San Francisco

Oakland Hired Pricey PR Agency after Deadly Warehouse Fire, Paid Exec. $500/Hour

The city of Oakland contracted with The Press Shop, a San Francisco-based public relations firm, to provide media consulting services following the deadly Ghost Ship Warehouse fire that killed 36 people

The City of Oakland hired a public relations firm, in a 6-month deal worth up to $90,000, to serve as official media consultants and spokespeople following the city’s deadly warehouse fire.

The Press Shop, a San Francisco-based public relations agency, was hired to develop “media strategies and communications” following the disaster. The NBC Bay Area Investigative Unit obtained the contract and discovered the deal entitles the city to a 3-person communications team, including one executive who is being paid $500 per hour.

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NBC Bay Area
The Press Shop contracted with the city of Oakland in a deal worth up to 90,000 for "media strategies and communications" relating to the deadly Ghost Ship Warehouse fire. The contract calls for a 3-person media team, including one executive who is being paid $500 per hour.


“I think that was a misappropriation and a misuse of public funds," said Oakland City Councilman Noel Gallo.  “That is really unexplainable."

Gallo lives about a block away from the now shuttered warehouse and said he was unaware of the city’s contract until the Investigative Unit showed it to him.

“I don’t need a media strategy,” Gallo said. “I need to take care of the needs of this neighborhood, and that’s what the taxpayers are paying us to do, so I think that was a bad choice.”

The city became a target of heavy criticism following the fire, which erupted on Dec. 2 during an unpermitted, late-night dance party. The warehouse, known as the Ghost Ship, was never permitted as housing or event space, but it had been used for both. In the hours after the fire, the Investigative Unit obtained records that showed city building inspectors knew about the unpermitted activity and potentially dangerous living conditions well before the disaster.

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NBC Bay Area
Oakland City Councilman Noel Gallo says Oakland's decision to hire private public relations consultants is "unexplainable and inexcusable." (March 1, 2017)


According to the city’s contract, the media firm was hired “for the purpose of managing and minimizing the City of Oakland’s potential exposure to liability for claims and litigation that may arise out of the Incident.”

“It is clearly reasonable in terms of value,” said Charles Byers, a public relations professor at Santa Clara University with more than 40 years of experience in the industry. Byers, who is not affiliated with The Press Shop, reviewed the scope of services of the deal before speaking with the Investigative Unit.

“What this engagement is deigned to do is to protect the city from unwarranted liability… and ultimately protecting you, the taxpayer, from that bill,” Byers said. “This is the use of public relations to protect you.”

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NBC Bay Area
Charles Byers, a public relations professor at Santa Clara University, says Oakland's public relations contract is reasonable, but says the city should be completely transparent about the details of the deal (March 1, 2017).


It is impossible to know all the details of the deal since the city redacted 12 lines of the contract.

The administration said that information is “privileged" since litigation could be involved.

Meanwhile, Oakland has already paid for $15,000 of work.  The invoice, however, does not detail what the city got in return, only saying the payment was for “confidential media services.”

NBC Bay Area
Portions of Oakland's contract for media consulting were redacted by the city. The Mayor's Office said those 12 lines contain "privileged" information that could involve future litigation and so, therefore, those details can be kept from the public.


According to the contract, "the city's insurance carrier will be responsible to pay for all of the consultant's fees and costs," however, the Investigative Unit learned taxpayers in Oakland and throughout the state are still getting stuck with the bill.

In addition to Oakland, residents in 13 other cities and counties across California are also funding the contract since those areas all pool their money into a single fund that can only be used to manage a major crisis.  Allowable costs include counseling, funeral services, and media consulting.

The California State Association of Counties Excess Insurance Authority (CSAC EIA) manages the money and acts similar to an insurance company. Cities and counties pay annual premiums and those tax dollars are then used to pay out claims, like the one Oakland submitted to hire The Press Shop.

List of Cities_Counties_CSAC
NBC Bay Area
Taxpayers in 13 cities and counties are helping Oakland pay for private media consultants to handle public relations following the deadly Ghost Ship warehouse fire.


The Press Shop and Oakland's in-house media team receive tax-payer money to deal with the press, however, both declined to be interviewed.

In a statement, the mayor’s Communications Director, Erica Derryck, echoed the language of the contract in saying the deal is helping protect the city from “potential exposure to liability for claims and litigation.”

The contract was signed on Jan. 12 and expires June 30.  Gallo calls the deal unnecessary and irresponsible.

“I don’t need a media strategy,” said Gallo. “I need to take care of the needs of this neighborhood and that’s what the taxpayers are paying us to do, so I think that was a bad choice.”


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