Councilmembers Back $3,000 a Month Apartment Tower Project, Opposed by Eastlake Neighbors

Apr 16, 2015

Rendering of Lake Merritt Boulevard Apartments, courtesy of UrbanCore.

By Ken Epstein

The City Council’s Community and Economic Development (CED) committee voted unanimously this week to approve the sale of public land on East 12th Street across the roadway from Lake Merritt to a development company that wants to build a 24-story, 298-unit luxury apartment tower with rents that will go for about $3,000 a month.

Emphasizing the need for market rate as well as affordable housing and throwing in a number of community benefits, Councilmembers Rebecca Kaplan, Larry Reid, Lynette Gibson McElhaney and Annie Campbell Washington approved the project and forwarded the full council for a decision.

Also speaking at the meeting was Councilmember Abel Guillen, who backed the project, explaining that he was working with the developer to add more community benefits.

Michael Johnson of Urban Core Development. Photo by Ken Epstein

Guillen also urged councilmembers to seek a new appraisal, saying that the city’s $5.1 million asking price seemed to be too low. Committee members rejected the proposal for a new appraisal, citing the need to move ahead quickly and said they felt the city had more or less made a commitment on price to developer Michael Johnson and his company Urban Core Developers.

Abel Guillen

Those opposed to the project include a neighborhood group called East Lake United for Justice, local residents who are urging the city to reject the sale of the parcel. They do not oppose market-rate housing, but, they say, it should be built on private land and not by selling a piece of land that was created by a public project at public expense.

“If the city is going to build on public land (created) with taxpayer dollars, we need it to go for affordable housing. This is “not the kind of project we need here in Oakland,” said Michael Flynn of East Lake United for Justice.

 “We don’t believe that building market rate housing is going to stabilize the housing situation,” he said. Instead, “it’s going to drive people out (of the city).”

Adding urgency to the issues raised by residents is the example of San Francisco where the torrent of market rate construction has not led to more affordable housing but instead to the almost complete elimination of the African American population and now seems to be leading to pushing out Latino residents of the Mission District.

Guillen told his follow council members that the city has to consider all the housing needs “not just those of the very poor or the very rich.”

“We have to look at the big picture – new comers end up competing with long time residents for existing housing,” he said. “Building market rate housing will end up easing not exacerbating” rents for existing lower cost rental units.

“I do have concerns about the $5.1 million appraisal,” Guillen continued. “It appears the land value should be about 25 percent higher at a minimum, an additional one million dollars or so to the city.”

He said he has worked with Urban Core to provide $300,000 in community benefits, including maintenance and other improvements to the Lake Merritt area and Children’s Fairyland.

“We have moved forward to create an iconically designed project for this city. We have found a capital partner. We have worked with (Councilmember) Guillen to expand the community benefits for the project,” said Johnson of Urban Core.

Councilmembers said they wanted to use 25 percent of the selling price to build affordable housing and another 25 percent to maintain the newly upgraded Lake Merritt area, which has lost most of its gardening and maintenance staff and is danger of deteriorating.

A number of speakers in favor of the project emphasized that there is a great unmet need for market-rate housing in Oakland. Several speakers also stressed that developers and investors around the country are closely monitoring this project to see whether city officials are serious about promoting development.