City officials are pushing Bayer to dedicate more money to a community benefits package tied to the pharmaceutical giant’s plans for a major expansion at its West Berkeley campus.
Bayer will hold an online public meeting to discuss its West Berkeley expansion plans and proposed community benefits package on Aug. 18, starting at 6:30 p.m. You can register for the event by clicking here.
Already the city’s largest private-sector employer, Bayer is planning to double its Berkeley workforce in the coming decades by building a dozen or more new structures within its existing footprint, adding nearly 1 million square feet of additional space that will support a broader array of pharmaceutical manufacturing. Key to those plans is an extension of the development agreement the city and Bayer struck in 1992, and the community benefits package within it that has funded a slate of local programs over the past three decades.
Earlier this summer, Bayer officials laid out their proposal for the next 30 years of community benefits. The package includes annual payments starting at $720,000 in 2022 and increasing by 2% each year, to $1.3 million in 2052, totaling $30 million over the life of the agreement.
Educational programs, such as “hands-on science education” for elementary through middle-schoolers and internships for high-schoolers and community college students, would receive 60% of the funding. Another 20% would be put into community programs, with a focus on areas such as health equity and support for local businesses; the remaining 20% would go into Berkeley’s Housing Trust Fund.
Mayor Jesse Arreguín praised Bayer as “a really good corporate partner,” and called the benefits proposal “a good starting point.”
But, Arreguín added, “I think they can do more.”
Precisely how much more is not clear — Arreguín said the city has not yet drafted a written counter-offer to Bayer’s proposal, which he said would be made public once it is prepared. Asked if there was a dollar amount the city believes the company should provide each year, the mayor said that was still being discussed.
Bayer officials declined to comment on Arreguín’s call for a more generous benefits package.
“Whatever form the city gives us feedback, we’re looking forward to it,” Bayer spokesperson Cathy Keck said. “We’ve given a really strong … partner offer.”
Unlike in the city’s recently completed negotiations with UC Berkeley, however, Bayer has also noted in public discussions of the benefits package that its expansion plans are not wedded to the West Berkeley campus.
“What the site team is trying to do is work with Berkeley to ensure that the city of Berkeley can be competitive in attracting Bayer’s global infrastructure dollars,” Keck said. “And that’s competitive with places like Raleigh, Boston, Toronto — if we just want to stay in North America. If we want to go European we’d be talking Germany, Spain, etc.”
The company will hold an online public meeting to discuss the development agreement and benefits package next week. Bayer and the city’s negotiators are expected to reach a consensus on the agreement by September, when it will go before the Planning Commission and City Council.
At stake in the talks, according to Bayer, are 1,000 jobs the expansion would add at the campus, and an estimated $15 million in broader economic benefits to the city.
“It’s a delicate balance,” said Councilmember Terry Taplin, whose District 2 includes the Bayer campus and who has worked with Arreguín in negotiations with the company. “You don’t want to be steamrolled, you don’t want to drive the other partner away and you don’t want to walk away with nothing.”
The agreement clears a path for the planned expansion, providing Bayer with a predictable permitting schedule and allowing it to construct new production facilities that are up to 80 feet tall. The current limit in the area is 45 feet.
It also expands the kind of work Bayer can do at the facility, lifting restrictions in the original development agreement that barred research using recombinant DNA.
That provision has drawn concerns from some neighbors and others, who worry it could allow for research at the facility that could pose a risk to the broader community. Bayer officials counter that their West Berkeley facilities will continue to operate at the same bio-safety levels as before, and stressed that the facility houses production and manufacturing work — not research. Neither Taplin nor Arreguín expressed concerns about the research provisions of the development agreement in negotiations.
City officials are also hammering out a draft of other details in the development agreement, including how they will distribute the company’s payments. To that end, Arreguín and Taplin have convened an ad hoc committee with more than 20 members, including representatives from schools, businesses, community groups and faith leaders, among others.
And Arreguín said he is raising concerns about the impact of 1,000 new workers commuting through West Berkeley each workday, calling Bayer’s plans to build a new parking garage on the site “excessive.”
Still, the key sticking point in discussions between Bayer and the city remains how much the company will pay each year.
The community benefits package is based on the idea that the development agreement’s provisions will save Bayer time and money in building out the expansion. Arreguín contends the agreement’s rules allowing for taller buildings are more valuable than Bayer’s offer judged them to be.
“If they were any other developer they would have to get a variance” to build the facilities of 65 and 80 feet that Bayer’s plans call for, Arreguín said, “which is a very, very hard thing to do.”
“We believe that additional value should be considered in determining the amount of community benefits that Bayer should provide the city,” he added.
Drew Johnston, Bayer’s vice president for site engineering, said that in calculating the benefits package, “I pushed it as far as I could,” assuming the development agreement would provide the maximum value to the company and, in return, the highest payments to the city. Johnston also reiterated Bayer’s view of how critical the agreement is to its future in West Berkeley.
“The heights we’ve asked for allow us to do our business here,” he said. “And without the heights, especially on the manufacturing side, other sites that Bayer has will get the project — it’s as simple as that.”