Documents Part 1 PDF

AGENDA REPORT
TO:
JOHN A. FLORES
INTERIM CITY ADMINISTRATOR
SUBJECT: DDA for 12th St Remainder Parcel
FROM: Mark Sawicki
DATE: February 27, 2015
________________
City Administrator
Approval
Date
___________
COUNCIL DISTRICT: # 2
RECOMMENDATION
Staff recommends that the City Council adopt the following legislation:
An Ordinance Authorizing: (1) The City Administrator, Without Returning To The City
Council, To Negotiate And Execute A Disposition And Development Agreement and
Related Documents Between The City of Oakland, And A Development Entity Comprised
Of UrbanCore Development, LLC and UDR, Inc., (Or Its Related Entities Or Affiliates)
For Sale Of The 12th Street Remainder Parcel Located At E12th Street And 2nd Avenue
For No Less Than $5.1 Million And Development As A Residential Mixed-Use Project, All
Of The Foregoing Documents To Be In A Form And Content Substantially In
Conformance With The Term Sheet Attached As Exhibit A; (2) Set-Aside Of No More
Than $500,000 From Land Sales Proceeds For Remediation of Property, And (3)
Appropriation of $200,000 From Land Sales Proceeds To Fund An Asset Portfolio
Management Plan
OUTCOME
The City Administrator is authorized, without returning to the City Council, to negotiate and
execute a Development and Disposition Agreement (DDA) that will allow: (a) the City to sell the
12th Street Remainder Parcel (Property or Remainder Parcel) to an entity comprised of
UrbanCore Development, LLC and UDR, Inc. (or its related entities or affiliates) (such entity
referred to collectively herein as Developer or UrbanCore) for $5.1 million ; (b) the
Developer to build a mixed-use residential high-rise tower on the Property as well as to provide
the landscaping and ongoing maintenance of the 0.91 acre City-owned open space/water
treatment basin adjacent to the Property; and, (c) a set aside of up to $500,000 from the land sale
proceeds from this transaction be placed in an escrow account to cover the possibility of
qualified environmental remediation work.
Item: __________
City Council
March 31, 2015
John A. Flores, Interim City Administrator

Subject: DDA for 12th Street Remainder Parcel
Date: February 27, 2015
Page 2
In addition, the City Administrator will be authorized to appropriate $200,000 from the land sale
proceeds of this transaction to fund the development of an Asset Portfolio Management Plan for
all City-owned real estate.
EXECUTIVE SUMMARY
UrbanCores 18-month Exclusive Negotiating Agreement (ENA), with the City expired on
January 5, 2015 and Project Implementation staff have substantially completed negotiations with
UrbanCore on the terms for a DDA.
Developer satisfied the requirements of the ENA, including working with staff to refine the
project proposal in response to community input and new zoning regulations that were adopted
as part of the Lake Merritt Station Area Plan; completing California Environmental Quality Act
(CEQA) review; completing market studies and determining projects financial feasibility; and,
identifying a capital partner and a guarantor entity that would execute a Completion Guaranty.
As of the writing of this report, Planning staff is working to schedule UrbanCores project for
Planning Commission approval for entitlements & CEQA review on March 18, 2015.
Pending Planning Commissions approval of UrbanCores proposed project, staff is seeking City
Council approval to execute a DDA with UrbanCore which includes: 1) the sale of the Cityowned 12th Street Remainder Parcel at the appraised Fair Market Value of $5.1 million; and 2)
starting construction (within six months of receiving building permits) of a 24-story residential
apartment tower with a three-level podium base, including 298 residential units, approximately
2,000 square feet of ground level commercial space, 209 parking spaces and associated amenities
and improvements.
BACKGROUND/LEGISLATIVE HISTORY
The 12th Street Remainder Parcel is owned by the City of Oakland. This 0.925 acre of land was
previously public right-of-way and was created in 2011 as a result of the reconfiguration of 12th
Street that was a part of the City of Oaklands Lake Merritt Park Improvement/12th Street
Reconstruction Project which was funded by Measure DD.
The Remainder Parcel is bounded by E. 12th Street on the east, by 2nd Avenue & Oakland
Unified School District (OUSD) property on the south, by the newly created open space to the
west and by Lake Merritt Blvd to the north. The site is located within the Central District
Redevelopment Project Area and is immediately adjacent to the Central City East
Redevelopment Project Area. (See Attachment A: Parcel & Aerial Map)
The Redevelopment Agency acquired the Remainder Parcel from the City on June 16, 2011 for
$2.5 million for the purpose of controlling development of this key site through a DDA. The
price was based on a Fair Market Value Appraisal considering the highest and best use of the
Property based on the zoning and estimated parcel size existing at the time. In February of 2012,
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with the dissolution of the Redevelopment Agency, the Property was transferred to the Oakland
Redevelopment Successor Agency by operation of law.
In December 2012, staff issued a Request for Proposals (RFP) to those developers who had
shown interest in the Property. Staff received two proposals and established a selection
committee to evaluate the proposals and interview the two respondents to the RFP.
Then in July 2013, the City Council (Reso No. 84492 C.M.S.) authorized the City Administrator
to enter into an ENA with the selected respondent, UrbanCore-Integral Development, LLC for
the development of a high-rise residential tower on the Remainder Parcel.
In August 2013 the Oakland Redevelopment Successor Agency and the City received a City of
Oakland Redevelopment Agency Asset Transfer Review from the California State Controller,
commonly referred to as the Clawback Report. This report, among other things, disallowed
the 2011 acquisition of the Property by the Agency and required the City to transfer the sales
proceeds for the Remainder Parcel back to the Oakland Redevelopment Successor Agency.
Therefore, on April 7, 2014 the Oakland Redevelopment Successor Agency transferred
ownership of the 12th Street Remainder Parcel back to the City.
During the 18-month ENA period, UrbanCore worked diligently with staff to satisfy the
requirements of the ENA, including refining the project proposal in response to community
input, Planning staff input, new zoning regulations that were under development as part of the
Lake Merritt Station Area Plan (and later adopted by City Council in December 2014), changing
market conditions and what is needed to make the project financially feasible. Community
stakeholders, including members of the Measure DD Coalition, Coalition of Advocates for Lake
Merritt (CALM) and surrounding neighbors such as residents of 1200 Lakeshore (a residential
high-rise located across the street from the Remainder Parcel), participated in public meetings to
give input on the Developers proposed development, including feedback on design and
increasing its compatibility with the existing neighborhood.
Also, UrbanCore successfully identified UDR, Inc. as their equity partner and the guarantor
entity who will execute a Completion Guaranty for the project. As of the writing of this report,
Planning staff is scheduling this project for the Planning Commission meeting on March 18,
2015, to seek planning entitlements, including the projects CEQA approval.
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Development Team
UrbanCore, who has been the lead developer to date1, proposes to form a new Limited Liability
Company in a partnership with UDR, Inc. to acquire and develop the Property. UDR or an
affiliate intends to provide 97.5 percent of the equity needed during predevelopment and 100
percent of the equity to construct the project.
UDR, Inc. (NYSE:UDR), an S&P 400 Company, is a leading multifamily real estate investment
trust with a demonstrated performance history of delivering superior and dependable returns by
successfully managing, buying, selling, developing and redeveloping attractive real estate
properties in targeted U.S. markets. As of December 31, 2014, UDR owned or had an ownership
positon in 51,293 apartment homes including 1,387 homes under development.
The persons authorized to bind the new entity will include Mr. Donald D. MacKenzie from UDR
and Mr. Michael E. Johnson from UrbanCore. These two persons will be assisted by Ms. Kirsty
Greer from UDR.
The proposed ownership of the project will include a 97.5 percent interest for UDR and a 2.5
percent interest for UrbanCore. UDR will serve as the Managing Member of the LLC and
provide the required guarantees necessary to secure the project capital as needed. Both
companies will work together jointly throughout the predevelopment and construction phases,
and UDR will manage the marketing, leasing and property management of the Property.
The design team is a joint venture of AVRP Studios and Oakland-based Pyatok Architects. The
joint venture development team has not made a final selection of a General Contractor, but has
been working with three different contractors who have provided construction cost estimates,
and will continue to do so during pre-construction. Once the development team makes a final
selection of the General Contractor, they will advise the City and submit their experience and
financial information for City review.
The Citys ENA was with UrbanCore-Integral, LLC which was a partnership between UrbanCore
Development, LLC and The Integral Group, LLC. During the course of the ENA period, Integral dropped
out of the project while UrbanCore continued to satisfy the ENAs schedule of performance.
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The Project
UrbanCores proposed development project, also known as LakeHouse Residences, is a 24story residential apartment tower with a 3-level podium base (one level below grade, two above
grade) with 209 parking stalls, 298 residential units, approximately 2,000 square feet of ground
level commercial space for a caf with a terrace, and associated amenities and improvements:
A lobby and lounge area, on ground level (3,000 sf);
A recreation room and exercise room, on 3rd floor (approx. 2,000 sf);
A garden and plaza, on the 3rd floor (approx. 15,400 sf, above the garage);
A green roof, on the 6th floor (approx. 3,400 sf);
A roof terrace, on the 8th floor (approx. 3,500 sf); and,
Off-site improvements involving enhancement of the adjacent City-owned open

space/water treatment basin (0.91 acres) with natural landscaping and providing ongoing
maintenance.
The 298 units will consist of a mix of unit types, including seven lofts, eight penthouse units, 113
studios, 110 one-bedroom units, and 60 two-bedroom units, which would range in size from
approximately 550 to 1,595 square feet.
(See Attachment B: Development Plans for UrbanCores LakeHouse Residences)
ANALYSIS
DDA Terms
The general terms of a DDA for the Property have been substantially negotiated and key terms
include:
1. Appraised fair market price An appraisal conducted by Yovino &Young determined the
as-is Fair Market Value to be $5.1 million and the highest and best use of the site to be a
multi-unit residential project that conforms to the new zoning regulations under the Lake
Merritt Station Area Plan. Developer will pay $5.1 million.
2. Easements on adjacent open space for construction and no-build to allow openings on
property line; maintenance of open space by Developer.
3. Environmental Remediation City staff intends to sell Property in as-is condition and
does not believe, based on environmental assessment studies that have been conducted to
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date2, that the Property contains hazardous materials. However, a Phase I report
indicated some possible shallow soil contamination from automobile exhaust and a
gasoline service station that occupied a portion of the site that may have affected soil or
groundwater in such a way as to provide a concern for vapor intrusion into the new
development. So further study will be conducted by Developer.
Should a pending Phase II report discover a need for environmental remediation, staff has
proposed that an amount not to exceed $500,000 from the land sale proceeds be set-aside
in an escrow account for the project and released as the remediation work is completed.
4. Development schedule Although a maximum of 48 months is allowed, including
purchasing the site and starting construction within 18 months of DDA execution (or
within six months of receiving building permits), construction is expected to begin as
early as Spring 2016.
5. Other typical DDA terms such as, completion guaranty, $50,000 good faith deposit,
repurchase option, etc..
(See Attachment C: DDA Term Sheet for UrbanCores LakeHouse Residences)
Closing Date
Throughout the nearly 2 year negotiation period with UrbanCore, staff had consistently
requested UrbanCore commit to closing the transaction and purchasing the Property by June 30th
2015 because the revenues from this land sales transaction were already included in the Citys
Fiscal Year 2013-15 Budget. UrbanCore agreed early on to meet this deadline, submitted audited
financial statements of UDR to show availability of capital, and had been preparing to purchase
land by June 30th, 2015 once a DDA was executed.
However, because the City delayed the adoption of the Lake Merritt Station Area Plan and Final
EIR, the Developers project schedule (CEQA review in particular) was impacted, and it became
more unlikely that UrbanCore could obtain building permits or enter into a construction contract
by June 30th.
The City Attorneys Office expressed serious concerns about conveying land before a developer
receives building permits. Therefore, staff had to negotiate a delay in the closing date to occur
after the original target date of June 30th 2015. Accordingly, the DDAs schedule of performance
shows the transfer of land will occur after the issuance of building permits, at which time a
2
Environmental studies include: Phase I Environmental Site Assessment (ESA), by Adanta, dated 9/1/14
and several soils & geotechnical reports and an ESA developed for the E12th Street Reconstruction
Project, dating from 2006 to 2009
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Completion Guarantee would be signed. This is expected to happen as early as Spring 2016 or
as late as Fall 2016.
Payment and Performance Bond Requirement
UrbanCore has made a strong request to staff to waive a typical DDA requirement related to
payment and performance bonds, which states: Developer to provide payment and performance
bonds in an amount not less than 100% of the project construction costs, pursuant to the
Developer-executed construction contract. After consulting with the City Attorneys office,
staff does not recommend this waiver.
Analysis of Project Feasibility
Staffs analysis of Developers proforma indicates that the project is feasible assuming a sale of
the property and rents increasing. This is consistent with recent studies commissioned by the
City that show high-rise developments are marginally feasible. The November 25, 2013
Downtown Oakland Development Feasibility Study prepared for the Planning & Building
Department by AECOM and the March 12, 2014 update showed that high-rise housing was
feasible in the Uptown Area, but not in the Lake Merritt Area, although it was becoming more
feasible with increasing rents.
According to the Developers latest proforma, the project has a 5.77 percent rate of return on cost
(ROC). According to Developer and appraiser, a ROC of 5.86 percent to 6.0 percent for the
Oakland market is whats needed for institutional investment funding for a project of this type
and size. Because of UDRs REIT structure, UrbanCore and UDR negotiated a slightly lower
acceptable ROC to move this transaction forward.
Therefore, reducing rents on the project will render the project infeasible. This means that the
City cannot attract affordable housing in high-rise developments without providing significant
public subsidies, which the City does not have, especially with the dissolution of
Redevelopment. Even if the City did have public subsidies to offer, such as in the form of a land
write-down, a developer is likely to not prefer that option. This is because certain City
contracting and employment requirements, such as prevailing wage and living wage, would be
triggered and add to developers costs.
In the case of the Remainder Parcel, Developer is not receiving any public subsidy and will be
paying the City the appraised Fair Market Value for the land.
(See Attachment E: Major Housing Projects in Oakland with Affordable Housing Since 2012)
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Anticipated Economic Benefits to City

In addition to the initial $5.1 million revenue from the sale of the land and permit fees associated
with the development of this $137 million project, staffs assessment of the projects
employment and ongoing tax benefits to the City is as follows:
Jobs 252 construction jobs; 14 full time employee (FTE) jobs post construction
Annual Property Tax $650,000
Annual Sales Tax $6,000
Annual Business License Tax $165,000
POLICY ALTERNATIVES
Lease vs. Sale
The City Council adopted a resolution in December 2014 to establish a general policy to lease
rather than sell City property (Reso No. 85324 C.M.S.). Staff is recommending a sale of the
Property as necessary to promote the Citys economic development and housing goals. Attached
to this report is a chart setting forth the pros and cons of making an exception to the Councils
policy of preferring ground leases when disposing of City property.
Staff recommends an exception to the general policy be made for this Property based on the
following:
1. Staff and Developer reliance on prior council direction
The City issued an RFP in 2012 which explicitly offered the Property for sale. Staff and
UrbanCore conducted good faith negotiations for over 18 months assuming a land sale
transaction based on the Propertys highest and best use. The FY 2013-15 Budget,
approved by the City Council in June 2013, included $4 million in revenue from land
sales proceeds of the Property.
2. Potential inability to finance development
Developer is not prepared to ground lease the Property from the City. The capital
investor, UDR, that UrbanCore attracted to be its joint partner to finance and develop the
project, operates under a Real Estate Investment Trust (REIT) ownership structure.
UDRs underwriting and joint venture development agreement with UrbanCore is based
on the land value assumption provided in the Citys December 2014 appraisal. A change
in the projects financial model to accommodate an on-going ground lease payment could
reduce the available cash flow return on equity. Even with reduced upfront cost of no fee
for the land, the cash flow may be insufficient to provide the required return on
investment. Also as a long term institutional investor, UDR prefers to avoid the risk of
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someday losing control of the building if it is unable to extend its ground lease.
Therefore, a change to a ground lease would require UDR to re-evaluate this investment
opportunity and could cause the project to be infeasible.
3. City investment in a ground lease would be at the cost of Citys immediate financial
needs
Table 1 below shows that the project after 66 years is worth $482.3 million, which in
terms of Net Present Value (NPV) is equivalent to $10.3 million today. Therefore, in the
structuring of any ground lease deal, the City would need to be prepared to make up this
$10.3 million loss to the Developer. For example, on a ground lease deal that terminates
in year 66, the City would need to give the land away for free and pay the Developer at
least $5.2 million in order for it to be worth it to the Developer to develop the project. But
under a land sale deal, the Developer would be willing to pay the City the appraised FMV
of $5.1 million to develop the project.
Table 1: Analysis of NPV of Project on Leased Land vs Owned Land
Year1
2016
NetOperatingRevenue*
PropertyValuewith6%CapRate**
NPVLeaseVersusSale***
$1,066,175,484
$482,302,380
$10,307,001
Year2
2017
Year3
2018
Year4
2019
Year5
2020
Year10
2025
Year25
2040
Year50
2065
Year66
2081
$0
$7,120,488
$7,913,282
$8,151,128
$8,396,120
$9,546,871 $12,848,831 $21,079,869 $28,938,143
$0 $118,674,800 $131,888,033 $135,852,133 $139,935,333 $159,114,510 $214,147,182 $351,331,150 $482,302,380
$0
$0
$0
$0
$0
$0
$0
$0 $482,302,380
Revenuegrowthat3%from2017to2023perdeveloperproformaand2%fromthereonto2081.
**
ThevalueoftheProperty(i.e.land+improvements)iscalculatedbydividingtheNetOperatingRevenuebya6%CapRate.
*** Thedifferenceinvalueforsaleofpropertyversusleaseofpropertyiscalculatedasthediscountedvalueofthepropertyattheend
ofthe66yearlease.ThediscountrateusedwasthesameastheCapRate6%.
For additional staff analysis on the pros and cons of lease vs. sale, see Attachment D: Analysis
of Ground Lease Vs. Sale of the 12th Street Remainder Parcel
Asset Portfolio Management Plan
Real Estate Services Division, under the direction of the City Administrator, and in coordination
with the Finance Department and the Public Works Department, has investigated and determined
the need for an Asset Portfolio Management Plan for all City-owned real estate. In October
2014, City Council authorized $200,000 from the sale of 3455 and 3461 Champion Street be
allocated to fund the Asset Portfolio Management Plan (Ordinance No. 13264 C.M.S.).
However, in the event the Champion Street transaction does not close, staff is now requesting
$200,000 of the sales proceeds of this transaction be used instead. The appropriation would fund
the development of this Plan, which involves hiring a 3rd party portfolio management firm to
assist in the drafting and implementing of an asset portfolio management plan for City-owned
real estate.
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PUBLIC OUTREACH/INTEREST
UrbanCore hosted a public meeting on October 28, 2013 to present their initial proposed
development and seek input. The Developer incorporated the feedback they received from that
meeting and followed up with a presentation at the November 18, 2013 meeting of the Measure
DD Coalition, a regular and broadly publicized meeting that is open to the public. Most recently,
Developer hosted a meeting on January 20, 2015 to present the latest version of their projects
description and design.
At each of the three public meetings, there were about 30 to 50 participants; about two weeks
prior to each meeting, announcement notices went out both by mail and by e-mail to key
community stakeholders, including the Citys Lake Merritt Station Area Plan contacts list, and
both City Council District 2 and City Council District 3 contacts list. In addition, Developer
made themselves available to meet with various interested community stakeholders, when
requested. For example, a subcommittee of the Measure DD Coalition interested in the
development of the Remainder Parcel was formed to follow the project closely and provide
guidance and input on various topics including the projects design, community benefits and
environmental impacts, especially wind and shadow. In fact, between September 2013 and
March 2014, the Remainder Parcel was a topic of discussion at the Measure DD Coalition
meetings for eight of those ten meetings.
Community Benefits
1. Developer to enhance and maintain City-owned open space adjacent to Property
Early on and throughout this public engagement process, community members have
asked the Developer to be responsible for the landscaping and ongoing maintenance of
the newly created City-owned open space adjacent to the Remainder Parcel. The
Developer has been positively responsive to this request. The park design the Developer
presented to the Parks and Recreation Advisory Committee on February 11, 2015 was
informed largely by a subcommittee of the Measure DD Coalition, who wished to
maintain Measure DDs intent for this park as passive open space.
In negotiating the DDA, Developer has agreed to: 1) design the adjacent open
space/water basin treatment center; 2) pay for enhancements to this open space; and, 3)
pay for ongoing maintenance of this open space in perpetuity. In exchange, the City
would convey an easement to this City open space as part of the sale of Remainder
Parcel. The parks maintenance standards would be captured in the easement itself as
well as the DDA and related documents.
2. Preservation of existing rental stock
In response to concerns of affordable housing and tenants rights interests represented by
community groups such as the Oakland Tenants Union, Developer agreed to restrict the
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project from generating the 298 condo conversion credits that the project would normally
be entitled to under the current Condo Conversion Ordinance, in the event that Developer
chooses to condo-map the project and restrict the projects 298 units for rental use for a
minimum of seven years. In other words, if Developer had not agreed to this restriction
in the DDA, Developer could become owner of 298 condo conversion credits that then
could be sold on the open market to property owners/developers who need these credits
to convert existing rental stock, including rent-controlled rental stock, into condos.
COORDINATION
Staff from the Project Implementation Division and the Bureau of Planning have worked closely
with UrbanCore to develop the proposed project to be consistent with the vision of the Lake
Merritt Station Area Plan and new zoning. The Citys Measure DD staff has also been involved
and acted as a liaison to the Measure DD Coalition, a community group that helped to inform the
proposed landscaping of the City-owned open space adjacent to the Property, amongst other
things. Planning staff prepared the report to the Parks and Recreation Advisory Committee on
this proposed landscaping. Real Estate staff commissioned and reviewed the appraisal report.
Project Implementation Division staff coordinated this report with the Budget Office, the City
Attorney's Office and the Controllers Bureau.
OUSD owns a three acre development site adjacent to the Property, to the south. Project
Implementation staff followed OUSDs 2014 Request for Qualifications (RFQ) process for
development of that site; UrbanCore was one of four respondents to the OUSD RFQ. Even
though the School Board decided to put the RFQ process on hold and not move forward on
selecting a developer until OUSD staff conducted more community engagement on the sites
development potential, both UrbanCore and Project Implementation staff continue to monitor
this neighboring development site.
COST SUMMARY/IMPLICATIONS
The land sale proceeds totaling up to $5.1 million will be deposited in the General Purpose Fund
(1010), Real Estate Services Organization (85231), Sale of Land (48111), Non-Project
(0000000), Real Estate Program (PS32).
An Environmental Remediation Allowance not to exceed $500,000 of the land sale proceeds will
be set aside in escrow. The exact amount will be negotiated based on findings of a Phase II
report and released directly to Developer as the remediation work is completed. Any Allowance
amount remaining after remediation work is complete will be deposited into the above named
account.
$200,000 of the land sale proceeds from this transaction will be appropriated to fund the
development of an Asset Portfolio Management Plan for all City-owned real estate, to be
managed by the Real Estate Services Division. The funds will be appropriated in the General
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Purpose Fund (1010), Real Estate Division (85231), Contract Contingency (54011), and Real
Estate (PS32). The exact project number is to-be-established.
Developer has agreed to pay for all escrow fees and closing costs, including City and any other
county taxes.
Pursuant to the ENA, UrbanCore has been solely responsible for all costs associated with
developing the project to date, including paying for market studies, architectural designs, legal
counsel, CEQA consultant study, the environmental Phase I and Phase II reports, etc.. Also, the
City used UrbanCores Project Expense Payment for the ENA to pay for the Citys third party
expenses related to the project including appraisal report, economic consultant services, and
creation of final parcel map.
FISCAL/POLICY ALIGNMENT
UrbanCores proposed project is consistent with the zoning and vision of the Lake Merritt
Station Area Plan adopted by City Council in December 2014. The Property is considered an
ideal development site for an iconic, high density residential high rise with ground floor retail
and has been identified as a Primary Gateway Opportunity Site in the Specific Plan.
Sale of the Remainder Parcel at FMV would be consistent with the FY 2013-15 Budget,
approved by the City Council in June 2013, which included $4 million in revenue from land
sales proceeds.
SUSTAINABLE OPPORTUNITIES
Economic: The sale to UrbanCore would generate land sale proceeds of $5.1 million and
facilitate development of housing and a modest amount of neighborhood-serving retail. The
development would put vacant underutilized land into productive use. The construction of the
project could provide significant employment at the site. Staff assessment of project employment
benefits includes approximately 252 construction jobs, five FTE retail/commercial jobs and nine
FTE permanent jobs in the residential portion. The project is anticipated to generate significant
tax benefits to the City, including $650,000 in annual property taxes, $6,000 in annual sales tax
and $165,000 in annual business license tax. Commencement of a new high rise construction in
Oakland is likely to precipitate further developer interest and investment.
Environmental: As an infill project that develops in an already built-up area, this project reduces
the pressure to construct on agricultural and other undeveloped land, and thereby contributes to
the prevention of urban sprawl. The location of the project in proximity to major public
transportation nodes will likely encourage project residents and retail customers to use BART
and AC Transit. The project proposes to incorporate green building and energy efficient
components both during construction and occupancy, such as a green roof, a solar thermal
system and a waste management system to facilitate recycling. The Bureau of Plannings
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Conditions of Approval for this project include requirements for pro-environmental plans be
incorporated prior to issuance of a building permit, such as a Parking and Transportation
Demand Management Plan, a Bird Collision Reduction Plan, and a Greenhouse Gas Reduction
Plan.
Social Equity: During the 18-month ENA period, UrbanCore engaged in an active community
participation process that involved a variety of stakeholders so that the project could be informed
by a wide-range of voices. Specific community benefits from this project include the Developer
agreeing to landscape and to maintain the City-owned open space adjacent to the Property and
agreeing to restrict the project from generating condo conversion credits. The caf to be added to
the ground floor of the project will be an amenity for nearby Lake Merritt users as well as the
public in general. Finally, the residents that will be attracted to live in this high density project
will contribute to Oakland's economic diversity and the demand that is needed to support
Oaklands growing economy.
Some affordable housing advocates have asked for some of the land sales proceeds to go toward
a fund for affordable housing. Measure DD Coalition members have asked for some of the land
sales proceeds to go toward a maintenance fund dedicated to the Measure DD-funded park
improvements.
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Attachments
Attachment A. Parcel & Aerial Maps for 12th Street Remainder Parcel
Attachment B. Development Plans for UrbanCores LakeHouse Residences
Attachment C. DDA Term Sheet for UrbanCores LakeHouse Residences
Attachment D. Analysis of Ground Lease Vs. Sale of the 12th Street Remainder Parcel
Attachment E: Major Housing Projects in Oakland with Affordable Housing Since 2012
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12th Street Remainder Parcel Briefing Paper
1. Housing Strategy
a. Production Goals
i. Regional Housing Need Allocation
Production of new housing is falling short in all categories, including Above Moderate Housing
as proposed for the 12th Street Remainder Site. The following table outlines how Oakland
performed against the Regional Housing Need Allocation for the various categories based on
Area Median Income (AMI).
Oakland Housing Need vs. Production
2007-14 Period3
Rental
Income Level
Housing Need
Very Low (Up to 50% AMI)
1,900
Low (51-80% AMI)
2,098
Moderate (81%-120% AMI)
3,142
Above Moderate (>120% AMI)
7,489
Total
14,629
3
Oakland Housing Element Annual Progress Report, 2014
Bldg Permits
1,282
385
22
2,341
4,030
% of RHN
67%
18%
1%
31%
28%
1. Work Force Housing - Largest Unmet Need

