At B-Side: Implications of downtown Berkeley initiative

At the first B-Side forum co-sponsored by The Hub and Berkeleyside, participants debated the merits of this fall's downtown initiative. From left, Lance Knobel of Berkeleyside, Jesse Arreguín and Eric Panzer. Photo: Frances Dinkelspiel — At the first B-Side forum co-sponsored by The Hub and Berkeleyside, participants debated the merits of this fall’s downtown initiative. From left, Lance Knobel of Berkeleyside, Berkeley Councilman Jesse Arreguín and Eric Panzer of Livable Berkeley. Photo: Frances Dinkelspiel

About 50 people gathered at Berkeley’s David Brower Center last week for a discussion about the ballot initiative supporters say will put more “green” in local development, but which opponents argue will stop new projects that are contributing to a downtown renaissance and are bringing critical amenities to the city.

Berkeley Councilman Jesse Arreguín faced off against Eric Panzer, chair of Livable Berkeley and the treasurer of the group opposing the initiative. They joined Berkeleyside co-founder Lance Knobel at Impact Hub Berkeley last Tuesday evening in the first of a series of informal discussions about Berkeley issues — co-sponsored by Berkeleyside and the Hub — called The B-Side.

Arreguín — who represents the downtown district on the Berkeley City Council — is a main backer of the downtown initiative, which will be on the November 2014 ballot. He told the crowd he had been involved in planning for the downtown for about eight years, starting with the Downtown Area Plan Commission. That 23-member board examined downtown zoning issues prior to Measure R, the advisory measure voters adopted by a 64% plurality in 2010 to set out a blueprint for downtown growth.

Although he was an opponent of that measure, Arreguín did vote for the Downtown Area Plan when it came before City Council in 2012. He said he did so “under the promise of certain community benefits from large developments.”

“I have been dismayed, as have other people in the community, about the fact that we are seeing some of these projects move forward, which is good because it will provide increased housing, and jobs and businesses downtown, but without the community benefits that were promised in Measure R,” he told those in attendance.

In particular, Arreguín referenced a provision in the Downtown Area Plan called the Green Pathway. That section of the plan was designed to provide expedited approval and higher density in exchange for more significant community benefits, such as higher wages for workers, more stringent environmental standards, and a higher percentage of affordable housing units than would otherwise be required. But the concept has not worked, said Arreguín, as no developer has taken that approach.

“Green Pathway is a path to nowhere,” said Arreguín.

This fall’s initiative is a vehicle to make sure that, when developers construct buildings taller than 60 feet, a high level of community benefits are mandated, not voluntary, he said.

Panzer, who ran against Arreguín in 2010, argued that the Downtown Area Plan, which seeks to place housing close to transit to reduce greenhouse gases, is already working and providing significant community benefits even though no developer has yet selected the Green Pathway. Developers are constructing more than 1,000 apartments, providing much-needed housing. The city stands to collect millions of dollars in taxes and fees for affordable housing, open space, parks and other amenities.

“The Downtown Plan does contain numerous community and environmental benefits,” said Panzer, who studied city planning at UC Berkeley and now works at an environmental consulting firm. “All of the new construction downtown is going to be LEED Gold. All of the new construction downtown has to either provide affordable housing on site, or pay into a [fund] by which the city can provide affordable housing on its own. It provides bike parking. Projects are required to provide transit passes … to all households. They have to pay a fee for the streams and public open spaces in the downtown. … So these projects are meeting expectations. The Downtown Plan is doing exactly what we want it to do, but this initiative would bring a lot of that to a screeching halt.”

The crowd at The Hub included many developers and their reprentatives including Patrick Kennedy, Mark Rhoades, Matthew Taecker, and William Schrader. Photo: Tracey Taylor. — The crowd at The Hub included many developers and their representatives including Patrick Kennedy, Mark Rhoades, Matthew Taecker and William Schrader Jr. Photo: Tracey Taylor

The Downtown Area Plan was adopted by council in 2012 and since then six residential projects and a hotel are in the planning stages or have been approved. (The University of California, which does not have to abide by city zoning laws, has built one structure, the LEED-certified Energy Biosciences Building, and is in the middle of building the Berkeley Art Museum/Pacific Film Archive. Cal has agreed to create open spaces and make other improvements that comply with the spirit of DAP.)

The Downtown Area Plan allows, among other provisions, the construction of five tall buildings in Berkeley — two 180-foot tall structures and three 120-foot structures. Three of these projects are already underway. A Los Angeles developer is planning to construct a 180-foot, 355-unit apartment complex with three towers at 2211 Harold Way. Another group is planning to build a 180-foot, 16-story hotel at Shattuck Avenue and Center Street. And a San Francisco family is proposing to construct a 120-foot, 12-story residential apartment complex on Shattuck and Berkeley Way.

