OAKLAND, Calif. -- A U.S. Bankruptcy Court judge has approved an agreement that calls for the failed Lehman Brothers financial firm to pay $3.7 million to abate health and safety hazards at the site of the former Oak Knoll Naval hospital in the East Oakland hills.
SunCal Companies, which is based in Orange County, had planned to tear down the hospital site, clean it up and build 960 homes, a shopping area and a 50-acre park. Lehman Brothers was providing financial backing for the project.
But the project went south when the economy faltered and Lehman Brothers collapsed and the division of SunCal that was working on it declared bankruptcy.
Oakland City Attorney spokesman Alex Katz said Tuesday that contractors abruptly walked away from the property, leaving more than 90 half-demolished buildings, piles of asbestos, overgrown vegetation and other problems.
The Oakland Fire Department declared the property a major fire hazard.
The city of Oakland ordered the nuisances on the property to be abated last June.
In November, the city brought representative from Lehman and SunCal to the table and brokered an agreement to clean up the site. Last week a judge in Southern California approved the agreement.
The pact calls for Lehman to pay $3.7 million to demolish the buildings at the site, which date back to World War II, remove asbestos, clean up debris and secure the vacant hospital.
That money is in addition to $550,000 already released by Lehman to pay for armed security guards, improvements to fences and deploy goats to eradicate the fire threat posed by overgrown vegetation.
SunCal Companies is responsible for managing and directing the clean-up work.
Oakland City Attorney John Russo said in a statement, "I am very pleased that Lehman stepped up to meet the demands of the community and that this deal was ultimately approved by the court."
Russo credited the Sequoyah Hills/Oak Knoll Neighborhood Association for its work and leadership on the issue. Copyright 2010 by Bay
Market Data 
Markets 
AI
