Housing to replace Berkeley Grocery Outlet building

The zoning board approved a new development at 2001 Fourth St. in December. Image: Trachtenberg Architects
The zoning board approved a new development at 2001 Fourth St. in December. Image: Trachtenberg Architects

A mixed-use housing complex, designed by Trachtenberg Architects, has been approved for Fourth Street and University Avenue in West Berkeley, along with about 8,500 square feet of retail the developer says he hopes could become a grocery store.

The 5-story, 152-unit complex at 2001 Fourth St. is set to include nearly 200 vehicle parking spots, as well as space for more than 80 bicycles and nine motorcycles. Berkeley’s Zoning Adjustments Board approved the project at its Dec. 11 meeting nearly unanimously, with seven members in favor, Commissioner Igor Tregub voting against the project, and Commissioner Steven Donaldson recusing himself because he is a neighbor.

Read more about West Berkeley.

The project is slated to include 12 very-low-income units — to be distributed throughout the property — and will also pay $400,000 into the city’s Housing Trust Fund, which the city uses to help build additional affordable housing in Berkeley.


About a dozen speakers addressed the board in December. Most were concerned about the demolition of the Grocery Outlet building and the store’s impending closure, currently scheduled to come at the end of the year; the resulting loss of union jobs at the store as well as a place to buy affordable food; and the changing neighborhood demographics, ballooning rents and intensifying pressure on existing residents as density increases.

“I’m tired of people who call Berkeley home having to kowtow to people who look at it like a cash cow,” said one neighborhood resident. “I don’t want to see any more luxury apartments going in.”

In recent years, new apartment developments have been built nearby at Fourth & U (171 units) and The Avalon (99 units), which opened last May. The 58-unit Aquatic is under construction and set to open later this year. There’s also a new commercial project planned on the Spenger’s block, and there could one day be housing across the street from Spenger’s at what is now a huge parking lot.

Read more about West Berkeley neighborhood changes.

Zoning board commissioners stressed that, whatever its decision, Grocery Outlet plans to leave. The company moved its corporate headquarters to Emeryville in 2013 after relocating to Berkeley from San Francisco in 1992. A company representative told Berkeleyside in August that the store has struggled financially for many years.

Speakers disputed the company’s assertion, testifying before the zoning board that the store is always busy, and that the company may have different reasons for its plans to leave Berkeley.

Some said they hope to see space allocated for a large grocery store in the neighborhood before it’s too late.

“We’re going to move from a situation where the Grocery Outlet currently doesn’t have enough customers to one where there will probably be demand and the ability to support a full-service grocery. And there won’t be a space for it within the Fourth Street area,” said neighborhood resident Bryce Nesbitt. “I’m not saying that this building is the one that needs to have the space for the grocery, but what I see here is the need to plan for a full-service grocery within this developing district.”

Said another speaker: “One by one we are allowing things to leave based on the individual needs of that property and the individual needs of the developers. I think that this is a great loss.”

Today: Grocery Outlet and its large parking lot. Image: Google Maps
Today: Grocery Outlet and its large parking lot. Image: Google Maps

The project developer and property owner at 2001 Fourth is Read Investments, LLC, a real estate firm founded by the Read family, which also founded the Grocery Outlet chain. Read’s managing partner, Morgan Read, told the board in December that Read Investments and Grocery Outlet have been separate companies since the grocery store was sold in 2009 to Berkshire Partners LLP. (Members of the Read family continue to run Grocery Outlet, however.)

Read said his team had tried and failed, since 2011, to find a new tenant for the existing building, approaching everyone from T.J.Maxx and CVS to Walgreens, Trader Joe’s, Sprouts Farmers Market and Whole Foods.

Morgan Read. Photo: Read Investments
Morgan Read. Photo: Read Investments

“We were not able to solicit any interest,” he said. “Which led us down the path of a redevelopment of the site.”

Those businesses told Read Investments the site would not work for them because of its limited parking, difficult access and “limited and competitive trade area“: “limited” because roughly half of the 1-mile radius around the store falls in Bay, which cuts down on the number of nearby customers, and “competitive” due to the other grocery stores in the area, members of the development team explained to the board. (See a graphic representation, from the project architect, of the property’s trade area.)

The company then shifted gears and began to target more “neighborhood-serving” retailers, and designed the retail space at 2001 Fourth to accommodate them.

“Our first choice among them would be to have a grocery user or multiple grocery users stacked side by side,” he said. “We have approached a dozen or so such tenants. And unfortunately, because completion of the project right now is so far out, getting anybody to sign up and commit is pretty much impossible. That being said, we’re very much encouraged by the amount of interest out there.”

(Project architect David Trachtenberg said, as of early January, there is no estimate as far as when 2001 Fourth might be built because the timeline has not been set.)

