Oakland (Special to ZennieReport.com) – Oakland residents are in collective shock and disbelief that the City of Oakland will have to pay between $250 million and more likely closer to $678 million in damages from how it mishandled the Oakland Bulk and Oversized Terminal or OBOT development project. Some of those who call themselves “progressive” or “No Coal In Oakland” have been only too happy to point the finger at Oakland Developer Phil Tagami and his companies California Capital Investment Group and Oakland Bulk and Oversized Terminal LLC, but documents that make up the 2013 Lease Disposition and Development Agreement aka LDDA tell a vastly different story.
It tells a story that has the City of Oakland in direct partnership with Oakland Bulk and Oversized Terminal LLC,, the City of Oakland expressing a stated mission to build a long-desired “working waterfront and break bulk commodities terminal” which it identifies as “The proposed Oakland Bulk Oversized Terminal”, and a large number of public officials aware of the stated objective, including Alameda County Supervisor Keith Carson and Oakland Mayors Ron Dellums and Jean Quan even before Oakland Mayor Libby Schaaf, who was on the Oakland City Council from 2010-2014 before becoming the 50th Mayor of Oakland in 2014.
Here’s key language from the “EXHIBIT A, LONG-RANGE PROPERTY MANAGEMENT PLAN, OAKLAND ARMY BASE” document within the 2013 Lease Disposition and Development Agreement that points to break bulk commodities as “e.g. lumber, coal, sulfur” and does not have any language expressing concern for those commodities as the focus of the project.
The proposed use of Parcel E is as part of a new working waterfront and break bulk commodities terminal. See site plan attached as Attachment D. The transition by the major U.S. ports to container terminal and mechanized operations has forced break bulk products, mainly commodities (e.g. lumber, coal, sulfur), to be transported via truck to vessel, or to operate from secondary, smaller ports (e.g. Stockton) both of which limit the capacity, decrease the efficiency and increase the cost of these types of bulk product shipping operations. The proposed Oakland Bulk Oversized Terminal, using Parcel E and other adjacent land, would link rail to vessel break bulk shipping operations. Since Parcel E is Tidelands Trust parcel, transfer of Parcel E to the City will require the approval of the State Lands Commission. ORSA’s remaining interest, if any, in the City-owned Army Base parcels will be quitclaimed to the City for future development as described above.
Yet the document also includes mention of the Oakland City Council as one of the parties consulted regarding OBOT:
“Following conveyance of the GDA to the Agency, City Council directed staff to update the land use planning, including revising the Interim Reportto correspond with current conditions and soliciting input from community stakeholders. Staff entered into a four-month series of workshops with the West Oakland Community Advisory Group (WOCAG). In addition, staff worked with the office of Mayor Ronald V. Dellums and the Oakland Metropolitan Chamber of Commerce to discuss the analysis of land uses being developed by their joint Oakland Partnership Initiative. City and Agency economic development and planning staff also met with consultants from DC&E and BAE to evaluate the site alternatives. DC&E incorporated the input into a Final Report issued in October 2007.”
Also, the City of Oakland’s project manager for OBOT Pat Cashman hired an organization called The Tioga Group for the evaluation of OBOT and the ability of Phil Tagami’s group to “deliver” on the development of OBOT and the viability of coal as a commodity to be handled from a standpoint of market performance. I talk about that in this video-blog, but the point is the Tioga Group report was written in such a way that some believed the City of Oakland was trying to take Phil and his team off the development project and replace them with another coal-focused developer.
The Long Range Property Management Plan For The Oakland Army Base
What follows is the complete text from the document copied and pasted without editing or adjustment to maintain authenticity. Zennie62Media has had this document set since 2019, and was hired by Insight Terminal Solutions President John Siegel to present and distribute it and other information the City of Oakland had previously held from public view via court order. That’s right: the City of Oakland was trying to cover up the truth about OBOT.
