The text of 2010 Measure R hints that benefits will flow from the construction of taller buildings in the Downtown in a new Downtown Area Plan (DAP). The 2012 DAP establishes that these will occur as follows:
GOAL LU-2: New development shall contribute its fair share toward downtown improvements, guided by Policy LU-2.1: Contributions Required of All Development with a listing of items, among which are:
- Meeting LEED Gold or equivalent.
- Providing on-site recycling services.
- Paying an impact fee to fund the Streets and Open Space Improvement Plan (SOSIP).
- Providing on-site open space or reducing that amount by paying an in-lieu fee to Downtown SOSIP improvements.
- Ensuring no new net water runoff on-site or making in-lieu payment for Downtown improvements.
- Providing car share opportunities and on-site bike parking.
- Providing transit passes for project residents and/or employees.
- Renting parking spaces separate from dwelling units.
- Residents shall be ineligible for Residential Preferential Parking Permits.
- Paying an affordable housing mitigation fee and/or provide affordable housing.
- Paying a child care mitigation fee.
However, two provisions in the DAP stand out. The first is:
Section e of Policy LU-2.1
“Before new zoning provisions for new building heights are adopted, specific requirements will be defined in the context of citywide provisions and returned to City Council for approval.” (Emphasis added.)
Given the fact that “new building heights” were adopted in 2012 (Ordinance No. 7,229-N.S.) and that as of mid-June 2015, the matter of specific community benefits has not yet been completed, we conclude that the City is in violation of this policy.
The second DAP provision that stands out is:
Policy LU-2.2: Additional Community Benefits for Buildings Exceeding 75 Feet.
“Developers of buildings in excess of 75 feet must provide significant community benefits beyond what would otherwise be required. These may include: affordable housing, supportive social services, green features, open space, transportation demand features, job training, and/or employment opportunities. The applicable public benefit requirements shall be included as conditions of approval and the owner shall enter into a written agreement that shall be binding on all successors in interest.” (Emphasis added.)
The Zoning Adjustments Board (ZAB) discussed the issue of community benefits over several meetings starting in December 2014 and ending in March 2015. They received an abundance of comments and took no action. On April 1, 2015 they sent a memo referring the matter to the City Council asking them to:
- Create a framework that is measurable, quantifiable, and enforceable.
- Ensure that community benefits do not include customary items that ZAB are given jurisdiction over with their traditional land use authority.
- Conduct a well-publicized, city-wide public process for this discussion so there is opportunity for community groups that may be interested to participate.
- Consider the ZAB’s record of the proceedings to date regarding community benefits. (ZAB’s record was sent to the Council as an attachment.)
April 7, 2015: Mayor Bates and Council Members Arreguin, Capitelli and Moore placed an item on the Council agenda calling for public input and holding a Council discussion on significant community benefits for buildings over 75 feet tall. The item pointed out that in addition to ZAB’s request for a quantifiable framework, the Housing Advisory Commission voted on March 11 to recommend that additional affordable housing requirements be a component of the additional community benefits. Examples were given of community benefits programs in other cities. Thirty-three speakers were heard and the matter was continued to a Special Meeting on May 5, 2015.
May 5, 2015: Council Member Arreguin submitted separate material on a community benefit process. Eighty-three speakers were heard. The Council took no action.
May 26, 2015: Mayor Bates and Council Member Capitelli submitted a proposal to request that the City Manager draft a Council resolution regarding significant community benefits required of projects over 75 feet using the following guidelines:
- Projects between 76 and 120 feet would be assessed a fee of $100 per square feet for the residential portion
- Projects above 120 feet would be assessed $150 per square foot for the residential portion.
- Projects that included a Project Labor Agreement including local hiring and training components would receive a credit equal to 5 percent of the project construction costs. This credit would be deducted from the fee.
- The fee could be further reduced by voluntary on-site benefits for arts and culture which must be approved by the City Council. The remainder would be paid into a City fund to be used for affordable housing and arts and culture benefits.
Council Member Arreguin also submitted a proposal requesting the City Manager draft a resolution regarding Downtown building projects over 75 feet using the following guidelines:
- Before submitting an application, the developer would hold at least one community meeting regarding their proposed community benefit package.
- Applicants can choose to meet 4 categories of benefits depending on the total value of the public benefits the City determines the project can bear. The categories are:
- Affordable Housing, on-site or in-lieu up to an additional 10%.
- Labor: Project Labor Agreement and Local Hire with no less than 50% Berkeley or green corridor/Alameda County.
- Arts and Culture: on-site or in-lieu.
- Choose an additional category: Additional SOSIP, public restrooms, higher green construction standards, restoration of historic civic center buildings, specific on-site benefits, or homeless/supportive social services.
- Or the developer can propose other benefits equivalent to what the City is asking for in monetary value and include a benefit in each of the 4 categories as agreed to by the City.
