The owner of a building site approved for a 39-story apartment highrise in Downtown Oakland has defaulted on a $6 million loan tied to the project.
An affiliate of locally based R2 Builder led by Randall Miller is delinquent on the loan tied to the 425-unit tower project approved for 2044 Franklin Street, the San Jose Mercury News reported.
The unidentified affiliate obtained the loan in 2020 from Lone Oak Fund, based in Los Angeles, according to the newspaper. The owner of the site is Village Glen Oakland 2 LLC, tied to Miller, according to a property records database.
In August last year, R2 Building scrapped plans to build the apartment tower after failing to obtain financing.
The developer then put the approved building site up for sale for an undisclosed price. The site contains a 25,500-square-foot former Bank of America building.
A company controlled by Miller bought the 0.6-acre property in 2016 for $14.3 million, according to the Mercury News.
R2 Building, a modular builder that succeeded the defunct RAD Urban, had filed a preliminary application early last year under the state’s builder’s remedy provision to boost the height of the apartment tower to 39 stories, from 22 floors.
The loophole in state housing law allows builders to get projects approved if cities fail to certify state-mandated housing plans, provided there’s at least 20 percent affordable housing. Earlier reports said R2 Building had fast-tracked the project using Senate Bill 330.
Brokers Todd Vitzthum and Drew Malm of Apartment Capital and Realty Advisors hold the listing.
A year ago, Vitzthum said R2 Building decided to sell the property after its year-long search for investors or a joint venture partner fell through.
The building site at Franklin and 21st Street has had numerous plans and approvals going back to 2016. That’s when RAD Urban proposed a 40-story tower at 2044 Franklin Street, plus a 28-story highrise at 1433 Webster Street, both using modular construction.
In 2018, RAD Urban was approved to build a 22-story, 357-unit building of small apartments at 2044 Franklin, and won approval for a 15-story, 168-unit modular residential tower at 1433 Webster Street.
Together, they were to have been Oakland’s tallest modular buildings, seen by developers as a way to save construction costs. But while RAD Urban was able to complete a 77-unit student housing project near UC Berkeley, the Downtown Oakland projects were never built.
— Dana Bartholomew
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