We compare the proposed loan to what commercial lenders charge — and estimate the below-market public financing is essentially a giveaway of roughly $45 million to $114 million.
Thank you for this article. Oakland should not be providing seller financing. It’s likely that the current buyer will flip the property to another buyer for a much higher price and keep the proceeds - acting as a broker not a developer but keeping all of the profits. That would be wrong. Oakland should only pay a broker a market rate fee - 5-6% of purchase price, not millions in profit.
If they don’t have the money to buy the property, they don’t have the money or experience to develop the property.
Oakland city council has a fiduciary duty to its citizens (who all pay taxes) to not enter into transactions that are below market. And if the transaction contract is in default due to non-payment it should be terminated.
Sounds like a Developer with bad credit history is “buying” the public property with zero down payment and below market public financing - what a great deal for Oaklanders!
Has the City of Oakland ever considered taking up comedy sitcom writing? They do have a knack for creating ridiculous situations. Oakland is the George Costanza of cities.
Perhaps we're a junior varsity city? Our city seems incapable of making sound and pragmatic decisions and there is the pattern of the city snatching defeat from the jaws of victory (eg missing the deadline for the state grants for retail theft abatement - this is the grant that governor Newsom said he had personally lined up for Oakland to get).
They likely were focused on the concept of equity for this project but to ensure stability and longevity in delivering equity, you need to pay very close attention to risks and sustainability. Again, those are topics that our "leaders" fail at, repeatedly.
Thanks for this artilce. I have two words to describe this deal. Insanity and stealing the lives of Oaklanders. Enough is Enough. We need to start developing real business, skilled jobs and real revenue for Oakland. Mindy Pechenuk, for Oakland Mayor 2026
One important aspect of the Council discussion seems to be missing from the article. Much of the focus is on the financing, but the amended agreement also added several accountability provisions in response to the earlier payment delays.
OAC must provide a third-party guarantee or payment bond by January 2027 (or four months after closing). If that doesn't happen, the purchase price increases by $100,000 per month, certain City obligations are suspended, and the City retains foreclosure rights through a deed of trust, including the ability to sell the property to another buyer.
Those provisions don't eliminate the risk, but they materially change the City's remedies if OAC fails to perform. It seems to me the City learned from OAC's previous payment delays and negotiated stronger accountability measures in the amended agreement.
It is extremely sad and disappointing to see how far OR has fallen from Tim's founding vision to provide a fact-based, data-driven news outlet. Similar to Hyphy Republic, OR cannot be trusted to deliver fact-based journalist, but rather editorials driven by persoanl animus. We all know Seneca has a personal beef with Ray from the argument they had at a press conference outside of City Hall, and we all know you are working in concert with him on this.
I will never contribute to this organ again due it's lack of editorial integrity and respect for the truth.
The key factual error remains: OAC is Jim Reynold's company, not Ray Bobbit's.
Oh and this is wrong, too:
"....The combined price of both halves of the property is $225 million. Of that, $115 million would be a county loan and $60 million a city loan..."
I'll leave it to you to figure out your math error, but your intern deserves a competent, unbiased editor to help them grow.
See you at the press conference this morning at 9:30!
David, thank you for your comment. Our article is accurate and we stand behind it. People can read the article and the underlying evidence it presents, and decide for themselves what to think about it. Thank you again for your comment; the discussion is appreciated.
Of course! Under your leadership, OR no longer stands on data. The SF Chronicle, reports that the county installment payments are $65M, while OR reports they are $115.
"...mainly for the county, which already has a bird in the hand with the $85 million from its 2019 sale to the A’s. The deal would leave the county acting as a lender of some $65 million to the Oakland Acquisition Co...."
Putting the quality of characters in play of this deal aside, loans are constructed according to risks and the proposed low interest rate (not in line with national trends or business logic) is a red flag.
Moreover, Oakland is currently in dire financial straits and a more appropriate interest rate for this loan would help the city better manage other liabilities.
Give it any name you'd like, the risks are still present. We are mindful of Oakland's terrible track record in financial management. Moreover, Oakland's track record in actually using the funds collected from various taxes for their advertised purpose is terrible as well. This is the reason why Measure E was rejected.
My point is we have "leaders" that govern by 'the feels' rather than sound economic principals. I'm tired of Oakland residents and small businesses footing the bill for poor decisions.
The real estate is well secured. Provisions re: EV, surety bond, title.
The other things you mentioned are irrelevant to this deal, but reveal your motivation - it’s about u being politically butt-hurt instead of analytical.
My comments are drawn from being an Oaklander for 29 years with significant blood, sweat, and tears. I'm interested in pragmatism and results, not politics but for the record, I've voted for candidates across the political spectrum.
Thank you for this article. Oakland should not be providing seller financing. It’s likely that the current buyer will flip the property to another buyer for a much higher price and keep the proceeds - acting as a broker not a developer but keeping all of the profits. That would be wrong. Oakland should only pay a broker a market rate fee - 5-6% of purchase price, not millions in profit.
