Stop, Drop and Roll

22 November 2006 | Alameda Truthiness | John Knox White

Much has been written in certain circles about the price of land sold by the city at Harbor Bay Business Park in 2003.

At issue is 1.19 acres of land sold for $45,000 to Harbor Bay Storage as part of an overall 6.2 acre, $1,055,000 sale. The issue is being used to paint certain councilmembers as developer-friendly. That is until it’s used to prove that land is so cheap in the Bay Area that building affordable housing in Alameda is simple, but people are just too lazy or stupid or greedy to do it. (Ironically, these arguments are made by the same person).

The entire issue is a complete non-starter when one takes a mere two minutes out of their hectic schedule to look at the actual facts.

The site sits at the corner of Maitland and Harbor Bay Parkway. The 1.19 acres of note were created after Maitland was redesigned so that it intersected HB Pkwy at a safe distance from the recently built Ron Cowan Parkway (so many parkways, so few trees). This left a a long section of roadway sitting unused as well as a small triangle between the old road and the new one.

Consider.

Fake: Developer crazed councilmembers sold off prime business park land for an inexcusably low amount of money. Proof that they are “in the developer’s pockets.”

Facts:

The first tip-off that the “bad guys” in this myth are being cherry-picked for political expediency is that a unanimous council approved the sale, This included both Barbara Kerr and Tony Daysog. (Given his record of approving the financials on the Alameda Theater Project and then raising the same financials as his prime concern when voting against the project, I’m willing to accept that Daysog was unaware of the financial underpinnings of the sale when he voted to support it).

Second, the appraisal for the 1.19 acres came in at $210,000 but only after $165,000 in infrastructure improvements were implemented, the city wisely decided to sell the property without making the improvements and credited the seller the amount of the needed work…viola, the $45K price.

Third, at $210,000 an acre, the price is still low. That is until you learn that the parcel sits in the Metropolitan Oakland Airport’s designated Safety Zone A. The lucky landowner may build no permanent structures that are higher than the surface of the runway at OAK. This would make it difficult to build usable space for all but the tiniest among us. However, assuming that we were to hire a workforce of 2 inch microhumans, we would still be restricted from any activity that needed 25 persons per acre present at any given time. Obviously, these restraints are pretty major, one might even reasonably accept that they would dramatically bring the sale price down.

It’s pretty clear, no matter how you look at it (unless of course you’re trying to make baseless attacks on councilmembers that you disagree with), the sale price is pretty reasonable.

So let’s look at the second item. This being that based on the sale price of 1.19 acres of land in an airport zone that was once a roadway, we can make reasonable assumptions about the cost of 700 acres of land at Alameda Point and extrapolate a devastatingly conclusive opinion on how the cost of land has no bearing on housing prices.

Consider.

Fake: Land at Alameda Point will cost less than $50,000 an acre.

Facts:

On the face of it, this is utterly unbelievable. The US Navy recently agreed to sell approximately 525 acres to Alameda Point Community Partners for $108 million, including some sites that will not be available for use for years when the Navy actually does the environmental remediation on them. That’s over $200K per acre before any additional costs are factored in. The entire infrastructure at Alameda Point is going to be redone (info here). That’s sewers, streets, telephone, gas, everything. The navy built the base to last through the war, after 50+ years, its hastily built back-bone is falling apart quickly and will have to be removed, before it can be recreated. The additional costs to this land will be in the hundreds of millions of dollars. The price of land at the point is not cheap.

Yet another way to look at how much land in Alameda is worth is by looking at the Beltline railyard. The appraised market value of the 28 acres in the Beltline, according to the railroad, is $53 million dollars. That’s $1.9 million per acre.

Cutting through the post-election rhetoric, all the hype over developer friendly sales at Harbor Bay is complete nonsense.

Learning not to trust babbling founts of misinformation is an important first step in beginning an inclusive community dialog. Only through trust, honesty and openness can a true dialog occur.

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