SunCal Loses Funding, Project Stalled

As many of you have probably heard, SunCal’s proposed development at the former Oak Knoll Naval Hospital site has been put on hold indefinitely because of the collapse of SunCal’s financial backer, Lehman Brothers. What this ultimately means for the future of Oak Knoll is uncertain, but there appear to be two main possibilities: The project could simply sit abandoned until SunCal finds a new financial backer, or it could be sold to another developer. Either way, it is possible that in the current economic climate it could be many months before the project gets moving again.

Nevertheless, we understand SunCal is actively seeking a new financial partner, and if it acquires one, the process could indeed restart soon. SunCal is also the developer for the Alameda Point project, for which it recently acquired D.E. Shaw as its new financial partner. With Shaw now at the helm, that project is again moving ahead.  SunCal has said it would announce in a few weeks whether Shaw will be its new partner at Oak Knoll, and if so, we cannot assume that there will be a long lull (although that could still be the case).
 
Project Entitlements Still Not Secured

SunCal has not yet approached the city for approval of its final site map for Oak Knoll, which would give the project the entitlements it needs for development at the site to move forward. Selling the property without the entitlements already in place would be problematic, so it appears likely that SunCal will eventually continue the planning process and pursue the entitlements whether or not it intends to keep the property. Some 2,000 trees have already been removed from the site, but work has been halted and hospital demolition, originally slated for November, has been taken off the calendar. No new timeframe has been set for demolition.
 
The Coalition’s Role

The Oak Knoll Coalition has worked very hard over the past several years to ensure that SunCal’s plans for the site are a good fit with the surrounding community and that they conduct their project responsibly. Besides commenting extensively on various aspects of the Supplemental Environmental Impact Report, OKC’s recent efforts have focused on stopping SunCal’s current plan to raze the namesake Knoll and cut down hundreds of native oaks in order to build a small number of houses on the ridge. The Sierra Club has supported us in our fight to preserve the Knoll, and the East Bay Regional Park District has expressed interest in adding the Knoll and oak woodlands to its parklands system. Good progress was being made in this direction when the project came to a screeching halt. The OKC also strongly supported the recently approved Measure WW, which includes dedicated funds for the Oak Knoll creek trail.
 
The Oak Knoll Coalition remains committed to the community’s longstanding goals for the Oak Knoll site, which include advocating for reasonable density; monitoring environmental mitigations during demolition and construction; securing  adequate traffic mitigations, supporting the daylighting and restoration of Rifle Range Creek; preserving Club Knoll for public use; and ensuring that active recreation areas and natural open spaces can be enjoyed by the entire community.

Focus Shifts to Security and Demolition

Now, with the project stalled and the possibility that it may remain so for an extended time, the Coalition’s focus is shifting to the more immediate concerns of neighbors surrounding the site: blighted buildings and security. With the trees cleared, visibility into the site has increased, and the decrepit buildings are prominent eyesores to passersby. They are also magnets for squatters, metal scavengers, graffiti artists, meth labs and other illegal activities -- all of which increase the risk of fire or other trouble at the site.

The OKC is increasingly concerned about site security now that work has stopped and believes that buildings at the site should be demolished as soon as possible, whether or not development is imminent. OKC representatives have contacted SunCal as well as city officials to express these concerns and to stress the importance of quick demolition. We have not been able to secure any promises to date, either from the developer or the city, but we will continue to advocate for increased security and timely demolition of the buildings at Oak Knoll. The Coalition will continue to monitor the changing conditions and stay on top of the dynamically unfolding events. We will update this page with new information as it becomes available.