The plan to renovate and reopen Carnegie Free Library has stalled.

Angry over delays and unexpected requirements in the final lease, Michael Sturtz and his Carnegie Innovation Hall group have withdrawn plans to turn the Carnegie Free Library into an education and special events venue.

The Alameda City Council had voted 5-0 on Nov. 5 to approve a lease agreement with Sturtz and the CIH on the historic 1902 building, but Sturtz balked over what he considered unreasonable requirements and conditions in the final lease.

Sturtz and CIH had won the city’s Request for Qualifications in January 2019 to renovate the Carnegie building, and Sturtz and his team of 25 volunteers had already done a significant amount work on the project. They took possession of the building in spring 2019 and had, along with help from the city, cleared the building of city files and debris. “We’ve created budgets, timelines, etc., on this project. We’ve done a lot of work,” said Sturtz.

Sturtz laid the blame for his withdrawal with Alameda Mayor Marilyn Ezzy Ashcraft and city council members who, in September, after he’d had five months of negotiations with city staffers, required insurance and added a project labor agreement to the lease agreement.

A project labor agreement, also known as a community workforce agreement, is a pre-hire collective bargaining agreement with a labor organization or organizations that establishes the terms and conditions of employment, including wages and benefits, for a specific construction project. The federal government has used them in large labor contracts. Studies of PLAs have mixed results, with some studies concluding that PLAs have a favorable impact, while others find the agreements can increase costs with higher wages and may negatively impact non-union contractors and work.

Sturtz estimated the requirement would raise the costs of the initial estimated $6.5 million Carnegie Library renovation that was in the RFQ. “The PLA will raise our costs by 25 percent,” he said, suggesting the amount could be even higher.

“We’ll have to negotiate with labor unions about a contract. It potentially leaves us struck between labor unions and the city. We won’t sign a contract that has a PLA,” he said.

Ashcraft said the new parts of the lease were standard precautions to protect a city asset with an insurance requirement and to have a fair labor agreement. “The labor part is important to me. We’re trying to make sure people are paid adequately since the Bay Area is so expensive to live in. And it’s a 66-year lease, so that needs insurance. I get it that they’re raising funds, but they have to have adequate insurance.”

Sturtz said the RFQ hasn’t been honored by the current city council since it added conditions to it in the lease.

“You wouldn’t put an insurance part in the RFQ. City staff said it had to be in the lease. Something could happen and the building could burn down. Lease negotiations are complex,” said Ashcraft.

She acknowledged that many of Sturtz’s CIH volunteers and community members spoke in favor of the project at September and October city council meetings. “It’s great to have cheerleaders for your project. But the devil’s in the details, and the details are important in this project. I think it’s a reasonable agreement for him,” said Ashcraft.

But Sturtz disagreed about the PLA, a 27-page document.

“The union says they can’t tell us what labor costs will be without architectural drawings. And the verbal agreement between us and the union seems really risky,” said Sturtz.

Sturtz expressed frustration over delays in the finalization of the lease agreement and a vote on it, which was expected as early May. In September, Ashcraft and the city council took up the lease in a closed session after they read the formal lease drawn up by the city staff, which is when they made the changes.

“We always discuss and have our negotiations in closed session. There were a lot of things we had questions about,” said Ashcraft.

Sturtz said the city council should have been involved in the negotiation of the lease much earlier than September. “They’ve bred more uncertainty into the lease,” he said.

Councilman John Knox White said everyone has made mistakes in the creating of the Carnegie Library building’s lease. “I totally understand Michael’s frustration. I know some council members are trying to protect the city,” he said.

Knox White said a lack of clarity about the process has led to much mistrust. “We in the city need to learn from it. There will be earlier engagement of the council with leases. We have changed it in mid-stream now. As a body, they’d like to be more involved in the process so the months and months of work and negotiations don’t end up getting changed,” he said.

Because the CIH has to fundraise the millions of dollars for renovation for the project, the financing is a key component and was made more difficult by the delays and the creation of the financial lease agreement, Sturtz said. “I lost a key seed funder because of it,” he said. “And the city isn’t willing to extend the financing beyond 90 days after the lease is signed,” he said.

