Developer Loses Financial Backer for East 12th Street Luxury Apartments
Aug 5, 2015
By Post Staff
UrbanCore Development has lost it financial backer after the City of Oakland agreed to seek a new bid for the property at East 12th Street by Lake Merritt. The developer is now looking for a financial partner to build a housing project that will include at least 15 percent affordable housing units, according to the S.F. Business Times.
“We are encouraged” that the project’s financial supporters have backed off, said Monica Garcia, a member of the neighborhood group, Eastlake United for Justice.
“It was never really appropriate for city to be selling public land to out-of-state multi-billion dollar firm,” she said.
The City Council had seemed to heavily favor the luxury-housing tower on Lake Merritt but ran in serious trouble when confronted by continuing and deepening community protests.
Support on the council for the proposal fell apart earlier this month when the East Bay Express revealed a confidential memo from the City Attorney, written in February, warning councilmembers that their proposed deal was illegal.
As a result, the council dropped the proposal to sell the property to UrbanCore and issued a notice requesting new proposals.
UrbanCore told the Business Times on Tuesday that it is planning to submit a new bid for the property by the city’s deadline of Sept. 12. The developer is working to secure a new financial partner and will submit plans for a building that includes some affordable units on site.
United Dominion Realty (UDR), UrbanCore’s previous partner, is no longer involved in the project.
“We are in discussions with several other potential capital partners who are very interested in the project,” said Michael Johnson, president of UrbanCore, speaking to the Business Times.
“UrbanCore will join forces with an affordable housing developer to assist in implementing the affordable housing goals we are proposing for the site, and is discussions with several potential new capital partners,” said an UrbanCore media statement released Wednesday. (See postnewsgroup.com for the full statement.)
Under the California Surplus Lands Act, at least 15 percent of the units built would have to be affordable units. UrbanCore’s original proposal had 298 market-rate units and no affordable housing units on site.
In the interview with the Business Times, Johnson said his new proposal would be consistent with the city’s goals of “a high density, transit-oriented residential development” on the site that would provide economic development and social benefits.
However, opponents of the original development have argued that public land should only be used for public benefit and they are unlikely to support a proposal for a luxury development at Lake Merritt with only 15 percent affordable housing on site.
“I would hope that all groups that apply for parcel are in compliance with the law,” said Garcia of Eastlake united. “There will certainly be others applying, too, whose main interest is in constructing affordable housing.”
“This is a chance for the city to do the right thing this time around,” she said.