Oakland is preparing to divert nearly $1.5 million from its Army Base redevelopment project to help a well-connected city contractor stay in business — even though a court ruled earlier this year that the contractor, Bill Aboudi, had bilked his employees out of $1 million in wages. Aboudi's truck-parking business at the former Army Base, Oakland Maritime Support Services, also has been discharging stormwater pollution into San Francisco Bay in violation of state and federal environmental laws, according to court documents.
"I'm speechless," said Doug Bloch of the Teamsters, which has publicly objected to the special treatment Aboudi has received from the city — which includes repeatedly allowing him to miss rent payments in excess of $235,000, records show. The city also has effectively exempted Oakland Maritime Support Services from having to pay parking taxes — taxes that other city parking contractors must pay, city officials acknowledged. "It's a gift of public funds," Bloch added.
The latest gift for Aboudi stems from yet another dispute over his truck-parking business. Until late last week, Aboudi operated on city-owned land at the former Army Base. But the city needed Aboudi to move off that property because it's going to be redeveloped as part of a $600 million upgrade of the base.
And so the city attempted this summer to negotiate a lease with the Port of Oakland so that Aboudi could move his business onto port land for the next four years — when the first phase of the Army Base redevelopment project is to be completed on the city's property. City officials intervened with the port on Aboudi's behalf despite the fact that Alameda County Superior Court Judge Robert Freedman ruled in May that Aboudi had failed to pay 73 workers $1 million in back wages and interest dating back to 2008. As of late last week, Aboudi had still not paid the workers what he owes them. City officials also have tried to help Aboudi even though he has admitted to failing to obtain proper stormwater-pollution permits for his truck-parking facility for several years.
So why has the city been assisting a contractor who fails to pay his workers and has polluted the environment? And why does it continue to do financial favors for him? Aboudi has strong defenders on the city council: namely, Councilmembers Larry Reid, Desley Brooks, and Rebecca Kaplan.
Aboudi also has exploited citizen fears of trucks parking in West Oakland neighborhoods to achieve his goals. He and his supporters have maintained that if the city does not provide him with another truck-parking location, then truckers will park their big rigs in front of people's homes — even though such long-term parking is illegal. But Aboudi's threats appear to be hollow because the port also operates a thirty-acre truck-parking facility, and thus provides plenty of truck parking in the area.
Port officials also have been less accommodating toward Aboudi than the city has. According to multiple sources, the port balked at agreeing to a multi-year lease with the city because of Aboudi's many legal troubles and the $1 million court judgment against him. As a result, city officials ordered the Army Base development team, led by Oakland developer Phil Tagami, to move part of its construction-staging area to the port property so that Aboudi could move his business onto the land that Tagami's team had planned to use.
However, the switch will cost an extra $1.465 million, Tagami said late last week, because the port property has to be readied for use as a construction-staging site. That's $1.465 million that the city doesn't have — and wouldn't otherwise have to spend were it not for Aboudi's business. "The city wrote a letter accepting responsibility," Tagami said of the extra costs, "but doesn't have the money to pay for it."
Mayor Jean Quan said in an interview that the costs would be borne by the Army Base project itself.
But that's not all. The city also is in negotiations with Aboudi for a long-term truck-parking contract at the former base once the redevelopment project is done — despite his history of not paying his employees what they're owed under the law.
Quan and Councilwoman Libby Schaaf said the talks are part of the city's efforts to do "due diligence" on Aboudi, although Schaaf acknowledged that Aboudi and his business have a troubling track record. "I can't imagine that due diligence is going to satisfy me that it makes sense for the city to keep doing business with this company," she said.
As for Quan, she said that her administration is taking a practical approach to the situation — considering the influence Aboudi has with some councilmembers. Quan also said she is concerned about meeting this year's deadline to begin construction on the base project so as to not lose $242 million in state funds. "I just need to get this going," she said.
Aboudi did not return a phone call seeking comment for this story. But just last week, Kaplan intervened again on his behalf when the city began evicting the remaining tenants on the base so construction could start. Quan said that Aboudi had mucked up the effort by tearing down the city's eviction notices so that his truck-parking tenants were unaware of what was going on. Aboudi also has threatened not to leave unless the city gives him a new lease for his business.
Kaplan did not respond to requests for an interview for this story by press time. In a response to a voicemail I left that asked why she was continuing to help Aboudi, she said through a spokesman that she was "trying to make sure that the transition [of truck-parking at the base] was as seamless as possible."