In September 15, 2011, the City of Oakland, acting by and through its Board of Port Commissioners (the “Port”), made and entered into an agreement (the “2011 Contract") to sell approximately 64 acres along the Oakland Estuary and the Embarcadero to Oakland Harbor Partners, LLC, succeeded by assignment by Zarsion-OHP I, LLC (the “Insiders”).

The 2011 Contract states in its Recitals that the Port and the Insiders “entered into that certain Option to Purchase and Ground Lease Real Property, dated November 7, 2003… [granting] the option to purchase certain portions and ground lease other portions of the Property” (the “2003 Option”).

Thus the 2011 Contract grew out of the 2003 Option, and it was presented for approval by the 2011 Board of Port Commissioners as such. It was not until the execution of the 2011 Contract that a taxpayer exercising reasonable care should have discovered the 2003 Option, the existence of which had been downplayed and concealed by both the Port and the Insiders. It was not until the execution of the 2011 Contract that taxpayers suffered any damages from the 2003 Option. And it was not until 2014 that the larger picture of this multi-faceted, decade-long scheme to rezone the property and transfer it free-of-charge to the Insiders became reasonably apparent.

And the 2003 Option grew out of an even more questionable transaction: the award of a 2001 Request for Developer Qualifications ("2001 RFDQ") to Oakland Harbor Partners by the Port. The 2001 process suggests it was procedurally and substantively invalid for a few reasons:
 a. There were only two competing proposals, and the Shorenstein proposal was superior on its face to that of Oakland Harbor Partners in terms of both the quality and details of the proposals themselves as well as the background, experience  and qualifications of Shorenstein versus Oakland Harbor Partners

b. The selection was delegated to a three-person Commercial Real Estate Committee.

c. The most objective member, of the committee, Commissioner Kiang, recused himself from the decision apparently in protest.

d. The remaining two Commissioners Tagami and Protopappas failed to recuse themselves despite glaring conflicts of interest with Oakland Harbor Partners and Mike Ghielmetti both before and after the decision. For example, a few years after the 2001 decision Ghielmetti sold or gifted to Tagami an ownership in hi family's La Rochelle winery. For an example, from 2000-2006, Signature Properties (the successor-in-interest to Oakland Harbor Partners) and Signature's partner in the Oak to Ninth deal, Reynolds and Brown, donated $175,800 to Perata and campaigns associated with him, making them Perata's third biggest East Bay donor. It was Perata who sponsored the bil....[ADD here regarding SB____ etc.]
​
Over and above the invalidity of the 2001 decision, the scope of the 2001 Port decision never included the aggressive profit-oriented residential real estate development currently proposed. Instead the 2001 decision was explicitly limited to implementing the public-oriented Estuary Policy Plan. The 2001 RFDQ and the Estuary Policy Plan called for "the transformation of maritime and marine industrial uses into a public-oriented waterfront district that encourages significant public access and open space opportunities" and encouraged "a mix of light industrial, manufacturing, artist lofts and workshops, hotel, commercial-recreation, cultural uses, and water-oriented uses that complement the recreational and open space character of the waterfront." (See, 2001 RFDQ at p. 1.) That is, the only proposal that the Insiders were awarded on an ostensibly  competitive basis (and even this competition was rigged as just discussed) was for a public-oriented redevelopment project.

Most recently, this rigged award of a public-oriented 2001 RFDQ to Mike Ghielmetti and the Insiders by his friends Jon Protopappas and Phil Tagami has morphed into the sale to the Insiders of the entire 64-acre parcel in question for $18 million in return for nothing more than a down payment of $460,000 in 2011. Two years later, the City of Oakland repurchased 6 of those same 64 acres back from the developer for $21.5 million in cash. In return for an investment of $460,000, the Insiders received $3.5 million in cash and sixty acres of waterfront property worth as much as $300 million.

