Fixing a Failing Flip: 2211 Harold Way Gets Another Pass for Another Year

Becky O'Malley
Saturday September 01, 2018 - 09:57:00 AM

If three trees fall on University Avenue in Berkeley, do they make any noise? Last week three felled redwoods created a reasonably substantial hullaballoo, proving once again that we’re a city of tree huggers. Online stories (Berkeley disciplines developer after redwood trees chopped down, City orders removal of 3 potentially dangerous trees at construction site, City orders redwood removal after trees destabilized at construction site ) prompted an outflow of outraged complaints from the little people, some of whom actually signed their real names, a refreshing contrast to the usual comments from the surly entitled trolls who spend too much time anonymously carping on these news sites.

Lost in the chorus was another disaster waiting to happen, the City of Berkeley Planning Department's surreptitious extension of the entitlements for 2211 Harold Way, a project which threatens to undermine the Shattuck Hotel in much the same way that this small-time developer undermined the redwoods. More about that later.  

The last time trees generated so much press was the protest against UC Berkeley’s proposed decimation of the oak grove which used to be outside of Memorial Stadium. Despite the efforts of several of the city’s most distinguished older matrons, who went up in a tree to register their protest against this stupid project, the university cut the oaks down. The stadium project continued on schedule, eventually producing an enormous albatross, a $438 million debt which U.C. bureaucrats are still haggling about paying for.  

It’s remarkable how many ill-conceived building projects produce unpredicted adverse results—or at least results denied by proponents. The concerned public all too often can say “I told you so” after things go south, for all the good that does. The stock in trade of development promoters is promises, promises, which are seldom if ever fulfilled.  

The redwoods were on a lot where an apartment project was approved at least 10 years ago. After a lot of protests at the Zoning Adjustment Board, needed variances were approved, with the proviso that the trees be preserved as a condition of the use permit.  

Since then, the project has been “flipped” multiple times.  

How does this work? The Zoning Board grants “entitlements” to the developer. According to the Urban Land Institute, “entitlements are legal rights conveyed by approvals from governmental entities to develop a property for a certain use, intensity, building type or building placement. “ Once a property is entitled, its value increases a great deal, often exponentially, and then it can be re-sold—flipped—multiple times, to add still more layers of profit and profiteers.  

What this means is that all the folderol which surrounds citizen testimony at ZAB hearings often adds up to just a lot of hot air. The ultimate flippee who now owns the project on University Avenue where the trees were lost has benefited handsomely because the Berkeley Planning Department turned a blind eye to numerous violations of the supposed conditions on the use permit. The flippers made out handsomely too, I’m sure.  

Friday morning when I started writing this I intended to list some of the many projects in the twenty or so years since I’ve been keeping track where the City of Berkeley has neglected to enforce conditions on a use permit. One of the three or four things I remember from law school is that standard conditions on use permits are not enforceable by citizens or their elected representatives, but must be enforced by the bureaucracy—if and when it wants to. If flipping is the goal, it’s a lot easier if Planning looks the other way where onerous conditions are concerned.  

Time and space do not permit me to provide a comprehensive list of such projects, so let’s just consider one, the apartment building on Shattuck which sports a theater marquee which says “Fine Arts”. That’s the former site of the historic Fine Arts Theater, and a successor art film house was supposed to be given space in the new building. Never happened. And this pattern exists all over Berkeley.  

My intention on Friday was to point out that across Shattuck from the Fine Arts is another debacle waiting to happen, the so-called 2211 Harold Way project. Its entitlements present many risks of disaster, some of which are detailed in the adjacent commentary from civic activist Kelly Hammargren, who sued the city on the inadequate EIR process which helped this bad scheme slide past a compliant council. 

Flipping hasn’t been going so well for the original recipient of the Harold Way entitlements, a “developer” which has never actually developed any of the projects for which it obtained permits. Two one year extensions on the permits had already been granted by Berkeley’s Planning Department in order to help the company out, and I had picked up rumors around City Hall that Planning was discussing giving them their third one year extension to continue trying to find a buyer. 

Trying to figure out what was going on, I made a call to the office of Planning Director Timothy Burroughs on Friday. His voice mail said he was out of town because of a family emergency, but he gave another number to call, where I left another (never returned) message. I’d tried to reach Burroughs a couple of months ago, when he was also out of the office, but that call was never returned either. 

I called the City Manager’s office, but was told I could only speak to the city flack, Matthai Chakko. I left him a voice mail message. 

Then I called Mayor Arreguin, who actually took my call. He told me he knew very little about what was going on with 2211 Harold Way, but would check. 

Finally, around three o’clock, Chakko called me back. Quelle surprise, quelle horreur, quel dommage! 

The letter granting an extension of the Harold Way entitlement to January 2020 had been sent that very day, perhaps that very afternoon, over Timothy Burroughs’ signature, despite the fact that he’s out of town. Chakko offered to send me a copy. 

So I called Councilmember Kate Harrison, who told me she’d also understood from the city manager in a discussion yesterday that staff were contemplating extending the project’s entitlements for a third year, which she opposed, but she had no idea the letter would be going out today. No further word from the Mayor at press time, so I sent them both a copy of the Burroughs letter. 

It seemed the least I could do. I hope Burroughs himself got one too, but if not I’d be glad to send him one. 

However, I did notice that cc’d on the letter along with two Planning staffers was Mark Rhoades, of the Rhoades Planning Group. He’s a predecessor of Burroughs in the city’s Planning Department. Having passed through the revolving door, he is now the developer’s fixer on this project. It is, shall we say, ironic, that Rhoades got a copy while none of our elected officials did. 

In case you are one of the innocents who believed that by changing the Berkeley City Council majority you could change the standard operating procedure in city government, think again. Even Berkeley, yes, dear little liberal Berkeley, is subject to regulatory capture. 

Wikipedia: “Regulatory capture is a form of government failure which occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or political concerns of special interest groups that dominate the industry or sector it is charged with regulating.” 

The revolving door is the easiest way to achieve regulatory capture. Planners like Rhoades write the rules for development when they’re inside the government and then exploit them for profit when they move outside. 

This differs not at all from coal company executives getting jobs with the EPA or the DOE. And Michael Cohen is not the only fixer in the country, he’s just swimming in a bigger pond. 

Berkeleyans like to believe that they’re superior, but there’s a bit of Trumpism everywhere, even here. And so it goes….