Alexan Webster – Oakland housing project breaks ground near construction site damaged in suspicious fire

East Bay Times

July 19, 2017

OAKLAND — There was a ceremony here Wednesday to mark the groundbreaking for the Alexan Webster, a new 234-unit, mixed-use project, but it wasn’t the backdrop either the developers or city officials had anticipated for such a momentous day.

Looming overhead were the contorted charred remains of the Alta Waverly, a 196-unit market-rate apartment complex already under construction that was destroyed July 7 in a suspicious fire. Crews with an excavator working to clear parts of the mangled wreckage ceased their work at the request of program organizers so the noise wouldn’t drown out the day’s speeches celebrating the new project.

“It would be hard for me to do the real political thing and say look over here, don’t look over there, because I was over there a few weeks ago, and it was an unhappier day,” said Councilwoman Lynette McElhaney, whose district includes downtown.

The mangled wreckage was an unwelcome reminder of what was already on many people’s minds. Over the past year, there have been four suspicious fires at housing sites under construction in Oakland and Emeryville. Two have been ruled arsons, and though there has been no official determination of what caused the other two, a number of local builders and developers have expressed fear that someone may be targeting development.

It’s too early to know what impact the fires will have on investor and developer confidence in Oakland. It takes years to pull together financing proposals, secure investors, find and buy property, draft plans for a development and then get them approved by the city’s Planning Commission, a lengthy and often contentious process. By the time developers are breaking ground on a new project, they’re already committed, usually contractually or financially, to the project, said Mark McClure, president of the Oakland Builders Alliance.

“By their nature, developers are optimists,” McClure said. “You have to be if you’re taking the risks they are.”

However, he said developers in the East Bay are paying close attention to how much companies are charging to insure projects.

Some said the impact from the fires is already being felt in rising costs. “We’re incurring more from a security standpoint, and we fully expect our insurance costs to increase,” said Bruce Dorfman, senior managing director for Trammell Crow Residential, the developer for the Alexan Webster. “It’s having a dramatic impact not just on our project but throughout the industry and the region.”

Designed by KTGY Architecture + Planning, the Alexan Webster, will include studio, one-, two- and three-bedroom apartments, retail space, an underground parking structure and an art installation. Out of the 234 apartments, 15 percent will be reserved for low- and moderate-income people.

Dorfman said his “heart sank” when he first heard news of the fire at the construction site directly across his project. “I thought that project and this one were going to do a lot for this neighborhood, and so I’m disappointed obviously, but it hasn’t changed the viability for the Alexan Webster,” Dorfman said. “There is still incredible demand in the Bay Area for housing.”

Oakland is experiencing a building boom, particularly along the former Auto Row on Broadway and in downtown. High-rise and other residential buildings are going up at Broadway and 17th, along 17th near Webster, and in the former MacArthur BART station parking lot.

“This is a particularly important time for Oakland,” Assistant City Manger Claudia Cappio said. “I’ve been a resident here for over 30 years. It’s unprecedented, the amount of construction we have going on.”

McElhaney stressed that the cause of the recent fire at Alta Waverly has yet to be determined and said she had not heard a lot of fear from developers.

“What I’ve heard is how do we mitigate the risk and how do we move forward to solve what is a regional housing crisis that is driving up rents and threatening displacement,” McElhaney said.

Greg McConnell, president and CEO of the Jobs and Housing Coalition, said Oakland is still an attractive investment for people coming from all over the world. But if they think they can’t protect their investment, there will be problems.

“Developers like to build because that’s what they do, but if these people view Oakland as not a safe place, the money will dry up, housing development will dry up, and gentrification will be on steroids,” McConnell said. “Four fires in a year is incredible.”

Last week, Mayor Libby Schaaf met with developers to quell fears over the recent fires. She told the group that the city was gathering information from developers to give to Oakland police and fire to better protect and respond to blazes or vandalism.

McConnell, who attended the meeting, said developers had requested more police protection at sites, particularly ones where the wood is still exposed and sprinkler systems haven’t yet been installed, making them easier to burn. In the case of all four fires, McConnell said the buildings were in that fragile state. He said Schaaf told developers there weren’t enough cops. Some developers also want to put barbed wire around their sites.

“We have five or six more going up in the Valdez corridor that are going to be just like those (at previous fires), and we’re going to have to be real vigilant,” he said.

Staff writers Erin Baldassari and David DeBolt contributed to this story.