The county was set to buy a six-story building on Harrison Street to use as a COVID-19 homeless shelter, but the deal has fallen through. Credit: Natalie Orenstein

Alameda County’s plan to buy a historic building near Lake Merritt for use as a COVID-19 homeless shelter has fallen through. 

In June, the Board of Supervisors approved a deal to purchase the old “Lake Merritt Lodge” property on Harrison Street with $23.3 million in emergency coronavirus funds, to house around 90 people with medical risks. Advocates for Oakland’s unhoused residents applauded the decision, praising the county for taking advantage of state funding to buy a building that could become permanent supportive housing after the pandemic rather than using up the funds on more temporary shelters.

The county and current owner of the property each confirmed to The Oaklandside that the deal is no longer in the works, and each blamed the other for its collapse.

Initially, Jerri Applegate Randrup, a county spokesperson, said that the building ended up needing too many “adjustments.” 

“County assessed the situation to find these adjustments could not be accomplished within the expedited time frame needed…for our [COVID-19] response effort,” she wrote in an email.

In a phone interview Thursday, Mahnaz Khazen, the building’s owner, said the county “pushed us around” so many times that she gave up on the deal. 

“We tried to work with them every time, and every time we would accept their new terms and their discounted variations,” she said. “Unfortunately the last change was so unreasonable, it broke the camel’s back.” 

According to Khazen, county staff told her there could be millions of dollars needed in building upgrades before the sale could close. 

When asked to respond, Randrup said the terms of the agreement, as approved by the board and Khazen, never changed. Instead, she said, the owner didn’t meet conditions required in the deal and “thus, as the buyer, County had to walk away.”

At its Aug. 4 meeting, the Board of Supervisors retroactively approved a contract for a $30,160 facilities condition assessment analyzing mechanical, electrical, structural, and other needs at the property. 

Khazen had been in talks with the Alameda County General Services Agency even before the pandemic began, to sell the Harrison Street property to use as a women’s shelter. The sale would include an adjacent office building and parking lot too. According to county staff, the asking price was out of reach, but once the coronavirus crisis affected both the market for hotel-type buildings and the funds available for such purchases, they struck up a new deal.

Khazen said she had other offers for the property but was eager to see it used as a shelter for vulnerable people, and particularly women, once again. The 1920 yellow six-story building at 2332 Harrison St. was originally a YWCA boarding house for “young working girls,” and later it was turned into a single-room-occupancy hotel called the Lake Merritt Lodge. There is still a plaque engraved on the side of the building that says it’s “dedicated to nobler womanhood.”

Most recently, under Khazen’s ownership, it was a dormitory for the Hult International Business School. When Khazen purchased the foreclosed property in 2013, she spent millions of dollars on renovations, trying to recreate its original splendor.

“This building is a treasure for Oakland,” said Khazen, noting the original architects built it to be sturdy after the 1906 earthquake and fires. 

For advocates who work with homeless communities, the failure of the deal is a blow. As coronavirus case numbers continue to climb in Alameda County, there are still thousands of people still living on the streets, increasing their risk of exposure to the disease. A new 92-room shelter was an encouraging development.

Naomi Schiff, a neighbor of the old Lake Merritt Lodge and advocate with ShelterOak, started urging the county to buy the property long before the pandemic.

“I am disappointed, and I hope they could still work something out,” Schiff said Thursday. “Perhaps the city of Oakland would like to step up and lease the place if not. The state provided this money and the city and county are not taking quick enough advantage of that.”

After the crisis began, the county began leasing hotels to house both homeless people who test positive for the virus as well as those at higher risk of contracting it, through the state’s Project Roomkey program. There are three in Oakland—Radisson Hotel, Comfort Inn & Suites, and Days Hotel—all clustered around the airport in East Oakland. 

The county is negotiating with the owners of four of its Roomkey hotels to potentially purchase the buildings. State money for that effort, called Homekey, must be used by the end of 2020, and the cities where the hotels are located would need to sign off on the deal.

As for the old Lake Merritt Lodge, Khazen said she’s planning to hang onto it for now and is in “serious conversations” with a possible tenant. 

She declined to say who it is, but said the property would have a “use that is going to serve the community, and women, again” if they move in. 

Natalie Orenstein covers housing and homelessness for The Oaklandside. She was previously on staff at Berkeleyside, where her extensive reporting on the legacy of school desegregation received recognition from the Society of Professional Journalists NorCal and the Education Writers Association. Natalie’s reporting has also appeared in The J Weekly, The San Francisco Chronicle and elsewhere, and she’s written about public policy for a number of research institutes and think tanks. Natalie lives in Oakland, grew up in Berkeley, and has only left her beloved East Bay once, to attend Pomona College.