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The Blood House battle—pitting a Berkeley historical landmark against a prominent developer in the arena of California’s complex environment law—entered a new phase this week when the city ordered developers back to the drawing board. 

After three hours’ debate including testimony from developers and about a dozen preservationists, Zoning Adjustment Board (ZAB) commissioners voted to delay their decision for the second time in three months, unsatisfied that the building’s owner, Berkeley development firm Ruegg & Ellsworth, had made a good faith effort to incorporate the building in their proposal. 

“I don’t think we got a serious project from the applicant showing they want to make money from the land,” Commissioner David Blake said. 

The first phase of the confrontation began in 1999 when the Blood House, a stuccoed-over Victorian sandwiched between the Beau Sky Hotel and the Albra Apartments at 2526 Durant Ave., was landmarked as one of three remaining 19th Century homes in the immediate neighborhood, a ruling Council later upheld. 

In June of 2000 Ruegg & Ellsworth sought city permission to tear down the building to make way for a planned housing and commercial development on the site. 

But the structure’s landmark status placed it under the protection of the California Environmental Quality Act (CEQA), which places tight restrictions on what can and can’t be done with the building. 

Under CEQA, a developer can only tear down a landmarked structure by convincing the city that demolition is the only feasible way to ensure them a reasonable profit on their investment. 

To win approval for the 44-unit mixed-use development, Ruegg & Ellsworth must show that any alternative plan that preserves the Blood House—now an office building and an officially designated “structure of merit”—is unfeasible. 

In September, the firm presented ZAB with plans for a 20-unit, 5-story L-shaped building that looped around the Blood House. Commissioners greeted the plan with skepticism, worried that the firm—wanting to win approval for its original plan—had purposely designed the project to lose money and ordered the firm to return with a more viable design. 

The firm presented a new plan Monday, which they said would lose an estimated $2.8 million. It moves the Blood House to the northwest corner of the lot, adjacent to a 14-unit three-story development. Moving costs alone would run $800,000, said project consultant Evan McDonald of Panoramic Interests. 

Again questioning the firm’s intentions, commissioners ordered it to return in January with analyses of three plans: Moving the house to the corner of the plot beside a five-story building; leaving the house in the middle of the property, and building a five-story building around it without a driveway or the planned second floor balcony (which, they said, would unnecessarily reduces space for apartments); or extending the complex to unused parts of the neighboring parcels, which the city contends Ruegg & Ellsworth also owns. 

They also asked the firm to consider removing the planned 18 parking spaces or adding a sixth floor to make the project more financially viable. 

McDonald insisted that the neighboring properties were off limits because a different partnership owned them, and said that without the 44 apartment units in the original plan, the development would actually reduce the value of the land.  

Ruegg & Ellsworth Project Manager Paul Dyer said his firm had already ruled out erecting a five-story building beside the relocated house, which they determined would lose $2.4 million. 

City Planner Debra Sanderson rejected a request from Commissioner Blake to have the planning department conduct an independent analysis of the proposals, maintaining such a move was politically dicey and put planners in the role of developers. 

An Environmental Impact Report found no way to mitigate the loss of the building—which means that to proceed with demolition, the firm must convince the ZAB to adopt a Statement of Overriding Considerations, showing there is no feasible alternative that will ensure developers an adequate profit. 

The developers contend that their inclusion of retail space and three units of affordable housing outweighs the value of preserving the house.