Residents consider Golden Gate redevelopment plan

on October 31, 2009

On Wednesday night Golden Gate residents gathered at the neighborhood’s Recreational Center to hear officials from Oakland’s Community Economic Development Agency (CEDA) explain how becoming part of a city redevelopment area could change the neighborhood.

The informational meeting was the first step in a two-year process aiming to annex a section of the Golden Gate neighborhood east of San Pablo Avenue (see map) onto the existing redevelopment area known as the Broadway/MacArthur/San Pablo area, which includes the stretch of San Pablo Avenue bordered by Berkeley to the north and Emeryville to the south.

According to CEDA officials, the goal of creating redevelopment areas such as the Broadway/MacArthur/San Pablo area is to reduce chronic blight through revitalization projects on streets, parks, and residential and commercial buildings. These projects, which can be public, private or a hybrid of both, are partially funded by tax money that stays within the redevelopment area instead of going into the city’s general fund. The idea behind it is that, as the area’s property revenue rises, the extra money will stay within that particular community, creating a self-sustainable money pot that could potentially finance increasingly ambitious revitalization projects.

The annexation must ultimately be approved by CEDA, environmental agencies and the city council, but the first step is to convince the residents themselves that this is a good idea.

Golden Gate residents have long had a laundry list of complaints about their neighborhood: high crime, abandoned lots and boarded up houses, bad or nonexistent street lighting and sidewalks, and illegal trash dumping. Residents say blight is particularly visible on Lowell Street, a street often cited by those who support redevelopment as a solution for the neighborhood’s problems.

Charles Porter, a longtime Golden Gate resident and one of the organizers of Wednesday’s meeting, said there’s no other source of money for revitalizing streets like Lowell.

“There’s no money coming from the general fund,” Porter said. “There hasn’t been money in the past ten years, and there won’t be money in the next ten years.”

So where does redevelopment money come from?

Redevelopment areas are funded by a tax increment system. At the start of the program, the total amount of property tax revenue in the area is recorded. As property value goes up, and as property changes hands or new properties are added, the total amount of property tax revenue rises. Part of the revenue difference—or “increment”—is put aside to be used by CEDA to finance projects in the redevelopment area.

Most often these projects are done in partnership with private developers through façade improvement and tenant improvement grants provided by CEDA, which are limited to commercial property. Tenants and landlords use these grants to make all sorts of upgrades to their properties, like repainting walls, remodeling interiors, installing new awnings, and rebuilding roofs. In addition, the agency also finances street improvement projects such as sidewalk construction or streetlight and median installation.

Because of the way the money is raised, redevelopment projects are slow to bear tangible fruits. Kathy Kleinbaum, a representative from CEDA’s Redevelopment Division, started Wednesday’s session with a warning that residents would need to be patient. “Things happen in redevelopment, but they don’t happen all at once,” Kleinbaum said, adding that the benefits of redevelopment wouldn’t be felt for at least five years, and that it could be some thirty years before the neighborhood was effectively transformed. “Becoming a redevelopment area, you are not going to see a quick fix to those problems,” she said.

The redevelopment area to which this neighborhood would be annexed was officially formed ten years ago and consists of the businesses along both sides of San Pablo and the neighborhood west of the street. According to many residents, one of the area’s most urgent projects back then was the installation of sidewalk lights for the protection of pedestrians. The project, with a tab of 1.8 million dollars, is only now getting underway.

“We worried Kathy [Kleinbaum] to death until we got the money for that project,” said Josephine Lee, who has lived in the neighborhood for more than 80 years and is a staunch supporter of the redevelopment plan.

Another sign of how slowly the redevelopment program works is that the only other streetscape project completed by the agency so far on the redeveloped section of San Pablo Avenue is a set of outdoor tables and benches, which were added to the Golden Gate Public Library and cost $10,000.

Things are happening faster in the private sector, where a number of investors, landlords and tenants are making use of the agency’s improvement grants.

Two years ago, 51-year-old Amy Chen bought a three-story brick building on the corner of 55th and San Pablo, in the middle of the old development area. Chen, a first time investor who is raising her four-year-old daughter just west of San Pablo, was approved for a $75,000 façade improvement grant from the redevelopment agency, which she used to fund much-needed renovations in her newly acquired building.

A vocal supporter of annexing the new redevelopment area, Chen said at the meeting that when she bought the building, it was covered in graffiti. “You could not walk in without smelling the stench of urine and feces,” she said as she passed around handouts with colorful before-and-after pictures of her building, which now show a graffiti-free brick and tile façade.

“This is what redevelopment does,” she said in an impassioned voice. “It’s a good thing.”

Chen said she is currently looking for a tenant for the storefront property below, but has kept all but one of the tenants she inherited in the apartment building above.

Other businesses along San Pablo Avenue have also profited from the plan. Golden Gate resident Sal Bednarz plans to open Actual Café on the corner of San Pablo and Alcatraz in December. The interior of the building is being completely repainted and remodeled, and he has received two grants from CEDA amounting to over $30,000- about half of his remodeling cost. Bednarz said that since his landlord had also received a façade improvement grant to redo the building’s exterior before he signed his lease, he used the second façade improvement grant to buy awnings and signs.

