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News Analysis: Winning OUSD Proposal Failed to Meet Goals

By J. Douglas Allen-Taylor
Friday July 21, 2006

While two rejected proposals for the Oakland Unified School District administrative properties substantially meet several district “baseline expectations and intentions,” the winning proposal by TerraMark/UrbanAmerica does not, an analysis by the Daily Planet has found. 

Included in the “expectations and intentions” of the district’s 2005 Request For Qualifications (RFQ) not reached by TerraMark/UrbanAmerica were provisions for affordable housing for teachers, construction of a multi-grade school complex to replace the five schools currently on the property site, and provisions for a possible ongoing revenue stream for the district. 

The analysis raises questions as to why TerraMark/Urban America got the winning bid. State Superintendent Jack O’Connell, who is handling the sale negotiations, has not released information on how he made his selection. 


District board calls for halt of sale 

Sale of the properties has stirred considerable controversy in Oakland in recent days, with most members of the OUSD Advisory Board of Trustees and a coalition of community organizations calling for a halt to the sale until local control is returned to the district. 

The district’s state-appointed administrator Randolph Ward and the seven members of the OUSD Advisory Board of Trustees signed off on the 2005 RFQ to either sell or lease 8.25 acres of Lake Merritt-area district property, including the Paul Robeson Administration Building, an elementary school, two high schools, and two child development centers. 

At a public hearing on the proposed sale held last week, Ward said, “I remember particularly not wanting to look at” selling the administration building when the RFQ was developed in 2005, but added, “It was something the board wanted to look at.” 

Of the seven board trustees, only Vice President Kerry Hammil said at last week’s hearing that she was still in favor of the proposed sale. She told fellow trustees that “we all approved the RFQ” in 2005. 

“If we want to say every administrative parcel is sacred” and not available for possible sale, she said, “it will be less money in the budget going to the school sites.” 

Three developers submitted proposals: the east coast-based TerraMark/UrbanAmerica team, Gilbane Properties of Palo Alto, and a development team including Oakland-based Strategic Urban Development Associates (SUDA). 

State Superintendent Jack O’Connell is currently negotiating a contract agreement with the TerraMark/Urban America team based on a Letter of Intent signed the first of June by state-appointed OUSD administrator Randolph Ward. Under the legislation that authorized the state takeover of the Oakland in 2003, O’Connell has the legal authority to make the final decision on the sale of the Oakland school properties. 


Expectations and intentions 

The district’s 2005 RFQ and Request for Proposals (RFP) included a number of what it called “baseline expectations and intentions by the District” which the RFQ said “all proposals must address.” 

Among these expectations and intentions were “the construction of a new instructional campus of small schools serving students from pre-school through high school” and “provide the district with an on-going revenue stream.” 

In addition, the 2005 RFQ-RFP said that while it was considering moving its administrative facilities to another location off the downtown property, “the District will consider proposals which provide modernized and/or new [administrative] facilities for the District” including a 70,000-square-foot District Headquarters and both adequate parking and provisions for alternate means of transportation for district employees. 

In addition, in a list of “other factors which the District will view favorably,” the RFQ-RFP included “public benefit, such as the provision of affordable housing or jobs for community residents; affordable housing for teachers; and retention and adaptive reuse of historic buildings.” 

The TerraMark/Urban America proposal calls for five 27- to 37-floor high-rise towers dominating the Lake Merritt Channel area, with luxury condominiums on the top and commercial space on the ground floors. The project is called “The Trophy” in honor of Heisman Trophy winners who played for the Oakland Raiders, and includes plans for a possible Heisman Trophy Museum.  

While TerraMark/UrbanAmerica proposes “a broad range of apartment sizes [that] will allow for a rich mixture of buyers from all age groups and socioeconomic backgrounds,” the proposal only refers to “market-rate” housing and does not specifically call for an affordable housing component, or set-aside housing for teachers.  

The TerraMark/UrbanAmerica proposal also makes no specific provision for the building of a new education facility on the property as called for in the district’s RFQ, but instead notes that “ideally, the developer seeks to make use of the entire acreage and pay the District a generous sum of money to find and construct new school/administrative buildings off-site.” 

“In an alternative arrangement,” the TerraMark/Urban America proposal adds, “the developer would set aside a portion of the [property] that the District could use for the construction of new school buildings and administrative space.” 


Losing bids 

In contrast, both the SUDA and Gilbane proposals call for the construction of a new multi-grade educational complex on the property as called for in the district’s RFQ to replace La Escuelita Elementary School, Dewy and MetWest High Schools, and two district-run child development centers. Both proposals also include the building of new district administrative facilities on the Lake Merritt-area property site. 

While the Gilbane proposal does not specifically mention an affordable housing component, it does mention affordable housing in its analysis of the Oakland/Emeryville housing market, saying that while the market is down for rental units rather than condominiums, “developers of subsidized affordable housing continue to develop rental units using a combination of conventional and governmental financing sources.” 

The SUDA proposal specifically calls for “both luxury and workforce housing,” and also includes “market-rate and affordable/workforce condominiums [targeted towards teachers].” 

Both the SUDA and Gilbane developments would differ significantly from the 37 to 27 story luxury towers of between 1,000 and 1,388 total residential units called for in the TerraMark/UrbanAmerica project, which also anticipates requesting the city close a portion of 2nd Avenue to be sold to the developers. 

SUDA proposes 725 residential units spread out between six housing structures, the largest two 35 and 24 stories respectively, but the other four low-rise buildings ranging between six and four stories. SUDA also proposes renovating the existing Paul Robeson Administration Building, setting up an urban plaza on the corner of 3rd Avenue and East 11th Street “to double as festival and event space for local residents and students,” “shared facilities, such as a Black Box Theater, a Gymnasium/Multipurpose facility and Community meeting and study rooms.”  

SUDA president Alan Dones says that even though the State Superintendent is currently in final negotiations with TerraMark/UrbanAmerica over the OUSD project, “we are not dropping our proposal. It’s absolutely still on the table. We’re not fighting anybody over it. We just want them to know that we’re still here if they’re interested.” 

SUDA is presently building the Thomas L. Berkley Square development in Oakland’s uptown area adjacent to the proposed Forest City development site. In addition, last year the developer was involved in a controversial proposal to develop the Peralta Community College District Administrative Building and several parcels owned by Laney College. Dones later voluntarily dropped his proposal after significant opposition to the plans developed among Laney College staff members and students, union representatives, and Peralta Board of Trustees members. 

The Gilbane proposal includes 540 residential units of between 20 and 7 stories and instead of closing a street, as TerraMark/UrbanAmerica proposes, would open the presently-closed East 11th Street between 2nd and 3rd Avenues. Gilbane also suggests a possible use of the Laney College athletic fields by the high school students on the Lake Merritt-area site. 

Neither the SUDA nor the Gilbane proposals provide final financial details of the proposed price for the OUSD properties, both organizations stating that the final price would depend upon the structure of the deal, including whether or not the land is purchased outright or a joint district-developer development project is entered into.  

The SUDA proposal specifically provides provisions for the ongoing revenue stream called for in the original district RFQ. 

The original TerraMark/UrbanAmerica originally mentioned such an ongoing revenue stream, but that proposal was dropped in the Letter of Intent later signed with the state superintendent and the state-appointed OUSD administrator. 

TerraMark/UrbanAmerica has proposed paying up to $60 million for the project, but the actual money eventually going to the district could be significantly reduced if various options within the proposal come into play.