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Throughout the past 10 years, several real estate developers, including the John Benjamin Company, have investigated the feasibility of purchasing and redeveloping 326-340 MacArthur Boulevard. Unfortunately, the speculation surrounding environmental contamination on the site, along with the pre~development costs of conducting the appropriate studies to determine the extent, if any, of the contamination, has been a redevelopment deterrent time and time again. The current property owners are a couple who used to reside in the single family home and do not have the financial resources to perform the necessary environmental assessment. In recent months, the John Benjamin Company met with City staff to discuss their renewed interest in purchasing and redeveloping 326-340 MacArthur. As a result of the discussion, staff and the John Benjamin Company were in agreement that redevelopment at 326-340 would continue to be generally unfeasible without Redevelopment Agency assistance to determine the level of contamination, if any, prior to redevelopment of the site. Therefore, in an attempt to facilitate potential redevelopment of 326-340 MacArthur Boulevard, Office of Business Development and Environmental Services staff worked in conjunction with the Regional Water Quality Control Board to establish a scope of work for an environmental assessment which will determine the extent of environmental contamination at 326-340 MacArthur Boulevard. Once such an assessment is completed, either development will be allowed to proceed per City zoning requirements, or a framework for further environmental remediation efforts will be established. It is estimated that a complete environmental assessment of 326-340 MacArthur Boulevard will cost $40,000. As required by the Reimbursement Agreement, the John Benjamin Company will be responsible for obtaining an option to purchase the property and retaining an environmental consultant to conduct the assessment, the scope of which will be pre-approved by Office of Business Development and Environmental Services staff. The John Benjamin Company will be responsible for paying for the up-front costs associated with the assessment; however, per the agreement, it may be reimbursed for approved costs up to a maximum $40,000. Current Redevelopment A1!encv Policy . Chapter 3.20.060 of the City of San Leandro Redevelopment Plan for the West San Leandro/MacArthur Boulevard Redevelopment Proj ect area states that "the Agency may take any actions that it determines are necessary and that are consistent with other state and federal laws to remedy or remove a release of hazardous substances on, under, or from property within the project area whether Agency owns that property or not". Previous Redevelopment A!!encv Action(s) N/A City CounciJJRedevelopment A!!encv Committee Review and Action The Business and Housing Development Committee received an update on this item on Thursday, February 8, 2007 and were in general agreement that Agency assistance may help bring a development project forward on the subject site. Applicable General Plan Policy . Policy 7.06 - Adaptive Re-use - Encourage private investment in vacant or underutilized industrial and commercial real estate to adapt such property to changing economic needs. G:\DEP1\Office of Business Development\Files RDA \ WSL-MacArthur Area \326-340 MacArthur\Staff Report.RDA.Final.doc