Berkeley settles case with blighted Telegraph lot owner

The design. Courtesy: Kirk E. Peterson & Associates

The design for a mixed-use project at 2501 Haste St. Courtesy: Kirk E. Peterson & Associates

The city of Berkeley and Ken Sarachan have settled a lawsuit over his empty lot at 2501 Haste St. on the corner of Telegraph Avenue, clearing the way for the construction of a a six-story, mixed-use, Moorish, palace-like structure inspired by Italian hill towns, Tibetan forts and the rock-cut architecture of Petra in Jordan.

Under the settlement, Berkeley agreed to drop its lawsuit to force Sarachan to pay $640,000 in liens or have the city sell the lot at auction. In exchange, Sarachan agreed to meet specific deadlines to pursue and build something on the lot that has been vacant for more than 20 years.

“Basically, we are saying, OK, one last chance, we are going to clean everything up, we are going to have much clearer deadlines and obligations, let’s go,” said City Attorney Zach Cowan.

As soon as the settlement papers are filed with the court, Sarachan has 45 days to move his proposal forward through the design review and approval process with the Zoning Adjustments Board, said Cowan. If Sarachan fails to meet that and other deadlines, Berkeley has the right to make Sarachan forfeit the deed of trust on the property and pay the liens, said Cowan.

The City Council approved the settlement in a closed session on Oct. 22, but it was not announced until the city council meeting on Oct. 29, said Cowan.

Sarachan could not be reached for comment.

Ken Sarachan, in plaid, waits to address Berkeley's Zoning Adjustments Board on Thursday, May 9, 2013. Photo: Emilie Raguso

Ken Sarachan, in plaid, waits to address Berkeley’s Zoning Adjustments Board on Thursday, May 9, 2013. Photo: Emilie Raguso

The settlement is similar to the one the city made with Sarachan more than 10 years ago. Sarachan, who also owns Rasputin Records, Blondie’s Pizza, the old Cody’s Building and the retail development at 2350 Telegraph, bought the Telegraph and Haste property, which once held the historic Berkeley Inn, in 1994. The city agreed to forgo the existing liens on the site if Sarachan developed it, setting an initial deadline in 2004. Sarachan also acquired the adjacent properties to the east and north of the site, raising hopes that an ambitious project could be developed on the site. But nothing happened. Officials were  “pushed to the point of exasperation,” according to City Councilman Kriss Worthington and filed a lawsuit for non-judicial foreclosure on the blighted lot in September 2011.

At the time, Sarachan put the blame for the delays on the city’s planning department. He said he had a project ready but had been stymied by city staff.

Ken Sarachan, who owns multiple properties on Telegraph Avenue, bought 2501 Haste St. in 1994. The Berkeley Inn sat there until a fire destroyed it. Photo:Frances Dinkelspiel

Ken Sarachan, who owns multiple properties on Telegraph Avenue, bought 2501 Haste in 1994. The Berkeley Inn sat there until a fire destroyed it. Photo: Frances Dinkelspiel

Worthington, who said the rat-infested lot “creates more noise complaints, more rats, and more trash than any other single address in his district,” is hopeful that construction will start soon. Sarachan had resisted the previous settlement, hiring lawyers to fight it. Now he has agreed to move forward, said Worthington.

In April 2012, Sarachan proposed a project designed by architect Kirk E. Peterson. The project, dubbed “La Fortaleza” (as in “fortress” or “stronghold”) is a mixed-use building with a ground floor and sunken courtyard space for retailers, five residential floors of 79 one- and two-bedroom apartments, and a landscaped roof deck. There will also be numerous terraces, balconies and “naturalistic” entrances created using either rock, or concrete made to look like rock.

If Sarachan proceeds with construction, that intersection, now cursed with two empty lots and an unused building, could be transformed, said Worthington. Sarachan also is proposing to covert the old Cody’s Building into Mad Monk Center for Anachronistic Media, an entertainment center. The owners of the Sequoia Building, which was destroyed by a fire two years ago, are also planning to rebuild soon.

“It’ll change from 20 years of blight to potentially one of the most happening intersections in the city with two totally new buildings and one giant reconstructed building on three corners of the same intersection,” said Worthington. “That could be a giant boost for the whole district.”

