Public Comment

2211 Harold Way is one of three 18-story downtown projects allowed by Ballot Measure R of 2010, which also mandated that significant community benefits be provided by the project. Located at the current site of Landmark Cinemas and the historic Shattuck Hotel, this project probably received more citizen opposition than any other in Berkeley history. 

Throughout the approval process, the applicant team for the owner, HSR Berkeley Investments LLC, made it abundantly clear that they did not want to rebuild the movie theaters – if required to do so, they wished to build fewer than the ten theaters occupying the building now. Berkeley citizens tenaciously fought for the theaters as one of the most important community benefits, and ultimately won. 

On September 30, 2015, the Zoning Adjustments Board (ZAB) approved the Use Permit for the project, including ten theaters. The decision was appealed to the City Council, which upheld the ZAB approvals on December 8, 2015, thus concluding the approval process. The Notice of Decision defines the project that can legally be built by the applicants, or by a subsequent owner of the site, as a project containing ten movie theaters of approximately 28,250 square feet. 

In early 2017, HSR Investments put 2211 Harold Way on the market as a development opportunity –that would be the site plus the Use Permit to build the project that was approved. I actually believe that the most lucrative use of developer time in Berkeley has been to secure a Use Permit for a big building and flip the land with the Permit to another party. After all, constructing a big building involves significant risk, and we are once again in a real estate bubble, one so extreme that it puts the previous bubble to shame. 

For some time it appeared that no one wished to purchase this most unusual of development sites. Unusual how? Amazingly, HSR does not own the entire building. Rather, it owns two of three commercial condominiums intertwined within one building in a complicated manner. For example, one condo owned by HSR includes the Cinemas and the storefronts on Shattuck Avenue, while another condo contains the hotel rooms directly above them, yet under separate ownership and expected to remain in use during construction. I thought this odd arrangement, combined with the presence of a seismic Liquefaction Hazard Zone below might render the site less than desirable to most potential purchasers. But then the Trump Tax-Break-for-Billionaires happened! 

The Trump administration's Tax Cuts and Jobs Act created "Opportunity Zones" within cities, providing generous tax incentives for those who invest in them. These Zones were supposed to be in "distressed" areas, not in those already teeming with corporate investors. Inexplicably, our downtown was included among them. 

In a letter dated June 25, 2018 to Planning Director Timothy Burroughs, HSR attorney Kristina D. Lawson discussed difficulties related to the project, including securing financing. She then wrote that enactment of the Tax Cuts and Jobs Act "made investments in multifamily real estate projects such as the project more attractive." 

In the same letter, Lawson mentioned the possibility of requesting modifications to the project's significant community benefits package. She stated, "Ultimately, the project team chose not to seek the City's review and approval of modifications to any element of the project." My interpretation of this statement is that the applicants knew that such modifications would need to be reviewed by the ZAB, as is dictated by our Zoning Code. This would reopen the process to Berkeley citizens, who surely would resist losing community benefits they were entitled to and had fought so hard to preserve. 

It was therefore surprising to see 2211 Harold Way on the Landmarks Preservation Commission (LPC) agenda for December 5, and even more surprising to see a new set of plans, minus four of the theaters and featuring several other modifications that were under the purview of the ZAB. The Planning staff person running the meeting urged the Commissioners to vote to refer it to the Design Review Committee (DRC), but the Commissioners declined to do so. 

This new proposal needs to be reviewed by the ZAB for modifications to the Use Permit, not just by the LPC and DRC for design tweaks. My observations of the Planning Department over the years cause me concern that Planning staff may try to circumvent the required zoning process to benefit the project. Citizens have complained for many years that the Department is largely funded from developer fees, a practice that seems bound to create bias in favor of projects, no matter how illogical or detrimental they may be. 

The Planning Department's mission is, in part, "to work together with the community to promote and protect Berkeley's distinctive neighborhoods, vibrant commercial areas . . ." It would be unconscionable if members of this Department were instead to violate our Zoning Code to assist an investment opportunity in an illegitimate "Opportunity Zone."