Public Comment

Dear Mayor Bates and members of the Berkeley City Council,

The City Council should not allow the developers of 2211 Harold Way to weasel out of their commitment to retain the ten Shattuck Cinemas theaters in the new building. They are describing the theater complex requirements as "unreasonable" (item 2, page 2 of their appeal). The developers made the choice to propose a building where ten of downtown's 20 movie screens are located. Those theaters are important to downtown economic vitality as they are major draws to the downtown especially at night and on weekends. City policy, expressed in the Downtown Area Plan, calls for retention, and even expansion, of movie theaters in the downtown. By choosing this site, the developers took on an obligation to include the movie theaters in the new building. There should no modifications in conditions of approval for the project that in any way weaken the requirement to provide movie theaters in the new building; if anything those conditions should be strengthened. 

Conditions 17, Street Frontage Improvements and 21 and 53 Green Trip Platinum Certification should not be eliminated as requested by the applicant in their appeal. These are reasonable and not very costly requirements that the developers can easily afford. 

The Applicant's appeal is correct on one point: ZAB did rely on flawed economic data and analysis. The flawed economic data includes the pro forma submitted by the developers.  

The Harrison-Hendry appeal notes the gross overestimate of land cost in the developer's pro forma. Land cost is not $40 million as stated. The property was acquired for $20 million; that is a matter of public record and that includes the cost of the existing commercial space on Shattuck which is not part of the new 2211 Harold Way project. So land cost for the 2211 Harold Way is something less than $20 million, not $40 million. And Harrison and Hendry also note that the developer's pro-forma understates project revenues. They fail to even include an estimate of parking revenues. Per City policy, parking is not included in the rent or purchase price of the units, but must be rented or purchased separately. And the developers are providing an additional unnecessary level of parking that will bring in some revenue.This revenue should have been included in the pro forma. 

ZAB acted on community benefits without the benefit of any independent analysis of the proposed project's finances. With no independent evaluation of the project's costs, revenues and profits, there was no determination of what the developer could reasonably afford to pay and there was no way to value proposed community benefits relative to the project's profits and no way to know whether the project was capturing the increase in value resulting from the up zoning of downtown as part of the Downtown Plan process. All of this is ably addressed in the Harrison-Hendry appeal which council members should carefully review. As Harrrison and Hendry note, the EPS review did not include any independent verification of project costs but simply accepted the developer's flawed pro forma. 

What should the City Council do? 

Send 2211 Harold Way back to ZAB. Ask the developers to resubmit a pro forma with parking revenues and an acreage land cost included. Mandate hiring of an independent consultant to review the pro forma and relevant data and to advise the ZAB on what the developer can afford to pay in community benefits. ZAB should then revisit community benefits based on this independent assessment of the project. 

Harrison and Hendry make a persuasive case that the project's profits are grossly understated and that the City should be getting a large dollar amount of community benefits. To approve this project without real independent analysis of the project's finances would amount to granting the developers a huge windfall. The public were promised that new development would bring with it substantial community benefits. That will only happen if the the City Council shows leadership and sends this back to ZAB for and independent analysis and reconsideration of community benefits