Rob AriasThe news of Sutter Health’s plans to open a massive campus in the center of Emeryville sent shock waves across the city when it was announced back on February 19.
The sale of the property has already fetched the city over $11 million via the city’s property transfer tax. The years of planning and building permits could bring additional millions in revenue for the city. The business and property taxes collected should be an economic engine for Emeryville, indefinitely helping fund the services and infrastructure Emeryville residents have come to expect.
But there’s clearly a lot to consider with this project other than just revenue. The 12-acre, 1.3 million square foot campus would be a regionally serving medical center meaning patients from all over the East Bay would be drawn to it likely producing several hundreds of daily car trips when at full capacity.
The project may run counter to Emeryville’s push to be more bike and pedestrian friendly. The recently installed diverter, The Horton Bike Boulevard, the plans for the 40th Street Multimodal project, The San Pablo Avenue Corridor project … these would all be impacted by the influx of vehicles.
“If you don’t know your past, you won’t know your future.”
It’s not yet clear to what degree the battle will be waged over this project and what tools residents or the city has to push back on it. Like most projects, much of the leverage will fall on zoning, development bonuses, the Environmental Impact Report, and traffic studies.
Some residents might be surprised to learn this isn’t the first time a massive health care provider has targeted Emeryville’s central location for a hospital. From 1993-1995, Emeryville was the site of an epic political battle that pitted the tiny city against a much larger neighbor with many forces and interests at play. It’s worth revisiting this story and reviewing the parallels that we may yet witness again.
1989: Del Monte Plant No. 35 Shuttered
Originally developed in 1918 by Western Cannery, the site was acquired by Virden Packing in 1921. It was next acquired by California Packing Corporation in 1927 who changed its name to Plant No. 35. Plant No. 35 thrived for decades eventually adopting the name of one of their popular brands (Del Monte).
The rising popularity of frozen foods in the 1960s caused a decline in canned food sales and many of California’s urban canneries became obsolete and were forced to close. When the gates of Plant No. 35 closed in 1989, it was the last cannery operating in the Bay Area.
The plant was razed in 1992 leaving the site fallow and open to opportunity.
1993: Emeryville Among 6 Options for Relocation
This opportunity came a year later in 1993 when Kaiser listed Emeryville as one of six locations the HMO was exploring to replace their aging Oakland Broadway hospital (the other five in Oakland).
Kaiser had called Oakland home since the end of WWII when industrialist Henry J. Kaiser began pivoting from military production to consumer products (incidentally including an automobile designed in Emeryville).
Kaiser expressed a preference for a 24-acre site on the Laney College campus occupied by playing fields and surface parking. The site was preferred in part because of its superior public transit and highway access.
In exchange for allowing Kaiser to locate there, Laney was promised it would play an expanded role in medical job training opportunities for their students. The negative impact was that it could limit the college’s future growth opportunities. “With a project of this magnitude, we can’t keep all our eggs in one basket,” said Kaiser spokesman Ron Treleven at the time.
Peralta Trustees Torpedo Planned Move Within Oakland
When brought to a vote by Peralta Community College trustees, they voted 5-1 to kill the land lease agreement citing the need for a “real campus” (incidentally, 24 years later the same board killed an agreement with the Oakland Athletics that would have kept the team in Oakland).
City of Oakland officials scolded the board for their decision saying it was uninformed and personal with others blaming legal restrictions on use of the site which was intended for educational use.
Del Monte Site becomes Kaiser’s “No. 1 Choice”
A frustrated Kaiser immediately turned it’s focus to its Emeryville option. “With Laney no longer available, the Del Monte site does become our No. 1 choice at this time, based on the criteria we have,” said Kaiser spokesman Ron Treleven.
Emeryville officials seemed giddy over the prospects and moved quickly to enter into an exclusive negotiating agreement. “Clearly, our chances have been fantastically improved,” said Kofi Bonner, Emeryville’s Director of Economic Development and Housing. “We are prepared, willing and able to work with Kaiser.”
Emeryville’s advantage was its central location that was smack dab in the center of its service area that included Richmond and Albany.
The $300M hospital would provide $3.5M in up front payments and bring in an estimated $1.5 annually in taxes not to mention the thousands of jobs the project would bring to the city. To lock in the support of Emeryville’s population (6,400 people at the time), they teased free healthcare to all residents.
Emeryville quickly began chipping away at the many obstacles that stood in the project’s way. Property was acquired and cleared, and businesses and homes were relocated. The city’s general plan, which called for homes and open space on the land, would need to be amended.
Economic Development Director Kofi Bonner
The 38-year-old Ghana-born Bonner, considered a wunderkind in the city planning realm, was a key-figure in the city’s well documented renaissance. Bonner, along with City Manager John Flores and Director of Planning Gaye Quinn, are among the key strategists that helped transform Emeryville from the gritty industrial town to the mixed-use, retail destination it is today.
