City Walk Update

If you live or work anywhere near City Center in downtown Oakland, you’re no doubt familiar with the City Walk project, which has been sitting half-built right behind the Federal Building for what seems like forever. Olson stopped construction on the building back in July 2007.

This site has been a problem long before Olson got their hands on it, although none of the other obstacles were quite so ugly. Back in 2000, the City certified an EIR for planned projects on four lots in the City Center area to be built by Shorenstein – it included 555 12th Street (sometimes affectionately called the “Ask” building), 601 12th Street (the now-stalled project on the empty lot right behind 555), and the lot between 555 and 111 Broadway (sometimes known as the APL Building). And also, the lot right behind the Federal Building, charmingly referred to as T-10.

The plan originally was for Shorenstein to stick a mixed use tower on the site with 550,000 sf of office space and 200 residential units. Shorenstein later decided they didn’t want it, and the City was stuck with trying to figure out what to do with the site next. So they put it out for bids, and a Houston-based company named Camden Property Trust won out with a promise to pay us $7 million for the right to build a 36 story, 480 unit high rise apartment building. This was back in October 2002.

The Camden jerked us around for a while, eventually bringing plans to design review for a 220-unit, 8 story building, and demanding that the City guarantee them a five percent return on investment for five years. We said no thank you, Camden went home, and we were once again stuck with a big lot and nothing to do with it.

Enter Olson. The Olson Company bought the land from the City in September 2004 for $8.7 million, and agreed to build 252 market-rate condominiums and 3,000 sf of retail space to be completed by the end of 2007 (construction started in March 2005). Obviously, that didn’t happen. Towards the end of 2007, Olson’s DDA was expiring, so the Council voted to extend it with a new completion deadline of June 30, 2009 . Olson never managed to meet the requirements set forth in the revised DDA, placing them in default with the City, and although there has been the occasional report of construction starting again, Olson just never managed to get it together, and tonight, the Council will again amend Olson’s DDA.

At this point, Olson’s giving up. What we’re doing now is amending the DDA (PDF) so that they won’t be in default anymore which will allow them to sell the property to somebody else, ideally a rental housing developer. The newly revised schedule will require Olson, or whoever buys the project from them, to begin construction by the end of May and finish the entire project by December 31, 2010. Of course, given the history of the project, these dates are essentially meaningless. There is no reason, at this point, to expect that Olson will conform to their schedule when they’ve already failed to do so twice.

So now we just sit and wait and cross our fingers and hope that Olson can find a reputable rental housing developer to buy the project and complete it. Anyone want to place bets on how long we’re going to have to keep looking at this blight?

39 thoughts on “City Walk Update

  1. dbackman

    Adding to the complications of this project is the fact that when Olson stopped construction, the left the incomplete construction exposed to the elements. By now much of the plywood decking is probably rotting and will have to be replaced. The east end of the project is now wrapped in plastic, but this step was only taken a few months ago, after more than a year of exposure. A lot of the building materials are probably compromised by now. Who is going to want to take over this project with so many outstanding problems?

  2. Navigator

    How many half baked construction sites has Oakland suffered through in the last few years? I mean, if these developers start something they should be required to finish it and worry about the financial and legal entanglements later. If they’re not sure about a development, then don’t start it. Why should Oakland have to live with a a multi story rusting relic in the middle of what is otherwise a clean, modern, and thriving City Center? This is a complete disgrace and so is the Shorenstein hole in the ground at 12th & Jefferson.

  3. oaklandhappenings

    Nav, that is precisely what I was saying, especially in regards to 601 City Center. Once again, San Francisco companies (i.e. Shorenstein) and their sleezy, unpromising ways should NOT be allowed to develop/own major projects in Oakland. I pointed this out with Ellis Partners and JLSquare a week or so ago. As for Shorenstein, what exactly have they done to improve city center, aside from 555 city center? Nothing! It is still practically a Ghost Town at Night, the elevators leading up to the mall are often not on ( the other two sets being 2 years past due of their completion). They even let “San Francisco Soup Company” lease space at the mall’s west end (although I never was craxy about McDonalds being there. City Center should be full of Oakland-brand type of restaurant/caf├ęs– not these big chain names (jamba juice, briazz ,etc). There are some decent ones there foodwise,, such as Panda Express, Max’s, Top Dog, and the new yogurt place being set up next door to Max’s.
    Are there any Oakland-based firms/companies (or other east bay ones) that can “grab the bull by the horns” and help keep our development from falling victim to SF firms/companies?

