Oakland City Council President Ignacio De La Fuente's chief of staff and three of his close friends stand to profit handsomely from vacant waterfront land they own in an area where city officials may soon allow condominium developments, Feeder has learned.
In July 2004, longtime De La Fuente aide Carlos Plazola went in on a $1.86 million deal for 2.35 acres of industrial land along the estuary near the High Street Bridge. His partners included Port Commissioner Anthony Batarse Jr. , head of several East Bay car dealerships; Ana Chretien, owner of ABC Security, who backed De La Fuente for mayor this year; and former powerhouse city lobbyist Lily Hu, who has been a central figure in the FBI's corruption investigation of state Senator Don Perata, De La Fuente's closest political ally.
But the property will become far more valuable if the city council rezones the vacant plot and the land surrounding it on Tidewater Avenue as residential. For years, De La Fuente and Mayor Jerry Brown have championed condo development along the waterfront, most recently the massive 3,100-unit Oak to Ninth project. City officials are currently looking at rezoning industrial land throughout Oakland including the Tidewater area, which is in De La Fuente's council district.
Plazola has served as De La Fuente's staffer on the rezoning issue, meeting with property owners and business as his representative. Back in December 2004, Plazola and De La Fuente got mad when they learned that city planners wanted to allow Capitol Recycling to locate on 440 High Street, around the corner from Tidewater, which they viewed as problematic for future residential development in the area.
The aide told the Oakland Tribune at the time that he and De La Fuente were "very surprised" to hear about the recycling business moving in, because they had been working for months to rezone the area as medium-density residential and retail. In the end, De La Fuente worked out a deal with Capitol in which the company agreed to move if and when the new residential zoning went into effect. De La Fuente estimated that Capitol's property would double in value once it was rezoned. Through it all, Plazola never publicly disclosed his potential conflict of interest. "The whole city is being rezoned, so I don't know how you avoid that," he says.
When reached for comment, De La Fuente said he knew nothing of Plazola's real-estate investments, including the deal on Tidewater: "I don't know everything in the lives of the people who work for me." When Feeder questioned how De La Fuente known for his hands-on management style could know nothing about a big land deal involving his aide and three of his close pals, he said it was the truth. "Whether you want to believe me or not is your fucking business," he snapped.
Plazola's name doesn't show up on the deed for the Tidewater land, but the name of his limited-liability corporation, Turquoise Villas, does. Plazola says he started Turquoise Villas with his brother-in-law back in 2002 with an eye on real-estate investment to prepare for his golden years. He has a minority stake in the partnership. "I'm just a guy trying to invest and put his kids through college," says the 37-year-old, who worked for Congresswoman Barbara Lee before being recruited by De La Fuente six years ago.
Shortly before buying the land on Tidewater, records show, Turquoise Villas and Chretien purchased two rundown homes on Fruitvale Avenue sitting on one parcel for $402,500. The partners applied to the city to subdivide the property into two lots, a request the planning commission approved. The two houses later sold for more than $1 million. Plazola, however, says that he cleared only about $20,000 from the deal.
Plazola says that Chretien and Batarse, two of Oakland's most prominent Hispanic business leaders, invited him to invest in the vacant land on Tidewater that they wanted to buy. Ultimately, Turquoise Villas contributed $291,325 for a 15 percent stake in the land, according to documents provided by Plazola: "They see a young Latino trying to do something with himself and they say, 'Hey, let's bring the kid in.'"
But Batarse told a very different story. In fact, he told Feeder that he didn't even know Plazola was involved in the deal, saying that Chretien had been the main player and had brought in Turquoise Villas because its managing partner was a developer. Plazola, however, says that Batarse definitely knew of his involvement and that neither he nor his partner were sought out for their development expertise. Plazola said that Batarse was probably lying to a reporter to help out a friend being scrutinized.
In any event, both Plazola and Batarse say the original plan was to buy the waterfront land for Batarse to build a new business office for his car company, Lloyd A. Wise. Under the area's current industrial zoning, they were allowed to do that. But things changed within a few months, Plazola says, when developer Steve Jaca began lobbying in earnest to rezone the area from industrial to allow residential. The resulting zoning limbo has kept Plazola and his partners from pursuing their office plans while, like many Oakland landowners, they wait and see what happens, the council aide says.
In recent years, the tiny waterfront peninsula surrounding Tidewater Avenue has been a hotspot for real-estate speculation as the city and the East Bay Regional Parks District move along with plans to build a waterfront park and trail. Don White of White Brothers, a 134-year-old Oakland lumber company, says Pulte Homes offered him $2.2 million for his 1.3-acre plot, an offer he rejected. Like many other businesses in the area, White doesn't want to move. "We've been around here a long time, and we don't have any intention of going anywhere else," he says.
De La Fuente has made it clear that he eventually wants to rezone the side of Tidewater closest to the estuary where White Brothers operates. De La Fuente, who unsuccessfully ran for mayor this year, featured his plans to condo-ize Tidewater as part of his overall vision for Oakland's waterfront on his campaign Web site: "Soon, the Tidewater area near High Street will also undergo a similar transformation from an industrial/commercial area unfriendly to pedestrians, to a residential/retail/commercial area teeming with human activity built around the waterfront trail."
In spite of his cheerleading, the council president quickly points out that he hasn't expedited residential zoning for the area. In fact, at an economic development committee meeting last month he voted to postpone rezoning Tidewater and other areas even though his colleague, Jane Brunner, recommended making the change. The committee will reconsider the issue again in September. "If I had an interest in pushing the issue," De La Fuente reasons, "I would have gotten it done one month ago."
After being confronted by Feeder, Plazola sought advice from Deputy City Attorney Mark Morodomi, the city's legal ethics expert, to find out whether his involvement in the industrial rezoning issue for De La Fuente posed a conflict of interest. State law prohibits public officials, including city council aides, from using their positions to unduly influence governmental decisions to personally enrich themselves. According to Plazola, Morodomi said there was no conflict of interest because the rezoning would affect many property owners, not just Plazola.
Still, even if Plazola's activities pass legal muster, there's always politics to consider. After talking to Feeder last week, De La Fuente barred Plazola from working on any zoning issues in areas in which he owns real estate. "He doesn't have a vote," De La Fuente said of his aide, "but I hear you. I understand what you're saying; I understand the perception."
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