Initial reponse to the Oakland Post

February 20, 2014

 

Paul Cobb, Publisher

The Oakland Post

405 14th Street, Suite 1215

Oakland, CA 94612

 

 

Re: The Oakland Post article titled “Tagami Failed to Make Payments on Rotunda Partners Development Loan” (Weekly Edition Feb. 12-18, 2014).

 

 

 

Dear Mr. Cobb:

 

In the article referenced above, writer Ashley Chambers repeats many inaccurate assertions, which could have easily been remedied by even the most cursory fact checking.

 

The article’s headline claims that Rotunda Partners has not made payments on the loan from the City of Oakland.  Wrong — Rotunda Partners has made each payment on time.

 

The article repeated a councilmember’s allegation that the company is currently technically in default.  Wrong – Rotunda Partners has made each payment on time and of course, is NOT in default.

 

The article references “some level of penalty for failure to perform.”  Again, this makes no sense since Rotunda Partners has made all payments on time.

 

The article asserts that the Rotunda documents have not been made public.  Wrong – All Rotunda documents are public and available.

 

The article suggests that Rotunda Partners is Phil Tagami’s company.  Mostly Wrong – Mr. Tagami is one of more than a dozen investor/partners.

 

The article prints Mr. Gene Hazzard’s assertion that “[the loan]is fraud, this is a gift of public land.” The loan was neither fraud nor a gift of public land.  Rotunda Partners purchased the property in partnership with the City of Oakland. 

 

The City of Oakland was both a lender and remains an equity partner.  If the property were sold at today’s appraised value, the City of Oakland would have its loan paid in full, and in addition, earn over $5,000,000 as its share of equity.  Thus, the City’s loan/equity partnership with Rotunda Partners is actually one of the best real estate deals the City has ever made.

 

In the future, please make an effort to check facts before published inaccurate articles about Mr. Tagami and Rotunda Partners. 

 

And regarding our payments, please check with Oakland’s Community and Economic Development Agency before claiming inaccurately that Rotunda Partners has failed to make timely payments.

 

 

 

 

 

 

 

 

 

 

 

Mark Moss

Managing Member, Rotunda Partners II, LLC

 

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CITY AND AGENCY RESOLUTIONS AUTHORIZING A DISPOSITION AND DEVELOPMENT AGREEMENT WITH ROTUNDA GARAGE, LP FOR THE DEVELOPMENT OF A PARKING GARAGE STRUCTURE

CITY OF OAKLAND

COUNCIL/ AGENCY AGENDA REPORT

 

TO:             Office of the City Manager/ Agency Administrator ATTN:                  Deborah Edgerly

FROM:         Community and Economic Development Agency DATE:                  June 8, 2004

 

RE: CITY AND AGENCY RESOLUTIONS AUTHORIZING A DISPOSITION AND DEVELOPMENT AGREEMENT WITH ROTUNDA GARAGE, LP FOR THE DEVELOPMENT OF A PARKING GARAGE STRUCTURE BETWEEN 16TH AND 17TH STREETS AND SAN PABLO AVENUE, OAKLAND; THAT INCLUDES SELLING THREE PARCELS OF LAND FOR $99 EACH AND LEASING A FOURTH PARCEL FOR $1.00 PER YEAR FOR 20 YEARS; AND ASSIGNING TO ROTUNDA GARAGE, LP, $4 MILLION PLUS INTEREST OF A $12 MILLION PROMISSORY NOTE PAYABLE TO THE REDEVELOPMENT AGENCY BY THE ROTUNDA BUILDING DEVELOPER, AND FURTHER REQUIRING AGENCY TO PAY THE NET PROPERTY TAX INCREMENT GENERATED BY THE NEW PARKING GARAGE FOR A PERIOD OF 10 YEARS TO ROTUNDA GARAGE, LP

 

 

 

                              

 

SUMMARY

Resolutions have been prepared authorizing the Redevelopment Agency to sell and lease to Rotunda Parking, LP (“Developer”) Agency-owned real property located on the block bounded by 16th Street, 17th Street and San Pablo Avenue, (Exhibit A) and authorizing the Agency Administrator to enter into a Disposition and Development Agreement (“DDA”) with Developer for the 17th Street Garage Project (see Exhibit B, Term Sheet for the full details of the material terms of the DDA).  The Agency resolution will also authorize the transfer of one third of the

$12 million Note from the Rotunda Building, and rebate of the net tax increment, after statutory pass throughs, ERAF payments to the state and housing set-a-sides are made, for ten years. The property will be sub-divided into four parcels and Developer will purchase three parcels for a purchase price of $99 each. Parcel 1 (23,445 square feet) would be used for the 320+ space parking garage. Parcel 2 (3,723 square feet) and Parcel 3 (2,775 square feet) would  be developed as retail or other commercial uses within 5 years or the Agency would have the right to take them back at the Developer’s cost for site demolition and preparation. The developer will be granted a permanent vehicular and pedestrian easement and a lease for up to 15 years for $1 per year on Parcel 4 (see Exhibit A, Parcel Map). The Agency will be allowed to sell Parcel 4 for a development in the future and the Developer will have the right to make a competing offer. Rotunda Parking, LP, is a new limited liability corporation to be set up for the development of the garage with Phil Tagami and Leonard Epstein as general partners and Rotunda Partners I as the limited partner. Messers Tagami and Epstein are principles in Rotunda Partners I; Rotunda Partners I is the general partner in the partnership that owns the Rotunda Building.

 

 

 

FISCAL IMPACTS

Approval of the DDA and sale of the 17th Street Garage site will cost the Agency $2.7 million in land write downs (the Agency paid approximately $1.8 million for the site, but the current fair market value is now $2.7 million), $4 million in principal and $600,000 in interest on the Rotunda Note and approximately $380,000 in tax increment rebates over ten years (the rebate for the first year, FY 2006-07, is estimated to be $35,000). When discounted by 4.85%, the federal long term cost of funds, the current value of the Rotunda Note, including interest, is $2.2 million and $270,000 for the tax increment rebates, for a total of $2.47 million. When discounted by 8.25%, the Developer’s required return, the current value of the note, interest, and rebate is

$1.513 million. This is approximately 25% of the developer’s estimated costs for the garage (the Project will cost approximately $6.0 million, including $5.0 million to construct the garage). Approval of the DDA will free up approximately $4 million which would otherwise have been needed to fund part of the Agency-owned garage. It is anticipated that $3.8 million of this will be reallocated to fund the proposed Uptown lease disposition and development agreement. This reallocation will eliminate the need for a parking revenue bond which would reduce the ability of the Public Works department to fund Traffic Engineering staff, and transfers this amount of Uptown funding to the Agency rather than the City.

The City will receive approximately 70% more in parking tax revenue from the garage than it now receives from the surface lot presently on the site. This is approximately $40,000 per year in additional General Fund revenue beginning in FY 2006-07. The City will also receive its share of property tax which is not rebated to the project, about $5000 per year to start.

Other options for building a public garage on the site have even greater fiscal impacts. For the Agency to develop a larger garage (525 spaces instead of 320), the Agency would have to put in the land, $2.7 million value, an additional $4.2 million in cash and $10.0 million in debt. The debt would require a guarantee from the City or Parking Authority, which could have fiscal impacts in the future if the garage cannot cover debt service. The Agency-owned garage would have major short-term costs to the Agency and long-term benefits, including free and clear ownership of the garage after 30 years.