Bonner was involved in the early planning stages of projects that residents enjoy today including East Bay Bridge Shopping Center, The Amtrak Station, The Emeryville Child Development Center and “The Gateway Fashion Center” that ended up becoming Bay Street.
Bonner earned a Master of City Planning and a Master of Architecture from the University of California at Berkeley in 1987. He was considered particularly gifted in the public financing aspect of infrastructure projects. “He was very quick, particularly with numbers,” provided U.C. Berkeley professor of urban planning Ed Blakely. “He’s not a perfectionist but he likes to get things done fast and do them well.”
“We will be a self-contained city,” Bonner told the Oakland Tribune in a 1994 profile of him. “We will have the amenities of a big city with the feel of a small town.”
1994: Oakland Coalition Formed to Oppose Project
Some resistance to the project began to build within Emeryville from groups opposed to growth and the obvious traffic concerns. But the biggest opposition did not come from within Emeryville, it came from Oakland interests.
The loss of Kaiser, Oakland’s largest employer, would be catastrophic for Oakland’s tax base. Forces began to mount to oppose the relocation.
A coalition was quickly assembled by a political operative named Brad Paul consisting of environmental, preservationist and Pro-Oakland booster groups. “I know how to stop things from happening,” a quote attributed to Paul in one of Emeryville City Councilmember Ken Bukowski’s Emeryville City Bulletin memos that he distributed throughout the city.
This coalition adopted the name “Bay Area Coalition on Kaiser” or BACK. “Oakland’s downtown is the perfect regional site for Kaiser; Emeryville’s is a disaster,” Paul is quoted as saying.
Oakland took measures to delay the process by seeking a temporary restraining order from a Superior Court Judge. “It’s sleazy how they’re just pushing this Emeryville Planning through as fast as they can,” said Stephanie Garrabrant-Sierra, an attorney for Legal Aid.
Jerry Brown Joins Fight
Another vocal opponent of the project was former Governor Jerry Brown who joined forced with BACK.
Brown, coming off an unsuccessful run for President that ultimately saw Bill Clinton’s election, had settled into Oakland to stage his political comeback. He moved his grassroots “We the People” platform to the city and began hosting a radio program that focused on political discussions.
Meanwhile in Emeryville, Ken Bukowski, finishing off a one-year term as Mayor, was enthusiastic about the project. “We should be proud that a business like that wants to come here,” Bukowski told the Tribune on November 13.
While Bukowski was clearly in favor of the project, fellow council member Greg Harper was not.
“We’re being gigantified,” Harper told the Tribune on November 2, 1994. “With a handful of large industries calling the shots, he said, Emeryville could become a modern-day company town. That’s putting all your eggs in a few baskets. Politically, that means if you cross them, you’re dead.”
Planning Commission Showdown
A “showdown” between these groups was set for the Emeryville Planning Commission meeting on November 3, 1994.
Brown and members of the BACK coalition swarmed Emeryville council chambers in an effort to push back on the project.
“I have the comment that you inserted inside this monster tome with just 9 or 10 days to read it.” spoke Brown referencing the 1,300 page, 3-inch thick Environmental Impact Report (EIR) while jamming his finger on the podium to emphasize his point. ”I’m just here to tell you that we’re going to fight it every step of the way because we don’t think as a matter of law, it’s right or as a matter of policy that it represents sound judgment on the part of the city.”
Among the estimated 200 in attendance at the meeting were supporters of the project as well. ”They’re trying to portray Emeryville as Bumpkinville,” Emeryville resident Jonathan Marks said in a November 4th Oakland Tribune article. “We‘re being accused of taking Kaiser from Oakland, when what’s happening is Oakland is trying to take it from us.”
Even Piedmont interests came out in opposition of the project fearing the impact of traffic caused by outpatient use of the existing Broadway facility.
In an unexpected move, The Planning Commission voted to continue the public hearing to give the public more time to review the EIR. This delay did not change the outcome and the Planning Commission ushered the project through at the next meeting.
“The site was not ideally situated for a hospital and there was clearly a lot of problems with it, but we felt a lot of pressure from the city to approve it,” provided still active Emeryville resident Kris Owens who was Chair of the Planning Commission at the time.
November, 1994: Plan Approved
As the final hurdle, the plan was brought before City Council on November 21, 1994. Under pressure, Mayor Dick Kassis opted to delay the vote on the project.
The item came back to council on November 30. In what was described as an “exhausting” meeting that concluded at 11:30 p.m., council voted 4-1 to approve the needed General Plan amendment and EIR certification (Harper dissenting).
Councilmember Nora Davis described the project as a “seed for rejuvenation along San Pablo Avenue that will spread south to Oakland and north to Berkeley.”
