The city of Berkeley holds $640,000 in liens against this lot at 2501 Haste Street. Photo: Frances Dinkelspiel

The city of Berkeley has filed a lawsuit against Ken Sarachan, telling him they intend to seize his lot at the intersection of Telegraph and Haste to pay off the $640,000 he owes in liens and interest.

Berkeley filed the suit against the businessman in Alameda County Superior Court on January 28th and served Sarachan’s place of business, Rasputin Records, on Monday, according to Zach Cowan, the city attorney.

“The city is alleging that Mr. Sarachan has not lived up to his agreement to pursue development of the site in a diligent and timely manner,” said Cowan. “As a result, we want to recover the liens we offered to waive if he did so.”

Mr. Sarachan could not be reached for comment. The suit also names Laurie Brown, his wife, as a co-defendant since California is a community property state.

The suit stems from the 20-year troubled history of the lot at 2501 Haste at Telegraph Avenue. It was once the location of the 80-room Berkeley Inn, a hotel that evolved into a low-cost rooming house. The inn suffered two devastating fires, one in 1986 and one in 1990. Berkeley paid for clean-up and removal of the debris and fencing to block off the lot, and filed a lien against the then property owner to recover its costs. The $500,000 in liens has ballooned to $640,00 with interest, said Cowan.

Sarachan, who has extensive property on Telegraph Avenue, including Blondie’s Pizza, the old Cody’s building, and the large glass and steel shopping mall at 2350 Telegraph, bought the lot in 1994. He also owns 2503 and 2509 Haste, the latter acquired from UC Berkeley in 2006.

The city worked with Sarachan for years to help and encourage him to build affordable housing and retail on the site. Sarachan asked – and received – a promise from city officials that they would not collect the liens filed against the property if he got a building permit and started construction. The agreement was renewed numerous times in the past 15 years.

In September 2011, the City Council got so frustrated that the lot, which is on a major commercial thoroughfare, had stood vacant for more than 20 years that members voted to pursue legal action against Sarachan.

Sarachan told the council he was not to blame for the inaction. He said he had submitted numerous plans to the Building Department, including one called the Pagoda Project, which he promised would be the greenest building in the city. The various projects have never been approved.

“This  whole delay in the Pagoda Project is really due to the Planning Department’s lack of competence to make a decision and get work done,” Sarachan said in a Sept. 6, 2011 letter to the city council.

The lawsuit contends that Sarachan missed deadline after deadline set by the city and never submitted complete plans.

No hearing date has been set yet.

View a copy of the lawsuit.

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City hands ultimatum to Sarachan on vacant Telegraph lot [09.07.11]
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Frances Dinkelspiel, Berkeleyside and CItyside co-founder, is a journalist and author. Her first book, Towers of Gold: How One Jewish Immigrant Named Isaias Hellman...