 

BACKGROUND

 

History of Site

In June 1998 the Agency entered into a disposition and development agreement with Rotunda Partners I, the limited partner of the Developer, for the Rotunda Building. The Rotunda Building DDA included a $12 million loan, profit sharing with the Agency of 50% of all sales proceeds over $38 million and required that the City/Agency provide parking for the Rotunda Building tenants and customers. Accordingly, the City provides 50 monthly parking spaces plus short term visitor parking in the Daziel Building for the Rotunda Building tenants and customers, and the Agency leases the proposed development site to the Rotunda Building developer for its tenants’ parking. The Agency receives all net revenues from the surface parking lot. It was anticipated that the Agency would build or have another entity build a garage on the current development site primarily for use by Rotunda Building tenants and visitors. The Agency pledged 220 spaces in any new garage to the Rotunda Building. The Agency has pursued the development of this garage for several years.

 

 

 

The Agency issued Requests for Proposals for the garage twice, in 1998 and 1999, and negotiated with two developers, Allright Parking and Aegis Realty Partners. Both times staff could not negotiate a deal that was support by staff or the Agency Board. Instead the Agency Board authorized staff to pursue development of an Agency-owned garage. The Agency issued a Request for Proposals for a design project management team for the garage, hired a team made up of Aegis Realty Partners, Komorous-Towey Architects, and Watry Design Group and paid

$750,000 to complete the design. The Agency concurrently pursued a $10 million garage construction loan from the State Infrastructure Bank. It should be noted that in order for the garage revenue to cover debt service the loan would have needed to be amortized over 30 years, 14 years longer than the life of the Central District Plan Area. As a result, a loan guarantee from the City General Fund or Parking Authority would have been necessary, thereby potentially putting the general fund at risk of covering any debt service shortfalls.

 

Current Proposal

At about the time that Aegis completed the construction documents, Phil Tagami and Leonard Epstein submitted an unsolicited proposal to develop the garage. Messrs. Tagami and Epstein propose to form Rotunda Garage, LP (“Developer”) to construct a 320 space garage (the “Project”). Rather than bidding the project immediately and selecting a contractor, the Agency asked the Developer to refine its proposal to determine if it provided a viable alternative to a pledge of the General Fund. The Developer was always interested in owning the garage, which is tied to their office building and will enhance the buildings value even more if it is under control of the same owner, but pulled out of the 1998/1999 Requests for Proposals while they were concentrating on completion of the Rotunda Building. The Developer put in a proposal for the Request for Proposals for design and project management of the garage but lost out to Aegis for the contract. A comparison of the various proposals that the Agency has considered, along with the current proposal are included as Exhibit C, Comparison of Proposals.

After completing negotiations with the Developer, staff is bringing for approval a DDA with the following key terms (for the complete terms of the DDA, see Exhibit B, Term Sheet):

 

1)                  The Agency will divide the Site into four parcels as reflected on the attached Exhibit A, Parcel Map: Parcel 1- the garage site; Parcels 2 and 3- retail or commercial sites; and Parcel 4- a remainder site on 16th Street with garage access easements and reserved for future development by an Agency-selected developer.

2)                  The Developer will purchase Parcels 1, 2 and 3 for $99, and lease Parcel 4 for

$1/year until the parcel is ready for development by Developer or another developer in the future. All future development on Parcels 2, 3 and 4 would require separate Agency approval. (The Developer would retain an auto/pedestrian easement  for the garage over Parcel 4);

3)                  The Agency would assign to the Developer a $4 million (plus interest on this amount) of the $12 million promissory note, with a NPV of $2.2 million, due from repayment of a loan the Agency made to the developer of the Rotunda Building. [In 1999, when the Agency sold the Rotunda Building to Rotunda Partners II, LLC, of which the proposed garage Developer was the  general partner, the Agency loaned Rotunda Partners $12 million. Rotunda Partners executed a promissory note (secured by a second deed of trust on the building)

 

 

 

that requires it to pay the Agency accrued interest at 3% per annum starting in 2014 and repay the principle in 2019.]

4)                  The Agency would rebate to the Developer the net tax increment generated by the project (net of required pass-throughs for affordable housing, ERAF, etc.) for 10 years; and,

 

5)                  Developer will take all risk that the garage revenue will cover operating costs and debt service.

The Developer will build a garage with at least 320 parking spaces on Parcel 1. The Developer will have 18 months from execution of the DDA to complete the garage design, obtain approvals, and complete construction. The Developer’s initial schematic design is attached hereto as Exhibit D. The Agency will give the Developer five years to develop retail or commercial uses on Parcels 2 and 3. If the Developer does not develop Parcels 2 and 3 within five years, the Agency will have the option to reacquire the parcels by reimbursing the Developer for its reasonable demolition, landscape and hardscape costs. Until the Agency executes its option, the Developer will landscape and hardscape (e.g., treewells and scored concrete with the same specifications as Kahn’s Alley and Broadway for the Rotunda Building) and maintain the parcels. The Developer will grade, pave, stripe, secure, landscape, and maintain Parcel 4 until it is developed. The Agency can select a developer and proceed with development on Parcel 4 at any time after the garage is completed. Developer will have the option to make a comparable offer on the site when the Agency is ready for development. The Agency requested that the Developer provide a completion bond. The Developer hesitated at the cost and proposed that the budget include a 10% contingency at start of construction and the Developer provide a non- revocable line of credit to the Agency equal to 15% of the construction costs, approximately

$750,000.

 

KEY ISSUES AND IMPACTS

 

Staff believes that the proposed DDA substantially benefits the Agency. By permitting a private developer to construct the garage, the Agency would not have to commit $4.2 million in cash and borrow $10 million from the State Infrastructure Bank for the garage construction. The State loan would have to be backed by the City General Fund or City Parking Authority (from funds that presently go to the Multipurpose Reserve Fund) that would repay the loan from the parking

revenues from other garages should the 17th Street garage not produce enough revenue to cover its operating costs and the loan payments. Under the Agency-owned alternative, the City would be risking revenue that presently funds the Public Works Agency – Traffic Division, and that would need to be offset with allocations from the General Fund. Private development of the garage by the Developer would eliminate this risk.

 

The Agency has already invested a substantial sum in the garage project. Land acquisition costs have totaled $1.8 million. Design, planning and project management costs have totaled $1.2 million. If the Agency were to construct the garage, it would need to invest an additional $4.2 million in cash, along with a $10 million State loan to finance construction, for a total of $17.2 million. The Developer’s proposal relieves the Agency of investing any further cash at this time, and frees up Agency funding for other projects.

 

 

 

The Agency’s garage design is superior to, larger than, and more expensive than the garage the Developer proposes. However, staff believes that the revised schematic design will work if design modifications based on Planning’s suggestions are incorporated into the future plans.

 

Including the project property tax reimbursement as income, the garage project has been estimated to provide an annual return of $376,200 or 6.27%. A normal market-rate investment would have a $495,000 or 8.25% annual return. The difference between the lower return for the Garage proposal compared to a normal 8.25% return over the first 16 years, the term of the Rotunda loan, is $2,999,390. When the loss is compounded over 16 years at an 8.25% interest rate, the loss is $5,155,123. In addition, the appreciation on the Garage would be lower than a normal investment by approximately $3,277,105 at the end of this term. An equivalent investment at a normal market return of 8.25% would yield approximately $8.4 million more than the proposed garage investment. The Developer is gambling on the long-term return, and more importantly the synergy that will benefit their investment in the Rotunda Building. Given this analysis, the $4 million write down of the Rotunda loan seems like a reasonable subsidy for creating a privately-owned, public-access garage. This analysis reflects that required prevailing wages will be paid and Rotunda Garage, LP has further stated that they would commit to using union labor.