In sum this episode of municipal corruption involves the gifting gift a sixty-acre parcel of waterfront property in a prime location with panoramic views – property worth as much as $300 million – to a private developer while circumventing competitive bidding. The $300 million in question would be sufficient to finance the entire annual budget of the Oakland Unified School District. We seek emergency injunctive relief to halt the so-called Brooklyn Basin development until and unless a fair and competitively-determined price is paid to the taxpayers for the sixty acres of waterfront property.​

​                                                                         EXECUTIVE SUMMARY
                                                               OAK TO NINTH/ BROOKLYN BASIN
                                                                                    1999-2006
 
BACKGROUND
The Oakland City Council adopted the Estuary Policy Plan on June 8, 1999.  Extensive public input and collaboration between various public agencies and the Estuary Plan Advisory Committee created a vision for an extensive network of PARKS and OPEN SPACE  and PUBLIC ACCESS IMPROVEMENTS ALONG THE OAKLAND WATERFRONT, ESTIMATED TO COST MORE THAN $150 MILLION TO COMPLETE.  THE PROPOSED IMPROVEMENTS WOULD CONTRIBUTE TO THE ENHANCEMENT OF CITYWIDE AND REGIONAL RECREATIONAL RESOURCES AND ARE INTENDED TO CREATE IMPROVED CONDITIONS FOR THE REVITALIZATION OF NEARBY NEIGHBORHOODS AND THE REDEVELOPMENT OF ADJACENT PROPERTIES.  IT IS ENVISIONED THAT A “NECKLACE” OF OPEN SPACES WILL BE CREATED ALONG THE WATERFRONT, WITH THE EVENTUAL GOAL OF ESTABLISHING A CLEAR AND CONTINUOUS SYSTEM OF PUBLIC ACCESS ALONG THE ESTUARY.

[Report on Policy Issues and Targeted projects for the Estuary Plan: Proposed Waterfront Path, From Community and Economic Development Agency, William Claggett CEDA Director July 11, 2000]

 
BOARD OF PORT COMMISSIONERS –PORT OF OAKLAND SEPTEMBER  4, 2001 :  SUBJECT RECOMMENDATION TO ENTER INTO NEGOTIATIONS WITH A DEVELOPER TEAM FOR SPECIFIC PLANNING AND MASTER DEVELOPMENT OF THE OAK TO NINTH DISTRICT PROPERTIES.

BACKGROUND
On March 15, 2001, the Port Commercial Real Estate(CRE) Division released a “Request for Developer Qualifications, Oak to Ninth District Properties”(RFQ).  Two written submittals (Statements of Oualifications) were received as of the May 28 deadline: one from OAKLAND HARBOR PARNERS, LLC (SIGNATURE PROPERTIES-REYNOLDS & BROWN), and the other from OAKLAND HARBORWALK PARTNERS, LLC (INTERLAND-SHORENSTEIN).  THE TWO TEAMS OF DEVELOPERS PRESENTED THEIR QUALIFICATIONS AND WERE INTERVIEWED BY A SPECIAL PORT-CITY ADVISORY PANEL IN A PUBLIC MEETING ON TUESDAY, JULY 31st IN THE PORT BOARD ROOM.

…MEMBERS OF THE PANEL HAD ALSO REVIEWED AND EVALUATED THE WRITTEN STATEMENTS OF QUALIFICATIONS SUBMITTED BY THE RESPECTIVE DEVELOPER TEAMS.  THE ADVISORY PANEL RECONVENED IN CLOSED SESSION ON AUGUST 8 IN CONJUNCTION WITH THE CRE COMMITTEE MEETING TO CONTINUE THEIR DISCUSSION FROM JULY 31.
…
THE MARCH 15 RFQ IDENTIFIED 11 DEVELOPMENT OBJECTIVES FOR THE OAK TO NINTH DISTRICT AND CRITERIA THE PORT WOULD APPLY IN EVALUATING AND SELECTING A DEVELOPMENT PARTNER.
 
APPENDIX – A , (REQUEST FOR DEVELOPER QUALIFICATIONS OAK-TO-NINTH DISTRICT PROPERTIES.

RECITALS
WHEREAS, the Port owns certain property within the City of Oakland (“City” located between Oak Street and 9th Avenue, the  Embarcadero  and the Oakland Estuary (the “Oak to Ninth District”); and

WHEREAS,THE Estuary Policy Plan was accepted by the Board of Port of Commissioners on February 10, 1999 and was adopted by the City Council on June 8, 1999; and

WHEREAS, the Estuary Policy Plan was accomplished through cooperation and collaboration among the Port, the City and the public; and

WHEREAS, the Estuary Policy Plan contemplates development of retail, commercial and other uses of the Oak to Ninth District which attract people to the waterfront, and

WHEREAS, in furtherance of its power and duty to develop property within the Oak to Ninth District and in furtherance of the Estuary Policy Plan, the Port issued a REQUEST FOR QUALIFICATIONS for a Master Developer for the development of the Oakland Estuary Area Oak to Ninth District Properties, dated March_____, 2001(“RFQ) by which the Port solicited from interested parties qualifications and concepts for development of certain real property located in the Oak to Ninth District of the City, identified in the RFQ … and  
                                                                  
