More than half a century ago, BART and Berkeley struck an unusual deal.
Because residents agreed to tax themselves to pay the additional cost of moving the city’s portion of the transit system underground, BART gave Berkeley the option to buy the air above the Ashby and North Berkeley stops. BART owned the stations and their parking lots, but since Berkeley had a claim to the “air rights” overhead the city would need to sign off before anything could be built there.
Berkeley leaders say that arrangement, which no other city in the BART system has, gives them leverage today to demand a slate of community benefits from the plan to build hundreds of homes at the Ashby station.
What they view as an opportunity also has the potential to be a stumbling block, however.
The benefits the city wants — including a commitment for more affordable housing at the site and a new location for the Berkeley Flea Market — would make the development less lucrative for BART, a conflict that has led to months of complex negotiations over the air rights.
The stakes are high for both sides. BART has long viewed development on its property as a source of revenue to help fund transit service, and that need has only grown more critical since the pandemic plunged the agency into a fiscal crisis. Meanwhile, Berkeley told state housing regulators it anticipates the closely watched development at Ashby could deliver as many as 1,200 new homes, which would represent 13% of the housing the city must plan for over the next eight years.
“We take this responsibility to exercise the city’s property rights very seriously,” said Mayor Jesse Arreguín, who is leading negotiations for Berkeley. “We want to see a project built, but we also want to make sure that it advances the community’s expressed priorities.”
Negotiations have dragged on for longer than expected. Arreguín at one point estimated they would be complete by last fall; now officials hope to finish them in March, though he indicated they may miss that target too.
As a result, the Ashby development has fallen behind the effort to build housing at the North Berkeley station, where the city no longer holds air rights. While BART solicited for developers at North Berkeley last July and picked a team in December, it can’t start that process for Ashby until the air rights negotiations are resolved.
Still, officials from both the city and BART reject any suggestion that the air rights negotiations pose a serious threat to the Ashby project, or could lead the transit system to walk away from years of work there to instead focus on other developments it has planned for stations all over the Bay Area.
“Things are going well; we’re making progress,” said Abby Thorne-Lyman, who leads BART’s real estate and development office. “There’s no reason to be thinking right now that we can’t see our way through this.”
The BART board and Berkeley City Council are expected to discuss the negotiations next month; both will need to sign off on the deal.
BART has compensated Berkeley for air rights in the past — the city gave up its claim to the rights over North Berkeley decades ago in exchange for the land that became Ohlone Park, and it did the same for the rights above the parking lot east of the Ashby station as part of the deal to build the Ed Roberts Campus.
Berkeley’s last remaining air rights claim is over the larger west parking lot at Ashby, which represents the vast majority of the developable land at the station.
Arreguín said his priorities in the negotiations with BART are ensuring at least half of the units built at the site are affordable, creating a new location for the flea market and securing a commitment that space for businesses at the future development will face out onto Adeline Street, to create a more attractive corridor rather than a “dead zone.”
City officials say those sorts of commitments can be a step toward repairing the destruction BART caused in South Berkeley when blocks of homes and businesses were cleared to make way for the transit system.
“While it does not approach repairing the loss of economic power that the homeowners lost,” South Berkeley Councilmember Ben Bartlett said, his hope is that “the commercial aspect is at least engaging for the community.”
Each of those priorities requires a concession from BART, however.
While Berkeley has committed $53 million to ensure at least 35% of the homes built at both Ashby and North Berkeley are affordable, it’s unclear where funding for more below-market-rate units would come from.
Berkeley voters rejected an affordable housing and infrastructure bond on last November’s ballot that city officials said would have paid for additional units at the BART stations. In its absence, Arreguín suggested exploring public-private partnerships, an enhanced infrastructure financing district or other programs to raise money for the units.
Whatever shape it takes, the funding source would likely cut into BART’s revenue from the development.
“We can only really take things so far,” Thorne-Lyman said.
Similarly, BART believes committing to having businesses face Adeline Street could make the project more complex and expensive. The commercial space would have to be built effectively on top of the station’s entryway and platform, Thorne-Lyman said, which could require changes to ventilation, lighting and other aspects of its architecture.
According to Arreguín, BART must accept that the Ashby project will be less lucrative than its other station developments because of Berkeley’s claim to the air rights.
“There has to be a revenue share, that’s the reality” Arreguín said.
It remains to be seen, though, whether BART and its governing board — made up of nine directors elected from across the East Bay and San Francisco who are tasked with ensuring the transit system is on solid financial footing — will agree. Officials from BART and other public transit agencies have warned they face a “fiscal cliff” after the pandemic decimated ridership and fare revenues, which they say could lead to deep service cuts if they don’t receive funding from other sources.
“We are in our worst fiscal crisis in our history,” Thorne-Lyman said. “It’s a difficult context in which to negotiate.”