UPDATE: The Oakland City Council selected the AMB/CCG proposal Tuesday night.

The Oakland Army Base (area proposed for development highlighted in color)

Since its closure in 1999, the decommissioned Oakland Army Base, a plot of land sandwiched between freeways, the Port of Oakland, and a wastewater treatment facility, has languished largely unused. There have been a number of false starts – most recently, the Wayans Brothers withdrew a proposal to build a production studio on the land after two years of negotiations, and a plan to use a chunk of the space for a new freeway-adjacent auto mall fell through. Tonight, the Oakland City Council will take another step towards trying to get something built on the City’s 165 acres.

The large amount of land available represents a rare opportunity for a City as old and built-up as Oakland, but the site is not without its challenges. Significant environmental clean-up will be required before anything can be built, and outfitting the land with basic infrastructure like roads and utilities is expected to cost over $100 million.

After the Wayans Brothers proposal fell through, the City issued a Request for Qualifications in January 2008, asking interested developers to submit broad concepts for site development. The City then selected four teams out of 13 respondents to complete a Request for Proposals, providing more detailed development plans. Over the past year, two of the four teams withdrew from the competition, leaving the Council with only two proposals to decide between tonight.

The two proposals could not be more different. One team, Federal Oakland Associates (FOA), wants to devote the site to retail and entertainment, with an outlet mall and large movie theater, while the other, a partnership between AMB Property Corporation and California Capital Group (AMB/CCG), would use the site for Port-related purposes, primarily industrial and logistics space.


Federal Oakland Associates (FOA)'s proposal

An eleven member City evaluation panel selected the AMB/CCG proposal as the preferred choice by 10-1, based on a variety of factors. The trade and logistics focus of the proposal is hoped to increase the Port of Oakland’s competitiveness, and high-quality new industrial space could potentially attract much desired green tech and biotech businesses to the City, and the panel worried that a large retail project could hurt retail attraction efforts elsewhere in the City. Additionally, the evaluation panel was concerned that FOA does not have sufficient financial capacity to take on the large project, based on the information (and lack thereof) provided in the team’s RFP response.

Both competitors agree that the area cannot be developed without some amount of public funding, which would come from a variety of sources – local, State, and Federal. CCG/AMB estimated a needed public contribution of $70 million for infrastructure costs, while FOA wanted $128 million for infrastructure plus another $1.2 million to help pay for the movie theater. The evaluation panel concluded that a Port-compatible industrial development would be better positioned to receive Federal funding than an outlet mall. The City’s financial risk would also be minimized under the ABB/CCG plan, which would pay annual rent based on the land’s value, versus the FOA plan, where the City would only receive payment after the developer had achieved a 20% return on their investment.


The proposal from AMB Property Corporation and California Capital Group (AMB/CCG) 

Both City staff and the Mayor have endorsed the AMB/CCG proposal, but the final decision rests with the Council. Tonight, they have the option of choosing one or the other, or possibly trying to merge the two somehow. Whatever they decide, the future of the Army Base will still be far from certain. The winner will enter into a one-year Exclusive Negotiating Agreement with the City, during which period the City and the developer will have to work out the final development arrangement as well as the details of how to pay for infrastructure costs and what kind of revenue the City will be getting from the developer.