Related:
Telegraph Avenue property owner shows plan for vacant site (04.19.12)
Can Berkeley’s Telegraph Avenue get its mojo back? (04.18.12)
Imagining a future for Telegraph Avenue without blinders (04.11.12)
Telegraph fire site owner plans for temporary resurrection (02.06.12)
Urban think tank: Student visions for blighted Telegraph lot (10.03.11)
City hands ultimatum to Sarachan on vacant Telegraph lot (09.07.11)
What about that vacant lot on Haste and Telegraph? (08.11.11)
Berkeley students want better stores, fewer street people (05.31.11)
City says it is addressing Telegraph Avenue rats problem (02.10.11)
The rats of Telegraph Avenue (video) (01.28.11)

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  • guest

    Pathetic. Our city leaders are incapable of leadership.

  • Doc

    Hope it gets built. That would help poor old Telegraph

  • Annie Painter

    As an uninformed onlooker, I sense a number of clues here that there is more than meets the eye –both about Sarachan and about the approval process he and his neighbors across the street have followed or not followed. We could use some more details?

  • Bill N

    “The settlement is similar to the one the city made with Sarachan more than 10 years ago.” If that’s the case what is different that made something happen? I wouldn’t put it all off to our city leaders being incapable of leadership but also to a recalcitrant (to put it politely) landlord. I wouldn’t trust him to bring this to completion either.

  • Guest

    My thoughts exactly. “Those who don’t know history are destined to repeat it.” -Edmund Burke

  • Sherman Boyson

    Wow. Sarachan continues to just walk all over the Berk City Council. Another promise he will break and the CC will continue to look foolish as he laughs and ignores all the new deadlines. What’s that definition of insanity — expecting new results from the same old tired and failing agreeements.

  • Doc

    If he really is just suckering the city, isn’t it best to give him to conditions that prove it? I still hope he didn’t design such an interesting building just to taunt us.

  • how’d THAT happen?

    You would think that the city could have walked into court and thrown down on the table clearly written, clearly valid contracts, and unassailable documentation of the past performance of both sides — an open and shut case. The city was unable to do so and the case was turning complex, prolonged, and presumably expensive.

    Some will blame elected officials but the problems originated in the work of city staff. Council has no direct oversight of city staff. Council’s oversight over the City Manager includes the power to fire the manager but, in practice, council doesn’t have a lot of insight or influence into city operations other than as the manager chooses to give them.

  • Woolsey

    A Tuscan building on top of inhabited caves in downtown Berkeley – definitely interesting…

  • bgal4

    or accountability.

  • guest

    Has everyone seen the sign that Sarachan has put in this lot? A picture on Berkeleyside might be useful.

    He says that it is the city’s fault that the lot has remained vacant, because he submitted a proposal in 2007. He doesn’t mention that this Pagoda proposal could never be economically feasible, and he doesn’t mention that he bought the site in 1994 – so he had already left it vacant for 13 years before he submitted that proposal.

    The sign also says that a faction on the council does not want to settle with him – which would prevent him from going ahead with his development. It would be interesting to know which councilmembers were in this faction – but since it was decided in closed session, we will probably never know.

  • B2B

    LOL… what’s the likelihood Sarachan’s gonna bother doing anything this time, either?

  • JohnD

    What I can’t beleive is how he’s managing to avoid the stacked boxes look that Berkeley has managed to push everywhere else. A lot of the new buildings have that ultra designed by committee look (ie, no character). While I find this design ugly THANK GOD if he can get something a bit more interesting through the process. I do wish property owners were allowed to show a little variety inside their height and other limits. Otherwise berkeley is going to look like every other city around.

  • Johnd

    The last 20 years have been the city blowing hot air about this location. Insanity is sitting around another 20 years while attorney’s argue about issues at the city from 20 years ago.

    What’s the harm in letting this project MOVE FORWARD?

    You think if the city forced a non-judicial foreclosure legal battle, subject to further appeals on up the chain, then subject to fights over valuation, then subject to fights over lien costs, then subject to fights over sale / transfer process, political debate at the city level about who they should give the property to, then subject to fights about what to build there, then subject to city paced construction project that would get this property sorted out more quickly?

