Lehman Signs on Signature Development Group for Oak Knoll Navy Hospital

Senior VP for Signature, Paul Nieto, expects to put forward a development plan in 2014.


Published:

Pat Mazzera

The Oak Knoll Naval Medical Hospital was decommissioned in 1996, and the city designated it as a Redevelopment Project Area. The East Oakland hillside property has sat idle ever since, behind a locked fence. Like the Oakland Army Base, the abandoned naval hospital site has been an enticing development opportunity for the city but has been beset by delays and setbacks.

This year could be decisive for the future for the 183-acre site, a golf course until the U.S. government took over the site in 1941 and converted it into a hospital complex for the Navy during World War II.

Developers SunCal Companies, together with Lehman Brothers, bought the property in 2006 from the U.S. government for $100.5 million with plans to develop a residential and commercial community on the grounds. Nearly all of the 100 structures were demolished.

But when Lehman collapsed in 2008, plans for the property stalled. SunCal walked away from the project, and California cut all its redevelopment funds, leaving the property in limbo. But, despite the challenges that have barred any progress on the Oak Knoll site, movement is beginning again.

Lehman, now working out of bankruptcy, has in the past year signed on Oakland-based Signature Development Group as its new partner to put together a revised proposal for the city to consider. City officials are hopeful the process can pick up where it left off.

Gregory Hunter, Oakland’s deputy director of the Office of Neighborhood Investment, says the city is eager to have development plans on the property moving again.

“Oak Knoll is one of the few remaining large development sites in Oakland that is perfectly suited to a large mixed-use development project with commercial and residential,” he says. “We believe that the plan put forward by SunCal all those years ago is still doable.”

That plan included more than 900 units of mixed residential, 85,000 square feet of retail, with a large amount of land left for parks and open space.

“When you talk about adding 900 housing units, you have a lot to gain in the Bay Area housing market,” Hunter says. “We think a wide range of income levels will be attracted to the site.”

Paul Nieto, senior vice president of Signature Development, says the hillside site—just east of the Interstate 580 between Keller Avenue and Golf Links Road, near the Oakland Zoo—is a tremendous opportunity for Oakland.

“It is a site used for a lot of years as a medical facility mostly, and we don’t have many large pieces of land for a planned residential community with retail,” he says. “So we think this is a special piece of land and we are evaluating what to do with it.”

 Nieto said he believes a development plan will be put forward sometime this year, but couldn’t be more specific with the timeline.

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