MMRP.
• Volume I of III contains the Draft EIR, which includes the executive summary; the introduction and purpose; the project description, the project’s environmental analysis, impacts, and mitigation measures; and project alternatives.
• Volume II and III of III contain the Draft EIR Appendices
• Errata to Final EIR and MMRP, which modifies Condition Bio-4 to clarify permitted demolition activities may occur prior to securing dredging permits if such demolition activities would not impact eelgrass habitat. The revision confirms that all applicable permits for the mitigation site must be secured prior to commencement of any dredging activities.
These four volumes, as well as the Eratta, collectively constitute the Final EIR.
Notice of Preparation, Scoping Meeting and Draft EIR
In accordance with CEQA, environmental review of the Proposed Project, began in April 2014 after BEA submitted a project application to the District for a new floating drydock. The EIR project description includes the following three components: (1) the Proposed Drydock Component, which in summary, consists of construction and operation of a new drydock on the north side of BAE’s existing Pier 1; (2) incorporation of the neighboring TUOP parcel (the adjacent 2-acre land parcel and 4-acre water parcel) into BAE’s long-term leasehold and extension of its lease term to year 2058; and (3) removal of the underground cooling tunnels.
On April 18, 2014, a Notice of Preparation for the EIR was published. Subsequently, a scoping meeting was held on May 1, 2014 at the San Diego Unified Port District Administration Building. As detailed on pages 2-4 through 2-24 in the Draft EIR, the District received five comment letters from various stake holders regarding the scope of the EIR.
After the scoping process was completed and based on an Initial Study (dated April 18, 2014 that was attached to the Notice of Preparation), it was determined that the Draft EIR needed to evaluate whether the Proposed Project would result in potentially significant environmental impacts related to: Air Quality, Biological Resources, Geology and Soils, Greenhouse Gas Emissions, Hazards and Hazardous Materials, Hydrology and Water Quality, Land Use Planning, Noise, Transportation and Traffic, and Utilities and Service Systems. Accordingly, the Proposed Project’s environmental impacts in these areas were analyzed. The Draft EIR found that mitigation was needed to reduce potentially significant impacts in the following resource areas: Biological Resources, Geology and Soils, Hazardous and Hazardous Materials, Hydrology and Water Quality, and Transportation and Traffic. After implementation of the identified mitigation measures, the Draft EIR concluded that all impacts would be reduced to a less than significant level. The Draft EIR did not identify any unmitigated or unavoidable impacts from the Proposed Project.
The Draft EIR also included the following Proposed Project objectives:
1. Construct and operate shipyard repair facilities that maximize the use of existing waterways, available shoreline, and existing land;
2. Retain and expand current ship repair business operations by BAE Systems, in order to provide economic and employment benefits to the District and the San Diego region;
3. Modernize the BAE Systems shipyard by providing a new drydock facility, including associated improvements, and ship repair services, to meet the needs of the current and anticipated ship fleet of military and commercial customers;
4. Invest in new shipyard infrastructure that will enhance the short- and long-term attractiveness and viability of San Diego Bay and the region to military and commercial ship operators for construction and repair;
5. Impose current terms of the SDG&E TUOP that require removal of the cooling tunnels;
6. Ensure the long-term health, safety, and sustainability of the project site and surrounding tidelands area by removing the SDG&E cooling tunnels in a manner that minimizes environmental impacts, including the potential to release hazardous materials into the environment; and,
7. Obtain real estate agreement(s) necessary to achieve the aforementioned project objectives.
The Draft EIR analyzed three alternatives-the CEQA-required No Project Alternative, the Reduced Project Alternative, and the Replacement of the Existing Drydock Alternative. The No Project Alternative resulted in fewer environmental impacts to all CEQA resource areas, but failed to meet any of the Proposed Project’s basic objectives. Similarly, the Reduced Project Alternative and Replacement of the Existing Drydock Alternative would result in fewer impacts to some of the resource areas, but failed to meet the following two project objectives: (Objective 3) Modernize the BAE Systems shipyard by providing a new drydock facility, including associated improvements, and ship repair services to meet the needs of the current and anticipated ship fleet of military and commercial customers, and specifically to service large amphibious transport dock (LPD-17) vessels; and, (Objective 4) Invest in new shipyard infrastructure that will enhance the short- and long-term attractiveness and viability of San Diego Bay and the region to military and commercial ship operators for construction and repair.
The Draft EIR was circulated for public review for 45 days, between April 3, 2015 and May 20, 2015, during which time the District received four comment letters from the following organizations and agencies: California Public Utilities Commission, California State Lands Commission, EHC and BEA. These comments did not raise any significant new environmental issues or present any significant new information. The comment letters and responses to all written comments on the Draft EIR are included in the Final EIR.