The largest unmet need is for moderate income housing, 81%-120% AMI, often referred to as
work force housing. Almost no work force housing is being developed in Oakland. None of the
major federal, state or local programs target this income group because market rate housing has
usually met this need. But market rate housing in the core Bay Area no longer meets this
housing need. Rent and sales prices for new housing are just too high. Land prices, construction
costs and other development costs make it difficult if not impossible to develop work force
housing without subsidies. But no subsidies are available for work force housing.
ii. Redevelopment Plan Production Requirement
While funding was terminated with the dissolution of redevelopment, other aspects such as the
redevelopment plan and production requirements were not eliminated. Redevelopment
production requirement are that at least 15% of the units are long term affordable, 55 years for
rental and 45 years for for-sale housing, of this 9% need to be affordable to Low Income
Households and 6% to Very Low Income Households. The 12th Street Remainder Site is on the
edge of the Central District Redevelopment Area and immediately adjacent to the Central City
East Redevelopment Area. Both of these areas have production requirements. But since most of
the recent units produced were assisted affordable housing units, there has been a surplus of
affordable units in these areas. Since the production requirement began for the Central District,
April 3, 2012, all of the units produced have been in affordable housing projects and several
thousand market rate units can be developed before the is an issue with the production
requirements.
1. Central District
Property Name
Harrison Senior
James Lee Court
Merritt Crossing
The Savoy
Madison Park Apartments
Cathedral Gardens
1701 MLK Jr. Way
Civic Center 14 TOD
11th and Jackson
Completion
Date
Total
Extremely
Low
Income
Very
Low
Income
Low
Income
73
26
70
106
98
100
26
40
71
10
13
42
21
40
14
12
22
29
5
56
63
75
30
11
14
18
43
9
610
100.0%
174
28.5%
301
49.3%
8/31/12
3/30/13
4/30/13
8/31/13
12/31/13
10/31/14
10/31/15
9/30/16
12/31/16
Total
Percentage of Total
Moderate
Income
1
2
1
1
2
1
1
1
1
29
13
30
124
20.3%
Above
Moderate
Income
2
0.3%
9
1.5%
Moderate
Income
Above
Moderate
Income
2. Central City East

Property Name
Completion
Date
Total
Miley Gardens Senior

Housing Community
4/2/07
69
Orchards on Foothill
Senior
Hugh Taylor
Posada de Colores
Clinton Commons
Eldridge Gonaway
Kenneth Henry Court
MacArthur Apartments
12/31/08
65
8/31/11
8/31/11
9/30/12
2/28/13
6/30/13
11/30/13
42
100
55
40
50
32
Total
Percentage of Total
453
100.0%
b. Past Production 2007-2014
Extremely
Low
Income
Very
Low
Income
Low
Income
50
19
57
14
42
99
12
39
22
16
46
10.2%
337
74.4%
25
1
1
1
17
28
1
65
14.3%
1
0
0.0%
5
1.1%
Housing production is inconsistent. Affordable housing production has been fairly consistent.
The available governmental subsidies produce a reliable number of units each year. But this
number may drop off as the last of the redevelopment funded projects are completed. The City is
scrambling to find other funds to fill this loss. It is the market rate housing that has been very
inconsistent. There were many projects completed between 1999 and 2008 and almost no
projects since. But with the recent increases in rent and sales prices, a new surge of projects is
expected.
c. Future Production 2015-2022
d. Funding
i. Loss of Redevelopment - New Sources
ii. Money - Not Sites - Greatest Need
The City already owns several affordable housing sites, including four developable parcels in the
Brooklyn Basin Project and a large site in the Wood Street Project that can accommodate
approximately two projects. These sites will accommodate 665 residential units. The main issue
delaying development of these sites is a lack of funds. These projects will require the Citys land
and approximately $50 million in development subsidies from the City, in addition to Low
Income Housing Tax Credits and other competitive funding sources, to make them feasible. The
City has been only able to award about $7 million a year over for affordable housing projects in
the last couple Notice of Funding Availability. These funds have been oversubscribed so there
are numerous other projects ready for development that remain unfunded.
2. 12th Street Remainder Project and Benefits
The .925 acre parcel was previously the public right-of-way and was created in 2011 as a result
of the reconfiguration of 12th Street as part of a park improvement/street reconstruction project
funded by Measure DD.
In December 2012, City staff issued an RFP for the sale of the parcel. Two proposals were
received.
In July 2013, City Council authorized the City Administrator to enter into an Exclusive
Negotiating Agreement (ENA) with UrbanCore-Integral Development LLC for the development
of a high-rise residential tower. (Resolution No. 84492 C.M.S.)
During the 18-month ENA period, the Developer engaged in an active community participation
process. As an example, the Remainder Parcel was discussed at two community meetings hosted
by the developer and a topic of discussion at the Measure DD Coalition meetings for eight of ten
meetings held between September 2013 and March 2014, including one that was more broadly
announced to the greater community as a presentation of the project. The resulting project was
informed by a wide range of voices. At the conclusion of the ENA process, UrbanCore-Integral
Development LLC advanced a proposal for a $137 million multi-unit housing project with about
298 residential units and 2,000 square feet of ground level commercial space.
Concurrent to this progress on the Remainder Parcel, the City of Oakland worked with the
community to craft the Lake Merritt Station Area Plan. City Council adopted the area plan in
December 2014 (Ordinance No. 13276 C.M.S.) The Area Plan creates a vision for the area,
vetted through a community-based planning process, and streamlines the development process
for projects that fall within the Plans vision. The Developers proposed project fits within the
vision of the Area Plan.
With increasing rents, high-rise development is just becoming financial feasible in the Lake
Merritt area as noted in the November 25, 2013, Downtown Oakland Development Feasibility
Study and the March 12, 2014, update.
The Developer is not receiving any public subsidy and will be paying the City the appraised fair
market value.
The sale of this property will help the City meet immediate financial needs, plus provide
employment opportunities and community benefits. Sale of the parcel does not result in the
reduction in access to public land as the parcel was previously a street right-of-way.
a. Site Options
i. Approve Project
The main consideration by staff is that the City selected UrbanCore to develop a market rate
project. UrbanCore spent years of staff time and hundreds of thousands of dollars to develop the
project to this stage. Now that the project is ready for approval, the City should follow through
with the project selected in 2013.
Even if the need for affordable housing is considered paramount, the City should then set aside
all of the sales proceeds for affordable housing. This would provide funding for about 41 units
on another site. This way market rate housing could quickly be developed on the 12th Street
Remainder Site and the City can find a site to develop affordable housing in the next Notice of
Funding Availability (NOFA) using the sales proceeds.
ii. New RFP - Market Rate with 15% Affordable or more
A new RFP to include affordable housing developers would delay the project. It would probably
also require an affordable component, if an affordable housing developer shows any interest.
The project would likely turn into a low rise development of 100 to 150 units with at least 15 to
22 affordable units and a reduced sales price. The reduced sales price would trigger City
contracting programs requiring even lower sales price for the land. This may eliminate all or at
least most of the sales price. The end result is less affordable units that a market rate sale with
all of the proceeds going to affordable housing
iii. Affordable (100%) Housing RFP
The community members have also demanded a 100% affordable project on the site. They have
suggested a Low Income Housing Tax Credit deal would work on the site, and it will. But the
City subsidy for this would be approximately $10 million, with only half of the subsidy coming
from the land. The City needs additional funds to complete the project and the developer would
need to obtain highly competitive tax credits in order to make the project feasible. Issuing a
RFP, selecting a developer, entitling a new project and finding financing would delay any project
on the site for several years. It would be faster to transfers sales proceeds to another site in the
NOFA, both land sales and the other funding that would be needed for the project.
b. No Displacement
There has been widespread discussion of the displacement that will be caused by the project.
But the site is a vacant lot. There are no persons living on the site so the project cannot cause
displacement. The displacement argument is stretched to say that new market rate housing in the
area will encourage new high income residents to move into the area, displacing current lower
income residents. The problem is that this displacement is happening without the project, and
not providing new housing for higher income residents will only increase this type of
displacement. The project should in fact reduce displacement.
c. Tax & Other Benefits
Project Employment Benefits
252 temporary construction jobs
5 permanent retail/commercial jobs
9 permanent residential/building management jobs
One Time Financial Benefits
Purchase Price
Asset Management Plan for all City-Owned Properties
Environmental Remediation set-aside2
Net Proceeds
Of the Net Proceeds
Affordable Housing Trust Fund 25%
Maintenance of Measure DD Improvements around
Lake Merritt 25%*
Proceeds to General Purpose Fund
1
Original
Proposal
$5.1 million
-$200,000
-$500,000
$4,400,000
Staff
Alternative1
$5.1 million
-$200,000
-$500,000
$4,400,000
$1.1 million2
$1.1 million2
$1.1 million2
$2.2million2
$3.3million2
In the staff alternative recommendation, rather than allocating one-time funds for ongoing
maintenance, the FY 2015-17 Proposed Budget has included $400,000 of ongoing funding
beginning in FY 2016-17 for additional Lake Merritt parks maintenance. 2After site remediation
is completed; any amount remaining from the $500,000 set-aside will be allocated to the
Affordable Housing Trust Fund, Maintenance Fund and General Purpose Fund per the above
percentages.
Ongoing Annual Financial Benefits for the City
$821,000 annually for the Citys General Purpose Fund which supports essential City
services such as Police, Fire, Library and Recreation services.
$650,000 property tax annually
$165,000 business license tax annually
$6,000 sales tax annually
Economic Equity/Community & Jobs Benefits
Activates a vacant, underutilized parcel with an iconic residential tower that generates
much needed revenue for the Citys General Purpose Fund.
Provides landscaping and maintenance of the City-owned open space adjacent to the
Remainder Parcel.
Restricts the project from generating 298condo conversion credits
25% goal for local hiring of construction jobs
25% combined goal for local-business and small-local-business of professional services
and construction contracts
$500,000 in community grants
o $150,000 for construction and/or maintenance of a skateboard park
o $100,000 for local trade construction training programs
o $100,000 for graffiti abatement and neighborhood beautification via the Eastlake
Merchants Association
o $75,000 for tenant legal rights and education program(s)
o $25,000 to fund a study to create a Business Improvement District or Community
Benefit District in the E. 18th St./Lower Park Blvd. commercial area
o $25,000 for Childrens Fairyland programs
o $25,000 for tree planning east of Lake Merritt and in San Antonio Park
20 hours of pro bono affordable housing development consulting
d. Site More Symbolic than a Solution to Housing Crisis

e. Need to Encourage All Types of Housing (cancelling project wrong message
to developers)
3. Exclusive Negotiating Agreement Process
a. Developer Selection
One of the issues is how the project was initiated. At the start of this process at the beginning of
2012 the property was owned by the Oakland Redevelopment Agency and was quickly
transferred to the Oakland Redevelopment Successor Agency before being transferred back to
the City in 2014. When a number of unsolicited proposals were received by the City in 2012, the
City Council decided to request detailed proposals from the interested parties before making any
decision. The reason for a public process is to ensure that the City receives a fair offer for its
property. The City received two strong proposals that offered competitive options for the City
an approximately 140 unit low rise proposal from Wood Partners and the approximately 270 unit
high rise proposal from UrbanCore. UrbanCores proposal was selected because it demonstrated
a feasible high-rise proposal. The City wanted to give UrbanCore a chance to develop this
proposal final approval of the project, a Disposition and Development Agreement (DDA).
Both proposals offered a market rate purchase price, to be set when the DDA is approved.
While the initial discussion was in closed session, so that the council could direct staff in private
on how to negotiate with the proposed developers, all final actions were required to be approved
in a later open session. After receiving detailed proposals, and holding a second closed session,
the UrbanCore Exclusive Negotiating Agreement (ENA) was approved by the City Council at
a regular Council Meeting on July 2, 2013, Resolution No. 84492 C.M.S.
b. Community Meetings
There has been discussion of the inadequate level of community outreach and discussion for the
12th Street Remainder Project. But the level of discussion for the project was extensive. All of
the identified community members and groups were included in invitations to project specific
meetings, including large groups from the Measure DD Community Coalition and the Lake
Merritt Station Area Plan. Presentations were made at project specific meetings and Measure
DD Community Coalition Meetings. These presentations to the community included:
The UrbanCore ENA was discussed and approved at the June 25, 2013 Community and
Economic Development Committee Meeting and the July 2, 2013 City Council Meeting.
The 12th Street Remainder Site was identified as an opportunity site and discussed during
the long Lake Merritt Station Area Plan adoption process.
UrbanCore set up two community meetings to present the project and discuss community
issues, on January 20, 2015 and on October 28, 2014.
UrbanCore made a substantial presentation of the 12th Street Remainder Project at the
November 18, 2013 Measure DD Community Coalition Meeting; and was discussed at at
least six other Measure DD Community Coalition Meetings, including meetings on:
January 19, 2015; November 17, September 15, July 21, and May 19, 2014; and
September 16, 2013.
The Urban Core DDA has now been presented at the April 20, 2015 Community and
Economic Development Committee Meeting, and still requires at least two readings at
the City Council for the ordinance to be approved.
c. Appraisal
The City has an on call contract with Yovino & Young for appraisal services. At the Citys
direction, Yovino & Young conducted an appraisal of the property and found that the as-is fair
market value is $5.1 million. Included in the transaction price is up to $500,000 to be set-aside
for environmental remediation work. Early reports indicate that the site might have shallow soil
contamination from automobile exhaust and a gas station that occupied a portion of the site may
have affected the soil.
There have been claims that this price is below market. One of the stronger claims was that the
City purchased land in 2014 for affordable housing at a higher price, based on a fair market
appraisal, than it is proposing to sell land now. Everyone agrees that prices have been rising.
The two appraisals value the sites differently. Community members have argued that the
Brooklyn Basin approach should be applied to the 12th Street Remainder Parcel. The Brooklyn
Basin Appraisal valued the sites at $50,000 per unit, which is being compared to the $17,114/unit
price in the 12th Street Remainder Parcel Appraisal. But it is hard to compare low rise
development sites, 100 units to the acre, with high rise sites, 330 units to the acre. In addition,
the 12th Street Remainder Parcel Appraisal considered the site as unentitled, since the developer
paid the cost of entitlements. The 12th Street Remainder Parcel Appraisal was therefore
appraising unentitled land value. If the sites are compared as land values, the 12th Street
Remainder Parcels price is higher than the average for the Brooklyn Basin Parcels, $127/sqft
versus $119/sqft. Taking into account: 1) entitled versus unentitled; 2) location differences (12th
Street Remainder Parcel being closer to BART); and 3) appraisal date (the later appraisal should
be higher in the rising market); the appraised values of the two sites are similar. Given the
additional community benefits that will be included in the UrbanCore DDA, the price seems to
be at market.
Site
12thStreetRemainder
BrooklynBasinParcelF
BrooklynBasinParcelG
BrooklynBasinAverage
Price
$5,100,000
$7,500,000
$15,750,000
$23,250,000
Units
298
150
315
465
Price/Unit
$17,114
$50,000
$50,000
$50,000
Area(sqft) Price/sqft
40,293
78,408
117,612
196,020
$127
$96
$134
$119
APPRAISAL REPORT
12 Street Remainder Parcel
East 12th Street & 2nd Avenue
Oakland, California
January 22, 2015
TH
2716 Telegraph Avenue, Berkeley, California 94705 ~ 510-548-1210 ~ 510-548-3110 fax ~ www.yovino.com
January 22, 2015

James Golde
Manager of Real Estate Services
Project Implementation
City of Oakland
250 Frank H. Ogawa Plaza
Oakland, California 94612 2033
Re:
APPRAISAL REPORT
12th Street Remainder Parcel
Oakland, California
Our Reference No. 140665
Dear Mr. Golde:

At your request and authorization, we have completed an appraisal of the
above referenced property (under the ownership of the City of Oakland) which
consists of a single legal parcel, referred to below, and further described
herein:
12th Street Remainder Parcel; East 12th Street and 2nd Avenue, 0.925 acres.
The purpose of the appraisal is to form an opinion of the property's market
value as of December 1, 2014, assuming as is condition, and subject to
various extraordinary assumptions enumerated herein.
The function of this
appraisal is to assist the intended user, the City of Oakland, in negotiating
the proposed purchase of the property by UrbanCore Development LLC.
This appraisal report finalizes a draft document prepared on December 10,
2014, and incorporates additional new information and analysis.
The appraisal is communicated in an Appraisal Report, as defined and
regulated in Standard Rule 2-2 of the Uniform Standards of Professional
Appraisal Practice (USPAP), effective January 1, 2014. It has been performed
in accordance with standards and requirements of USPAP, and with the Code of
Professional Ethics of the Appraisal Institute.
(continued)
To: James Golde

Re: 12th Street Remainder Parcel
Page 2
1/22/2015
The appraisal is subject to the following extraordinary assumption:

1.
It is assumed that the prospective buyers of the property may
successfully apply for, and obtain, a conditional use permit allowing
development of the property to LM-275 Height and Bulk Standards under the
Lake Merritt Station Area Plan District.
2.
It is assumed that the designated land use zone districts for the Lake
Merritt Station Area Plan will be implemented as currently anticipated.
Based on this investigation and analyses, it is our opinion that the market
value of the Fee Simple Interest in the properties, in As Is condition, as
of December 1, 2014, and subject to the aforementioned Extraordinary
Assumptions and the General Assumptions and Limiting Conditions contained in
Section 4 of this report, is as follows:
FIVE MILLION ONE HUNDRED THOUSAND DOLLARS ($5,100,000.00).
Attached as Exhibit E are statements of the professional qualifications of

the appraisers. The appraisers whose signatures appear below meet all of the
requirements of the Competency Provision of USPAP.
Thank you for providing us this opportunity to be of service. We will retain
all relevant data and research material in file should you require further
appraisal services concerning this property.
Very truly yours,
YOVINO-YOUNG, INCORPORATED
__________________________
Peter D. Overton, MAI
Principal Appraiser
Certified General RE Appraiser
California State License No. AG002631
__________________________
_
Michael Yovino-Young, MAI, ASA, FRICS
Supervisory Appraiser
Certified General Real RE Appraiser
California State License No. AG002841
Attachments
PO:po
Subject Property
12th Street Remainder
Parcel, East 12th St &
2nd Avenue, Oakland,
California
Front of subject looking

across intersection of
East 12th Street and 2nd
Avenue
Side of Subject (2nd

Avenue frontage)
North Side of subject

(looking along East
12th Street frontage)
Yovino-Young Inc.
Reference No. 140655
Subject Property
12th Street Remainder
Parcel, East 12th St &
2nd Avenue, Oakland,
California
East 12th Street looking

easterly
2nd Avenue looking north
2nd Avenue looking south
Yovino-Young Inc.
YOVINO
YOUNG
INCORPORATED
TABLE OF CONTENTS
1.
2.
3.
4.
SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS.............................1

SCOPE OF APPRAISAL ASSIGNMENT..........................................2
IDENTIFICATION OF THE PROPERTY.........................................4
LIMITING CONDITIONS AND ASSUMPTIONS....................................5
A. General
B. As Is Condition
C. Special Limitations: Only Properties With Public Access
D. Special Limitations: Possible Impairment By Hazardous
Contamination
E. Reservation of Authorship Rights
F. Confidentiality Statement
G. Limitations on Obligation to Perform Services
H. Special Conditions
5. DEFINITION OF MARKET VALUE............................................10
6. DESCRIPTIVE DATA......................................................11
A. San Francisco Bay Region
B. Alameda and Contra Costa Counties
C. City of Oakland
D. Subject Property Location Oakland CBD
E. Subject Site & Zoning
F. Improvements
G. Proposed Improvements and Entitlements
7. HIGHEST AND BEST USE .................................................20
8. SALES COMPARISON APPROACH.............................................27
A. Market Conditions
B. Market Study
9. RECONCILIATION AND CONCLUSIONS........................................36
10. CERTIFICATION........................................................37
ADDENDA
Exhibit A
Recorded Parcel Map
Exhibit B
Developers Proforma and Schematics
Exhibit C
Comparable Land Sales Data
Exhibit D
Overall Rate Comparables
Exhibit E
Professional Qualifications of the Appraisers
YOVINO
YOUNG
Page 1.
INCORPORATED
1.
SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS
Subject Property:
12th Street Remainder Parcel, East 12th Street & 2nd

Avenue, Oakland, Alameda County, California. Consists
of a single, vacant, parcel containing 0.925 acres.
Date of Valuation:
December 1, 2014
Zoning:
D-LM-1, Lake Merritt Station Area District Mixed

Residential Zone-1
Property History:
The property was formerly part of the 12th Street right

of way, and was demised as a separate parcel as part of
the nearly completed 12th Street Reconstruction Project.
Highest and Best

Use:
Immediate development with a multi-unit residential

project conforming to the LM-275 Height & Bulk Area
regulations under the Lake Merritt Station Area Plan
Marketing / Exposure
Time:
Nine to twelve months.
Value Indications:
Sales Comparison Approach:
Final Value
Estimate:
$5,100,000
$5,100,000
$127/'
~ of site area
YOVINO
YOUNG
Page 2.
INCORPORATED
2.
SCOPE OF APPRAISAL ASSIGNMENT
Client(s):
James Golde
Manager of Real Estate Services
Project Implementation
City of Oakland
250 Frank H. Ogawa Plaza
Oakland, California 94612 2033
Intended User(s):
Client and UrbanCore Development LLC
Purpose:
Form an opinion of market value of the

property under its highest and best use.
Intended Use:
Assist intended user in evaluation of the property

to assist in negotiation of a proposed sale to
UrbanCore Development LLC
Rights Appraised
Fee Simple,
assumptions.
Effective Date:
December 1, 2014
Special Conditions:
See Extraordinary Assumptions enumerated in Section