The reuse appraisal of the site, i.e. an appraisal of the site with the Redevelopment Agency’s requirements attached to property, will ?????? [add language per report from Keyser Marston]. Even with a substantially below market loan from the State Infrastructure Bank, the Agency’s development of the garage requires the land (about $1.8 million in cost to the Agency) and completed design and planning ($1.2 million), plus $4.1 million in additional Agency funds. The Agency would only receive a 3% return after stabilized occupancy. This is far below the margin for which any developer would invest in the project.

To put the previous paragraphs into concise terms, Rotunda Garage, LP needs the project to generate an additional $8.4 million in revenue and future sales value for the investment to meet normal developer return requirements; and Rotunda Garage, LP is asking for the Agency to subsidize the project with $5.1 million over 15 years to partially meet this need. Even with the Agency subsidy, the project does not meet normal developer return requirements. The only reason Rotunda Garage, LP is willing to develop the project under this scenario is so that they can control parking for the Rotunda Building and increase the long term value of their other investment. Since the Agency could share 50:50 with Rotunda Partners all sales proceeds in excess of $38 million from the Rotunda Building, the Agency will directly benefit from any increased value in the Rotunda Building.

 

Some additional advantages of the Developer’s proposal to the Agency are:

1)                  It satisfies the Agency’s contractual obligations under the parking agreements under the Rotunda Building DDA (its parking lease) and to the Rotunda Building tenants and customers.

2)                  The newly built garage will provide mitigation and parking for tenants in the adjacent Adcock Joiner residential building, the Fox theater, Ice Skating rink and the Uptown Project.

 

 

 

3)                  The reduced scale of the Developer’s proposed garage will lower the impact on views and natural light for the tenants at the adjacent Adcock Joiner Apartments, compared to the larger garage the Agency planned

4)                  The City/Redevelopment Agency/Parking Authority can also use the financial plans and the proposed State Infrastructure Bank loan to develop another downtown parking facility, once garage revenues are improved through the current RFP manager selection process.

5)                  Central District redevelopment plan terminates in 2009. By having the Developer construct the garage, the Agency can reallocate funds to Uptown and other important projects that need to be completed before the plan expires.

 

ALTERNATIVES

 

Three alternatives for the garage project are: (1) the City, Redevelopment Agency and Parking Authority can develop a publicly owned garage on the site as originally proposed; (2) the Agency Board can direct staff to issue a new Request for Proposals to developers for a privately developed garage on the site; or (3) the Agency can keep the existing parking leases with Rotunda Partners on the 16th Street surface lot and in the Dalziel Building and wait to build the garage until the effects of the Uptown project change the financial feasibility for parking. Rotunda Building DDA does not require the Agency to build a parking garage, but only to provide parking for the Rotunda Building in any garage actually built. Unless and until such a garage is built Agency must continue to provide the surface parking lot and parking spaces in the Dalziel Garage.

 

Alternative 1: Agency Developed Garage – If the City, Redevelopment Agency and Parking Authority develop the garage, the Agency will have to contribute the land and other expenditures already made (relocation, environmental impact report, design, etc.), about $3 million, plus $4.2 million in additional costs. The Parking Authority will also have to borrow $10 million from the State Infrastructure Bank by pledging revenue from City owned parking facilities. The City will be risking revenue that presently funds the Public Works Agency – Traffic Division, although initial estimates are that the garage would be able to service the $10 million loan and no City funds would be required, parking rates have been declining and this conclusion is uncertain. The long term benefits of this alternative are (1) surplus revenue from publicly owned facility; (2) increased parking tax for the City from 525 spaces (as the Agency originally planned) instead of 320 spaces proposed by the Developer; (3) ownership of a fully capitalized garage in 30 years;

(4) no requirement to assign to the Developer $4 million of Rotunda Building loan repayment proceeds. The disadvantage of this option is that if the Uptown project does not move forward, and approximately 1,250 public parking spaces remain in the immediate area, the demand for 525 new parking spaces may not exist and the financial assumptions would be too aggressive. This alternative costs the Agency $14 million more initially compared to the Developers proposal, and there is risk that the City will have to make up any State Bank loan payment deficiencies. In the long run the costs of the $10 million loan should be off-set by garage revenue.

 

Alternative 2: Issue a New Request for Proposals – Although issuing a new RFP may bring more offers to the Agency/City, there is no guarantee the City/Agency would receive any improved

 

 

 

offers, since the Developer has the greatest incentive to develop the site. Prior negotiations from proposed developers pursuant to RFPs for this project were not better, and in many cases, worse, than the Developer’s current proposal.. One of the most important points of the proposal by the Developer is that the subsidy in the project is a reduction in a future payment to the Agency ($120,000 in interest per year from 2014-2018 plus $4 million in 2019) that has a Net Present Value of $2,199,733. That is to say that the Agency’s subsidy is from future funds that the Agency will not receive for 10 to 15 years; and these future funds are worth $2.20 million to the Agency today. The one benefit of a new RFP, is that it could generate better proposals for the Agency and would allow other property owners in the area to develop/control parking required for their properties. The disadvantages of the option are that the project has already been delayed by continued changes in the development scenarios and two RFPs have been issued. In order to have the garage completed prior to demolition of the parking on the Uptown sites, it will be difficult to recruit a new developer for the project through a new RFP process. Previous RFPs have not produced a substantially better offer, and would require substantial time and staff work. In order to have the garage completed prior to demolition of the parking on the Uptown sites, it will be difficult to recruit a new developer for the project.

 

Alternative 3: Postpone the Garage Development and Maintain Existing Lot and Parking License for the Rotunda Building Tenants – By maintaining the existing parking arrangement for the lot at 17th Street and San Pablo, the Agency would continue to receive a small amount of revenue from the surface lot and will not have to make any significant capital expenditures. The benefits of this option are that the Agency will continue to receive a small amount of net revenue from the surface lot and the Agency will receive the benefit of any increase in parking rates that result from the removal of approximately 1,250 public parking spaces if the Uptown project proceeds, if the garage is developed after the Uptown project. Moreover, activities generated by the Uptown development will increase demand, and supply will decrease, which will result in higher prices for the remaining parking spaces. The disadvantages of this option are that by delaying the garage development, the Agency will not be supporting the Rotunda’s leasing e fforts – which could affect the Agency’s long term financial interest in the Rotunda, the surface lot will remain an underutilization of land, no off-setting parking mitigation for Uptown will be built, and the Ice Rink will not have nearby parking.

 

SUSTAINABLE OPPORTUNITIES

 

Economic

The project will generate additional parking tax revenue for the City’s General Fund beginning in FY 2006-07 and increase the Redevelopment Agency investment value for the Rotunda Building.

 

Environmental

The developer and design consultants will work with the Agency and the Mayor’s Sustainability Programs staff to investigate the feasibility of incorporating green building attributes into this development, including: (1) energy efficiency; (2) water efficiency; (3) recycled, local and less materials and resources; and (4) improved indoor environmental quality.

