Preparatory Work for Tower Demolition at Oak Knoll Moving Forward on Schedule

Mar 01, 2011, 10:00 ET from SunCal

OAKLAND, Calif., March 1, 2011 /PRNewswire/ -- Preparatory work for the planned springtime demolition of the hospital tower at the former Oak Knoll U.S. Naval Medical Center in Oakland is continuing on schedule according to SunCal, which is managing the cleanup of the 167-acre site.

As part of the ongoing demolition process, the warehouse and bachelor enlisted quarters have recently been removed, leaving only the 11-story tower in place.  Its demolition will take place in the spring and the Oakland Fire Department has approved the demolition plans.  As part of the pre-demolition preparatory work, an analysis of the tower's concrete structure recently revealed that no asbestos was found in its composition.  Lead and asbestos materials were removed from all buildings during an earlier work phase, and the concrete and steel are being recycled. 

SunCal began general cleanup, weed abatement and demolition of several wooden outbuildings in fall 2009, and that work has been completed.  SunCal's efforts to obtain funding to address the critical needs at Oak Knoll have been ongoing throughout the current bankruptcy court proceedings and extend back to Lehman Brothers' bankruptcy in September 2008.  Lehman was both SunCal's partner and lender for Oak Knoll.  SunCal initiated legal action against Lehman in November 2008; SunCal itself is not in bankruptcy.

"Lehman Brothers was the financial partner and lender for SunCal Oak Knoll LLC, the owner of the property, but since Lehman's collapse, we've been managing the site's cleanup on behalf of the court-appointed bankruptcy trustee," said Pat Keliher.  "Oak Knoll has been under the court's authority since 2008, and we have consistently pushed for the release of funds to address the property's critical issues."

Last month, the presiding judge in Lehman Brothers' bankruptcy approved the release of $1.7 million to complete the major demolition work, including the hospital tower.  Lehman and the trustee for Lehman's bankruptcy stipulated to SunCal's request to release the funds, and the agreement was approved by the U.S. Bankruptcy Court. 

SunCal is continuing to work through the court to bring in a new source of funding to resolve the property's remaining and move the development forward.  The plans for the Oak Knoll master-planned community include 960 homes with a diversity of housing types, 82,000 square feet of commercial/retail, and 50 acres of parks and open space.