New project signs Alameda County Social Services Agency
In one of Oakland’s largest-ever real estate deals, the Alameda County General Services Agency has signed a 30-year lease for 101,000 square feet at a pending downtown development.
At $46.32 per square foot, the lifetime value of the lease is roughly $140 million.
“I don’t know who else has ever signed a 30-year lease, so in terms of value for an office building lease, this is the biggest I could think of,” said Larry Westland, longtime Oakland broker and vice president with BT Commercial Real Estate. “I don’t know of anything that’s close.”
Dubbed Thomas L. Berkley Square and planned by Oakland construction company ADCo, the 20th Street and San Pablo Avenue project will serve as the Social Services Agency’s administrative headquarters and house the North Alameda County Self Sufficiency Center, a welfare job training program.
“It is a good central location for the Social Services Agency and the North County Self Sufficiency Center, because it serves residents in that vicinity and there’s transportation along the San Pablo corridor and the nearby BART center,” said Aki Nakao, director of the General Services Agency.
The deal also allows the agency to consolidate its divisions, which are currently spread throughout Oakland at 401 Broadway, 4501 Broadway, 1401 Lakeside Drive and elsewhere.
Much of the money for the new lease will come from savings on current leases elsewhere, with the remainder derived from the State Subvention Fund, a California reimbursement program for counties, said Nakao.
The new facility, which will be built on a 1.6-acre lot with 150 parking spaces, will include 101,000 square feet of office space and 5,700 square feet of reserve commercial or retail space.
A planned second phase will include 30 to 50 residential units, targeted at low- to moderate-income tenants, and approximately 5,000 square feet of street-level commercial office or retail space.
The site was purchased by Bank of America’s Community Development Banking department in early 2002 through a joint venture with ADCo, which now has an option to buy the lot.
The current financing plan for the project, which will include demolition of the old Oakland Post building on the site, will utilize tax-exempt bond financing through a team that includes the Los Angeles Local Development Corp., First Albany Corp. and Kutac Rock.
ADCo principal Alan Dones said the company is exploring other options as well, however.
Dones expects groundbreaking within the next 12 months and completion by May 20, 2004.
ADCo, founded by Dones’ father, Ray Dones, has primarily focused on residential developments such as the 1,000-unit Morh Housing Complex in West Oakland. Now the company must navigate the city entitlement process and complete an environmental impact review for the new commercial project.
The company has yet to make a formal application, said Oakland Deputy Director of City Planning Claudia Cappio, but Dones has been in ongoing discussions with the city and developer Forest City Residential West, whose pending Uptown revitalization project is located across the street.
“What we’ve focused on is what will front Forest City, which Dones has indicated is going to be housing,” said Cappio, referring to the project’s second phase. “It will be a residentially-oriented street.”
Forest City has expressed its support for the project.
“The project is being built by a local developer and will provide local benefits. And we support that,” said Susan Smartt, regional vice president of Forest City Residential West.
Dones said the project did generate some initial concern for locating welfare services in an area that the city is working to revitalize through the Forest City project. But, he said, because of welfare reform, the old notion of undesirables loitering around the welfare office isn’t accurate.
“People are no longer allowed to languish on welfare. They are pushed off,” said Dones. “The main function of the center is job training.”
The other important difference, he said, is that Alameda County delivers welfare funds via debit card, so money is electronically placed into recipients’ accounts rather than passed out in person.
Originally published in the San Francisco Business Times on January 19, 2003
by James Temple