Looks like another major project is lost to California.

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“Kaiser Permanente is pulling out of its planned $900 million Oakland headquarters project, the nonprofit health care giant said Tuesday, in a huge hit to a city and region already reeling from the coronavirus crisis.

The decision to cancel the project is not related to COVID-19, a Kaiser spokesperson said in a statement, but that “delays and increasing costs related to this project” caused the organization to “re-examine the feasibility and focus on renovating our current buildings.”

California regulations, rules, permits, studies, taxes, unions and more made this important health care project too expensive.  In California you never know the final price until the project is done.  Kaiser is no longer accepting those conditions.

Kaiser Permanente drops plans for new headquarters in Oakland

 

By Laura Waxmann, San Francisco Business Times, 3/24/20  

Kaiser Permanente is pulling out of its planned $900 million Oakland headquarters project, the nonprofit health care giant said Tuesday, in a huge hit to a city and region already reeling from the coronavirus crisis.

The decision to cancel the project is not related to COVID-19, a Kaiser spokesperson said in a statement, but that “delays and increasing costs related to this project” caused the organization to “re-examine the feasibility and focus on renovating our current buildings.”

“Kaiser Permanente appreciates the hard work by the developer and its team on the 2100 Telegraph Ave. project,” the statement said. “We wish them well with the project and look forward to welcoming new neighbors to downtown Oakland when it’s completed.”

Lane Partners, which is developing the Eastline site with Strategic Urban Development Alliance, declined to comment.

Oakland Mayor Libby Schaaf disclosed the change in plans earlier Tuesday before the statement from Kaiser, the city’s biggest emplouyer.

“It’s a pivot for Kaiser, and one that makes sense for their organization and members at this time,” Schaaf said a statement on Tuesday. “They are reinvesting and improving their existing sites across the city, so the most important fact is that they’re staying rooted right here in Oakland. In the meantime, this is an incredible project that will attract an incredible new tenant.”

The pivot comes amid the coronavirus crisis, which has shut down much of the Bay Area and requires Kaiser’s full attention. Like operators of other hospitals, Kaiser is bracing for an influx of thousands of patients as new infection cases continue to increase exponentially.

The deal, part sale and part lease, was announced with great fanfare last June, with Kaiser detailing plans to consolidate more than 7,000 employees from its national and regional headquarters in the 1.6 million-square-foot building. The nonprofit, which integrates doctors, hospitals and health plans under one umbrella, has long been Oakland’s most prominent corporate citizen. Kaiser has more than 12 million members nationwide, more than half of them in California. Last year it posted revenue of $84.5 billion.

The headquarters project, dubbed Thrive Center, was the brainchild of Bernard Tyson, Kaiser’s charismatic chairman and CEO, who died in November at age 60. He was succeeded by Gregory Adams.

Lane Partners has been among the most active developers in Oakland’s renaissance over the last decade. Its roster of projects in the city is headlined by Uptown Station, which it developed and sold to Uber for its use. Uber eventually abandoned plans for a major presence in Oakland. The 350,000-square-foot project has since passed through several hands and is now set to be occupied by payments company Square.

Lane’s agreement with Kaiser included deals to buy three existing buildings Kaiser now occupies after it relocated to the Thrive Center.