Friday, June 13, 2008

WOPAC goes "all in" with millions for empty lot

In a local version of funding the Bridge to Nowhere, the WOPAC approved spending $3,900,000 of your tax dollars to support a project many believe will never be built.

The project in question would erect 109 units of housing for persons of moderate income at 1396 5th Street, near the West Oakland BART station. The project site is significant to some WOPAC members because it is the former site of Red Star Yeast, a business that emitted foul odors for decades, limiting development possibilities nearby. It is a small patch of dirt – less than one acre – next to the freeway, and is known to have toxic issues. But additional funding for the $48MM project, while essential, is extremely problematic. The plan calls for an additional $18MM from the City’s NOFA funds. Marge Gladman of the Housing Department informed the WOPAC prior to their vote that total Notice of Funding Availability (“NOFA”) funds available in the coming year, for all housing projects citywide, would total only $16MM. $18MM for this one project will not be available from that source.

The project has already failed to win funding from the State of California’s Transit-Oriented Development Housing Program, on May 9th, and also was turned down by the State’s Infill Infrastructure Grant Program on May 23rd. While the developer has positioned his request for WOPAC support as necessary for appealing those decisions, the deadlines for filing documented appeals has passed, and the NOFA was heavily oversubscribed and highly competitive. The LLC that owns the land has gone bankrupt, and their former plan to build market-rate housing has been shelved. A new LLC was created to rescue the developers’ investments by constructing affordable housing at public expense. Few on the WOPAC expect, or even want, this affordable housing to be built. The WOPAC’s underlying intent is to purchase the site in order to control whatever eventually is constructed there. But there is no actual plan other than the affordable housing currently on the table.

A key motivation for several WOPAC members was the developer’s assertion that a builder from L.A. had offered $3.9MM for the property, with the intention of building low-income senior housing on the site. Members felt a site near a BART station was more suited to market-rate housing. WOPAC member Jabari Herbert stated that, as a developer, he had interests in multiple projects in the vicinity of the project site, and that a low-income housing project would have an adverse effect on those other projects. Mr. Herbert did not recuse himself, however, due to conflict of interest. Instead, Mr. Herbert voted with the WOPAC to purchase the property.

WOPAC co-chair Larry Rice was the only member to vote against the proposal.

The WOPAC currently has only $1,246,805 at their disposal. The bulk of the $3,900,000 would come from anticipated tax revenues for the 2008-2009 fiscal year. In other words, the WOPAC is going “all in” and committing most of your available redevelopment tax dollars for the coming year to purchase a Brownfields site for housing that won’t be built.

The land must be appraised and the City Council must approve the funding before money is actually spent.


Charlie2 said...

The lot is "known to have toxic issues." Uh oh, that might actually encourage the council to support low-income senior housing there. Councilmember Quan knew another lot, also by a freeway, has decades of benzine and other carcinogenic chemicals from auto paint, auto body, and gas station operation in the ground. That hasn't stopped her from riding roughshod over community opposition to a low-income senior housing proposal at High St. and MacArthur Blvd. See

Charlie2 said...

An investigative report on Mr. Herbert and this land:

Another Bad Deal

The City of Oakland plans to spend nearly $4 million for blighted land in West Oakland that sold for less than $2 million in 2004.

By Robert Gammon
East Bay Express, August 20, 2008


JAMMI Journalist said...

At its September 16th meeting, the City Council voted to spend no more than $2,750,000 for the parcel. Costs for any remaining cleanup of the site would be included in that total figure.