5(H) on Page 8.
Valuation Methodology:
Replacement Cost Approach; not applicable

Sales Comparison Approach; applicable
Income Capitalization Approach; not applicable
subject
to
enumerated
subject
extraordinary
The Replacement Cost Approach is based on the

current cost of reproducing or replacing a property,
less loss in value from deterioration and functional
or economic obsolescence (accrued depreciation),
plus the value of the site, as vacant.
This
approach is most applicable for proposed new
development projects where current, timely and
accurate project cost data is available for analysis
by the appraiser. Since the appraisal considers only
land value exclusive of any improvements, this
approach is deemed not applicable and is not used in
the appraisal.
The Sales Comparison Approach is based on the value
YOVINO
YOUNG
Page 3.
INCORPORATED
indicated by comparison with recent sales of

competitive properties in the market. This approach
is most applicable when there is adequate and
reasonably
similar
market
data
available
for
comparison to the subject property. It is employed
in this appraisal.
The Income Capitalization Approach is based on the
value that the property's net earning power will
support, based on a capitalization of net income.
This approach is most applicable to the valuation of
properties
when
the
typical
income-producing
investor in such properties purchases it to receive
future income benefits. The property, consisting of
underdeveloped land does not produce income and
therefore this approach, is not used in this
appraisal.
Extent of
Analysis:
Research
Report Type:
&
Physical inspection and verification of land areas,

identification and analysis of applicable land use
property
encumbrances,
controls
(zoning),
development of opinions and conclusions of the
highest and best use of the subject properties,
analysis of market conditions relevant to the
subject property, investigation into relevant market
sales of land, and comparative analysis leading to
an opinion of market value for each property.
Appraisal Report (USPAP 2.2)
YOVINO
YOUNG
Page 4.
INCORPORATED
3.
IDENTIFICATION OF THE PROPERTY
The subject property is commonly known as the 12th Street Remainder Parcel,
East 12th Street & 2nd Avenue, Oakland, Alameda County, California. The
property has recently been assigned an Assessors Parcel number, though the
the Assessors plat has not been published to date. Public records, a
preliminary title report dated August 23, 2013, and final recorded parcel map
provide the following factual data:
Legal Description:
Parcel 1, as shown on Parcel Map 10111, filed

December 3, 2013, in Book 324 of Parcel Maps,
Pages 44 through 46, Alameda County Records. (see
recorded parcel map attached as Exhibit A)
Owner of Record:
City of Oakland, the Oakland Redevelopment Successor

Agency.
Flood Map Zone:
The property is located in Flood Zone X, area

determined to be outside the .2% annual chance flood
plain, on the Federal Emergency Management Agency,
Flood Insurance Rate Map 06001C0067G, dated 8/3/2009
Seismic Zone:
The property is not within a Special Study Zone as

designated by the Alquist-Priolo Act.
Assessed Values and Taxation 2014-2015

Address
Parcel No.
019-0027-014
Land
$0.00
Improvements
$0.00
Other
0
Subtotal
$0.00
Exemptions
0
Total Assessment
$0.00
Tax Rate
1.4376%
Ad Valorem Taxes
$0.00
Special Assessments
$0.00
Total Taxes*
$0.00
* Property owner is a public entity and
not subject to taxation.
YOVINO
YOUNG
Page 5.
INCORPORATED
4.
LIMITING CONDITIONS AND ASSUMPTIONS
A.
General
This appraisal investigation and analysis is communicated in an Appraisal

Report, as defined and regulated under Standard Rule 2-2 of the Uniform
Standards of Professional Appraisal Practice (USPAP), effective January 1,
2014.
Extensive background data, reasoning and analyses developed in the
appraisal process for this assignment are not necessarily included in this
summary report. Supporting documentation is retained in the appraisal files
of Yovino-Young, Incorporated.
The information contained in this report is specific to the requirements of
the named client and for the intended use stated in this report.
The
appraiser is not responsible for the unauthorized use of this reporting
document by any third party unless prior consent is obtained.
The estimates of value and supporting conclusions presented in this appraisal
represent our personal, unbiased and professional analysis of the valuation
issues and objectives addressed in this assignment.
These opinions and
conclusions are subject to certain limiting conditions and assumptions as set
forth in this section of the report.
Except as may be set forth as the specific purpose of this study, or, as
special conditions stated elsewhere in this document, this appraisal is of an
assumed marketable, Leased Fee interest to the property, free of debt
obligations, liens, encumbrances, or any other restrictions affecting title,
ownership or use of the property or properties in question.
No
representation is made or implied as to the actual conditions of title,
ownership or encumbrances, or matters legal in nature.
Utility of the property is assumed to be restricted only by normal zoning,
publicized governmental laws and governmental controls, and its use under
responsible ownership and adequate management.
The appraiser does not survey the property. All statements describing parcel
boundaries, dimensions, topography, utilities, and other descriptive physical
information have been obtained from available official county maps and
records or references as otherwise identified.
The appraiser may recognize
the need for and recommend the employment of other experts, but will not
render an expert opinion which may require engineering expertise as to
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structural conditions, soil composition,

characteristics of the property.
site
stability
or
geotechnical
All statements of fact and data gathered from others for this appraisal are
from sources deemed correct and reliable, and verified when possible to do
so, but in no sense can they be guaranteed. Should disclosure subsequent to
this appraisal indicate errors or omissions that may alter the conclusions
and opinions expressed herein, the authors reserve the right to review the
same and prepare an addendum setting forth the corrected facts and their
effect, if any, on the original appraisal.
Under certain assumptions for special valuation problems, estimated values of
limited interests and/or portions of a property need not, when combined,
accurately state or coincide with the value of the property in its entirety.
B.
As Is Condition
The property is appraised in

unless otherwise indicated
Special Conditions.
It is
conditions of the property,
more or less valuable.
C.
its as is condition as of the date of valuation

elsewhere in this report, or specified under
assumed that there are no hidden or unapparent
subsoil, or structures, which would render it
Special Limitations: Only Properties With Public Access
The Americans with Disabilities Act (ADA) became effective January 26, 1992.
The appraisers signing this appraisal document have not made a specific
compliance survey and analysis of this property to determine whether or not
it is in conformity with the requirements of the ADA. The reader should be
aware that if a compliance survey revealed non-compliance with one or more
requirements of the Act, that a negative effect upon the value of the
property might result. Unless otherwise stated in this document, we have no
direct evidence relating to this issue and did not consider possible noncompliance with ADA in estimating the value of the property.
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D.
Special Limitations: Possible Impairment By Hazardous Contamination
Unless otherwise stated in this report, the existence of hazardous

substances,
including,
without
limitation,
asbestos,
polychlorinated
biphenyls, petroleum products, urea formaldehyde, agricultural chemicals, or
other adverse environmental conditions which may or may not be present on the
property, were not identified to the appraiser, nor did the appraiser become
aware of such conditions during the appraiser's inspection.
The appraiser has no knowledge of the existence of such materials on or in
the property unless otherwise stated and is not qualified to test for such
substances or conditions. The presence of such hazardous materiels or
environmental conditions might effect the value of the property. Therefore,
the value estimate in this appraisal is predicated upon the assumption that
there is no such adverse conditions on, in or under the property, or in such
proximity thereto that it would cause a loss in value. No responsibility is
assumed for any such conditions, nor for any expertise or engineering
knowledge required to discover them. The client is urged to retain an expert
in the field of environmental assessment on real estate, if subsequent
investigation reveals their existence.
E.
Reservation of Authorship Rights
All rights to this report are reserved, including the right to reproduce or
to publish in whole or in part, it being understood that this report may be a
portion of the services being rendered and the client may use the report
incident to the specific purposes stated herein for the appraisal, without
further conveyance to the public or unnamed third parties of the value
conclusion, identity or the professional designations of the author unless
prior written consent is obtained.
F.
Confidentiality Statement
Appraisers who are signatories to this report and certification statement are
dedicated
to
upholding
the
confidentiality
of
the
appraiser-client
relationship regarding the disclosure of personal, financial or other
information provided the appraiser that has been identified by the client as
confidential under the definitions provided in the Ethics Rule of the Uniform
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Standards of Professional Appraisal Practice, and/or identified in the GrammLeach-Bliley Act of 1999.
G.
Limitations on Obligation to Perform Services
Submission of this appraisal constitutes full completion of the requested

service and does not obligate the author to any subsequent consultation,
services prerequisite to a legal action, or testimony in a deposition or
trial, unless specific arrangements are made prior to the rendering of such
services.
H.
Special Conditions
The appraisals are subject to the following extraordinary assumptions:

1.
It is assumed that the prospective buyers of the property may
successfully apply for, and obtain, a conditional use permit allowing
development of the property to LM-275 Height and Bulk Standards under the
Lake Merritt Station Area Plan District.
2.
It is assumed that the designated land use zone districts for the Lake
Merritt Station Area Plan will be implemented as currently anticipated.
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5.
DEFINITION OF MARKET VALUE
Market Value means the most probable price which a property should bring in a
competitive and open market under all conditions requisite to a fair sale;
the buyer and seller, each acting prudently and knowledgeably, and assuming
the price is not affected by undue stimulus.
Implicit in this definition is the consummation of a sale as of a specified
date and the passing of title from seller to buyer under conditions whereby:
1.
buyer and seller are typically motivated;
2.
both parties are well informed or well advised and each acting in
what he or she considers his or her own best interest;
3.
a reasonable time is allowed for exposure in the open market;
4.
payment is made in terms of cash
financial arrangements compared thereto;
in
U.S.
dollars
or
in
terms
of
5.
the price represents the normal consideration for the property sold,
unaffected by special or creative financing or sales concessions granted by
anyone associated with the sale.
Source: (12 F.C.R. Part 34.42(g) 55 Federal Register 34696. August 24, 1990, as
amended 57 Federal Register, April 9, 1992, Federal Register 39499, June 7, 1994.
This source for the above definition is cited in the Dictionary of Real Estate
Appraisal, Fifth Edition, The Appraisal Institute, page 123.
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6.
DESCRIPTIVE DATA
A.
San Francisco Bay Region
The San Francisco Bay region consists of nine counties, which surround San
Francisco and San Pablo Bays.
Its highly diversified physical features and
mild climate allow for a wide range of industry and lifestyles, and
contribute to a desirable living environment.
Economically, the region is
similarly varied, although there has been a marked shift from manufacturing
to service industries, principally high-tech related, over the last few
decades.
This diverse economic base has proved itself relatively resilient
during recessionary periods. Governmental regulation of land use is enacted
at the municipal and county levels, although there is a well-established
research and advisory body: the Association of Bay Area Governments (ABAG),
which has been in existence since 1961.
The U.S. Census Bureau estimates the population of the nine-county Bay Area
as of the end of 2013 as follows:
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B.
Alameda and Contra Costa Counties
The immediate sub-regional context for the subject property is the East Bay
Region, which includes Alameda and Contra Costa Counties. These counties are
well within the daily commute sphere of San Francisco, the central economic
locus of the Bay region.
The two East Bay counties encompass intensively
developed inner urban areas immediately adjoining San Francisco Bay, and are
bordered on the east by low-lying hills paralleling the shoreline from
Richmond to Fremont.
The East Bay is developed with an extensive freeway
network, rail services, Oakland International Airport, and is well served by
the Bay Area Rapid Transit District (BART) and regional bus services. Along
with the University of California campus at Berkeley, there are several other
colleges and universities in the East Bay and numerous cultural and
recreational resources. The total population of these two counties as of the
2010 Census was 2,559,286 persons, with Alameda County accounting for
1,510,261 persons, and having Oakland as the largest city and the county
seat.
C.
City of Oakland
The City of Oakland is a large, economically diverse, and demographically

complex community, which encompasses approximately 78 square miles rising
from the east shore of San Francisco Bay to the crest of the East Bay hills.
The city has 19 miles of bay front coastline.
Oakland is the largest and
most established of the East Bay cities, and has a current estimated
population of over 400,000 people, (based on 2010 Census). It is the third
largest city in the Bay Area, and the eighth largest city in the state,
comprising about 27% of residents of Alameda County. Due to an economically
diverse population, median household income for Oakland is in the lower 50%
of East Bay communities at $51,700. The city benefits from immediate access
to rail, air, sea, freeway and bus service to all major employment and
residential centers of the vibrant Bay Area econoour.
Historically, Oakland supported a large manufacturing base, which grew out of
the industrial development period during and after WWII.
Much of this
industrial infrastructure is now obsolete, and is slowly being converted to
more intensive uses, including industrial R&D, as well as office, residential
and retail.
Services now represent the predominant employment sector
category in Oakland; seven of the top 10 employers in the City are government
agencies, school districts, medical centers, or utility companies.
The
others include airlines operating out of Oakland International Airport.
Oakland has a labor force of 180,000, of which 60,000 workers are based in
the central business district.
DeLorme Street Atlas USA 2014
Residential Development Map

Downtown Oakland 2003-2014
Data use subject to license.
Scale 1 : 11,200
TN
0
DeLorme. DeLorme Street Atlas USA 2014.

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800
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500
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A steady influx of immigrants during the 20th century, along with thousands
of African-American war-industry workers who relocated from the Deep South
during the 1940s, have made Oakland one of the most ethnically diverse major
cities in the country. Oakland is known for its history of political
activism, as well as its professional sports franchises and major
corporations, which include health care, tech companies, and manufacturers of
household products. The city is a transportation hub for the greater Bay
Area, and its shipping port is the fifth busiest in the United States.
Oakland has a Mediterranean climate with an average of 260 sunny days per
year. Lake Merritt, a large estuary centrally located east of Downtown, was
designated the United States' first official wildlife refuge. Jack London
Square, named for the author and former resident, is a tourist destination on
the Oakland waterfront.
Much progress has been made in reducing the city's historically high crime
rate; violent crime is primarily concentrated in certain neighborhoods, and
property crime has declined throughout the city. Oakland is continually
listed among the top cities in the United States for sustainability
practices, including a No. 1 ranking for usage of electricity from renewable
resources.
In recent years, Oakland has gained national recognition as a travel
destination. In 2012, Oakland was named the top North American city to visit,
highlighting its growing number of sophisticated restaurants and bars, top
music venues, and increasing nightlife appeal. Oakland also took the No. 16
spot in "America's Coolest Cities," ranked by metrics like entertainment
options and recreational opportunities per capita. .
According to the City's 2010 Comprehensive Annual Financial Report, the

top employers in the city are:
No.
Employer
# of Employees
Alameda County
Wells Fargo
5,862
Oakland Unified School District
5,704
City of Oakland
4,478
Cost Plus World Market
4,125
Kaiser Foundation Hospitals
3,105
Peralta Community College District
2,759
Safeway
2,692
Internal Revenue Service
2,500
Albertsons
2,209
10
10,374
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Economic Base, Employment and Income
The following table summarizes certain salient demographic indicators for the
City, Region, State and Nation. (Source: ABAG, Census Bureau, Bureau of Labor
Statistics).
Item
Median HH
Income
Median Family
Income
Avg HH Size
Unemployment
Rate(8/2014)
City of
Oakland
Alameda
County
San
Francisco
Bay Region
$51,700
$70,079
$76,476
$61,154
$41,994
$71,530
$85,802
$90,927
$69,659
$50,046
2.49
2.75
2.72
2.92
2.59
9.4%
6.1%
5.0%
7.4%
5.7%
State
of
California U.S.
The unemployment rate in Oakland, CA, was 9.4% in mid-August 2014, which is a
dramatic decrease since 3rd quarter 2012, when it was over 16%. As of April
2014, the job growth has resulted in a further decrease to 8.9% in Oakland.
Future job growth over the next ten years is predicted to be 18.46% (per
decade), or 1.85% annually.
D.
Subject Property Location; Lake Merritt District
The property is located near the southeasterly corner of Lake Merritt, the
main civic focal point and prominent open space amenity in central Oakland.
The lake itself is a large tidal lagoon, located east of the Central Business
District. It is surrounded by parkland and city neighborhoods. It is
historically significant as the United States' first official wildlife
refuge, designated in 1870, and has been listed on the National Register of
Historic Places since 1966. The lake features grassy shores; several
artificial islands intended as bird refuges; an interpretive center called
the Rotary Nature Center; a boating center where sailboats, canoes and
rowboats can be rented and classes are held; and a fairy tale themed
amusement park called Children's Fairyland. A popular walking and jogging
path runs along its perimeter. The circumference of the lake is 3.4 miles
and its area is 155 acres.
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Development of privately owned property in the neighborhoods surrounding the

lake consists mostly of multi-unit residential buildings of varying sizes,
built in the early decades of the early to mid 20th century. At the
northwesterly corner is a significant commercial node at the confluence of
Grand Avenue, Lakeshore Avenue and Lakeshore drive.
There is additional
commercial development along Grand Avenue on the north end of the lake,
including the Adams Point apartment district, and the Kaiser Center office
district bordering the west side. Southwesterly of the lake and park, is the
Alameda County civic center including courthouses and administration
buildings, the Oakland Main Library and other institutional buildings such as
churches, interspersed with apartments. At the south end is the historic
Kaiser Convention Center, which is currently vacant and underutilized, though
various re-use proposals are under active consideration as of this writing.
Between the lake and the convention center there is a major traffic artery
This roadway has
(12th Street) which connects the CBD with east Oakland.
recently been reconfigured, and the subject parcel was created from remaining
surplus land as result. Hence the designation of 12th Street Remainder
Parcel.
Subject
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The property is located at the southerly end of Lake Merritt in an area

dominated by civic institutions. To the southeast of the subject is the
Oakland Museum and to the south is the Laney College Campus of PCCD. To the
east of the Lake Merritt Channel, the subject property is proximate to
properties occupied by the Oakland Unified School District and, more
generally, various residential neighborhoods. Across 12th Street, and next to
the lake, is a high-rise apartment building, one of the few such structures
close to Lake Merritt. With the exception of the Essex, at 1 Lakeside Drive
(westerly side of lake) there have been no recent developments of large highrise residential projects around the lake within the last 20-25 years. The
proposed development of the subject property is the first project of its
type, on the lakefront, since 2009.
Site Overview
Subject
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E.
Subject Site
The subject consists of a single parcel as illustrated below.

Since the
property (and boundaries) have been defined relatively recently, there is no
established street address to date. This illustration is an excerpt from the
recorded parcel map, a document which is appended in full as Exhibit A in the
addenda.
Parcel Map
The property is gently downsloping from east to west, and at grade with the
street frontages. It fronts on East 12th Street for 305 feet, and on 2nd
Avenue for 73 feet. The westerly site boundary is formed by a new City park
constructed as part of the recently completed East 12th Street Reconstruction
Project.
The southerly boundary is with the former Oakland Unified School
District (OUSD) administration building, which fronts on East 10th Street and
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2nd Avenue.
feet ('
~).
The property contains a total of 0.925 acres, or 40,271 square
As of the date of valuation, the site was clear of all improvements and
landscaping, and appears to be under use for outdoor storage of construction
materials.
We reviewed a Phase 1 Environmental Site Assessment (ESA) dated 9/1/14 on the
subject property, and several soils and geotechnical reports and an ESA
dating from 2006 to 2009 which were developed in connection with the East 12th
Street Reconstruction Project.
These reports indicate no significant
contamination of the site (with the exception of some possible shallow soil
contamination from automobile exhaust) and no site conditions which would
preclude high-rise construction on the subject property assuming execution of
specific recommendations and best practices.
Site Overview looking Southeasterly
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Review of the recorded parcel map (See Exhibit A in addenda) indicates that
the only easements affecting the property are an storm drain and a utility
easement which lie adjacent to another in the extreme northwesterly corner of
the property, and together encumber approximately 355 ~
' , approximately 0.8%
of the total site area.
Physical inspection of the site revealed no
indications of any encroachments or hazardous contamination.
Off-site improvements include standard streetscape features including
sidewalks, curbs and gutters, storm drains, street-lighting and standard
utilities (gas, water, electricity).
F.
Zoning
The property is zoned D-LM-1 Lake Merritt Station Area District Mixed
Residential Zone-1. The intent of the D-LM-1 zone is to create, maintain,
and enhance areas of the Lake Merritt Station Area Plan District appropriate
for
high-density
residential
development
with
compatible
commercial
activities.
As of the date of valuation of this appraisal, the Lake Merritt Station Area
Plan was in the process of adoption by the Oakland City Council with the
second reading scheduled for December 9th, 2014. City staff members have
indicated that no significant changes or delays in adoption are anticipated
and that the ordinance will be effective as of January 8, 2015. As stated
previously, the appraisal assumes that the ordinance will be adopted and
effective as of these dates.
Approval Processes
Land Use
Lot Minimum Requirements
Design Review required.

Conditional Use Permit required to apply for
increase in Height/Bulk standards and Maximum
Tower Height. One such changes is permitted among
the opportunity sites identified within the
LMSAP district that are east of the Lake Merritt
Channel.
Multi-unit Residential, Civic and Commercial uses,
retail/commercial uses.
Width
25 feet
Frontage
25 feet
Size
4,000 ~
'
Setback Front
0 feet
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Building Requirements
Parking Requirements
G.
Setback Rear
10 feet
Height/Bulk Area
LM-85
Minimum Ground Floor Height
15 feet
Minimum Storefront Width
15 feet
Max Units/Acre
194
Max Units/Acre with CUP
369
Max FAR
5
Max FAR with CUP
12
Max Building Base Height
45 feet
Max Building Base Height w/CUP 85 feet
Max Tower Height
85 feet
Max Tower Height with CUP
275 feet
Tower:
Max Length
150 feet
Max Diagonal Length
180 feet
Min Distance btwn Towers
50 feet.
(Tower dimensions, floor plates may be increased
by 30% with CUP)
Multi-Unit Residential
3/4 space per Unit
Proposed Improvements & Entitlements
The following outlines a conceptual

properties, proposed by Urban Core LLC.
proposal
for
development
of
the
The proposed project would develop a 24-story residential apartment tower

with a 3-level podium base, and include 298 residential units, 2,000 ~
' of
ground floor commercial space, 209 parking spaces, and associated amenities
and infrastructure. The total building height would be 240 feet with a
maximum additional height consisting of architectural and mechanical features
above the roof line.
The proposed project would encompass 249,939 ~
' of net residential floor
area. The residential units are to include seven 2-story lofts at ground and
podium levels, 24 residential units in the south and west wings, 259 units
would be within a 21-story tower, and eight 2-story penthouses would be atop
the tower. The mix of unit types would include 7 lofts, 8 penthouse units,
113 studios, 110 one-bedroom units, and 60 two-bedroom units. Unit areas
would range from 550 ~
' to 1,559 ~
' . In sum, the project have net 251,939 ~
'
of rentable floor area inclusive of 2,000 ~
' of ground floor retail space.
Inclusive of all common areas, hallways, elevators and stairwells, we
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estimate the total gross floor area of the proposed building at 323,000 ~
'
assuming and net/gross efficiency of 78%.
The conceptual framework of the proposed project is consistent with the D-LM1 zoning assuming acquisition of a Conditional Use Permit (CUP) to allow use
of the LM-275 Height and Bulk standards for the project.
7.
HIGHEST AND BEST USE
In standard appraisal methodology, highest and best use is usually defined

as:
"The use, from among the reasonably probable and legal alternative uses,
found to be physically possible, appropriately supported, financially
feasible and that results in the highest present land value."2 The highest
and best use of the property is analyzed from two perspectives: A) as vacant;
and, B) as improved. Further, four criteria are applied in the analysis: 1)
Physically Possible; 2) Legally Permissible; 3) Financially Feasible; 4)
Maximally Productive1.
1.
The legally permissible land uses proposed for the subject site
includes primarily multi-unit residential complexes, as the Lake Merritt
Station Area Plan (DLM-1) aims to promote this type of use. Other compatible
commercial uses are permitted, but the highest development density is
achievable
by
multi-story
apartments
or
condominiums.
Therefore,
a
residential tower appears to be the obvious choice among the legally
permissible uses.
2.
The physically possible uses, essentially include all legal uses of the
property, as evidenced by the numerous large and technically advanced
structures in the immediate vicinity.
3.
Those uses to be tested for financial feasibility include apartment
development.
a)
There has been an unquestioned assumption that residential development in all
its forms is (and has been since 2011) financially feasible in the Bay Area.
1
The Dictionary of Real Estate Appraisal, Fifth Edition, The Appraisal Institute,
Page 93.
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Again, in San Francisco, rent levels of $6.00/'
~ to $7.00/'
~ for new apartments
are common, while in Oakland, rates for units in high-rise buildings hover
between $3.50/'
~ and $4.00/'
~. San Francisco is experiencing an unprecedented
building boom, while Oakland ground breakings among the various (and
numerous) entitled sites are more modest.
The possible exception is
Berkeley, where demand for student housing has prompted several new projects
to break ground in and around the CBD. However, this sub-market features high
demand from students, administrative constraints on the supply side, and
therefore rent growth almost commensurate with San Francisco.
The
accompanying map illustrates the extent of currently approved residential
projects in Oaklands development pipeline.
One large project which has remained entitled for over 10 years is 1331
Harrison Street, which consists of a proposed 27-story residential tower with
191 units and 130 parking spaces. The developer (Peter Iwate 415-288-1412)
stated that he is seriously considering initiating the project and consulting
with bank representatives regarding construction funding. He considers the
positive factors for a decision to move forward to be the propertys
proximity to BART and the ongoing spike in residential rents in San
Francisco. This project will feature expansive views of Oakland, the hills,
and San Francisco Bay.
The challenges appear to be the costs for Type 1
concrete and steel construction.
Mr. Iwate also cited the Ellington Condominiums at 222 Broadway, as a recent
example of a successful high rise project in Oakland. This 15 story-building
encompasses 134 units which are selling at prices between $400,000 and
$700,000. This building is also Type 1 concrete structure which is less
costly that steel frame construction.
Patrick Kennedy (510-883-1000), an experienced East Bay developer who is
building a 17-story mini studio project in San Francisco, cited a report by
Realfacts that rents in Oakland have increased 19% in the last year. His
project in San Francisco is costing approximately $400 per square foot, and
he expects to achieve rents of $6.00/'
~ to $7.00/'
~, which he maintains will
justify the costs of construction.
He stated that in Oakland, part of the
development challenge is that costs are virtually the same as in San
Francisco, but rents are only 50% to 60% those achievable in that city.
San Francisco and the Inner East Bay cities of Berkeley, Emeryville and
Oakland have historically been under-supplied with housing, and current
conditions have not changed this appreciably despite evidence of numerous new
multi-unit projects. In prior markets, when apartment rents climbed
appreciably, tenants would begin to compete with home buyers, but up-trends
Current Approved Residential Development
Scale 1 : 31,250
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0