Phase I of the project was slated to begin in early 1996 and be completed in mid-1999. It would include 292 beds, 2,600 parking spaces, a Health Education Center with a library that would be open to the public, and “liner” buildings along the perimeter to accommodate other uses including food and retail tenants.
It also included plans for a future campus expansion just north of the campus along Hollis that would increase capacity to 450 beds and 3,600 cars. The biggest obstacle identified in the Environmental Impact Report was of course traffic and a city shuttle from BART was included in the approval to help mitigate this.
The 477-page PUD Document (Planned Unit Development) is still available online.
Shortly after the vote, Emeryville’s Director of Economic Development, Kofi Bonner was lured to San Francisco to be their Redevelopment Agency Deputy Executive Director.
1995: Threats of Lawsuits Begin to Pile Up
In the wake of the approval, Berkeley city council voted to file suit against Kaiser for failing to comply with The California Environmental Quality Act (CEQA).
A divided Oakland began weighing its options for also filing suit to prevent them from moving. Oakland was more conflicted about taking legal action as they didn’t want to completely alienate Kaiser and risk them completely abandoning their city.
AC Transit, who maintains a fueling and maintenance yard adjacent to the project, voted to file an official complaint against the project citing fears of gridlock. AC Transit was also weary of the competition by the proposed private shuttle that would take Kaiser customers to and from MacArthur BART.
Kaiser was able to successfully negotiate with AC Transit and Berkeley to avoid a potentially protracted legal fight. Kaiser also agreed to pay Berkeley and Oakland nearly $4 million for traffic improvements, plus contributions for low-income housing to ease the impact of the project on the adjacent cities.
At the time, the worldwide web was in its infancy and most of the stories written about the project are in printed newspaper archives. SF Gate (initially known simply as “The Gate”) was one of the first Bay Area online news sources to cover the project. They published their first story on the project on January 3, 1995 detailing the “successful” meeting between hospital officials and Berkeley leaders.
Kaiser Abruptly Pulls Plug
By late 1995, citing shifting industry trends including shorter hospital stays, Kaiser abruptly put plans for the hospital on hold.
They began exploring deals with competing hospitals that also have more rooms than they can use. “This is the future of health care — people consolidating and working together instead of competing,” said Kaiser spokeswoman Katherine Alexander in this December 1996 SF Gate article.
Emeryville City Manager John Flores noted the city was prepared to put the property back on the market. “There’s a lot of interest in any property in Emeryville,” he noted.
1997: Pixar Steps in
Pixar, fresh off the success of its groundbreaking Toy Story feature-length computer animated movie, was rapidly outgrowing its Point Richmond facility and sought a more central location to boost recruitment efforts. They set their sights on 15 acres of the former Del Monte site that they acquired for $5.8 million.
In 1998, Emeryville City Council approved a master plan for the Pixar campus that included two new buildings with a private park for employees. The city conceded the right of way to several segments of streets perpendicular to Park Avenue to satisfy their privacy concerns.
The campus, newly constructed to resemble an old factory like what was previously there, was completed in November 2000. Monsters, Inc. was Pixar’s first film released from their new campus in 2001.
Pixar is currently Emeryville’s largest employer with an estimated 1000 employees but could be eclipsed by Sutter Health if their project goes through as planned.
Postmortem
All told, Kaiser spent a reported $43 million on the planning process before “settling” on the existing Broadway location for expansion. The two plus years spent planning, a relative “sprint” for a project of this magnitude by today’s standards, was all for naught.
Over the years, some have speculated that Emeryville was merely used for leverage with Oakland to allow them to expand on their existing site. This expansion was eventually completed in 2014.
Bonner’s tenure in SF did not last long and in 1995 he took a job with the City of Oakland. He’s held many positions since then and currently serves as CEO of Bedrock Detroit whose mission is to help revitalize the Detroit area.
Jerry Brown went on to run for and win the Oakland Mayorship in 1998 serving two terms. His victories helping revitalize Oakland earned him a second tenure as Governor of California. Brown’s decision to dissolve Redevelopment Agencies as governor drastically cut funding for municipalities and is frequently blamed for city’s inability to build affordable housing and has contributed to the state’s rampant homeless population.
Sutter Hospital is a non-profit and will not pay taxes. The EIR and Conditions of Approval (Planning approvals) may require ongoing contributions by Sutter for special shuttle services (such as The Emery serving West Oakland BART) and non-profit organizations, as property owners, are generally subject to assessments like the PBID that funds the Emery Go-Round (EGR), just like any other property owner.
Thanks for your comment. My understanding is that Non-profits are exempt from income taxes but not ALL taxes. I’ll need to probe a little deeper on the different revenues they’ll bring to Emeryville.