 

 

 

Social Equity

The project will create jobs for low-income Oakland residents that pay the City’s mandated “Living Wage,” and will provide free after hours parking to the very low-income residents of the neighboring Adcock-Joyner Building.

 

DISABILITY AND SENIOR CITIZEN ACCESS

 

The garage and all developments on the site are new construction and will be required to comply with state and federal accessibility requirements, including Federal ADA Accessibility Guidelines and the State of California’s Title 24 Accessibility regulations.

 

ACTION REQUESTED OF THE COUNCIL AND AGENCY MEMBERS

 

Staff recommends that the City and Agency approve the attached resolutions that authorize the Agency Administrator to negotiate and execute a disposition and development agreement with Rotunda Garage, LP for the development of a parking garage structure between 16th and 17th streets and San Pablo Avenue, Oakland; including selling three parcels of land for $99 each and leasing a fourth parcel for $1.00 per year for 20 years; and assigning to Rotunda Garage, LP, $4 million plus interest from the $12 million promissory note payable to the  Redevelopment Agency by the Rotunda Building developer, and further requiring Agency to pay to the net tax increment generated by the new parking garage for a period of 10 years to Rotunda Garage, LP.

 

 

 

Respectfully submitted,

 

 

 

 

      

Dan Vanderpriem, Director of Redevelopment,

Economic Development, and Housing and Community Development

 

Prepared by: Patrick Lane

Redevelopment Manager

 

 

APPROVED FOR FORWARDING TO THE COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE

 

 

 

 

      

 

OFFICE OF THE CITY MANAGER/ AGENCY ADMINISTRATOR

 

EXHIBIT A PARCEL MAP

 

 

EXHIBIT B TERM SHEET

17th Street & San Pablo Avenue Garage

 

The following terms will be incorporated into a Disposition and Development Agreement for the 17th Street & San Pablo Garage (“DDA”) between the Redevelopment Agency of the City of Oakland and Rotunda Parking, LP, a new limited liability corporation to be set up for the development of the garage with Phil Tagami and Leonard Epstein as general partners and Rotunda Partners I as the limited partner. These terms will be first taken to the City Council/Redevelopment Agency Board in closed session to confirm that the negotiations and

terms are acceptable, and to get directions for any additional requirements. Once the Council/Board confirms the terms, the full DDA will be negotiated and then the DDA will be taken to the Council/Board for approval.

 

1.                  Scope

 

1.1.            The Agency will subdivide the site into four parcels as shown in Exhibit “A”. Rotunda Garage will purchase the garage/retail site (parcels 1,2,& 3) and have an, pedestrian and vehicular entry/exit easement on parcel 4.

 

1.2.            Rotunda Garage will lease parcel 4 for $1 per year, to be used as a surface parking lot until such time a development project is approved by the Agency.

 

1.3.            Parcel 2 will be hardscaped and landscaped to the same specification as Kahn’s Alley and Broadway for the Rotunda Building, and professionally maintained until such time as it is developed for retail uses. Rotunda Garage shall cooperate with the Agency to recruit retail use(s) for parcel 2. If at the end of a five year period, commencing from the date of completion of the parking garage, parcel 2 is not developed for retail or other agreed to use(s), then this portion of the site shall be transferred to the agency in exchange for reimbursement of all reasonable demolition on Parcel 2 of the building at 1630 San Pablo, and depreciated improvement costs incurred by Rotunda Partners.

 

1.4.            Parcel 3 will be at a minimum hardscaped and professionally maintained until such time as it is developed for retail or Public Works uses. In all cases this site will be secured to prevent public/transient access to the alley.

 

1.5.            Rotunda Garage , shall design, construct and operate the following improvements on parcel 1, 2,3& 4:

 

1.5.1.      Rotunda  Garage  will  receive  all  parcels  in  an  “as  is”  condition  and demolish the existing building at 1630 San Pablo.

 

1.5.2.      Rotunda Garage will build a 320 plus space parking garage on parcel 1.

 

 

 

1.5.3 .    Rotunda Garage will construct surface parking on parcel 4.

 

1.5.4. Rotunda Garage will cooperate with the Agency to develop retail/or other use on parcel 2 and shall at a minimum construct and maintain minimal hardscape and landscape improvements on this portion of the property prior to retail development. As an alternative, if financially feasible, the portion existing structure at 1630 San Pablo not on the garage parcel shall be renovated for retail use and permanent landscaping installed within one year of completion of the garage, .

 

Collectively, these improvements will be referred to as the 17th & San Pablo Garage Project.

 

2.                  Financial

 

2.1.            Agency will sell the land to Rotunda Partners for $99 for Parcels 1, 2, and 3.

 

2.2.            The tax increments generated by the project, net of all pass throughs to the County, ERAF, Housing, etc. will be rebated to Rotunda Garage for up to 10 years after the project receives a temporary certificate of occupancy.

 

2.3.            Agency will assign to Rotunda Garage a note for $4 million in principle plus interest from the $12 million loan made by the Agency to Rotunda Partners II on the Rotunda Building.

 

3.                  Design and Construction

 

3.1.            Within 18 months of execution of the DDA, Rotunda Garage will complete the design, obtain approvals, and initiate construction of a 320+ car garage, incorporating design comments made by Claudia Cappio consistent with the design attached as Exhibit D, Schematic Design.

 

3.2.            The surface lot on 16th Street will be graded, paved, striped, secured, landscaped, and made ready to accept parked autos at Rotunda Garage sole cost.

 

4.                  Garage Operation

 

4.1.            The garage will be operated as a public parking garage that is available to members of the public on a first come, first served basis.

 

4.2.            At least one hundred- (100) parking spaces are available at all times the garage is open for transient (hourly or daily) parkers.

 

4.3.            The garage will be open for transient parking from 8 a.m. to 6 p.m.

 

4.4.            Parking will be made available outside normal business hours for patrons and employees of the Oakland Ice Center.  Developer agrees to make best efforts to

 

 

 

investigate and use technology that would enable Oakland Ice Center patrons and employees to use electronic access card (sometimes known as “proximity cards”) to enable them to access the garage outside normal business hours.

 

4.5.            Parking will be made available outside normal business hours for members of the public on a basis that will permit Developer to recover its cost of making such parking available.

 

5.                  General Provisions

 

5.1.            The Agency will continue to provide parking spaces in the Dalziel building (50 monthly spaces) and on the surface lot until the start of construction on the garage. At the start of construction on the garage, the Agency will provide an additional 50 monthly spaces in the Dalziel building at the fair market price (100

spaces total), plus provide short term validated parking (2 hours maximum) for visitors to the Rotunda. At the completion of the 17th Street and San Pablo Garage, the Agency will have no parking obligation to the Rotunda Partners (I, II or III).

 

5.2.            Rotunda Garage will grant the Adcock Joiner tenants use of (10) spaces on the parcel 4 surface lot or parcel 1 garage between the hours of 6 pm and 8 am, if requested,

 

5.3.            Rotunda Garage will continue to operate the parking lot on the site under the existing Parking Lease (Surface Lot) until the DDA requirements prior to construction are met. These requirements will include: evidence of financing, land use entitlements, building permits, construction contract, etc. Once these requirements are met, the Agency will sell the land.

 

5.4.            If and only if the parking garage is offered for sale by the developer during the next 16 years the agency shall have a right to purchase it at an 8.25% cap rate.

