High-rise developer in Berkeley to use 100% union labor

2211 Harold Way. Image: MVEI Architecture and Planning
2211 Harold Way is set to be a union shop, but the project will not proceed if Measure R passes, a project rep says. Image: MVEI Architecture

The developer behind a 180-foot-tall, mixed-use project planned in downtown Berkeley at 2211 Harold Way announced a commitment this week to use 100% union labor to construct The Residences at Berkeley Plaza.

According to Mark Rhoades of Rhoades Planning Group, a project representative, it’s the first agreement of its kind in Berkeley — between a private developer and labor — in at least 17 years.

Project developer HSR Berkeley Investments signed the labor agreement several weeks ago, after more than a year of discussion and negotiation, with the Building & Construction Trades Council of Alameda County. The group represents all 28 labor unions in the county.

The agreement will mean a livable wage, along with benefits including health care and sick leave, for an estimated 300 skilled workers. They will make, on average, $65 an hour, according to project documents. Construction for Berkeley Plaza is expected to take 2-3 years, and many of the workers hired must live in Berkeley or nearby, within the East Bay Green Corridor.


Rhoades said the agreement will cover everything “from digging the hole to doing the concrete and the steel, and including the first round of retail tenant work. It will result in a much better building, a much nicer streetscape, and a building whose systems work because of the union labor that will be putting it together.”

The deal was announced this week, as Berkeley voters prepare to cast their ballots on Measure R, a 28-page downtown zoning initiative whose supporters say it will bring in more affordable housing units, more sustainably built projects, and better labor commitments for the people who build them. They also contend that developers have not been contributing enough in community benefits, and that the measure will force them to be more generous.

But numerous groups representing significant labor, environmental and affordable housing interests have signed on in opposition to the measure, saying they believe it will actually halt the push for smart growth and transit-oriented building in Berkeley that has picked up steam in recent years, saddling developers with unwieldy requirements that will make construction financially infeasible.

Read more about Measure R and Berkeley real estate in past Berkeleyside coverage.

Concern about Measure R has already caused one developer — who had plans for a hotel downtown — to put his project on hold pending Tuesday’s vote. Representatives for other tall buildings in the pipeline, including Rhoades, have said they are moving forward cautiously and believe Measure R will fail.

But if it succeeds, said Rhoades, 2211 Harold Way will be through.

“This project will not be built if Measure R passes,” he said Thursday. “We will be done.”

Berkeley City Councilman Jesse Arreguín — who represents downtown Berkeley and has endorsed Measure R along with Councilman Max Anderson — said previously that developers are just using the initiative to scaremonger and make a political point to undermine the initiative’s campaign. Arreguín said earlier this year that the claims are unsubstantiated, and that he does not believe projects will actually cease if Measure R passes.

“It’s great we have people wanting to invest in our community and build housing, but obviously they want to maximize their investment, their profits,” Arreguín said in May when he announced the signature drive to put Measure R on the ballot. “So of course they are going to say things aren’t feasible because they are trying to increase the amount of their rate of return.”

An 1,800-square-foot public plaza is planned at Harold and Kittredge street is slated to include furniture, landscaping and seating for adjacent restaurant and café space. Image: MVEI Architecture and Planning
An 1,800-square-foot public plaza planned at Harold Way and Kittredge Street is slated to include street furniture, landscaping and seating for adjacent restaurant and café space. Image: MVEI Architecture and Planning
The current view Harold and Kittredge offers little of interest for the passer-by. Image: Google maps
The current view of Harold and Kittredge offers little of interest for the passer-by. Image: Google maps

The Trades Council announced its opposition to Measure R in September. At the time, Andreas Cluver — a representative of the group, called the measure “a wolf in sheep’s clothing,” and said in a prepared statement that it “would stop the very projects that are supposed to provide these good jobs.”

Cluver worked with Rhoades and HSR to hammer out the labor agreement for 2211 Harold. He said this week that HSR’s decision to commit to a 100% union workforce is laudable, particularly given the financial pressure on private developers to make sure projects are profitable enough for investors to commit.

“There is no requirement here at all for the developer to enter into this agreement,” he said. “There’s not an endless pot of money. These are decisions companies and developers make to show a level of involvement as community partners.”