EXHIBIT A
LONG-RANGE PROPERTY MANAGEMENT PLAN
OAKLAND ARMY BASE
Introduction
On June 27, 2012, Governor Brown signed into law Assembly Bill 1484 (AB 1484), a budget
trailer bill that makes changes to the redevelopment agency dissolution process implemented by
Assembly Bill 1X 26. AB 1484 requires all successor agencies to develop long-range property
management plans that address the disposition and use of former redevelopment agency
property. This document is the Long-Range Property Management Plan for Parcel E at the
former Oakland Army Base, owned by the Oakland Redevelopment Successor Agency
(“ORSA”), as well as the remainder of ORSA’s interest in the Oakland Army Base, owned by the
City of Oakland.
Health and Safety Code Section 34191.5(c) requires that the plan include certain information, as
well as address the use or disposition of the property. The required information is provided
below.
The date of the acquisition of the property and the value of the property at that time, and an
estimate of the current value of the property.
Gateway
Area
Street
Parcel Number
Date of
Acquisition
Value at
Acquisition
Current
Estimated
Value
Area
1 Parcel E
Burma Rd
0000-0507-001-07
8/7/2003 from
Army to OBRA;
8/7/2006 from
OBRA to RDA
No cost EDC
$0
16.73 ac
2
City Army
Base
parcels
Burma Rd
Maritime St
Wake Ave
018-0507-001-10
018-0507-001-11
018-0507-004-01
018-0507-004-04
018-0507-005
018-0507-006
018-0507-007
018-0507-008
8/7/2003
from Army to
OBRA; 9/19/2006
and 5/17/2007 from
OBRA to RDA;
1/31/12
from RDA to City
No cost EDC
$0
152.32 ac
1 In 2003, to enable local economic development and job creation, pursuant to the federal base
reuse law (“BRAC”, Section 2903 of Title XXIX of Public Law 101-510), the U.S. Army
transferred the decommissioned Oakland Army Base to the Oakland Base Reuse Authority
(“OBRA”), a joint powers authority consisting of the City, the Redevelopment Agency of the
City of Oakland (“RDA”), and the County of Alameda, via a No-Cost Economic Development
Conveyance (“EDC”). The terms of this conveyance were provided in a 2002 EDC
Memorandum of Agreement (“EDC MOA”) between the Army, OBRA, and the RDA.
The EDC MOA anticipated that OBRA would dissolve after completion of the transfer, and its
interests and obligations would be assumed by the RDA. As anticipated, in 2006 and 2007,
OBRA conveyed its interest in the property to the RDA, and the RDA assumed all obligations,
including those associated with the EDC MOA and related transfer documents.
The Army Base property, other than Parcel E, was transferred to the City in 2012 by grant deed.
This transfer was determined by the State Controller, as part of its review of asset transfers per
Health and Safety Code Section 34167.5, to be an allowable transfer. See Attachment A. The
inclusion of the City-owned property in this Plan, and ORSA’s transfer of any remaining interest,
if any, in these parcels is done for the purpose of clearing up title, allowing completion of
remediation and redevelopment, and completing any remaining process required by the
California Department of Finance in accordance with AB 1484.
The purpose for which the property was acquired.
Parcel E is part of the Gateway Development Area (“GDA”) portion of the former Army Base.
The GDA, the largest piece of undeveloped land in Oakland, is located within the Oakland Army
Base Redevelopment Project Area, which is separated from the West Oakland Redevelopment
Project Area by I-880 and various railroad tracks. West Oakland was severely impacted by the
closure of the Army Base, which at the time of closure employed more than 1,800 civilians,
many from the West Oakland community. One of the primary goals for redevelopment of the
Army Base is economic development and the creation of jobs with potential for advancement.
The Army Base property was acquired from the Army for the express purpose of promoting
economic development. It should be noted that the development of Parcel E is limited to
Tidelands Trust consistent uses (maritime, ancillary maritime and public access related uses).
Parcel E and the City-owned Army Base parcels are subject to the restrictions and requirements
of the EDC MOA.
Parcel data, including address, lot size, and current zoning in the former agency
redevelopment plan or specific, community, or general plan.
Parcel E is approximately 16.73 acres in area. This parcel does not have a specific address. The
Assessor’s Parcel Number for Parcel E is 018-0507-001-07. Parcel E is zoned IG, General
Industrial. The IG zone allows heavy industrial and manufacturing uses, transportation facilities,
warehousing and distribution, and similar and related supporting uses. The City-owned Army
Base parcels are approximately 152.32 acres in area. These parcels do not have a specific
address. The Assessor’s Parcel Numbers are: 018-0507-001-10, 018-0507-001-11, 018-0507-
004-01, 018-0507-004-04, 018-0507-005, 018-0507-006, 018-0507-007 and 018-0507-008.