  4. Hayden

    My recollection is reading a story that the construction work on this project–specifically the welding–was sub-par, and had to be redone a couple times, delaying the project prior to the housing market going south.

    In Chicago, a subdivision begun–but never completed–during the Great Depression was subsequently turned into a prairie–complete with sidewalks, the only part of the project that *was* finished. The Village of Oak Park, on the City’s western border, for many years had a huge foundation hole next to its downtown called the “Stankus Hole,” after the developer who abandoned a big project there and left the eyesore. It was ultimately developed into a combination high-rise/low-rise condo project, so presumably there’s hope for Citywalk.

  5. dto510

    Happenings, how is Shorenstein sleazy? I am as annoyed as the next person that 601 12th St’s construction is delayed, but Oakland is not a victim of SF developers, it’s a victim of the national economy (and our government’s incompetence which scares away potential employers). As a prominent Oakland businessman reminded the Mayor recently, the economy does not stop at Oakland’s borders. Restricting development to local companies and (aside from being unconstitutional) would mean many, many more abandoned construction sites than those held by well-capitalized and strongly-committed Shorenstein. There is not a single major office developer based in the inner East Bay. You can complain about certain chain stores you not patronize as much as you want, but they are popular and successful in City Center. The office/lunchtime retail complex is not meant to be all things to all people. Don’t take its tenant mix personally.

  6. Aaron Priven

    There is too much empty retail space in downtown Oakland (and Oakland generally) to complain about chain stores. I’m no huge McDonald’s fan but the space on Webster near 20th that used to be a McDonald’s has been nothing at all for five years or so. I’d rather it be McDonalds than nothing. Every day I walk by empty strorefronts on 14th, 15th, etc.

    Before I met my wife I was seriously considering one of the CityWalk condos. (Says something that it’s been “under construction” since before I even met her.) It’s a good location.

  7. SF2OAK

    I’m not clear about why you call the developers sleazy- it takes developers years to entitle buildings, during which time there are obvious changes that may derail a development. Why not incentivize a fast track to build? There seems to be no master plan for OAK. You must blame OAK for some of the delay.

  8. Michael H

    SF2Oak,

    It should not take years for developers to entitle their projects, it only takes them years because they are trying to go above and beyond the current zoning or building ordinances. It is this back and forth approval process that hangs up developers, and on top of that when developers purchase land, it is their responsibility to know what is allowed to be developed in that plot.

    The problem with downtown oakland right now, is that there isn’t enough heads in the downtown to promote large chain retail, and no one comes downtown, because there is nothing to do. Chicken and Egg basically.

    In my personal opinion, oakland should pursue tax credits for small businesses, and build up services this way instead of focusing all the efforts on massive developments hoping corporate companies will move into them. Don’t get me wrong, oakland does need class A office space, and just a broad range housing types to accommodate citizens from different walks of life as well.

    There should be significant tax credits for the construction or renovation of businesses, tax credit for creation of jobs, and tax credit for equipment or capital. This focus should help specifically smaller businesses, and bring more development downtown.

    Many of the current developers are stalling until the market turns the corner, and housing prices begin to crawl back out of the hole. Sorry for the random tangent, just had some thoughts to get off my chest.

    Michael

  9. Carlos Plazola

    Michael, even completely conforming to building and zoning code (that is, no variances or rezoning requested) could take more than a year, depending on the size of the project. Large projects could take more than a couple of years, even when they are completely compliant because the city may require traffic studies, air quality studies, multiple plan revisions, and even a focused or full EIR. For hills projects, it could be even more difficult because of grading, biological, creek, and aesthetic issues.

    In short, the planning entitlement process can be complex and cumbersome, even for those not asking any special favors with respect to zoning or building codes.

