Berkeley developer Panoramic Interests owes the city another $200,000 in taxes on four properties the firm built and manages—and the city’s Finance Department is implementing procedures to ensure that such properties don’t slip under the tax radar again.
Such was the gist of the “escaped” tax assessments update Finance Director Fran David gave to the city council at last Tuesday’s work session. David described “escaped” taxes as taxes mistakenly not charged to Berkeley properties.
David said her department is also reviewing a project by an unnamed builder that could net the city an additional $37,000 in previously unbilled taxes.
The council ordered the escaped taxes report last October after the announcement by former mayoral aide Barbara Gilbert that Panoramic’s Gaia Building—one of the most controversial developments in the city in recent years—didn’t appear to be paying certain Berkeley property fees and assessments, even though it had been occupied for two years.
A follow-up story in the Berkeley Daily Planet revealed that a second Panoramic property—the Berkleyan—hadn’t been billed for some Berkeley taxes since its permanent certificate of occupancy had been issued three years before. A Finance Department staff member later said that the Berkeleyan’s assessments had “[fallen] through the cracks.” There was never any allegation that Panoramic, headed by developer Patrick Kennedy, had failed to pay any county or city taxes for which it had been billed.
While some city staff members have called the amount of “escaped” Berkeley taxes small in relation to the city’s $110 million to $120 million annual budget, the issue became a potent and (to city government representatives) embarrassing symbol during last fall’s debate over the since-discarded fire parcel tax.
At the time, David revealed that the Gaia Building had escaped the taxes because Berkeley assessed them only after issuing a permanent certificate of occupancy—while the Gaia was operating under a continuing temporary permit. That loophole is now being closed, with both commercial and residential properties now triggering tax assessments as soon as the city deems them suitable to occupy.
David also reported that 200 potentially untaxed properties, mostly-residential and less than 3,000 square feet each, remain to be investigated. Most are so small, she said, that even if they are billable, they “will likely yield very little increase in revenue.”
The report also referred to more than 40 properties improperly put on the “OO” properties list. Properties normally appearing on the untaxable “00” list are vacant lots, parking lots, or are buildings under construction. Assessment amounts improperly assigned to the list are currently being calculated and research continues on another 50 properties.
David will present a follow-up escaped assessments report to the council in May.›