East Bay Market Report

With housing demand slowing, Oakland shifts gears with a redevelopment project at Jack London Square while Kaiser Permanente moves ahead with a new medical center replacement project.

By Greg Aragon

Despite a housing slump that’s impacting the Oakland area and its ambitious Downtown 10k Housing Initiative, work continues on two high-profile local projects in the mixed-use and health-care sectors.

Patrick Lane, redevelopment manager for the city of Oakland, says currently “both sales rate and price are below what was expected” in the housing market.

“The 10K produced a large number of units and the absorption is slow,” he says. “There are 2,193 units with planning approvals and 3,905 units in planning, but nothing has started construction in over a year.”

The 10K Downtown Housing Initiative was launched in 1999 by then-Mayor Jerry Brown to attract 10,000 new residents to downtown Oakland by encouraging the development of 6,000 market-rate housing units.

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According to the city’s Web site, the initiative, as of April 2008, has resulted in the following: 30 projects (2,676 units) have been completed; 17 projects (1,892 units) are in construction; 24 projects (2,193 units) have received planning approvals; and 24 projects (3,905 units) are in the planning process.

Still, other projects are in demand in the East Bay.

“There has been a lot of interest in restaurants, bars, cafes and clubs,” Lane says.

One is the $400 million Jack London Square Redevelopment Project, a 14-block mixed-use destination on the Oakland waterfront across from the Oakland Estuary, which is being developed by San Francisco-based Ellis Partners LLC. The land is owned by the Port of Oakland.

“There is a huge pent-up demand for this project,” says Dean Rubinson, senior vice president of development for Ellis Partners. He says the development will give the people of Oakland something they desperately want and need: a place on the waterfront to go for dining, retail and entertainment.

As for a housing slump, Rubinson adds that it hasn’t affected the Jack London project “at all.” He says the development is located next to recently completed condominiums “full of tenants” eager for such a project.

The highlight and first phase of the 1-million-sq-ft redevelopment is Jack London Market, a 200,000-sq-ft, six-story building that broke ground in October of last year.

The first floor of the market will house 70 vendors selling fish, local fruits and vegetables, meats, and cheeses. The second floor will offer cafes and fine dining, and the upper floors will feature 100,000 sq ft of Class A office space. And a soaring 52-ft atrium will provide a sense of openness throughout the building.

Ellis Partners says that when complete in April, it will be the largest of its kind on the West Coast.

Other pieces of phase one include a 32,000-sq-ft, two-story, mixed-use building known as 10 Clay; and a seven-story, 1,100-space parking garage being built by Pasadena-based Pankow Builders.

San Francisco-based RMW Architecture (along with Steven H. Worthington Architects) is project designer, and Seattle-based Howard S. Wright Construction is general contractor for both the market and 10 Clay.

Anthony Batarse, president of the Oakland Board of Port Commissioners, says this phase will create 2,000 new permanent jobs, 650 jobs during the construction phase, and an additional $2.9 million in annual taxes.

Future construction phases at Jack London Square are set to include another 500,000 sq ft of office and retail buildings, and a 250-room hotel.

Another endeavor pushing forward is the $100 million first phase of the Kaiser Permanente Oakland Medical Center Replacement Project.

Led by St. Louis-based McCarthy Building Cos. as general contractor, and NBBJ Architects of San Francisco, the project involves the construction of the 165,000-sq-ft Broadway Medical Office Building, which will house 50 doctors and a variety of exam, physical therapy and cancer care rooms, as well as labs and educational classrooms.

Ground for the five-story structure was broken last spring.

This phase also includes a 500-space parking garage, being built by Richmond-based Overaa Construction; and a 40,000-sq-ft office building being built by Pankow.

All three projects, located on West MacArthur Boulevard at Broadway, are scheduled to complete in summer 2009.

The second phase will include demolition of the existing medical building center and construction of the replacement hospital, a specialty medical office building and the central utility plant.

The demolition of the current hospital and construction of the administrative building will make up the third phase.