Maxson, Nayeli

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Campbell Washington, Annie <ACampbellWashington@oaklandnet.com>

Friday, May 29, 2015 3:51 PM
Maxson, Nayeli
FW: 12th St Remainder Parcel -- CED
12th Street Remainder Parcel-1-22-15-rev1-27 FINAL.pdf

From: Flynn, Rachel

Sent: Monday, April 13, 2015 10:16 AM
To: Campbell Washington, Annie
Cc: Flores, John; Lane, Patrick; Sawicki, Mark
Subject: 12th St Remainder Parcel -- CED

Hi Annie This property is being handled by Economic Development. Patrick Lane is the lead on it and can discuss with
you the points raised by Elissa Dennis. Im copying him on this e-mail. Thanks, Rachel
From: Campbell Washington, Annie [mailto:ACampbellWashington@oaklandnet.com]
Sent: Monday, April 13, 2015 9:58 AM
To: Flores, John; Flynn, Rachel
Subject: FW: E 12th St parcel issue for Tues CED

Hi John and Rachel,

Elissa makes a compelling point about the appraisal of the E. 12th Street remainder parcel. Can you call me to discuss?
(510) 599-8610 cell
Thanks so much,
Annie
Annie Campbell Washington
Oakland City Councilmember, District 4
(510) 238-7004
From: Elissa Dennis [mailto:elissa@communityeconomics.org]
Sent: Sunday, April 12, 2015 5:12 PM
To: 'acampbell-washington@Oaklandnet.com'
Cc: asimons@oaklandnet.com
Subject: FW: E 12th St parcel issue for Tues CED

Hi Annie,
This weeks topic is the E. 12th Street parcel coming to CED on Tuesday. Im sure youve been following the discussions
at Planning Commission and the Eastlake neighborhood groups efforts to stop the deal and have the City start over by
offering this site for affordable housing.
I think they have done a good job of pointing out the flaws in the way the City set up this deal. Under State surplus
property law, the site should have been offered first for the development of affordable housing. Im not sure what
could be considered more surplus than the remainder parcel from a publicly funded project. Even if the site
somehow could be determined to not meet those requirements, the Citys own ordinance called for a transparent
process where bids are solicited publicly, rather than a deal offered to only two developers in secret.
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So the Citys process was flawed from the outset by ignoring those requirements. However, we acknowledge that the
developer has acted in good faith based on the Citys representations, and it would not be pragmatic or fair to just undo
the deal. We do want to make sure, though, that the City secures a reasonable market value for the property and that
some of the proceeds from that sale are programmed for affordable housing.
We urge you to get an appraisal that accurately reflects market value for this important site.
Ive attached two appraisals: the Citys January 2015 appraisal of the E 12th parcel, and a June 2014 appraisal of a site
about a half mile away where an affordable housing project has started construction at 11th and Jackson Streets. The
Jackson appraisal is for a site about 2/3 the size of the E 12th site, and is appraised based on a similar number of units.
Yet, Jackson is appraised at $6.8 million, compared to $5.1 million for the E 12th site. If you look at page 34 of the E 12th
appraisal, and page 41 of the Jackson appraisal, you can see that they actually use two of the same comparable sales: #4
(522-532 20th St) and #5 (4700-4770 Telegraph) of the Jackson appraisal are #5 and #2 of the E 12th appraisal. But they
come to very different conclusions. The E 12th appraisal concludes that the set of comparable sales establishes a value
of $15,500/unit. The Jackson appraisal comps determine a value of $25,000/unit. If the $25,000/unit figure were applied
to the E 12th parcel, the value would be $7,450,000.
Other recent data also indicates the E 12th appraised value is very low. Weve just read about Carmel
Properties purchase of a site a mile away in Jack London Square for a reported $20 million to build 330 units in a
property very similar to the proposed E 12th building. And of course, the City secured an appraisal to support its $22
million purchase of the Brooklyn Basin parcels that might fit 400 units.
While we acknowledge that many of the deal terms for the E 12th parcel were set a while ago, the deal was always going
to be based on market value. The appraisal was just completed a few weeks ago, so there is no valid argument about
longstanding commitments that would apply to the purchase price.
A couple of weeks ago, the Council voted against our urging to upzone the Coliseum sites to the max, using its land use
regulatory authority to provide a windfall profit to a handful of private landowners. Here, you have the opportunity to
take advantage of a similar increase in value derived by City land use decisions, but in this case, one that could benefit
the Oakland community. Please dont just give away that value.
We urge you to program some proceeds from this sale for affordable housing.
The Council acknowledged in 2013 that the end of Redevelopment dictated a new approach to supporting affordable
housing development, and specifically that publicly owned land could be a tool in the absence of public dollars. In the
ordinance about boomerang funds, Council provided not only that 25% of boomerang dollars would be used for
affordable housing starting in 2015, but also 25% of the Citys receipts from land sales from the former redevelopment
agency. The E 12th St parcel bounced between the City and the Agency and we acknowledge it is not on the list of
Agency-owned property covered by the boomerang ordinance. But the principle could easily be applied here, with 25%
of the proceeds from this sale dedicated to affordable housing.
Alternatively, we understand that $4 million was the anticipated proceeds from the sale of this site that was
programmed into the current fiscal years budget. Although the timing will not work for these funds to be available in
current budget year anyways, you could choose to keep that $4 million as anticipated for the general fund and dedicate
the amount over $4 million for affordable housing. Or there could be other rationales/calculations. But however it is
calculated, we urge you to salvage some community benefit from this flawed process, and secure some revenue from
this site that serves the community.
Sorry for the lengthy email. Look forward to talking with you at 9:45am on Monday.
Thanks!
Elissa
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