Oakland Housing Authority out of courthouse deal

Jun 09, 2009 (The Oakland Tribune - McClatchy-Tribune Information Services via COMTEX) -- TCC | Quote | Chart | News | PowerRating -- The future of the stately old brick Courthouse Athletic Club building on Telegraph Avenue is once again in limbo now that the Oakland Housing Authority walked away from a deal to buy the structure from national residential developer Trammell Crow.

The news does not necessarily mean the building has been spared a date with the wrecking ball. But neighbors who oppose plans to tear it down are mounting another offensive to find a buyer who will save and reuse the structure before it deteriorates further.

Trammell Crow purchased the historic red brick building with the colonial facade at 2935 Telegraph Ave. some years ago, when it was being used as a popular athletic club.

Once vacant, the structure became a magnet for graffiti and vandals who tore apart the interior walls to obtain copper and other metals to recycle.

After extensive reviews and an environmental study, Trammell Crow received approval from the Oakland Planning Commission in August 2007 to demolish the structure and replace it with a five-story, 280,000-square-foot building with as many as 142 market-rate residential units, ground-floor retail space and parking for 204 cars.

The city, sensitive to other half-finished developments that have stalled because of the recession, added a condition that the building could not be demolished until the developer was ready to start construction.

The city has every reason to be cautious. The Temescal neighborhood alone

has at least four large market-rate condominium projects on Telegraph Avenue that have been approved but have yet to break ground.

And, it turns out, Trammell Crow was also not immune to market forces. It quietly put up the property for sale, the Oakland Housing Authority offered $9 million, and the parties struck a deal in January, said Philip Neville, the authority's director of development.

The authority planned to keep the same design and architect, and although the project would not include public housing, it would include below-market units.

Neville said the agreement called for the property to be delivered free of buildings, which Trammell Crow agreed to do. The developer had applied for building, grading and demolition permits, which cost about $450,000.

The parties had hoped to handle the sale administratively, but Northgate neighbors found out after Trammell Crow balked at paying a higher fee for demolishing the historic building and the matter was sent to the Planning Commission, said Robert Brokl, a Temescal resident who is trying to save the Courthouse building.

The neighbors -- including some who had supported Trammel Crow's market-rate project -- objected because the area is already oversaturated with public housing and other low-income housing, said Madeline Wells, a member of the West Oakland project area committee.

Rather than battle the neighborhood, Neville said the agency walked away from the deal when the agreement expired at the end of May.

"We were under the impression that the property would be demolished and delivered free and clear," Neville said. "We didn't want to inherit a lot of old buildings. Trammell Crow was not able to deliver on that promise."

Representatives from Trammell Crow would not comment.

Councilmember Nancy Nadel (Downtown-West Oakland) said it might have turned out differently if the residents were consulted upfront.

"That neighborhood has a lot of low-income housing and very little market rate," Nadel said. "I thought if (the project) was going to be different, the neighbors should have a chance to weigh in on it."

Tao Matthews, a nearby resident, said she would like to see the Courthouse building reused as a school, library, job-training center or a medical building.

"We support any of those that would be used by people who live and work in the community," she said.

Nadel supports that idea, but the city has no money to invest.

"Unfortunately, I don't have the funds to put into it and the city is in such bad financial straits, it can't afford it either," she said.

For his part, Brokl is still suspicious that the housing authority will re-enter the picture. Trammell Crow's permit applications are pending, and if the building and demolition permits are granted, he vowed to appeal because he doesn't believe the developer has the money to build the condos.

"It's not an improvement to have a vacant lot," he said.

Reach Cecily Burt at 510-208-6441 or cburt@bayareanewsgroup.com. Check out her blog at www.ibabuzz.com/westside.

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