These parcels are zoned IG, General Industrial and CIX-1 Commercial Industrial Mixed Use.
The proposed use of Parcel E and the rest of the Army Base parcels are consistent with the City’s
General Plan, the Oakland Army Base Redevelopment Plan, including its five-year
2 implementation plan, and the Final Base Reuse Plan, all of which have included extensive
community engagement processes.
An estimate of the current value of Parcel E including, if available, any appraisal information.
The current estimated value of Parcel E is less than $0, i.e., Parcel E has a negative market value
considering its current condition.
The Army Base property, which includes the approximately 16.73-acre Parcel E, has been
comprehensively appraised a few times during the development process. The first was an
appraisal in 2003 which valued the 280-acre Army Base at $105.5 million or $8.63 per square
foot. The 2003 appraisal listed 15 assumptions and 9 limiting conditions, including an
infrastructure cost estimate of $26.5 million or $2.18 per square foot. Additionally, the $26.5
million cost estimate was based on 2003 construction costs.
In 2006, an Army Base appraisal for the State Lands Commission (SLC) legislation and Army
Base Exchange Agreement was completed. The 2006 appraisal contained 25 assumptions and
limiting conditions, including the same $2.18 per square foot infrastructure cost estimate. This
cost was based on 2006 construction costs. The 2006 appraisal estimated the Army Base value at
$1500 per square foot.
These two appraisals provide a starting point for an estimate of the current value of Parcel E.
However, both appraisal are pre-2007/2008 economic recession/depression, are old and outdated
and do not provide a full accounting of the correct costs of mitigating all site constraints. The
current, correct cost of site mitigations, including infrastructure costs should include the
following: existing infrastructure master plan and design, existing buildings, hazardous
materials, poor soil conditions, obsolete utilities, substandard roads, poor rail infrastructure, labor
relations, community benefits and CEQA compliance. These costs to cure/mitigate total an
estimated cost to cure of $525 million or $43.23 per square foot (total acreage being 265 acres –
all Army Base property now owned by the Port and City). The cost to cure estimates were
prepared by the City and its consultants for the Oakland Army Master Plan Design Set, which
was approved in conjunction with the Oakland Army Lease Disposition and Development
Agreement and the Amended and Restated Cost Sharing Agreement.
Using either $8.63 per square or the $15.00 per square foot value, including the $2.18
infrastructure assumption, the appraised value of Parcel E without factoring in the cost of site
mitigations would be $10.81 (2003 appraisal) or $17.18 (2006 appraisal), which would equate to
$7.4 million or $12.5 million in value respectively. Using $43.23 per square foot as the correct
cost to cure site mitigations, the total cost to cure for Parcel E is $31.5 million, which results in a
negative market value for Parcel E in excess of -$19 million.
In addition, Parcel E is subject to remediation requirements contained in the EDC MOA and
ESCA, as contained in a 2002 Consent Agreement with the California Department of Toxic
Substances Control (“DTSC”). As noted in the January 17, 2013 letter from DTSC, attached as
Attachment B, the state will continue to hold ORSA jointly and severally liable for the
remediation of the Base until the property is transferred to the City. This obligation further
reduces the value of Parcel E. See discussion below for a description of the environmental
contamination at the Base.
3 The current estimated value of ORSA’s remaining interest in the City-owned Army Base parcels
is $0; i.e., it has a negative value to ORSA, as ORSA’s only remaining interest are obligations
arising from ORSA’s joint and several liability for remediation, discussed below.
An estimate of any lease, rental, or any other revenues generated by the property, and a
description of the contractual requirements for the disposition of those funds.