    That’s a bit of a scary thought and view!

  • http://berkeleyside.com Frances Dinkelspiel

    Annie, this is a complicated story with a long history. I included links to other stories about the lot at the bottom on the article.

  • http://berkeleyside.com Frances Dinkelspiel

    Please take a photo and send it to us. I will add it to the article.

  • Rob Wrenn

    In April 1994, there was a proposal to build housing on the site that would have been a joint venture with Amoeba Records. But Ken Sarachan bought the property at the last minute. Speculation at the time was that he didn’t want his competitor to expand. The housing developer, RCD (developers of the Oxford Plaza housing downtown among other projects) then tried to work with Sarachan, but Mayor Shirley Dean (elected in 1994) and her allies on the Council, who didn’t like RCD, blocked Housing Trust Fund funding for the project and pushed for soliciting other developers. But no other developers came forward. So Dean and Sarachan share responsibility for killing a viable proposal to develop housing on the site back in 1994-1995. This was all reported in the Berkeley Voice and the Express at the time.

  • http://www.caviarcommunism.com/ West Bezerkeley

    I hope something is built, but we’ve seen property owners in West Berkeley make empty promises to the city about cleaning up a property that are later broken. For this to happen, the city needs to be proactive throughout the entire process. Unfortunately being proactive and constantly on the ball is among the weakest areas in our city government today and the main reason why we don’t make meaningful forward progress in Berkeley.

    Crossing my fingers, but not holding my breath.

  • BerkeleyCitizen

    From the looks of it, if it gets built, it will fit in great with the “Walking Dead”, bombed out ambience of that section of Telegraph. And, if the building burned down in 1994, it’s been vacant for almost 30 years, which is more precise than the statement in the article “has been vacant for over 20 years”. It has been vacant and blighted for 29, almost 30 years. In other words over a generation.

  • SarahSiddell

    When I first came here to go to school in 1964, Telegraph Avenue was such a bright, vibrant street. It continued the spirit of the campus, as did Bancroft Avenue. It’s very sad to see Telegraph looking like a slum.

    I was down near Stanford campus recently, and was chagrined to see the contrast with Berkeley. The part of Palo Alto around the university is really alive and beautiful. It’s filled with locally-owned businesses, and there are only a couple of chain stores such as Starbucks. This appealing business district goes on for blocks. There were many, many pedestrians on the sidewalks and at the sidewalk cafes.

    I hold the city of Berkeley and its councils responsible for the desolation that is Telegraph. Their policies have been dogmatic and just plain stupid. They’ve created an embarrassing skid road as the gateway to one of the world’s major universities. The city fathers and mothers who contributed to this disaster over the years should be ashamed to show their faces in the city.

  • UniversityAve ≠ UniversityAve

    I went to grad school at Stanford, but have lived in Berkeley for twenty years. Palo Alto’s development is supported by the many billions made in Silicon Valley, and Stanford’s own commercial exploitation of its endowed lands. Berkeley ain’t got that kinda bucks.

  • Doc

    And of course before that the sro hotel on the site was rendered permanently unprofitable through regulation, so it burned. Are progressives then responsible?

  • Rob Wrenn

    Let’s get our facts straight. The Berkeley Inn burned down in 1987, that would be 26 years ago. It was demolished in 1990. A proposal to build housing there was killed in 1995. Sarachan and the City have been going around in circles since then. Most of the blame for the site being vacant clearly rests with Sarachan.

  • rob wrenn

    You think regulation is bad when it comes to housing. You should check out Berkeleyside’s story about Lakireddy Bali Reddy right here on Berkeleyside. http://www.berkeleyside.com/2013/10/31/fire-damaged-berkeley-apartments-to-stay-rent-controlled/ The problem is too little regulation, not too much.

  • jth

    I’d take Telegraph over the anodyne yuppie snoozefest that is Stanford’s University Ave any day. Plenty of other places to live in this country if that’s your thing.

