Berkeley City Council to consider Harold Way appeals

2211 Harold Way is one of several tall building proposals in the pipeline that must offer "significant community benefits" under the Downtown Area Plan. Image: MVEI Architecture and Planning
The City Council will consider seven appeals tonight on the permits issued to allow construction of 2211 Harold Way. Image: MVEI Architecture and Planning

There have been more than 35 public hearings over the 180-foot-high 302-unit building proposed for 2211 Harold Way and at most of those meetings a dedicated group of people has objected to its construction.

Tonight may be their last chance – at least before the issue goes to court – to thwart what they consider an oversized building for the wealthy that doesn’t fit architecturally into the neighborhood.

The Berkeley City Council is holding a special meeting at Longfellow Middle School at 1500 Derby St. 5:30 p.m. to consider eight appeals filed over the approvals and permits issued by the Zoning Adjustments Board and the Landmarks Preservation Commission. That is one less appeal than expected; on Monday night, the Berkeley Unified School District Board voted to drop its appeal, according to president Judy Appel. BUSD and the building’s developer, HSR Berkeley Investments, worked out an agreement in recent days that will mitigate the school district’s concerns about the impact of construction on Berkeley High, which is about a half a block away.

The council will consider appeals that question the LPC’s decision to issue a structural alteration permit that will allow the developer to tear down two old additions to the former Hink’s Department Store. Members will also have to decide whether ZAB failed to sufficiently consider a host of issues, including the quality of the EIR, lack of compliance with Measure R, the height of the complex, earthquake safety, the impact of the project on the view from the Campanile, and other issues.


But the main question for the council may be whether the community benefits ordered by ZAB are too much or too little.

ZAB use permit shifts community benefits costs

On Sept. 30, ZAB approved a use permit for 2211 Harold Way, but ordered the developer to pay $5.5 million more in community benefits than the owner, Joseph Penner, or his representative, Mark Rhoades, had proposed. The developer had offered $23 million in community benefits, which they said was about 20% of the $120 million construction costs. The developer suggested it get a $10 million credit for hiring union labor throughout the construction process, not just at certain points (called a Project Labor Agreement); a $12.7 million credit for building 10 new movie theaters (the original proposal had eliminated those theaters) and it agreed to pay $350,000 to Habitot Children’s Museum, which will have to relocate as a result of the construction.

But ZAB commissioners, relying on an economic analysis prepared for the city by Economic and Planning Systems, rejiggered the numbers. ZAB commissioners assigned less credit for the PLA ($5 million) and for the movie theater ($4 million) and attached a new $4.5 million payment for affordable housing. This is on top of the $6 million that the developer already has to pay into a housing trust fund.

ZAB also required the developer pay $1 million into an arts and culture fund without specifying which organization should get the money.  That maneuver has greatly upset Habitot officials, and they will urge the City Council tonight to give them $500,000 of that money, according to Gina Moreland, the director.

Mark Rhoades, (l) and his Rhoades Planning Group is helping Joseph Penner (r) in his application to build more than 300 units at 2211 Harold Way. Photo: Frances Dinkelspiel
Mark Rhoades, (l) and his Rhoades Planning Group is helping Joseph Penner (r) in his application to build 302 units at 2211 Harold Way. Photo: Frances Dinkelspiel

Rhoades will tell the council that the project cannot be built with the numbers put forward by ZAB. “We believe that the ZAB condition to disregard the guidance from the City Council on community benefits has caused a significant imbalance in the project’s financial profile, jeopardizing the project, and compromising the legal foundation of the city’s approval,” Rhoades writes in his appeal of the ZAB use permit. “The mandated $5.5 million cash payment [for affordable housing and arts and culture] is more than the guidance provided by the City Council and lacks a reasonable or proportional relationship to the impacts of the project.”

Rhoades is also asking the council to strike ZAB’s requirement that the developer install curbs, gutters and other improvements on Shattuck Avenue. He said those requirements are inappropriate because the new building is not on Shattuck Avenue. He is also asking City Council to change other ZAB requirements, including requiring Design Review Commission to review signage and other exterior features. Instead, he is asking that only the Landmarks Preservation Commission be required to do so.

Affordable housing requirement reflects dire shortage

ZAB’s addition of $4.5 million for affordable housing is a reflection of just how dire the housing situation has become in the Bay Area – a condition that was not as urgent in December 2012 when HSR Berkeley Investments first filed its application. While Berkeley, like most Bay Area cities, is behind on providing the amount of affordable housing recommended by regional governmental bodies, the situation has been exacerbated in recent years as the technology industry has shifted from Silicon Valley to San Francisco. As the number of tech workers with their generous salaries moving to San Francisco, Oakland and Berkeley has increased, demand for housing has gone up. Those tech workers are able to pay more in rents and have been taking over apartments formerly occupied by teachers, artists, and families.

In Berkeley, rents have increased substantially in recent years. In 2014, median rent in Berkeley reached just over $1,300 for a one-bedroom or studio apartment, according to the American Community Survey. (The national median rent for a one-bedroom or studio is $796, according to the survey.) And Zillow, an online real estate database, currently estimates the median rent for all units and homes in Berkeley is $3,584.

Rhoades and other developers believe that new construction is the only way to relieve pressure on the rents. The 302-units that will be built for The Residences at Berkeley will be part of the solution of the housing crisis, according to Rhoades.

2211 Harold Way is one of several tall building proposals in the pipeline that must offer "significant community benefits" under the Downtown Area Plan. Image: MVEI Architecture and Planning
2211 Harold Way is one of several tall building proposals in the pipeline that must offer “significant community benefits” under the Downtown Area Plan. Image: MVEI Architecture and Planning

But many of the activists opposing 2211 Harold Way believe that Rhoades and other developers have it backward, and that building the project will further squeeze people with modest incomes. They point to the fact that the report prepared by Economic and Planning Systems for the city states that rents at 2211 Harold Way will cost between $51,875 and $155,000 annually.

Many of those opposed to Harold Way are concerned that Berkeley laws only require the developer to make 10% of the units affordable or to pay an in-lieu fee of $20,000 per unit into a housing trust fund. They would like the council to require HSR Berkeley Investments increase the number of affordable units in midstream. They also would like the developer to pay a higher in-lieu fee.

It was under this atmosphere that ZAB added on the new $4.5 million affordable housing fee.

Regardless of how the City Council votes tonight, there will be a legal appeal of the decision. Becky O’Malley, a co-owner of the Berkeley Daily Planet and a former LPC commissioner, has said publicly that she and other project opponents have already consulted with an attorney to fight the development.

Project documents are posted on the city website. Read complete Berkeleyside coverage of 2211 Harold Way. Several recent stories appear below.  

Related:
Numerous appeals filed for Berkeley’s Harold Way project (11.03.15)
ZAB approves Harold Way permit with increased affordable housing provision (10.01.15)
Harold Way project gets Landmarks Commission approval (08.14.15)
Op-ed: The Harold Way Project, as presented, will sacrifice Berkeley’s unique character (08.05.15)
New plan calls for 10 theaters at 2211 Harold Way (07.30.15)
Berkeley council adopts community benefits package (07.16.15)
Op-ed: Let’s say ‘yes’ to a vibrant downtown Berkeley (07.10.15)
Council declines to overturn LPC vote on Campanile Way (07.01.15)
Berkeley council to hear Campanile Way landmark appeal (06.30.15)
Council approves community benefits package; ZAB votes to certify Harold Way EIR (06.29.15)

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