Tired of waiting, Sturtz informed his board, and it voted to shut down the efforts on Sept. 18, but the board delayed a final decision at Sturtz’s request. Sturtz then sent a letter of ultimatum to the city council and began a public campaign on social media to inform the community of the state of negotiations to get the council to lessen its demands in the contract.

The current impasse is a 180-degree turn away from the excitement and good will Sturtz had engendered at a February 2019 presentation he gave to an enthusiastic crowd of supporters and the community at City Hall.

Sturtz, the founder of the largest and most successful industrial arts education center in the United States, The Crucible in Oakland, seemed poised to save the Carnegie Building, a Historic and National Landmark. After his City Hall presentation about a possible state-of-the-art center for innovation that paired educational programming and entrepreneurship with the arts, performance, music, and technology, Sturtz got a round of applause. Members of the enthusiastic audience also asked how they could donate to the project, and some even handed cash to Sturtz.

The 115-year old Carnegie Free Library building has been closed and vacant for 20 years. In late 2018, the city sought requests for qualifications from companies or organizations interested in restoring and leasing the building and the adjacent Foster House. The goal was to find a tenant that would provide cultural, educational, and/or economic benefits to the community while restoring and maintaining the character of the building and opening it for public use.

Constructed as the Alameda Free Library, it was one of the first three libraries funded by Andrew Carnegie to be built in California. It is a City of Alameda Historical Monument and is listed on the National Register of Historic Places.

Sturtz lives in a Victorian he restored over the past decade just steps from the Carnegie Building on Santa Clara. “I have walked by that building every day for a long time. It is my dream to use that building,” Sturtz said.

After the Alameda Pinball Museum withdrew its proposal to lease and renovate the Carnegie in 2015, Sturtz began forming his proposal in spring 2018 when he and an architect met with city officials, former Mayor Trish Spencer, and former City Manager Jill Keimach to discuss his idea. “They encouraged me, and Spencer said I should begin fundraising. That’s when the city realized I was serious and initiated the RFQ process. So, we’ve been ramping up for this for awhile.”

Ashcraft, a member of council in 2018, rejected the notion that Sturtz had been working with the city for two years. “He could’ve met with the former mayor and city manager, but that was informal. It didn’t come before the council,” she said.

Knox White said there’s never been a time that city council members didn’t support the project. “I still think we can get this project done. I’m sorry they pulled out. They still have time to reverse course. The ball’s in their court. I’d love to see this thing come to fruition. I understand they don’t like things to be up in the air. But if they decide in the next month to do it, they could still agree to it. It’s up to them,” he said.

Sturtz said Knox White’s response showed how completely tone deaf the city council is.

“I’ve tried to illustrate that there’s much bigger problems at play here, that they are completely ignoring. They just don’t get it. If they cannot address the bigger picture, then we would rather wait them out three years to see if a more innovative and supportive mayor and council are elected, then we can revisit this opportunity. The building has sat vacant for the last 21 years. I highly doubt this government is going to do anything other than let it sit for three more.”

Sturtz still has 30 days — approximately until Dec. 5 — to sign the lease as passed by the city council, but said he won’t.

The lack of support from City Hall in terms he considers unfair have left him bitter over the whole matter.

“Honestly, I’m happy to not have to deal with the mayor or the city council again. There’s only a few city staff that I trust to work with. I’m surprised this happened, but it sounds like the city. It’s disappointing, but the more I deal with them, the more I think this is the right move. They need a wake up call,” he said.

But Knox White is determined that the building won’t sit empty another 20 years if the lease and deal with CHI falls through.

“I think this is a jewel of a building, and I want this project to happen, but, if it doesn’t, let’s use the building for something else,” he said.

Knox White said the building could be used to house the homeless or as a day center. “The No. 1 issue we hear about is the homeless. So, let’s put the building to use, but not in someone’s neighborhood, but across the street from City Hall. Having a building just sit there and we’re paying for it when our community members have a need doesn’t make sense either. Done right, it can meet the needs for the people who have them, and also give tools to our city to address the homelessness of our city.”