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in home prices have been so pronounced that tenants have not been able to
offer the necessary down payments and qualify for mortgage funding as
readily. This leaves greater numbers in the rental market competing for the
existing supply of apartments.
These market conditions will continue as long as the overall economy grows,
and in particular, as long as the high-tech boom in the Bay Area remains
stable. Many San Francisco developers project a 2 to 3 year run of growth
which has spurred dramatic competition for development opportunities in the
City. All of this evidence suggests that a high-rise apartment development on
the subject site would be financially feasible. While Oakland projects will
likely never command rents on par with San Francisco, it must be remembered
that the subjects location in Oakland is more convenient (via BART) to
employment centers in San Francisco than from many neighborhoods in the city.
4.
The maximally productive use of the subject property can be considered
by analyzing the developers conceptual proforma for the proposed apartment
complex. This analysis not only tests whether the proposed development option
would support the highest land value, but also provides an additional test of
financial feasibility. The development proforma provided by Urban Core
Development are attached in the addenda, as Exhibit B.
The analysis takes as a basis the following metrics from within the proforma:
1.
2.
3.
4.
5.
6.
Gross and Net Floor Areas and Number of Units

Efficiency (Net/Gross ~
')
Hard, Soft, and Financing Costs
Proforma Rental Income and Operating Expeneses
Occupancy at Stabilization
Annual Stabilized NOI
The inputs for Land Cost are the results from the Sales Comparison Approach.
One option not explicitly proposed by Urban Core Development is condominium
development. The developers cited a cautious approach to this option due to
recent experience in the San Francisco market in which access to debt capital
was significantly easier to secure for apartments over condominiums as banks
are just not as eager to enter that market. In any case, Urban Core would
plan to build for condominium conversion if they were to develop apartments
on this site. In our opinion, the location of this property is appropriate
for either rental housing or condominiums. However, a building configuration
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suitable for condominium conversion implies a greater degree of separately

metered utilities for tenant occupants.
A review of the developers proforma confirms that the building schematics,
development costs, and income projections are consistent (within 10%) of
indices from our other data sources for both high-rise residential projects.
The configurations of the proposed improvements appear consistent with the
basic concepts of highest and best use.
In the additional test for feasibility, the analysis indicates a Return on
Cost (NOI/Total Cost), or ROC, of 6.13% for apartment development. This
index is slightly lower than calculated by Urban Core Development, though we
believe it remains above the threshold for feasibility.
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Lake Merritt Apartment Tower Proforma Analysis

Date of Proforma
14-Dec
Use
Apartments
Average Floor Plate (sf)
10,497
Building Height
Floors
Units
NSF/Unit
Net Residential SF
Ground Floor Retail SF
Total Net Floor Area (sf)
Efficiency (estimated)
Gross SF (estimated)
Parking Spaces
Land SF
FAR (floor area ratio)
Units/Acre
Land $/SF-Site
Devleopment Costs
Land Value (estimated)
Hard Cost
Soft Cost
Financing
Total Cost
Cost Per Net Rentable Square Feet of Building
Land
Hard Cost
Soft Cost
Financing
Total Cost
Cost / Residential Unit
(continued on following page)
240
24
298
839
249,939
2,000
251,939
78%
322,999
209
40,271
8.0
322
$127
% Total
3.86% $5,100,000
80.95% $106,938,680
13.09% $17,297,086
2.10% $2,767,605
100.00% $132,103,371
$20.24
$424.46
$68.66
$10.99
$524.35
$443,300
YOVINO
YOUNG
Page 25.
INCORPORATED
Forecast Income/Expense
Income (Stabilized Year)
Rent PSF (Stabilized) mo
Residential (rent/sf/month)
Misc Income
Parking Income ($/space/mo)
Subtotal Gross Income
Occupancy
EGI (Effective Gross Income)
Operating Expenses ($/unit/yr)
Expense Ratio
Annual NOI
ROC
Overall Rate of Return
Capitalized Value of NOI
Capitalized Value/NSF
Capitalized Value/Unit
Developers's Incentive
Annual NOI/Site-SF
2018
1.
$3.75
$150
2.
$11,000
3.
5.
4.
$3.75
$11,247,255
$476,800
$376,200
$12,100,255
94.00%
$11,374,240
$3,278,000
28.82%
$8,096,240
6.13%
5.25%
$154,214,090
$612
$517,497
16.74%
$201.04
Key to Abbreviations:
PSF
=
Per Square Foot
Mo
=
Refers to PSF: Per Square Foot/Month
EGI
=
Effective Gross Income
NOI
=
Net Operating Income
ROC
=
Return on Cost
OAR
=
Overall Capitalization Rate
Table Notes for Proforma Analysis:
1. Rent PSF
Reflects Rent Per Net Square Foot / Month
(apartments) x Net Square Feet x 12 months
2. Effective Gross Income =
Total Scheduled Income x 94% Occupancy
3. Expense Ratio
(Effective Gross Income - Net Operating Income) /
Effective Gross Income. Apartment expense ratios
typically range from 25% to 40%. In this case, the
developer's proforma is reasonable since it
projects a new building mapped for condominium
conversion, minimum to nil repair expenses and
reserves, and all utlities separately metered
except for garbage
4. Developers Incentive
(Stablized Value - Total Costs)/Stabilized Value.
This figure is a result of the proforma
calculations.
5. Overall Rate of Return
Please see OAR comparables in addenda
YOVINO
YOUNG
Page 26.
INCORPORATED
As shown in the analysis on the previous page, land represents only 4% of

the total costs, so a significant reduction in land value does not
appreciably impact the Return on Cost (ROC). However, the effect on
Developers Incentive is more pronounced, as shown in the sensitivity
analysis outlined in the table below:
Land Value/sf
125
Pct chg
150
20%
175
17%
200
14%
225
13%
250
11%
Hi/Lo Chg
100%
-44%
Return On Cost
5.89%
Pct chg
5.85%
-0.73%
5.80%
-0.72%
5.76%
-0.72%
5.72%
-0.71%
5.68%
-0.71%
-4%
-3%
Developer's Incentive
12.16%
Pct chg
11.35%
-6.71%
10.54%
-7.09%
9.75%
-7.52%
8.97%
-8.01%
8.20%
-8.59%
-33%
28%
The above table shows how changes in Land Value/sf affect Return on Cost and
Developers Incentive given the proforma costs, revenues, and overall values.
This demonstrates that the construction cost/revenue equation is far more
determinative of feasibility than land cost for high rise development in
general.
Overall rates of return were applied to the estimated net operating income
under stabilized conditions to generate the overall value of the site as
proposed for development.
For apartments, the selected (conservative) rate
is 5.25% which can be demonstrated as consistent with market activity for
newer apartment complexes.
The overall value for the subject (as improved per the developers proforma)
indicates a margin of developers incentive (Value/Cost) of 10%, which is
within a reasonable range for this type and size of project.
Conclusion
This analysis concludes that as of the date of valuation, acquisition of a
conditional use permit (CUP), for development with a multi-unit residential
development similar to that proposed by the prospective buyers of the
property, (UrbanCore Development LLC) represents
a viable highest and best
use option for the property.
YOVINO
YOUNG
Page 27.
INCORPORATED
8.
SALES COMPARISON APPROACH
A.
Market Conditions
The local market for vacant land, or properties suitable for redevelopment,
is currently very strong, due to the perceived opportunities for profit from
chronic under-supply of housing. This, coupled with the strong job market and
economic performance in the region has led to double digit growth rates in
rents in San Francisco and the inner East Bay markets. The rent growth has
not translated into increased numbers of buyers of condo units or single
family residences, as pricing in these markets has kept pace with rents due
to constrained supply.
Also the sources of housing demand have shifted in
emphasis to younger workers who prefer denser urban environments and there is
greater competition for available living units.
It is not clear at this time when the market cycle will peak, or if it will
continue in its growth phase for one or two more years.
Hence, it is not
unusual for developers to seek opportunities with even great urgency in order
to complete the development cycle before there is another broad economic
downturn, or a change in the market cycle.
YOVINO
YOUNG
Page 28.
INCORPORATED
B.
Market Study
The subject exists in a competitive market context of well-located

development sites suitable for multi-unit residential development.
The accompanying table provides a summary of the market transactions deemed
instructive in this valuation.
The primary indices extracted from the data
is price per square foot of land ($/'
~-Site), and price per living unit
($/Unit). Data sources include Costar, MetroScan, the Loopnet, local brokers
and developers and the East Bay Regional MLS.
As stated previously, the location and relatively clear set of development
possibilities for the subject property, coupled with the intent of the City
of Oakland (the owner) to facilitate near term development, affords a
competitive advantage in the market. Therefore, we have chosen to use sales
primarily of entitled sites. This usually means that the sale was closed
after receipt of approvals for the proposed development.
YOVINO
YOUNG
Page 29.
INCORPORATED
Land Sales Summary
NO. LOCATION
SALE PRICE
UNITS
SITE AREA
$/SF
APN
SALE DATE
SHAPE
ZONING
$/unit
1
1900 Broadway
$4,611,500
294
40,650
$113.44
008-0638-005,006-03
24-Feb-14
Irregular
CBD-P
$15,685
Three adjacent parcels including corner site improved with dilapidated four-story masonry office building (+/-36,00
sf) which will be rehabbed as part of the project. Costs to retaining and rehabbing structure are considered
equivalent to cost to replace, but retention provides some leverage in planning process. Buyer has scaled back
previously conceived project to a 24 story residential tower with ground floor commercial space. Location is
adjacent to 19th Street BART station.
2
4700-4770 Telegraph Ave, Oakland

$3,600,000
51
19,950
$180.45
013-1150-017-01,019-02
30-Jul-13
Rectangular
CN-2
$70,588
Entitled site for 51 residential units and 5,050 sf of retail space. Total GBA will 55,015 sf. FAR = 2.7 Units per
acre = 113. Existing residential units provide carrier income prior to construction.
3
4801 Shattuck Ave, Oakland
$2,660,000
44
14,934
$178.12
013-1162-009-01,009-02,010
30-Jul-13
Irregular
CN-2
$60,455
Three adjacent parcels with existing residential improvements to be removed to make way for 44 unit residential
condominium project. No commercial space included. Units per acre = 128
4
5175 Broadway, Oakland

$2,300,000
28
12,833
$179.23
014-1241-005-01
26-Jul-13
Rectangular
CC-2
$82,143
Rectangular corner parcel entitled for development with 28 unit condominium project with total GBA of 35,325 sf of
which 2,995 sf would be ground floor retail. FAR = 2.75; Units/Acre = 96
5
522-532 20th St
$1,180,000
82
7,405
$159.35
008-0645-006.007
29-Apr-14
Rectangular
CBD-X
$14,390
Recent sale for an un-entitled site zoned CBD-X (Height Area 6), which allows for a maximum density of 484
units/acre, maximum F.A.R. of 20.0 to 1.0, no building height limit (minimum building height of 45'), and a 100%
site coverage. The price/unit figure above is reflective of the maximum allowable density on the site (82 units based
on 484 units/acre). Site is rectangular and level with all off-sites. Currently being utilized as a parking lot.
6
1200 Ashby Avenue, Berkeley
$5,105,000
98
34,412
$148.35
053-1627-022,039,037
31-May-13
Irregular
C-1
$52,092
Vacant site entitled for development of 98 residential units (66,300sf) and 9,392 sf of retail space. FAR = 2.2. Units
per acre = 124. Location at major intersection in West Berkeley.
7
378 11th Street, Oakland
$1,500,000
111
10,000
$150.00
002-0057-020
7-Nov-14
Rectantgular
CBD-C
$13,514
Vacant in Oakland CBD, located two blocks SW of subject and two blocks from 11th Street BART station. Max
FAR = 20. Max Units/Acre = 483
8
1225 Webster Street
$2,200,000
133
12,000
$183.33
002-0057-004-02
1-Sep-14
Rectangular
CBD-C
$16,541
Current listing of corner site in CBD zoned for commercial, though residential development is most probable. Max
FAR is 20. No height limit.
Sub E. 12th St, west of 2nd Avenue
019-0027-014
Date of Value
298
40,271
1-Dec-14
Triangular
D-LM-!
Unentitled vacant site proposed for 298 units in 24 story structure with on-site parking. Max FAR (w/CUP) = 12.
Proposed FAR is 8. Max units/acre = 369, Proposed units/acre = 322
Land Sales Map
Scale 1 : 40,625
TN
0

www.delorme.com
MN (13.8E)
1" = 3,385.4 ft
mi
km
Data Zoom 12-3
YOVINO
YOUNG
Page 30.
INCORPORATED
Sale One; 1900 Broadway, Oakland, is located in the downtown Central Business
District of Oakland, and consists of three adjacent parcels including corner
site improved with dilapidated four-story masonry office building (+/-36,00
sf) which will be rehabbed as part of the project. Costs to retaining and
rehabbing structure are considered equivalent to cost to replace, but
retention provides some leverage in planning process. Buyer has scaled back
previously conceived project to a 24-story residential tower with ground
floor commercial space.
Location is adjacent to 19th Street BART station.
The location is considered comparable to the subject overall.
Sale Two; 4700-4770 Telegraph Ave, Oakland, is located in the Temescal
District of Oakland at the intersections of Telegraph Avenue and 48th Street,
and consists of a corner site improved with residences providing carrier
income. It was entitled before the recession, and was purchased, along with
Sale Three & Five by a party intending to completely redevelop the site as
approved. The location is inferior to the subjects location.
Development
density and FAR are both inferior.
Sale Three; 4801 Shattuck Ave, Oakland, is a corner site, located in the
Temescal District near Sale Two, which also occupies a corner site and has
the benefit of existing improvements providing some carrier income.
Its
location is inferior as is its development density, compared to the subject.
This property will be developed with residential units only.
Sale Four; 5175 Broadway, Oakland, is a vacant corner site entitled for
development of 28 condominium units. Its location is at the southerly end of
the Rockridge district near the intersections of College Avenue, Broadway and
51st Street. This location is superior to most of the comparables, but still
inferior to the subject. It is across Broadway from the Rockridge Center, a
soon to be redeveloped major community shopping center. Density is lower than
the subject.
Sale Five; 522-532 20th Street, Oakland, is located in the revitalized uptown
district north of the Central Business District of Oakland and is a mid-block
rectangular site previously approved for development with a six-story
residential building with 19 units. It is currently operating as a similar
pay surface parking lot with NOI of $55,200. The site size is much smaller,
and the development density is higher compared to the subject. The mid-block
configuration is inferior. The location is rated slightly inferior. This sale
is not adjusted for previous approvals, and is not considered an immediate
development site, since new approvals must be sought.
YOVINO
YOUNG
Page 31.
INCORPORATED
Sale Six; 1200 Ashby Avenue, Berkeley, is located at major traffic

intersection in West Berkeley, and spans two corners. It is entitled for
development of 98 residential units in a five-story building with 9,932
of ground floor retail space, now under construction.
The location is
inferior to the subject Oakland City Center setting.
This area is in the
path
of
new
development,
but
does
not
constitute
an
established
neighborhood or a pedestrian oriented retail district. The property is also
exposed to thoroughfare traffic from two directions. The development density
is inferior.
Sale Seven; 378 11th Street, Oakland, is a closed sale of a vacant site in the
Oakland CBD, located two blocks from the 11th Street BART station, and 6-7
blocks from the subject. It consists of a mid-block site located across the
street from the 10-story EBMUD headquarters. Like other CBD sites it has a
maximum FAR of 20, but was marketed as a potential 10-story project. The sale
is pending resolution of certain easement questions. Surrounding developments
are three to ten stories. The location is inferior to the subjects City
Center setting. At 10 stories high, this property will have a similar
development cost structure compared to the subject.
Sale (Listing) Eight: 1225 Webster Street, is a current listing on the market
for a site located at the corner of Webster Street and 13th Street. This site
is currently leased to a parking lot operator on a short-term basis (annual
NOI of $43,200). There are no current entitlements or approvals for the site.
Site is zoned CBD-C (Height Area 7), which allows for a maximum density of
484 units/acre, maximum F.A.R. of 20, building height ranging from 45' to
120', and a 100% site coverage. Site is level with all off-sites.
This
property has a similar zoning to the subject, and the location is comparable.
Development on this site will likely exceed 10 stories and will have similar
cost structure to the subject. Adjustments for listing status and no existing
entitlements are applied.
The sales were analyzed, and the data
differences with the subject property:
adjusted,
to
reflect
significant
Property Rights Appraised

This factor tends not to be applicable to vacant land. In any case, all of
the comparable transactions involved fee simple rights.
YOVINO
YOUNG
Page 32.
INCORPORATED
Financing Terms
All sales were financed with cash or mortgages at prevailing rates.
Conditions of Sale
No adjustments warranted, except for Comparable 8 which is adjusted downward
for its status as a listing.
Immediate Expenditures
No adjustments warranted.
Market Conditions (Time)
As discussed previously, market participants have observed factors including
lease rates, availability of financing, and consumer behavior leading them to
conclude that there have been increases in land values as evidenced by sale
of development sites. Anecdotal evidence supports the application of modest
price adjustments averaging between 0% and 1% per month. We have concluded
that an adjustment is realistic for all the transactions considered here, and
have applied a rate equating to 6% per year.
Location
Locational factors include visibility, accessibility, and concentration of
compatible and complementary uses. Adjustments were made to account for all
the influences that vary between the comparables and the subject. The subject
property is superior to most of the comparables except for One Seven and
Eight which have CBD settings, which are comparable in appeal to proximity to
the Lake Merritt.
Size and Scale
A uniform adjustment is applied to all of the comparables to reflect
economies of scale inherent in improvements larger (or smaller) in size
compared to the subject.
Construction Costs
This comparative factor takes into account the difference in costs between
Type 1 and Type 5 construction. High rise development is approximately 30%
more costly per ~
' than standard four to seven story wood (or lightweight
concrete) frame over podium construction techniques due to additional costs
for required fire and life safety features.
Configuration and Shape
The utility of the subject and comparables varies depending on access and
street frontage. This affects both the ease of development and exposure to
light and air, particularly in residential projects. Sales One and Seven are
YOVINO
YOUNG
Page 33.
INCORPORATED
adjusted up for inferior non-corner sites; Sale Six is adjusted down for
superior three-street frontage.
Entitlements
Entitlement costs of processing applications and developing technical and
architectural specifications equate to approximately 25%-30% of land costs
for approved sites. In addition, there is the time value of money expended
during what can be a lengthy process, The time/cost of entitlements is likely
to be mitigated in the case of the subject properties. Sales One to Four and
Sale Six are adjusted downwards for acquired entitlements.
YOVINO
YOUNG
Page 34.
INCORPORATED
The comparable sale data and adjustments are summarized in the accompanying
spreadsheet for $/Unit and $/'
~ analyses.
1)
Site Valuation Analysis
Sales One, Seven and Eight are given most emphasis due to their greater
similarity to the subject in development density and location.
Summary of Adjustments to Data
Comparable No.
Address
Subject
E 12th Street
& 2nd Avenue,
Oakland
E 12th Street & 2nd Avenue, Oakland

1
1900
4700-4770 4801 Shattuck
Broadway Telegraph Ave, Ave, Oakland
Oakland
Price Per Unit

8
5175 522-532 20th

St
Broadway,
Oakland
1200 Ashby
Avenue,
Berkeley
378 11th
Street,
Oakland
1225
Webster
Street
Planned Units
298
294
51
44
28
82
98
111
133
Units per Acre
322
274
113
128
96
250
124
250
483
5/31/13
Sale Date:
Price
Price/Unit
Adjustments to Data
Rights Appraised
Adjusted Price
Financing Terms
Adjusted Price
Conditions of Sale
Adjusted Price
Adjusted Price
Time:
0.5%
Current Cash Equiv. Price
Adjusted Price/Unit
Location
Zoning/Density
Scale
Const Costs
Configuration/Shape
Entitlements
Improvements
Subtototal:
Adjusted $/Unit
Mean $/Unit
Max $/Unit
Min $/Unit
Variance mx/mn
Mean 1,7,8
Concluded Index
12/1/2014
2/24/14
7/30/13
7/30/13
7/26/13
4/29/14
11/7/14
9/1/14
$4,611,500
$15,685
$3,600,000
$70,588
$2,660,000
$60,455
$2,300,000
$82,143
$1,180,000
$14,390
$5,105,000 $1,500,000
$52,092
$13,514
$2,200,000
$16,541
0
$4,611,500
0
$4,611,500
0
$4,611,500
0
$3,600,000
0
$3,600,000
0
$3,600,000
0
$3,600,000
8%
$3,888,590
$76,247
10%
-23%
-12%
-30%
0%
-25%
-5%
-85%
$11,318
0
$2,660,000
0
$2,660,000
0
$2,660,000
0
$2,660,000
8%
$2,873,236
$65,301
10%
-21%
-13%
-30%
0%
-25%
0%
-79%
$13,792
0
$2,300,000
0
$2,300,000
0
$2,300,000
0
$2,300,000
8%
$2,485,885
$88,782
5%
-25%
-14%
-30%
0%
-25%
0%
-88%
$10,511
0
$1,180,000
0
$1,180,000
0
$1,180,000
0
0
$5,105,000 $1,500,000
0
0
$5,105,000 $1,500,000
0
0
$5,105,000 $1,500,000
0
$2,200,000
0
$2,200,000
-$110,000
$2,090,000
$1,180,000
4%
$1,221,784
$14,900
5%
-8%
-11%
0%
0%
0%
0%
-14%
$12,857
$5,105,000 $1,500,000
9%
0%
$5,564,450 $1,505,902
$56,780
$13,567
15%
0%
-22%
-8%
-10%
-9%
-30%
0%
-5%
5%
-25%
0%
0%
0%
-77%
-12%
$13,289
$11,904
$2,090,000
1%
$2,121,179
$15,949
0%
17%
-8%
0%
0%
0%
0%
9%
$17,411
$4,620,000
(rounded)
$4,611,500
5%
$4,823,175
$16,405
0%
-5%
0%
0%
5%
0%
10%
10%
$17,975
$13,632
$17,975
$10,511
1.71
$15,763
$15,500
YOVINO
YOUNG
Page 35.
INCORPORATED
Summary of Adjustments to Data

Comparable No.
Address
Land Area (SF):
E. 12th St, west of 2nd Avenue

1
12th St West
of 2nd
Avenue,
O40,271
kl d
1900
4700-4770 4801 Shattuck
Broadway Telegraph Ave, Ave, Oakland
Oakland
5175 522-532 20th

Broadway,
St
Oakland
1200 Ashby
Avenue,
Berkeley
Price Per SF
8
378 11th 1225 Webster