Parcel E is currently occupied and used by Foss Maritime Company and the California
Department of Transportation (“Caltrans”), as well as Caltrans’ Bay Bridge Construction Project
contractors. Foss Maritime Company is on a month-to-month lease agreement and its monthly
rent, currently paid to the City, is $4,500. The City plans to terminate the Foss Maritime
Company lease to commence the Army Base Infrastructure Project sometime in 2013. Caltrans
and its contractors occupy the approximately nine -acre western portion of Parcel E and another
17-acre portion of Army Base property known as the West Gateway Development Area under a
Temporary Construction Easement recorded in 2002. There are no lease payments for this use;
however, litigation settlement funds from Caltrans for the 2002 taking and its delay to the
development and revenue production of this 26-acre property were received in 2002 and 2009
and transferred to the RDA with the remaining RDA Army Base funds on January 2012. After
the Foss Maritime lease is terminated to allow for the public infrastructure improvements, the
City will not be collecting revenues until it enters into ground leases for new development on the
Army Base.
The consideration for conveying the EDC Property to OBRA and subsequently to the
Redevelopment Agency was OBRA’s and the Redevelopment Agency’s agreement (1) to
complete the environmental remediation of the EDC Property and achieve regulatory closure, as
defined in the Environmental Service Cooperative Agreement (ESCA) among the Army, OBRA,
and the Redevelopment Agency, and (2) to commit all EDC Property Proceeds to the economic
development of the EDC Property during the Reinvestment Period. The EDC MOA allows the
following uses:
(1)
Road construction
(2)
Transportation management facilities
(3)
Storm and sanitary sewer construction
(4)
Police and fire protection facilities and other public facilities
(5)
Utility construction
(6)
Building rehabilitation
(7)
Historic property preservation
(8)
Pollution prevention equipment or facilities
(9)
Demolition
(10) Disposal of hazardous materials generated by demolition
(11) Landscaping, grading, and other site improvements
(12) Planning for or the marketing of redevelopment and reuse of the former OARB
In addition, the EDC MOA provides for environmental remediation costs and investments made
outside the boundaries of the former Base if they are directly related to the list of purposes and
directly benefit economic development and job generation objectives.
If at the end of the Reinvestment Period, OBRA or the Redevelopment Agency has not
reinvested the EDC Property Proceeds in accordance with the EDC MOA or demonstrated to the
4 Army’s satisfaction that they will be, all such amounts become payable to the Army. Prior to the
end of the Reinvestment Period on August 7, 2012, the Redevelopment Agency submitted to the
Army a Reinvestment Plan that committed EDC Property Proceeds to the completion of
environmental remediation, master planning, CEQA documentation, site preparation, and
infrastructure development.
On June 11, 2011, the Redevelopment Agency and the Port of Oakland entered into a Cost
Sharing Agreement which committed the Agency to invest up to $32 million in eligible Trade
Corridor Improvement Fund (“TCIF”) expenditures on the former Army Base in return for up to
$62 million of the Port’s $242 million TCIF allocation. Eligible expenditures include site
remediation, planning and design, and construction of backbone infrastructure. On June 19,
2012, the City and the Port executed an Amended and Restated Cost Sharing Agreement which
committed the City to invest up to $54.5 million on TCIF eligible expenditures in return for up to
$176.3 million of the TCIF allocation.
On August 22, 2012, the California Transportation Commission amended its Project Baseline
Agreement with the Port for the TCIF Program to include add the City as a party and signatory to
the agreement and to revise the project scope to reflect that the bulk of the TCIF allocation will
be used for the City site preparation and backbone infrastructure.
There are no lease or other revenues accruing to ORSA from the City-owned Army Base parcels.
The history of environmental contamination, including designation as a brownfield site, any
related environmental studies, and history of any remediation efforts.
Environmental contamination from past Army Base activities and older industrial uses was found
and characterized during City/Agency and Port investigation and testing. The former Base is
currently being remediated under a joint City-Port program to commercial and industrial
standards under a Remedial Action Plan (“RAP”) and a Risk Management Plan (“RMP’)
approved by the DTSC”. These agreements, as well as a DTSC-approved Covenant to Restrict
Use of Property (“CRUP”), establish the clean-up goals and reporting procedures, restrict the
uses of the former Army Base property, and are binding on eventual developers and future
owners of the property.
See Attachment C for a list of all the Environmental Assessment Reports for the GDA (current
as of May 2012).
A description of the property’s potential for transit-oriented development and the advancement
of the planning objectives of the successor agency.
