City Government

After San Pablo Ave. Fire, City Modified Real Estate Deal to Financially Benefit Building Landlord

Published

9 years ago

April 5, 2017

Oakland Post

The city went out of its way to acquire state-owned land to exclusively benefit the landlord’s company

By Darwin Bond Graham, East Bay Express

The day after Monday’s deadly apartment fire in West Oakland, the city council voted to modify a potentially lucrative real-estate deal involving Keith Kim, the owner of the fire-ravaged building.

The blaze took four lives and displaced more than 80 people. Records show that Oakland officials knew for years that Kim’s building, at 2551 San Pablo Avenue, was a fire danger. It was the subject of 20 building code complaints since 2007. And fire inspectors flagged the structure as a hazard last week.

But while Kim allowed the building to fall into a dangerous state of disrepair, he was also investing in a company that negotiated an unusual multimillion-dollar real-estate deal with the City of Oakland.

What’s more, the city even went out of its way to acquire state-owned land for the exclusive benefit of the company Kim had a major stake in.

The complicated real-estate transaction involving the city, Kim, plus other investors and companies dates back to 2013.

Businessman Jabari Herbert approached Oakland officials with a proposal: give a company that he and Kim operated, the West Oakland Development Group, the exclusive right to purchase 2.8 acres of state-owned land on Kirkham Street, near Interstate 880. Herbert planned to develop hundreds of apartments and retail shops at the location, potentially worth hundreds-of-millions of dollars.

Herbert told the Express this morning that he was motivated to reclaim the land for West Oakland’s Black community, which had been pushed off the site when the freeways and BART were built. “The public land was taken from private Black business owners and home owners who weren’t paid market rate for those properties,” Herbert said.

The land is currently owned by the California Department of Transportation. Normally, Caltrans auctions off excess property to the highest bidder. But the agency’s policy is to solicit bids from government agencies first, in case they might want to acquire it for a public-benefit purpose.

The city stepped in, on behalf of the West Oakland Development Group, and offered to buy the land from Caltrans for $4.2 million. Oakland officials then planned to immediately sell the land for the same price to Herbert’s West Oakland Development Group.

But the city never issued any public notice seeking input or proposals from other developers. Instead, Oakland negotiated privately with West Oakland Development Group. Officials justified the exclusive deal on the grounds that it would give the city more control over what would be developed on the site.

Emails from last year, obtained via a public-records request, show that Herbert was the everyday face of the West Oakland Development Group. But state documents show that the company was actually incorporated by Hahn Kim, brother of Keith Kim. And its business address is a Montclair home that Keith listed as his personal residence between 2005 and 2009.

For the rest of this East Bay Express article, click here.