Cluver said the Trades Council has become increasingly active in Berkeley in the past 3-4 years. As a result, the group has forged an agreement with the city of Berkeley and the school district to use union forces on their projects, but that doesn’t extend to private developers. Cluver said the organization has also worked to increase outreach with job fairs, recruitment and training for Berkeley youth who want to enter the trades. Four years back, he said, fewer than 10 Berkeley residents were part of the Trades Council; now there are more than 50. The group has been working with the school district to continue to boost that figure and offer young people who aren’t aiming for college a stable career where they can earn a livable wage.

“These are blue collar careers where folks earn a real living,” he said. By contrast, non-union shops pay a quarter of what the union promises, and do not offer benefits, according to Cluver.

Cluver said he hopes the labor agreement with HSR, which he described as a significant community benefit, will be a model for other developers who want to work with labor and offer fair conditions.

Developers for The Residences at Berkeley Plaza say they want to create a "shared street" on Harold Way that would feature widened sidewalks and special pavement on the roadway to force motorists to slow down. Image: MVEI Architecture and Planning
Developers for The Residences at Berkeley Plaza say they want to create a “shared street” on Harold Way that would feature widened sidewalks and special pavement on the roadway to force motorists to slow down. Image: MVEI Architecture and Planning

Rhoades said the labor agreement will increase projected project costs by 10%, but that it is worth it for the community, the overall stability on the job site throughout construction, and a better quality project — created by skilled, trained craftsmen — in the end. The project is projected to cost $120 million when all is said and done. As estimated by the development team, it would bring in nearly $1 million a year to the city and school district in property, sales and business license taxes. (See Appendix B in the developer’s community benefits overview to learn more; that document was submitted to the city of Berkeley last week.)

Both Rhoades and Cluver were quick to point out Thursday that plans for the labor agreement predated Measure R by a long shot. The project was first submitted to the city in December 2012, and HSR founder Joseph Penner said from the get-go that “he was going to do everything he could to make this a union labor project,” according to Rhoades.

He said too that, though the union agreement is “the centerpiece” for the Harold Way project, “and the thing we’re most proud of,” the team has also committed to other significant community benefits, which are required under the Berkeley Downtown Area Plan. Developers have the flexibility under the plan to determine exactly what benefits to offer.

In this case, HSR has committed to bring back six state-of-the art movie theaters to the site in partnership with Landmark’s Shattuck Cinemas; create a public plaza at the building entrance at Harold Way and Kittredge Street; and include an expansive program of green- and transit-oriented features, such as two transit passes per unit (twice the number required under the code), cargo bike and shopping cart access for residents, bike fix stations, EV charging stations, electric bikes to rent and more. In addition, a “SmartWalk transit screen” is planned that would project real-time transit and navigation information onto the pavement for passing pedestrians.

(If Measure R passes, the building would have to be LEED Platinum, rather than the current LEED Gold standard or equivalent. Thirty percent of its units would need to be affordable as opposed to 10%, and those units would have to be built on site. The developer would not have the option — as he currently does — to pay into the city’s affordable housing fund rather than build those units. Developers would have to pay an additional $1 per square foot into a streets and open space fund, on top of the $2.23 they currently pay for residential construction and $1.68 for commercial construction. They would have to pay into a loan fund for small business. There would need to be public bathrooms. Rhoades has said those extra requirements would make the project financially unfeasible.)

The public comment period on the project’s draft environmental review document — which is posted on the city website — runs through Nov. 19. Those interested to learn more about Berkeley Plaza can view the project website, which went live Thursday, to learn more and offer feedback to the development team.

Related:
Berkeley hotel plans halted pending initiative vote (08.07.14)
At B-Side: Implications of downtown Berkeley initiative (07.22.14)
Would new green initiative kill 2 downtown high rises? (05.14.14)
‘Explosive’ downtown Berkeley housing boom under way (01.14.14)
Developers put theaters back into high-rise plans (06.26.13)
Early high-rise plans lack inspiration, say commissioners (03.19.13)
First high-rise in 40 years planned for downtown Berkeley (12.21.12)
Large downtown Berkeley property changes hands (11.28.12)

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