.It’s Bottom of the Ninth for Uptown

Oakland's council must soon choose between housing and baseball for its long-suffering uptown redevelopment area.

Here’s the pitch: Oakland mayor Jerry Brown wants to build housing in Oakland’s uptown area; City Manager Robert Bobb wants to build a new ballpark for the A’s. The disagreement has led to an uncharacteristically public clash between Bobb and Brown, complete with a bizarre mayoral gag order on his erstwhile enforcers. The issue also divides the city council, which is set to vote next week on whether to renew a no-bid contract with an urban housing developer that has contributed generously to the mayor’s political interests. The result is an odd game of chicken involving one of the city’s most notorious parcels of land. One side has warned that without a new ballpark the A’s might leave town, while the other insists that a hard-won housing deal might evaporate if the developer doesn’t get an exclusive negotiating agreement next week.

Though geographically desirable, the neighborhood bounded by 18th and 20th streets, San Pablo Avenue, and Broadway has nevertheless languished for the better part of three decades. A succession of mayors has faced mounting public pressure to do something with it, but the city has never been able to stick with a master plan, even though almost everyone agrees that the uptown needs a makeover. Former mayor Elihu Harris once envisioned it as an entertainment zone crowned by a refurbished Fox Theater. Planners later reconceived the area as a shopping district anchored by a department store. Thanks in part to the mayor’s push to entice ten thousand new and mostly upscale residents to the downtown area, the city’s recent focus has been on building about a thousand apartments on what is now mostly a grid of crumbling parking lots. And now there’s the ballpark idea. “We never know what we want, and when people do come up with some proposals, we always say we want something bigger,” sighs District 2 Councilmember Danny Wan.

When it comes to a possible ballpark, the A’s won’t yet comment, and the ink is hardly dry on their recent Coliseum lease extension. The mayor says the absence of a bid from the baseball team gives him the willies, saying that the team prefers an even more expensive location, the waterfront Howard Terminal, which would cost an estimated $517 million to build. In the meantime, Brown warns that pursuing an elusive ballpark deal might scuttle the very real housing plan. “The chances of the stadium happening are very unclear, but not the chances of it killing the development downtown one more time when it’s happened three times over the last quarter of a century,” says Brown. “I’m looking at dead dirt at the end of my term as mayor unless the Forest City project comes forward.”

But even negotiations with Brown’s favored developer, Forest City Residential West, have been subject to fluctuation. Over the last four years, the Cleveland-based developer has signed two previous exclusive agreements with the city, each calling for a different housing and retail mix on the uptown site, and each of which was allowed to expire. Oakland even once put talks with Forest City on a six-month hiatus while it carried out top-secret talks with Sun Microsystems, hoping the uptown might host a corporate campus.

Forest City’s most recent set of preliminary plans, which were released this July, called for an eight-hundred-unit gated community and a reduced retail component. Although the developer will not comment publicly on its proposal, one week before the council vote it was still being tweaked. Forest City quickly axed the universally reviled gate, and proposes to boost the number of units to a thousand, while adding enough new units to house a thousand UC Berkeley students. Twenty percent of the units would be set aside for renters earning fifty percent of the area’s median income.

The city council remains divided, although a majority seems to lean in favor of the Forest City plan. The last time the council voted on Forest City’s exclusive negotiating agreement, it split 5-3 with Henry Chang, Ignacio De La Fuente, Moses Mayne, Nancy Nadel, and Danny Wan in favor, and Jane Brunner, Larry Reid, and Dick Spees opposing it. As the council prepares to vote, Spees has put forth a motion that would allow the city to pursue negotiations with the A’s without violating its exclusive negotiating agreement with Forest City, leading to speculation that the council might ask Forest City to work up a hybrid plan that would include a ballpark and housing.

Although housing advocates are happy to see new apartment construction, especially a high-density plan with an affordable housing component, it’s not easy for them to like Forest City’s plan. They worry that the high level of proposed subsidies make Oakland’s projected $51 million investment far too steep. The city normally pays no more than forty percent of affordable housing construction. According to the preliminary July plans, Forest City was asking for about 96 percent, a whopping subsidy of $225,000 per unit, and expects an unusually high 12 percent return on its investment. Skeptics worry that the Forest City deal would swallow up several years’ worth of funds for other redevelopment projects.

Dan Vanderpriem, redevelopment manager for Oakland’s Community and Economic Development Agency, says that when you break it down, the $51 million price tag is not as imposing as it seems. “The $51 million number is the entire cash flow that the agency needs to do everything having to do with uptown,” he says. “It’s not a check that’s written to Forest City.” According to Vanderpriem, that figure includes $2 million for public improvements such as sidewalks and streetlights, a $12 million subsidy for affordable housing, and the $8 million difference between the land’s market value and what it will cost for the city to rehabilitate it and relocate pre-existing businesses. Altogether, he says, the subsidy pocketed by Forest City would actually be closer to $26 million.

But Forest City also is asking for a giant tax break in addition to hefty subsidies. In many redevelopment areas, certain property taxes are handed over to the city’s redevelopment agency for revitalization projects; by state law, twenty percent of those funds must go to affordable housing. Brown has encouraged the building of market-rate developments by noting that the higher tax revenues would ultimately be used to build affordable housing. But Forest City’s current plan asks for an exemption from paying these taxes, which Elissa Dennis of East Bay Housing Organizations says defeats the whole purpose of allowing market-rate development. “They’re letting these guys off the hook,” Dennis says. “It’s just hypocrisy; it’s classic trickle-down mentality.”