Final EIR
A Final EIR has been prepared for the Project. The Final EIR includes Errata, as well as the District’s responses to written comments received on the Draft EIR. The Errata was prepared to ensure the accuracy and completeness of the environmental analysis. The Errata clarifies, corrects or adds information to the EIR based, in part, on information gathered as part of the public review process. The changes contained in the Errata are minor and do not constitute significant new information or a change in the Draft EIR’s conclusions. Similarly, the additional information contained in the District’s response to public comments clarifies and further substantiates the conclusions contained in the Draft EIR. Three issues that warranted additional information and clarification in the Final EIR, as part of the Errata or Response to Comments, are summarized below:
• Air Quality Impacts: The Project’s Final EIR provides additional clarification on the Project’s air quality analysis, which concluded that the Proposed Project would result in “less than significant” impacts to air quality. The response to comments chapter clarifies, among other things, that the Draft EIR analyzed removal of the cooling tunnels while the drydock is being constructed to account for a “worst-case” environmental scenario. The response to comments chapter also clarifies that the air-quality analysis accounted for the additional time that would be needed for tug boats to maneuver the vessel in and out of the drydock, and that newer engine technologies were included as part of the analysis for the newer fleet of tug boats. In addition, results from a supplemental air quality analysis is included, which determined that the emissions from construction trucks would not result in significant adverse impacts to residences that are located along truck haul routes in Barrio Logan (e.g., Harbor Drive and 28th Street to Interstate 5).
• Global Climate Change: The Errata includes additional information that further substantiates the Draft EIR’s conclusion that the GHG emissions associated with the Proposed Project, which equate to 570 MT CO2e/year, would result in a less than significant impact to Global Climate Change. More specifically, the Errata notes that the Project’s annual emissions are below other adopted or recommended GHG thresholds of significance across the state including 1,100 MT CO2e/year Sacramento Metropolitan Air Quality Management District (SMAQMD) and the Bay Area Air Quality Management District (BAAQMD); and 1,150 MT CO2e/year for the San Luis Obispo County Air Pollution Control District (SLOAPCD). The Errata also identifies the types of activities needed to meet the 2050 GHG reduction target of 80% below 1990 levels, which are also discussed in the May 2014 Update of the California Air Resources Board (ARB) Climate Change Scoping Plan.6 The Errata also cites information from April 2015, in which the California ARB noted that the 40% goal set out in Executive Order B-30-15 is achievable and that ARB was “accelerating cuts to carbon output through 2030 to reduce continued temperature rise, and shifting infrastructure priorities to protect against climate change related impacts in the future.”7 Accordingly, ARB recognizes that California has established a downward GHG emissions trajectory and the updates to the Scoping Plan must allow California to achieve the more stringent 2050 target. Thus, through compliance with updates to the Scoping Plan and regulations independently promulgated or codified as a result of the Scoping Plan, it is reasonable to expect the Project’s emission levels to decline over time.
• Parking: As a result of the additional employment created by the new drydock, the Draft EIR identified the need to provide alternative transportation to address a parking shortage of 57 spaces at project completion. The Draft EIR acknowledged that this could be accomplished by increasing the number of vanpools, providing subsidized trolley passes, or increasing the number of shuttles. The Draft EIR requires BAE to provide evidence to the District on a quarterly basis that demonstrates that a minimum increase of 57-person ridership in alternative transportation has been accomplished.
The response to comments chapter in the Final EIR provides additional information about what BAE has proactively done to address parking issues in the Barrio Logan community. Prior to implementation of the Proposed Drydock Component, BAE began providing bus service to/from the U.S.-Mexico Border on July 1, 2015, in which 50 employees registered for service. On August 6, 2015, BAE entered into a two-year agreement with the District and Ace Parking for 300 parking spaces on top of the Hilton garage (located approximately 1.1 miles from the shipyard), and began providing shuttle service to/from the shipyard. Although the program is new, approximately 150 employees have already started to take advantage of this parking and shuttle service.
BAE will continue to report the number of people utilizing alternative transportation options to the District on a quarterly basis. As part of the Proposed Drydock Component, BAE is required to demonstrate that a minimum 57-person increase in alternative ridership is being accomplished. However, BAE has indicated a willingness to continue to work with the District to explore other arrangements that may help alleviate parking concerns in the Barrio Logan community.
