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Buildings on the area to be developed are photographed at a groundbreaking ceremony for the $500 million Oakland Global Project in Oakland, Calif., on Friday, Nov. 1, 2013. The project will transform the City of Oakland's half of the former Oakland Army base into a warehousing and logistics center serving the adjacent Port of Oakland. (Dan Honda/Bay Area News Group)

OAKLAND -- The city's bid to restore a "working waterfront" took a big leap forward Friday as construction officially began on a $500 million project to transform much of the long-shuttered Oakland Army Base into a logistics and warehousing center.

Although it lacks the glitz of a new ballpark or convention center, the decidedly blue-collar plan for the former base is seen as a cornerstone project for the city. The Oakland Global Trade and Logistics Center is expected to help the adjacent Port of Oakland become more competitive, reduce truck pollution throughout the city and generate several thousand jobs, replacing many of those lost in the 1999 base closure.

"I believe that jobs prevent violence and prevent crime, and that is a critical part of this project," Mayor Jean Quan said during a festive groundbreaking ceremony that also was attended by Gov. Jerry Brown and Rep. Barbara Lee.

The groundbreaking culminates more than a decade of discussions over what to do with the 366-acre base that was divided between the city and Port of Oakland. The city had entertained plans for a movie studio, Indian casino and convention center before settling on the more industrial vision offered by the development team of ProLogis and Phil Tagami, who heads Oakland-based California Capital & Investment Group.


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The project that now is underway on Oakland's share of the former base includes 1 million square feet of new warehouses that is expected to reduce the need for truck trips from the port to storage facilities scattered throughout the region. It also includes infrastructure improvements, two recycling centers and a new a facility that will allow the port to better handle cargo that can't be transported in shipping containers.

The project is expected to take nearly five years to complete. Funding is coming primarily from a state grant and the developers, along with two federal grants and $54 million from the city. The Port of Oakland is chipping in nearly $16 million, primarily for a new rail yard on its property.

The port still is seeking funding for a $700 million complimentary project on its share of the Army Base land that would pay for additional storage facilities, road improvements and improved rail access to shipping terminals.

When the port eventually develops its share of the base, the entire Army Base redevelopment is forecast to generate $2.9 million a year in local tax revenue.

The Army Base was one of Oakland's biggest employers, and community advocates fought to secure hiring preferences for Oakland residents for many of the new jobs generated by the project.

Overall, job estimates have tumbled since the City Council approved the project last year. Initially, the developers forecast the project directly generating 2,810 construction jobs and 2,032 permanent jobs. But as it became clear that the construction work would not be as labor intensive as initially anticipated, the figures dropped to 1,523 construction jobs and 1,832 permanent jobs.

Contact Matthew Artz at 510-208-6435