Oakland developer agrees to hundreds of thousands of dollars in concessions


Street View - Alice St Looking North - PortraitThe developer of an approved 126-unit residential tower in downtown Oakland has agreed to pay hundreds of thousands of dollars in additional community concessions in one of the biggest financial victories for community activists, who criticized the project’s impact on parking and blocking views of a mural.

After negotiations mediated by City Council president Lynette Gibson McElhaney, Bay Development has agreed to pay $100,000 to replace an adjacent mural, subsidized with $40,000 in public funds, that will be blocked by the construction of the project, at 250 14th St.

Bay Development will also pay $160,000 for renovations at the neighboring Malonga Center for the Arts and $15,000 in parking mitigation funding for Malonga staff and residents. The project’s art fee, equal to 1 percent of the project’s commercial space value and 0.5 percent of its residential value and estimated at around $225,000, will also go to the Malonga Center for the Arts if the city is able to modify its ordinance. All new projects are subject to the fee but can currently only build art on-site or pay into a general fund.

“We thank Council President McElhaney for bringing everyone together. As a result, we were able to formalize the commitments we already talked about previously – supporting the replacement mural and the Malonga,” said Maria Poncel, principal of Bay Development.

Market-rate projects proposed in Oakland in recent years have rarely attracted such demands, although project labor agreements to use union builders are more common. The controversial UrbanCore proposal to build a tower on public land near Lake Merritt agreed to pay $8 million for affordable housing, but opponents weren’t satisfied, and the city eventually restarted the developer selection process.

The city is seeking to implement new impact fees to fund affordable housing, but approved projects may be able to avoid the fees by starting construction prior to a deadline. It’s unclear when the 250 14th St. project will start construction.

Community groups will now withdraw their appeal of the project’s approval, which was to be heard by the City Council, and their $1,891 fee will be refunded. The city will also open public parking lots for Malonga events and seek more resources for the Black Arts Movement and Business District in the area.

“We see this as a very important first step in creating a cultural equity framework for Oakland. Bay Development has set a huge precedent here in recognizing the need for community benefits, investing in public art, and supporting a cultural institution like the Malonga Casquelourd Center for the Arts. We hope other developers will follow this example,” said Eric Arnold from the Community Rejuvenation Project and the Oakland Creative Neighborhoods Coalition, two of the groups involved in the appeal, in a statement.

“While the lack of affordable housing on this project remains a concern, we hope city officials will take leadership to implement impact fees and an inclusionary housing policy soon so that developers and residents can have consistent standards,” said Arnold.

At least one other project will attract similar scrutiny. Community groups previously told the Business Times that they plan to seek concessions from Wood Partners’ 248-unit proposal across the street at 226 13th St.

This story has been updated to clarify the structure of the art fee.

Roland Li covers real estate and economic development