Pursuant to CEQA Guidelines Section 15090, prior to certifying the EIR and approving the project, the Board, as Lead Agency, shall certify that: (1) the Final EIR has been completed in compliance with CEQA; (2) the Final EIR was presented to the Board, and the Board has reviewed and considered the information contained in the Final EIR prior to its approval of the project; and (3) the Final EIR reflects the District’s independent judgment and analysis.
Mitigation, Monitoring and Reporting Program (MMRP)
As concluded in the Draft EIR, the Proposed Project would result in less than significant environmental impacts with mitigation incorporated. All impacts can be mitigated to below a level of significance with various construction- and operation-related mitigation measures. The Proposed Drydock Component requires several construction-related mitigation measures to address impacts associated with biological resources, geology and soils, hazardous materials and hydrology and water quality. Ongoing operation of the new drydock will require mitigation measures to ensure no adverse impacts occur as a result of storing or using hazardous materials and that ongoing water-quality monitoring efforts are coordinated with the District and RWQCB. In addition, BAE Systems will be responsible to provide evidence to the District on a quarterly basis that alternative transportation ridership is accomplished for a minimum 57-persons. Mitigation measures related to geology and soils, hazardous materials, and hydrology and water quality will also be required for removal of the underground cooling tunnels.
All mitigation measures have been prepared in compliance with CEQA Guidelines Section 15097. The MMRP identifies the required mitigation measures, the party responsible for carrying them out, and a monitoring and reporting mechanism. Compliance with the MMRP contained in the Final EIR will be included as a condition of the CDP for the Proposed Drydock Project, and any future lease amendment or CDP for the removal of the cooling tunnels.
Findings of Fact
CEQA requires the District to make written findings of fact for each significant environmental impact identified in the Final EIR (CEQA Guidelines Section 15091). The proposed Findings of Fact are attached to the proposed Board resolution for certification of the Final EIR and adoption of the Findings of Fact and MMRP. The purpose of findings is to restate, systematically, the significant effects of the Proposed Project on the environment and to determine the feasibility of mitigation measures and alternatives in the Final EIR that would avoid or substantially lessen the significant effects. If all significant effects can be reduced to below significance by the application of feasible mitigation measures, the District is not required to adopt findings concerning the alternatives identified in the Final EIR. The findings set forth the reasons, and the evidence in support of, the District’s determinations.
The Proposed Project will not result in significant impacts to: aesthetics, air quality, greenhouse gas emissions, land use and planning, noise, or utilities/service systems. Significant environmental effects which have been mitigated to levels below significance include: biological resources, geology and soils, hazards and hazardous materials, hydrology and water quality, and transportation/traffic. No potentially significant unmitigable impacts were identified. These environmental effects, and the mitigation measures identified to avoid or substantially lessen them, are discussed in detail in the Final EIR.
The Final EIR and the Findings of Fact and MMRP are available for review in the Office of the District Clerk, and were distributed to the Board for its consideration via a Board memo dated November 5, 2015, and were also made available to the Board in the Board Offices (see Attachment G).
(B) Concept Approval
Pursuant to Board Policy No. 357, plans for new tenant development must be presented to the Board for approval if the project is estimated to cost more than $500,000. The Proposed Drydock Component cost is approximately $104 million. Based on staff's review of the concept plans, the Proposed Drydock Component qualifies as a capital investment for a lease term extension. BAE’s current lease with the District expires in 2034, and the TUOP for the neighboring 2-acre land parcel and 4-acre water parcel expires on October 31, 2019. Staff may return to the Board with recommendations for term extension based upon BAE’s recent capital investment in both the Pier 1 and the Pier 4 projects in the near future.
(C) Coastal Development Permit
The Proposed Project site is located in Planning District 4, Tenth Avenue Marine Terminal, which is delineated on Precise Plan Map Figure 13 of the certified Port Master Plan (PMP). The landside area is designated Marine Related Industrial, and the waterside area is designated as Specialized Berthing Industrial. The Proposed Drydock Component will result in a new floating drydock, as well as physical improvements to the shoreline, the existing pier, and two mooring dolphins, all of which would help facilitate ship repair activities. The uses associated with these physical improvements conform to the underlying land use designations and precise plan text, and would serve to facilitate implementation of the certified PMP. Therefore, the Proposed Drydock Component is consistent with the District’s certified PMP.
Pursuant to the District’s CDP Regulations, the new drydock requires issuance of a non-appealable CDP for the portions of the project within the District’s jurisdiction. A copy of the draft CDP is provided as Attachment F to this Agenda Sheet. Special conditions are incorporated into the CDP to ensure project conformance with the Final EIR’s MMRP and related District requirements. A separate CDP will be required to authorize removal of the underground cooling tunnels.