    Carlos

  10. Donald

    You can throw tax credits around all you like, as though the mere mention means a changed economic environment, but I don’t think it will have the expected magic.

    First of all, Oakland gets mainly two kinds of taxes: property and business. Small businesses that don’t own property can’t benefit from the former. That leaves the business tax. It’s enough, I pay it, but it’s in big round numbers about 1% of gross receipts. You could refund all a company’s business tax and not have enough to cover any substantial construction or renovation. (And, renovation is just about the most expensive form of construction you can deal with).

    So Oakland just doesn’t have enough in the pot to dispense tax credits in a way that amounts to anything. And, since tax credits would only make budget shortfalls worse, you can see there just isn’t much to play with there. Oakland can’t print money like Nancy Pelosi and it’s a good thing.

    If you want more small business in Oakland, which can’t hurt, you have to look at what keeps small business away (and what tips the scales for those that say Oakland is ok). If you do I think you will find that businesses consider many factors, taxes being only one, in deciding where to locate.

    When Shorenstein stops construction on a project it has started, you can pretty much assume that they do not see demand for the space for *at least* 3 years (2 for construction and 1 to rent out). Oakland downtown real estate took, if I recall, about 5 years to claw back from the earthquake. That seems about right to me.

    Even in tough economic times, though, there is a lot we can do to emerge smart and ready to grow again. Hard budget realities may be a blessing if it helps us find the essentials of government services and civic life again.

    Donald

  11. Ralph

    i don’t get how developers are sleazy, but fortunately i’ve gotten hip to east bay distrust of development…i would like to see more development downtown anything to drive away the professional woman, but i also understand a business need to earn a reasonable return. if ron could walk and chew gum maybe we make some inroads on these fronts (but that won’t change returns)

  12. oaklandhappenings

    Folks, thanks for your feedback. By “sleazy,” I was thinking more of Ellis Partners (give us a chance and we’ll 1-up Pier 39 at JLS) and one or two others, as opposed to Shorenstein. My error there, for blanketing too many names with the word–which may have been the wrong one to being with–sorry. However, my feelings about Shorenstein still are not too good. Digressing somewhat, their security officers in the evening–on the mall–are horrible about approaching panhandlers who seem to hassle those walking by. That makes City Center even more avoidable to stroll through even after 6 PM (to remaining open eateries and club One, for example). Back to the development side of Shorenstein, agreeing with Navigator and others here, I feel that they made a bad mistake about starting 601 in October, when the economy was already not good. They may not be sleazy, but someone (perhaps) associated with them is not very wise.

  13. DontBotherDelores

    I thinks Oaklandhappenings is sleazy! I don’t have any facts and maybe I’m confusing him the The Navigator or the Boss, who knows, but I just like saying it because saying that is a whole lot better than facing facts that the economy is in the tank, it ain’t getting much better and certainly not on DoNothing Dellums watch, so there!

  14. Max Allstadt

    You know, I went drinking with the right people a few days ago, and somebody pointed out a theory about developers and why everybody hates them…

    Scooby Doo!

    The bad guy in every episode is a developer! So what’s happened in the East Bay? Clearly, a small group of vocal people have eaten too many Scooby Snacks.

  15. Max Allstadt

    Well since it used to be an “Boys Club” that got , I figured I should adjust my thinking for a new era…

    Check out this factoid:

    With the election of Rebecca Kaplan, 7 out of 11 of the Elected Officials at Oakland City Hall are women. That’s almost a super majority.

    So I think if I want a planning commission seat, perhaps I should start buying rounds for well connected women!

    A couple of other factoids (not well checked) about City Hall after Kaplan’s innauguration:

    City Council’s average age has been reduced by over four years, from over 59 down to a little over 55.

    City Council’s average height has been reduced by approximately one inch.

    Generational make up of City Hall electeds has shifted a little too:

    Baby Boomers: Only a bare majority now. 6 out of 11.
    (Nadel, Brunner, Kernighan, Quan, De La Fuente, and Reid).

    Generation Jones: 3 out of 11
    (Brooks, Russo, Ruby)

    Generation X: We finally got one!
    (Kaplan, of course.)

