The Berkeley City Council took its first steps Tuesday to prioritize which community benefits it will require from developers, and affordable housing and local union jobs were the top priorities.
Council members said other priorities could include ensuring that businesses impacted by the 18-story apartment building proposed at 2211 Harold Way, particularly Habitot Children’s Museum — which says it will have to relocate — receive some sort of remuneration. They also want a better understanding of the profits developers stand to make so the city can recapture some of the increased value that comes from up-zoning land to allow for taller buildings downtown.
The council discussion came after close to 90 residents talked for three hours about their concerns and hopes for three tall buildings now proposed downtown. They include the Harold Way project, an 18-story hotel proposed at 2129 Shattuck Ave. at Center Street, and a 120-foot-high condo complex, L’Argent, proposed at Shattuck Avenue and Berkeley Way. UC Berkeley is also planning to build a 120-foot building on Berkeley Way but, as a government entity, local zoning laws do not apply.
When city officials adopted the Downtown Area Plan in 2012, they mandated that any buildings over 75 feet needed to provide “extraordinary” community benefits in exchange for additional height. But exactly what those community benefits should be were not specified. General categories were suggested, including green architecture and technology, landscaping, transit benefits and more. Developers were expected to propose what benefits they would offer.
In the process of reviewing 2211 Harold Way, members of the city’s Zoning Adjustments Board decided that the community benefits language was too vague and asked council to better define it.
Most of the discussion May 5 revolved around the Harold Way project, which will be called The Residences at Berkeley Plaza. The $120 million complex is set to include 302 apartments, and have 10,500 square feet of commercial space and a 171-space underground garage. The project is the furthest along of all the proposed high-rises in the planning process. Its Environmental Impact Report is complete, though not yet approved, and its design has been tentatively approved by the city’s Design Review Committee.
The developer, Joe Penner of Hill Street Realty, also known as HSR Berkeley Investments, has proposed a number of community benefits for the project. Penner believes the benefits he is offering are worth around $27 million. Here is what Hill Street Realty is proposing:
- Union labor: In October, the developer announced it would use all union labor for the building’s construction. Using union labor will increase costs by 10% to 12%, according to the developer. This community benefit is worth $10 million, according to the developer.
- Retaining the Shattuck Cinemas: The original design of the structure did not include the movie theaters, but the developer added them back in after community outcry. Penner has offered to replace the 11 current screens with nine new ones. It will cost about $16 million to build the theaters, according to the developer. Theaters can’t pay as high a rent as other businesses, so the developer will be subsidizing the rent. In total, including movie theaters in the project is a community benefit worth about $16 million – half the cost of construction and half a 20-year rent subsidy, according to the developer.
- Penner has said he will pay mitigation fees to at least two organizations that will be disrupted – Habitot Children’s Museum and BOSS, or Building Opportunities for Self Sufficiency. No one has stated how much money has been offered.
- Hill Street Properties had offered to create two other community benefits related to transit and the streetscape worth about $7.7 million over the life of the project, but the zoning board has suggested that it does not consider them sufficiently significant, so they are not currently on the table.
Berkeley law already requires that the building be LEED Gold, make 10% of its units affordable (for a total of 30 units) or pay $6 million in into the city’s Housing Trust Fund. The project must also provide transit passes and car share parking spaces, and pay around $490,000 into a streets improvement fund.
Most of the people at Tuesday’s meeting testified that they did not think the community benefits offered are significant enough. A number of people also spoke out against the project because they said they thought it was too massive, would block sunlight and views, and would only cater to the rich, whom they characterized as speculators who would not even live in the units.
Those at the meeting asked that the developer fund a number of projects. They asked for more affordable housing, performance space for the arts, a retention of Shattuck Cinemas, money to buy a new ladder truck for the Berkeley Fire Department, money to complete the UC Theatre’s renovation, and transitional housing for youth aging out of the foster care system.
A number of people spoke about the urgent need for affordable housing in Berkeley and pointed out that the majority of apartments at Berkeley Plaza would cost around $3,400 a month. They said that is not affordable. One speaker even said building more affordable housing “is a moral obligation.” Moni Law, who works for the city’s Rent Stabilization Board, said only four of Berkeley’s 132 firefighters live in the city, and few teachers can afford to live here. “We are facing a historic crisis of affordable housing in Berkeley,” said Jesse Townley, the chair of the Rent Board.
