Op. Ed. From the Desk of Jason Mahon, Oakland CA 94609. (415) 279 4053. MrJasonMahon@gmail.com.

Oakland agency selling key real estate to recycler in exclusive deal during billion dollar garbage contracting process.
Oakland, CA Friday December, 16th, 2011. Covered with large piles of dirt, the odor of a sewage gently blowing through the air, and with the noise of several freeway interchanges routing traffic in the sky, the 28 acres of property in the North Gateway Area of the Oakland Army base, often called the Subaru and Baldwin lots, admittedly doesn't look or smell like a valuable or important real-estate asset. Yet, this property is potentially one of the most valuable in Alameda County. This tight little corner right next to the Bay Bridge and EBMUD is one of the few locations in all of Alameda County where it is possible to site and permit a solid waste or recycling facility without not-in-mybackyard (NIMBY) type complaints. It is also a central location to both near the port of Oakland and major freeways, which creates the potential to payoff for garbage and recycling logistics in the East Bay. It's no wonder local garbage and recycling companies are wanting to the purchase the the location. They aren't alone. The neighboring landlocked waste water treatment plant can't expand its operations if it doesn't purchase some or all of the property from the owner, the City of Oakland. It's a great and rare situation for Oakland to be in multiple competing buyers for a scarce and in demand asset. In light of the many factors that are driving up the price of the North Gateway property, it may be suprising that the Redevelopment Agency of Oakland is proposing to enter into an exclusive negotiating agreement (ENA) with, only two of the city's recyclers, California Waste Solutions (CWS) and Custom Alloy Scrap and Sales (CASS). Putting an ENA in place will result in a cap on the price that the city will be able to sell this land for and block other parties from offering higher prices to cash-strapped Oakland. The timing is also interesting. As every Zero Waste advocate in the area knows, Oakland is about to put its garbage and recycling contracts out to bid in a process that will secure the winners for a set of contracts worth $2 billion dollars over the next 20 years. These are some of the largest contracts the city has to offer. Control of facilities and land is a significant barrier for companies trying to compete for these contracts because the contracts will include a facility which currently doesn't exist in the area. It may be just a coincidence that the proposed ENA would give CWS the right to purchase the property (but not the obligation) for the same period of time the city is putting these recycling contracts out to bid. Having that option will give CWS a signficant advantage in bidding at the cost of other interested companies and, ultimately, at a cost to Oakland residents. The North Gateway property may also hold the key to building new facilities that could help to increase recycling and reaching the city's Zero Waste goals - goals that the city hasn't yet been able to achieve. If this land is so valuable to so many parties, there may be some wisdom in not selling it. Instead, why not lease it to the winners of the upcoming contracting process for garbage and recycling contracts. Leasing after the contracts have been awarded would make the bidding process more competitive by evening the playing, and bringing more potential recycling companies to bid. The city could also consider selling the properties to the EBMUD, the land-locked waste water treatment plant operator. EBMUD directors are publicly elected, the agency's meetings are also public, and the EBMUD district is subject to things like ballot measures and the Brown Act, all of which provide the public a level of control in the land's use that a private buyer simply won't provide. If the city sold the North Gateway property to EBMUD, Oakland citizens and elected officials would still have the potential for direct and indirect control of the area and use. EBMUD also has the ability to finance any project that the city might want or need with tax free bonds. With these options, why would the city agency pursue an exclusive agreement that would sell the land for a fraction of its value and jeopardize the intergrity of a mult-billion dollar contracting process? California Waste Solutions is well versed in Oakland politics. It was awarded a recycling contract in a no-bid ammendment in 1992 as well as being awarded a city loan for $350,000 for the express purpose of purchasing vehicles. Since 2008, CWS (and CASS) as well as its officers, have directly and indirectly

contributed to elected officials' campaigns in Oakland. At least three of these donations made by CASS and CWS officers were made in March of 2011 (to councilmember Schaaf) well after closed session meetings with the two companies started in December of 2010. The ties run deep, even familial. One of the officers of CWS is the daughter of Councilmember Larry Reid (the current President of city council and member of city council for 14 years.) Councilmember Reid also revealed in interview that he was the godfather of one of the children of David Duong, the founder of California Waste Solutions. These relationships have cast a shadow over the integrity and neutrality of the proposed Exclusive Negotiating Agreement with city. It's difficult to describe the ENA agreement as "arm's-length" and impossible to call it a competitive or market rate sale of the property. Community organizations and residents have been petitioning Oakland City Council to move recyclers out of West Oakland. At MClymonds high school in the area, there have been elevated levels of heavy metal found in the air. All signs point to the recyclers working with metals. Moving these organizations out of residential communities has been a worthy goal of Oakland City Council member, Nancy Nadel. In this process, city officials have presented dealing the city's most valuable land and its largest contracts to CWS and CASS in an ENA as the only way of accomplishing this goal despite other feasible and economically preferable options being present. Before the city vastly expands the scope of CWS contracts and embeds them in Oakland garbage and recycling infrastructure indefinately, maybe someone should review their performance under their existing contract. In an information request dated January of 2011, city staff reported that the most basic of reports, contractually required recycling tonnage reports from CWS, weren't on file and didn't exist. This begs the question, who is counting and monitoring these contracts? How much recycling actually gets recycled and what happens to the garbage residual that doesn't get recycled, residual which is regulated and taxed? It seems prudent to first understand how CWS is performing under their existing duties and responsibilities before vastly expanding them. This hasn't been done. If this all sounds new, that's because all of these conversations have been happening in closed session meetings for over a year without the possibility for any public input. Public records requests asking for information on proposals or copies of requests for proposals regarding the North Gateway land have been denied by the city despite Brown Act laws. The city is hiding its process from the public while the EBMUD has considered the matter open. EBMUD did release its offer to purchase the property as public information in April 2011 and that offer was for $522,000 per acre. The CWS then offered 6% higher. CWS had the knowledge and access to EBMUD's offer when making a slightly higher offer, and EBMUD was not given the opportunity to respond. Andy Katz, a director of EBMUD, did state that EBMUD negotiators, whom are about to be blocked out of the process have the authority to negotiate further implying that EBMUD was ready to offer a higher price if given the same opportunity to negotiate that CWS has had . The last offer made in 2006 by the auto dealerships to purchase the property was for $12 Million more than the offer currently on the table from CWS and CASS. th The city council meets on Tuesday, December 20 at 5:30 to discuss the issue and vote to decide wether or not to grant an Exclusive Negotiating Agreement to California Waste Solutions and Custom Alloy Scrap and Sales, Inc. This may be one of the two and last opportunities for the public to speak on this item. A speaker card can be filed at the city of Oakland's website at http://tinyurl.com/speakercard and the agenda item number is 14. A card can also be filed at the meeting by filling out a paper card and giving it to the city clerk before and during the meeting.

Reference: EBMUD Proposal to Purchase North Gateway Staff Report on ENA with CWS & CASS Map of Northgate Area CPRA document request showing CWS reports not on file/do not exist December 7, 2010 Closed Session Meeting Agenda showing negotiations commencing. Campaign Contribution Report, Schaaf showing contributions after negotiations began.