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Lehman Brothers will spend $3.7 million to complete the demolition of more than 90 buildings at the former Oak Knoll Naval base that are targets for vandals and squatters, the Oakland City Attorney’s Office announced Wednesday.

Lehman, the bankrupt financial partner of SunCal Companies in the planned 960-unit residential development project in the East Oakland hills, agreed to release the money after touring the site last month with city officials and the Oakland fire marshal.

The company already has released $550,000 to pay for security guards, repair fencing around the 167-acre site and to hire goat herds to clear the overgrown brush that represents a serious fire hazard to neighboring communities.

Contractors will remove asbestos, trash and debris from barracks, homes, garages and other structures — all of which have been stripped of metal and wiring and heavily vandalized since SunCal abandoned the property last year. The buildings will be leveled.

The contractor will remove asbestos from several floors of the large hospital building and better secure the historic Club Knoll building, which has also been vandalized. The club was supposed to be renovated and reopened for public use as part of the residential development.

The agreement must be approved by SunCal’s bankruptcy court, which is expected to happen fairly quickly, said Alex Katz, spokesman for the city attorney. The work could begin within a couple of weeks.

Oakland

has $6.7 million in claims against Lehman Brothers in U.S. Bankruptcy Court in New York, but Katz said the results are what counts.

“The amount is not important, what is important is that the work gets done,” he said.

Neighbors said they were pleased with the news.

“I look forward to cleanup at the property but will remain cautiously optimistic until the last building is removed and the last fire, health and environmental hazard is gone,” said Don Mitchell, spokesman for the Sequoyah Hills/Oak Knoll Neighborhood Association.

Reach Cecily Burt at 510-208-6441. Check out her blog at www.ibabuzz.com/westside.