n December of 1996, the Authority issued $41.5 million in tax-exempt bonds to finance construction of an office and parking facility in downtown Oakland for the University of California Office of the President and the Redevelopment Agency of the City of Oakland.

Oakland Developments, LLC, had been selected by the University to develop the project. The Developer is a limited liability company created by a team led by Lankford Construction, La Jolla, to participate in the State's competitive process for construction and delivery of the facility on a "turnkey" basis. Even though the project would be owned during construction by the Developer, interest on the Authority's Bonds qualified for tax-exempt status on the basis of both the eventual governmental purpose of the facilities and on the governmental source of repayment on the debt.

The bond issue was structured and sold in the form of Variable Rate Tax-Exempt Revenue Bonds with proceeds used for project construction, capitalized interest, and financing costs. The tax-exempt interest rates on the debt will lower the overall cost of the project to the University and the City of Oakland. The Borrowers received "AAA" ratings on the basis of an irrevocable direct-pay letter of credit issued by Union Bank of Switzerland.

The land under the project at 12th and Broadway was acquired by the Developer from the Redevelopment Agency of the City. The project totals 395,940 gross square feet, with 8 levels of office space, at 26,330 square feet per level, and 5 levels of parking with 496 total stalls. Following completion, the building will be purchased by the University and used for the Offices of the University President. The related parking garage will be purchased by both the University (3 levels) and the City (2 levels). Provisions will also be made for the parking facility to tie into future development by the City along Broadway. Project construction reached substantial completion well ahead of schedule in March of 1998.