 

5.5.            Once the 17th Street Garage is completed, the City and Agency will no longer be required to provide parking to the Rotunda Building.

 

 

EXHIBIT C COMPARISON OF PROPOSALS

 

 

Allright Parking   *

Aegis **

Agency Owned +

Rotunda Garage   ++

 

 

 

 

 

Parking Spaces

500

500

525 spaces

320 spaces

Retail

10,000 square feet

 

 

Differed (separate project)

 

 

 

 

 

Land Subsidy

$1.8 million

$1.8 million

$1.8 million

$1.8 million

Financial Assistance

$5.5 million capital investment

Rate guarantee for permanent loan, no more than 7.5% interest

$4.2 million cash from the Redevelopment   Agency

Assign $4 million Note plus future interest

 

 

Agency to lease 200 spaces for $265/month

$10.0 million loan from the State Infrastructure   Bank

Rebate the net tax increment   for 10 years

 

 

 

$1.2 million design, project management,   planning, and EIR costs   that are only marginally applicable to other project

 

 

*    Allright Parking’s proposal was for the Agency to own the garage and Allright to lease the garage.  Allright would prepay the lease for 20 years for $3,600,000, and make annual payments equal to 35% of the net revenue over $1,050,000. According to Allright’s operating proforma the Agency would not receive a payment from the net revenue until the tenth year and only receive

$685,000 in payments over the 20 year lease.  The Agency would pay for $5.5 million in capital costs not covered by the lease prepayment.  The Agency would own the garage free and clear after 20 years.

**  Lease of land at $1.00 per year plus additional rent equal to a 5% return on the Agency’s costs plus bonus rents of 67% of remaining revenue.  There would be no additional or bonus rents for several years according to Aegis’ proforma.  The Agency would lease of 200 parking spaces at the above market price of $265/month.  With current monthly rates at $140, this would require a subsidy of up to $125/month*12months*200 spaces or $300,000 per year.

+    The total Agency costs for the Agency-owned option would be $17.2 million, including $14.2 million in additional equity and debt needed to complete the project.  The Agency would own the garage free and clear after 30 years and would get net yearly revenue.

++ $2.2 million net present value for assigning 1/3 of $12 million Rotunda Note and interest, rebate approximately $380,000 in property taxes over 10 years, and sell three parcels for $297 and lease a fourth parcel for $1 per year.

Item: CED Committee June 8, 2004

 

EXHUIBIT D SCHEMATIC DESIGN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Item:               CED Committee June 8, 2004

CCIG Response to Oakland Works

May 7, 2013

BY ELECTRONIC MAIL AND HAND DELIVERY

Honorable Rob Bonta
Mr. Andre Boutros
Mr. James C. Ghielmetti
Honorable Loni Hancock
Honorable Rebecca Kaplan
Honorable Patricia Kernighan
Honorable Lynette McElhany
Mayor Jean Quan
Honorable Larry Reid
Mr. Douglas Remedios
Honorable Nancy Skinner

Re: Letter from OaklandWORKS Dated April 26, 2013 regarding CTC Funding Allocation for the Oakland Army Base Redevelopment Project

Ladies and Gentlemen:

CCIG Oakland Global LLC, a member of Prologis/CCIG Oakland Global LLC
(“Developer”), the developer for the City of Oakland’s Army Base Redevelopment Project (“Project”), submits this response to the letter dated April 26, 2013 from OaklandWORKS asserting the need for additional economic review and environmental mitigation planning for the Project.

As an initial matter, we note that the author of the OaklandWORKS letter, Brian Beveridge, submitted a very similar letter to the Federal Highway Administration (“FHWA”) on January 29, 2013 in connection with the City’s receipt of federal TIGER II Grant funds for the Project. There, Mr. Beveridge sent the letter on behalf of a different group, the West Oakland Environmental Indicators Project (“WOEIP”). After reviewing the WOEIP letter and a detailed response by the City, the FHWA rejected Mr. Beveridge’s assertions on all issues, including his allegations regarding financial mismanagement of the Project and an insufficient opportunity for public participation. Copies of that correspondence, including the FHWA’s response dated March 20, 2013, are attached as Exhibit 1.

By its letter dated April 26, OaklandWORKS seeks a “full and comprehensive public reckoning” of financial and environmental mitigation planning for the Project with the stated purpose of “building a consensus of support” for the Project within the community.

The OaklandWORKS letter, however, misstates key facts and creates numerous false impressions. Below, we provide some important background on the planning process for the Project and address each of Mr. Beveridge’s issues, in turn.

Background
In reviewing the OaklandWORKS letter, it is important to appreciate the numerous
approvals and agreements that have established the mitigation required for, and the public and community benefits to be provided by the Project, as well as the negotiations over many years, with multiple public and private stakeholders, that led to their adoption.  Among other planning documents, the Project is subject to a Master Plan (Base Reuse Plan), a Lease Disposition and Development Agreement (which includes a Community Benefits Package) between the City and the Developer (“LDDA”) and a Cooperation Agreement, which collectively exceed the requirements of applicable laws and provide an unprecedented benefit package to the Oakland community. This package was negotiated among multiple stakeholders, over two years, and, in the absence of unlimited funds, necessarily balances the interest of those stakeholders. The participation, cooperation and agreement of these many stakeholders in the overall mitigation and benefits package are evidenced by their respective signatures on the Cooperation Agreement executed concurrently with the approval of the other documents. This agreement plainly documents the important and hard-won “consensus of support” sought by OaklandWORKS.  Significantly, the signatories to the Cooperation Agreement include Mr. Beveridge, the author of the OaklandWORKS letter, in his role as Co-Director of the WOEIP. A copy of the Cooperation Agreement is attached as Exhibit 2.

Mr. Beveridge and OaklandWORKS had the opportunity to participate in each of the above processes and, as explained below, will have the ability to continue their participation through the City’s public participation process as the Project moves forward.

Project Funding
The OaklandWORKS letter raises two issues related to the project funding: (1) the ability of California Capital & Investment, Inc. (“CCIG”) to deliver the project on-time and on budget (specifically referencing an audit of the Fox Theater project on which the California Capital Group (an affiliate of CCIG, “CCG”) served as the City’s project manager) and (2) concern over the City’s capacity to take on additional public debt to complete the Project.

Two portions of the Projects will be funded in part by the requested Trade Corridor Improvement Fund (“TCIF”) grant: (a) the City’s construction of approximately $247 million in new public infrastructure improvements (streets, utilities, wharf and rail) necessary for the development of the City’s and the Port’s respective portions of the former Oakland Army Base property (the “City Project”) and (b) the Port’s construction of Phase 1 of the new port rail terminal that will serve development to be located on the City and Port properties (the “Port Project”). While the City Project and the Port Project are the subject of the same Project Baseline Agreement, they are the subject of two different funding allocations. The California Transportation Commission is set to make its decision on the allocation for the City Project on May 7, 2013.

The development of the infrastructure included in the City Project will permit the development of approximately 1,000,000 square feet of rail-served trade and logistics facilities, a redeveloped bulk commodity wharf, new rail service, and two recycling facility sub totaling 200,000 square feet and additional 14+ acres of ancillary maritime services by a third party, all to be located on the City’s portion of the former Oakland Army Base property. The trade and logistics uses , wharf and specific rail improvements are the subject of the LDDA between the City and the Developer and meet the intent and spirit of the TCIF program.

