Two industrial buildings used to grow pot in East Oakland have been seized through foreclosure by a Canadian lender that wants to revive its once-thriving marijuana business.
The lender, an affiliate of Toronto-based Romspen California Mortgage, seized The Oakland Tinnery at 5601 San Leandro Street and The Oakland Cannery at 5733 San Leandro Street, SiliconValley.com reported.
Both buildings had been the subject of community complaints involving the use of unpermitted diesel generators used to power lights for pot production. They also ran afoul of local air regulators.
They were owned by an investor group led by Kenneth Greer, a Denver-based real estate executive. In 2016, a Greer-led group paid $16 million for the Tinnery. In 2017, a different Greer-led group paid $6 million for the Cannery down the block.
A Greer company, Denver-based Green Sage, operated the cannabis business inside the buildings.
The generators were used as power sources for tenants cultivating marijuana, Greer stated in a filing in January 2020 in connection with a civil lawsuit.
In 2019, Romspen California Mortgage provided $54.5 million in financing to different affiliates led by Greer. The collateral for the mortgage — which greatly exceeded the combined amounts that the Greer groups paid for the properties — were the buildings.
In December last year, Romspen filed a notice of default against both of the East Oakland buildings. The timing of the loan default means that the battle over the diesel generators was ongoing at the same time that the mortgage for the two properties had fallen into delinquency.
By the time an affiliate of Romspen, RIC San Leandro, had seized the property on Sept. 23, the unpaid debt on the loan had ballooned to $72.6 million, according to SiliconValley.com.
RIC San Leandro, however, paid only $25 million to grab the property through foreclosure. The generators were removed around the time the foreclosure was officially completed and the Greer-led groups no longer owned the two buildings.
The Oakland Tinnery is an Art Deco property totaling 278,900 square feet. The Oakland Cannery is a historic brick building totaling 162,500 square feet.
An affiliate of Romspen California Mortgage now owns the buildings and intends to revive the cannabis complex, according to Kevin Saavedra, a consultant for the property owner. PG&E will provide conventional power for cannabis cultivation.
— Dana Bartholomew
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