Creative Development Partners submitted a formal appeal to the staff recommendation prior to the CED Committee meeting based on process and substantive issues related to the selection of a developer for the Oakland Auditorium. While we were strongly discouraged to submit an appeal by the director of Contract Compliance, we felt that the stakes were high enough for the future of development in Oakland, that we must ensure that the City of Oakland uphold the Mayor's stated pledge to an open and transparent government, along with pursuing viable and equitable economic development opportunities and demonstrating a commitment to the participation of ALL of Oakland's residents.
Our primary goals for this project are to create the highest sustainable economic and community impacts for Oakland, building upon the city's existing assets and preserving its most valued treasures -- and we've backed that up by raising $66 million dollars in equity towards the effort from a range of mission-aligned investors, which is more than the competing proposals total project budget. Yet, CDP was deemed as not having comparable or sufficient ability to raise capital in the staff recommendation...
We do not believe that putting the citizen's trust in a TBD strategy, over a comprehensive and well developed approach is reasonable, responsible, nor responsive to the needs of the average Oakland citizen. CDP has assembled a highly credible development team, put forth a detailed plan, attracted an impressive amount of capital and garnered the support of many of the major cultural and community organizations as partners in progress. Our approach respects the past while participating in Oakland's future in a manner that embraces our core tenet -- community benefit by design, not by negotiation.
Oakland desperately needs hotel rooms, economic stimulus, training opportunities and jobs, and we deliver that. Contrary to the position of the historic preservation NIMBY contingent, there is no better site for an thoughtfully placed arts-integrated hotel than next to an existing convention center and museum. Further, the Oakland Auditorium Arena is unique in the mid-size venue market, and re-purposing the arena would not only destroy a significant part of Oakland's history, but also send the message that Oakland was closed for business -- take your convention, meeting and special event business elsewhere.
Appeal to the Staff Recommendation on
the Henry J. Kaiser Convention Center RFP
Submitted May 26, 2015
Process-related Appeal
● Review panel was misaligned with the RFP criterion, and lacked key expertise and representation from the arts community, economic, community and workforce development.
● Activist panelist, Naomi Schiff, was unable to be impartial or objective in her evaluation of the CDP proposal, based on long prior-stated opposition to the hotel development siting, which was disclosed prior to the panel and should have been cause for disqualification.
● CDP proposal was grossly underscored on key items and material misrepresentations made
● Published review process was inconsistent with the actual review process.
Substantive Content Appeal
● The recommendation stated that the CDP team did not have the same ability to access capital for our project:
CDP and its development partners have secured commitments of of $66 million toward the project and a letter of interest for another $70 million from our bond financing partner. In addition, we have standing relationships with other financing entities that are very interested in supporting our team to secure additional funds, relieving all doubt of CDP’s financial capacity. The competing proposal's total budget for re-purposing the building is $52 million, with $5 million dollars in equity proposed.
● The recommendation stated that CDP's financing structure is too complicated and creates additional risk:
While the financing structure is complex, it is not at all uncommon based on the nature of the project and the goal to include a range of stakeholders. The team has completed similar deals and the investors are all very confident in CDP’s ability to successfully execute. The recommendation mentions philanthropy multiple times, giving the impression that CDP would be writing grants to help fund this project, when in fact, $10-$20 million in INVESTMENTS from philanthropic institutions will be secured to create a sustainable platform for community benefits.
● The recommendation stated that CDP is a new entity and doesn't have sufficient experience for such a project:
Our development team, a joint venture, was highly under-valued and under-scored in the review in terms of experience, and has excess capacity to successfully complete this project- specifically in hotel development, management and investment. Furthermore, the local team of architects, engineers and contractors matches or exceeds the competition in skill and experience.
● The recommendation scored CDP's community benefits strategy as only slightly higher than our competitor:
CDP’s embedded training and employment program, 1LM Works, is supported by an impressive continuum of educational institutions, along with organized labor organizations including UNITE HERE 2850, Alameda County Building Trades and IATSE 107. With 1LM Works, we've identified a market-rate solution to solve a community-based problem, which creates a self-sustaining program. Additionally, our deep green development strategy, integration with neighboring institutions, community partnerships and cultural arts programming far outpaces our competition and anything that Oakland has ever seen.
In addition to significantly more permanent jobs than projected in the City’s RFP, the new tax revenue that our project will produce from the hotel and event center, with the arena preserved for a full range of large concerts, sports and conventions, is $5.1 million, which far surpasses the projections anticipated by the City. Additionally, our jobs are career and union-track jobs in a variety of mid-to-high-range industries, not just retail and foodservice, which are not considered "good" jobs.
The One Lake Merritt proposal provides tax revenue to the City of $5.1 million annually and will contribute to the City’s budget shortfall for workforce development program along with other vital services
Finally, our proposal preserves the historic Oakland Auditorium arena for public use and all of the traditional uses of the building including community and civic activities, sporting events, conventions and epic concerts, which is a community benefit in itself
● The recommendation under-scored CDP’s integration with Laney College
Our partnership with the Peralta Community College District and specifically Laney and Merritt Colleges, is a long-standing and deep relationship that will integrate One Lake Merritt physically and programmatically. We have an MOU with the Chancellor and the two Oakland campus Presidents, that will integrate six (6) core Career Technical Education programs, along with a facility sharing agreement for additional meeting space and use of the 1,000 parking spaces at Laney College. The physical and programmatic integration with Laney College far exceeds that put forth by the competing proposal.
● The recommendation misstated the hotel's compatibility with the Specific Area Plan
The recommendation suggests that a hotel was not contemplated for the site and is incompatible with the Lake Merritt Specific Area Plan, posing an entitlement risk, while in fact, the EIR for the Lake Merritt Specific Area Plan refers specifically to a "boutique hotel somewhere in the Lake Merritt Station planning area, which this building falls within. There's no specific reason from a planning perspective, then, that said the EIR couldn't accommodate our proposed hotel, as the plan's own economic study said 400 rooms are supportable within the study area.
● Based on the City’s stated goal to get this extremely important historic landmark open and alive again, and to bring activity on the weekend and evening in this part of the city is a major priority, CDP’s proposal accomplishes this is much less time.
CDP has a simpler, phased development strategy, with the HJKCC redevelopment coming first, which will get the building open and active faster than the competition's plan to redevelop the interior arena space as office and retail. After getting the major systems in order, CDP will immediately open and activate the space, while continuing with upgrades. The competition's plan drastically and permanently alters the original (and historic) use of the arena and, from a preservation standpoint, there is a significant loss of the historic fabric of Oakland through a concept that builds-out the arena with interstitial floors and converts into private office space instead of maintaining its original use and re-engaging into the public sphere.
