Road to Nowhere 

The FBI probes links between state Senator Don Perata and a $40 million roadway project designed to enrich Alameda developer Ron Cowan.

Page 2 of 7

Let the Voters Pay

By the mid-1980s, Interstate 880 between Oakland and Fremont was viewed widely as one of the worst, if not the worst, commutes in the Bay Area. Nicknamed the Nasty Nimitz, the freeway rivaled some of Los Angeles' most horrific traffic. It was choked with so many cars and big rigs each day that politicians believed Alameda County voters would happily tax themselves to widen it.

That would have brought some relief to Cowan, but not enough to support his high-flying lifestyle and inject life into his half-filled business park. What he really needed was a direct roadway from Harbor Bay to the airport. That way, his business tenants wouldn't have to take the circuitous two-lane Doolittle Drive from Bay Farm Island. "A new roadway was extremely important for Harbor Bay Business Park, and it was extremely important for Ron Cowan because he was the primary owner," said Bill Withrow, former mayor of Alameda.

It was also extremely important that county taxpayers pay for the road, because Cowan couldn't afford it. In 1986, he teamed up with other local developers, road builders, business leaders, and local politicians on an ingenious plan. They decided to put a ballot measure before voters that would combine the popular idea of widening the freeway with their own individual pet transportation projects. This became Measure B, a countywide half-cent sales tax, which was packaged and sold to voters as the solution to the I-880 nightmare even though there were ten other transportation projects included in the measure's fine print.

To ensure his road was among them, Cowan persuaded his pal, Alameda County Supervisor Robert Knox, to place a Cowan employee on the task force charged with recommending the Measure B projects. Cowan's airport connection also was combined with the widening of 98th Avenue between I-880 and the airport, which made the package more palatable to county voters.

The Measure B campaign, to which Cowan was one of the largest donors, advertised the costly public project as a way to relieve airport traffic jams, which was partly true. The 98th Avenue widening and a third component -- the overhaul of the Doolittle Drive interchange -- have proved their worth (see map). But the airport connector, a major part of the overall project, was designed largely to benefit Cowan's corporate tenants and make him money.

The scheme paid off at the ballot box, but even with voter approval, it would take nearly two decades to build Cowan's road, then known as the Cross Airport Roadway. For starters, the project required environmental studies and additional fund-raising -- the ballot measure provided only $60 million of the overall project's estimated $77 million price tag. Cowan also needed cooperation from the port, which had become the project's sponsor. But the developer angered some port officials in 1989, according to news accounts, when he campaigned to become the master developer of all port property along the Oakland Estuary.

As the 1990s began with no Ron Cowan Parkway on the immediate horizon, Harbor Bay Business Park was hemorrhaging money. According to public records, it nearly went bankrupt before Cowan, reportedly with Willie Brown's help, secured $22 million in loans from the pension funds of two powerful labor unions -- the Northern California Carpenters Union and Local 3 of the Operating Engineers Union.

Armed with fresh cash and the promise of his roadway getting built sometime during the decade, Cowan launched one of the most ambitious campaigns of his career: He attempted to transform his business park into a biotech mecca and tried -- without success -- to persuade UC San Francisco to construct a new medical school campus at Harbor Bay.

Rocked by this very public failure, Cowan's finances nearly hit bottom. In 1996, his development company, Harbor Bay Isle Associates, filed for Chapter 11 bankruptcy when it became clear it couldn't repay the union pension loans. That same year Cowan was forced to sell Roundhill for $9 million, property records show. He then bought a smaller $1.9 million Belvedere house with three bedrooms, three and a half bathrooms, and no theater.

The Cross Airport Roadway Project, meanwhile, sputtered to a stop; it was tied up in litigation initiated by the cities of Alameda and San Leandro, and environmental groups that wanted to block the airport expansion.

As the decade drew to a close, Cowan was down but not out. He emerged from bankruptcy after obtaining two loans totaling $34 million from Lehman Brothers, the investment bank. The loans were secured against much of his remaining property in Harbor Bay Business Park, property records show. He got another break in 1999, when the Port of Oakland and the city of Alameda agreed to remove the roadway project from their litigation over the larger airport expansion -- Alameda, too, was anxious to get the roadway built, in the hope that it would relieve congestion on Alameda Island proper. That June, the Port Commission selected a contracting firm owned by local businessman Ed DeSilva, one of Perata's closest friends and biggest campaign contributors, to build the entire Cross Airport Roadway Project, the cost of which had ballooned to $104 million.

It looked as though Cowan would get his road after all.


Enter the Lobbyist

Just as it seemed things were finally a go, the construction plan hit a bureaucratic snag that left backers fearing their project would go even more over budget, or not get built at all. The roadway needed environmental clearance from the Federal Aviation Administration, which was sitting on the plans. Local officials wanted the FAA to act by year's end. Otherwise, they claimed, they risked losing a time-sensitive $5 million state construction grant. With the future Ron Cowan Parkway hanging in the balance, Don Perata intervened with the plan that later piqued the FBI's interest.

Comments

Subscribe to this thread:

Add a comment

Anonymous and pseudonymous comments will be removed.

Readers also liked…

  • Racial Profiling Via Nextdoor.com

    White Oakland residents are increasingly using the popular social networking site to report "suspicious activity" about their Black neighbors — and families of color fear the consequences could be fatal.
    • Oct 7, 2015

Related User Lists

Latest in Feature

Author Archives

  • Goodbye, Express Readers

    This is my final column for the paper. It's been a great ride.
    • Mar 23, 2016
  • Oakland Can't Afford to Wait

    The city council and city administration need to immediately implement Mayor Libby Schaaf's housing plan. Plus, there's plenty more to do to deal with the city's affordability crisis.
    • Mar 16, 2016
  • More»

Author Archives

  • Artists, Inc.

    When a family goes corporate, art consumes life.
    • Jan 31, 2007
  • Can Any Mayor Fix Crime?

    Brown took the city's crime problem seriously, and that seemed to work — for a while.
    • Jan 3, 2007
  • More»

Most Popular Stories

Special Reports

Holiday Guide 2016

A guide to this holiday season's gifts, outings, eats, and more.

Taste, Fall 2016

Everything you need to know about dining in and out in the East Bay.

© 2016 East Bay Express    All Rights Reserved
Powered by Foundation