Oakland Army Base
The development project at the Oakland Army Base is inching forward, though not without bulldozing through the wishes of some of the facility's longest tenured residents.
At recent meetings of the Council's economic development committee, several tenant companies have expressed frustration with the process of being evicted or moved to the Port of Oakland-controlled portion of the base by a May 31 deadline.
Part of the development plan includes $242 million in untapped state development funds, but all of the tenants must have vacated the base by Oct. 1 if the city wants to see any of that money. The city's push to control its portion of the base has caused friction between it and the tenants, and amongst the tenants themselves.
At the Jan. 15 committee meeting, Dexter Vizinau, a spokesman for army base tenant Pacific Coast Container Inc., told the councilmembers that the hundreds of jobs that businesses at the base provided Oakland were in jeopardy because of the way their eviction was being handled.
"This would be an opportunity for someone else to pick those jobs up," Vizinau said, suggesting that many of these jobs could leave Oakland. "The business that comes through this port, the local people will miss out."
Councilwoman Lynette Gibson-McElhaney requested that city staff return to its next meeting with a report on how the companies at the base were being affected. But at the Jan. 29 committee meeting, the report that was given only included the current number of jobs - 500 in Oakland - not the number of jobs the city stood to lose because of the eviction process.
The report does give rosy predictions of the thousands of jobs that the development project might create for Oakland in the future: 2,335 jobs on site and 6,560 jobs throughout the Bay Area, as well as nearly $2.9 million in new tax revenue. But contrary to McElhaney and Councilwoman Patricia Kernighan's requests on Jan. 15, no additional report was created showing how many jobs Oakland stood to lose in the short term because of the evictions.
Vizinau said he was surprised that city staff did not contact him asking what effect the evictions were having on PCC's ability to hold on to its employees and contractors.
"The request from the Councilmember was not honored," Vizinau said. "Those calls never came."
Update: Speaking after the meeting, John Monetta, a real estate agent for the city, said Gibson-McElhaney's request could not completed because of its short notice. The real estate consulting team hired to write the jobs report, Keyser Marston Associates, completed their work back in September 2012.
Monetta said writing an additional report for just the potential jobs losses that could be caused by the evictions would take longer than the two weeks in between economic development meetings.
Though the jobs report gives its numbers of what the base's future development could provide the city, not all of the Councilmembers were confident that construction would stay on schedule. Councilman Larry Reid has expressed his disapproval of the development process. At the Jan. 15 meeting, he was not even optimistic that construction on the project would start this year.
"It'll be interesting ... to see if that really happens. Let me tell you, I've never been a fan of this whole process," Reid said after asking Assistant City Administrator Fred Blackwell if the city could keep to its construction schedule. "We've not done anything to make sure that [these businesses] continue to play a viable role in our city's economy … I am just really troubled by this process."
Reid also has expressed his dissatisfaction with the city's agent in overseeing the development, California Capital & Investment Group, which is run by prominent Oakland real estate developer Phil Tagami.
"I don't like the way CCIG has handled this process," Reid said. "I've supported them, but going forward, you guys can expect not to have a vote from me regarding what their efforts are on the army base. I will abstain from any future voting because I do not like how they have disrespected the businesses that are out there on that piece of dirt."
Some tenants at the base have blamed Tagami and CCIG, who will receive part of the $242 million from the state for leading the development, for the increasing pressure on the tenants to leave the base as quickly as possible. Bill Aboudi, the president of AB Trucking, is one of them. He said he believes it is a conflict of interest for Tagami to be both profiting off of and managing the development for the city.
"The problem that we are falling into is that the city has approved this awkward situation … it's not proper business etiquette," Aboudi said. "Those lines between Tagami and the developers and are so gray, you don't know where property management begins and development ends."
The strains that this pressure to leave have placed on the tenants has resulted in infighting between the companies. Though all have stated their intent to remain in Oakland, preferably on the part of the base that the Port of Oakland owns that is not part of the city's development, the limited space for the tenants has led to a previous transition deal falling apart and threatening the construction schedule.
According to testimony from the Jan. 22 meeting, four of the tenant companies will have to squeeze down into a fewer number of warehouses after some are demolished in order to accommodate the city's construction.
The loss of workspace, and access to a strategic road that runs through the base, has led a few of the companies to pull out of the previous deal that gave PCC the largest share of the buildings.
Now the companies are submitting bids to the port for the best of the final buildings. The losers of that bidding process will get whatever is left.
A representative of Industrial Railways said at the last meeting that "all of us [companies] are going to suffer," as a result of the move.
Alex Ayestaran, a manager at PCC, elaborated on that potential suffering.
"I have union employees that come to my office pretty much on a day-to-day basis and asking me 'Are we going to have a job after this?' " Ayestaran said.
Councilwoman Libby Schaaf was unmoved by Ayestaran's statements - according to a presentation at the meeting by Monetta, PCC had not contacted him about getting out of the base by the May 31 deadline. Schaaf also noted that all of the companies have been on temporary, six-month leases as part of the program that originally brought them to the base.
"When you entered into this lease it was made very clear that you would have to be moving, and I just want to hear why you have not had the courtesy to respond to any of our correspondence from our staff or engaged in any dialogue at all in the last 90 days with our staff," Schaaf said to Ayestaran.
"It's hard to understand … it's hard to feel a lot of sympathy for your plight. You haven't been working diligently to find a resolution and it doesn't sound to me that that has occurred."
But Reid countered, saying "I want you to know I have sympathy for you. The city should have been communicating with you and not through our agent [CCIG]."
In the middle of all of this is Monetta, who has worked with the tenants at the base for years as the development project has gained traction. He has told the Council at previous meetings that all of the tenants should have been aware that this development was coming and that their temporary leases gave the city the right to evict them when it needed the property back.
He stressed to the tenants at the Jan. 22 meeting that, if they didn't help the city complete the eviction process soon, legal action in the form of unlawful detainer suits would follow.
"Time is running out," Monetta said.