OAKLAND >> With hopes of reducing truck traffic on local highways, making shipping more efficient and creating jobs, a massive $500 million redevelopment project is taking shape at the Port of Oakland.

Building begins this year on the publicly and privately financed project managed by the city of Oakland to replace a 330-acre U.S. Army base closed in 1993. Crews already have demolished 320,000 square feet of warehouses.

Cleaning toxic waste left by the military and stabilizing soil for earthquakes is ongoing.

Once the Oakland Global Trade & Logistics Center is finished, the port can use more trains to haul cargo and do more freight packing and unpacking on site rather than at locations outside the Bay Area. That, in turn, will reduce the number of cargo-carrying trucks heading out from the port along Interstates 80 and 880.

“Everything we eat and wear is delivered by truck,” said Phil Tagami, president of California Capital & Investment Group, the primary developer chosen by the city of Oakland. “Our objective is to shorten truck trips and do it in an environmentally responsible way. If we get more cargo on rail, we can reduce roadway congestion and emissions.”

Monumental project

Motorists driving south on Interstate 880 just past the Grand Avenue exit can see some of the work begun last year, including a new $100 million rail yard with 16 parallel tracks stretching 4,000 feet. The rail yard will allow more trains to come to the port and increase the amount of cargo coming in and going out.

Transforming the former base is a monumental process.

“We’ve had 140 public meetings over three years, received 137 permits and approvals, and we’re under the purview of 22 regulatory agencies,” Tagami said. “The master plan is 1,700 pages in three volumes. This project is definitely not for the faint at heart.”

Tagami will start construction of a 34-acre bulk shipping terminal this year, where unpackaged commodities such as logs, steel, grain and potash will be loaded and unloaded from ships.

Next year, new warehouses will start going up, allowing shippers to consolidate and break down shipments on site and load them on trains in the new rail yard.

Currently, much of the packing and unpacking of loads is done off site, in places like Stockton or Reno. By doing it at the port, Tagami’s group estimates 112,000 truck trips will be cut from local freeways each year.

“The warehouses will allow shippers to consolidate and deconsolidate cargo in a number of hours,” said Port of Oakland Maritime Projects Administrator Mark Erickson. “Shippers are always looking for ways to cut costs out of the supply chain, so we expect this to be very well received. Our goal is to balance the 85 percent of port traffic that comes by trucks by increasing rail trips.”

When the entire logistics center is finished in 2020, volume at the port is expected to increase by about 200,000 containers a year, a 9 percent increase over 2014.

The new rail yard will make more room for trains to easily come and go, increasing the port’s capacity from 17-car trains to 200-car trains.

Local jobs

The whole project is expected to create 1,800 permanent jobs and 1,500 construction jobs. It also will bring the city of Oakland about $2 million a year in rents.

A second phase on land controlled by the Port of Oakland, where more warehouses will be built, has not yet broken ground. The port is negotiating exclusively with Tagami’s team for that part of the project as well, Tagami said.

While job estimates at the port have changed over the last few years, the city has been closely monitoring a hard-fought local rule that requires 50 percent of construction jobs to go to Oakland residents. Last year, a contractor in charge of tearing down warehouses was kicked off the job for not hiring enough local labor.

“It’s one of the biggest developments Oakland is going to have in our lifetime,” said Kate O’Hara, executive director of East Bay Alliance for a Sustainable Economy, who fought for the local hire job rule. “It’s a public investment on public property.”

So far, the project has generated 694 construction jobs where the city of Oakland is building warehouses and 427 on the rail yard project, which is under control of the port. While the city is meeting its local hiring obligations, the port is not subject to it, but has managed to hire 27 percent from Oakland and the remainder from local areas, including cities in Alameda and Contra Costa counties.

Recycling facility

Also part of the project is a 379,610-square-foot indoor recycling facility. The city is negotiating with California Waste Solutions to run that facility and hopes to sign a deal to sell the land to the company by July 2016, said Doug Cole, project manager for the city of Oakland.

The timeline for finishing the logistics center was accelerated a bit because development on one large parcel had to be shelved due to an overwhelming amount of toxic waste under the surface. On that piece of land, crews found an entire building buried in the dirt.

“The question is more like, ‘What didn’t we find there?’€‰” Tagami said. “It’s basically an Army debris field.”

By abandoning immediate development of that parcel, the city was able to focus on other areas, said Cole.

“When we found that buried building — we call it Building 99 — we went back to the City Council in November and asked to put that area on hold,” Cole said. “That way we can redistribute our money to different areas, so we can meet our goals by 2019 and 2020.”

The amount of demolition and recycling that has been completed is staggering. For example, 800,000 board feet of lumber was saved; 25,000 tons of concrete and asphalt were taken to grinding facilities to be reused on road projects; 383 tons of metal were recycled and another 1,650 tons of construction materials were recycled.

Cole said that without a $242 million infusion from the state, the project never would have gotten off the ground.

“There would have been no way the city could do this project alone,” Cole said. “So there will be some big changes out there that otherwise would not have happened. It will put the old Oakland Army Base into productive use that will benefit the local and regional economy. Otherwise, it would have just sat there for who knows how long.”