If they don’t have the money to buy the property, they don’t have the money or experience to develop the property.
Oakland city council has a fiduciary duty to its citizens (who all pay taxes) to not enter into transactions that are below market. And if the transaction contract is in default due to non-payment it should be terminated.
Sounds like a Developer with bad credit history is “buying” the public property with zero down payment and below market public financing - what a great deal for Oaklanders!
Has the City of Oakland ever considered taking up comedy sitcom writing? They do have a knack for creating ridiculous situations. Oakland is the George Costanza of cities.
Perhaps we're a junior varsity city? Our city seems incapable of making sound and pragmatic decisions and there is the pattern of the city snatching defeat from the jaws of victory (eg missing the deadline for the state grants for retail theft abatement - this is the grant that governor Newsom said he had personally lined up for Oakland to get).
They likely were focused on the concept of equity for this project but to ensure stability and longevity in delivering equity, you need to pay very close attention to risks and sustainability. Again, those are topics that our "leaders" fail at, repeatedly.
The corruption and incompetence is breathtaking.
Thanks for this artilce. I have two words to describe this deal. Insanity and stealing the lives of Oaklanders. Enough is Enough. We need to start developing real business, skilled jobs and real revenue for Oakland. Mindy Pechenuk, for Oakland Mayor 2026
Oakland city government continues to use "Idiocracy" as a how-to-manual.
One important aspect of the Council discussion seems to be missing from the article. Much of the focus is on the financing, but the amended agreement also added several accountability provisions in response to the earlier payment delays.
OAC must provide a third-party guarantee or payment bond by January 2027 (or four months after closing). If that doesn't happen, the purchase price increases by $100,000 per month, certain City obligations are suspended, and the City retains foreclosure rights through a deed of trust, including the ability to sell the property to another buyer.
Those provisions don't eliminate the risk, but they materially change the City's remedies if OAC fails to perform. It seems to me the City learned from OAC's previous payment delays and negotiated stronger accountability measures in the amended agreement.
Can someone please explain what is public to loose if this deal failed?
It is extremely sad and disappointing to see how far OR has fallen from Tim's founding vision to provide a fact-based, data-driven news outlet. Similar to Hyphy Republic, OR cannot be trusted to deliver fact-based journalist, but rather editorials driven by persoanl animus. We all know Seneca has a personal beef with Ray from the argument they had at a press conference outside of City Hall, and we all know you are working in concert with him on this.
I will never contribute to this organ again due it's lack of editorial integrity and respect for the truth.
The key factual error remains: OAC is Jim Reynold's company, not Ray Bobbit's.
Oh and this is wrong, too:
"....The combined price of both halves of the property is $225 million. Of that, $115 million would be a county loan and $60 million a city loan..."
I'll leave it to you to figure out your math error, but your intern deserves a competent, unbiased editor to help them grow.
See you at the press conference this morning at 9:30!
Let's go Oak-LAND!
David, thank you for your comment. Our article is accurate and we stand behind it. People can read the article and the underlying evidence it presents, and decide for themselves what to think about it. Thank you again for your comment; the discussion is appreciated.
Of course! Under your leadership, OR no longer stands on data. The SF Chronicle, reports that the county installment payments are $65M, while OR reports they are $115.
"...mainly for the county, which already has a bird in the hand with the $85 million from its 2019 sale to the A’s. The deal would leave the county acting as a lender of some $65 million to the Oakland Acquisition Co...."
Putting the quality of characters in play of this deal aside, loans are constructed according to risks and the proposed low interest rate (not in line with national trends or business logic) is a red flag.
Moreover, Oakland is currently in dire financial straits and a more appropriate interest rate for this loan would help the city better manage other liabilities.
The city isn’t a bank, and it’s not a loan. That’s why the risk-weighted i rate model doesn’t apply.
City is simply beating inflation to prevent time value erosion
Give it any name you'd like, the risks are still present. We are mindful of Oakland's terrible track record in financial management. Moreover, Oakland's track record in actually using the funds collected from various taxes for their advertised purpose is terrible as well. This is the reason why Measure E was rejected.
My point is we have "leaders" that govern by 'the feels' rather than sound economic principals. I'm tired of Oakland residents and small businesses footing the bill for poor decisions.
“Pissed Off Oaklander” — Thank you for your comments. We would like to publish them in our next Letter to the Editor column.
The real estate is well secured. Provisions re: EV, surety bond, title.
The other things you mentioned are irrelevant to this deal, but reveal your motivation - it’s about u being politically butt-hurt instead of analytical.
My comments are drawn from being an Oaklander for 29 years with significant blood, sweat, and tears. I'm interested in pragmatism and results, not politics but for the record, I've voted for candidates across the political spectrum.
Just because you’ve only been here 29 years is no excuse for not understanding the security