  • BerkeleyCitizen

    Whoops, my math was clearly wrong. Sorry about that. 26 years of blight with Sacharan and the City responsible for the last twenty. It is still a ridiculous amount of time and clearly exposes some serious dysfunction with our city government.

  • BerkeleyCitizen

    Wow! I’d love to see that building put up. It’s perfect for Berkeley, and especially that area. Hope all the nonsense that’s been going on over the past 20 years and more concerning that site can finally be put to rest with such a terrific outcome.

  • testit

    I agree that Telegraph could aspire, and easily achieve, to become a vastly improved area. it doesn’t have to be the same as Palo Alto, but it wouldn’t take much to be better than it is. Why not make an attempt to make it be the best that it can be, with a Berkeley flair.

    To start with, create a parking policy that recognizes that people do drive and that a vibrant central area needs to accommodate parking cars (along with bicycles and good public transportation). Like Palo Alto, this should be free (along with a reasonable policy to prevent long term parking of visitors, in Palo Alto, two hours of free parking is ubiquitous, both on the street and in city owned parking garages, perhaps some underground parking on a significant scale could be built with the projects at Haste and Telegraph, including under the street). I strongly believe that free parking with plenty of spaces will bring many people to the area.

    The city claims to be “experimenting” with a new policy of pricing and time limits to determine if the overall experience is improved. Can anyone imagine that the results of the test which will be measured by the same people who devised the test will not demonstrate that the change was an improvement. They resist publishing the key performance indicators that they supposedly will measure, what they were prior to the “experiment” and afterward, nor the methods that they use to measure them. My belief is that they tried the wrong experiment. The goal should not be to make more parking spaces be empty rather the goal should be to create more vitality in the city, measured not just by parking but quality of life (and from the city’s perspective, increased business as Berkeley businesses, business tax, increased jobs, non-resident visits to the city, etc.)

    The next step is to make there be something worth coming to. I suspect that with all the new housing that is planned that the new residents will needs lots of new services ranging from shopping to entertainment. This is a recipe for new vitalization except that city polices will retard that vitalization.

    We have to face the fact that there are natural pressures to change our city. We live in a highly desirable city surrounded by a large group of other highly desirable areas. As the population continues to grow and more people want to live here, the value of land will naturally increase and building vertically, like every other major city in the world, is the typical direction of that growth. We can try to fight that pressure and create restrictive policies but we are not geographically isolated so unless we can limit the value of existing real estate, the price of surrounding real estate will drive up the cost of living in Berkeley (just like San Francisco). Not to mention that the city generates more revenue from higher real estate prices and therefor taxes. The better approach is to not try to swim against the current but to go with the current, accept the reality of the trends and the limited ability to buck them, and instead create the best possible quality of life for the inhabitants and visitors to this city.

    Berkeley often acts like driving is evil and many people do find ways to limit or even eliminate driving from their lifestyle. But that shouldn’t lead those people to belief that this means that everyone, or even a majority, can also do so. Just consider the city policy towards schools. An enormous number of kids are not permitted to go to their neighborhood school so they are driven to and from school, mostly in their parent’s cars and sometimes in school buses. With about 15,000 students in Berkeley schools and 180 school days, and two trips (to and from school) each day, that’s 5,400,000 trips. Without being too scientific (I don’t have the data handy), if 25% of students walk to school under the current policy but if kids could go to their neighbor school instead, estimating another 50% (or a total of 75%) would walk if they attended the closest school, this would reduce the traffic in Berkeley by 2,700,000 trips per year. A very meaningful reduction in traffic and impact on the environment. Not to mention that kids would have more friends in their neighborhood and grow up on a culture with less car use.

  • curiousjorge

    ??

  • Charles_Siegel

    The latest news about city parking policy on the southside is that they have lowered the price of parking in the garage near Telegraph in order to attract more people and fill the vacant spaces in the garage.

    They also made the first hour in the garage free.

    http://www.berkeleyside.com/2013/10/30/city-parking-garage-fees-up-downtown-down-on-telegraph/

  • Jesse Townley

    If I remember correctly, the point of the City’s lawsuit was to push Sarachan to take action, not to necessarily win the suit.

    Looking at it from that viewpoint, the City was successful.