WHEREAS, on_____________the Developer submitted a Response to REQUEST FOR QUALIFICATIONS for the Port of Oakland’s Oak to Ninth District in response to the RFQ (“Developer’s Response”)…
APPENDIX –E (REQUEST FOR DEVELOPER QUALIFICATIONS/OAK TO NINTH DISTRICT PROPOERTIES)
SPECIFIC PLAN CONSIDERATIONS

1.  Why Prepare a Specific Plan for Oak to Ninth District

The ESTUARY POLICY PLAN(EPP) provides policy guidance for redevelopment of the Oak to Ninth District “INTO A LARGE –SCALE NETWORK OF OPEN SPACE AND ECONOMIC DEVELOPMENT THAT EXTEND FOR OVER 60 ACRES FROM ESTUARY PARK TO NINTH AVENUE”…

“The Oak to Ninth district is large and diverse, with several unique, complicated issues that dominate its real development potential.  It should be PLANNED in sufficient detail to identify all potential issues and to understand the options available to address these issues in a timely manner…. A SPECIFIC PLAN should be based on a strategy which analyzes the area comprehensively and which accounts for the constraints imposed by subsoil environmental conditions.

TRANSFORMATION of the district will require that several outstanding issues be resolved simultaneously.  Development feasibilities should be analyzed, phasing of improvements should be identified, and a funding strategy to finance and implement recommended OPEN SPACE should be addressed.  These require that a realistic development program and site plan be developed.”

SOME OF THE KEY ISSUES AFFECTGING THE OAK TO NINTH DISTRICT INCLUDE PORT PRIORITY USE STATUS OF THE NINTH AVENUE TERMINAL SHED, TIDELAND TRUST RESTRICTIONS ON MUCH OF THE PORT PROPERTY….
….
E. LAND USE AND OPEN SPACE CONSIDERATIONS
….
The EPP characterized the Oak to Ninth District as presenting “OPPORTUNITIES FOR POSITIVE CHANGES THAT COULD BENEFIT THE ENTIRE COMMUNITY” INCLUDING “…THE DISTINCT OPPORTUNITY TO REALIZE LONG-HELD COMMUNITY OBJECTIVES FOR THE CREATION OF A MAJOR OPEN SPACE OF CITYWIDE SCALE AND SIGNIFICANCE.”  EPP POLICIES FOR SHORELINE ACCESS AND PUBLIC SPACES “ARE INTENDED TO ESTABLISH THIS AREA OF THE ESTUARY AS THE MAJOR RECREATIONAL DESTINATION FOR THE CITY” BY PROVIDING FOR A SERIES OF INTERCONNECTED OPEN SPACES LINKED TO THE LARGER CITYWIDE SYSTEM OF TRAILS AND PARKS.  THE EPP ALSO CALLS FOR PROVISION OF CONTINOUS PEDESTRAIN AND BICYCLE MOVEMENT ALONG THE WATER”S  EDGE, AS WELL AS CONNECTIONS INLAND ALONG LAKE MERRITT CHANNEL.

IV.  DEVELOPMENT PROGRAM AND ENTITLEMENT PROCESS
   (REQUEST FOR DEVELOPER QUALIFICATIONS Oak to Ninth District Properties)
…

1.  TIDELAND TRUST.

The State Lands Commission has jurisdiction over the lands granted in trust to the Port of Oakland.  Much of the property that is subject to development pursuant to this RFQ is comprised of landfill placed on former tidelands and submerged lands and property acquired by the port with Tideland Trust revenues.  Properties offered for development in the RFQ that are encumbered by the Trust are shown in Figure 4.  For these properties for the future development program must be in compliance with the State Lands Commission’s guidelines for administration of the Trust.  The Tideland Trust IMPOSES three principal conditions: (1)land uses are limited to Trust purposes, (2) sale of fee title to Trust property to private entities or persons is PROHIBITED(ALTHOUGH GROUND LEASES OF UP TO 66 YEARS ARE ALLOWED),and (3) revenues received by the trustee from the use of Trust property must be devoted to TRUST PURPOSES.

