Port to Give Tagami $600 Million Exclusive
By Ken Epstein and Ashley ChambersPosted February 7, 2014 12:44 pm
The Port of Oakland is scheduled next week to decide on signing a new exclusive negotiating agreement (ENA) with Oakland developer Phil Tagami and his partners to develop 170 acres of the old Oakland Army Base that are owned by the port. Under the agreement, which is on the Port Commission’s agenda for Thursday, Feb. 13, the port would attempt for six months to negotiate a development agreement with Tagami’s California Capital & Investment Group (CCIG) and his partner Prologis, a global leader in developing industrial real estate.
So far, the port does not have the developers or the funding to go ahead with the development of its land – to build the facilities, including warehouses and a new railroad terminal, which would allow the seaport to grow and capture more business. Two previous ENAs awarded to Tagami failed to produce a written agreement, primarily because he could not produce the private funding or grants to finance the project, and the port was unwilling to take on the debt, according to observers who are familiar with port operations.
There is nothing to indicate, so far, that Tagami and his partners are now coming to the table with private sources of money, nor explain why the port is considering him for a sole source agreement. Though Tagami’s past development projects have been paid by the city, supplemented by state andfederal grants, the port is not in a position to go into debt to foot the bill for the estimated $600 million for this project.
The port is already struggling to pay nearly $1.3 billion it owes as a result of past deals that resulted in multimillion dollar losses. The port is working with the City of Oakland on phase one of the development project, which broke ground late last year, for rail, road and utility infrastructure.
Tagami serves as the master developer for the city’s Army Base property. Tagami’s previous negotiations with the port expired, failing to produce a development contract, because he did not come up with the private money, according to West Oakland community and environmental activist Margaret Gordon, who served on the port commission from 2007 until 2012 and is familiar with Tagami’s past ENAs.
“His ENAs expired because he did not have the financing,” said Gordon. “He wanted the port to take on all liability for the financing and find all the grants. He never was able to produce what should have been a private-public joint venture.”
Gordon continued: “I was the first one (on the commission) who asked when he got the ENA, ‘Where is your money? Where is your check?
The Port of Oakland is scheduled next week to decide on signing a new exclusive negotiating agreement (ENA) with Oakland developer Phil Tagami and his partners to develop 170 acres of the old Oakland Army Base that are owned by the port. Under the agreement, which is on the Port Commission’s agenda for Thursday, Feb. 13, the port would attempt for six months to negotiate a development agreement with Tagami’s California Capital & Investment Group (CCIG) and his partner Prologis, a global leader in developing industrial real estate.
So far, the port does not have the developers or the funding to go ahead with the development of its land – to build the facilities, including warehouses and a new railroad terminal, which would allow the seaport to grow and capture more business. Two previous ENAs awarded to Tagami failed to produce a written agreement, primarily because he could not produce the private funding or grants to finance the project, and the port was unwilling to take on the debt, according to observers who are familiar with port operations.
There is nothing to indicate, so far, that Tagami and his partners are now coming to the table with private sources of money, nor explain why the port is considering him for a sole source agreement. Though Tagami’s past development projects have been paid by the city, supplemented by state andfederal grants, the port is not in a position to go into debt to foot the bill for the estimated $600 million for this project.
The port is already struggling to pay nearly $1.3 billion it owes as a result of past deals that resulted in multimillion dollar losses. The port is working with the City of Oakland on phase one of the development project, which broke ground late last year, for rail, road and utility infrastructure.
Tagami serves as the master developer for the city’s Army Base property. Tagami’s previous negotiations with the port expired, failing to produce a development contract, because he did not come up with the private money, according to West Oakland community and environmental activist Margaret Gordon, who served on the port commission from 2007 until 2012 and is familiar with Tagami’s past ENAs.
“His ENAs expired because he did not have the financing,” said Gordon. “He wanted the port to take on all liability for the financing and find all the grants. He never was able to produce what should have been a private-public joint venture.”
Gordon continued: “I was the first one (on the commission) who asked when he got the ENA, ‘Where is your money? Where is your check?