It should be understood that the on-time and on-budget delivery of the City project will be facilitated by the oversight of the City; the skills and experience of CCIG and the joint venture contractor formed by Turner Construction, Top Grade Construction and Flat Iron Construction (the “Contractor JV”); and the contracting structure established by the LDDA. The LDDA requires the City to retain CCIG as its project construction manager for the development of the City Project and for CCIG, in turn, to enter into a design build contract with the Contractor JV, which contract includes a guaranteed maximum price to be approved by the City prior to the commencement of construction and which will be based on approximately 65% construction documents. CCIG and its principals and affiliates have an established track record of facilitating the delivery of private and public projects and the contractors involved in the Contractor JV have a vast amount of experience with respect to the delivery of public infrastructure projects such as the City Project. The parties involved believe that this G-Max structure of the contract is the best method to establish price certainty and that the design-build structure minimizes the opportunity for delay in project delivery.

The reference to the Fox Theater audit in conjunction with an expression of concerns over CCIG’s project experience evidences a gross misunderstanding of that document, and the Fox Theater project. While it is true that the ultimate cost for the Fox Theater project exceeded the initial budget, that is primarily due to the fact that the City elected on several occasions to increase the scope of the project as CCIG and the City continued to identify and obtain new funding sources, which was consistent with city policy and the overall objective of the project. In effect, the City paid more for the project because it elected to procure a larger and better project as it had originally envisioned but out of an abundance of caution opted for a more modest approach until all tenants were secured and additional funds were secured. The city did in fact authorize more project and scope. Further, the audit and the City’s response made it clear that there were no failures or issues related to CCG’s management of the project. Rather, the primary criticism put forth by the audit was the failure to establish the final project scope prior to the execution of the contract. As set forth above, this criticism is not applicable to the City Project because the design-build contract will be based on a static, well-defined project scope.

With respect to the second concern, neither the City nor the Port will be required to incur any public debt in conjunction with the delivery of the City Project or the Port Project.  The proposed funding for these projects has been previously discussed and disclosed in public forums in conjunction with the City’s and Port’s application for and pursuit of the TCIF grant funds, the Cost Sharing Agreement entered into between the City and the Port in support of the application for the TCIF grant funds and the LDDA.
The following chart summarizes the sources of funds (listed in millions) for the
development of the City Project and the Port Project:

OHIT funding

The TIGER grant was awarded to the Port in 2012 (TIGER IV funding) and the Port and City funds are either currently in hand or will be funded through the City’s proposed sale of the “North Gateway” portion of the former Oakland Army Base property. The balance of the project is proposed to be funded by the TCIF grant and private matching dollars provided through the LDDA and the development of the North Gateway property. While it is true that the City and the Port would be liable for the repayment of any “unmatched” TCIF funds, the City addressed this risk through various provisions included the LDDA and the applicable ground leases. Under the Baseline Agreement, the City and the Port would have until August of 2020 to deliver evidence of the required matching funds. The various sources of the matching funds are outlined in the table above. It is understood that the “Private Match” funds will be supplied by the developers’ construction of vertical improvements on the City property (logistics and recycling facilities). The LDDA requires the Developer to pay up to $5 million in liquidated damages if it fails to timely execute the ground leases upon the completion of the City Project and other conditions precedent, which obligation is guaranteed by Prologis, L.P. and CCIG.

Further, if the Developer or its designees enter into the ground leases, these documents include Minimum Project obligations requiring the ground lessee to construct a minimum scope of improvements with a specified time period and to pay up to $5 million in liquidated damages if the obligations are not met. The liquidated damages are similarly guaranteed by credit worthy affiliates of the ground lessees. The City believes that the Minimum Project is sufficient to satisfy the “Private Match” allocation and, if necessary, that the liquidated damages are sufficient to allow the City to reposition the property and secure a successor developer to fulfill the obligations under the Baseline Agreement allocated to the “Private Match” funding sources.

Lastly, in response to the allegation in the Mr. Beveridge’s letter that the Oakland Army base project “lacks financial oversight,” again Mr. Beveridge fails to understand or disclose the true facts related to the project. The City has implemented a process where it meets weekly with CCIG to review project costs and invoices; the project invoicing is reviewed by Williams Adley, an independent auditing firm; the project will be subject to audit by Caltrans staff in conjunction with the use of the TCIF grant funds and the agreements with CCIG and the Contractor JV will require compliance with all City and State audit requirements.

Emissions Reduction and Public Participation
The OaklandWORKS letter asserts that, since the City’s approval of the 2002
Environmental Impact Report (“EIR”) for the Project, “the City and the developer refuse to discuss their plan to protect the children and senior citizens of West Oakland.” Likewise, it implies that three mitigation plans, a Diesel Reduction Plan, Criteria Pollutant Plan and a Truck Management Plan required by the 2002 EIR were eliminated or reduced in the current approvals. These allegations are simply and demonstrably untrue yet Mr. Beveridge has elected to continue to wrap himself in misrepresentation and myth.

First, since December 2008 alone, there have been no less than 144 public meetings, hearings and public outreach events with respect to the Project. These events are listed on Exhibit 3.  Second, each of the plans referenced by OaklandWORKS are part of the Standard Conditions of Approval and Mitigation Monitoring and Reporting Program (“SCA/MMRP”) adopted by the City in connection with the City’s approval of the 2012 Initial Study/Addendum (“IS/Addendum”) for the Project under the California Environmental Quality Act (“CEQA”).

The 2012 CEQA Process and the SCA/MMRPs
In 2012 the City evaluated several proposed changes to the Project under CEQA and, consistent with Section 15164(a) of Chapter 14 of the California Code of Regulations (“CEQA Guidelines”), prepared CEQA addendum for the Project.  The City’s IS/Addendum analyzed, among other things, the project and cumulative effects of 17 environmental aspects of the 2012 Project against existing physical conditions:  Aesthetics; Agriculture and Forest Resources; Air Quality; Biological Resources; Cultural Resources; Geology and Soils; Greenhouse Gas Emissions; Hazards and Hazardous Materials; Hydrology and Water Quality; Land Use and Planning; Mineral Resources; Noise; Population and Housing; Public Services; Recreation; Transportation/ Traffic; Utilities and Service Systems. With specific regard to air quality, the IS/Addendum included a robust study and comparison of construction- and operation-related air quality impacts of the 2012 Project and what was studied in the 2002 EIR for the area, including a quantification of construction emissions. The study followed all current methodologies and protocols recommended by the Bay Area Air Quality Management District (BAAQMD).

The City’s final approval of the Project includes 69 pages of detailed conditions of approval and mitigation for the Project, including eight pages relating to air quality. These conditions and mitigation measures are summarized in the SCA/MMRP, included as part of the IS/Addendum and attached as Exhibit 4. The Diesel Reduction, Criteria Pollutant and Truck Management plans allegedly removed or reduced by OaklandWORKS are explicitly retained and required as part of SCA/MMRP Mitigation Measures 4.4-4, 4.4-5 and 4.3.7, respectively. See Exhibit 4.

Although the City provided opportunities for public comment on the IS/Addendum, it received very few comments concerning the document, and no party including OaklandWORKS, filed a legal challenge to the document.

