Editorials
The Sun Sets Over the Berkeley Hills
There was a remarkable sunset on Wednesday night. As I came up Martin Luther King towards Old City Hall, looking southeast, I could see the hills behind the Berkeley Community Theater bathed in an amazing rose-colored light—in fact everything to the east of MLK was tinted pink. Sunsets for those of us who live in Lower Berkeley are not the splendid views of the Golden Gate which our Upper Berkeley friends enjoy, but instead the subtler eastern reflection of the sun going down in the west.
Inside, from the former council chambers where the Zoning Adjustment Board meets, you could still see the candy-colored hills through the deteriorating Beaux Arts casement windows. The Hancock/Bates regime has allowed the formerly grand building to fall apart, like most of Berkeley’s civic patrimony, but it’s still a beautiful wreck, and the gorgeous view of the sunset only made its decay more poignant.
Someone in the audience waiting for the meeting to start suggested that people should look out the windows. Someone, maybe me, said, see what we’re going to lose if the board votes the wrong way tonight. Someone else, developers’ shill Mark Rhoades in fact, said No We’re Not.
It’s true that from the Maudelle Shirek Old City Hall building second floor windows you can’t exactly see the area behind the Berkeley High campus which will be dominated by the 18 story monstrosity Rhoades has been flacking, but his project is the camel’s nose in the tent. It’s only a matter of time, if the trend continues, until it will no longer be possible for Berkeley flatlanders to lift up their eyes unto the hills as they’ve always done. But not to worry—by the time that happens Mark Rhoades and Joseph Penner will have departed the scene with their thirty pieces of silver.
A small posse of iggerunt young’uns were recruited to attend this meeting by an online call to arms on the list-serv of SF BARF, the appropriately acronymed San Francisco Bay Area Renters Federation.
On Wednesday, September 16, one emunahhauser wrote a pitch for attendees there: “Looking for a satisfying brawl? To be part of history? To make or break the difference whether housing lives or dies?”
(Someone at the meeting last night suggested during public comment that Emunah Hauser might be related to new ZAB Commissioner Savlan Hauser, District 8 Councilmember Lori Droste’s appointee. No response from the Commissioner to this question.)
The BARFers did show up looking for a brawl, about ten of them, carrying mass-printed signs on yellow paper with cutesy slogans. Some of them even spoke, earnestly recounting pathetic tales of woe. They seemed to be under the direction of Downtown Berkeley Association honcho John Caner—when he showed up (late) someone gave him a sign of his very own to wave and offered him their seat.
This courtesy might be because he was one of the few token old folks taking part in the Yellow Sign Brigade. The other two that I recognized were former councilmember Polly Armstrong, who now fronts for the Chamber of Commerce, and Suzy Medak, boss of the well-heeled Berkeley Repertory Theater. (Memo to self: cancel those family plans to take in the musical now at BRT.)
So how did the brawl turn out, anyway? Well, if I were a betting woman I might have made a few bucks on the outcome, if I’d been able to find a sucker to take my bet.
As predicted in this space and elsewhere, the vote was 6-3, with the commissioners who were appointed by the Bates majority, all historic or current participants in the development industry, voting in lockstep. Also as predicted, they abdicated the Zoning Board’s statutory responsibility under the Downtown Plan to calculate the basis for what would constitute an appropriate amount of profit-sharing by developers of properties upzoned like this one, based on how much the extra floors upped the applicant’s total take. They capitulated to the city council’s cut-rate “recommendation” (which was justified by exactly nothing in the way of data) to give Hill Street Realty, Joseph Penner and Mark Rhoades huge windfall profits, estimated by economist James Hendry as between $89-$145 million.
In the process they totally blew off the concerns of the Berkeley Unified School District, as expressed by letters from its attorneys and the chair of Berkeley High’s safety committee, about a myriad of adverse environmental consequences for the schools from the construction process. They ignored the District’s demand that the EIR be recirculated, dismissed by a few cavalier remarks which Commissioners Pinkston and Pinto made at the end on the basis of their own personal experience with the many projects they’d been involved in.
So who won the brawl, after all?
One interesting development is that Commissioner George Williams, who used to be a high-level employee of the San Francisco Planning Department and knows his stuff, insisted that the permit approval contain conditions which would insure that 10 movie screens be provided in the new building to replace those which would be demolished by the project. ZAB members declined to credit the full cost of rebuilding the theaters as an in-kind contribution to the “significant community benefits” tally, saying that it should be considered mainly mitigation of damage done. This analysis was supported by a consulting economist’s requested appraisal of the applicant’s proferred benefits package which down-valued both the project labor agreement and the proposal to rebuild the theaters.
The majority of commissioners did accede in the main to the City Council’s “request” that SCBs be capped at a deeply discounted $13.50 million, though their final package added up to a million more at $14.5 million. Williams’ winning motion allocated the total as a $5 million credit for a project labor agreement, a $4 million credit for rebuilding the theater complex and $1 million for “arts and culture”, which seemed to be code for helping on-site non-profit Habitot to relocate.
Another $4.5 million was added for the city’s affordable housing fund, but the developer will be exempted from including any affordable units in what’s touted as a luxury building, despite cogent arguments from Stefan Elgstrand (substituting for Sophie Hahn) for the merits of including onsite low-cost housing units in every new development.