Kathy Kleinbaum, Project Manager for the Oakland CEDA Redevelopment Division, answers questions at a Golden Gate neighborhood meeting Wednesday night

Kathy Kleinbaum, Project Manager for the Oakland CEDA Redevelopment Division, answers questions at a Golden Gate neighborhood meeting Wednesday night

Bednarz, who has spent a quarter of his 40 years living just a few blocks from his new business, said he decided to open the café because he was tired of having to go to other neighborhoods for services. “The neighborhood is changing but so far we’re doing a good job of keeping some character,” he said one afternoon outside the unfinished store, while inside his construction crew members busied themselves with sheet rock and wood beams.

“Every little bit helps make this street feel a little fresher,” he said, wiping his forehead sprinkled with fresh white paint. “People are walking down this block when they never did before.”

On the same block, Kent Brooks, the owner of a Brooks Jewelers, said it was the possibility of getting a tenant improvement grant that first attracted him to the location. “When I saw that, that made a big difference to me wanting to rent this place,” he said. Brooks, whose two-year lease on the jewelry store is about to expire, said he plans to renew it.

Brooks said the changes on San Pablo have only recently begun to pick up speed, but already he worries things may change so much that he won’t be able to afford to keep his business in the neighborhood much longer. “Within five years, this place will be very different,” he said one afternoon at his store, which overlooks several run-down or abandoned storefronts. “By then, I know my rent will be sky high. If I’m still here.”

Brooks said he suspects people from San Francisco may be looking for homes in the area as a cheaper alternative, and that an influx of more wealthy residents will raise prices and drive out longtime Oakland residents and business owners. “For some people, it’s rising to their level,” he said, referring to rent prices. “For others, it’s rising beyond them.”

Brooks is not the only one who worries about the future of the redevelopment areas, both the existing and the proposed one. At the meeting Wednesday night, two main concerns were raised, although the first of them—that redevelopment might bring in lower-income residents—is almost the opposite of Brooks’s gentrification fears. A mandate of the redevelopment plan is that 15 percent of all new and renewed residential units in the redevelopment area must be made affordable for low-income families, and some critics argued that the inclusion of low-income housing may scare off future investors and ultimately drive property prices down. CEDA officials have said that the low-income units need not be included in every single project, and will most likely be clustered in a few large housing projects.

Another point of contention during the meeting was CEDA’s power to use eminent domain. A heated debate arose on the floor after a resident suggested that, by agreeing to join the redevelopment plan, people were resigning their rights to refuse to sell their homes. “Laugh now,” the resident said, as dismissive voices rose on the floor. “The devil is on the details.”

But according to Kleinbaum, homeowners’ fear that the city would be able to acquire their properties without their consent is unrealistic. She said that in the eight years she’s been on the redevelopment board, eminent domain has never been used in that stretch of San Pablo.

She also said that according to the rules agreed upon by the Project Area Committee, a group of elected residents and business owners who live within the redevelopment area and advise the Redevelopment Division, no residential properties with four or fewer units can be seized by the agency.

Commercial and large residential properties may be seized by the agency through eminent domain, though according to Kleinbaum this right is only used in extreme, rare cases.

Bernard Wells, a long-time resident of Golden Gate, said he didn’t believe the city should have the right to buy someone’s property without the owner’s consent. “That’s not what America is all about,” he said.

Wells, who lives on Alcatraz Street off San Pablo, also complained that not everybody in the neighborhood had received the notice about the informational meeting. “I made copies myself and gave them to my neighbors,” he said.

One of the neighbors was Dave Higgenbotham, who said he thought more information was needed before people could make up their minds. Although he seemed skeptical of having his neighborhood joining the redevelopment area, he also agreed that some action was necessary to lift up the area. “There are still a lot of boarded buildings, nothing is getting done,” he said. “Let’s hope that it works for the best.”

A near unanimous vote at the end of the session decided that talks between the neighborhood and CEDA should continue, at least for now.

Dolores Banks, who lives on 55th Street, said she was pleased with the vote. “All we voted on was to have more meetings,” she said. “I think we have to get in on what’s happening.”

Additional reporting by Thomas Gorman

This story was amended to correct a factual error: the city of Oakland has not used eminent domain to acquire property for the MacArthur Transit Village project.


|Proposed Addition to Redevelopment Area

2 Comments

  1. We Fight Blight on October 31, 2009 at 2:56 pm

    Because of the lack of any money in the Oakland general fund for public infrastructure improvements redevelopment zones fundd through tax increment financing are critical for making funds available for such improvements and addressing blight. The fear of emminent domain is overblown and has been used to thwart other redevelopment zones in North Oakland. Oakland has a powerful anti-blight ordinance that is generally well-enforced. Residents can get the City to enforce against problem properties. We Fight Blight has been very successful in using the existing laws to address problem houses and commercial properties, althought our area of interest does not extend to the proposed Golden Gate redevelopment zone.



  2. commercial property to let on November 5, 2009 at 9:07 pm

    The real estate market has changed but some of the rules to staying in the business of investing in real estate have remained the same. Over my years of being in and around the real estate industry I have seen investors come and go and from that I have compiled my list of the top 4 killers of real estate investing careers.



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