The Webster – 234 Housing Units Could Land in Oakland’s Booming Auto Row Neighborhood
San Francisco Business Times
December 11, 2015
The Oakland City Council is close to selling two city-owned parcels in the hot Broadway-Valdez district to developers planning a residential project with 234 units.
Under the proposed agreement, developers Thompson Dorfman and Madison Marquette would pay the city $9.4 million for land at 2330 Webster St. and 2315 Valdez St., which is currently used for 197 parking spaces. The city bought the property for $4 million in 2010. The new building would also have 17,000 square feet of ground floor retail space. KTGY Architecture + Planning is designing the project.
The city’s economic development staff recommends that the City Council approve the sale. A proposal will be reviewed by a Council subcommittee next week and is scheduled for a Council vote on Jan. 5.
Under the sales agreement, 36 units, or 15 percent, of the building will be reserved for residents making 50 percent to 100 percent of the area median income. “That was part of what the city wanted to see,” said Bruce Dorfman, principal of Mill Valley-based Thompson Dorfman. “We view this as a private-public partnership between us and the city of Oakland.”
The project is expected to create 600 temporary construction jobs and 40 permanent jobs. It is expected to generate $986,000 in annual taxes and fees, up from the parking lot’s current revenue of $175,000 per year, according to a city report.
The developers have up to 18 months to close the sale and would have to begin construction within 30 days of acquiring the property. Construction would have to be completed within 27 months, so a building could open by 2019.
The transaction is complicated by parking requirements. Two companies have parking agreements at the current lot: CIM Group, the landlord of nearby office buildings, and California Nurses Association, a major office tenant.
To replace the current spots, the new project will include a three-story parking garage with 330 spaces, which will be partially used as a city parking lot. The city would pay the developers up to $13.4 million for the parking garage.
The city plans on temporarily relocating parking rights to the Franklin Street Parking garage, but if they’re unable to reach an agreement, the sale could be postponed by up to six months and cancelled by the developer after that time period.
Building a parking lot underneath the housing complicates the project’s design. Each parking space is expected to cost $55,656, for a total budget of $18.3 million for the 330 spaces. The new parking garage is expected to generate $300,000 in annual fees for the city after it begins operating.
“Generally, developing public parking in downtown is an expensive infrastructure investment and requires public subsidies,” the city staff report stated.
“The development of and proposed purchase of the City Garage represents a neighborhood investment into a public asset that is expected to act as a catalyst for future residential, retail and office development in the Broadway Valdez area, with long-term economic impacts.”
Dorfman sees Oakland attracting new investor interest, which will help the project move forward. The developer doesn’t have a financial parter for the site but it has been in discussions.
“I think that Oakland has reached the tipping point,” said Dorfman. “Around our site is going to be the premier urban core area in Oakland. It’s close to BART. It’s close to the Lake.”
Thompson Dorfman has been involved in four projects in Emeryville, but this would be the developer’s first in Oakland. It was previously involved in the entitlements of 3093 Broadway, which is being built by CityView and Blackstone, but is no longer involved.