After the Williams plan was proposed and a more stringent one from the minority commissioners was voted down, Chair Pinto called a brief recess. Mark Rhoades asked for permission to meet with his “team” in the private offices behind the dais. When the group reconvened, he and his associate seemed angry, and a testy exchange ensued.
You can tell when Mark Rhoades is mad because his ears turn red. He stood up before the commission, ears red, and said that he thought the plan, which did after all grant him all the permits he sought, was “arbitrary”. This provoked commissioners, especially Denise Pinkston and Prakash Pinto, to show some serious annoyance in turn.
Pinkston reminded Rhoades that their decision was based on their econ consultant’s report, after all, and Prakash said that he’s built way more projects than Rhoades ever has, so there! Arbitrary? Not on your tintype!
(If you believe the Hill Street Realty website, by the way, neither the corporation nor its principal Joseph Penner has ever built a project of any kind, though they seem to have procured all the permits for a number of projects before flipping them to someone else to build. Many commenters at the meeting predicted that this will happen again—one opponent was handing out a list of flipped Penner projects.)
What the aggrieved commissioners seemed to be saying to Rhoades at this point, with some justification, was: We just gave you a whole damn farm, and now you say you want a pony too?
Rhoades threatened to appeal the decision to the City Council—of course, this might all have been playacting from a previously concocted script. It’s possible Rhoades has planned from the git-go to take his project up to the next level, where he seems to think he has even more juice than he did with the ZAB. Perhaps he hopes his good buddies on the council will re-write the deal for him.
Why do I think that? Well, this call to arms appeared on the SF BARF list-serv on Tuesday, even before the Wednesday meeting:
“For the policy wonks, a message from the project team for the Residences at Berkeley Plaza: “I wanted to alert people to the fact that we really need your support at the Berkeley ZAB tomorrow night because the Residences at Berkeley Plaza project is in jeopardy. The staff report for Wednesday is unfortunate, it severely under values the proposed community benefits package. In particular two tragically flawed financial characterizations of the two most important project benefits. “First, in all four of the City staff’s report on the community benefit options, the union PLA is completely undervalued. The project is going to cost $125MM to build and the PLA is going to cost an additional $12MM to $20MM dollar to achieve. One option has the PLA valued at only $6MM, two options have it valued at $1.8MM, and the last option has it valued at a meager $675K. An outrage to be sure in a community that SAYS it values union labor. Apparently not.It sounds kind of like it might be a Bre’r Rabbit maneuver:“The second and as troublesome issue is the undervaluation of the movie theaters. Our estimates (which are derived from actual data, the staff’s are NOT) has the theaters worth approximately $15MM to $17MM. In one of the staff’s options to ZAB they value the theaters at $6.3MM. The next option has it at $4.1MM, the next option at $2.7MM, and in the final option the theaters are valued at $0. That’s right, $0.
“This is an attempt to extort even more money out of the project. The project is already agreeing to pay an in-lieu affordable housing fee of $6,040,000. The project won’t work under any of the options except MAYBE Option 1, which is more than $1MM over our estimates and proposal. That option still undervalues the community benefits, which is going to make it very difficult for the City to attract more of these buildings.
“So a vote tomorrow night is still critical – up or down. If the ZAB decides it wants to go with anything beyond Option 1 we don’t have a project and may look for the ZAB to deny it so we can move on to Council. That would be a shame but might be unavoidable if we can't ’pack the chambers tomorrow night to tell the ZAB to recognize the value of the project’s Community Benefits package and overall design after almost three years of good faith effort on our part to deliver what the community has said they wanted…twice.
“Remember the project itself is worth approving even without the additional benefits – 302 units of sustainable, transit-oriented housing units. LEED Gold. Transit passes. Car share. Very high quality design. Public plaza. More than $6MM to the Housing Trust Fund. The development project has shown good faith, now it’s time for the Berkeley ZAB to hold up their end of the voters desires and approve the project after almost three years and 35 public hearings.”
“Oh please Bre’r Fox, don’t throw me into that briar patch,” says the Rabbit.
(Bre’r Fox throws Bre’r Rabbit into the briar patch anyway.)
“Born and bred in a briar patch”, sings out the Rabbit, hopping gleefully away.
Perhaps Rhoades wanted to be able to claim it was a bad deal so he could appeal and get a better one…
So now what’s going to happen? Project opponents have also expressed their desire to appeal the ZAB decision, the LPC approval for structural alteration of the landmarked hotel and the Environment Impact Report.
Will Rhoades and company file their own appeal, asking the City Council to give them that pony after all? At the beginning of Wednesday’s meeting, when the applicant was given the usual extra time to make his case, he began by saying that he needed to get this finished before the first of the year or…or what??
I didn’t quite catch what he was saying, but I do know that real estate loan approvals usually have time limits. It’s apparent that someone in the city government, whether it’s mayor, councilmembers or staff, has desperately wanted this project to be sped up in the last few months, even though announced deadlines have repeatedly been missed.
Council watchers are targeting December 15 as the date they'll make the deal final.
Might this be because the project financing will evaporate after January 1? Or will interest rates for borrowed money go up by then?
As we say all too often in this space, time will tell, even if Mr. Penner and Mr. Rhoades won’t.
And about those sunsets over the hills? Enjoy them now--it's later than you think.
If you’d like to see a few more reports of this confusing meeting, check out:
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