As stated earlier today by this blogger, the City of Oakland Auditor’s report was little more than a smear job on Oaklander Phil Tagami, the Managing Partner of California Commercial Group, and a booster of Oakland as a place to be other than San Francisco.
The report by the Office of City Auditor Courtney Ruby did not include any mention of the condition the Fox Theater was in when the City took it over in 1996. The Fox had been unused for about 30 years, and the structure was severely weakened by age and water damage from rain water leaking into it over the years. But to anyone reading the City Auditor’s report, that was not known.
We seem have entered a period where some in the City of Oakland’s City Hall seem to think they can re-write Oakland’s history to their liking. First, we have the tenure of Oakland City Manager Craig Kocian almost completely forgotten, with Lamont Ewell penciled in as the City Manager during what really was Kocian’s period.
Now we have the Fox and the City Auditor’s report, which lacks any discussion of the long history of a building that has maintained the largest theater stage west of the Mississippi River – even while it was closed.
Why the Oakland City Auditor did this is not known. A call placed to Ruby’s office was not returned as of this writing, and email was not answered.
Mr. Tagami provided this statement for presentation by this blogger:
The California Capital Group (CCG) is proud to have been a member of the Fox Theater team. It was a complex project and CCG followed all of the directions of the Oakland Redevelopment Agency (ORA) and applicable rules and regulations in the performance of its contracts. CCG stands behind its work and is thrilled to have facilitated the ORA’s receipt of millions of dollars in private capital, grants and philanthropic donations and the successful completion of the project. While public projects may often be controversial due to a lack of definable benefit, the Fox Theater is a rare redevelopment project that has received universal acclaim that has delivered demonstrable, concrete benefits to the City of Oakland.
With respect to the recently released audit of the Fox Theater project, CCG applauds its stated goals of improving contracting procedures and reinforcing accountability; however, CCG is concerned that the document incorporates apparent factual inaccuracies and we are disappointed that CCG was not provided with the opportunity to provide additional facts prior to the release of the final document. CCG has reviewed by the response that the ORA provided to the auditor and we support the bulk of its facts and findings.
CCG would like to take this opportunity to respond to some of the issues raised in the audit document.
1. The audit erred in determining that the implementation of the Fox Theater project lacked appropriate oversight. The project was the subject of over 24 public hearings conducted by the ORA Board and 14 Board resolutions providing review and direction on the project’s scope, goals and budget. The project was the subject of 1,000’s of man-hours of direct oversight by ORA and CCG staff.
2. The audit appears to place undue emphasis on a concern that the project contracts provided CCG and others with an incentive to increase the project budget in order to increase fees. This undue emphasis is made clear when the audit itself concludes that no actual conflicts of interest of city employees or CCG officials were revealed.
3. The audit erred in determining that CCG received approximately $178,000 in unsupported cost reimbursements. As set forth in Section 4(b) of the ORA’s response, all of the reimbursements paid to CCG were supported by the documentation required by the applicable contracts. The ORA has stated that this documentation was provided to the city auditor prior to the issuance of the final document.
4. The audit erred in determining that CCG received approximately $178,000 in unearned fees. CCG performed the work requested by the ORA, submitted appropriate invoices and was paid pursuant to those invoices. Further, as set forth in Section 4(c) of the ORA’s response, the work related to the payments at issued was properly authorized by Fox Oakland Theater, Inc. The only amount subject to further review is approximately $36,000 in previously paid fees for work performed in 2005/2006. CCG is confident that its invoices are appropriate, has offered to escrow the amount pending final resolution and welcomes the opportunity to review this amount with the ORA through the previously proposed process.
5. The audit fails to recognize that the project exceeded the ORA’s then current goals for participation by local and small local business enterprises by 17.47% and 9.41%, respectively.
The auditor also expressed concerns about future contracting procedures related to the Oakland Army Base (OAB). The ORA has already implemented enhanced contract review and coordination procedures in its work with CCG on the OAB master planning work. These procedures are in compliance with FHWA/DOT, State of California, ORA and Port requirements and based in part on the experience with and successes of the Fox Theater project. CCG is confident that these procedures will be carried forward into any construction work for the OAB project.
A follow-up post on Wednesday will include relevant document information to further support California Commercial Group’s argument that the City Auditor’s Fox Theater report was incorrect.