As part of the 2003 transfer of the Army Base properties from the federal government, the State
of California required a Covenant to Restrict Use of Property (CRUP) to be recorded against the
Army Base property. The CRUP prohibits the Army Base property, including Parcel E and the
City-owned Army Base parcels, from residential development or residential uses. Therefore, the
property is not suitable for transit-oriented development.
A brief history of previous development proposals and activity, including the rental or lease of
property.
5 Following Base closure, OBRA engaged in a series of planning processes that culminated in the
Final Reuse Plan for the Oakland Army Base, adopted on July 31, 2002. As a result of the
planning process and negotiations, in August 2006, approximately 170 acres of the former Army
Base, including Parcel E, were conveyed to the Redevelopment Agency to comprise the Gateway
Development Area (“GDA”) and 220 acres to the Port of Oakland for its Port Development
Area.
In preparation for the Agency assuming ownership of the GDA, OBRA undertook additional
predevelopment planning to create a refined list of potential uses for the site, identify evaluation
criteria and develop site plan alternatives to assist the Agency in defining its property disposition
program and a developer solicitation process. In March 2005, OBRA hired a consultant team led
by Design, Community & Environment (“DC&E”) to assist with the planning process. DC&E
was supported by Bay Area Economics (“BAE”) for economic, market and fiscal analysis and
SMWM for site design. In June 2005, DC&E issued an Interim Report, which provided a market
scan of 25 potential uses, a draft of a detailed opportunities and constraints report, and four site
alternatives.
Following conveyance of the GDA to the Agency, City Council directed staff to update the land
use planning, including revising the Interim Reportto correspond with current conditions and
soliciting input from community stakeholders. Staff entered into a four-month series of
workshops with the West Oakland Community Advisory Group (WOCAG). In addition, staff
worked with the office of Mayor Ronald V. Dellums and the Oakland Metropolitan Chamber of
Commerce to discuss the analysis of land uses being developed by their joint Oakland
Partnership Initiative. City and Agency economic development and planning staff also met with
consultants from DC&E and BAE to evaluate the site alternatives. DC&E incorporated the input
into a Final Report issued in October 2007.
In the report, DC&E encapsulated the various land uses it had analyzed into four conceptual site
alternatives. These alternatives, intended to present the Agency with distinct, yet viable
alternative visions for the Gateway Area, are designated as:
1. Eco-Oakland, which focuses on providing flexible, primarily light industrial land
uses that support the green technology and economic development initiatives of
the City of Oakland;
2. Destination Oakland, which provides a signature retail destination for Oakland
and Bay Area residents that capitalizes on the almost 300,000 cars per day that
pass by the site;
3. Gateway Oakland, which also capitalizes on the site’s high visibility and access
to transportation to attract advanced technologies and creative industries;
4. Mixed Use Oakland, which combines elements of Destination Oakland and
Gateway Oakland, with the largest emphasis on logistics and other maritime
serving uses to build on synergies with the Port.
In January 2008, the Redevelopment Agency initiated an RFQ/RFP process to identify a master
developer for the GDA. The process resulted in the selection of AMB/California Capital Group
(reorganized as Prologis/CCIG) and a development strategy for the GDA, which is to align GDA
development with the Port’s operations and long-term expansion plans. Doing so will give the
GDA regional or national reach and better position it to obtain regional and national support.
6 The City has entered into a Lease Disposition and Development Agreement (“LDDA”) with
Prologis/CCIG for the development of a trade and logistics center on the City-owned Army Base
parcels and Parcel E. The development will create an estimated 1,840 – 2,330 new on-site jobs,
and indirectly support an additional 3,140 – 4,225 jobs throughout the region.
The City’s Project and separate portion to be constructed by the Port will be funded in part by a
Trade Corridor Improvement Fund (“TCIF”) grant: (a) the City’s construction of approximately
$247 million in new public infrastructure improvements (streets, utilities, wharf and rail)
necessary for the development of the City’s and the Port’s respective portions of the former
Oakland Army Base property (the “City Project”) and (b) the Port’s construction of Phase 1 of
the new port rail terminal that will serve development to be located on the City and Port
properties (the “Port Project”). While the City Project and the Port Project are the subject of the
same Project TCIF Baseline Agreement, they are the subject of two different funding allocations.
