Oakland poised to give $18M for 766-unit retail village

Oakland is poised to toss an $18 million lifeline to a trio of developers whose plans to build a nearly 800-unit retail village in West Oakland has skidded sideways for lack of funds.

A city Community and Economic Development Committee is slated to vote March 14 on whether to recommend the city help fund the project around the West Oakland BART station at 1451 Seventh Street, the San Francisco Business Times reported.

The project, known as Mandela Station, would include 766 homes and more than 380,000 square feet of offices, shops and restaurants on what is currently a 5.5-acre parking lot.

If approved by the city, the $18 million in funding — which comes from voter-approved bond money — would go toward the project’s 240-unit affordable housing component. 

In November, Oakland voters approved Measure U — an $850 million bond measure for infrastructure, including $350 million for affordable housing.

As a project that includes infrastructure improvements, Mandela Station is eligible for the grant, according to city documents. But the funding is contingent on city approvals, including a pending bond counsel for Measure U funds and the Oakland City Council.

Strategic Urban Development Alliance, Hensel Phelps Construction/Development and China Harbor Engineering had hoped to break ground in October at Mandela Station.

But the developers weren’t able to secure a capital partner for the $700 million project. 

Alan Dones, co-founder of the Alliance, had said Investors seemed to avoid West Oakland in preference for places such as Uptown Oakland and Emeryville.

Mandela Station would be the first large-scale project in West Oakland’s Prescott neighborhood in years, he said, and was widely seen as a catalyst for additional development, according to the Business Times.

Dones said this week that the $18 million grant, if issued, would position the project’s affordable component to apply for tax credit financing — a highly competitive source of funding for affordable projects that often represents the last piece of the puzzle for their financing stacks. 

“Affordable housing just needs to have that quiltwork of funding sources, and we’re getting close,” Dones told the newspaper. “We’re putting in the last pieces so that we can be prepared to go for tax credits and bonds in the next application round.”

That could be as soon as June, Dones said, adding his alliance also intends to apply for a round opening up in the fall of 2023. 

The conditions of Mandela Station’s approval require the developer move forward with the affordable component before the developer can build anything else – the commercial space, the market rate homes. So the alliance is “really pushing to get that part of it cleared out,” Dones said. 

The Strategic Urban Development Alliance has so far put together $60 million in financing for the affordable component, which has an estimated development cost of $201 million, Dones said.

— Dana Bartholomew