Large Oakland cannabis buildings mired in dispute seized by lender

OAKLAND — Two large Oakland buildings that have been turned into cannabis grow centers in recent years have been seized by their lender in a foreclosure proceeding that leaves their future cloudy.

The Cannery and The Tinnery, the two buildings that have been seized by a finance company, have been mired in a long-running dispute over the operation of huge diesel generators that were used to power the production of pots inside the structures.

A few weeks ago, in late September, the property’s former owner, a group led by Kenneth Greer, a Denver-based property manager, removed diesel generators that had offended community groups and environmental activists.

The generators were used as power sources for tenants who were going to grow marijuana, Greer said in a January 2020 filing in a civil lawsuit in Alameda County Superior Court.

The Tinnery, a building located at 5601 San Leandro St. in East Oakland. (Google Maps)

“The landlord provides electricity to all tenants by renting diesel generators,” Greer said in the court filing. “At the request of a tenant, we order a generator. Generators are only provided when a tenant is willing to test installed cannabis cultivation equipment.

The Bay Area Air Quality Management District believes the Greer-led homeowners group violated agency regulations through unauthorized and improper use of diesel generators, an operation that has started in April 2021, according to a July 2022 filing from the district.

“The defendants’ violations resulted in the emission of regulated air contaminants, contributing to the production of air pollution within the district’s jurisdiction and thereby threatening human health, safety and the environment,” the district said in a statement. an Alameda County court filing.

Greer and his group purchased the buildings in separate transactions a few years ago. A Denver-based Greer company, Green Sage, operated the cannabis business inside buildings.

In 2016, a group led by Greer paid $16 million for The Oakland Tinnery at 5601 San Leandro St. in Oakland. In 2017, another Greer-led group paid $6 million for The Oakland Cannery at 5733 San Leandro St., just down the block.

In 2019, Canadian company Romspen California Mortgage provided $54.5 million in financing to various affiliates led by Greer, according to Alameda County real estate records.

Collateral for the mortgage – which greatly exceeded the combined amounts the Greer groups paid for the properties – were the buildings of Oakland Tinnery and Oakland Cannery.

In December 2021, Romspen, the lender, filed a notice of default against the two buildings in East Oakland. The timing of the default means the battle over the diesel generators was underway at the same time the mortgage on both properties fell into default.

By the time a Romspen subsidiary, RIC San Leandro, seized the property on September 23, the outstanding debt on the loan had soared to $72.6 million, according to county documents.

RIC San Leandro, however, only paid $25 million to seize the property by foreclosure. Rompspen, the lender, did not respond to a request for comment regarding the situation. The generators were removed around the time the lockdown was officially completed and the groups led by Greer no longer owned the two buildings.

In a post on the Green Sage website, the company touted its purchase of the buildings. The post describes The Oakland Tinnery as an “iconic art deco property” totaling 278,900 square feet and The Oakland Cannery as a “historic building” totaling 162,500 square feet.

“The Cannery is a state-of-the-art, multi-tenant facility built for the cultivation, research and testing of cannabis, as well as manufacturing and production,” Green Sage said in its post. “The Tinnery is a state-of-the-art cannabis facility for some of California’s largest and most established cannabis companies.”

About Mallory Brown

Check Also

Mortgage Holders Pay Hundreds More As Interest Rates Rise

In just a few months, Lauren Gilbert says her monthly variable rate mortgage payments have …