- The developer must present a pro-forma showing all costs as well as the projected rate of return based on revenues when the project is completed.
- The developer must provide an estimate of the costs of the proposed benefit package for the City to review through a third party independent consultant.
- ZAB would review the third party economic analysis of the community benefits package in order to make the required finding for approval of the application.
Among the sixty speakers heard on May 26, 2015, BNC pointed out to the Council that the item submitted by Mayor Bates and Council Member Capitelli regarding significant community benefits from 5 tall downtown buildings lacked any documentation for how the fees were calculated. No new study or independent analysis of market conditions were mentioned in the item or new information provided in the Mayor’s verbal statements at the meeting.
The AECOM study done in September 2011 stated it was intended to inform policy debate on the extent to which new development can contribute financial resources to support a range of public benefits package. One model they studied was an 18-story building on a corner lot with approximately 200 rental units. 2211 Harold Way is an 18-story building on a corner lot with over 300 units. That study found that setting aside 20% of the units for affordable housing, there would still remain an additional $33,000 per unit available for additional community benefits.
Note: this was before the large increases in rental costs over the past 4 years.
The City’s 2010 nexus study concluded that an inclusionary housing fee of up to $34,000 per unit was supportable.
There is also in past records a comparison of Berkeley fees with 7 jurisdictions in the I-80 corridor from Alameda to San Leandro that indicated:
- Other cities have more impact fees than Berkeley
- Berkeley fees for residential projects are generally lower and for commercial projects Berkeley’s fee are generally higher but developers compensate by setting higher commercial rents; and
- Berkeley’s permit fees are higher but developers compensate because Berkeley’s parking requirements are lower.
And, there is a January 2, 2015 communication to the City Council from Nico Calavita, Professor Emeritus, Graduate Program in City Planning, San Diego State who co-authored with Dr. Marian Wolfe, a White Paper on the Theory, Economics and Practice of Public Benefit Zoning dated November 2014 and sponsored by East Bay Housing Organizations.
Dr. Calavita states in that paper: the project at 2211 Harold Way would take away uses that are particularly valuable to the public, such as the movie theaters and that while the developer will provide benefits — ironically those benefits are not likely to even match in value what is being eliminated. His paper offers approaches which are based on “Public Benefit Zoning, sometimes called ”Land Value Recapture.“
We strongly believe that the Calavita/Wolfe paper should be considered. It begins with the provision:
In order to ascertain community benefit levels, it is necessary to establish first, through an economic analysis the ”enhanced value“ — created by the public action.
That public action was created when the DAP ”up-zoned“ areas of the Downtown giving those properties a greatly increased value. It just makes common sense to do a pro-form economic analysis of the specific taller buildings over 75 feet in the Downtown based on up-to-date market information. Developers already have these pro-formas as they need them for financing and to make a decision for project feasibility.
We asked the Council to stop the current process because it wasn’t accomplishing anything except to waste the time of the community, the City staff and the developer, and to proceed to obtain the data that would provide the answers decision makers needed.
There has been no response from the Council and the matter was continued to a special Council meeting to be held on June 16. There is no evidence that notices of these meetings were sent to community groups or neighborhood associations as requested by ZAB.
BNC has learned there will be no special meeting on June 16. Instead a special Council meeting has been scheduled for June 25, 2015 at 5:00 pm, at Longfellow Middle School, 1500 Derby Street, corner of Derby and Sacramento. Unbelievably, this is the same date on which ZAB is scheduled to certify the Environmental Impact Report for 2211 Harold Way in the Council Chambers of Old City Hall, 2140 Martin Luther King, Jr. Way.
The press release announcing the June 25 Council meeting at Longfellow School states that the reason the Council was meeting in a different venue was to accommodate an expected large number of attendees. It didn’t mention that the ZAB meeting is being held in Council Chambers where the Council would normally be meeting and that ZAB is holding a meeting on the same date to certify the Environmental Impact Report on what might be called an incomplete project since requirements for significant community benefits for that specific project have yet to be determined. Note: The City’s ordinances require that the community benefits be a part of the Use Permit conditions.
Scheduling the item to discuss and probably act on ”significant community benefits“ for 5:00 PM doesn’t seem to matter to the Council. People have complained over and over in the past that 5:00 PM is a time that makes it difficult, if not impossible, for Berkeley residents to attend.
Scheduling the ZAB meeting for that same date makes it doubly difficult. ZAB members have been told not to consider this matter earlier than 8:00 PM. Apparently the City believes it is perfectly OK to place consideration of both of these important items regarding the largest project in our Downtown on the agendas of 2 different legislative bodies on the same date, in different locations, as long as they are separated by a few hours. Protests have been made to this scheduling but no corrective action has been forthcoming. We will have to wait and see just how many people will make it to the first meeting and then rush to the second, find a parking place and then make their remarks.
ZAB’s consideration of the permits required for the 2211 Harold Way project is said to occur no earlier than their meeting in July.