Street,
Street
Oakland
40,650
19,950
14,934
12,833
7,405
34,412
10,000
8.0
8.0
2.7
2.0
2.8
2.0
2.2
10.0
20.0
12/1/2014
Price
Price/SF ($/SF):
Adjustments to Data
Rights Appraised
Adjusted Price
Financing Terms
Adjusted Price
Conditions of Sale
Adjusted Price
Adjusted Price
Time:
0.5%
Current Cash Equiv. Price
Adjusted Price/SF
Location
Zoning FAR
Size:
Const Costs
Configuration/Shape
Entitlements
Improvements
Subtototal:
Adjusted $/sf
Mean $/sf
Max $/sf
Min $/sf
Variance mx/mn
Average 1,7,8
Mean Excl Max/Min
Concluded Index
2/24/14
7/30/13
7/30/13
7/26/13
4/29/14
5/31/13
11/7/14
9/1/14
$4,611,500
$113
$3,600,000
$180
$2,660,000
$178
$2,300,000
$179
$1,180,000
$159
$5,105,000 $1,500,000
$148
$150
$2,200,000
$183
0
$4,611,500
0
$4,611,500
0
$4,611,500
0
$3,600,000
0
$3,600,000
0
$3,600,000
0
$3,600,000
8%
$3,888,590
$195
10%
23%
-8%
-30%
0%
-25%
-5%
-34%
$128
0
$2,660,000
0
$2,660,000
0
$2,660,000
0
$2,660,000
8%
$2,873,236
$192
10%
26%
-9%
-30%
0%
-25%
0%
-28%
$138
0
$2,300,000
0
$2,300,000
0
$2,300,000
0
$2,300,000
8%
$2,485,885
$194
5%
23%
-10%
-30%
0%
-25%
0%
-37%
$122
0
$1,180,000
0
$1,180,000
0
$1,180,000
0
0
$5,105,000 $1,500,000
0
0
$5,105,000 $1,500,000
0
0
$5,105,000 $1,500,000
0
$2,200,000
0
$2,200,000
-100000
$2,100,000
$1,180,000
4%
$1,221,784
$165
5%
26%
-12%
0%
0%
0%
0%
19%
$196
$5,105,000 $1,500,000
9%
0%
$5,564,450 $1,505,902
$162
$151
15%
0%
25%
0%
-2%
-11%
-30%
0%
-5%
5%
-25%
0%
0%
0%
-22%
-6%
$126
$141
$2,100,000
1%
$2,131,328
$178
0%
0%
-11%
0%
5%
0%
0%
-6%
$168
$5,640,000
(rounded)
FAR
Sale Date:
$4,611,500
5%
$4,823,175
$119
0%
0%
0%
0%
0%
0%
0%
0%
$119
$142
$196
$119
1.65
$143
$137
$140
12,000
There is a significant divergence in overall value indications suggested by

the $/'
~ and $/Unit indices. We typically give greater emphasis to the results
based on the $/Unit index as it is more consistent with the viewpoint of
typical buyers of multi-unit residential developments. However, having
applied our adjustments consistently in each case, and finding that the
resulting indices show a relatively narrow pattern of values for both $/'
~ and
$/Unit, we have concluded that affording similar emphasis to both is
warranted.
Therefore, the foregoing analysis indicates a value for the subject of:
$5,100,000.
YOVINO
YOUNG
Page 36.
INCORPORATED
9.
CONCLUSIONS
Sales Comparison Approach:
$5,100,000
The sales comparison approach is based on analysis of similar properties in

the same market area as the subject. The analysis demonstrates that there is
a market for this type of property and that meaningful value indices can be
developed and applied to generate a consistent pattern of indicated overall
values, consistent with our conclusions regarding highest and best use.
The two most relevant land value indices for multi-unit residential
development sites, Price per Square Foot of Site Area ($/'
~) and Price per
Unit ($/Unit) indicate divergent overall values for the property.
This is
primarily due to the necessity to use comparable sales with quite different
effective development densities from the subject. Further, there is little
market consensus regarding land values for higher density high-rise
development, in contrast to San Francisco, where this pattern of development
is common.
We have concluded that similar emphasis on the $/'
~ and $/Unit indices is
appropriate in this case.
Thus, based on this investigation and analyses, it is our opinion that the
market value of the Fee Simple Interest in the properties, subject to the
Assumptions and Limiting Conditions contained in Section 4 of this report, as
of December 1, 2014 is:
FIVE MILLION ONE HUNDRED THOUSAND DOLLARS ($5,100,000.00).
This final value estimate presupposes a specific exposure and marketing time
during which the subject would sell at this price.
We conclude that the
marketing and exposure periods for the property are relatively equivalent.
We estimate that the appropriate exposure and marketing periods relative to
this value estimate are from nine to twelve months.
YOVINO
YOUNG
Page 37.
INCORPORATED
10.
CERTIFICATION
This appraisal is conveyed in a Summary Report format (USPAP 2-2 (b)). The
signatory below certifies that, to the best of his or her knowledge and
belief:
the statements of fact contained in this report are true and correct.
the property was personally inspected unless otherwise indicated by
designating a signatory to this report as a "Supervising Appraiser".
the reported analyses, opinions, and conclusions are limited only by
the stated assumptions and limiting conditions, and are the personal,
impartial, and unbiased work product of the named appraisers.
there are no past, present, or prospective interests, adverse
interests, or bias with respect to the property that is the subject of this
appraisal, nor any personal interest with respect to the parties involved.
the acceptance of, engagement in, and compensation for this assignment
are not contingent upon developing or reporting a predetermined or stipulated
result, a predetermined value or direction of value that may favor the cause
of the client, or the occurrence of a subsequent event directly related to
the intended use of this appraisal.
the analyses, opinions, and conclusions were developed, and this report
prepared, in conformity with the Uniform Standards of Professional Appraisal
Practice (USPAP), and for members, the requirements of the Code of
Professional Ethics and the Standards of Professional Appraisal Practice of
the Appraisal Institute. The preparation and use of this report is subject
to the requirements of the Appraisal Institute relating to review by duly
authorized representatives.
unless otherwise identified in this report, no one provided significant
professional assistance to the persons signing this report.
all appraisers licensed by the Office of Real Estate Appraisers (OREA) of
the State of California are required to complete a minimum level of
continuing education to be eligible for license renewal on specified dates.
The signatories to this report are currently licensed and have met all
current requirements of the Office of Real Estate Appraisers.
YOVINO
YOUNG
Page 38.
INCORPORATED
as of the date of this report, signatories who are members of the

Appraisal Institute have completed the requirements of the continuing
education program and are currently recertified.
As of the date of this report, Peter D. Overton, MAI, has completed the
requirements under the continuing education programs of the Appraisal
Institute.
As of the date of this report, Michael Yovino-Young, MAI, ASA, FRICS,
has completed the requirements under the continuing education programs of the
Appraisal Institute, the American Society of Appraisers, and the Royal
Institution of Chartered Surveyors.
As of the date of acceptance of this assignment, the undersigned had
not provided services as appraisers, nor in any other capacity, with respect
to the subject property for the previous three years.
Attached as Exhibit E is a statement of the professional qualifications of
the appraiser.
Thank you for providing us this opportunity to be of service.
This report
has been prepared in accordance with the Uniform Standards of Professional
Appraisal Practice (USPAP) and with our agreement and understanding of the
nature and requirements of the appraisal assignment.
We will retain all relevant data and research material in file should you
require further appraisal services concerning this property.
YOVINO-YOUNG, INCORPORATED
__________________________
__________________________
_
Peter D. Overton, MAI
Michael Yovino-Young, MAI, ASA, FRICS
Principal Appraiser
Supervisory Appraiser
Certified General RE Appraiser
Certified General Real RE Appraiser
California State License No. AG002631 California State License No. AG002841
10/27/2014
Lake Merritt Boulevard Apartments

Oakland, California
a Leeding Edge Tower Project
#######
UrbanCore Development, LLC
1 of 9
10/27/2014
Project Assumptions
General
Project Name:
Project Type:
City & State
County
Class
Total Units
Market Rate
Total Number of Buildings
Land Cost/Per Unit
Lake Merritt Boulevard Apts

Multi-Family, Market Rate
Oakland, California
Alameda
New Development
298
298
1
$13,448
Construction
Construction Start
Construction Completed
Construction Period
Lease-up
Net Leasable Square Feet
Common Area Square Feet
Circulation Square Feet
Hard Cost Contingency
Soft Cost Contingency
Management Fee (% of Hard Costs)
Financing
Equity Bridge (% of Tax Credit Equity)
Equity Bridge Interest Rate
Construction Loan Interest Rate
Construction Loan Interest Rate Pay Off
Permanent Financing Begins
1st Mortgage Interest Rate
1st Mortgage Term
Amortization
Required DSCR
Equity Co-Invest Percent
Rental and Valuation
Marketing Starts
Marketing Ends
Rental Period Begins
Rent Up Completed (month, year)
Unit Rent-Up (months)
Sale Date
Cost of Sales
Cap Rate
6/30/2015
12/31/2016
18.0 Months
12.0 Months
249,939
Proforma
Lease Up
Base Year/Stabilization
Base Year Rents
Miscellaneous Income
Parking Revenue (Market Rate Only)
Total Parking Spaces
Market Rental Income Growth
Other Income Growth
Market Vacancy Rate
Other Vacancy Rate
Operating Expenses
Replacement Reserve Per Unit
Replacement Reserve Growth
Operating Expenses
per unit
2017
2018
See "Rent Schedule"
$133.33 Per Unit
$150.00 Per Unit
209
3.00%
3.00%
6.00%
6.00%
3.00%
$300
2.50%
$11,000
5.0%
5.0%
0.25%
30.0 Months
0%
4.00%
4.00%
12/31/2017
12/31/2017
5.00%
7 Years
30 Years
1.2x
0.0%
Month 10
Month 23
1/1/16
8/31/17
12
6/30/2025
1.00%
5.25%
2 of 9
Lake Merritt Boulevard Apartments

E. 12th Street Merritt Blvd.
Oakland, CA
Sources
Equity
Debt
Total
Cost
45,853,805
85,157,067
131,010,872
% of Cost
35.0%
65.0%
100.0%
Per Unit
153,872
285,762
439,634
Per NSF
183.46
340.71
524.17
Uses
Land Acquistion (to be appraised)
Hard Costs
Architecture & Engineering
Professional Services
Environmental
Insurance
Permits & Fees
Closing Costs and Taxes
Loan Interest and Fees
Financial Advisory Fees
Construction Loan Fee
Construction Loan Interest
4,007,500
106,938,680
3,556,156
370,000
380,000
380,000
3,576,000
723,969
2,767,605
638,678
2,128,927
% of Cost
3.1%
81.6%
2.7%
0.3%
0.3%
0.3%
2.7%
0.6%
2.1%
0.0%
0.5%
1.6%
Per Unit
13,448
358,855
11,933
1,242
1,275
1,275
12,000
2,429
9,287
2,143
7,144
Per NSF
16.03
427.86
14.23
1.48
1.52
1.52
14.31
2.90
11.07
2.56
8.52
Developer Overhead and Fee

Start-Up and Reserves
Soft Costs Contingency
Total Uses
4,200,000
3,155,500
955,461
131,010,872
3.2%
2.4%
0.7%
100%
14,094
10,589
3,206
439,634
16.80
12.63
3.82
524.17
10/27/2014
Return on Cost
Value Upon Completion: (Cap Rate)
Equity: (Upon Stabilization)
Equity Multiple
6.12%
5.25%
152,631,555
21,620,684
1.47
3 of 9
10/27/2014
Development Budget
Land
Land Acquisition
Total Land Costs
Hard Costs
GMP Contract with Suffolk (Estimate)
Construction Management Fee
Hard Cost Contingency
Total Hard Costs
0.25%
5.00%
Soft Costs
Architecture & Engineering
Environmental
Insurance
Permits & Fees
Loan Interest and Fees
Construction/Perm Loan Fee
Construction Loan Interest - Lease-up
Developer Overhead and Fee
Soft Costs Contingency
Total Soft Costs
Total Development Cost
4.00%
Total Cost
% of Total
Per Unit
Per NSF
4,007,500
4,007,500
3.1%
3.1%
13,448
13,448
16.57
16.57
101,604,447
254,011
5,080,222
106,938,680
77.6%
0.2%
3.9%
81.6%
340,955
852
17,048
358,855
420.23
1.05
21.01
442.30
3,556,156
370,000
380,000
380,000
3,576,000
723,969
2,767,605
638,678
2.7%
0.3%
0.3%
0.3%
2.7%
0.6%
2.1%
0.0%
0.5%
11,933
1,242
1,275
1,275
12,000
2,429
9,287
2,143
14.71
1.53
1.57
1.57
14.79
2.99
11.45
2.64
2,128,927
4,200,000
3,155,500
955,461
20,064,691
1.6%
3.2%
2.4%
0.7%
15.3%
7,144
14,094
10,589
3,206
67,331
8.81
17.37
13.05
3.95
82.99
131,010,872
100.0%
439,634
541.86
4 of 9
10/27/2014
Soft Costs
Architectural and Engineering
Pyatok Fees and Expenses To-Date
AVRP Fees and Expenses To-Date
Design Development
Construction Documents
Bidding and Negotiations
Construction Administration
Optional MEPS/DB Peer Review
Total A&E
3.5%
Amount
Per Unit
Per GSF
Per NSF
3,556,156
11,933
-
14.23
-
14.71
-
350,000
20,000
370,000
67
0.08
0.08
0.08
0.08
Community Outreach, Entitlement Consultants
Audit & Tax Return
Tax Credit Cost Certification
Total Professional Fees
67
-
Environmental
Surveying
Geotechnical Engineer
Soil Testing/Inspections
Appraisal/Market Study/Financial Consultants
Phase One Envir./EIR Consultants
Total Environmental
40,000
134.23
0.16
0.17
250,000
45,000
45,000
380,000
838.93
151.01
151.01
1,275.17
1.00
0.18
0.18
1.52
1.03
0.19
0.19
1.57
Property Insurance
General Liability
Builder's Risk (hard costs)
Builder's Risk (soft costs)
Total Property Insurance
80,000
200,000
100,000
380,000
268.46
671.14
335.57
1,275.17
0.32
0.80
0.40
1.52
0.33
0.83
0.41
1.57
3,576,000
12,000.00
14.31
14.79
1.120%
523,969
200,000
723,969
1,758
671
2,429
2.10
0.80
2.90
2.00
0.83
2.99
0.00%
0.75%
0.00%
0.00%
638,678
2,143
2,143
2.56
2.56
2.64
2.64
2,128,927
7,144
8.52
8.81
3.42%
4,200,000
4,200,000
14,094
14,094
16.80
16.80
17.37
17.37
4,000
25%
1,192,000
819,500
894,000
250,000
3,155,500
4,000
2,750
3,000
1,000
10,589
4.77
3.28
3.58
1.00
12.63
4.93
3.39
3.70
1.03
13.05
5.0%
955,461
3,206
3.82
3.95
20,064,691
67,331
80.28
82.99
Permits & Fees

Total Permits & Fees
Property Tax During Construction(1)
Legal and Organizational Costs
Total Closing Costs and Taxes
Loan Fees
Construction Loan Fee/Closing Costs
Construction Loan Fees - B Piece
Permanent Loan Fees (Combined w Const Loan Fees)
Total Loan Fees
Loan Interest
Construction Loan Interest
12,000
4.00%
0
Total Loan Interest

Developer's Overhead and Fee
Developer's Overhead/Fee
Developer's Overhead and Fee
Marketing
Capitalized Lease-Up Reserve (2)
Operating Reserve(3)
Furniture, Fixtures and Equipment
Contingency
Total Soft Costs
638,678
2,128,927
1 Tax Rate Multiplied by Land Cost and 50% of Construction Cost

2 25% of Operating Expenses
3 4 Months Operating Expenses
5 of 9
10/27/2014
Lease Up Projection
Pre-Lease
Market Rate
BMR
Lease-Up
Market Rate
BMR
Total
Lease Up Schedule
Occupancy
Market Rate
Total
Market Rate GPR
Total
Parking Revenue
Total
Total Revenue
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
60
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Month 12 Month 13
0
0
0
0
60
22
22
22
22
22
22
22
22
22
22
18
22
22
22
22
22
22
22
22
22
22
18
85%
100%
Month 14
0
0
Month 15
Total
0
0
0
0
60
0
238
0
298
85%
100%
100%
100%
100%
100%
20%
20%
28%
28%
35%
35%
35%
42%
35%
50%
42%
57%
50%
64%
57%
72%
64%
79%
72%
87%
79%
94%
Stabilized Base Year

11,253,975
11,253,975
188,825
188,825
258,061
258,061
327,297
327,297
396,533
396,533
465,769
465,769
535,004
535,004
604,240
604,240
673,476
673,476
742,712
742,712
811,948
811,948
881,184
881,184
937,831
937,831
937,831
937,831
937,831
937,831
937,831
937,831
9,636,374
9,636,374
476,800
376,200
853,000
8,000
6,312
14,312
10,933
8,627
19,560
13,867
10,941
24,808
16,800
13,255
30,055
19,733
15,570
35,303
22,667
17,884
40,551
25,600
20,199
45,799
28,533
22,513
51,046
31,467
24,828
56,294
34,400
27,142
61,542
37,333
29,456
66,790
39,733
31,350
71,083
39,733
31,350
71,083
39,733
31,350
71,083
39,733
31,350
71,083
408,267
322,127
730,393
12,106,975
203,137
277,621
352,104
426,588
501,072
575,555
650,039
724,523
799,006
873,490
947,973
1,008,915
1,008,915
1,008,915
1,008,915
10,366,767
6 of 9
Unit Breakdown
Floor
Ground
7
3 thru 4
1
1
2
3
1
2
Unit
Lofts
Unit Sqft
No. Units
Total Sqft
Gross Monthly
Rent
Annual GPR
Utilities
Net Annual Rent
Monthly
Rent Psf
Config.
1,450
10,150
4,975
417,926
417,926
3.43
Loft
Studio A
Studio B
Studio C
Studio C
1A
1B
588
641
741
610
931
743
2
2
4
6
2
4
1,176
1,282
2,964
3,660
1,862
2,972
2,421
2,639
3,051
2,512
3,493
2,787
58,106
63,344
146,451
180,841
83,824
133,793
58,106
63,344
146,451
180,841
83,824
133,793
4.12
4.12
4.12
4.12
3.75
3.75
Studio
Studio
Studio
Studio
1 BR/Den
1 BR
2
1C
1
1D
1
1E
1
2A
2
2B
5 thru 5
1
Studio A
1
Studio B
2
Studio C
3
Studio D
3
Studio E
1
1A
1
1B
2
1C
2
1D
1
1E
1
1F
1
2A
2
2B
6 thru 7
2
Studio A
2
Studio B
1
Studio C
3
Studio E
1
1A
1
1B
2
1C
1
1D
1
1E
3
2A
8 thru 22
1
Studio A
2
Studio B
2
Studio C
1
1A
1
1B
2
1C
1
1D
3
2A
Penthouse 23-24
4
2A
4
2B
Total
741
784
702
1,188
1,594
4
2
1
2
4
2,964
1,568
702
2,376
6,376
2,780
2,941
2,634
4,022
5,105
133,433
70,588
31,603
96,527
245,030
133,433
70,588
31,603
96,527
245,030
3.75
3.75
3.75
3.39
3.20
1 BR
1 BR
1 BR
2 BR
2 BR/Den
588
641
741
610
672
931
702
743
741
784
1,026
1,188
1,594
1
1
2
3
3
1
1
2
2
1
1
1
2
588
641
1,482
1,830
2,016
931
702
1,486
1,482
784
1,026
1,188
3,188
2,421
2,639
3,051
2,512
2,767
3,493
2,634
2,787
2,780
2,941
3,849
4,022
5,105
29,053
31,672
73,226
90,420
99,611
41,912
31,603
66,897
66,717
35,294
46,188
48,264
122,515
29,053
31,672
73,226
90,420
99,611
41,912
31,603
66,897
66,717
35,294
46,188
48,264
122,515
4.12
4.12
4.12
4.12
4.12
3.75
3.75
3.75
3.75
3.75
3.75
3.39
3.20
Studio
Studio
Studio
Studio
Studio
1 BR/Den
1 BR
1 BR
1 BR
1 BR
1 BR
2 BR
2 BR/Den
628
549
588
672
919
702
741
1,026
818
1,188
4
4
2
6
2
2
4
2
2
6
2,512
2,196
1,176
4,032
1,838
1,404
2,964
2,052
1,636
7,128
2,586
2,261
2,421
2,767
3,448
2,634
2,780
3,849
3,069
4,022
124,118
108,504
58,106
199,221
82,743
63,205
133,433
92,377
73,649
289,582
124,118
108,504
58,106
199,221
82,743
63,205
133,433
92,377
73,649
289,582
4.12
4.12
4.12
4.12
3.75
3.75
3.75
3.75
3.75
3.39
Studio
Studio
Studio
Studio
1 BR/Den
1 BR
1 BR
1 BR
1 BR
2 BR
588
628
549
919
702
741
818
1,188
15
30
30
15
15
30
15
45
8,820
18,840
16,470
13,785
10,530
22,230
12,270
53,460
2,421
2,586
2,261
3,448
2,634
2,780
3,069
4,022
435,796
930,884
813,783
620,573
474,040
1,000,750
552,371
2,171,866
435,796
930,884
813,783
620,573
474,040
1,000,750
552,371
2,171,866
4.12
4.12
4.12
3.75
3.75
3.75
3.75
3.39
Studio
Studio
Studio
1 BR/Den
1 BR
1 BR
1 BR
2 BR
1,350
1,450
4
4
298
5,400
5,800
249,939
5,867
6,302
145,584
281,637
302,499
11,253,975
4.35
4.35
2 BR Den
2 BR Den
281,637
302,499
11,253,975
Avg/SF/Unit
839
3,147.08
3.75
10/27/2014
Proforma
2017
Lease-Up Period (15 Mos)
Market Rate GPR

Gross Potential Rent
Market Rate Rent PSF per Month
Rent % Growth
Parking/Storage Revenue
Total Other Income
(# of Spaces/Storage):
Market Rate Vacancy

Other Income Vacancy
Effective Rental Income
Operating Expenses (Market Rate)
Total Operating Expense
Replacement Reserve (Market)
Total Replacement Reserve
Capitalized Lease-Up Reserve
209
2019
Year 2
2020
Year 3
2021
Year 4
2022
Year 5
2023
Year 6
9,636,374
9,636,374
11,253,975
11,253,975
3.75
11,591,594
11,591,594
3.86
3.0%
11,939,342
11,939,342
3.98
3.0%
12,297,523
12,297,523
4.10
3.0%
12,666,448
12,666,448
4.22
3.0%
13,046,442
13,046,442
4.35
3.0%
408,267
322,127
730,393
476,800
376,200
853,000
491,104
387,486
878,590
505,837
399,111
904,948
521,012
411,084
932,096
536,643
423,416
960,059
552,742
436,119
988,861
6.00%
6.00%
10,366,767
(675,239)
(51,180)
11,380,557
(695,496)
(52,715)
11,721,973
(716,361)
(54,297)
12,073,633
(737,851)
(55,926)
12,435,842
(759,987)
(57,604)
12,808,917
(782,786)
(59,332)
13,193,184
11,000
29.1%
3,073,125
3,073,125
3,278,000
3,278,000
3,376,340
3,376,340
3,477,630
3,477,630
3,581,959
3,581,959
3,689,418
3,689,418
3,800,100
3,800,100
300
67,050
67,050
89,400
89,400
91,635
91,635
93,926
93,926
96,274
96,274
98,681
98,681
101,148
101,148
819,500
Net Operating Income

ROC
Debt Ratio
8,046,092
Debt Service
DSCR
Cash Flow
Annual Return on Equity (ROE)
2018
Base Year
8,013,157
6.12%
9.41%
8,253,998
6.30%
9.69%
8,502,076
6.49%
9.98%
8,757,608
6.68%
10.28%
9,020,818
6.89%
10.59%
9,291,936
7.09%
10.91%
4,087,539
5,485,699
1.46x
5,485,699
1.50x
5,485,699
1.55x
5,485,699
1.60x
5,485,699
1.64x
5,485,699
1.69x
3,958,553
2,527,458
2,768,300
3,016,378
3,271,910
3,535,119
3,806,237
6.91%
5.51%
6.04%
6.58%
7.71%
8.30%
9.45%
7.14%
8 of 9
10/27/2014
Mortgage Amortization Schedule
Base Year NOI
Annual Debt Service
DSCR
8,013,157
5,485,699
1.46x
Principal Balance
Interest Rate
Term
Amortization Schedule
Years
7.00
30.00
$85,157,067
5.00%
Months
84.00
360.00
9 of 9
SALE NO. ONE

