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Dog bites man: Developer/Landlord cheats city, tenants
Man bites dog: Community fights back

by Dave Kadlecek

In April 2003, over 40 mostly elderly, low-income tenants at the Pacific Renaissance Plaza in Oakland's Chinatown received eviction notices. Why? Because the developer who owned the building said he was no longer required to maintain their units as "affordable housing," so he was going to sell them as market-rate condominiums.

The "Stop Chinatown Evictions Coalition" quickly formed. Housing activists joined with Chinese community groups to demand that the tenants be allowed to stay and that the units be preserved as permanently affordable housing.

At first, the City of Oakland backed developer Lawrence Chan. They said that it was unfortunate that the tenants would be displaced, but there was nothing the city could do. Chan and his companies had lived up to all their commitments under the development agreements.

Tenants Overcharged on Rent

Tenant advocates discovered that the tenants had been overcharged $2 million on their rents and that the city had been tricked into forgiving a $16 million debt. City leaders began to come around.

When the July 31, 2003, eviction date arrived, six households remained. The landlord agreed to wait until a lawsuit filed by tenants and community groups was settled. A few weeks later, the city filed suit against the developer over the rent overcharges. In September 2004 several moved out tenants served the landlord with a wrongful eviction lawsuit, and in November 2004 the City of Oakland added the loan issues to their complaint.

At Partisan press time, two of the original tenant households remain at Pacific Renaissance Plaza, and all of the lawsuits are scheduled for trial in October 2005. The Stop Chinatown Evictions Coalition continues to plan actions to win its original demands (and to allow tenants who moved out because of the eviction notices to move back) without relying on or waiting for the courts.

"Redevelopment" at Work

The Pacific Renaissance Plaza was built as a redevelopment project in the early 1990s on land that had been turned into parking lots by BART construction twenty-something years earlier. Due to community struggles during the 1970s and 1980s, the developer was required to build and pay for affordable housing, a library and community center as part of the project. Originally, the only cost to the city was to be a below-market price for the land.

After C&L Financial was selected as developer in 1987, the promises became much weaker. 100 permanently affordable units now became 50 units of housing rented at affordable prices for at least 10 years. The city paid for the library, community center and public parking and provided a $7 million loan on favorable terms.

The development agreement required that the units be affordable for a minimum of 10 years. The developer changed the meaning of "affordable" to charge higher rents on those units.

The Shell Game

Lawrence Chan comes from a rich Hong Kong family, running its U.S. holdings. Their main companies are C&L Financial, for real estate development, and Park Lane Hotels International, for their hotel business. (They own or operate hotels in California, China, Indonesia and Hawaii.)

The Chans set up a new affiliate, Pacific Renaissance Associates II, to develop and own Pacific Renaissance Plaza, which in 1990 borrowed $7 million from the City of Oakland in return for 10% annual interest and 40% of net profits on the project.

As part of a 2000 refinancing of the project, this affiliate sold the property to another Chan affiliate, International Hotelier Management Corp., which later issued the eviction notices. It looked like Pacific Renaissance Associates II was left with no assets. James Murad, Chan's chief lawyer and corporate secretary, convinced Oakland's unelected city officials that they shouldn't have to pay back the loan.

(The deputy city attorney who advised then City Manager Robert Bobb that Murad's argument was correct left shortly thereafter to hang out at a yacht club in the Virgin Islands.)

Demonstrations in support of tenants took place at the Pacific Renaissance Plaza and at Oakland City Hall, and also at the Chan-owned Parc 55 Hotel in San Francisco and at San Francisco State University (where the developer is on an advisory board).

Chan is a regular donor to pro-business local politicians in Oakland and San Francisco, and also gives to both Democratic and Republican incumbents at the state and national level.

For more information, see the websites of the Oakland Tenants Union, www.oaklandtenantsunion.org, and of CJWP (Chin Jur Wor Ping, Cantonese for "Moving Forward for Peace"), www.cjwp.org.

[Dave Kadlecek is Alameda county chair of the Peace and Freedom Party.]

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