[jump] Over the past year, the one-acre slice of land near Lake Merritt known as the E. 12th Street Remainder Parcel has been a lightning rod in Oakland’s affordable housing debate. Last May, affordable housing advocates completely shut down a city council meeting, preventing the councilmembers from voting on a proposal to sell the land to the developer UrbanCore for $4.6 million. UrbanCore intended to build a 24-story tower consisting of 298 units of all market-rate housing. A leaked city attorney opinion later revealed that the city council had been advised that the deal would have violated the state Surplus Land Act. The Surplus Land Act states that public land intended for sale must be offered first to affordable housing developers, and that the city should prioritize proposals that offer the highest number of affordable units at the deepest levels of affordability.
After the Express reported on city attorney’s memo, the city reopened bidding for the land. Five developer teams submitted plans, all of which included affordable housing on the site. But city officials all along have appeared to favor UrbanCore, which has now teamed up with the affordable housing developer EBALDC. The UrbanCore/EBALDC team are currently proposing to purchase the land for $4.7 million, and to build a 26-story market-rate apartment tower next to an 8-story affordable housing mid-rise building. The project would have a total of 360 housing units, of which 108 would be affordable, according to the city.
Neighborhood activists calling themselves the E. 12th Wishlist Design Team partnered with the developer Satellite Affordable Housing Associates (SAHA) and are proposing to buy the land for $1 million, and to build a seven-story building made up entirely of 133 units of affordable housing, with no market-rate units, according to the city. Although the SAHA/E. 12th Wishlist Design Team proposal includes the most affordable housing at the deepest levels of affordability, city staffers who reviewed all the proposals have ranked it third because it is not as dense as the other two proposals and because it doesn’t maximize revenue for the city on the land sale.
During the city council’s meeting in the mayor’s office last night, Councilmember Abel Guillen said that negotiations over the E. 12th Street Remainder Parcel have been the hardest issue he’s faced during his first term on the city council. The parcel is located in Guillen’s district.
Guillen said the UrbanCore/EBALDC plan will provide the greatest number of housing units, and noted that it’s a mixed-income development. He also said it would require the smallest public subsidy from the city.
“We can’t build a wall around Oakland,” Guillen said about market-rate housing developments in lower-income neighborhoods like Eastlake, which many activists fear portends gentrification and displacement as property values rise.
Councilmember Anne Campbell Washington said that the council “understands the pain of the housing crisis,” but that activists have projected too much importance onto one piece of land — a parcel that cannot solve the city’s need for more housing.
Council President Lynette Gibson McElhaney, who joined the meeting by telephone, said before the vote that one of the benefits of the UrbanCore/EBALDC proposal is that it will create the highest property values on the site, which will flow to the city in the form of property taxes and real estate transfer taxes.
Councilmember Dan Kalb said before the vote that he believes the city has now fully complied with the state Surplus Land Act’s requirements, and he cited the UrbanCore/EBALDC proposal as a “model” for addressing the housing crisis.
Councilmember Rebecca Kaplan recused herself from the room for the vote, citing a financial conflict of interest due to an apparently illegal contribution made by UrbanCore’s CEO Michael Johnson to her 2014 mayoral campaign committee.
Councilmembers Noel Gallo and Desley Brooks used the discussion before the vote to argue about the law, and about the role of public land.
Brooks asked pointed questions to the city attorney about whether Oakland had ever violated the Surplus Land Act in the first place. According to Brooks, the city was in compliance all along with state law, and the city attorney’s opinion was incorrect and should never have prevented the city from selling the land to UrbanCore last year.
According to city records, the city attorney had commissioned a second legal opinion on whether the Surplus Land Act barred the city from selling the E. 12th Street Remainder Parcel to UrbanCore under the terms of the first deal last year. It’s unclear what this second legal opinion states, but last November Brooks and Kaplan tried to schedule a motion to require the city attorney to release this second legal opinion to the public. The motion was never brought to the full council for a vote, however.
Gallo cast the sole dissenting vote on the land deal last night. “The people I represent in Fruitvale are being displaced,” Gallo said. “We should never sell public land.” When the final vote was taken Gallo voted “no,” telling other members of the council he was doing so “with honor.”
The result of last night’s vote is that Oakland city staff will enter into a six-month exclusive negotiating agreement with UrbanCore and EBALDC to strike a final deal for the land. The council will still be required to vote on the final land sale to UrbanCore and EBALDC later this year.
Correction: the original version of this story stated that the UrbanCore/EBALDC project was a 190-unit market rate apartment tower with a 90-unit affordable housing mid-rise. The actual unit totals are 252 market rate units and 108 affordable units.