Each of these tall structures will provide some community benefits, although only the project at 2211 Harold Way is far enough along to see what form they may take. According to a Berkeleyside estimate, the developer of The Residences at Berkeley Plaza would either build 30 units of affordable housing or pay $7,248,000 into an affordable housing fund, or a combination. The developer will pay $491,251 into the streets and open space fund. The developer is planning to create a 1,800 square foot plaza open to the public. The DAP requirements mean the developer will give all the residents of the apartments and employees of the stores and movie theaters annual transit passes. There will be car share spots in the garage as well. After input from the community, the developer agreed to reinstate movie theaters into the complex that he had originally planned to eliminate.

But, while numerous projects have been steadily moving through the city approvals process, the Green Pathway provision of the downtown plan was held up in court until last fall. A trio of neighborhood groups sued the city, saying the provision did not comply with state environmental regulations when it adopted the plan. An Alameda County Superior Court judge ruled in October against the neighborhood groups in that matter.

The legality of parts of the downtown initiative is also in question, Panzer pointed out. City Attorney Zach Cowan sent a memo to council in June noting that the initiative would require developers to pay certain fees prior to the completion of “nexus studies” to analyze the market to set appropriate rates. That is not legal in Cowan’s opinion.

A report by consulting firm AECOM — which was hired by the city to evaluate the initiative — also concluded that the new rules would make it financially infeasible to construct anything higher than 60 feet in Berkeley. The report concluded that 1,300 fewer housing units would be constructed if the downtown initiative passes and the city would lose millions in expected fees.

Arreguín disagrees with Cowan’s viewpoint, as well as the conclusions of the AECOM study, he told the crowd. Initiatives are not subject to nexus study requirements, he said. Also, the initiative makes clear that the right to build structures 60 feet or higher in Berkeley is not automatic, but discretionary. If developers want this right they must agree to provide more community benefits.

While Arreguín did not mention this at the debate, his office pointed out in June that the author of the AECOM report was Alexander Quinn, a former board member of Panzer’s organization, Livable Berkeley. Quinn’s wife, Jennifer Phelps-Quinn, currently sits on the Livable Berkeley board and Erin Rhoades, who is married to Mark Rhoades, a consultant helping with numerous downtown development projects, was the former director of Liveable Berkeley. Arreguín called AECOM’s report “publicly paid political propaganda,” and said it lacked the data to back up its conclusions.

April Gilbert, left, talks to Councilman Gordon Wozniak at the B-Side talk. Anthony Sanchez, aide to Councilman Jesse Arreguín, is in the center, rear. Photo: Tracey Taylor

Another central issue that panelists and members of the audience brought up was the wisdom of having Berkeley residents vote on the initiative, since it is so complex. The initiative is 28 pages of zoning code.

“This is ballot box planning at its worst,” said Panzer, who described the initiative as a document with “excruciating strike-throughs and additions” that would set downtown zoning laws “in stone.” They could only be changed by another vote of the electorate, he said.

Arreguín said that is not completely true, as the initiative allows council to change certain things.

Downtown Berkeley zoning. (Click for the full map.) Image: City of Berkeley — Downtown zoning. (Click for full map.) Image: City of Berkeley

Moreover, the initiative would guarantee that voters have a say in critical civic issues, Arreguín added. For example, it includes a civic center overlay to mandate that buildings like the post office, city hall and the veterans’ facility be used only for civic and non-profit uses; height limits in that district would be significantly reduced. And, though council is on track to create an overlay district in September, Arreguín noted that council would not be prevented — without the power of the initiative — from overturning that decision later.

“It’s best for legislative bodies to enact laws, but there are situations where our legislative bodies don’t step up to the plate,” said Arreguín. “I would have preferred that council do these things. They didn’t, so the only option we had was to go to the ballot box.”

Even though voters have not had a chance to weigh in, the initiative is already having an impact in Berkeley. The developer of the proposed hotel on Shattuck Avenue has suspended work on the project pending the outcome of the November vote. Other developers have said that the initiative’s requirement that all buildings over 60 feet follow the Green Pathway will make projects too expensive, forcing them to abandon their plans if it passes.

Arreguín questioned those claims. He said he is committed to bringing a new hotel to downtown, and does not believe the initiative will halt growth.

“Things will get built,” said Arreguín. “Berkeley has a hot real estate market.”

Panzer had a different take: “They are asking you to fix what isn’t broken.”