Later in the evening, City Councilwoman Lori Droste said Berkeley is only meeting 21% of its goal to provide housing for very-low and low income people, and only 3% of its goal for moderate and middle income residents. James McFadden, a physicist at Berkeley Lab, said the Harold Way project won’t relieve the housing crunch, will drive up rents, and will remove land that can be used for affordable housing. “We have too much capital flowing into Berkeley,” said Becky O’Malley, the publisher of the Daily Planet. “We have too many rich people looking for a place to park their money.”
Union Labor Agreements
A number of people said the Harold Way project would be a win for labor, particularly if the developer commits to hiring locally. Andreas Cluver, a representative for the Building & Construction Trades Council of Alameda County, said the community benefits package should contain language requiring union jobs as well as apprenticeships for local people. He estimated that 60 Berkeley residents could be hired for the construction project, and 25-30 residents could gain access to an apprenticeship program, which would set them on a path to a well-paying career. (In addition to the 2211 Harold Way project, the developers of the hotel have pledged to use union labor, including those working at the hotel).
From the early days of the Harold Way project, residents have been concerned about the fate of the Shattuck Cinemas. One group, Save Shattuck Cinemas, says it has collected more than
2,000 4,200 signatures to protest the demolition. The developer agreed to put the theaters back into the project, but his promise has not assuaged critics. They point to the fate of the Fine Arts Theater, which developer Patrick Kennedy was supposed to restore when he constructed the Fine Arts apartment complex on Shattuck Avenue. It didn’t happen.
Hill Street Properties has promised to build nine new theaters and has had extensive discussions with Landmark Theatres, which leases Shattuck Cinemas, said Penner. When the theaters are rebuilt, Landmark will offer the same viewing experience and programming, according to Ted Mundorff, president of Landmark. “Landmark would continue to play its normal mix of films curating the best selection in independent and commercial film,” he said.
A number of local filmmakers told council that the Shattuck Cinemas are an integral part of the local film community and are needed to screen the kinds of films made at the Saul Zaentz Film Center. One independent filmmaker estimated that just 25 local filmmakers had brought $100 million into the economy during the last 30 years.
Others talked about how the Shattuck Cinemas are an economic engine for the downtown, and said shuttering them for two years will hurt local businesses. Lindsey Vurek, a longtime environmental activist, told council he was representing the investors behind Gather Restaurant who are concerned about the closure.
Droste expressed concern that the number of people going out to the movies is dwindling. She suggested that the city retain some rights so, if Landmark withdraws, the city could have jurisdiction over what replaces it.
Mundorff has disagreed with the comments about the decline of the movie business. At $10 billion a year, it is healthy, he said. Townley, the chair of the rent board, suggested that council adopt an “or else” clause. If developers fail to keep their promises, they should be penalized, he said. Council members, too, expressed some support for the possibility of consequences for developers who do not follow through.
Habitot Children’s Museum
Dozens of people came out to support Habitot. They held up blue Habitot signs throughout the meeting. Gina Moreland, the founder and director of the museum, which is located in the basement of the proposed Harold Way building, asked that her organization be at the top of the list of those in line to be compensated for displacement. In its 17 years of existence, Habitot has welcomed 1 million children and their families, Moreland told council, adding: “Berkeley stands to lose a cultural resource…. Habitot will be forced out and may be forced to close if we cannot raise the money to relocate.”
Moreland has said the museum is looking for $250,000 to move. Penner has made an offer, which Moreland took to her board, but details remain private.
Habitot has found a new location on Adeline Street in South Berkeley’s Lorin District in a building now owned by Steve Oliver, the developer and arts patron. It will cost from $2.5 million to $3 million to purchase and remodel the space, according to a number of board members who spoke. “We need the city of Berkeley and the city council to help Habitot to get to its new home,” said Jeff Evans, a board member.
The view from Campanile Way
Critics of the Harold Way project have expressed concern that the building will affect the view of the Golden Gate Bridge and San Francisco Bay from the steps of the Campanile. Renderings submitted by the developer show that the building will be visible and will block a section of the view, but only from one side of the Campanile. The Landmarks Preservation Commission declined in April to landmark the view, although that decision has been appealed to the City Council, according to Steve Finacom, a local historian and preservationist. After the landmarks vote, some UC Berkeley students started an online petition at Change.org and collected 3,348 signatures in just a few days. “We are OK with development, just development people can afford,” said Alexandra Smith, who began the petition. “Please do not privatize and destroy this view from the UC Berkeley campus.” Hill Street already pulled back the north section of the apartment complex by 23 feet to lessen the impact on the view. Finacom is urging the developer to pull it back more so the impacts are even smaller.
