Huge Oakland housing project criticized

0 Comments | Oakland Tribune, Apr 9, 2006 | by Paul T. Rosynsky, STAFF WRITER

OAKLAND -- As the giant Oak to Ninth housing development inches closer to final approval, debate over what its developer should give the city is becoming more pronounced and heated.

In the last two weeks, various groups have come together to question both the project's impact on the city and terms of the deal that earned Signature Properties of Pleasanton control over 64 acres of waterfront land.

Those questions have come in the form of an appeal of the city Planning Commission's recommended project approval and a letter from an attorney questioning the deal.

"It is a huge project and they are trucking down the road pretty quickly here," said Naomi Schiff, executive director of the Oakland Heritage Alliance, one of six groups that have filed an appeal of the development. "This is an opportunity to get a better deal."

Concerns raised by the group remain the same as they have been since the project was proposed several years ago.

The groups are worried about not having enough park land along the water. They're concerned with limited access to the development. Others oppose destruction of an historic port terminal. And they want to ensure the publicbenefits the developer has promised are completed in a timely manner.

The project is proposed to be built in phases with the all the park land and the Bay Trail not completely finished until at least 2026.

"We feel like this is the developer telling us what he wants to do. It should be us telling the developer what we want to do," said Helen Hutchison, executive director of the League of Women Voters of Oakland. "Decisions have been made without complete information."

The fact that the development would be built on public land has caused emotions to run hot and given residents a sense of entitlement not found in a more private development proposal.

It also will require a change to the city's Estuary Plan, a much touted document created a decade ago to guide how the city's waterfront land should be developed.

As a result, many say, the city should get more for the development than it would if the project were being built on private land.

"If we are going to give up public lands, we should get, in return, improved access to those lands," said Robert Raburn, executive director of the East Bay Bicycle Coalition. "It is unfair to residents to build new housing and parks that are not accessible to the entire city."

But access would not matter if there were no park to begin with, argues Signature Properties' President Michael Ghielmetti.

"If this project wasn't there, how would their parks be built?" he said. "This developer has offered to install the parks, and maintain them forever."

The amount of open space in the project has increased since it was first proposed, he said. And access to the land will be improved once it is completed, he argued.

"We are building on blighted and unopened land," Ghielmetti said.

Signature Properties was selected by the Port of Oakland to purchase the 64-acre tract in 2001.

Under the deal, Signature Properties paid $18 million for the land that was appraised at $34 million. But Signature Properties took full responsibility for cleaning up the site. At the time, the cleanup cost was estimated to be $16 million.

Since then, Signature Properties has increased the number of housing units it plans to build at the site to 3,100 from 1,400. That has caused critics to question if the value of the land has increased.

And now critics want the port to seek additional funds when it might be forced later this year to extend its exclusive negotiation agreement with Signature Properties.

"The port is working on an appraisal that is three years old," said Arthur Levy, an attorney who is investigating the agreement. "Signature Properties stands to gain (value) just on the entitlements alone ... they basically are way underpaying for the property."

Ghielmetti, however, said the deal is still fair to all.

Since Signature Properties began working on the site, clean-up costs have risen by at least $8 million. He said his company is providing all infrastructure improvements, such as sewer, roads and parks.

All those improvements will cost more than originally thought since the cost of construction has risen since 2001, Ghielmetti said.

"I need to provide infrastructure, I have to bring in water, I have to bring in sewer, I have to bring in storm water basins," he said. "It is still a fair deal for the port. It is still a fair deal for the city."

Ghielmetti said there is not much more he can give back to the city without losing the investment funds needed to make the project a success.

"I can't attract financing to this project without having something that has a minimum level of profitability," he said. "Look, I am buying an old house, fixing it up and delivering it at cost."