Monday, June 27, 2011

City to Sell Kaiser Center to Redevelopment Agency

by Robert Gammon
Mon, Jun 27, 2011 at 1:33 PM

Based on budget proposals made by councilmembers late last week, it seems obvious that the city council plans to approve Mayor Jean Quan’s plan for the city to sell the shuttered Henry J. Kaiser Center to Oakland’s Redevelopment Agency for $28.3 million. In fact, all of the three budget proposals made by the eight councilmembers contemplate using proceeds from the sale of the Kaiser Center to help close Oakland’s $58 million general fund deficit.

Oakland plans to sell Henry J. Kaiser Center (in background)
  • Oakland plans to sell Henry J. Kaiser Center (in background)
Moreover, proposals by seven of the councilmembers would use more money from the Kaiser sale than Quan had proposed to balance next year’s budget. The proposal, for example, by Councilwomen Rebecca Kaplan, Pat Kernighan, Nancy Nadel, and Libby Schaaf would use $15 million from the sale of the Kaiser to help balance next year’s budget, and $5 million from the sale for the 2012-13 fiscal year.

Quan, by contrast, proposed using just $2 million from the sale for each of the next two years in her budget scenario B, and would use the remaining $24-plus million in proceeds to help pay off Oakland’s debt. (It makes more sense to compare the Kaplan-Kernighan-Nadel-Schaaf budget to Quan’s scenario B because both assume substantial public-employee concessions at the bargaining table. Quan’s scenario A, by contrast, assumes no employee concessions, and would only achieve compensation savings from city workers by implementing unpaid furlough days.)

The revelation that all of the councilmembers are proposing to sell the Kaiser to the redevelopment agency also comes in contrast to criticism leveled at Quan when she initially made the proposal. Some councilmembers, including Ignacio De La Fuente, had called the proposal “illegal,” and yet they’re now all basing their budget proposals on it. (To be fair, however, the proposal by Councilmembers Desley Brooks, Jane Brunner, and Larry Reid contemplates restructuring the planned Kaiser sale so that the redevelopment agency does not use funds earmarked for new construction projects in East Oakland.)

Looking at the councilmembers budget proposals, it’s also clear that the one by Kaplan, Kernighan, Nadel, and Schaaf would result in the fewest cuts to city services — in part because it relies so heavily on the Kaiser sale. This budget, for example, would not only keep all of the city’s libraries open, but it would maintain 85 percent of Oakland’s cultural arts funding and restore planned cuts to tree maintenance and city parks.

This budget also calls for putting $6 million into the city’s reserve fund and rehiring 44 cops who were laid off last year and are still looking for jobs. In an interview, Schaaf explained that their budget assumes the city will be able to afford the cops because the current attrition rate among police officers is higher than what Quan estimates in her proposals. Their budget, unlike those from De La Fuente, Brooks, Brunner, and Reid, also does not call for cuts to Oakland’s already understaffed Public Ethics Commission.

Finally, it should be noted that based on the all of the proposed budgets made so far, it seems clear that councilmembers think that De La Fuente’s call on Friday for the Oakland police union to make more concessions at the bargaining table is unrealistic. None of the other proposals call for the police union to make an additional $2.3 million in givebacks — as De La Fuente has done.

As a result, it seems obvious that De La Fuente is on his own with that demand. Indeed, De La Fuente said he had to break away from working on a proposal with Brooks, Brunner, and Reid because he could not reach agreement with them.

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