Army Base Investigations Loom; Tagami Conflict of Interest Charged

Pat Kernighan

Lynette McElhaney

phil Tagami

Bill Aboudi

By J. Douglas Allen-Taylor Oversight of the massive Oakland Gateway Army Base development project – which has been confined to Oakland City Council’s Community and Economic Development committee for several months – may soon be moving into larger forums following two formal requests for investigations into the project. Construction on the multimillion-dollar contract by Oakland-based developers California Capital & Investment Group (CCIG) and their international partner Prologis is scheduled to begin later this year. Late last month, members of OaklandWORKS, a consortium of Oakland organizations, asked City Council President Pat Kernighan to work with City Auditor Courtney Ruby to review several aspects of the Army Base development financing. A week ago Oakland Maritime Support Services President Bill Aboudi, a current Army Base tenant, put in a formal written request to Assistant City Administrator Fred Blackwell asking for a City Attorney opinion regarding Aboudi’s charges of conflict of interest and unethical business practices by CCIG in the Army Base project and said he would no longer recognize CCIG as the city’s agent in negotiations to move off of the Army Base property. Meanwhile, CED Committee Chair Larry Reid and fellow committee member Councilmember Lynette Gibson McElhaney have already called for a more formal public hearing before CED on “the economics of the Army Base deal.” In their March 21 letter to Kernighan, OaklandWORKS representatives Rashidah Grinage of PUEBLO and Margaret Gordon of the West Oakland Environmental Indicators Project said, “The member organizations of OaklandWORKS are very concerned by the mounting number of questions coming to light” regarding certain aspects of the Army Base project. Grinage and Gordon called for a financial analysis of the current state of the development project, including “what public and private funds are secured at this time” and “what gaps in funding exist” and whether or not the developers “anticipate seeking public debt financing in bonds or other forms” for the project. The two Oakland leaders also asked for a review of the duties of the project’s Master Developer, CCIG and Prologis, as well as of the project agreement between the developer and the city. In response, Kernighan told The Oakland Post, “The specific questions raised by OaklandWORKS will be addressed in a public forum in late May at a meeting of the City Council’s Community and Economic Development Committee. I trust that following that discussion, the benefits of the Oakland Army Base project will be better understood by everyone and we can all move forward together to create jobs and revenue for the citizens of Oakland.” Aboudi’s company is negotiating a move from the Oakland portion of the Army Base to the Port of Oakland portion while the Oakland portion is being developed, and at the same time is expecting agreement with the City on development of 15 acres of the Army Base property. He said in his letter to Assistant City Administrator Blackwell that his company had “experienced over the past few months what can only be interpreted as a concerted effort by CCIG and certain City staff persons to disrupt our business operations, defame our company and harm our reputation.” Aboudi repeated a charge he made last month before the CED committee that CCIG was guilty of a conflict of interest in its management of OMSS’ move to the Port portion of the Army Base, and requested “a stay of the proceedings” forcing his company’s move from the Oakland portion “until this conflict of interest is resolved.” Aboudi said in his letter that he would no longer recognize CCIG as the agent of the city in negotiations over his company’s relocation, but would only deal directly with city staff. Oakland city staff has given CCIG authority to serve as the city’s agent in negotiating the removal of the various existing tenants from the Army Base property to make way for the development. In a letter to The Oakland Post, CCIG President Phil Tagami denied Aboudi’s allegations, asking why Oakland would “allow a single tenant [OMSS]-who is out of compliance with its lease, whose lease expressly provides for termination based on 30 days’ notice and who has known of its pending termination for nearly a year – to further delay [the Army Base] project?”
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