Public Comment

Please vote to reject the recommendation from Mayor Bates and Councilmember Capitelli.

It’s offensive that this item was snuck onto the agenda at the last possible moment and is scheduled as the very last agenda item, an obvious attempt to discourage citizen participation in discussion of this issue, despite the enormous public interest that has been shown to date. This item should be continued to a later meeting when discussion can take place at a more reasonable hour.

Their recommendation is not based on any study or analysis of what developers of tall buildings can afford to pay. The amounts proposed are grossly inadequate and seem to be tailored to accommodate the developers of 2211 Harold Way and other taller buildings in the planning pipeline and to ensure them large windfall profits from their projects. Indeed, since the proposed fees are not based on any independent study and analysis, it is not unreasonable to suspect that they are the product of improper behind the scenes discussions with developers. 

Sound planning practice would require setting fees in one of two ways. Either, a study is done by independent consultants, which takes into account current market conditions and developer costs and recommends fees based on what developers can afford to pay, taking into account the enormous increase in value of downtown sites resulting from the public action of upzoning downtown. Or, the City opts for case by case determination of benefits, with an independent review of financial info that each developer would be required to submit. These are the approaches that other cities have followed in determining community benefits. 

But Mayor Bates and Councilmember Capitelli are rejecting current best practice in favor of an entirely political determination of fees. Far from acting in the public interest, they are handing developers a huge windfall. 

Other problems with their proposal include: 

• Allowing developers to reduce the minimal required benefits for having a required Project Labor Agreement. Project Labor Agreements benefit developers and there is no independent evidence to suggest that they increase overall project costs, given that the use of skilled union labor increases the likelihood of projects being completed on time and on budget, with reduced likelihood of accidents and reduced workers’ comp costs.
• A completely undefined “local hiring and training component.” How many Berkeley residents would have to be hired or trained to meet this requirement? Would Berkeley residents be 5% of the workforce? 20%?, 50%? How many Berkeley residents would have to receive training? 5? 10? 50? 100? 

• “Voluntary on-site benefits for arts and culture” is a huge loophole. How would value be assigned to such benefits? Would that be a political process since the Bates-Capitelli proposal does not call for any independent evaluation of developer-submitted numbers? With respect to 2211 Harold Way, developers should get no credit for merely retaining the movie theater space that’s currently there, and get no credit for adding “community performance space” unless it’s in addition to a full replacement of the existing theaters. 

• Why are community benefits being limited to affordable housing and arts and culture? Why couldn’t developers contribute to open space, alternative transportation improvements or supportive social services? Arts and culture are not even mentioned in the zoning ordinance tall building language and the City is already working on a base 1% for the arts requirement. Any expenditure for arts and culture should have to exceed 1% of construction costs before it could count as an extra community benefit required for taller buildings. 

• Their proposal fails to encourage energy efficient buildings and use of renewable energy. Developers of a building with a substantial solar component would get no credit for that. In Berkeley, buildings account for 53% of the greenhouse gases generated. The currently proposed taller buildings are not green, but would have substantial carbon footprints and would be obsolete as soon as the are built as the state is moving toward adoption of a zero net energy standard by 2020. 

• It’s not clear from the proposal whether the fees would apply to all square footage above 76’ or to only what is defined as “residential” square footage. To take the example of 2211 Harold Way and using residential square footage for floors 8-18 from the project plans submitted last July, I have calculated that the fee would be no more than about $7 million, for what is likely a $300 million project. It would be only modestly higher if everything from floor 8 on up were included. This is way below what the 2011 feasibility study suggested for feasible community benefits. That study assumed residential rents of $3.35 per square foot, but rents have soared since then so developers can afford to provide substantially more. Developers of 2211 Harold Way were assuming $5.10 per square foot in their community benefits submittal last year. 

In sum, the Bates-Capitelli proposal would be a huge giveaway to developers, giving them a huge windfall, while minimizing benefits to the City. It should be rejected in favor of one of the sound approaches that other cities have used.