    Silent Generation: 1 of 11 (Dellums)

    ——-

  16. V Smoothe Post author

    You think Kaplan brought down the average height of the Council by a whole inch? I don’t know about that. She’s short, but so are Jean, Ignacio, and Desley.

  17. Max Allstadt

    It’s not about Kaplan being petite and young, per se. It’s the contrast between her and Chang that has skewed the averages so much.

  18. V Smoothe Post author

    Oh, duh. He was tall. Unfortunately, he was also quite forgettable. So forgettable in fact, that he’s only been gone a month and I forgot how tall he was.

  19. Max Allstadt

    V- that’s not nice! Henry was the mellowest and friendliest council member, second only to Pat. And the had the coolest back story by far. I do think he underused the office. It looks like Rebecca is going to be the first one to really test this role to see what it can actually accomplish (she’s only the second one to have it).

    Ralph -

    http://en.wikipedia.org/wiki/Generation_Jones

    I’ve posted this link before. Generation Jones is what goes between Boomers and X. A lot of Boomers and Xers mistakenly think Jonesers are Boomers. All of this is somewhat arbitrary, but I agree with the article in the link – there’s a distinct cultural difference in the way this particular age bracket sees the world.

    The “Silent Generation”, which I counted Dellums as a part of, is the generation that was too young to fight in WWII, but old enough to experience it and remember it. Many of them lost fathers or older brothers to the war. They come after the GI Generation and before the Boom.

  20. oaklandhappenings

    DontBotherDelores, if you had read my last post carefully, you would have seen that I (casually) apologized for using what could have been–and apparently is–the wrong word. Refrain from the smart-a** remarks, please. I didn’t intend to disrespect any posters on this blog, as you seem to towards me.

  21. Ralph

    Thanks Max. I do wish when people redefine generations they would make big public announcement. My entire life I understood ’46 – ’64 as being the boomers. Then, someone goes and drop the Jones on me. Really, is it too much to ask for a full page ad in the NYT.

    Now, I often wondered how much someone born in the 40s had in common w/a child of the 60s- fortunately, I had my family as a test case. Other than blood, not much and I guess I was not the only one who to reach the same conclusion. But ‘merica, please for the love of dog, next time you want to make these changes, please hano, and take out a full page announcement in the NYT.

  22. Max Allstadt

    The ’46-’64 range that we’ve heard so often is really just another example of the Baby Boomers trying to take more territory than they need!

  23. Patrick

    I agree wholeheartedly, having been born in 1964. My childhood was full of the Vietnam war, the Apollo mission, Nixon, gas rationing, forced school integration, GI Joe, Star Trek, Mutual of Omaha’s ‘Wild Kingdom’, Sesame Street and The Brady Bunch. By the time those things rolled around, someone born in 1946 was already in their mid-twenties.

  24. Max Allstadt

    There are all sorts of ways of dividing up generations. The most well known are broad divisions that have been made by pop sociologists. But Patrick, you’re right, what really defines it is divisions in experience.

    I think to be really accurate, we need to consider that the dividing lines overlap where different realms of experience have moved at different paces.

    For instance, computers. I was born in 1976. By the time I was in Kindergarten, personal computers were beginning to appear in classrooms. By the time I graduated, the Web was beginning to be available in schools.

    Someone who graduated in 2006 could have had web access beginning in Kindergarten. Someone who graduated in 1982 may have had access to personal computers in high school. To most anyone who graduated before 1980, the primal image of a computer, etched into their young minds, was a big room full of blinky lights and reel to reel tape and punchcards.

    That’s just one layer. There are layers for politics, layers for race relations, layers for media saturation. It’s important to remember that they don’t all line up perfectly at cutoff points that some author defined using birthrate data. What’s more, some of these layers changed at different times depending on which socioeconomic strata you fall into. The big generational definitions are somewhat true, but they aren’t the whole story.

