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Revitalize Alameda Point – Residents Claim Oak Knoll Poses an Imminent and Substantial Threat to Oakland Residents

In a letter to the City Attorney of Oakland, and released to various City of Alameda officials, staffers and residents, Donald J. Mitchell, President of the Sequoyah Hills/Oak Knoll Neighborhood Association asserts that SunCal’s languishing Oak Knoll project poses an “imminent and substantial” fire threat to Oakland residents.

We’ll have more later, but here is an excerpt of the letter that covers the gist of it:

SunCal/Lehman LLC made a calculated business decision more than a year ago to abruptly and irresponsibly abandon their 165 acre development at the former Oak Knoll naval hospital site, located in Oakland, which totals 174 acres. They dumped onto their neighbors, whom they courted when it was convenient, a deadly situation which threatens the lives of thousands of Oakland residents as well as hundreds of homes should a fire break out at the site. (I have copied SunCal here, as well as City of Alameda officials and others, in light of the fact that SunCal, after abandoning Oak Knoll, is conducting business as usual in Alameda in an attempt to develop prime property there.)

The site, a portion of which is owned by the city of Oakland, contains nearly 100 blighted structures the majority of which consist of highly flammable wood‐framed construction. Prior to obtaining approval for development SunCal was permitted by the city to begin selective demolition, possibly in violation of Oakland’s building code if not common sense, resulting in most buildings being left stripped of their doors and windows as well as their fire resistant interior finishes and roof shingles. These structures pose an immediate, extreme and unacceptable risk in that any fire on site will likely develop into a major conflagration similar to what Oakland experienced during the urban firestorm of 1991‐ the worst urban fire in American history. In that tragedy, as bad as it was, city fire crews at least had the benefit of fire resistant structures and navigable roads.

5 comments to Revitalize Alameda Point – Residents Claim Oak Knoll Poses an Imminent and Substantial Threat to Oakland Residents

  • anonymous

    They should turn this site over to the Oakland Zoo and make it a real destination rather than a blight. The Zoo wants to expand, the neighbors don’t want it to expand there. Why not put this blighted eye sore to good use by having the zoo move in and make a win-win. Suncal failed and the citizens of Oakland should not have to stand by and suffer for it.

  • barb

    Gee could SUNCAL possibly do this to Alameda too?

  • Detailer

    I make this comment as a person who has easy access to and reads bankruptcy court files. I do not work for SunCal or its partner Lehman Brothers, nor do I work for their lawyers or the Oak Knoll bankruptcy trustee.

    Sadly, if you read the exhibits to the court pleadings in the bankruptcy case involving Oak Knoll, called In re Palmdale Hills, pending in the U.S. Bankruptcy Court in Santa Ana, you would see a transcript of a court hearing at the Lehman Brothers bankruptcy court in New York City. In that hearing transcript SunCal’s bankruptcy lawyer asked the New York Bankruptcy judge to please release money that Lehman as a bankruptcy debtor in possession is holding but which really belongs to the various Lehman/SunCal entities, so that critical public safety work could be done, including completing demolition on Oak Knoll, strengthening a canal bank in a project on the Delta, and finishing dangerous half built streets in Orange County.

    The Lehman Brothers bankruptcy judge said, in essence, “Screw you and the people of Oakland. All of the money is going to be used to pay Lehman Brothers creditors here in New York.” I was actually shocked when I read the judge’s comments in the transcript, in terms of their tone, and his complete disregard for public safety. Interestingly enough, there is a specific U.S. Code section which requires all bankruptcy debtors to comply with federal, state and local public safety laws…but this judge simply didn’t care to comply with the law he knows damn well exists, and SunCal’s lawyer was so obviously intimidated by the judge’s tone and manner that he didn’t say anything about that code section.

    What is equally interesting, is that for one month, about 8 months ago, Lehman Brothers was telling SunCal’s bankruptcy court in California that Lehman wanted to negotiate with the bankruptcy trustee for the Oak Knoll property, and the other properties with a trustee, and with SunCal, to “try to settle” these safety issues. Then nothing happened. Just recently, Lehman Brother’s California lawyers filed their legal fee billing ($875 per hour) and timesheets with the New York bankruptcy court, asking the judge to approve payment of their fees from debtor Lehman’s funds. I actually looked at the timesheets, trying to figure out what happened to the “settlement negotiations”. It turned out that Lehman Brothers’ California lawyer spent only 2 hours discussing such a settlement with 3 unnamed Lehman employees, and then nothing further was done. Lehman gave the bankruptcy trustee about 1 month’s worth of money to secure the properties, and then cut off any further funding or negotiation.

    Lehman’s California lawyer spending so little time on discussing settlement on the safety issues with his own client (Lehman), and apparently not even discussing or negotiating them with the trustee or with SunCal is certainly logical, given that no public agency in California has exercised its “police powers” against Lehman Brothers on health and safety issue, even though there is another specific provision in the Bankruptcy Code which says the bankruptcy judge cannot interfere with the states, cities and counties exercising those powers to protect the public, and that the public agencies don’t need the bankruptcy judge’s permission to take those enforcement actions.

    Lehman Brothers sitting on its hands, with the billions of dollars in income each month, despite being in Chapter 11 Bankruptcy, is entirely consistent with the public statements made by the person who is now running Lehman Brothers, Brian Marsal, the “Chief Restructuring Officer”. When asked by the press about what he was going to do with or about the SunCal properties, this arrogant fellow said he wanted to let them sit as is, spend not money on them, and wait until the market turns around sell them at a profit.

    Given the unlikely chance that Lehman Brothers could sell the Oak Knoll property it owns, through a limited liability company with SunCal, at a profit any time soon, it looks like Lehman Brothers firmly intends to do nothing to resolve the obvious public safety issue at Oak Knoll.

    It also looks like the City of Oakland’s public officials are going to get off their behinds and do something in terms of enforcing the public safety laws. Any competent “municipal lawyer” knows about that public health and safety exception to the bankruptcy code, as described above, and just goes ahead and enforces the city’s public safety poweres. So I don’t know what’s wrong with the lawyers for the City of Oakland or their City Council.

    I say issue a safety abatement and building tear down order to Brian Marsal and Bruce Elieff, and that if it is not complied with in a prompt way, file a criminal complaint against the two men ultimately responsible, respectively, for management Lehman and SunCal, and haul them off to jail.

  • What’s wrong with the City of Oakland officials? They’re in the tank with the developers as are most of Alameda’s City Officials and AUSD board of directors…

  • Gosh, this sounds awfully similar to what happened with the FISC fire – big building, everyone “Trying” to get it torn down, big ‘ole toxic fire the city FD couldn’t handle.

    These developers – and SunCal in particular – are a scourge.