The design for a mixed-use project at 2501 Haste St. Courtesy: Kirk E. Peterson & Associates

The city of Berkeley and Ken Sarachan have settled a lawsuit over his empty lot at 2501 Haste St. on the corner of Telegraph Avenue, clearing the way for the construction of a a six-story, mixed-use, Moorish, palace-like structure inspired by Italian hill towns, Tibetan forts and the rock-cut architecture of Petra in Jordan.

Under the settlement, Berkeley agreed to drop its lawsuit to force Sarachan to pay $640,000 in liens or have the city sell the lot at auction. In exchange, Sarachan agreed to meet specific deadlines to pursue and build something on the lot that has been vacant for more than 20 years.

“Basically, we are saying, OK, one last chance, we are going to clean everything up, we are going to have much clearer deadlines and obligations, let’s go,” said City Attorney Zach Cowan.

As soon as the settlement papers are filed with the court, Sarachan has 45 days to move his proposal forward through the design review and approval process with the Zoning Adjustments Board, said Cowan. If Sarachan fails to meet that and other deadlines, Berkeley has the right to make Sarachan forfeit the deed of trust on the property and pay the liens, said Cowan.

The City Council approved the settlement in a closed session on Oct. 22, but it was not announced until the city council meeting on Oct. 29, said Cowan.

Sarachan could not be reached for comment.

Ken Sarachan, in plaid, waits to address Berkeley’s Zoning Adjustments Board on Thursday, May 9, 2013. Photo: Emilie Raguso
Ken Sarachan, in plaid, waits to address Berkeley’s Zoning Adjustments Board on Thursday, May 9, 2013. Photo: Emilie Raguso

The settlement is similar to the one the city made with Sarachan more than 10 years ago. Sarachan, who also owns Rasputin Records, Blondie’s Pizza, the old Cody’s Building and the retail development at 2350 Telegraph, bought the Telegraph and Haste property, which once held the historic Berkeley Inn, in 1994. The city agreed to forgo the existing liens on the site if Sarachan developed it, setting an initial deadline in 2004. Sarachan also acquired the adjacent properties to the east and north of the site, raising hopes that an ambitious project could be developed on the site. But nothing happened. Officials were  “pushed to the point of exasperation,” according to City Councilman Kriss Worthington and filed a lawsuit for non-judicial foreclosure on the blighted lot in September 2011.

At the time, Sarachan put the blame for the delays on the city’s planning department. He said he had a project ready but had been stymied by city staff.

Ken Sarachan, who owns multiple properties on Telegraph Avenue, bought 2501 Haste in 1994. The Berkeley Inn sat there until a fire destroyed it. Photo: Frances Dinkelspiel

Worthington, who said the rat-infested lot “creates more noise complaints, more rats, and more trash than any other single address in his district,” is hopeful that construction will start soon. Sarachan had resisted the previous settlement, hiring lawyers to fight it. Now he has agreed to move forward, said Worthington.

In April 2012, Sarachan proposed a project designed by architect Kirk E. Peterson. The project, dubbed “La Fortaleza” (as in “fortress” or “stronghold”) is a mixed-use building with a ground floor and sunken courtyard space for retailers, five residential floors of 79 one- and two-bedroom apartments, and a landscaped roof deck. There will also be numerous terraces, balconies and “naturalistic” entrances created using either rock, or concrete made to look like rock.

If Sarachan proceeds with construction, that intersection, now cursed with two empty lots and an unused building, could be transformed, said Worthington. Sarachan also is proposing to covert the old Cody’s Building into Mad Monk Center for Anachronistic Media, an entertainment center. The owners of the Sequoia Building, which was destroyed by a fire two years ago, are also planning to rebuild soon.

“It’ll change from 20 years of blight to potentially one of the most happening intersections in the city with two totally new buildings and one giant reconstructed building on three corners of the same intersection,” said Worthington. “That could be a giant boost for the whole district.”

Telegraph Avenue property owner shows plan for vacant site (04.19.12)
Can Berkeley’s Telegraph Avenue get its mojo back? (04.18.12)
Imagining a future for Telegraph Avenue without blinders (04.11.12)
Telegraph fire site owner plans for temporary resurrection (02.06.12)
Urban think tank: Student visions for blighted Telegraph lot (10.03.11)
City hands ultimatum to Sarachan on vacant Telegraph lot (09.07.11)
What about that vacant lot on Haste and Telegraph? (08.11.11)
Berkeley students want better stores, fewer street people (05.31.11)
City says it is addressing Telegraph Avenue rats problem (02.10.11)
The rats of Telegraph Avenue (video) (01.28.11)

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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...