UC Berkeley will more than double what it pays the city under new settlement agreement

UC Berkeley will now pay the city more than $4 million a year for its use of city services.

view of UC Berkeley campanile, the Bay Bridge and San Francisco Bay
UC Berkeley Campanile. Credit: ngai58

Update, July 23 The UC Board of Regents voted Thursday to approve Cal’s long-range development plan and to certify the accompanying environmental impact report.

Original story, July 14 UC Berkeley will start paying the city of Berkeley about $4.1 million a year for its use of city services, more than doubling the $1.8 million it paid until recently.

Over the course of the next 16 years, the payments for fire, police, emergency services and the oversight of the health department should top $82.6 million, according to broad terms of an agreement between the two entities.

In exchange, Berkeley will withdraw from two lawsuits it is involved in, one over the university’s 33.7% jump in student enrollment and plans to build a new academic building for the Goldman School of Public Policy (known as the Upper Hearst Project) and one over the development of volleyball courts at the Clark Kerr campus. Berkeley also agreed not to file a lawsuit over the new 2021 long-range plan and environmental impact report UC Berkeley recently prepared.


Berkeley has also agreed not to oppose the Anchor House project, which will add 772 beds but involve the destruction of eight rent-controlled units, or a project for about 1,200 beds planned for People’s Park.

The proposed settlement does not require UC Berkeley to build a specific number of beds for its students nor does it propose an enrollment cap.

Mayor Jesse Arreguín and UC Berkeley Chancellor Carol Christ shaking hands
Mayor Jesse Arreguín and UC Berkeley Chancellor Carol Christ in a photo announcing a new agreement. Credit: City of Berkeley

“The agreement represents one of the largest financial settlements a UC campus has provided to a host city and paves the way for expanded educational opportunities while balancing community concerns and prospective impacts on city services,” according to a joint statement released by the city and the university. It included a photo of Mayor Jesse Arreguín and Chancellor Carol Christ shaking hands. “More importantly, the agreement assures a voice for the City and Berkeley community in the University’s future development.”

“The tentative agreement approved by the City Council calls for the University to provide annual payments to the city for a total amount of $82.64 million over the next 16 years,” according to the press statement. “The funding will support fire and city services, and projects supporting residents within a half-mile of the UC main campus and Clark Kerr Campus. In addition to the annual payment, the agreement calls for a stronger cooperative relationship including voluntarily honoring the City’s zoning standards in the design of off-campus projects, creating a collaborative planning process for projects in the City Environs, meeting and conferring around suspending master leasing of private housing, a commitment to work with the City around the closure of Alta Bates Hospital, and a willingness to work with the city to require commercial tenants to obtain permits and pay city impact fees.”

UC Berkeley will begin paying the city $4.1 million and the amount will escalate 3% a year, according to Dan Mogulof, a university spokesman.

The City Council voted 8-1 in closed session Tuesday night to accept the settlement that had been hammered out between the city’s and the university’s lawyers. City Councilmember Kate Harrison was the dissenting vote, according to sources who asked not to be named.

The settlement will not be final — or made public — until the UC Board of Regents votes on it at its July 20-22 meeting but an affirmative vote is expected.

The City Council did not report the vote it took in a closed session. The Brown Act requires public bodies to report actions taken in closed sessions, with some exemptions. City Attorney Farimah Brown said that since the vote was not final and still needs to be ratified by the Regents, it did not need to be disclosed.

Harrison said she could not talk about her vote against the settlement. Harrison said she had been advised she could not discuss or reveal her decision until the City Council vote was official and was revealed publicly.

Under terms worked out after UC Berkeley adopted a long-range plan in 2005, the university agreed to pay Berkeley $1.5 million a year for its use of city services. That number had reached $1.8 million by the time the agreement lapsed a few months ago.

In its responses to UC Berkeley’s new long-range plan and draft environmental impact report, as well as in public comments, Berkeley has said that UC Berkeley actually uses about $21 million a year in city services.

The agreement might actually generate more than $82.6 million over its 16-year life, said Arreguin. The agreement also includes:

  • An agreement that UC Berkeley will work towards requiring its non-program tenants to get city permits and pay city impact fees. For example, Microsoft rents 27,000-square-feet in Cal’s Berkeley Way West building in downtown Berkeley but did not pay into the city’s childcare or housing trust funds since the building is owned by the state. Other tenants in that building, including food businesses, are in a similar position. That could be as much as $1 million in revenues a year.
  • UC Berkeley will make a lump sum payment into the city’s housing trust fund to compensate for taking rent-controlled units off the market, said Arreguín. He could not comment on the amount.
  • The university will start paying its fair share of parking space rental tax.

There are other non-monetary benefits to the agreement, said Arreguín. UC Berkeley has agreed to confer on ending its master leasing of entire apartment buildings. That should help Berkeley renters. Cal will also get involved in the fight to stop the closure of Alta Bates Hospital. It has professors who are experts in the area of hospital financing and other issues that can help Berkeley, he said.

UC Berkeley still faces legal challenges over enrollment

UC Berkeley is still facing legal challenges over its increased enrollment. The community group Save Berkeley Neighborhoods has won two lawsuits against the university. Both challenged Cal’s decision not to do a full environmental review of the impacts of adding more students to the campus. The Court of Appeal found in Save Berkeley Neighborhood’s favor in 2020. Alameda County Superior Court Judge Brad Seligman ruled last week in the second lawsuit that the university abused its discretion when it failed to study the impacts of increasing its student enrollment as part of a supplemental EIR for the Upper Hearst Project. Under the new settlement agreement, Berkeley will withdraw from that lawsuit.

Phil Bokovoy, who founded Save Berkeley Neighborhoods, said his group will continue its litigation against UC Berkeley. And even though the city of Berkeley is a co-plaintiff, it did not inform Bokovoy’s group that was withdrawing from legal action.

He also said without seeing the details, he did not know how the agreement would be enforced and who would do the enforcing.

“A legally binding commitment”

Mogulof said there are enforceable provisions and they will be made public after the Regents approve the settlement.

“This is a legally binding commitment,” said Arreguín. “It’s enforceable in a court of law. If they don’t keep their obligations, we can go to court and hold them accountable.”

Arreguín said he hopes it does not come to that as the agreement is a step toward Berkeley and the university working together to solve issues.

Natalie Logusch, who lives at 1921 Walnut St. and has been fighting Cal’s efforts to relocate her and other tenants, said she was shocked by the announcement, especially since Arreguín said there was no reportable action out of the closed session. She also said she feels betrayed as Arreguín showed up to protest UC Berkeley’s plans to tear down the building.

“It really feels he smiles to our face and went behind our backs and sold us out,” said Longusch. “It makes one feel very cynical about Mayor Arreguín and the system.”

Arreguín said he still does not support Cal’s decision to tear down 1921 Walnut St. and force those tenants to move. However, the city could not see any legal way to stop Cal from its plan short of filing a lawsuit against the 2021 LRDP. And the LRDP includes plans for 11,200 more student beds, so challenging it might actually lead to less housing, he said. Since UC Berkeley is a state institution, it is not bound by city laws anyway, said Arreguín.

Correction: This article originally said UC Berkeley would triple the amount it paid Berkeley and would pay about $5 million a year. The press release did not provide an actual breakdown of the amount. Mogulof provided that after publication.

This story has been updated after publication with new information.

Frances Dinkelspiel is co-founder and executive editor of Berkeleyside. Email: frances@citysidejournalism.org.