 
BOARD OF PORT COMMISSIONERS CITY OF OAKLAND
                                RESOLUTION NO. 01359
 
RESOLUTION SELECTGING MASTER DEVELOPER FOR THE OAK TO NINTH DISTRICT PROPERTIES AND AUTHORIZING PORT AND DEVELOPER NEGOTIATION
 _______________
RESOLVED that the Board of Port Commissioners ( “Board”) hereby selects OAKLAND HARBOR PARTNERS, LLC (SIGNATURE PROPERTIES-REYNOLDS & BROWN) as the Master Developer for the Oak to Ninth District Properties and hereby authorize the Executive Director and Port Commercial Real Estate to begin negotiations with the Master Developer for the Exclusive Negotiation Agreement; and be it

FURTHER RESOLVED that the Board hereby finds and determines that the selection of a Master Developer and the grant of authority to Port staff to enter into negotiations with the Master Developer for an Exclusive Negotiating Agreement for the development of the Oak to Ninth district Properties are exempt from the provisions of the California Environmental Quality Act (“CEQA”) pursuant to CEQ and Port CEQA Guidelines Section 15061(b)(3)
 
Sept 4, 2001
Ayes:  Commissioners Ayers-Johnson, Kramer, Protopappas, Scates, Uribe and President Tagami -6
Noes: None
Abstained: Commissioner Kiang -1

 
OPTION TO PURCHASE AND GROUND LEASE REAL PROPERTY
                                           November 7, 2003
                                      CITY OF OAKLAND,
A municipal corporation, acting by and through its Board of Port Commissioners
                                            (Optionor)
                                                  And
                       Oakland Harbor Partners, LLC
                       A California limited liability company
                                             (Optionee)
 
OPTION TO PURCHASE AND GROUND LEASE REAL PROPERTY
     THIS OPTION TO PURCHASE AND GROUND LEASE REAL PROPERTY (“Option Agreement”) is made and entered into as of November 7, 2003 (“Effective Date”), by and between the CITY OF OAKLAND, a municipal corporation, acting by and through its Board of Port Commissioners (“Optionor”) and OAKLAND HARBOR PARTNERS, LLC, A California limited liability company (“Optionee”).
 
                                                    RECITALS

1. Optionor is the owner of that certain property in the City of Oakland, Alameda County, California, located between Oak Street and 9th Avenue, the Embarcadero and the Oakland Estuary (the “Oak to Ninth District”) consisting of improved and unimproved Land,.

1. Optionor is vested with the power, and it is Optionor’s duty for and on behalf of the City of Oakland, to make provisions for the needs of commerce, shipping and navigation of Optionor, to promote and develop the Port of Oakland, and in the exercise of such power and fulfillment of such duty, to enter into any option and/or purchase and sale agreement of Optionor-owned properties upon such terms and conditions as the Board of Port Commissioners shall prescribe…

                                           
                                            CHAPTER 542
 
An act relating to the Oakland Estuary
                             [Approved by Governor September 15, 2004. Filed with Secretary of State September 15, 2004]
 
The people of the State of California do enact as follows:
SECTION 1. This act shall be known, and may be cited, as the Oak Street to 9th Avenue District Exchange Act.
SECTION 2.  For the purposes of this act, the following definitions apply…
(k)  “FINAL TRUST LANDS”  means those lands within the Oak Street to 9th Avenue property that will be CONFIRMED as subject to the public trust and to the Oak Street to 9th Avenue legislative grants upon the completion of the sale and exchange authorized by this act and are generally depicted in the diagram referenced in Section 12.
…e
 
 
PROMISSORY NOTE
[SECURED BY DEED OF TRUST]
$13,500,000.00
 
                       FOR VALUE RECEIVED, the undersigned borrower(“Borrower”) promises to pay without offset or deduction, to the City of Oakland, a municipal corporation acting by and through its Board of Port Commissioners (“Holder”), or by, at 530 Water Street, Oakland < Ca. 94607, or such o lawful money of the United States, the principal of Thirteen Million Five Hundred Thousand and No/100s Dollars($13,500,000.00), with interest on the principal balance from time to time remaining unpaid from the date of this Promissory Note(“Note”) until paid, in the amount and in the manner hereinafter described
 

 
OAKLAND CITY COUNCIL
RESOLUTION NO. 79982   C.M.S.    JUNE 20, 2006
RESOLUTION AMENDINNG THE GENERAL PLAN ESTUARY POLICY TO CREATE A NEW LAND USE DESIGNATION, PLANNED WATERFRONT DEVELOPMENT -4 AND TO ADOPT LAND USE MAP AND TEXT CHANGES IN CONNECTION WITH THE OAK TO NINTH AVENUE MIXED USE DEVELOPMENT PROJECT
 
