New 16-story downtown condo/hotel project to appeal to empty nesters, visiting professors

Jim Didion of Center Street LLC (left) and Richard Kelleher, CEO of Pyramid Hotels, are teaming up to construct a 16-story hotel in downtown Berkeley. Photo: Frances Dinkelspiel
Jim Didion of Center Street LLC (left) and Richard Kelleher, CEO of Pyramid Hotels, are teaming up to construct a 16-story hotel in downtown Berkeley. Photo: Frances Dinkelspiel

The new developer of a 16-story hotel in downtown Berkeley plans to build up to 35 condominiums and include kitchens in every room so people can stay for extended periods of time.

The Pyramid Hotel Group has extensive experience constructing hotels near universities, according to the company’s founder and CEO, Richard M. Kelleher, who was in Berkeley this week to discuss the project with city officials and community activists. Many people who visit university towns are academics or family members who want to stay in the area for a long time, he said. The new hotel will cater to them, although there will also be guests who stay for short periods of time, he said.

The hotel will be built with union labor and staffed with union employees — part of Pyramid Hotel Group’s commitment to be a good community member, said Kelleher.

“We think we are good neighbors and socially responsible citizens,” said Kelleher, who founded the company in 1999 after serving as the CEO of Doubletree Hotels Corporation and Promus Hotel Corporation,which managed the Embassy Suites, Red Lion Hotels, Hampton Inn, and Hampton Inn and Suites brands, among others. “We like the site because we think it’s one of the premiere pieces of real estate in the western part of the country. With our investment here, this will help revitalize the downtown core of Berkeley and create an economic engine for the city.”


The Pyramid Hotel Group, a privately held company, is the fourth largest independent hotel group in the United States. It manages 53 properties with 18,700 hotel rooms across the nation, some of them under the Hilton, Marriott or Doubletree brands. Pyramid has 8,100 employees and 1.5 million square feet of meeting space. Pyramid managed the Claremont Hotel for seven years and has managed the Doubletree by Hilton Berkeley Marina for about a year.

Pyramid Hotels recently acquired a majority stake in Center Street Properties LLC, which was started by Jim Didion, who lives on the central coast. Didion, who will remain involved with the project as managing partner, was also in town this week. But the Pyramid Hotel Group will now take the lead on developing the hotel. The team hopes to break ground this year, said Kelleher.

Read more about tall building projects in Berkeley.

The hotel will be built at the intersection of Shattuck Avenue and Center Street, on a parcel that now holds a one-story Bank of America building. The bank owns the property and part of the deal is to have a B of A branch in the new building.

The view from Shattuck Avenue. Photo: Center Street Partners
While The Pyramid Hotel Group has not released a new rendering for the hotel, its CEO said there will be a restaurant on the ground floor and two lobbies — one for hotel guests and one for condo owners. This is an old rendering of the Shattuck Avenue side of the hotel project. Photo: Center Street Partners

While the $100 million project won’t be a five-star hotel like a Four Seasons, it will be a quality hotel, said Kelleher. (A spokesman called after this article was posted to say it will be a four-star hotel.) Although the architects, JRDV Urban, are still working on renderings, the plan is to include some conference spaces with indoor and outdoor options; Kelleher stressed it will not be a conference center. There will be meeting rooms and breakout rooms and places for people to gather, or hold weddings and parties, outside. There will be a restaurant, retail spaces, a swimming pool and nice athletic facilities, he said. There may be a roof deck.

Kelleher said he thought the Berkeley property might be an independent hotel not affiliated with a major chain.

“We will be the manager and face of the hotel for the long term,” he said.

Kelleher and Didion were vague on the community benefits the hotel would provide other than using union labor, paying real-estate and hotel taxes, and adding 50-100 union jobs to the economy. But Pyramid is always deeply involved in its local communities, said Kelleher, adding that past involvement should be an indicator of future actions.

Over the last seven years, the Pyramid Hotel Group has acted as a sponsor or event host for dozens of agencies and non-profits, including police and fire departments in Berkeley and Oakland, the East Bay Humane Society, the Contra Costa County Food Bank, Alta Bates Summit Foundation, Temple Beth Abraham, the Berkeley Youth Orchestra, neighborhood watch groups, Meals on Wheels, the Leukemia Society, the Berkeley Chamber of Commerce Crush festival, and more, he said. The company hired a cellphone carrier to improve the mobile phone reception near the waterfront, a move that helped hotel guests, but also people spending time by the marina, he said.

“Our first goal is to be where our community is, and our community is the people who we work with,” Kelleher said.

Adding condominiums will help the developer’s bottom line by reducing upfront costs, but it may also cut into the hotel tax paid to the city. One of the reasons Berkeley has wanted a hotel downtown is that guests pay a 12% tax on their rooms. That money goes into the city’s General Fund. When Didion first announced his intention to build a hotel, he said the city would get about $2 million in hotel taxes.

Constructing as many as 35 condominiums might reduce the number of proposed hotel rooms, although Didion said the tax paid to Berkeley shouldn’t change much. Didion said the condos would appeal to “people coming out of their homes in the hills and want to be in the downtown urban environment.”

“We believe that, by having the residences and extended-stay hotel environment, you have added to the residential character of  downtown, which is a driver to the growth of the downtown,” said Didion. “You get people downtown and it changes the environment because they are spending money, they are going to restaurants, they are going to the movies.”

John Caner, CEO of the Downtown Berkeley Association, said the condos would bring in a nice mix of empty nesters and professionals to balance out the downtown student population. It will add some economic diversity, he said. He said he was also glad that Pyramid Hotels would be the developer and operator, since it has a long history in the hotel business.

Kelleher stressed the importance of moving quickly on the hotel, which means getting quick approval from the city. He would like to try to break ground by the end of the year, which would be a much more aggressive timeline than any of the developers of the other proposed tall buildings have achieved.

The Pyramid Hotel Group is talking to the Planning Department about how to get the project through the various city panels — Design Review, Zoning Adjustments Board and others — in a timely fashion. While nothing has been decided, that could include paying the city to hire an additional contractor in the planning department, said Matthew Taecker, who is acting as community liaison for the project.

Related:
Downtown hotel to feature condos, conference center (01.26.15)
New hotel project is a go again after defeat of Measure R (11.06.14)
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)
New 16-story hotel proposed for downtown Berkeley (12.19.13)

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