OAKLAND, Calif. - A seven-story affordable-housing tower plagued by scandals and code violations may see new life under an agreement approved by the U.S. Bankruptcy Court earlier this month.
The city of Oakland sued the owners of the 90-unit Empyrean Towers in April 2015 for operating the property as a public nuisance in an "uninhabitable condition" and violating the city's tenant-protection ordinance.
Oakland's lawsuit demanded the owners bring the building up to code, but the owners declared bankruptcy after an Alameda County Superior Court judge appointed a receiver to oversee the property.
The building's former owner, Richard Singer, was sentenced to 27 months in prison in 2011 for trying to hire someone to burn down the building in order to collect insurance money. At that time the building, located at 344 13th St. in Oakland, was called the Hotel Menlo.
Oakland "red-tagged" the tower in May 2015 and residents were temporarily evacuated due to contaminated drinking water.
On March 4, U.S Bankruptcy Judge Roger Efremsky approved an option-to-purchase agreement, allowing a well-known Berkeley-based affordable housing developer to buy and renovate the structure.
The Oakland City Attorney's Office called the ruling a "landmark decision" that recognizes the principle of social responsibility in bankruptcy law and ensures the building will be maintained as affordable housing for at least 55 years.
"The court's order makes it possible to ensure that this property is preserved as part of Oakland's critical low-income housing stock, and that the horrendous conditions at the Empyrean Towers are remedied," City Attorney Barbara Parker said in a statement.
The agreement enables Berkeley-based Resources for Community Development to move forward with plans for an estimated $10 million renovation project to update the building's antiquated electrical, mechanical and plumbing systems.
RCD manages about 50 properties throughout the East Bay and more than 10 properties in Oakland, according to the organization's director of housing development Carolyn Bookhart.
The renovations will create new studio and one-bedroom units in the tower, as opposed to the building's current style of mostly boarding rooms with shared bathrooms, Bookhart said, adding that the project will also reduce the total number of housing units from 90 to about 65 or 70.
"It would be fewer units but better quality housing overall," Bookhart said. "All the units would have bathrooms and kitchens."
Over the next year, RCD will seek grants to secure public funding for the project and work with architects and contractors to finalize the design, she said.
In order to qualify to rent a unit, applicants must demonstrate they make 60 percent or less than the median income - about $32,000 compared to Oakland's median household income of $53,482, according to 2014 U.S. Census data.
After tackling the project's funding and design over the next year, Bookhart said the group hopes to start construction by the spring or summer of 2017 with plans to begin renting out the new units by summer 2018.
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