Infrastructure work has begun on Oakland’s largest active real estate project, the $1.5 billion Brooklyn Basin development that will transform the city’s southern waterfront into 3,100 housing units and 200,000 square feet of retail.
The project officially broke ground in March 2014, with environmental remediation as the first step in the build-out.
Signature Development Group and its Chinese financial partner Zarsion Holdings have begun building sewage, water and electric systems. They are creating new streets and turning Oakland’s Embarcadero into a landscaped parkway. The project will include solar-powered lights and a reclaimed water distribution system.
But groundbreaking of the first phase of the project’s residential portion, originally slated for this summer, has been delayed by a year until the second quarter of 2016. The first building of roughly 300 units will break ground by the second quarter of 2016. Occupancy is scheduled by the end of 2017.
“I was a bit optimistic last year. That said, the remediation took a little longer and the city of Oakland review of the engineering took a little longer,” said Mike Ghielmetti, president of Signature Development Group about the delay in starting work on the first residential units.
The developers are also working with network providers Paxio and Webpass to install fiber optic network with speeds of one gigabit per second to appeal to Internet-hungry residential tenants. It will also install electric vehicle charging stations. The project’s new infrastructure will give the apartments more modern features compared to the majority of new projects, according to the developers.
“We’re going to be bringing in a lot of technology that you’re not seeing in the Bay Area,” said Deborah Tu, project manager at Signature Development.
The project will be a mix of rentals and for-sale housing. Oakland controls two parcels, which will have 465 affordable units out of the project’s 3,100 total units. Specific designs for individual buildings haven’t been finalized, and individual parcels may be sold to other developers, which will lead to more varied architecture.
Signature is also working with the city on designs for a shoreline park atop a man-made platform above the water, with approvals scheduled this year and an opening by the time the first residents move in around 2017. The developer wants to include historic elements including maritime artifacts and an industrial theme to the landscape architecture.
The 62-acre project will also have a total of 32 acres of parks open to the public, creating a new waterfront district inspired in part by Battery Park City in New York, the Pearl District in Portland, Petco Park in San Diego and Belltown in Seattle.
Brooklyn Basin’s name isn’t a reference to the New York City borough that Oakland is often compared to. It comes from local history. In 1845, over 200 Mormons sailed from New York and became influential colonists in the area. In 1956, a city named Brooklyn was established, named after the Mormons’ ship, and in 1872, voters approved an annexation by Oakland.
Reminders of the city remain, including the body of water known as Brooklyn Basin, which gives Signature’s project its name.
The site is now a blank slate, with fields of grass and a view of downtown Oakland. An old Port of Oakland building will be partially preserved as an event space, but the rest of the project will be ground-up construction, ushering in the largest concentration of new buildings that Oakland has seen in decades.
“The vision here is to create a new neighborhood, a new district,” said Ghielmetti, who worked to get approvals since at least 2000 and prevailed against lawsuits trying to block the development.
Brooklyn Basin was approved in 2006, but with the credit markets frozen after the recession, Signature couldn’t get financing. “Capital got very risk averse during the recession,” said Ghielmetti. Signature tried to lure Lawrence Berkeley National Laboratory to build a campus on the site, but the institution chose Richmond instead.
Jean Quan, then the mayor of Oakland, connected Signature through a college friend to Zarsion Holdings, a developer active in China and Inner Mongolia. Chinese investors have flocked to buy gleaming office towers and condos in San Francisco, but they had never invested on a large scale in the East Bay.
Signature’s pitch was based around potential. “We explained, Mission Bay looked like this in 1997. And look at Mission Bay now. The South of Market area looked like this in 1990, and look at it now. It’s a logical next step,” said Ghielmetti. “Even though we didn’t speak the same language, we spoke the same language in terms of development.”
Zarsion, headed by former school headmaster Shan Weixun, has completed over 65 million square feet of real estate in China. Its status as a private company may have also opened it up to more risk, said Ghielmetti.
The Chinese company reportedly invested an initial $28 million to allow Signature to begin design work and has provided more equity for the $1.5 billion project. Ghielmetti declined to disclose the size of Zarsion’s stake or the amount of money they have invested.
Arthur Wang is president of Zarsion America and has two other employees who share office space at Signature’s headquarters at the Hive in Oakland’s Uptown District.
“What Zarsion has always been good at doing is being a master-plan developer,” said Wang. “The scope of Brooklyn Basin, along with its ambition to build a new community near the waterfront is very appealing to Zarsion.”
Wang references Zarsion’s master-planned project in Tianjin, a city of 14 million that is adjacent to Beijing, as a parallel to Brooklyn Basin.
He now lives in Emeryville and enjoys going to Scott’s Seafood restaurant at Jack London Square and walking around Lake Merritt. In some ways, he is the first arrival for a project that is expected to attract thousands of new Oakland residents. Of Oakland’s 4,500 approved market-rate residential units, 3,100 of those units will be at Brooklyn Basin.
A new wave of developers are investing in Oakland, including the Blackstone Group (NYSE:BX), America’s largest landlord, which is partnering with Los Angeles’ CityView on a 435-unit project in Oakland’s Broadway-Valdez District.
“The amount of institutional capital that’s coming to town is enormous,” said Ghielmetti, who grew up in the East Bay. His father James headed the single-family homebuilder Signature Homes, based in Pleasanton, for 31 years, and went through multiple cycles of boom and bust.
The challenge at Brooklyn Basin will be linking the project to the rest of Oakland. The nearest BART station, Lake Merritt, is about a mile away from the project’s western edge. Signature is in talks with AC Transit and the city to provide a shuttle to both Lake Merritt and the 12th Street BART.
Signature also hopes to fill the ground-floor spaces of the new buildings with retailers and run regular events such as concerts and farmer’s markets.
“I think suburbs are fine. Building in the urban areas – you want a street scene. The energy and the vitality of that are what defines a project,” said Ghilmetti. “That’s why I love a city like Oakland. It’s that energy.”
If you provide us with your email address to subscribe to Signature Development Group communications, we will use it only for notifications of market reports and our own services. We will NEVER share your information with anyone else. If you don’t like receiving our periodic emails, please unsubscribe anytime and we will take you immediately off the list.
We collect personally identifiable information, like names, postal addresses, email addresses, etc., when voluntarily submitted by our visitors. The information you provide is used to fulfill your specific request. This information is only used to fulfill your specific request, unless you give us permission to use it in another manner, for example to add you to one of our mailing lists.
The Site may use cookie and tracking technology depending on the features offered. Cookie and tracking technology are useful for gathering information such as browser type and operating system, tracking the number of visitors to the Site, and understanding how visitors use the Site. Cookies can also help customize the Site for visitors. Personal information cannot be collected via cookies and other tracking technology, however, if you previously provided personally identifiable information, cookies may be tied to such information. Aggregate cookie and tracking information may be shared with third parties.
We may share information with governmental agencies or other companies assisting us in fraud prevention or investigation. We may do so when: (1) permitted or required by law; or, (2) trying to protect against or prevent actual or potential fraud or unauthorized transactions; or, (3) investigating fraud which has already taken place. The information is not provided to these companies for marketing purposes.
Your personally identifiable information is kept secure. Only authorized employees, agents and contractors (who have agreed to keep information secure and confidential) have access to this information. All emails and newsletters from this site allow you to opt out of further mailings.