Implementation of the SCA/MMRPs and Public Participation

The majority of the SCA/MMRP mitigation requirements are prescriptive and selfexecuting.  That is, the City is required to perform specific activities (i.e. water exposed surfaces during active construction, cover all trucks hauling soil, maintain and properly tune all construction equipment in accordance with the manufacturer’s specifications) or to refrain from performing specific activities (i.e. not exceed speeds of 15 miles per hour on unpaved roads or not exceed specified idling times for diesel-fueled commercial vehicles).  Compliance with these measures can be objectively measured and will be enforced by the City in its regulatory capacity as the Project’s CEQA lead agency. In addition to these self-executing measures, and as reference above, the SCA/MMRP identifies four categories of plans to be prepared with respect to air quality: a construction management plan; a truck diesel emissions reduction program for operations; an emissions reduction program for operations, including a transportation control measures plan; and a greenhouse
gas reduction plan.

The City has agreed to provide an opportunity for further public review and comment on those air quality plans that relate to the construction of the City’s horizontal/infrastructure components of the Project. See Exhibit 5. It is premature from both a project and a planning perspective, however, to prepare, much less seek further public input on air quality plans beyond those relating to construction of the City’s horizontal/infrastructure until there is more certainty as to the specific nature and scope of the Project’s ongoing operations – especially since the infrastructure work will not be completed until approximately 2017.

Air Quality Meetings Under The LDDA

In addition to the SCA/MMRP requirements under CEQA, the LDDA requires the City
and the Developer to cooperate in an air quality monitoring program during construction of the Public Improvements and Private Improvements to install and maintain air monitoring equipment in locations determined in consultation with the Port, the BAAQMD and the Alameda County Public Health Department (ACPHD).
In November 2012 the City and the Developer participated in a meeting to discuss the
proposed monitoring locations that included not only the listed public agencies, but also interested community members, including Mr. Beveridge. In January 2013, Architectural Dimensions, acting on behalf of the City, distributed a Fact Sheet detailing proposed air monitoring protocols, equipment and locations based on input provided at the November meeting and through subsequent communications. On March 20, the City and Developer met with approximately 20 stakeholders at the office of the Bay Area Air Quality Management District (BAAQMD) to discuss the required air quality mitigations and the path forward for implementation of those measures. In addition to BAAQMD staff, the participants at that meeting included the U.S. Environmental Protection Agency, the California Air Resources Board, the ACPHD and Mr. Beveridge. At that meeting, the parties agreed to further discuss the appropriate processes for collaborating on air quality issues and agreed that the City would continue its work in implementing the air monitoring required by the LDDA, which the City has done and continues to do.

Conclusion
Contrary to the assertions in the OaklandWORKS letter, the City and the Developer have in place sound and transparent structures to fund and manage the Project and have completed extensive and interactive public outreach with respect to environmental issues, especially air quality. Both the City and the Developer are obligated and prepared to implement the Project in full compliance with all SCA/MMRP requirements promulgated under CEQA and all LDDA requirements negotiated with the City and community stakeholders. Moreover, the City has agreed to provide for further public review and comment on all air quality plans relating to construction of the City’s horizontal/infrastructure components, as and when such publication is appropriate consistent with the Project timeline. The process and outcome represent the most complex, open and transparent undertaking of the city of Oakland in recent history.  We appreciate your consideration of this letter and look forward to working with the City to successfully implement the Project. Please contact me directly if you have any further questions/concerns or need any supporting documentation.

Respectfully,

Phil Tagami

The Oakland Army Base project is moving forward now.

The Request for Qualifications and Proposal process for developer selection for the Oakland Army Base was long, open, transparent, included significant community outreach, and participation.  The project development team has been rigorously vetted and scrutinized and has met every reasonable test.  It is now time to move forward.

The Oakland City Council had sought a re-use for the former Oakland Army base since 1997 two full years before its eventual closing in 1999.

The Army permitted the City of Oakland to operate the Oakland Army Base property under a lease in further of conveyance, thereby enabling Oakland to initiate a short term leasing program which continued after the 2004 transfer from the department of Defense to the City of Oakland.  After the transfer date the Oakland was required under the Defense Base Closure and Realignment (BRAC) Commission regulations to bank and account for collected revenues by way of a reinvestment act account for future reinvestment in the subject properties infrastructure.

There were several attempts to re-develop the property since 1999, from a multicultural eco village, an auto mall, Indian casino, big box retail center, film studio and amusement park. The latter being pursued with a 2 year, sole sourced exclusive negotiating agreement, which did not go through an open, transparent, and competitive process.

None of the proposed projects resulted in a project, significant due diligence, master planning, infrastructure planning, entitlements, community benefits negotiations, permits, or grant applications or awards.   

In 2007 Oakland announced it would issue an RFQ/RFP process to invite developers to compete, submit proposals and form a team of consultant, to bring ideas and plans that the private developers would be willing to put their capital behind, and take the risk that such ideas would find market acceptance and result in a commercially viable enterpise.

In 2008 14 developers submitted proposals and 13 were evaluated resulting in the selection of 4 finalist invited to submit to a RFP process. In 2009 a team was selected to enter into exclusive negotiations.

As an imperative, the Oakland City Council directed their staff to insist that the project be at fair market value along with a host of other pre-conditions.    

There were a dozen public hearings and 93 community meetings and presentations over the course of the 5 years. The private developers have spent roughly $5,000,000 in the pursuit of the project and the City has invested roughly $6,000,000 to date.

On October, 23 2012 the Oakland City Council, on a 8-0-1 vote certified CEQA for the proposed project, adopted the master plan and basis of design, and voted to enter into a 66 year Lease and Disposition and Development Agreement.

The project developers had successfully secured and evidenced $179,000,000 of private capital and institutional commitments to match $242,000,000 of State of California proposition 1b Trade Corridor Improvement funds, $15,000,000 of federal TIGER funds, and $54,900,000 from the City of Oakland, the lion share of which was derived from the reinvestment act monies mentioned and the balance from the sale of certain land parcels that were not part of the state lands or federal land transfer to Deliver a $484,000,000 initial phase of the project, effecting more than 120 acres of the land conducted under a landmark Community Jobs Agreement.

Originally constructed in 1941 and designed to support the second world war, the 71 year old collection of warehouses and infrastructure systems has fallen into functional obsolescence and disrepair, is an open Department of Toxic and Substance Controls Remedial Action Plan site, loses over 2 million gallons of water per month due to leaking pipes, and is roughly 50 percent occupied.   

15 years after the initial planning effort, and 13 years since the closing and decommissioning of the Oakland Army Base, and 5 years since the begging of the RFQ/RFP process for developer selection the final master plan, entitlements, Lease Disposition and Development Agreement, and financing is in place to restore and repurpose the former base property. The project is gearing up to commence in July of 2013 delivering a new industrial district and a working waterfront to Oakland creating thousands of good paying jobs (direct, induced, and retained).  

Some individuals have argued for a do over, a delay, the “carve out”, a set aside. Some media outlets have reported concerns of the approved billboards, the proposed land uses, and the delivery method of construction. Further, some of the existing short term tenants have resisted relocation embracing the notion that they are owed something other than what they bargin for with a below market, short term lease at the former base. The pending utility dislocation, building deconstruction and material import make the retention of the tenants on the site impossible.  

Fairness, respect for the process, and the over 1788 pages of the approved, executed, and recordered Lease Dispostion and Development Agreement support that it is now time to move forward and realize the potential of the Oakland Army Base re-use project.