STREET ADDRESS:
CITY:
ZIP:
SALE PRICE:
RECORDING DATE:
SELLER:
FINANCING:
SALE COMMENTS:
PROPERTY TYPE: LAND

1900 Broadway
008-0638-005,006-03
ASSESSOR'S NUMBER:
Oakland
190467, 190468
DOCUMENT NUMBER:
94612
Closed
STATUS:
$4,611,500
n/a
LISTING PRICE:
1-Aug-2014
n/a
LISTING DATE:
Jackson Center Two L BUYER:
19th & Broadway Assoc
All cash
Fee Simple
RIGHTS TRANSFERRED:
Property was not listed for sale on open market, but both buyer and
sellers are experienced developers and market participants.
PROPERTY DESCRIPTION:
Site Area (SF):
Shape:
40,650
Irregular
Street Frontage:
311 feet on Broadway, 150 feet on 19th Street
Probable Use:
PROPERTY COMMENTS:
Multi Residential
294
No. Units:
Three adjacent parcels including corner site improved with dilapidated
four-story masonry office building (+/-36,00 sf) which will be rehabbed
as part of the project. Costs to retaining and rehabbing structure are
considered equivalent to cost to replace, but retention provides some
leverage in planning process. Buyer has scaled back previously
conceived project to a 24 story residential tower with ground floor
commercial space. Location is adjacent to 19th Street BART station.
Zoning:
Topography:
ANALYSIS OF TRANSACTION:
Effective Sale Price:
UNIT INDICES:
$/SF:
$/UNIT:
Data Source:
$4,611,500
$113.44
$15,685
Listing Broker Rich Martini, Costar
CBD-P; Height Area 7

Level
SALE NO. TWO

STREET ADDRESS:
CITY:
ZIP:
SALE PRICE:
RECORDING DATE:
SELLER:
FINANCING:
SALE COMMENTS:
PROPERTY TYPE: LAND

4700-4770
Telegraph Ave
Oakland
94609
$3,600,000
7-Nov-2013
ASSESSOR'S NUMBER:
DOCUMENT NUMBER:
STATUS:
LISTING PRICE:
LISTING DATE:
4700 Telegraph LLc
BUYER:
61.1% cash down, pvRIGHTS TRANSFERRED:
Purchase for development as entitled
013-1150-017-01,019-02
238205
Sold
n/a
n/a
Ngi 4700 Telegraph LLC
Fee Simple
Site Area:
Shape:
19,950
Rectangular
Street Frontage:
150 feet Telegraph Avenue; 133 feet 48th Street
Probable Use:
PROPERTY COMMENTS:
51
Multi-unit ResidentNo. Units:
Entitled site for 51 residential units and 5,050 sf of retail
space. Total GBA will 55,015 sf. FAR = 2.7 Units per acre = 113.
Existing residential units provide carrier income prior to
construction.
Zoning:
Topography:
CN-2
Level
Effective Sale Price: $3,600,000

UNIT INDICES:
$180.45
$/SF:
$70,588
$/UNIT:
Costar; Listing Broker Todd Vitzhum 925-951-5022
Data Source:
SALE NO. THREE

STREET ADDRESS:
CITY:
ZIP:
SALE PRICE:
RECORDING DATE:
SELLER:
FINANCING:
SALE COMMENTS:
PROPERTY TYPE: LAND

4801 Shattuck Ave
ASSESSOR'S NUMBER:
Oakland
DOCUMENT NUMBER:
94609
STATUS:
$2,660,000
LISTING PRICE:
30-Jul-2013
LISTING DATE:
Scott Ward
BUYER:
20.9% down; pvt 1st TD RIGHTS TRANSFERRED:
Normal marketing and transaction.
013-1162-009-01,009-02,010
263381
Closed
n/a
n/a
NGI 4801 Shattuck
Fee Simple
Site Area:
Shape:
14,934
Irregular
Street Frontage:
205 feet 48th Street; 65 feet Shattuck Avenue
Probable Use:
PROPERTY COMMENTS:
Multi-unit Residential No. Units:

44
Three adjacent parcels with existing residential improvements to
be removed to make way for 44 unit residential condominium
project. No commercial space included. Units per acre = 128
Zoning:
Topography:
UNIT INDICES:
$178.12
$/SF:
$60,455
$/UNIT:
Data Source:
LoopNet, MetroScan, Broker Todd Vitzthum 925-951-5022
R-50/R-70
Level
SALE NO. FOUR

STREET ADDRESS:
CITY:
ZIP:
SALE PRICE:
RECORDING DATE:
SELLER:
FINANCING:
SALE COMMENTS:
PROPERTY TYPE: LAND

5175 Broadway
ASSESSOR'S NUMBER:
Oakland
DOCUMENT NUMBER:
94611
STATUS:
$2,300,000
LISTING PRICE:
26-Jul-2013
LISTING DATE:
Rockridge Heights LLBUYER:
All cash
RIGHTS TRANSFERRED:
Conventional sale
014-1241-005-01
261177
Sold
Lc Merrill Gardens
Fee Simple
Site Area:
Shape:
Street Frontage:
Probable Use:
PROPERTY COMMENTS:
12,833
Zoning:
CC-2
Rectangular
Topography:
Level
116.67 feet Broadway; 110 feet Coronado Ave
Multi-unit ResidentiNo. Units:
28
Rectangular corner parcel entitled for development with 28 unit
condominium project with total GBA of 35,325 sf of which 2,995
sf would be ground floor retail. FAR = 2.75; Units/Acre = 96
UNIT INDICES:
$/SF:
$/Unit:
$2,300,000
$179.23
$82,142.86
Data Source:
Costar, Broker; John Kovaleski 408-282-3844
SALE NO. FIVE

STREET ADDRESS:
CITY:
ZIP:
SALE PRICE:
RECORDING DATE:
SELLER:
FINANCING:
SALE COMMENTS:
PROPERTY TYPE: LAND

522-532 20th St
Oakland
94606
$1,180,000
29-Apr-2014
Patrick White
All Cash
ASSESSOR'S NUMBER:
DOCUMENT NUMBER:
STATUS:
LISTING PRICE:
LISTING DATE:
BUYER:
RIGHTS TRANSFERRED:
008-0645-006.007
101680
Closed
Undisclosed
3/1/2012
522-532 20th St LLP
Fee Simple
Normal marketing and transaction.
Site Area:
Shape:
Street Frontage:
7,405
CBD-X
Zoning:
Rectangular
Level
Topography:
74.67 feet on 20th Street (Thomas Berkeley Way)
Probable Use:
Multi-Family/Retail
PROPERTY COMMENTS:
Recent sale for an un-entitled site zoned CBD-X (Height Area 6), which
allows for a maximum density of 484 units/acre, maximum F.A.R. of
20.0 to 1.0, no building height limit (minimum building height of
45'), and a 100% site coverage. The price/unit figure above is
reflective of the maximum allowable density on the site (82 units
based on 484 units/acre). Site is rectangular and level with all offsites. Currently being utilized as a parking lot.

UNIT INDICES:
$/SF:
$/UNIT:
$1,180,000
Data Source:
Seller (Partrick White (707) 933-9431), Metroscan, Costar.
No. Units:
82
$159.35
$14,390
SALE NO. SIX

STREET ADDRESS:
CITY:
ZIP:
SALE PRICE:
RECORDING DATE:
SELLER:
FINANCING:
SALE COMMENTS:
Site Area (SF):

Shape:
Street Frontage:
PROPERTY TYPE: LAND

1200 Ashby Avenue
Berkeley
94702
$5,105,000
31-May-2013
R.B. Tech Center
All Cash
Conventional sale of entiteled
053-1627-022,039,037
ASSESSOR'S NUMBER:
196679
DOCUMENT NUMBER:
Closed
STATUS:
n/a
LISTING PRICE:
n/a
LISTING DATE:
1200 Ashby LLC
BUYER:
Fee Simple
RIGHTS TRANSFERRED:
site with all cash financing
34,412
C-1
Zoning:
Irregular
Level
Topography:
Dual corner frontage: 240 feet San Pablo Avenue, 125 feet Ashby Avenue, 150 feet
Carrison St.
Probable Use:
PROPERTY COMMENTS:
Vacant site entitled for development of 98 residential units (66,300sf) and 9,392
sf of retail space. FAR = 2.2. Units per acre = 124. Location at major
interesection in West Berkeley.
No. Units:
UNIT INDICES:
$/SF:
$/UNIT:
Data Source:
$5,105,000
$148.35
$52,092
MetroScan, Costar; Broker Todd Vitzhum 925-951-5022
98
SALE NO. SEVEN

STREET ADDRESS:
CITY:
ZIP:
SALE PRICE:
RECORDING DATE:
SELLER:
FINANCING:
PROPERTY TYPE: LAND

ASSESSOR'S NUMBER:
002-0057-020
DOCUMENT NUMBER:
270493
STATUS:
Sold
LISTING PRICE:
$1,410,000
LISTING DATE:
1/1/2014
Salvation Army
BUYER:
OAK 378 LLC
RIGHTS TRANSFERRED:
All Cash
Fee Simple
Purchase of development site by developer. All cash.
378 11th Street
Oakland
94607
$1,500,000
7-Nov-2014
SALE COMMENTS:
Site Area:
Shape:
Zoning:
10,000
Topography:
Rectantgular
100 feet on 11th Street
CBD-C
Level
Probable Use:
Hotel
111
PROPERTY COMMENTS:
Non-corner site currently vacant and occupied as surface parking.

Max FAR = 20, Max units/acre = 483. Location across from EBMUD HQ;
two blocks from BART; Developer/Buyer plans 10-story building
implyin project FAR of 10.
Street Frontage:
No. Units:
UNIT INDICES:
$/SF:
$150.00
$/UNIT:
$13,514
LoopNet, MetroScan, Broker, Larry Westland 510-622-8466
Data Source:
LISTING NO. EIGHT

STREET ADDRESS:
CITY:
ZIP:
SALE PRICE:
RECORDING DATE:
SELLER:
FINANCING:
SALE COMMENTS:
Site Area (SF):

Shape:
PROPERTY TYPE: LAND

ASSESSOR'S NUMBER: 002-0057-004-02
1225 Webster Street
DOCUMENT NUMBER:
Oakland
n/a
STATUS:
94702
Listed
LISTING PRICE:
n/a
$2,200,000
LISTING DATE:
n/a
9/1/2014
BUYER:
OAC Propertiies LLC
n/a
RIGHTS TRANSFERRED: Fee Simple
n/a
Property listed recently and has generated one offer which was
declined due to extended due diligence clause.
Zoning:
12,000
CBD-C; Height Area 7
Topography:
Rectangular
Level
100 feet on Webster Street, 120 feet on 13th Street
Street Frontage:
Probable Use:
PROPERTY COMMENTS:
Multi-unit ResidentialNo. Units:

133
Corner site in CBD zoned for commercial, though residential
development is most probable. Max FAR is 20. No height limit.

UNIT INDICES:
$/SF:
$183.33
$/Unit:
$16,541
Data Source:
Loopnet, Listing Broker, Matt Currie -415-543-9402
275 Turk St - King Edwards Apartments

San Francisco County
San Francisco, CA 94102

Sale Date:
Sale Price:
Price/SF:
Price/Unit:
Pro Forma Cap
Actual Cap Rate:
Comp ID:
Research Status:
07/15/2014
$12,000,000 - Confirmed
$370.54
$206,897
3.80%
3088080
Confirmed
Bldg Type:
Year Built/Age:
RBA:
# of Units:
Parcel No:
1565 Madison St - Lake Park Apartments
Sale Date:
Sale Price:
Price/SF:
Price/Unit:
Pro Forma Cap
Actual Cap Rate:
Comp ID:
Research Status:
Bldg Type:
Year Built/Age:
RBA:
# of Units:
Parcel No:
GRM/GIM: 11.00/Sale Conditions: -
SOLD
04/25/2014 (182 days on mkt)

Bldg Type:
$13,200,000 - Confirmed
Year Built/Age:
$318.96
RBA:
$220,000
# of Units:
Parcel No:
4.20%
3015958
GRM/GIM:
Confirmed
Sale Conditions:
Class B Multi-FamilyApartments
Built 1914 Age: 100
41,385 SF
60
0693-014
-
318-320 Turk St
SOLD

Sale Date:
Sale Price:
Price/SF:
Price/Unit:
Pro Forma Cap
Actual Cap Rate:
Comp ID:
Research Status:
11/04/2013
$6,843,000 - Confirmed
$278.74
$134,176
4.80%
2908956
Confirmed
Bldg Type:
Year Built/Age:
RBA:
# of Units:
Parcel No:
Built 1924 Age: 89
24,550 SF
51
0337-007A
GRM/GIM: Sale Conditions: -
1389 Jefferson St - Doman Oakland
Sale Date:
Sale Price:
Price/SF:
Price/Unit:
Pro Forma Cap
Actual Cap Rate:
Comp ID:
Research Status:
SOLD
Alameda County
Oakland, CA 94612
Class C Multi-FamilyApartments
Built 1965 Age: 49
52,637 SF
66
008-0629-007-01
990 Geary St - Rex Arms Apartments
Sale Date:
Sale Price:
Price/SF:
Price/Unit:
Pro Forma Cap
Actual Cap Rate:
Comp ID:
Research Status:
SOLD
Alameda County
06/10/2014
$152.74
$121,818
4.80%
3057172
Confirmed
Built 1909 Age: 105
32,385 SF
58
0344-007
Oakland, CA 94612
SOLD
09/05/2013 (72 days on mkt)

Bldg Type:
$103,241,429 - Confirmed
Year Built/Age:
$411.32
RBA:
$391,066
# of Units:
Parcel No:
4.62%
2835273
GRM/GIM:
Confirmed
Sale Conditions:
Class A Multi-FamilyApartments
Built 2011 Age: 1
251,000 SF
264
002-0106-001-00, 002-0106-026-00,
002-0106-027-00, 002-0106-028-00 [Partial List]
-
500 Canyon Oaks Dr - Shadow Woods

Alameda County
Oakland, CA 94605
Sale Date:
Sale Price:
Price/SF:
Price/Unit:
Pro Forma Cap
Actual Cap Rate:
Comp ID:
Research Status:
SOLD
10/24/2012
$84.60
$10,068
4.80%
2668996
Confirmed
Bldg Type:
Year Built/Age:
RBA:
# of Units:
Parcel No:
Built 1986 Age: 26
43,438 SF
365
-
This copyrighted report contains research licensed to Yovino-Young, Inc. - 13733.
9/8/2014
Page 1
PROFESSIONAL QUALIFICATIONS
PETER D. OVERTON
PROFESSIONAL CREDENTIALS
Certified General Real Estate Appraiser (License No. AG002631)
Recertified to 08/12/16 OREA, State of California
Designated Member of the Appraisal Institute
MAI; Appraisal Institute #11878
Qualified as Expert Witness - Alameda County Superior Court
EDUCATION
Department of Architecture, MIT, Cambridge, Massachusetts, 1964-65.
B.A. Knox College, Galesburg, Illinois, 1965-1969
Professional Courses Completed:
AIREA - Real Estate Appraisal Principles Course 1A1
AIREA - Basic Valuation Procedures Course 1A2
AI - Capitalization; Theory & Techniques 1B_A
AI - Capitalization; Theory & Techniques 1B_B
AI - Case studies in Real Estate Valuation 2-1
AI - Report Writing & Valuation Analysis 540
AI - Eminent Domain Seminar
IRWA - Easement Valuation
IRWA - Legal Aspects of Easements
AI - Detrimental Conditions
McKissock - Regression Analysis
AI - USPAP 410-420
AI - Highest and Best Use / Market Analysis
1986
1987
1991
1991
1992
1994
1995
1996
1996
1998
1999
2000
2005
EXPERIENCE
All types of appraisal assignments in the San Francisco Bay Area
with an emphasis on commercial, industrial, office, complex
residential, and special purpose properties.
1986-1987 Mitch Durell & Associates Real Estate Appraisers

1987-1989 Dawson & Jones Inc. Real Estate Appraisals
1989-1990 Clyde Standley & Associates, Real Estate Appraisers
1990-Present
Senior Appraiser
Yovino-Young Incorporated, Berkeley, California
CURRICULUM VITAE
G. MICHAEL YOVINO-YOUNG, MAI, ASA, FRICS

PROFESSIONAL CREDENTIALS & MEMBERSHIPS
General Certified Real Estate Appraiser, by State of California, Office of Real Estate Appraisers (OREA)
License Number AG002841
Renewal Date: June 1, 2014
MAI
ASA
SRA
FRICS
Member
Arbitrator
Past Chairman, Commission 9
Appraisal Institute, Recertified to 12/31/2010

Accredited Senior Appraiser, Urban Properties,
American Society of Appraisers, Reaccredited to 8/19/2011
Appraisal Institute, Recertified to 12/31/2010
Fellow, Royal Institution of Chartered Surveyors, London
International Right of Way Association
Commercial Arbitration Tribunal, Retraining Completed Feb. 2000
American Arbitration Association
Valuation and Property Management, International Federation of
Surveyors (FIG), Copenhagen, Denmark (for Appraisal Institute)
EDUCATION
M.B.A., Urban Land Economics
University of California at Berkeley
1963
B.Sc., Commerce
Santa Clara University
1958
Continuing Education Requirements completed for OREA through June 2012, and MAI and ASA through 2014.
PROFESSIONAL PRACTICE
Full time general appraisal practice since 1960, including all types of urban and regional real estate throughout the State
of California, and western United States, British Columbia, Mexico, England, Switzerland, and Italy. Instructor &
Lecturer for Appraisal Institute, former American Institute of Real Estate Appraisers, former Society of Real Estate
Appraisers, American Society of Appraisers, U. of California, Graduate Adjunct Faculty @ Golden Gate University, and
Peralta Junior College District. International Consulting services through FIG member associations.
Market value appraisals for private parties, institutional lenders, insurance valuations, feasibility and investment analyses,
portfolio management and audit, appraisal review.
Areas of specialization include commercial & industrial properties, special purpose properties including entertainment
businesses, government & institutional property, transient lodging, marina & waterfront land uses, special interest &
public interest properties including conservation easements, parkland, ocean frontages, leases & all purpose easements.
LITIGATION RELATED PRACTICE

Qualified and experienced expert witness for all state and federal courts, State FTB, and IRS. Court appointed arbitrator,
umpire, commissioner in real estate valuation disputes. Litigation support and forensic services, review, critique, and
preparation of examination of experts. Sole Arbitrator & Neutral/Third Panelist
FAMILY, ESTATE AND PROBATE PRACTICE

Appraisal and consulting services for marriage and partnership dissolutions, estates, probate, gifting, discounted
fractional interests, tax disputes involving real estate and ownership interests. Arbitration services.
OTHER AREAS OF SERVICE

Insurance damage appraisals, catastrophic events with pre and post event valuation analyses, eminent
domain, environmental impact, stigma and endangerment issues, construction defects, missed easements.
G. Michael Yovino-Young, President
Yovino-Young, Inc. - 2716 Telegraph Avenue
Berkeley, CA 94705-1175
Telephone (510) 548-1210 / Facsimile (510) 548-3110

Email: myy@yovino.com
fILtD
m-nCl OF THE Cil ^ C.IF.S
jw NOV zo PH1= w ^GiFA^/M
REPORT
CITY OF O A K L A N D
TO: HENRY L. GARDNER

INTERIM CITY ADMINISTRATOR
SUBJECT: Laws for Real Property Acquisition
and Disposition
City Administrator
\Jp^^X<^-^
Approval
^^-"^^
^
F R O M : Rachel Flynn
DATE: October 13, 2014
/iS
Z1 /
COUNCIL DISTRICT:
All Districts
RECOMMENDATION
Staff recommends that the City Council adopt:
An Ordinance Updating And Revising The City's Real Property Acquisition And
Disposition Laws, And Codifying Such Laws Into The Oakland Municipal Code,
EXECUTIVE SUMMARY
Real estate staff and the City Attorney's Office have observed that there are numerous standalone ordinances and resolutions that govern the purchase, sale and lease of real property by the
City. These ordinances and resolutions are not always consistent with one another, and
inadequately address real property transactions such as the leasing of property by the City as
tenant, and the granting or acquisition of easement interests. Staff has determined the need to
reconcile the City's real property laws, and merge the stand-alone ordinances and resolutions,
consistent with applicable Charter provisions, into one ordinance that would be codified in the
Oakland Municipal Code. Also, the monetary thresholds for delegating administrative authority
to close transactions are out of date and should be adjusted to reflect current market conditions.
OUTCOME
The recommended Ordinance would merge the stand-alone ordinances and resolutions,
consistent with the applicable Charter provisions, into one ordinance that would be codified in
the Oakland Municipal Code, and would update and revise various rules governing the
acquisition and disposition of real property by the City.
Item:
CED Committee
December 2, 2014
Henry L . Gardner, Interim City Administrator

Subject: Laws for Real Property Acquisition and Disposition
Date: October 13, 2014
Page 2
BACKGROUND/LEGISLATIVE HISTORY
The current rules governing the acquisition and disposition of real property by the City are
scattered in a series of about a dozen stand-alone ordinances and resolutions adopted over the
past 40 years. These ordinances and resolutions are not codified in the Municipal Code (with the
exception of the recently-adopted ordinance governing disposition of property for development),
nor are they otherwise easily available to the public. These laws often overlap and set forth rules
that are not always consistent with one another. Additionally, the laws fail to adequately cover
many key areas - for instance, aside from the Charter, there are no rules governing the lease of
property by the City as tenant, nor any rules that govern the grant or acquisition of easement
interests. Monetary thresholds that would authorize staff to close transactions without Council
approval have not been adjusted to reflect current market conditions. The Ordinance
recommended for adoption would organize, reconcile, and update the current myriad of rules
governing the purchase, sale and lease of real property by the City.
The Municipal Code is available on-line and in public libraries, and is indexed and searchable, so
the new laws would be much more available and usable to the general public than the existing
laws. Under the recommended Ordinance, the real property laws of the City would be organized
as three new chapters in the Municipal Code:
Chapter 2.41 would govern the acquisition of real property by the City through negotiated
purchase or eminent domain, and the "lease-in" of real property by the City (i.e., lease
with the City as tenant).
Chapter 2.42 would govern the disposition of City property through sale or "lease-ouf
(i.e., lease with the City as landlord). This chapter would also incorporate several standalone ordinances governing special leasing circumstances ~ parking licenses in the
Central District (adopted in 1999), telecommunications leases and hcenses (adopted in
1996), Head Start leases (adopted in 2002), and City Administration Building leases
(adopted in 1998). This chapter would include the ordinance enacted by Council in 2013
that governs the disposition of City property for development purposes (adopted in the
wake of the demise of the Redevelopment Agency).
Chapter 2.43 would govern the grant of public utility franchises over City public space.
This codifies an uncodified franchise ordinance dating back to 1947. This chapter would
not apply to franchises that are governed by other parts of the Municipal Code or that are
governed by overriding state or federalfranchiselaws.
ANALYSIS
In addition to the codification, the recommended Ordinance would make a number of needed
substantive changes to the current real property laws. The major changes are as follows:
i
Item:
CED Committee
December 2, 2014

Date. October 13,2014 '
"
Page 3
Surplus vs. nonsurplus. This Ordinance merges the rules for the sale of "surplus
property" and "nonsurplus property," now governed by separate ordinances, into one set
of rules. There is no basis for distinguishing between "surplus" and "nonsurplus"
property transactions.
Definitions. This Ordinance adds definitions of basic terms like "real property,"
"acquisition," "lease," "fair market value," etc., not currently defined in any of the
existing laws.
Administrative authority for purchases and lease-ins. Currently, all purchases or leases
by the City over the $5,000 threshold set by the Charter require Council approval by
ordinance. This Ordinance would raise the minimum threshold for City Council approval
of purchases and leases to $100,000. With this change, staff would be authorized to
acquire or lease-in real property if the purchase price or lease payments (over the entire
term of the lease) are $100,000 or less, without Council approval. The $5,000 threshold
dates back to the 1968, when the current version of the Charter was enacted, and should
be increased to reflect current market conditions. The increased threshold is in line with
increases in real property values in the 46 years since the Charter threshold was set. As
evidence of this, the median Cahfomia home price in 1968 was $23,210, while the
median California home price in 2014 is $480,280. Thus, as measured by home prices,
real property values have risen over 20 times since 1968. The proposed $100,000
administrative threshold is also in line with the current administrative threshold for
entering into most services and purchasing contracts, as set forth in the City's purchasing
ordinance.
Waiver of competitive bidding. Currently, the requirement to sell property through a

competitive bidding process may be waived only if Council makes a finding that bidding
is impractical, unavailing or impossible, or that sale without bidding is in the best
interests of the City. This Ordinance would also provide for waiver of competitive
bidding if (1) the property is undeveloped and less than 5,000 square feet, or (2) the
appraised fair market value of the property is $100,000 or less.
Notice of competitive biddiuR. Currently, the competitive bidding process requires

posting of notice through newspaper pubHcation. This Ordinance would allow posting
notice on the City's website as an alternative to newspaper publication.
Administrative authority for sales and lease-outs. Currently, all sales of City property or
leases of City property for terms longer than one year require Council approval by
ordinance. This Ordinance would delegate administrative authority to staff to sell or
lease City property if (1) the sale or lease is required by the state or federal government,
(2) the property is undeveloped and less than 5,000 square feet, (3) for leases of improved
Item:
CED Committee
December 2, 2014

