Oakland officials have a new development plan for army base

The old Oakland Army Base, a 330-acre parcel that stretches from the city’s waterfront to the base of the Bay Bridge and into West Oakland, has lain fallow for more than a decade, as officials from the city and the Port of Oakland have mulled over how best to use the space.

Over the past twelve years, plans for redeveloping the army base, which is owned in equal parts by the port and the city, have ranged from the spectacular (a movie studio or an Indian casino, in turns) to the more commonplace (residential or commercial zoning). In the meantime, it has functioned as temporary winter homeless shelter run by the city.

Recently, though, city and port officials have worked up an altogether new development plan for the army base: The creation of a trade and logistics center that would significantly expand the port’s export capacity—and potentially create 5,000 new jobs in the first five years of development.

This month, port and city officials pushed the nascent venture one step closer to fruition when they jointly applied for a $40 million federal grant to help fund the first phase of the $438 million project. But some stakeholders fear that federal funding would undermine the city’s stated commitment to creating local jobs.

At an Oakland Army Base planning workshop last month, city councilmember Nancy Nadel, summed up her concerns this way: “A lot of people are going to be very disappointed if we spent so much time discussing jobs and then we have to abide by federal rules and bring in people from Pennsylvania.”

The venture is one of the largest redevelopment projects undertaken by the city in recent years, and community development groups like the East Bay Association for a Sustainable Economy (EBASE) and OaklandWorks have high hopes that its construction will to some extent ease the city’s 17 percent unemployment rate. The recession hit Oakland’s construction sector particularly hard and proponents of the project argue the creation of new construction jobs would go a long way towards relieving the city’s struggling economy.

“This project is about bringing more cargo through the port, and if we can bring more cargo through the port, we can create more jobs,” said Isaac Kos-Read, the port’s director of external affairs. While officials expect the project to create 4,900 one-year construction jobs, Kos-Read said increased port capacity would also generate more permanent jobs as well, such as forklift operators and warehouse workers.

In an effort to ensure that many of those jobs go to Oakland residents, port and city officials have been working closely with EBASE, OaklandWorks and other community stakeholders to develop local hiring policies for the army base project, which are expected to be finalized in December. Among these policies: 50 percent of work hours would be dedicated to Oaklanders, with hiring priority given to West Oakland or other low-income area residents.

The $40 million grant from the Department of Transportation, called a Transportation Investment Generating Economic Recovery (TIGER) grant, would jumpstart the $438 million project by funding the construction of a new rail terminal and warehousing facilities, road improvements and the relocation of recycling facilities.

But with federal dollars come federal rules. And the Department of Transportation, in particular, has strict rules about maintaining open, competitive bidding among contractors vying for DOT-funded jobs. Construction contracts funded with the DOT grant must be open to any company that bids—regardless of their location or whether they are willing to hire locally.

Local hiring policies are generally regarded by the DOT as an impediment to open, competitive bidding, said Kate O’Hara, EBASE’s community benefits director, and a key player in the effort to implement local hiring policies on the army base redevelopment project. “It’s old legal guidance and a lot of people within Obama’s administration have been working to change those rules,” she added, “and it’s something that we need to address.”

Now that the application has been submitted, city officials are hoping that they’ll be able work out a local hiring agreement with the DOT, but are preparing for the possibility that local hiring policies would be inapplicable to those funds.

“It is a concern,” said Sue Piper, special assistant to Mayor Jean Quan, adding that “the federal constraints are subject to negotiation and we will work to achieve our (local hiring) goals.”

Nadel emphasized the city hasn’t received the grant yet, so it may be too early to tell how the funds can be applied. “First we have to get the money and then negotiate whether we could have local preference or not, “ Nadel said in a phone interview. If the city receives the grant, officials would ask the DOT to adjust their bidding rules in this case, she said—but conceded that the $40 million would “more likely” be segregated—meaning that the parts of the project funded with the money wouldn’t be subject to local hiring rules.

While Nadel said $40 million is “not insignificant,” she also emphasized that regardless of what happens with the grant, city officials will do their best to ensure that the other $400 million spent on the project is subject to local hiring goals.

So far the city has committed $32 million to the project and, according to Kos-Read, Measure B—Alameda County’s 20-year transportation sales tax extension which was approved by voters in 2000—could shore up another $271 million dollars for the venture, if needed. Private developers Prologis and California Capital and Investment Group (CCIG) are also expected to invest more than $100 million together.

“We’re still in the process of sourcing funds,” said Kos-Read, adding that local officials plan to apply for the next round of TIGER grants, as well. “We don’t expect that we’ll get a fully funded request with this first application,” he said. “It may take a couple cracks to get at the full $40 million.”

In the meantime, the army base development will provide many opportunities for local job creation—not least because the Oakland City Council approved an ordinance Tuesday granting local businesses exclusive rights to demolition and remediation contracts for the Oakland Army Base project. Under the ordinance, businesses must prove that at least 33 percent of their workforce consists of Oakland residents before they can submit contract bids.

The ordinance doesn’t apply to the proposed development of the army base—just the project’s pre-development demolition and remediation phase—but groups like EBASE believe it’s a promising sign that the project will generate local jobs and stimulate the economy in the long-term.

“There’s a huge opportunity to create local jobs with the long-term project—and there are no limitations on those,” O’Hara said. “But the city and part need to have policies in place.”