WHEREAS, the Oak to Ninth Avenue Mixed Use Development Project (“Project”) area is within the Estuary Policy Plan area of the General Plan and is currently designated Planned Waterfront Development-1 and PARKSM OPEN SPACE, PROMENADES;

WHEREAS, RESIDENTIAL uses ARE NOT specifically permitted by the Planned Waterfront Development-1 designation; and

WHEREAS, the Project proposes 3,100 residential units…and

WHEREAS, the proposed Planned Waterfront Development- 4 designation and other text changes will allow the mix uses proposed by the Project; and

WHEREAS, the text amendments to the ESTUARY POLICY PLAN will establish the NEW Planned Waterfront Development-4 provisions, clarify and revise certain policies and statements applicable to the Project, and update information based on changed conditions since the adoption of the Planned..

 
 CONCLUSION
 OAKLAND CITY COUNCILS RESOLUTION 79982 C.M.S  JUNE 20, 2006
“RESOLUTION AMENDING THE GENERAL PLAN ESTUARY POLICY PLAN ESTABLISHING A DESIGNATED WATERFRONT DEVELOPMENT-1 AND PARKS, OPEN SPACE, PROMENANDES SUPPORTS THE CLAIM THAT THE APPLICANT OAKLAND HARBOR PARTNERS LLC CONSPIRED ON ARE BEFORE TO BEING SELECTED AS THE PREFERRED DEVELOPER FOR OPEN SPACE DEVELOPMENT FOR THE OAK TO NINTH PROJECT.

ALTHOUGH, BEING AWARE OF THE RESTRICTIONS AND PROHIBITIONS OF THE TIDELAND TRUST/STATE LANDS COMMISSIONS POLICIES REGARDING TRUSTED LAND, THE APPLICANT SUBMITTED A PURCHASE OPTION IN NOVEMBER 7, 2003 OF THE SUBJECT LAND, TWO YEARS [SEPTEMBER 4, 2001] AFTER THE PORT SELECTED THE APPLICANT AS THE DEVELOPER WHEN THE 63 ACRES WAS NOT IDENTIFIED IN THE REQUEST FOR QUALIFICATIONS (RFQ) WAS NOT A MATTER FOR CONSIDERATION FOR PURCHASE.  THE COMPETETING APPLICANT “OAKLAND HARBORWALK PARTNERS LLC” WHOSE TEAM “REQUIRES NO FINANCING CONTINGENCY TO COMPLETE THE DEVELOPMENT PURSUANT TO A BINDING DISPOSITION AND DEVELOPMENT AGREEMENT” WAS NOT GIVEN AN OPPORTUNITY TO COMPETE WHEN THE SCOPE OF THE PROJECT CHANGED.

ADDITIONALLY, THE APPLICANT DID A “PROMISSORY NOTE OF $13,500,000. FOR THE PROPOSED PURCHASE.  IT SHOULD BE FURTHER NOTED.

THE EVIDENCE SHOWS THAT THIS WAS A FRAUDULENT LAND DEAL FOR THE PURPOSE OF EXECUTING THE DEVELOPMENT OF 3100 UNITS OF MARKET RATE HOUSING THAT COULD ONLY BE ACHIEVED BY REMOVING THE SUBJECT PROPERTY FROM UNDER THE TIDELAND TRUST/STATE LANDS COMMISSION ; WHICH WAS ACHIEVED RETROACTIVELY BY CHAPTER 542 INTRODUCED BY THEN SENATE PRO TEM DON PERATA AND SIGNED BY GOVERNOR JERRY BROWN SEPTEMBER 15, 2004
 
    
Oakland City  Council  Ordinance no. 12758
AN ORDINANCE ADOPTING THE PLANNED WATERFRONT ZONING DISTRICT(PWD-4) FOR THE OAK TO NINTH MIXED USE DEVELOPMENT PROECT.

WHEREAS, on May 28, 2004, in accordance with the California Environmental Quality Act (“CEQA”), City staff issued a Notice of Preparation stating the City’s intent to prepare an Environment Impact Report (“EIR”)for the Oak to Ninth Avenue Mixed Use Development Project; and

WHEREAS, part of the proposed Project, the applicant requested adoption of a NEW Planned Waterfront Zoning District(PWD-4) to allow for residential, commercial, open space and mixed use development on the Project site  … July 18, 2006