Date- October 13, 2014
Page 4
space, the leasable space is less than 2,000 square feet, (4) for sales, the appraised fair
market value of the property is $100,000 or less, or (5) the property was formerly owned
by the Redevelopment Agency or the Oakland Redevelopment Successor Agency, and
staff was previously delegated the authority to sell or lease the property by Council
sitting as the Agency or ORSA board. Under this Ordinance, staff would be authorized
to sell or lease-out (City as landlord) real property in any of the above circumstances
without Council approval.
Competitive bidding of leases. This Ordinance removes the requirement to competitively
bid leases of City space. This is in line with the current practice of negotiating leases on a
case-by-case basis. Notice of potential leasing opportunities would have to be posted on
the City's website, however.
Fair market. Current laws do not clearly require that property be sold or leased by the
City for its fair market value. This Ordinance would require that property be sold for its
appraised fair market value, or leased for its fair market rental value, unless state or
federal laws do not allow for a fair market transaction, or unless Council has made a
finding that the below-market sale or lease is in the best interests of the City (for instance,
the property is being leased for in-kind services or pubhc benefits that justify belowmarket rent).
Zoning review. This Ordinance removes the requirement for Planning Commission
review of zoning before property may be sold. Zoning review should be governed by the
Planning Code, not by the City's real estate laws.
Easements. Current laws do not specifically address the purchase or sale of easement
interests, i.e., the right to use property for a particular use, by the City. This Ordinance
would add provisions governing the grant or acquisition of easement interests by the City.
These provisions generally parallel the provisions for disposing of or acquiring
ownership interests e.g., delegate authority to acquire easements for $100,000 or less,
or grant easements if the easement area is less than 5,000 square feet or has a market
value of $100,000 or less. In addition, the Ordinance delegates to staff the authority to
grant temporary easements of one year or less.
City Administration building leases. This Ordinance expands the delegation of authority
to enter into leases of retail space at the City Administration Building Complex within
specific parameters, to include retail space in City Center Garage West.
Disposition of City property for development purposes. This Ordinance does not modify
any substantive provisions of the recently-adopted ordinance governing disposition for
development purposes, other than adding provisions requiring compliance with recentlyadopted state statutes governing economic development sales.
Item:
CED Committee
December 2, 2014

Date: October 13, 2014
Page 5
COORDINATION
There has been extensive internal and external coordination with the Office of the City Attorney
and the Budget Office, which have reviewed this report and proposed Ordinance.
COST SUMMARY/IMPLICATIONS
This Ordinance would consolidate the previous stand-alone ordinances and resolutions that
govern the City's real property acquisition and disposition practices, and codify such laws into
the Oakland Municipal Code. This Ordinance also increases the administrative thresholds to
close transactions without Coimcil approval to reflect current market conditions. Having a
streamlined Ordinance would help to make business run more efficiently and thus save the City
time and money.
SUSTAINABLE OPPORTUNITIES
Economic: A streamlined Ordinance would make transactions more efficient and save City
funds and staff resources.
Environmental: This proposed action does not provide any environmental benefits.
Social Equity: This proposed action does not provide any social equity benefits.
CEOA
This report is not a project under CEQA.
Item:
CED Committee
December 2, 2014

Date. October 13, 2014
Page 6
For questions regarding this report, please contact Patrick Lane, Interim Manager, Project
Implementation at 510-238-7362.
Respectfully submitted.
lachel Flyim, Actmg Director

iconomic and Workforce Development
)epartment
Reviewed by.
Patrick Lane, Interim Manager, Project Implementation
James Golde, Manager, Real Estate Services
Prepared by:
Thang H. Nguyen, Real Estate Agent
Real Estate Services Division
Item:
CED Committee
December 2, 2014
F!l.ED
SFf^iCE OF THf C i l t C i ESi^
Approved astoforhi and legality
City Anorney's Office
OAKLAND CITY COUNCIL

ORDINANCE NO.
C.M.S.
AN ORDINANCE UPDATING AND REVISING THE CITY'S R E A L

PROPERTY ACQUISITION AND DISPOSITION LAWS, AND
CODIFYING SUCH LAWS INTO THE OAKLAND MUNICIPAL CODE
WHEREAS, as a home rule charter city, the City has the right and power to make
and enforce all laws and regulations that are its municipal affairs, including laws related
to the acquisition and disposition of real property by the City; and
WHEREAS, Section 1001 of the Oakland City Charter provides that the City
Council shall have authority to lease or sell real property owned or controlled by the City
in accordance with such uniform procedure as it shall adopt by ordinance; and
WHEREAS, state law authorizes cities to purchase, lease, receive, hold and
enjoy real property and dispose of real property for the common benefit; and
WHEREAS, the City Council has adopted various ordinances and resolutions
governing the acquisition and disposition of real property; and
WHEREAS, the City Council wishes to update and revise these ordinances and
resolutions as needed, adopt them as uniform rules and procedures, and codify them
into the Oakland Municipal Code to make them accessible to the public; now, therefore,
The Council of the City of Oakland does ordain as follows:
SECTION 1. Ordinance Nos. 2575 (grant of public utility franchises), 10142
(sale of non-surplus property), 11602 (sale of surplus property), 11603 (rental and lease
of City property), 11722 (rental and lease of City property for in-kind services), 11836
(acquisition of property interests less than $5,000), 11945 (disposition of property for
telecommunications facilities), 12079 (lease of City Administration Building Complex),
12195 (parking licenses), 12456 (Head Start leases), and 13185 (disposition of City
property for developmentyc.M.S., and Resolution No. 61788 C.M.S. (right of way
certifications for federally-funded projects) are hereby repealed and replaced with this
Ordinance and the Oakland Municipal Code provisions adopted under this Ordinance.
SECTION 2. Chapter 2.41 of the Oakland Municipal Code, added by

Ordinance No. 13185 C.M.S., entitled "Disposition of City-owned Property for
Development", is hereby repealed and replaced with the following new Chapter 2.41:
Chapter 2.41
ACQUISITION AND LEASE OF REAL PROPERTY BY CITY
2.41.010
Definitions.
The following words and phrases, wherever used in this chapter, shall be
construed as defined in this section unless othenwise required by the context.
The singular shall be taken to mean the plural and the plural shall mean the
singular when required by the context of this chapter. The following definitions
apply to this chapter:
"Acquisition of real property" or "acquire real property" for purposes of this
chapter and Section 219(6) of the Chiarter means the purchase or other
acquisition by the City from another of a fee simple interest in real property, with
or without consideration, by grant deed, quitclaim, trustee's deed, deed in lieu of
foreclosure, court order, or other transfer; but does not include the acquisition of
a leasehold interest, easement, equitable servitude, right-of-way, option interest,
security interest, or other estate in real property less than a fee simple interest, or
acquisition by civil forfeiture. Notwithstanding the above, the acquisition of a
leasehold interest for a term or lease period exceeding 35 years, including any
extension or renewal periods if the extension or renewal is exercisable at the
unilateral option of the City, shall be treated as acquisition of real property.
"Lease" means the conveyance to the City of a leasehold estate, rental,
license or other exclusive or nonexclusive right under a less than fee simple
estate for the City or its designee to use or occupy real property for a set term,
periodic term such as month-to-month, or at will, with or without the payment of
rent, lease payments, license fees, or other consideration; but does not include
an easement or equitable servitude. A "lease" includes a sublease or an
assignment of a lease to the City.
"Purchase price" means the total consideration given or provided by the
City to the seller or on behalf of the seller in exchange for the purchase or other
acquisition, whether paid in cash, cash equivalent, in-kind consideration,
exchange, credit, or anything else of value to the City.
"Real property" means land, buildings, structures and other fixtures or
immovable property affixed to the land.
2.41.020
Authority for acquiring real property.
The City is authorized to acquire real property by grant, purchase, gift,

devise, contract, or eminent domain. Per Section 219(6) of the Charter, all
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acquisitions of real property by the City must be authorized by an ordinance

enacted by the City Council, except as provided for below.
Notwithstanding the above, the City Administrator is delegated the full and
complete authority to acquire any real property if the purchase price for the real
property does not exceed $100,000. The City Administrator is authorized to
negotiate and execute all documents necessary for the acquisition of such real
property and take other actions necessary to complete such acquisition, provided
that the funds have been appropriated for the acquisition. No further City Council
action is required for such acquisitions.
2.41.030
Title.
Any deed or grant conveying real property to the City must include a
certificate of acceptance signed by the City Administrator or his or her designee
accepting said real property.
Title to any real property acquired by the City shall be held in the name of
"The City of Oakland, a municipal corporation."
2.41.040
Acquisition of real property by eminent domain.
The City has the right and power to acquire real property for a public use
through eminent domain. Acquisition of real property through the City's power of
eminent domain must conform to the provisions of the California Eminent Domain
Law, California Code of Civil Procedure Sections 1230.010, et seq., and other
applicable state and federal law provisions. Notwithstanding anything to the
contrary in this chapter, acquisition of real property through the use of the City's
power of eminent shall be authorized by Council adoption of a resolution of
necessity pursuant to California Code of Civil Procedure Section 1245.210, et
seq., and shall not require an ordinance.
2.41.050
Lease of real property by City.
The City is authohzed to lease real property from another entity. All
leases of real property by the City must be authorized by a resolution enacted by
the City Council, except as provided for below. The City may acquire leasehold
interests through eminent domain.
complete authority to lease any real property if the rent, lease payments, license
fees, or other consideration for the lease does not exceed $100,000 over the
term of the lease, including any extension periods authorized under the lease.
The City Administrator or his or her designee is authorized to negotiate and
execute all documents necessary for the lease of such real property and take
other actions necessary to complete such lease, provided that the funds have
been appropriated for the lease. No further City Council action is required for
such leases.
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2.41.060
Acquisition of easements.
The City is authorized to acquire easements, equitable servitudes, and

right-of-way interests in real property by grant, purchase, gift, devise, contract, or
eminent domain. This shall include the acquisition of negative easements such
as conservation easements. Per Section 219(6) of the Charter, all such
acquisitions must be authorized by an ordinance enacted by the City Council,
except as provided for below.
complete authority to acquire any easements, equitable servitudes, and right-ofway interests in real property if the purchase price for such interest does not
exceed $100,000. The City Administrator or his or her designee is authorized to
negotiate and execute all documents necessary for the acquisition of such
interests and take other actions necessary to complete such acquisition, provided
that the funds have been appropriated for the acquisition. No further City Council
action is required for such acquisitions.
2.41.070
Right of way certifications.
The City Administrator or. his or her designee is hereby authorized to

execute all right of way certifications and similar documents certifying that all
property rights needed for federally-funded projects have been acquired and that
the projects have qualified for the receipt of federal funds.
2.41.080
Gifts of real property.
Any gifts or donations of real property to the City shall be governed by

Section 2.04.160 and any regulations adopted pursuant to said provision by the
City Administrator. For purposes of applying the limit on delegated authority to
accept gifts as set forth in said provision, the fair market value (as defined in
Section 2.42.010) of the real property being donated shall be considered.
2.41.090
Implementation.
The City Administrator is authorized to implement this chapter and may

promulgate appropriate rules, regulations or guidelines for such purposes.
SECTION 3. Chapter 2.42 is hereby added to the Oakland Municipal Code to

read as follows:
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Chapter 2.42
DISPOSITION OF REAL PROPERTY BY CITY

Article 1
General provisions
2.42.010
Definitions.
The following words and phrases, wherever used in this chapter, shall be
construed as defined in this section unless otherwise required by the context.
The singular shall be taken to mean the plural and the plural shall mean the
singular when required by the context of this chapter. The following definitions
apply to this chapter:
"City Administration Building Complex" means, collectively, the Lionel J .
Wilson Building (150 Frank H. Ogawa Plaza), the Dalziel Building (250 Frank H.
Ogawa Plaza), the Plaza Building (200 Frank H. Ogawa Plaza), City Hall (One
Frank H. Ogawa Plaza), Frank H. Ogawa Plaza, and City Center West Garage
(1250 Martin Luther King, Jr., Way).
"Development" means the new construction of buildings or other facilities,
or the substantial rehabilitation of existing buildings or other facilities.
"Disposition" means the sale, lease or any other form of property
disposition.
"Fair market value" means the amount that a willing buyer would pay a
willing seller for the real property, neither being under any compulsion to buy or
sell and both having reasonable knowledge of the relevant facts, in an open and
competitive market under all conditions requisite to the sale, and considering the
property's highest and most profitable use.
"Fair market rental value" means the rental income that a real property
would most likely command on the open market. Said rent shall be supported by
a review of current rents paid, and asked, for comparable property and/or space.
"Fair reuse value" means the amount that a willing buyer would pay a
willing seller for the real property, neither being under any compulsion to buy or
sell and both having reasonable knowledge of the relevant facts, considering the
proposed use of the property and the sale or rental value of the property with the
conditions, covenants, restrictions, and development costs associated with the
negotiated disposition and development.
"Lease" for purposes of this chapter and Section 219(6) of the Charter
means the grant by the City of a leasehold estate, rental, license, or other
exclusive or nonexclusive right under a less than fee simple estate to use or
occupy real property owned by the City for a set term, periodic term such as
month-to-month, or at will, with or without the payment of rent, lease payments,
license fees, or other consideration; but does not include an easement, equitable
servitude, or franchise. A "lease" includes a sublease or an assignment of a
lease by the City.
"NODO" means a Notice of Development Opportunity. For purposes of
this chapter, a "NODO" also includes a Request for Proposals (RFP), Request for
Qualifications (RFQ), or any other public solicitation of proposals, bids, offers, or
statements of interest for acquiring and developing real property.
"Sale", "sell", "conveyance" or "convey" for purposes of this chapter and
Section 219(6) of the Charter means the sale, grant, contribution or other
voluntary disposition by the City to another of a fee simple interest in real
property, with or without consideration, by grant deed, quitclaim, deed in lieu of
foreclosure, or other transfer; but does not include a lease, license, or grant of a
leasehold interest, easement, equitable servitude, option interest, security
interest, or other estate in real property less than a fee simple interest.
Notwithstanding the above, the conveyance of a leasehold interest for a term or
lease period exceeding 35 years, including any extension or renewal periods if
the extension or renewal is exercisable at the unilateral option of the lessee, shall
be treated as the sale of real property for purposes of this chapter.
"Substantial rehabilitation" means rehabilitation, the value of which is 25%
or more of the after-rehabilitation value of the building or facility inclusive of land
value.
"Real property" means land, buildings, structures and other fixtures or
immovable property affixed to the land.
)
"Telecommunications facility" means an installation of equipment for the

transmitting and receiving of radio frequencies, including the attachment of
antennas to buildings and other structures, and the construction of ancillary
support structures for such equipment. The term "telecommunications facility"
shall include any "micro facility," "mini facility," "macro facility," "monopole," or
"tower," as these terms are defined in Section 2700, et seq., of the Oakland
Planning Code.
"Undeveloped" means real property that is unimproved land, a surface
parking lot, or othen/vise not improved with permanent buildings or structures.
2.42.020
Implementation.
The City Administrator is authorized to implement this chapter and may

promulgate appropriate rules, regulations or guidelines for such purposes.
-6-
Article II
Sale of City-Owned Real Property, Generally
2.42.030
Applicability.
This Article shall apply to all sales of real property by the City, except for
the sale of real property for development. The sale of real property for
development shall be governed solely by Article IV below.
2.42.040
Compliance with state laws.
The City shall comply with all state laws, to the extent applicable,
governing the sale of real property, including the Surplus Lands Act (California
Government Code Sections 54220, et seq.).
2.42.050
Process for selling City real property.
A.
Competitive process. No real property shall be sold by the City
except after calling for oral or written competitive bids or offers, unless the
competitive process has been waived as provided for below. Each solicitation for
written competitive bids or offers shall contain the following:
1.
The time and place bids or offers are to be received.
2.
The minimum acceptable bid or offers on each parcel.
3.
A description of each parcel.
4.
The amount and type of deposit required of the successful

bidder or offeror. Said deposit shall be retained by the City if
the successful bidder or offeror fails or refuses to complete
the transaction.
5.
When the balance of the bid or offer price must be paid.
Oral competitive bids or offers may be received through a public auction

process or other competitive process.
Notice of the proposed sale and competitive process shall be published in
the official newspaper of the City or posted on the City's website. Bids or offers
shall be received in public at the time and place specified in the notice calling for
bids or offers. The sale, if accepted by the City Council, shall be awarded to the
highest bidder or offeror meeting the conditions specified in the notice calling for
the sale of the property. The City Council shall have the right to accept or reject
any and all bids or offers. If the highest bidder or offeror fails or refuses to
complete the transaction, the property may subsequently be sold through
negotiation to the next highest bidder or offeror willing to meet the same
minimum advertised terms and conditions.
If no bids or offers are received after advertising the property as required
by this chapter, the real property may subsequently be sold through negotiation,
subject to the approval of the City Council if required.
B.
Waiver of competitive process. Notwithstanding the above, the
requirement to undertake a competitive process and to post notice of the
proposed sale shall not apply to any of the following circumstances:
1.
The real property is to be sold to another public agency or

entity which has the power of eminent domain;
2.
The real property is undeveloped and less than 5,000 square

feet in land area;
3.
The real property has a fair market value of $100,000 or

less;
4.
The City Council has made a finding and determination that

calling for bids or offers on a competitive basis is impractical,
unavailing or impossible; or
5.
The City Council has made a finding and determination that

it is in the best interests of the City to sell the real property
by negotiated sale.
C.
Approval by ordinance. Per Section 219(6) of the Charter, all sales
of real property by the City must be authorized by an ordinance enacted by the
City Council, except as provided below.
D.
Administrative authoritv. Notwithstanding the above, the City
Administrator or his or her designee is delegated the full and complete authority
to sell City real property in any of the following circumstances:
1.
The sale is required by an agency of the state or federal

government;
2.
The real property is undeveloped and less than 5,000 square

feet in land area;
3.
The real property has a fair market value of $100,000 or

less; or
4.
The real property was formerly owned by the

Redevelopment Agency of the City of Oakland (the
"Redevelopment Agency") or the Oakland Redevelopment
Successor Agency ("ORSA"), and the Redevelopment

Agency or ORSA governing body delegated the authority to
sell the real property to the administrative staff of the
respective agency by resolution.
The City Administrator or his or her designee is authorized to negotiate
and execute all documents necessary for the sale of such real property and take
other actions necessary to complete such sale. No further City Council action is
required for such sales.
2.42.060
Sale price.
Real property must be sold for a price, payable in cash or other

consideration, equal to or exceeding the property's fair market value as
determined by an appraisal, unless either (1) the City Council has made a finding
and determination that the sale of the property for less than fair market value is in
the best interests of the City, or (2) a state or federal government agency
requires the sale of the property for less than fair market value.
2.42.070
Restrictions on sales to City officials.
The following enumerated officers and employees of the City may not as
principal, agent, attorney or otherwise, be directly or indirectly interested in the
sale of any City-owned real property. Mayor, members of the City Council,
members of the City Planning Commission, City Auditor, City Attorney, City
Administrator, City Clerk, Director of Finance, Director of City Planning, Director
of Planning and Building, Director of Public Works, Real Estate Services
Manager, employees of the Real Estate Division, and any other City employee
who, because of his or her position with the City, has a potential conflict of
interest or a potential advantage over other potential purchasers.
2.42.080
Grant of easements.
The City is authorized to grant temporary and permanent easements,

including equitable servitudes and right-of-way interests, for access to or use of
City real property. This shall include the grant of negative easements such as
conservation easements. Per Section 219(6) of the Charter, all such grants must
be authorized by an ordinance enacted by the City Council, except as provided
for below.
complete authority to grant any temporary or permanent easements for access to
or use of City real property without Council authorization in any of the following
circumstances:
1. The grant of easement is required by an agency of the state or federal
government;
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2. The easement area is less than 5,000 square feet;

3. The easement has a fair market value of $100,000 or less; or
4. The easement period is for one year or less.
and execute all documents necessary for the grant of such easements and take
other actions necessary to complete such grant. No further City Council action is
required for the grant of such easements.
Any grant of easement must be in exchange for a price, payable in cash or
other consideration, equal to or exceeding the fair market value of the easement
conveyed as determined by an appraisal, unless (1) the City Council has made a
finding and determination that the grant of easement for less than fair market
value is in the best interests of the City, or (2) a state or federal government
agency requires the grant of easement for less than fair market value.
Article III
Lease of City-Owned Real Property, Generally
2.42.090
Applicability.
This Article shall apply to all leases of City-owned real property by the
City, except for the lease (including ground lease) of real property for
development, or the special leases or licenses set forth in Article V below. The
lease of real property for development shall be governed solely by Article IV
below. Special leases or licenses shall be governed by the applicable specific
provisions set forth in Article V below.
2.42.100
Process for leasing City real property.
A.
Notice. Notice of the proposed lease of City real property shall be
published in the official newspaper of the City, or posted on the City's website,
unless the City Administrator or designee elects to list the property with a broker
or listing service.
B.
Approval by ordinance. Per Section 219(6) of the Charter, all
leases of City-owned real property by the City must be authorized by an
ordinance enacted by the City Council, except as provided below. An ordinance
may authorize a specific lease of a specific City property, or may authorize
general leasing of City property by the City Administrator under parameters
provided for in the ordinance.
C.
Administrative authoritv. Notwithstanding the above, the City
to lease City real property in any of the following circumstances:
10-
1.
The lease is required by an agency of the state or federal

government;
2.
The lease is for real property that is undeveloped and less

than 5,000 square feet in land area;
3.
The lease is for less than 2,000 square feet of leasable

space;
4.
The r:eal property was formerly owned by the

Redevelopment Agency or ORSA, and the Redevelopment
Agency or ORSA governing body delegated the authority to
lease the real property to the administrative staff of the
respective agency by resolution; or
5.
The lease is for a term of one year or less. For purposes of

this subsection, the term shall be calculated based ori the
maximum lease term the lessee may claim under the terms
of the lease without City approval, including unilateral
options on the part of the lessee to extend or renew the
term. The execution of a month-to-month lease, a lease with
a lease term of one year or less that includes an option on
the part of the City to extend the lease term past one year, or
an agreement or exercise of option to extend a lease term
past one year shall not require Council approval, if, after the
first year of the lease term, the lease permits the City to
terminate the lease unilaterally for any reason upon notice of
30 days or less.

