Joe Debro Article on
6/20/06 Council Meeting
Kabuki
Theater cubed is a way to describe a recent city council meeting. The agenda
item was approval of the
ninth street
real estate deal. What I saw was the council and the
Port
of
Oakland
once again giving away valuable
Oakland
land and congratulating themselves for doing so. The city of
Oakland
has a tried and true method of trading city property for campaign
contributions. They under value the asset. Then they sell that undervalued asset
for what is a very low price. If they bid the property disposition, which they
seldom do, they use the RFP process, which allows them to select the crony of
their choice.
This
disposition process is not rocket science. It dupes the taxpayers because it
requires a few steps in order to confuse. If you remember the Rotunda, which the
city gave away to a crony, Phil Tagami, for $99, the Zhone Real Estate deal and
its $1.6 million below market price, for which Jerry Brown received a $50,000
kick back, they both used this process. Compare that to the
Bermuda
building, which the city attempted to give away to Ted Dang for a similar price
and the courts established a $3 million price tag. Then look at the Oak Knoll
deal which the city tried to steal from the Navy for $5 million and give to a
crony. There is a common theme. The city always hires what it calls an expert to
estimate the cost of making the site building ready. At Oak Knoll it was
both demolition and remediation that allowed the city of
Oakland
to give this $100 million property its $5 million value. In the
9th street
project it is remediation that justifies the sale of this $200 million property
for $18 million. This process played out at the council meeting. A meeting in
which neither the council nor the staff demonstrated an ability to negotiate
with the developer.
The
developer’s role at that meeting was to appear to grant community benefits in
exchange for this incredible gift of a very valuable city asset. The citizens
who were there had limited knowledge of this disposition process. They thought
that the concessions which they appear to get were gifts from the developer
Gods. One concession was for the city to be allowed to buy back for $28 million
a small fraction of the larger parcel that the Port had just sold to the
developer for $18 million. Why no use the $28 million to remediate the land and
then issue a Request for bid?
This
development’s value is in excess of $1.5 billion. The developer promises to
grant $1.5 million for a training component. That grant is so small compared to
the selling price of the development, that no one on the council was willing to
put a value on it. The open space is a selling tool for the developer not a
concession. Affordable housing which is to be built on the land bought back by
the city is also being paid for by the city. The open space concession and the
RFP concession to the
Historic
Land
mark interest are non starters. No developer would ever bid on such a limited
property with in another developer’s control. This Kabuki is one great comedy.
The
laugher was to watch Larry Reid, who promised not to seek reelection, during his
last campaign, posture for campaign contributions or more from the
developers. He consumed several minutes thanking the developers for this rape.
Pat Kernighan, whose reelection campaign is in trouble, was given credit by her
council colleagues for being the broker in this give away. I now know why the
developer community spent so much money in order to elect the status quo. They
are about to lose their license to steal.