New performing arts space
A number of people from Berkeley Ballet Theater and other arts organizations appeared before the council to ask for a new performing arts center at 2211 Harold Way. It is increasingly difficult to find stages to perform on, they said. Alison Bernstein, who is on the board of Youth Musical Theater Company, a children’s musical theater group, said the fall production had to be canceled because the group could not find a stage large enough to rent. (The organization has a practice space in West Berkeley, but it does not include a stage.)
This discussion prompted Finacom to remind council that there are large public spaces potentially available — in Old City Hall and in the Veterans’ Memorial Building. The Veteran’s Building has a large theater, although it is now filled with offices. Perhaps the renovation of those building could be part of a community benefits package he said. The those buildings are not seismically safe, however. City Manager Christine Daniel said she believes it would cost around $40 million to upgrade Old City Hall. There is no estimate on the cost of retrofitting the veterans’ building, she said.
While the vast majority in attendance had criticisms about the Harold Way project, a number of people praised it. Tim Frank, who headed up last year’s No on Measure R campaign, said Berkeley residents had twice voted in large numbers to increase the density of downtown. “Most Berkeleyans are really excited about the new housing,” said John Caner, who runs the Downtown Berkeley Association, a merchants group. “People understand and want a vibrant, dense urban core that has people living, working and playing downtown.”
At the end of the three hours of testimony, City Councilman Jesse Arreguín put forward a framework in which to consider the scope of community benefits. One important issue, he said, is to better define the term. Arreguín said a community benefit is not something that just directly benefits the project or its occupants, but benefits the entire community.
Arreguín suggested that the developers of all projects over 75 feet tall be required to provide community benefits in two categories — affordable housing and labor requirements — as well as a third additional category.
To ensure the city is asking for enough, developers should be required to provide a “pro forma,” or a breakdown of a project’s costs and estimated profits. Then city officials can make sure the offered benefits are “’proportional’ to the values of the additional height,” said Arreguín.
Councilman Max Anderson expressed concerns about the direction of Berkeley that echoed some of the issues presented by the public earlier in the evening. He pointed out that the city’s black population has shrunk from 30% to less than 10% in recent decades, and that the benefits of the recent economic upturn are accruing to those who earn more than $90,000 a year. “We have changed the demographics of this city from one of recognized diversity to one where … we are becoming a gated community without gates…. This is not the city we want to live in,” said Anderson.
City Councilman Kriss Worthington said Berkeley should not be timid about demanding its share of community benefits because, in his estimation, developers stand to earn tens of millions of dollars in profit. He said people are talking from a “small, frightened point of view,” and fear that, if Berkeley demands too much, the developers will walk. “None of these projects are going to leave Berkeley because of one, two, three million dollars,” he said. “Let’s not think small… We do need to be bold. We need to understand the magnitude of money and what is reasonable to ask for.”
Droste also expressed that: “We need to know a reasonable rate of return and know what we can reasonably extract.”
Council members did not take any action on Arreguín’s proposal or discuss Mayor Tom Bates’ analysis of what other cities demand from developers, but will bring up the issue in future meetings.
Update 5/9: This story has been update to revise the value of the developer’s proposed community benefits to $27 million. Previously it read the benefits were worth $12 million the first year and around $43 million over 20 years. The developer’s latest memo on community benefits is here.
Berkeley officials seek feedback on community benefits (04.16.15)
View from UC Berkeley Campanile will not be landmarked (04.06.15)
Developer of downtown Berkeley hotel offers ‘tapered’ tower; hopes for quick design review (02.18.15)
New 16-story downtown condo/hotel project to appeal to empty nesters, visiting professors (02.06.15)
Berkeley Zoning Board considers community benefits of proposed downtown high-rise (01.12.15)
Locals question Berkeley Plaza impact on theater, view (11.18.14)
New hotel project is a go again after defeat of Measure R (11.06.14)
High-rise developer in Berkeley to use 100% union labor (10.31.14)
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