and execute all documents necessary for the lease of such real property and
take other actions necessary to complete such lease. No further City Council
action is required for such leases.
2.42.110
Rent.
Real property must be leased for a rent or fee, payable in cash or other
consideration, equal to or exceeding the property's fair market rental value,
unless the City Council has made a finding and determination that the lease of
the property for less than its fair market rental value is in the best interests of the
City. In the" case of lessees who provide in-kind services in lieu of cash rent, the
value of such in-kind services to the City or the community at large may be
considered in making the required Council finding and determination. For
purposes of this chapter, in-kind services include benefits or values the provider
renders to the City or the community at large as a result of the tenancy in lieu of
payment of cash. This may include, but not be limited to, property security and
-11-
maintenance, social and cultural benefits to the community, or other appropriate

services.
2.42.120
Restrictions on leases to City officials.
The following enumerated officers and employees of the City may not as
principal, agent, attorney or otherwise, be directly or indirectly interested in the
lease of any City-owned real property: Mayor, members of the City Council,
members of the City Planning Commission, City Auditor, City Attorney, City
Administrator, City Clerk, Director of Finance, Director of City Planning, Director
of Planning and Building, Director of Public Works, Real Estate Services
Manager, employees of the Real Estate Division, and any other City employee
who, because of his or her position with the City, has a potential conflict of
interest or a potential advantage over other potential lessees.
2.42.130
Limitations on lease term.
Per Section 1001 of the Charter, no lease of City real property may be for
a term greater than 66 years.
Article IV
Sale or Lease of City-Owned Real Property for Development
2.42.140
Intent and application.
This article is intended to facilitate the City's sale, lease, or disposition of

real property for development to promote the economic development, housing,
environmental, and community development goals of the City under the
procedures set forth in this article. Any sale, lease, oriother disposition of Cityowned real property that conditions the transaction on the development of the
property by the purchaser or tenant shall be governed by this article.
2.42.150
Authority.
The City Administrator shall have the authority to make the initial
determination whether a property should be conveyed for development under this
article, or under other disposition provisions in this chapter.
2.42.160
Compliance with State laws, if applicable.
The City shall comply with the Surplus Lands Act (California Government
Code Sections 54220, et seq.) if and to the extent applicable to the disposition of
the property. Should the property be intended for development as affordable
housing, the City shall also comply with California Government Code Sections
37362, et seq., if and to the extent applicable.
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2.42.170
Process for disposition of property for development.
A.
The City Administrator shall market the real property by issuing a
public and competitive NODO to potential developers and other interested
^
parties. The NODO shall request potential developers and other interested
parties to submit written purchase or leasing and development proposals for the
property.
B.
Notwithstanding the above, the City Administrator may elect to
waive the competitive NODO process and negotiate a disposition transaction
with a selected developer, if the City Administrator determines that (1) disposition
through a competitive NODO process is impractical, or (2) disposition through a
process other than a competitive NODO process is othenwise in the best
interests of the City. The City Administrator must explain the basis for any such
waiver when he or she presents the proposed disposition to the City Council, and
the City Council shall make findings in support of any waiver of the NODO
process as a condition to approving any transaction.
C.
In evaluating development proposals for real property under this
article, the City Administrator may consider, without limitation, in addition to price,
any of the following factors:
1. '
The value of the proposed use of the real property to the

community and the City as a whole.
2.
The compatibility of the proposed development and use with

current zoning and community plans applicable to the real
property.
3.
The compatibility of the proposed development and use with

the character of the surrounding neighborhood.
4.
The experience, capacity and financial resources of the

proposed developer
5.
The quality of project design.
6.
The environmental sustainability of the proposed

development.
7.
Community and public objectives achieved by the proposed

development, such as creating jobs, expanding the tax base,
providing other fiscal benefits, providing needed commercial
or social services, providing or improving needed
infrastructure, increasing, improving or preserving the stock
of housing affordable to low and moderate income
households, eliminating physical or economic blight, and
contributing to the economic vitality of the neighborhood.
-13-
8.
Other factors, as the City Administrator may deem

applicable.
D.
Following his or her evaluation of development proposals, the City
Administrator shall make his or her recommendations as to the proposed
development and the terms and conditions of the proposed development to the
City Council. The City Council may evaluate the City Administrator's
recommended development proposal and any other proposals based on the
considerations set forth above.
E.
Per the City Charter, any such approval of a lease (longer than one
year) or a sale of the property requires a Council ordinance.
2.42.180
Disposition price.
A.
The real property may be disposed of either at its fair market value,
fair rental value, or at its fair reuse value, based on the City's assessment of the
proposed development and use, prevailing market conditions and development
climate at the time of disposition, and other economic and noneconomic factors.,
The City Administrator shall complete an analysis of the property's fair market
value, fair rental value, or fair reuse value, as applicable, in determining an
appropriate disposition price.
B.
The ordinance authorizing the disposition of the real property shall
include either a finding that the property is being conveyed at its fair market value
or fair rental value; or, if the property is being conveyed for less than fair market
value or fair rental value, a finding that the property is being conveyed at its fair
reuse value with the reasons for the below-market conveyance.
C.
The City shall comply with the procedures set forth in California
Government Code Sections 52201, et seq., and California Government Code
Sections 53083, et seq., to the extent applicable to the disposition of the real
property for development.
D.
If the property is being conveyed at less than fair market value or
fair rental value, all City employment and contracting programs pertaining to
subsidized projects shall apply.
2.42.190
Agreements to Effectuate Intent of Negotiated Development.
A.
Any disposition of real property pursuant to this article shall be
conditioned on the development and use of the property as negotiated. The City
and the purchaser shall enter into a disposition and development agreement,
lease disposition or development agreement, or similar agreement governing the
transaction. Such agreement shall set forth the terms and conditions of the
disposition of the property, the obligations of the purchaser to develop the
agreed-upon project, and any long-term restrictions on the use of the property.
-14-
The agreement may contain covenants or conditions running with the land, and
may include rights of reverter, repurchase rights, termination rights, or other
provisions securing the satisfactory performance of development covenants and
other purchaser obligations.
B.
The City Administrator is authorized to negotiate and execute
agreements and to take whatever other action is necessary with respect to the
approved development. The City Attorney shall review and approve all
documents and agreements related to the transaction as to form and legality, and
a copy Shalt be placed on file with the City Clerk.
Article V
Special Licenses and Leases
2.42.200
Parking licenses in the Central District.
A.
Pursuant to Section 219(6) of the City Charter, the City
Administrator or his or her designee is authorized, in his or her discretion, to
grant licenses for parking facilities owned by the City in the Central District .
Redevelopment Project Area, subject to the limitations set forth below. The City
to enter into agreements, without further specific City Council action, as needed
to grant such licenses, and to conduct related activities consistent with the
purposes of this section.
B.
The above delegation of authority is subject to the following
parameters:
1.
The authority to grant licenses under this section is restricted

to a cumulative maximum of 200 spaces per licensee;
2.
Licenses must be at the prevailing market rate, as

determined by the City Administrator or his or her designee;
3.
Licenses may not be assignable by the licensee;
4.
The City may retain the option to change the assigned

parking facility;
5.
The maximum term of any license agreement may not

exceed ten years with two five-year extensions at licensee's
option; and
6.
The license must be revocable by the City for just cause.
Any City license agreements exceeding one year that do not conform to
these parameters must be approved by the City Council. In addition, parking
-15-
licenses granted pursuant to disposition and development agreements shall

continue to be subject to Council approval.
C.
The Council finds and determines that, because of the unique
nature of the parking licenses and the need to expedite the process for approving
the use of City real property in order to serve the City's business retention and
attraction goals and to maximized revenue, it is in the best interests of the City
not to require competitive bidding for the use of City property for parking licenses.
Therefore, the provisions of this chapter related to competitive process for
leasing or licensing real property shall not be applicable to the licensing of City
parking spaces under this section. All procedural requirements in other sections
of the chapter are hereby superseded in favor of the requirements of this section
with respect to the licensing of City parking spaces under this section.
D.
All licenses and other agreements entered into pursuant to this
section shall be reviewed and approved by the Office of the City Attorney prior to
City execution.
2.42.210
Telecommunications leases and licenses.
A.
Pursuant to Section 219(6) of the City Charter, the City
Administrator or his or her designee is authorized, in his or her discretion, to
grant licenses, enter into leases, or convey easements with respect to any real
property owned by the City, or any real property in which the City holds a
property interest, for use as a telecommunications facility. Said use must be
consistent with the standards and requirements set forth in Ordinance No. 11904
C.M.S. and the Oakland Planning Code with respect to telecommunications
facilities, as well as state and federal law governing these uses. The City
Administrator or his or her designee is granted the full and complete authority to
enter into agreements, without further specific City Council action, as needed to
lease, convey easements, or grant licenses with respect to City property for use
as telecommunications facilities consistent with this section, and to conduct
related activities consistent with the purposes of this section. Any lease, license
or grant of easement of City property for a telecommunications facility must be
for an amount at least equal to the market value of the interest conveyed, as
determined by the City Administrator or his or her designee.
B.
The City Administrator or his or her designee shall submit annual
reports to the City Council on City real property that has been leased, licensed,
or conveyed for telecommunications facilities pursuant to this section.
C.
The Council finds and determines that, because of the unique
nature of the siting of telecommunications facilities and the need to expedite the
process for approving the use of City real property in order to encourage the
growth of the telecommunications industry in Oakland, and because the Oakland
Planning Code includes detailed standards regulating this use to protect public
health, safety, and welfare, it is in the best interests of the City not to require
competitive bidding for the use of City property for telecommunications facilities.
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Therefore, the provisions of this chapter related to competitive process for

leasing or licensing real property shall not be applicable to the lease, license or
conveyance of easements with respect to City real property (whether surplus or
non-surplus) for telecommunications facilities. All procedural requirements in
other sections of the chapter are hereby superseded in favor of the requirements
of this section with respect to the lease, license or conveyance of easements for
telecommunications facilities.
D.
All leases, licenses, deeds, and other agreements entered into
pursuant to this section shall be reviewed and approved by the Office of the City
Attorney prior to City execution.
E.
The scope of this section shall be limited solely to the use of City
property for the siting of telecommunications equipment, and shall not govern the
use of City property for office or other uses, even if those uses may be
associated with telecommunications activities.
2.42.220
Headstart leases.
A.
The City Administrator or his or her designee is authorized to
negotiate and execute all documents required to enter into lease agreements for
the Head Start and Even Start programs, including without limitation leases for
terms greater than one year, provided that the necessary federal funds have
been awarded and appropriated and are available to cover lease expenses and
other related costs.
B.
The City Administrator or his or her designee, for unforeseen
contingencies, is authorized to modify, make changes to, or amend said leases,
provide that any additional cost thereof is covered by appropriated funds.
2.42.230
City Administration Building Complex leases.
'
A.
The City Administrator or his or her designee is authorized to
negotiate and execute tenant leases for space in the City Administration Building
Complex. The City Administrator or his or her designee is granted the full and
complete authority to enter into agreements, without further specific City Council
action, as needed to lease said space and to conduct related activities consistent
with the purposes of this section.
B.
The City Administrator may only execute leases under this section
that fall within the following parameters:
1.
Applicable leases for the Dalziel Building and the Plaza

Building shall be in compliance with the Wetmore/Pardee
Relocation Agreement dated April 20, 1995.
2.
Minimum monthly triple net rent for non-Wetmore/Pardee

Relocation Agreement retail tenants in the Dalziel Building
-17-
shall be not less than $1.25 per square foot, excluding any
rent credits for tenant improvements.
3.
Minimum monthly triple net rent for retail tenants in the

Lionel J. Wilson Building, City Center West Garage, or Frank
H. Ogawa Plaza shall be not less than $1.25 per square foot,
excluding any rent credits for tenant improvements.
4.
Minimum monthly gross rent for office tenants in the Dalziel

Building shall be not less than $1.50 per square foot,
excluding any rent credits for tenant improvements and a
credit for possessory interest.
5.
Maximum tenant allowances for the Lionel J. Wilson

Building, City Center West Garage, or Frank H. Ogawa
Plaza retail spaces and Dalziel Building retail and office
spaces shall be $25.00 per square foot.
6.
Minimum lease term shall be three years for retail and office
spaces, unless the City Administrator determines that it
would be in the best interests of the City to enter into monthto-month leases for certain spaces.
SECTION 4. Chapter 2.43 is hereby added to the Oakland Municipal Code to

read as follows:
Chapter 2.43
GRANT OF PUBLIC UTILITY FRANCHISES
2.43.010
Public utility franchises.
No person, firm or corporation shall exercise any franchise permit or

privilege mentioned in this chapter, except insofar as he or it may be entitled to
do so by direct authority of the Constitution of the State of California or the
Constitution or laws of the United States, in, upon, over, under or along any
public place in the City of Oakland, unless he, she or it shall have obtained a
grant therefor in accordance with the provisions of this chapter and of the
applicable provisions of the Charter. Nothing in this chapter shall be construed to
invalidate any lawful franchise heretofore granted, nor to necessitate the
obtaining of a new franchise for a use for which a franchise holder shall have a
valid unexpired franchise.
2.43.020
Scope of chapter.
Except insofar as he, she or it may be entitled to do so by direct authority

of the Constitution of California, or of the Constitution or laws of the United
-18-
States, no person, firm or corporation shall exercise any privilege enumerated in

this section unless he, she, or it shall have been granted an appropriate franchise
therefor by the City of Oakland, namely:
(1)
Construct, maintain or operate a street, interurban, underground, or

elevated steam or commercial railroad, or other system for
/^transporting or conveying passengers or freight (including any
appurtenances which are a part of the system) over a fixed route,
along, upon, over, in, under or across any public place in the City of
Oakland.
(2)
Construct, maintain or operate pipes, tubes or conduits along,

upon, over, in, under or across any public place in the City of
Oakland for the purpose of transmitting or distributing water, gas,
steam, oil, air or other substance or utility.
(3)
Erect, construct, lay, maintain or operate poles, pipes, conduits,

wires, cables, or appurtenances, upon, over, under, in, across or
along any public place in the City of Oakland for the purpose of
transmitting or distributing, power, heat, electricity or electric
energy, or for communication by telephone, telegraph, or other
system.
(4)
Construct, maintain or operate any other plants or systems

necessary or convenient for furnishing the City and its inhabitants
with transportation, communication, water, light, power or other
public utility service, upon, over, in, across, or along any public
place in the City of Oakland.
The term "public place" as used in this chapter shall be deemed to include
any street, lane, alley, court or other public place in the City.
Nothing in this chapter shall be construed to require motor, contract or
other carriers of freight or passengers not operating over a fixed route to obtain
franchises for use of any public place of the City.
Nor shall anything in this chapter be construed to invalidate any lawful
franchise heretofore granted, nor necessitate the obtaining of a new franchise for
a use for which a franchise holder shall have a valid unexpired franchise.
Notwithstanding the above, this chapter shall not apply to (1) leases or
licenses of City public space, including without limitation telecommunications
leases and licenses (said leases and licenses are governed by Chapter 2.42), (2)
state video service franchises (said franchises are governed by Chapter 5.17), or
(3) any franchise in which the City's authority to grant or regulate the franchise is,
preempted by state or federal law.
-19-
2.43.030
Grant of franchises.
Pursuant to its constitutional, charter and statutory authority, the Council

of the City of Oakland may grant franchises and privileges for all of the purposes
enumerated in Sections 2.43.010 and 2.43.020 of this chapter to persons, firms,
and corporations, whether operating under any existing franchise or not, upon
such terms and conditions as are in the applicable provisions of the Charter, of
this chapter and of any supplementary ordinances provided, and may in such
franchises impose such other and additional terms and conditions not in conflict
with said Charter or ordinances, whether governmental or contractual in
character, as in the judgment of said Council are in the public interest.
2.43.040
Consideration.
No franchise shall be granted without reserving to the City adequate

consideration for the privilege conferred.
No franchise shall be deemed to grant the right to install public utility
facilities in any public park or playground unless the franchise ordinance
expressly so provides.
2.43.050
Application.
An applicant for any franchise above mentioned shall file with the Council
a verified application which shall state: (a) the name of the applicant, (b) the
purpose and term, whether definite or indeterminate, for which the franchise shall
be desired, (c) the amounts and/or percentages, if any, applicant, if granted the
franchise, will pay to the City during the life of such franchise, (d) any limitations
as to time, place or type of services proposed by applicant, and (e) any other
terms or conditions that applicant may desire, including surrender of existing
franchises, or parts, thereof, or claims to such franchises, or proposals to settle
any litigation or controversies between applicant and the City.
Franchise applications shall set forth such other information as the Council
may require.
2.43.060
Fee.
Every application for a franchise, permit or privilege shall be accompanied

by a cash deposit or not less than Five Hundred Dollars ($500), or by a certified
check for said amount, payable to the City Treasurer and certified by some
responsible bank in the City of Oakland as a fund out of which to pay all
expenses connected with such application. The deposit of the applicant shall be
retained until the acceptance of the franchise and the filling of any bond or other
security required or until the Council determines not to grant the franchise,
whereupon the remainder, if any, of the $500 after the payment therefrom of all
expensed incurred by the City in connection with the advertising, engineering.
-20-
clerical work and awarding of such franchise privilege or permit, shall be

returned.
2.43.070
Bidding.
The City Council may grant a franchise by ordinance without taking bids or
may, in its discretion, advertise for bids for the sale of a franchise after notice ,
inviting bids therefore upon a basis, not in conflict with the provisions of the
Charter, to be set out in advertisements for bids and notice of sale, provided that
no bidding shall be had or required upon any renewal of a franchise, surrender of
existing franchise or parts thereof, or in settlement of litigation between the
grantee and the City.
2.43.080
Transportation franchises.
Every franchise granted a transportation company shall specify the area in

which the grantee shall operate, the public places or routes to be followed by the
tracks or vehicles of the grantee-which area, public places and routes shall be
subject to the lawful orders of the Public Utilities Commission of the State of ^
California.
The franchise may also provide for the changing of such routes or for
alternate routes, provided such change or alternate routes shall be subject to the
lawful orders of said Public Utilities Commission.
2.43.090
Bonds.
The Council may require the grantee of any franchise to provide such
bond or other security as it deems the public interest requires.
2.43.100
City Administrator recommendations.
Every application made to the Council for a franchise, privilege or permit

mentioned in this chapter shall before any action is taken thereon, be referred by
the Council to the City Administrator and the City Attorney for their respective
recommendations.
Before making his or her recommendation to the Council, the City
Administrator shall obtain the recommendations of the Superintendent of Streets,
the Planning Engineer and the Traffic Engineer.
If, in the judgment of the City Administrator, the franchise permit or
privilege applied for should not be advertised for sale or granted, he or she shall
so report stating the reasons therefor; and if, in his or her judgment, such
franchise, permit or privilege should be granted, he or she shall recommend the
terms and conditions upon which the same should be granted.
-21-
2.43.110
Resolution and notice.
Upon receipt of the City Administrator's recommendation, the Council may

pass a resolution declaring its intention to grant the franchise, stating the
character of the same setting forth a notice of the day, hour and place when and
where any and all persons having any objection to the granting thereof may
appear before the Council and be heard thereon, and directing the City Clerk to
publish said notice in the official newspaper at least once within fifteen (15) days
after the passage of said resolution. The time fixed for such hearing shall be not
less than twenty (20) nor more than sixty (60) days after the date of the passage
of said resolution.
Such notices shall state the name of the applicant, the character of the
franchise, its term, whether definite or indeterminate, the amounts and or
percentages, if any, grantee shall pay to the City during the life of such franchise,
any limitations as to time, place or type of service proposed, the amount and
character of any bond or other security required, together with an outline of the
other major provisions of the proposed franchise.
2.43.120
Hearing.
At any time not later than the hour set for the hearing of objections, any
person interested may make written protest stating objections against the
granting of such franchise.. Such protest must be signed by the protestant and
be delivered to the City Clerk. At the time set for the hearing objections the
Council shall proceed to hear and pass upon all protest so made and its decision
shall be final and conclusive. The Council may adjourn said hearing from time to
time.
If no protest in writing shall have been delivered to the Clerk up to the hour
set for hearing, or such protests as shall have been filed shall have been heard
and determined by the legislative body to be insufficient or shall have been
overruled or denied, the Council may grant such franchise. Such franchise shall
be granted by ordinance adopted in the manner prescribed by the Charter for the
enactment of franchise ordinances.
2.43.130
Transfer.
No franchise, permit or privilege granted by the City shall be, in whole or in

part, leased, assigned or othenwise disposed of, or transferred without the
express consent of the City given by ordinance, and no deadlines with any one
on the part of the City to require the performance of any act or payment or any
compensation of any one shall be deemed to operate as such consent; provided
that nothing herein shall be construed to prevent the grantee from the City of
such franchise, permit or privilege from including it in a mortgage or trust deed
without such express consent.
-22-
The grantee of any franchise granted pursuant hereto shall (a) construct,
install and maintain all tracks, pipes, tubes, conduits, poles, wires,
instrumentalities and appurtenances in accordance and in conformity with all of
the lawful ordinances, rules and regulations theretofore or thereafter adopted by
said Council in the exercise of its police powers and as to State Highways
subject to the provisions of general laws relating to the location and maintenance
of such facilities therein, (b) pay to the City on demand the, cost of all repairs to
public property made necessary by any operations of the grantee under such
franchise, (c) indemnify and hold harmless the City and its officers and
employees from any and all liability for damages proximately resulting from any
operations under such franchise, and (d) make such reports and permit such
examination of its records as the franchise may require.
Nothing in this chapter shall be construed as prohibiting the Council from
including in any ordinance granting any franchise, permit, or privilege such other
conditions or requirements not inconsistent with the provisions of the Charter as
the Council may desire to have so inserted.
2.43.140
Acceptance.
The grantee of any franchise granted under this chapter shall within ten
(10) days after the franchise is granted, file with the City Clerk a written ,
acceptance of the terms and conditions thereof and any bond or other security
required by the Council.
2.43.150
Emergency franchises.
^ When the Council shall find that an emergency exists and that public
convenience and necessity require it, a special permit may be granted to an
applicant for a franchise under this chapter to permit such applicant to proceed
with the relocation, extension, alteration or other change in existing facilities,
except repairs or maintenance changes, which relocation, extension, alteration or
other change in existing facilities by reason of such emergency should be made
before the securing of a franchise under this chapter is possible.
Such special permits shall only be granted to an applicant for a franchise
under this chapter, and after the filing of the application for a franchise as in this
chapter provided.
An application for a special permit shall be filed in writing with the Council
setting forth such information as will permit action thereon. Reference in said
application may be made to the application for a franchise for a description of the
proposed extension, alteration or other change in existing facilities.
All such special permits shall be granted under the express condition that
if a franchise under this chapter is not granted and accepted, all work done under
such special permit shall be removed immediately at applicant's expense and the
streets or alleys or other public places affected by such work shall be placed in
-23-
as good condition as before such work was done, all to the satisfaction of the
Superintendent of Streets.
The Council may require, as a condition to the granting of such special
permits, that a bond of a kind and in an amount determined by it shall be
furnished by applicant conditioned upon the faithful performance of the terms and
conditions of the permit and further conditioned that applicant shall prosecute
diligently to completion all work thereunder including removal work as
hereinbefore provided.
Applications for permits under this section shall be referred to the City
Attorney and the City Administrator in the manner provided in Section 2.43.100
hereof.
SECTION 5. The provisions of this Ordinance are severable, and if any clause,
sentence, paragraph, provision, or part of this Ordinance, or the application of this
Ordinance to any person, is held to be invalid, such holding shall not impair or
invalidate the remainder of this Ordinance. It is hereby declared to be the legislative
intent that this Ordinance would have been adopted had such provisions not been
included.
SECTION 6. This Ordinance shall be in full force and effect immediately upon
its passage as provided by Section 216 of the City Charter if adopted by at least six
members of the City Council, or upon the seventh day after final adoption if adopted by
fewer votes.
IN COUNCIL, OAKLAND, CALIFORNIA,
, 2014
PASSED BY THE FOLLOWING VOTE:

AYES - BROOKS, GALLO, GIBSON MCELHANEY, KALB, KAPLAN, REID, SCHAAF, AND
PRESIDENT KERNIGHAN
NOESABSENTABSTENTION ATTEST:
-24-
'
LATONDA SIMMONS
City Clerk and Clerk of the Council of
the City of Oakland, California
AN ORDINANCE UPDATING AND REVISING THE CITY'S REAL

PROPERTY ACQUISITION AND
DISPOSITION LAWS,
AND
CODIFYING SUCH LAWS INTO THE OAKLAND MUNICIPAL CODE
NOTICE
AND
DIGEST
This Ordinance adds Chapter 2.41 to the Oakland

Municipal Code updating, revising, and codifying existing
City ordinances governing the acquisition of real property
by the City by purchase or lease, Chapter 2.42 updating,
revising, and codifying existing City ordinances governing
the disposition of real property by the City by sale or
lease, and Chapter 2.43, updating, revising and codifying
the City's ordinance governing the grant of public utility
franchises^y the City.
^ X ^
iO
o
CM
CD
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AGENDA REPORT

SUBJECT: DDA for 12th St Remainder Parcel

FROM: Mark Sawicki

DATE: February 27, 2015

John A. Flores, Interim City Administrator

John A. Flores, Interim City Administrator

John A. Flores, Interim City Administrator

John A. Flores, Interim City Administrator

A lobby and lounge area, on ground level (3,000 sf);

A green roof, on the 6th floor (approx. 3,400 sf);

A roof terrace, on the 8th floor (approx. 3,500 sf); and,

Off-site improvements involving enhancement of the adjacent City-owned open

John A. Flores, Interim City Administrator

John A. Flores, Interim City Administrator

John A. Flores, Interim City Administrator

Anticipated Economic Benefits to City

John A. Flores, Interim City Administrator

John A. Flores, Interim City Administrator

John A. Flores, Interim City Administrator

John A. Flores, Interim City Administrator

John A. Flores, Interim City Administrator

John A. Flores, Interim City Administrator

12th Street Remainder Parcel Briefing Paper

1. Work Force Housing - Largest Unmet Need

2. Central City East

Miley Gardens Senior

b. Past Production 2007-2014

d. Site More Symbolic than a Solution to Housing Crisis

January 22, 2015

Dear Mr. Golde:

To: James Golde

The appraisal is subject to the following extraordinary assumption:

Attached as Exhibit E are statements of the professional qualifications of

Front of subject looking

Side of Subject (2nd

North Side of subject

East 12th Street looking

2nd Avenue looking north

2nd Avenue looking south

SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS.............................1

Reference No. 140665

SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS

12th Street Remainder Parcel, East 12th Street & 2nd

D-LM-1, Lake Merritt Station Area District Mixed

The property was formerly part of the 12th Street right

Highest and Best

Immediate development with a multi-unit residential

Nine to twelve months.

Sales Comparison Approach:

Reference No. 140665

SCOPE OF APPRAISAL ASSIGNMENT

Client and UrbanCore Development LLC

Form an opinion of market value of the

Assist intended user in evaluation of the property

See Extraordinary Assumptions enumerated in Section

Replacement Cost Approach; not applicable

The Replacement Cost Approach is based on the

Reference No. 140665

indicated by comparison with recent sales of

Physical inspection and verification of land areas,

Reference No. 140665

IDENTIFICATION OF THE PROPERTY

Parcel 1, as shown on Parcel Map 10111, filed