Downtown Berkeley, May 2014. Photo: Emilie Raguso — Downtown Berkeley from Shattuck Avenue and Center Street, May 2014. Photo: Emilie Raguso

The initiative would change a number of things (partial list):

Buildings 60 feet or taller must follow the Green Pathway.
The height allowed in the “corridor” sections of downtown would drop from 75 to 60 feet.
The height in the downtown “buffer zones” would drop from 60 to 50 feet.
The height in the proposed Civic Center Historic District would drop to 50 feet; it currently has a range of 35 to 120 feet.
Buildings over 75 feet must be LEED Platinum; current law requires buildings over 60 feet to be LEED Gold.
Buildings 75 feet or taller must offer two or three bedrooms in 20% of their units to accommodate families.
Buildings over 75 feet must have public bathrooms, for lease to the city for $1.

Changes to the approvals process

Current provisions that allow developers to get an expedited ruling by the Landmarks Preservation Commission on whether a structure is considered historic will be struck.
The city Zoning Adjustments Board could no longer grant a use permit to allow heights or setbacks that deviate from city zoning laws. Deviations from code will require a variance, which is much more difficult to get.
Developers who want to build higher than 60 feet could no longer apply for a state density bonus, which often translates into an extra floor in exchange for more affordable housing units.
Buildings under 75 feet would no longer be eligible for “by right” approval — with no notice or hearings — under the Green Pathway, which currently exists.
The Planning Department could process just one building over 75 feet tall per year. Arreguín said this would not impede the progress of the three tall buildings in the pipeline, although developers would have to resubmit all plans in line with the Green Pathway. These buildings would be entitled to final action within 210 days of re-submittal.

Affordable housing

Buildings over 75 feet must make 30% of their units affordable, with at least 20% of those built on site. (Currently, buildings must make 10% of their units affordable and can pay an in-lieu fee to the city — $28,000 per unit — rather than build on-site. The Green Pathway would allow developers to pay an in-lieu fee for 20% of the units, with at least 10% more on-site.)
Buildings from 60-75 feet must make 20% of the units affordable, with at least 10% built on site. (Currently, buildings this size are only required to make 10% of the units affordable, unless the developer chooses the Green Pathway, in which case 30% of the units must be affordable. So this part of the initiative would reduce the number of affordable units required under the Green Pathway.)

Increase bicycle parking spaces; in some cases, the public must have access to them.
Increase the number of disabled parking spaces.
Increase the electric vehicle charging spaces in buildings with more than 10 units.
If a host of parking requirements is met, the developer could add on a 4,500-square-foot penthouse, bringing the maximum building height to 190 feet.
In the downtown buffer area, the rules would change from one spot per three units — which can be reduced or waived if a substantial fee is paid to the city — to one space for every 1,000 square feet of floor area.

Labor for Green Pathway projects (over 60 feet)

All construction workers must be paid prevailing wages on projects over 60 feet. Current law requires this for Green Pathway projects (over 75 feet), or those with more than 100 units.
Half of the construction workers on a project must be from Berkeley. Current law is 30%.
Maintenance and security workers, as well as employees of hotels, must be paid prevailing wages. Current law requires developers with Green Pathway buildings over 75 feet to pay hotel employees prevailing wages.

Operating hours and uses

New downtown bars and restaurants that sell alcohol must close by midnight Sunday through Thursday; they may seek a use permit to remain open later. To get that permit, a zoning officer or the zoning board must find that later hours “will not generate excessive noises, traffic or parking problems affecting the well-being of the residents of the district.” Bars and restaurants could automatically stay open until 2 a.m. on Friday and Saturday nights. Currently some restaurants can apply for an administrative use permit to stay open until 6 a.m.
New bars and restaurants in an expanded buffer zone outside the downtown core would have to close at midnight, and could not apply to stay open later.
Adult-oriented businesses, such as nude dancing and escort services, would be prohibited. Current law allows them with a use permit, which involves a public hearing.
A funeral facility for those who are cremated — called a columbarium — would be prohibited. A facility with 400 niches is now allowed with an administrative use permit.

New fees

In addition to current streets and open space improvement fees ($2.23 per square foot for residential; $1.68 for commercial; and $1.12 for institutional), developers of the five “tall buildings” would pay an additional $1 per square foot for those projects.
Currently, developers can elect to pay a fee if they include less open space on site than a project requires. That fee has not yet been set by council; the initiative sets it at $30 per square foot, to be adjusted annually for inflation.
Under the initiative, council would add on a new transportation services fee to support alternative modes of transport, in addition to the existing transit pass requirement (an unlimited monthly bus pass or its equivalent to each resident in perpetuity) and an increase in the bicycle parking and electric vehicle charging requirements, as well as potential increases in the number of car share spaces required on site.
Developers must pay a fee of 50 cents per square foot of new or additional floor area into a loan fund available to small businesses and run by the city.

Listen to a recording of the July 15, 2014 B-side discussion. It also appears in the player below.

Sophie Hahn, one of the authors of the downtown initiative and a member of the city’s Zoning Adjustments Board, has drawn up a grid of current zoning rules and what the initiative would change.

Emilie Raguso contributed to the reporting of this story.

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