oWow Risks Losing Oakland Apartment Tower Over Unpaid Bills

oWow could lose a 19-story mass timber tower in Downtown Oakland to foreclosure because of mechanics liens by two suppliers who say they’re owed $1 million for materials.

The locally based developer was sued by one supplier and notified of a pending lawsuit by another alleging they weren’t paid for materials during the construction of the 236-unit highrise at 1510 Webster Street, the San Francisco Business Times reported.

The building was among the few residential developments to break ground in the East Bay city since the pandemic.

Danny Haber, CEO of oWow, told the Business Times that both liens, and subsequent legal action, were the result of its subcontractors not paying their respective suppliers. The subcontractors didn’t respond to a request for comment.

San Francisco-based Pace Supply filed a lawsuit against oWow last month, after filing a mechanics lien on the building in November, alleging it had not been paid $62,846 for construction materials, according to the complaint.

The suit seeks foreclosure of the mechanics lien and sale of the property to satisfy the lien.

Ferguson Enterprises, a plumbing supplier, filed a mechanics lien on the building in September, alleging it hadn’t been paid for plumbing, HVAC and waterworks equipment totaling $929,299. Last month, Ferguson filed a legal notice that signaled plans to sue oWow, as well as the plumber that hired the Virginia-based supplier.

Both legal actions show the property is at risk of a court-ordered foreclosure sale to pay for the unpaid materials.

As of Jan. 7, oWow was also behind on its property tax payments for fiscal year 2024-2025. The developer owes a total of $769,903.42 payable in two increments, one due last month and another in February, according to the Business Journal.

Haber said his firm faces higher-than-expected property taxes because the county assessed the value of the property at more than $48 million, higher than what market conditions allow. The developer is working to get the property reassessed for a lower tax bill.

The apartment highrise is among the few built in Oakland since the pandemic. But current market conditions make such projects hard to pencil out, according to the Business Times.

Demand dropped after the pandemic, sending rents down by 20 percent, creating a concessionary market where landlords try to outbid each other with deals.

Haber said the developer received occupancy permits for the first six floors of 1510 Webster, while construction is ongoing for the rest of the building. One-bedroom units start at $1,650 a month, with two-bedroom apartments starting at $2,150 with a $1,000 “look and lease” concession.

It’s not clear how the use of mass timber reflects on oWow’s financial trouble. Mass timber, touted for efficiency and cost savings, can be prefabricated and assembled with more speed and less labor than steel or concrete, according to the Business Times.

— Dana Bartholomew