In downtown Oakland, a $50 million dream is just a third fulfilled.
That's the status of the city's unprecedented investment in the Uptown Apartments, the 665-unit mixed-use redevelopment project that was to be the crown jewel of Jerry Brown's plan to bring 10,000 new residents to downtown Oakland. More than a year after first opening the Uptown's doors to renters, management reports indicate that its three buildings are just 37 percent full.
There's no single explanation: the economic downturn, the area's reputation for crime, a relative dearth of local amenities, and a surplus of nearby condos that have been converted into rentals in a struggling housing market. Indeed, the challenges of the Uptown seem to be the challenges of Oakland itself: an intersection of diverse complications that keeps revitalization efforts at a standstill.
Stakeholders are hesitant to point fingers, but a tone of disappointment pervades ongoing discussions of the largest city-sponsored redevelopment project in Oakland history. And the subtext is clear: While the Uptown received $53.4 million from the city, none of the other projects from Brown's so-called 10K plan even received subsidies.
"It's been slower than everyone would like," said Nancy Nadel, the Oakland city councilwoman who represents the Uptown district. "But that's because of the difficult times we are in."
The Uptown's failure to fill as quickly as hoped is certainly not for a lack of trying. The project is everything its supporters might have wished for — mixed-use, mixed-income, high-density, BART- and AC Transit-accessible, secure, totally green. Its amenities are world-class. It features a 24-hour concierge, a state-of-the-art gym, access to Zipcar service, a game room, pool and spa, an on-site Oakland Police Department office, a chef's kitchen, and a private screening room, all available with a lease.
It also is backed by a saturation viral marketing campaign that includes ubiquitous ads on BART, billboards, and no fewer than 26 full-color promotional heavy-stock postcards for ready circulation. It has been heralded as the first major multifamily development in Oakland to receive LEED silver certification from the US Green Building Council. The Uptown represents exactly the kind of change city stakeholders want to see in that neighborhood.
Uptown employees say the development's vacant units are filling at a steady pace, with several new leases signed each week. The units have opened in phases between March and November 2008. But as the first one-year contracts come up for renewal this month, success is anything but guaranteed.
Councilwoman Nadel said the developer, Forest City Enterprises, assured her that spring is always "a really good time" for new leases, and that it expected the apartments to continue to fill. Nadel has planned an April 8 meeting with Uptown tenants to gauge their expectations for the future of the development and neighborhood.
New businesses are signing leases in the area, Nadel said, which she predicted would boost the Uptown's attractiveness for potential tenants. "We expect to increase those numbers soon," Nadel said. Approximately 9,000 square feet of empty retail in the Uptown also remain vacant.
Forest City declined to be interviewed for this story, instead offering a statement prepared by a San Francisco-based PR firm.
The city set no benchmarks for the developer in terms of move-in rates. However, even while offering massive rent reductions (free off-street parking, for example, or up to two months' rent free in exchange for a one-year lease), the Uptown has yet to rent out its lowest-priced units — some of which reportedly have gone for as little as $725 per month. Those cheaper apartments are part of the 25 percent of units offered at affordable housing rates, as mandated by the terms of the city subsidy.
Those who have inked contracts share mixed reviews of life at the Uptown. On a recent Saturday afternoon at the public space between William and 19th streets that was developed as part of the Uptown project, few residents were in evidence. Judy and Alma, sisters who qualified for affordable housing and have lived at the Uptown since November, said they don't plan to leave the Uptown any time soon.
"It's quiet and peaceful," Judy said. "There's entertainment. Sometimes residents walk their dogs. It's people that don't want to be bothered."
People particularly don't want to be bothered by criminals. The Uptown is fighting an uphill battle to mollify the age-old stereotype of downtown Oakland as crime-ridden. That challenge only got more difficult after the area played host to recent street riots in the wake of the Oscar Grant shooting. Mayor Ron Dellums has promised to reduce crime by at least 10 percent over the next year. And Forest City has installed an on-site office for the Oakland Police Department and made all of its buildings controlled-access.
Michael Cera, a 23-year-old cell phone retailer who works in the city, has been living in a one-bedroom Uptown apartment with his girlfriend and their mastiff since August 2008. The couple received "rent concessions" that reduced their rent from $2,000 to $1,700 a month. At the time, that was cheap enough to justify the commute to the city, but Cera said he's not sure he'll renew. "It depends on the whole rent concession thing," he said. "Personally, I'd like to live in the city, but it's cheaper here." But maybe not quite cheap enough, he added. "These apartments are not worth $2,000."
Crime doesn't concern Cera, but he is seeking more bang for his buck in a renter's market. While his apartment is just 700 square feet, he said he's found advertisements for 1,100-square-foot Emeryville lofts for the same price — although that price does not include amenities like gym access or a 24-hour doorman.
Forest City did not respond to questions about move-in rate and tenant turnover. Instead, it offered canned quotations from company president Kevin L. Ratner. "We are offering our residents a sense of community, where they can live, work, and play in an area undergoing a renaissance," Ratner said. "The opening of the Fox Theater and new restaurants are drawing people from all over the Bay Area who are contributing to the positive vibe in the area."
The Fox, a $40 million city investment, is an empty lot away from the Uptown on Telegraph Avenue. Forest City can develop the lot as part of a separate contract with the city. It was slated for multistory retail, but given the state of the economy and slight returns from Forest City's almost-$190 million investment in the Uptown, it will likely become a surface parking lot serving the Fox. The city retains ownership to this property, and expects to receive revenue of between $150,000 and $200,000 over three years. After three years, the project will be revisited by the city and the developer with an eye to launching a more retail-friendly development.
Nadel said the fate of the empty lot is currently being considered at the council committee level. Talks have revolved around how the lot might be landscaped, with superficial improvements proposed to avoid too much resonance with the kind of parking lots that once occupied the Uptown's current real estate.
"Some folks would like it to be very well landscaped, with a little greenery in there," Nadel said. "We're likely to be looking at it for quite a while."