The Uptown Apartments Look Nice, But Are Still Mostly Empty

Oakland's big investment looks a bit less solid in the current economy.

In downtown Oakland, a $50 million dream is just a third
fulfilled.

That’s the status of the city’s unprecedented investment in the
Uptown Apartments, the 665-unit mixed-use redevelopment project that
was to be the crown jewel of Jerry Brown’s plan to bring 10,000 new
residents to downtown Oakland. More than a year after first opening the
Uptown’s doors to renters, management reports indicate that its three
buildings are just 37 percent full.

There’s no single explanation: the economic downturn, the area’s
reputation for crime, a relative dearth of local amenities, and a
surplus of nearby condos that have been converted into rentals in a
struggling housing market. Indeed, the challenges of the Uptown seem to
be the challenges of Oakland itself: an intersection of diverse
complications that keeps revitalization efforts at a standstill.

Stakeholders are hesitant to point fingers, but a tone of
disappointment pervades ongoing discussions of the largest
city-sponsored redevelopment project in Oakland history. And the
subtext is clear: While the Uptown received $53.4 million from the
city, none of the other projects from Brown’s so-called 10K plan even
received subsidies.

“It’s been slower than everyone would like,” said Nancy Nadel, the
Oakland city councilwoman who represents the Uptown district. “But
that’s because of the difficult times we are in.”

The Uptown’s failure to fill as quickly as hoped is certainly not
for a lack of trying. The project is everything its supporters might
have wished for — mixed-use, mixed-income, high-density, BART-
and AC Transit-accessible, secure, totally green. Its amenities are
world-class. It features a 24-hour concierge, a state-of-the-art gym,
access to Zipcar service, a game room, pool and spa, an on-site Oakland
Police Department office, a chef’s kitchen, and a private screening
room, all available with a lease.

It also is backed by a saturation viral marketing campaign that
includes ubiquitous ads on BART, billboards, and no fewer than 26
full-color promotional heavy-stock postcards for ready circulation. It
has been heralded as the first major multifamily development in Oakland
to receive LEED silver certification from the US Green Building
Council. The Uptown represents exactly the kind of change city
stakeholders want to see in that neighborhood.

Uptown employees say the development’s vacant units are filling at a
steady pace, with several new leases signed each week. The units have
opened in phases between March and November 2008. But as the first
one-year contracts come up for renewal this month, success is anything
but guaranteed.

Councilwoman Nadel said the developer, Forest City Enterprises,
assured her that spring is always “a really good time” for new leases,
and that it expected the apartments to continue to fill. Nadel has
planned an April 8 meeting with Uptown tenants to gauge their
expectations for the future of the development and neighborhood.

New businesses are signing leases in the area, Nadel said, which she
predicted would boost the Uptown’s attractiveness for potential
tenants. “We expect to increase those numbers soon,” Nadel said.
Approximately 9,000 square feet of empty retail in the Uptown also
remain vacant.

Forest City declined to be interviewed for this story, instead
offering a statement prepared by a San Francisco-based PR firm.

The city set no benchmarks for the developer in terms of move-in
rates. However, even while offering massive rent reductions (free
off-street parking, for example, or up to two months’ rent free in
exchange for a one-year lease), the Uptown has yet to rent out its
lowest-priced units — some of which reportedly have gone for as
little as $725 per month. Those cheaper apartments are part of the 25
percent of units offered at affordable housing rates, as mandated by
the terms of the city subsidy.

Those who have inked contracts share mixed reviews of life at the
Uptown. On a recent Saturday afternoon at the public space between
William and 19th streets that was developed as part of the Uptown
project, few residents were in evidence. Judy and Alma, sisters who
qualified for affordable housing and have lived at the Uptown since
November, said they don’t plan to leave the Uptown any time soon.

“It’s quiet and peaceful,” Judy said. “There’s entertainment.
Sometimes residents walk their dogs. It’s people that don’t want to be
bothered.”

People particularly don’t want to be bothered by criminals. The
Uptown is fighting an uphill battle to mollify the age-old stereotype
of downtown Oakland as crime-ridden. That challenge only got more
difficult after the area played host to recent street riots in the wake
of the Oscar Grant shooting. Mayor Ron Dellums has promised to reduce
crime by at least 10 percent over the next year. And Forest City has
installed an on-site office for the Oakland Police Department and made
all of its buildings controlled-access.

Michael Cera, a 23-year-old cell phone retailer who works in the
city, has been living in a one-bedroom Uptown apartment with his
girlfriend and their mastiff since August 2008. The couple received
“rent concessions” that reduced their rent from $2,000 to $1,700 a
month. At the time, that was cheap enough to justify the commute to the
city, but Cera said he’s not sure he’ll renew. “It depends on the whole
rent concession thing,” he said. “Personally, I’d like to live in the
city, but it’s cheaper here.” But maybe not quite cheap enough, he
added. “These apartments are not worth $2,000.”

Crime doesn’t concern Cera, but he is seeking more bang for his buck
in a renter’s market. While his apartment is just 700 square feet, he
said he’s found advertisements for 1,100-square-foot Emeryville lofts
for the same price — although that price does not include
amenities like gym access or a 24-hour doorman.

Forest City did not respond to questions about move-in rate and
tenant turnover. Instead, it offered canned quotations from company
president Kevin L. Ratner. “We are offering our residents a sense of
community, where they can live, work, and play in an area undergoing a
renaissance,” Ratner said. “The opening of the Fox Theater and new
restaurants are drawing people from all over the Bay Area who are
contributing to the positive vibe in the area.”

The Fox, a $40 million city investment, is an empty lot away from
the Uptown on Telegraph Avenue. Forest City can develop the lot as part
of a separate contract with the city. It was slated for multistory
retail, but given the state of the economy and slight returns from
Forest City’s almost-$190 million investment in the Uptown, it will
likely become a surface parking lot serving the Fox. The city retains
ownership to this property, and expects to receive revenue of between
$150,000 and $200,000 over three years. After three years, the project
will be revisited by the city and the developer with an eye to
launching a more retail-friendly development.

Nadel said the fate of the empty lot is currently being considered
at the council committee level. Talks have revolved around how the lot
might be landscaped, with superficial improvements proposed to avoid
too much resonance with the kind of parking lots that once occupied the
Uptown’s current real estate.

“Some folks would like it to be very well landscaped, with a little
greenery in there,” Nadel said. “We’re likely to be looking at it for
quite a while.”

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