Read told the zoning board that his firm has talked to everyone from “a lower-end type of provider to a more specialized organic-type of grocer” to fill the retail space, but had been unable to lock anyone in. “I would love nothing more than to commit to a tenant today,” he said. “It’s just a market impossibility.”

Planning: 2001 Fourth St. Image: Trachtenberg Architects
Planned: 2001 Fourth St. aims to activate the street on both Fourth and Fifth. Image: Trachtenberg Architects
An aerial view of the courtyard and massing at 2001 Fourth. Image: Trachtenberg Architects
An aerial view of the courtyard and massing at 2001 Fourth. Image: Trachtenberg Architects

Trachtenberg gave a brief presentation to the zoning board describing his firm’s design. He said his team had broken up the building massing into four distinct structures “with ‘light courts’ that slice the block into four separate pieces,” letting light into a large courtyard that spans about 75 feet by 150 feet. He said, rather than build the project out to 206 units, which could have been allowed, the development team opted to go with fewer units and more space and amenities for tenants.

Trachtenberg said, “to activate the block” on Fifth Street, there will be two residential lobbies, at University and also mid-block, along with the new retail on the east side of Fourth Street just south of University and north of the Sierra Nevada tasting room, which opened in late 2013.

He described University Avenue below the freeway as “a difficult moment in the urban fabric”: “It’s not the nicest place in town,” he told the board. “We hope to improve that.”

Also planned are a garden at podium-level — above first-floor retail and parking — with a children’s play area and bocce ball court; a communal kitchen and gym; and a rooftop garden with an outdoor theater as well as barbecue and eating areas.

Above: University now and, perhaps, in the future. Below: The ground-level garden is advertised as family friendly. Images: Trachtenberg Architects
Above: University now and, perhaps, in the future. Below: The podium-level garden is advertised as family friendly. Images: Trachtenberg Architects

In response to concerns expressed by one local resident about congestion, Trachtenberg said that, according to the traffic analysis, there will be fewer car trips associated with the new project than there are currently. He also emphasized Read’s intention to find a business that will fill the neighborhood need to buy food: “The team is very sincere about getting a grocery in the ground floor of this building. It’s absolutely the best possible use for the neighborhood and for the project tenants.”

Board members said the project was well-designed and had been generous with its open space and amenities.

Said Commissioner Sophie Hahn: “This is an absolutely gorgeous project…. It’s the second project that this team has brought to us where they don’t max everything out. They don’t take everything they could take. The living spaces are generous. The architecture and design are tasteful and appropriate for Berkeley. The outdoor spaces are phenomenal, generous, and beautifully designed with a lot of amenities.”

They wondered, however, whether the project has too much parking, and asked the developers — as part of their use permit — to make every effort to pursue an agreement with a car-sharing company to have car-share spaces on site. There was also some discussion about the number of spaces in the garage that will be wired for electric vehicles, and the possibility of whether the neighborhood might one day be eligible for parking permits.

Commissioner Tregub said he could not vote for the project because he could not support the demolition of the building — because it houses the Grocery Outlet — or the store’s closure, and saw those changes as a detriment to the neighborhood.

Fourth Street, looking north toward University, as it may one day look. Image: Trachtenberg Architects
Fourth Street, looking north toward University, as it may one day look. Image: Trachtenberg Architects

Other commissioners said they sympathized with the neighbors but felt strongly that the project is right for the area, and that the impending closure of the grocery store is beyond their purview.

Commissioner Shoshana O’Keefe said, if the board did not approve the project, Grocery Outlet would leave anyway, and leave the neighborhood with “a blighted useless property.”

“This project is not forcing Grocery Outlet out,” she said. “I’m sad to see it go, but I think it’s outside of what we’re being asked to decide tonight.”

Commissioner Denise Pinkston agreed, and spoke briefly about the “huge amount of transformation” happening in the grocery industry, with outmoded large-format stores struggling financially due to changes in shopping patterns and lifestyles.

“Saving a building where a grocery store happens to be is not the same thing as saving a grocery store,” she said. “No amount of land-use planning can force a grocery store to work in a market that’s changing beyond our control.”

See the staff report to learn more about the project. Additional related documents are on the city website.

Related:
New beer garden, retail planned on Spenger’s block (09.25.14)
5-story complex proposed on Grocery Outlet site (08.04.14)
Development may come to Spenger’s lot in Berkeley (07.28.14)
Is the tech boom putting pressure on Berkeley rents? (07.03.14)
A dig in a Berkeley parking lot seeks shellmound answers (02.03.14)
Sierra Nevada’s Torpedo Room opens in Berkeley (11.26.13)
‘The Aquatic’ wins easy approval from Berkeley officials (10.11.13)
Sierra Nevada’s Berkeley tasting room to open soon (10.01.13)
Community farm buys 2+ acres in West Berkeley (05.23.13)
Nine Berkeley buildings win ‘design excellence’ awards (04.03.13)

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