Oakland approves sale of city-owned garage for Kaiser HQ

SAN FRANCISCO -- The Oakland City Council approved the sale of a public parking garage in Uptown Oakland on Tuesday to a developer who intends to build a massive office complex expected to be the new headquarters of Kaiser Permanente.

The approval by a 6-0 vote came despite resistance at the meeting by Kaiser workers who have been involved in contentious contract negotiations with the healthcare provider, which is Oakland's largest employer.

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There were also questions about campaign donations from developer Lane Partners to elected officials, particularly Mayor Libby Schaaf and Councilmember Lynette Gibson McElhaney.

The city attorney's office advised the council that if there were campaign contributions during negotiations, the councilmembers could face fines for ethics violations but it was still legal for the council to move forward with the project.

The city-owned parking garage at 2100 Telegraph Ave. will be sold to the developers for $28 million. The $900 million project is expected to be completed in 2023.

Developers Lane Partners and Strategic Urban Development Alliance are seeking to build an office tower up to 29 stories tall with 1.5 million square feet of office space and 85,000 square feet of retail space.

The project would encompass the entire block and will require demolishing a vacant drive-through burger stand and three other buildings on Broadway.

RELATED: Officials hope Kaiser's plan to buy, build in Oakland will be catalyst for business

There were two potential plans proposed by the developers. The other would include less office space, 880,000 square feet, but add 395 units of housing.

Oakland's director of economic and workforce development Mark Sawicki said that with the commitment by Kaiser to use the building as its new headquarters, the developers are likely to opt to construct the version with more office space and no housing.

"To this point we've been successful in the effort, but I've always said we need to find an anchor tenant for the project to become real," said Lane Partners principal Andrew Haydel. "Kaiser is a company that's displayed an unparalleled commitment to Oakland and the community."

But the deal comes on the eve of a planned one-day strike by Kaiser Permanente therapists in San Francisco, who say that the healthcare company's mental health care is worsening. The therapists say that staffing has declined while demand for services has increased.

Kaiser workers at the meeting questioned why Kaiser could afford a new headquarters but not better care for its patients.

Some councilmembers expressed empathy for the plight of the workers, but pointed out that Kaiser was not constructing the building and had only committed to use it as office space.

"I certainly hope you are sitting down and negotiating in good faith with the various bargaining units that you're negotiating with," Councilmember Larry Reid said to Kaiser officials at the meeting.

Reid said that he'd had four heart procedures and back surgery at Kaiser hospitals.

"I really appreciate the employees at Kaiser because if it wasn't for them, I might not even be here," he said.

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