In March of 2001 the Port of Oakland released a Request for Qualifications (RFQ) to the development community for approximately 60 acres of property known as the Oak to Ninth District along the Oakland Estuary. Information on the RFQ was available to the public and was provided on the Port of Oakland website. A public information session on the RFQ was held on April 4, 2001. Two proposals were received in response to the RFQ on May 28, 2001. In September of 2001 the Board of Port Commissioners selected the development team of Oakland Harbor Partners, LLC to enter into an Option Agreement.
In November of 2003 an Option Agreement for the potential purchase and ground lease of the property was executed by both parties with approval of that Option Agreement considered by the Board of Port Commissioners and the Commercial Real Estate Committee. The term of the Option Agreement runs through November of 2006. A draft Purchase and Sale Agreement and Ground Lease have been negotiated between both parties and are included as attachments to the Option Agreement. In September of 2004 legislation was adopted (SB1622) which enabled the State Lands Commission to execute a Tidelands Trust Exchange on the property, subject to compliance with various conditions contained within that legislation. Pursuant to the terms of the Option Agreement, prior to executing the Purchase and Sale Agreement and Ground Lease, the City of Oakland must review and approve the project environmental documents and land use entitlements and the Board of Port Commissioners must review and approve the project environmental documents and consider execution of the Purchase and Sale Agreement and Ground Leases.
The purchase price of the property at stated in the draft Purchase and Sale Agreement is $18 million dollars and was based upon an appraisal of the property obtained by the Port in 2003, which established a value for the land at $34 million, not including the expense of environmental remediation of the property. The draft Agreement includes an affirmative obligation on the part of the Developer to remediate the property and to obtain insurance to protect the Port from the future risk of exposure from environmental matters. The estimated costs of remediation in 2003 were determined at $16 million which established the purchase price amount of $18 million when deducted from the original appraisal of the site. Current estimates of these remediation costs indicate that it is likely the costs will well exceed $16 million and any and all costs above the original $16 million estimate are the obligation of the developer. The Agreement also contains an escalator on the purchase price which became applicable in November of 2005 based upon factors such as the Consumer Price Index and the actual costs of remediation, and the Agreement also requires that if the remediation costs are less than the original $16 million estimate than the Port receives back a portion of these savings. The draft Agreement anticipates close of escrow in November of 2007. The key terms of the draft Ground Lease for the marina area are for a 66 year lease with an annual rent of $1 per year plus annual participation rent of 5% of gross rental revenues.
A substantial amount of information regarding the proposed development project and the City entitlements and environmental review efforts to date has been posted on the
City of Oakland website.
More information on the Developer's proposed project and development team can also be obtained at the Developer's website:
www.oakto9th.com.
