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Kaiser project cancelled

Kaiser Permanente has canceled its $900 million headquarters project in Oakland, ...

The health care giant scrapped plans to build a 1.6 million-square-foot office tower that would have been Oakland’s biggest commercial project.

“Delays and increasing costs related to this project caused us to reexamine the feasibility and focus on renovating our current buildings,” Kaiser Permanente said, adding that the decision was not related to the coronavirus epidemic.

The move is a sign that the Bay Area’s booming office market may be weakening as companies look to cut costs. Construction prices have soared amid a shortage of workers and tariffs on some building materials, making large developments like Kaiser’s project harder to finance and complete. Housing projects around the Bay Area have also been stalled by rising costs.

Kaiser, Oakland’s largest private employer, would have consolidated 7,200 employees from seven East Bay offices into a new 29-story tower at 2100 Telegraph Ave. Real estate experts said the move would free up substantial office space for smaller tenants to occupy, leading to a boost in city employment.

Kaiser’s project was expected to generate an estimated $23 million in one-time taxes and fees and another $15 million in annual taxes.

Another major Oakland office tenant, BART, confirmed Tuesday that its headquarters move to 2150 Webster St. is moving forward.