Forest City has a reputation for being a shrewd bargainer that takes on the troubled areas that no one else will touch, then extracts a high profit from doing so. “These projects are often very difficult and require a level of commitment unlike other development projects,” Forest City regional vice president Susan Smart said at a recent Oakland city council committee meeting. “In many instances Forest City has been the leader in jump-starting development.”

If anywhere in the East Bay can benefit from such a jump-start, few disagree that Oakland’s uptown is the place. “There is no place in the state of California more appropriate for smart urban infill than uptown,” says housing supporter Ed Church, director of the East Bay Community Foundation’s livable communities initiative. “It has the best transit connections in the state.” If the city goes forward on a housing project, Church says his group will offer to help with the development by helping to obtain funding for environmental cleanup, and use of “green” construction materials and renewable energy sources.

City officials from San Jose, which began a similar project about a decade ago, say that boosting their downtown population has improved foot traffic and patronage for entertainment venues. Harry Mavrogenes, the deputy executive director of San Jose’s redevelopment agency, agrees that building housing first is the way to go, noting that San Jose employed Forest City to build a 323-unit residential complex. He points out that cities often pay more to develop “pioneer” projects, and that subsequent developments don’t always require the same aid, since factors such as parking, lighting, environmental cleanup, and facade improvements have already been addressed. “Developers and businesses that want to come into the city will say ‘How many residents do you have in a certain mile radius?’ It encourages them to come in when they see a serious commitment to new housing,” he says. “It’s a built-in customer base.”

How is Oakland doing with bringing in that customer base? According to Patrick Lane of the Community and Economic Development Agency, as of June the city had 1,055 new housing units completed within Brown’s highly touted “10K” project area. That means that only one tenth of the desired ten thousand units are open for business, but they seem to be leasing fairly well. Of the biggest projects to open within the last year, the Allegro, which began leasing last autumn is 75 percent full, the Landing, which opened its doors in January, is at 95 percent occupancy, and the Essex, which started renting in May, is already 46 percent full. (You could also make the argument that none of these buildings is truly “downtown” — the Allegro and the Landing are both near commercially desirable Jack London Square, and the Essex is on Lake Merritt.) Meanwhile, there are 403 more units currently being built, another 1,007 units approved for construction, and an additional 1,360 units — including those first proposed for the Forest City development — in earlier stages of the planning process.

Nobody’s arguing that a ballpark would be cheaper, especially since there’s been no word yet from the A’s indicating that they’re interested in the site, much less willing to pony up funds for ballpark construction. Consulting firm McKinsey & Co. estimate the total cost of building a new 42,000-seat ballpark at $385 million, with the city having to pay nearly half of that tab. But Bobb says the park would be a moneymaker, bringing in jobs, tourists, foot traffic for nearby shops and restaurants, and a renewed sense of civic pride. Plus, until last week when the A’s renewed their lease for another five years, there was a palpable sense that without a new stadium they’d split town — after all, talk that the team might move to Santa Clara prompted that city to begin its own research into ballpark construction.

Bobb is so excited about a new home for the A’s that he’s already spearheaded a tour of the nation’s ballparks and commissioned a study to determine if Oaklanders would support using public dollars for a stadium (only if the ballpark is part of a larger housing and entertainment district, the survey said). Supporters including District 4 Councilmember Spees say the ballpark would be a valuable public asset if it was packaged as what he calls a “total entertainment venue” that would include a refurbished Fox, a hotel and conference center, a club restaurant, and use of the ballpark for other activities, such as outdoor films, in the off-season. He also doesn’t think the city has to choose just housing or baseball. “With restaurants and clubs and retail all the way around, the whole area becomes a retail area and all the housing fits very naturally,” Spees says.

But if the Forest City plan is no easy sell, the ballpark plan has its own risks. Brown and his supporters say that ballparks aren’t good municipal revenue generators; they’re unused for part of the year, they mainly provide low-paying jobs, and their patrons do little to stimulate tourism or the retail economy in the surrounding areas. “They eat their beer and hot dogs and garlic french fries and aren’t in the mood to go to Le Cheval afterwards,” the mayor snorts. Even if the stadium brings in money for a while, the team may move if another city coughs up money for an even newer stadium. Corporations aren’t willing to fork over massive sums of money for naming rights any more, Brown says, and having two major sports facilities in Oakland, not to mention Pac Bell Park across the bay, might lead to competition for an audience.

Plus, the stadium would likely be financed with bond money, and it may be difficult to get the approval of taxpayers who still feel burned by the Raiders deal. Oakland already pays $11 million out of the General Fund every year to pay down its debt on the Coliseum; Councilmember Wan estimates that, even if the A’s front slightly under half of the cost of a new $400 million stadium, Oakland will still end up paying another $30 to $40 million annually to service that debt. “I don’t know which city is crazy enough to dedicate ten to twelve percent of their General Fund to building professional sports stadiums,” he says.

But if the way the council will vote is unclear, the ramifications of that vote are equally murky. Is the city’s desire to capture the bird in the hand allowing it to be played by Forest City, a notoriously hard-driving developer that may be using its dire view of Oakland’s economy in order to ratchet up its demands for subsidies? Or is Oakland’s chronic anxiety about the departure of beloved sports teams being used to justify an expensive new toy? By trying to have it all, and taking too long to wrangle with each entity, will the city eventually wind up building nothing? One thing’s for sure: next week marks the start of yet another inning in Oakland’s uptown development game.

Play ball.


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