Two industrial buildings used to grow cannabis in East Oakland have been seized by foreclosure by a Canadian lender who wants to revive its once-thriving marijuana business.
The lender, a subsidiary of Toronto-based Romspen California Mortgage, seized The Oakland Tinnery at 5601 San Leandro Street and The Oakland Cannery at 5733 San Leandro Street, SiliconValley.com reported.
Both buildings had been the subject of community complaints over the use of unauthorized diesel generators used to power lights for the production of pots. They also violated local air regulators.
They belonged to a group of investors led by Kenneth Greer, a Denver-based real estate executive. In 2016, a group led by Greer paid $16 million for the Tinnery. In 2017, another group led by Greer paid $6 million for the cannery around the corner.
A Denver-based Greer company, Green Sage, operated the cannabis business inside buildings.
The generators were used as power sources for tenants growing marijuana, Greer said in a January 2020 filing in a civil lawsuit.
In 2019, Romspen California Mortgage provided $54.5 million in financing to various Greer-led subsidiaries. The collateral for the mortgage – which greatly exceeded the combined amounts the Greer groups paid for the properties – was the buildings.
In December last year, Romspen filed a notice of default against the two buildings in East Oakland. The timing of the default means the battle for the diesel generators was going on just as the mortgage on both properties was overdue.
By the time a Romspen subsidiary, RIC San Leandro, seized the property on Sept. 23, outstanding debt on the loan had soared to $72.6 million, according to SiliconValley.com.
RIC San Leandro, however, only paid $25 million to seize the property by foreclosure. The generators were removed around the time the lockdown was officially completed and the groups led by Greer no longer owned the two buildings.
The Oakland Tinnery is an Art Deco property totaling 278,900 square feet. The Oakland Cannery is a historic brick building with a total area of 162,500 square feet.
A subsidiary of Romspen California Mortgage now owns the buildings and intends to revive the cannabis complex, according to Kevin Saavedra, consultant for the owner. PG&E will provide conventional power for growing cannabis.
— Dana Barthelemy