Next Steps and Recommendation
If the Board certificates the Final EIR, adopts the Findings of Fact and MMRP, as well as approves the concept approval and authorizes issuance of a Non-appealable CDP, BAE would begin coordinating with other responsible agencies to acquire the permits and approvals necessary to implement the Proposed Drydock Component.8 Provided the necessary agency approvals are obtained, BAE will begin strengthening and retrofitting the existing shoreline and pier to support dredging to an elevation of −65 feet MLLW. A portion of the dredged material (an estimated 80,000 cubic yards), will be used to create an Eelgrass habitat in the Bay. The new floating drydock is scheduled to arrive in September 2016. Finally, staff expects to return to the Board before the middle part of next year to request approval of BAE Systems real estate agreement(s).
Although the Final EIR has analyzed removing the cooling tunnels, and included mitigation measures that would be necessary to reduce environmental impacts to a less than significant level, this action will require separate project approval and issuance of a separate Non-appealable CDP. Such a Non-appealable CDP may be presented to the Board at a subsequent hearing.
Staff recommends the Board conduct a public hearing and adopt a resolution certifying the Final Environmental Impact Report for the “Pier 1 North Drydock, Associated Real Estate Agreements and Removal of Cooling Tunnels Project,” adopt Findings of Fact, adopt MMRP and direct filing of the Notice of Determination; adopt a resolution granting concept approval to BAE Systems San Diego Ship Repair, Inc. for the Pier 1 North Drydock Project; and adopt a resolution authorizing issuance of a non-appealable Coastal Development Permit for the Pier 1 North Drydock Project.
General Counsel’s Comments:
The General Counsel’s Office has reviewed the agenda sheet and attachments, as presented to it, and approves them as to form and legality.
Environmental Review:
The proposed Board action completes the CEQA process for this project.
Equal Opportunity Program:
Not applicable.
PREPARED BY:
Larry Hofreiter
Senior Redevelopment Planner
Environmental & Land Use Management
Attachment(s):
Attachment A: Project Location Map
Attachment B: Project Site Plan
Attachment C: Drydock Site Plan
Attachment D: Mitigation Sites for Eelgrass and Bay Coverage Impacts
Attachment E: Location of Subsurface Cooling Tunnels
Attachment F: Draft Coastal Development Permit
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1Pursuant to the terms of SDG&E’s former lease and TUOP with the District, SDG&E must remove all structures, buildings, installations, and improvements on the premises, including, without limitation, all underground circulating tunnels, pipelines and conduits.
2On June 9, 2009, the Board approved increasing BAE Systems rent from $546,624 to $798, 884 from December 1, 2007 to November 30, 2008; and to $820,180 from December 1, 2008 to November 30, 2009 with annual increases between two percent (2%) and four percent (4%) for the balance of the term to August 31, 2034.
3Prior to 2007, BAE Systems was known as Southwest Marine Inc.
4The San Diego RWQCB issued Cleanup and Abatement Order No. R9-2012-0024 on March 14, 2012, which required the remediation of San Diego Bay marine sediment along the eastern shore in order restore and protect beneficial uses of the water. As part of its actions on March 14, 2012, the RWQCB certified a Program EIR for the Shipyard Sediment Remediation Project. The District relied on this Program EIR to issue a CDP for activities associated with the RAP. On July 8, 2014, the District adopted an addendum to the Final Program EIR to increase the total dredge volume from 90,800 cubic yards to 105,800 cubic yards and amended its CDP accordingly.
5Please note that the activities associated with the Remedial Action Plan (RAP) were analyzed in a previous Program EIR that was certified by the RWQCB on March 14, 2012, as part of the Shipyard Sediment and Remediation Project
6CARB, First Update, page 32 identifies the type of activities required to achieve the 2050 target which include: energy demand reduction through efficiency and activity changes; large-scale electrification of on-road vehicles, buildings, and industrial machinery; decarbonizing electricity and fuel supplies; and rapid market penetration of efficiency and clean energy technologies that requires significant efforts to deploy and scale markets for the cleanest technologies immediately.
7CARB, Frequently Asked Questions About Executive Order B-30-15: 2030 Carbon Target and Adaptation, p.1, April 2015.
8Responsible agencies include the United States Army Corps of Engineers, United States Environmental Protection Agency, United States Coast Guard, National Marine Fisheries Service, California Coastal Commission, California State Lands Commission, California Department of Fish and Wildlife, San Diego Regional Water Quality Control Board, and the City of San Diego.