Open message to Oaklander’s on Public Safety

Oakland is in the throes of a full-blown public safety crisis. The time to debate whether and what to do has come to an end. As a city we must come together, support our elected officials, and act now.

 

I am writing first as a life-long Oaklander, a husband, and a father of two. I also run an Oakland based real estate development firm. As such, I am not a public safety expert, but I know something about public safety and closely related issues, such as economic development, taxes and jobs.

 

Ideally, Oakland would generate sufficient tax revenue to indefinitely fund the 850 police officers needed for safe streets. And, in a perfect world, Oakland would create enough jobs so that all Oaklanders would have work — including ex-offenders and others trying to get their lives back together.

 

But it is not realistic for a city to hope to achieve its ideals — or even to maintain the status quo — while besieged by constant violence and crime. And, so the violence and crime must end and tax revenue available today must be spent to end it. Not doing so will very simply mean that Oakland residents will be victims of more crime and that our residential neighborhoods and commercial districts will continue to feel unsafe.

 

On Tuesday night, the Oakland City Council will decide whether to approve several timely and common-sense measures to address our public safety crisis. I strongly urge the full City Council and all Oaklanders to support the measures.

 

The four proposals coming to the council Tuesday (today) are as follows:

 

1)      Contract with the Alameda County Sheriff’s Department to hire 10 deputies and one supervisor to work 10-hour shifts twice a week for 90 days on violence suppression.

 

2)      Hire 20 police service technicians and one crime lab technician to free up officers to patrol the streets, deter crime and make arrests.

 

3)      Immediately assemble a new police academy rather than wait until a scheduled June academy.

 

4)      Contract with William Bratton, former New York City and Los Angeles Police Chief, to help the city develop a short-term crime-fighting strategy.

 

Critics have balked at the proposals, arguing that Oakland has unknown future liabilities, such as the state redevelopment reimbursements and bond repayments. They contend that the city should wait for six months to consider the public safety spending as part of the city’s annual budget. 

 

On a positive note, the city’s economy is on the rebound and gained $34.8 million of unanticipated property, sales and business taxes at the end of 2012. A portion of those funds are available today to spend on public safety initiatives.  

 This blog is a work in progress but the time to act is now

Ending Gang Violence in Oakland…

On Monday, January 14, 2013, I am writing the Mayor, and City Council to respectfully request that they initiate a public action, a community action, against the gangs operating in our city.
It would be my intention that the Mayor and other elected leaders would invite the leadership of the City’s diverse population, in all walks of life, to a summit where we seek to adopt a path out of the madness of gang violence. Every member of our community has something to contribute to this campaign and we all have a stake in its successful planning and implementation.
After such a summit who implements such a campaign? The Chief of Police?
Observation
  • Gang on gang violence is tearing our city apart
  • Many innocent lives have been taken
  • Many other crimes have been cloaked by the violence of a few
  • Property Values suffer
  • Revenues to the city’s general funds have been and continue to be affected
  • Mention of Gangs around schools and by the media is constant but rarely is the name of the gang mentioned
It is fair to argue, we the residents of Oakland, have just “observed” for too long?
I for my part have tinkered with downtown BIDS, tracked selected crime statistics, and perfected full-throated armchair opinions… leaving the implementation to the professionals. Many community leaders have tried to get action.  I have given my support to them, and apologies for not doing more sooner.
As a community I think we have observed too long. We must finish the “OODA loop”  We have observed now we must “orient”, “decide”, and “act”.
The following are shared in the context of “including but not limited to the following…”
Orientation: 
  • How many gangs do we have operating in Oakland?
  • How many members are there?
  • Where are they recruiting members from?
  • What are the root causes of young people joining gangs?
  • Can we ask our legislature and our governor to help us align the resources and the laws to make this organized behavior become impossible and undesirable to continue?
  • Are we using all of the tools at our disposal?
  • What has worked?
  • and is the missing element to turn the tide of what is almost working?

Decision

  • Attrition of all of the Gangs operating in Oakland.
  • provide healthy real-time alternatives
  • balance suppression and diversion
  • align with prison re-alignment to prepare for diversion of recidivism

Action

  • Attrition of the gangs; their primary resources, soldiers, and their homes, or bases of operations geographically, their cars, and communications and of course the source of their operating cash.
  • Do we have legal standing to initiate steps to hinder their means of terror? What laws and legal process is required to rid our city of the gangs currently operating here? Prepare a full legal briefing.
  • publicly display the names and photographs of the gang leadership and known members.
  • Study and broadcast the places and methods of their recruitment so we can coordinate distribution to our schools and educate our children how to avoid recruitment?
  • Ask our legislature and our governor to help us align the resources and the laws to make this organized behavior undesirable to continue?

Initial Conclusions ( “I think, feel, and believe, but I cannot say definitively that I know “)

It appears that suppression by force alone has not and will not solve this problem, law enforcement has a central role to play and they need our support to be effective as part of our community resource to end this madness.  I am thinking we cannot expect a new day and a different result from the same means and methods of the past 30 years.  I believe there are reasons young people choose the gangster life and we must seek a way to offer them better alternatives.
We need many voices and ideas to come together in an orderly and coordinated fashion to marshal our considerable community resources and win this campaign against terror.
What other means and methods should be deployed? What constructive ideas do you have ?
It is our problem.  We need to solve it.
Note: At the age of 47, I have to admit I have long observed Oakland, but have only had an understanding and active involvement in the betterment of our community for the past 25 years. This issue has complexity and will require many hands, this writing is a work in progress, I will be making edits and updates and be including comments and ideas from several people to which I will be giving acknowledgment to in the blog when completed. PHT

Where is Sarge?

1965 the year I was born our country had been involved in war in Viet Nam for almost a decade, social unrest was growing, the civil rights movement was building momentum, and the war on poverty was months old.

How does that time compare with what we are experiencing today?

Like many of my generation, and those younger, I have no idea what the world was like, though I attempt to obtain the perspective of parents, relatives, and acquaintances to better understand and know the history, issues, divide, and sentiment of the past.

Images of Kennedy, King, Johnson, illustrate this time in history and then there was Shriver, who I had the honor to meet a few times between 2002 and 2005.

While at the Peace Corps and later at OEO, Sargent Shriver and his team started programs that changed the world and led millions out of poverty. Programs like Head Start, VISTA, Job Corps, Legal Services for the Poor, Neighborhood Health Services and Community Action helped communities by literally taking Federal funds and pursuing federal sponsored dissent through organized means using the law, both radical and unprecedented.

All told, the programs mentioned lifted almost 15 million Americans out of poverty and changed the world. He did not do it alone, but he is credited with bringing the issues, the people, and the resources to solve on the problems of the times.

 

 

Today we see many of the same images; the conflict, rage, war, and rebellion, poverty, hopelessness, and fear. Our friends and neighbors have begun to express their unhappiness and their desire for more immediate change. Where is Shriver? He passed in January of 2011. Where are the programs and the big ideas? Where is the unbridled optimism to counter the cynicism?

I ask you to all think what we can do in an hour a day to make a change or in a day of a week to support and stabilize our society in such uncertain times.

How can we wage peace? Can we too be guided by beliefs powerful enough to change the world?

As we grapple with these national issues here in Oakland, can you help to promote a dialogue of progress? Can you seek the action to forge ahead, reach out and include everyone along the path, and seek the new frontiers?

“Yes you can!” The late Shriver was quoted “You have such a chance. Oh, how I wish I were you!”