Zhone Closes Cash, Stock Purchase of City Land

Telecommunication startup Zhone Technologies has finalized a cash and stock deal with the city of Oakland for 15 acres between the Coliseum Bay Area Rapid Transit train station and the Oakland International Airport.

Zhone gave the city 100,000 stock warrants as well as $6 million in cash for the land on which it is now building a 300,000-sf headquarters building. The warrants give Oakland options to buy Zhone stock at $4 per share should the company go public.

City officials estimate the land’s market value at about $7.9 million. That means the stocks must reach nearly $20 per share for the city to get a fair price on the deal. Oakland bought the land for $9/sf several years ago, and appraisers recently pegged its value at $12/sf.