  25. Patrick

    It is definitely all about experience, as well as the belief system of an era. When I was a child, we knew that when we grew up we would be married (unless we, ahem, turned out gay), with a house in the suburbs, 2 cars, 2 kids, a stay-at-home mom and a job for Dad who worked until he retired, comfortably, at age 65 – oh, and the future was bright and shiny, America was a paragon of virtue and we could be anything we wanted if we just drank our milk, minded our parents and brushed with Crest. And let me tell you, I think what defines my generation is that we really did believe that – and in just 40 short years (well, the last 8 seem to have lasted for much longer) – all of that has been revealed as fantasy. It was clearly a much more innocent time.

    It’s been quite a shock.

  26. Ralph

    and my unofficial experiement continues…i am like hair a hair younger than patrick and we already debunked this 40 year man, stay at home mom foolishness

  27. len raphael

    MA, to continue your summary of the mayor’s office and council’s demographics, what are the resumes of current members? curious how many of them started out as teachers or as attorneys etc.

  28. Max Allstadt

    In brief…

    Four lawyers with various specialties. One in civil rights, one in prosecution, one in legal aid and private litigation, one private employment/union lawyer.

    One military man turned career politician. One PTA mom turned career politician. One machinist/union rep turned career politician.

    One geophysicist and “avid tricyclist” turned career politician.

    Skim their bios. Quan’s bio for kids is much more revealing than her main bio, which is just a resume, really. Some of the bios really leave huge gaps. Most of them haven’t done an update since before the election.

  29. V Smoothe Post author

    Max –

    There’s a difference between working as a political aide and being a politician. The terms are not interchangeable. I don’t think the term “career politician” is an appropriate way to describe someone unless they’ve held more than one public office.

  30. Max Allstadt

    Fair enough. Careers in politics? Public service? I didn’t use that term to describe anyone who was not elected or working directly for an elected or a hopeful. Besides, I was trying to keep it short. I think the similarity is that in either role, you have to do a godawful amount of bullshitting.

    To clarify:

    Reid was an aide to the mayor of Cincinnati and to Walter Mondale. IDLF has a gap in his bio from age 28 when he became a union rep to age 43 when he won his council seat. Quan worked as an organizer when she was young, but soon became a PTA mom, School Board President and council aide.

    I think 16 years in one office is a career, no?

  31. Max Allstadt

    Ok. Suffice it to say that a few of these folks have spent a lot of time in government.

    Quan, Kaplan, and Nadel have all held other elected offices.

    Kernighan, Quan, Reid, Brooks, and Kaplan list experience as aides to politicians. IDLF, Nadel and Brunner do not.

  32. SF2OAK

    I am still curious about those sleazy developers especially Ellis & JLS. let’s hear it- bringing business & jobs to Oakland is now sleazy.. Somebody commented about the dearth of Oakland eateries- wtf- I don’t know if OAK has a style or a brand. SF soup co, why not? those landlords charge high rent to be in city center , they want credit tenants, can you blame them.

    Now let’s go with the Oscar grant thugs who rampage killing downtown business, the small mom & pops struggle and don’t need this kind of help- the kind that pushes them over the edge. Where Oakland as a city runs roughshod over small businesses, then the rioters follow thru, Pg&E holds up service, don’t forget about the armed restaurant robberies, another nail in the coffin and now the economy. Just how unfriendly can one city be. and don’t forget bureaucrats who add nothing to the color & flavor get paid well for little to show for it, take no risks, and get a pension, vacation day, holidays. Get real, OAK ought to start respecting employers.

  33. Andrew

    Wow, there are lots of comments and I didn’t take the time to read them all (yet).

    One thing I can’t find is what the Mayor of Oakland and the council are trying to do to get this project complete. Despite a struggling economy, savvy businesses and entrepreneurs will forge ahead and are always looking for opportunity. Why did Emeryville get Ikea, Bay Street etc? Because Emeryville and it’s leaders gave them major credits to do so. All of that development should have be in downtown Oakland or Jack London.

    Bottomline, the leaders of Oakland could do more to ensure these projects get complete and should do more. More over, they do a piss poor job of marketing the city.

  34. Michael

    I worked on this project and I am still owed over $25,000 in payroll. I have been dealing with the labor board for over 3 years. Liberty Mut. is the bonding company who wrote a payment bond for UPA , who didn’t have a valid state contractors license. Talk about about sleazy, Oakland can do without these kind of savy entrepreneurs.