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May 16, 2006 > Hayward City Council Meeting

Hayward City Council Meeting

by Steve Warga

"Raze the one or you won't raise another!" So said the Hayward City Council in a 5 to 1 vote in favor of drafting a Purchase Agreement to sell the little used City Center Parking Garage to Intercoastal Property Group (IPG) for $1.5 million.

After several Closed Session negotiations, the Council tentatively accepted IPG's offer, considered quite low by some. Though many details remain to be decided, the Council refused to waver from a demand that the privately-held investment group from Southern California must remove one particular eyesore adjacent to the parking facility: the vacant Centennial Tower, also owned by IPG, which once housed the City of Hayward's business operations and staff.

Built in 1969, this distinctive monolith was abandoned in 1991 after the Loma Prieta earthquake rendered the building unsafe. In 1998, the city agreed with a developer to reserve 500 of 700 parking spaces for office building employees. Although the renovations never occurred, City Manager Jesus Armas cited this encumbrance as a factor in lowering the value of the garage; additionally, estimates range from $2 to $4 million dollars required to retrofit the structure to current building code standards. IPG Project Manager, Bruce Albert, stated that demolition costs of about $750,000 would raise their actual purchase price to $2,250,000. Albert was not prepared to say exactly what IPG plans for the parking garage and empty lot, but they are studying the feasibility of building between 150 to 200 upscale condominiums on top of the parking garage. Armas emphasized that no building permits have yet been requested.

Since 1991, several developers (four, by one Council Member's count) have purchased the property in hopes of fashioning some sort of money-making endeavor out of the earthquake-weakened structure. None of these ventures progressed beyond the planning stages and now Hayward says, "Raze it, or no deal for the garage." The city also wants a deadline for IPG to demolish what all concerned refer to as "the 11-story building." Setting aside their desire to retain the building, IPG agreed to raze Centennial Tower within 90 days of escrow close, or by January 1, 2007. In return, they will secure a low sale price, with no down payment and a very favorable interest rate offered by the city.

That $1.5 million price generated the most concern from the few members of the public who spoke to the council. Most emphatic of those in opposition was Brian Schott, one of two candidates for mayor in the June 6 elections. Schott expressed dismay with the Council's acceptance of a sale price far below his own estimate of more than $15 million according to his survey of current market rates around $22,000 per parking space. This figure did not account for the extensive retrofitting still to be done; nor did it take into consideration the somewhat derelict appearance of this property.

A city commissioned appraisal set the building's value at $3.5 million, not including the retrofitting costs. Calling it a "sweetheart deal," Schott admonished the council to think of the word "entitlement" to describe the proposed sale.

Schott also claimed the Council waited until 5 p.m. Friday, May 7, before publishing the agenda for their regular Tuesday meeting, implying that the Council wished to avoid controversy. City Clerk Angelina Reyes stated that Agenda Line Item 6, not Item 7 caused the delay. Item 6 addressed the proposed acquisition of about two acres of land in the vicinity of 199 C Street.

Long time City Manager Armas indicated his staff should have a Purchase Agreement prepared for the Council's consideration within 60 days. By then, a new Council will be sworn in along with a new Mayor, as both Matt Jimenez and Brian Dowling are standing for reelection. They are opposed by Robert Lopez, Hank Quintel and Gary Steinberger. It remains to be seen whether or not the elections will influence last Tuesday's resolution to draft a Purchase Agreement with IPG.

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