The following chart summarizes the sources of funds (listed in millions) for the development of
the City Project and the Port Project:
Project Segments
TIGER
Grant
Port
Match
City
Match
Private
Match
Total
TCIF
Grant
Total
1. Remediation
$ 5.7
$ 5.7
$ 11.4
2. Rail Access Imps & Manifest Yard
$ 5.0
$ 3.8
$ 65.8
$ 74.6
3. City Site & Backbone Infrastructure
$ 45.0
$ 25.9
$176.3
$247.2
4. Recycling Facilities
$ 46.6
$ 46.6
5. Logistics
$ 99.4
$ 99.4
6. Unit Train Support Yard
$ 15.0
$ 5.0
$ 20.0
Totals
$ 15.0
$ 15.7
$ 54.5
$171.9
$242.1
$499.2
% of Total
3%
3.2%
10.9%
34.4%
48.5%
100%
% of TCIF Grant Match
6.5%
22.5%
71%
100%
The TIGER grant was awarded to the Port in 2012 (TIGER IV funding) and the Port and City
funds are either currently in hand or will be funded through the City’s proposed sale of the
approximately 20- acre “North Gateway” portion (parcels 018-0507-004-01, 018-0507-004-04,
018-0507-005, and 018-0507-008) of the former Oakland Army Base property. The balance of
the project is proposed to be funded by the TCIF grant and private matching dollars provided
through the LDDA and the development of the North Gateway property.
Under the TCIF Baseline Agreement, the City and the Port will have until August of 2020 to
deliver evidence of the required matching funds. The various sources of the matching funds are
outlined in the table above. The “Private Match” funds will be supplied by the developers’
construction of vertical improvements on the City property (logistics and recycling facilities).
7 The Port of Oakland received their TCIF allocation in the amount of $65.8 million in October
2012. On May 7, 2013, the California Transportation Commission (“CTC”) unanimously
approved the City of Oakland’s TCIF grant allocation in the amount of $176.3 million. The
deconstruction of above grade structures is scheduled to begin in July 2013. Site preparation and
the construction of major infrastructure improvements are scheduled to commence in September
2013.
The use or disposition of the property, which could include: 1) the retention of the property for
governmental use, 2) the retention of the property for future development, 3) the sale of the
property, or 4) retention of the property to fulfill an enforceable obligation.
Parcel E will be transferred to the City of Oakland to be retained and used by the City for future
development, along with future development of the rest of the GDA as described above. As
noted above, this project has been identified in a number of approved redevelopment plans,
including the Oakland Army Base Redevelopment Plan and its five-year implementation plan,
the Final Base Reuse Plan, the City’s General Plan and the LDDA.
The proposed use of Parcel E is as part of a new working waterfront and break bulk commodities
terminal. See site plan attached as Attachment D. The transition by the major U.S. ports to
container terminal and mechanized operations has forced break bulk products, mainly
commodities (e.g. lumber, coal, sulfur), to be transported via truck to vessel, or to operate from
secondary, smaller ports (e.g. Stockton) both of which limit the capacity, decrease the efficiency
and increase the cost of these types of bulk product shipping operations. The proposed Oakland
Bulk Oversized Terminal, using Parcel E and other adjacent land, would link rail to vessel break
bulk shipping operations.
Since Parcel E is Tidelands Trust parcel, transfer of Parcel E to the City will require the approval
of the State Lands Commission.
ORSA’s remaining interest, if any, in the City-owned Army Base parcels will be quitclaimed to
the City for future development as described above.
Based on economic analysis by Keyser Marston Associates, there are significant fiscal, economic
development, and community benefits accruing to the taxing entities from successful
development and reuse of Parcel E and the Oakland Army Base property as a whole, and taxing
entities have provided their support of this approach, so that they will forgo any immediate
compensation for the future taxing benefits (see Attachment E).
Attachment A, State Controller’s Summary of Review
Attachment B, January 17, 2013 Letter from DTSC
Attachment C, Environmental Assessment Reports
Attachment D, Proposed Preliminary Site Plan
Attachment E, KMA Report and Taxing Entities Letters
8