Berkeley officials approved plans Tuesday night for a 61,000-square-foot Kaiser Permanente medical office building on San Pablo Avenue south of Parker Street after property owner Wareham Development agreed to give four months of free rent to several of its struggling tenants who have to move.
Shortly after 11 p.m., the Berkeley City Council voted 8-0-1 in favor of Kaiser’s plans in response to a motion by Mayor Jesse Arreguín. Arreguín said he is confident the medical offices, at 2621 10th St., will bring significant benefits to Berkeley and that the city will find a way to keep the impacted local businesses in town. West Berkeley Councilwoman Cheryl Davila, who represents the district where the medical facility would be located, was the lone abstention from the vote.
Kaiser Permanente could open in Berkeley as soon as 2021, Wareham Development executive Chris Barlow estimated after the vote. The project, designed by San Francisco architecture firm Gould Evans, rises three stories and would offer adult family medicine services, pediatrics, mental health care, a pharmacy and other outpatient offerings as well as a café. In an April 30 letter to the mayor, Kaiser said it expects the new facility to employ more than 136 people and serve its 58,000 members who live in Berkeley. Berkeleyside broke the news in December about the health care giant’s interest in Berkeley.
As part of the late-night deal — brokered from the dais by Councilwoman Susan Wengraf — Barlow agreed, with just a touch of hesitation, to give three of Wareham’s Carleton Street tenants free rent from July through October. The relief was palpable at the end of the night, as Barlow exchanged vigorous handshakes with the owners of two of those businesses — who have repeatedly expressed dismay about the loss of their longtime locations and concerns about the future — in recognition of the hard-won agreement.
“We’re delighted that, after a long process, that the council has approved this project,” Barlow said after the vote. “We think it’s going to be a fabulous asset to the city of Berkeley and its citizens and we look forward to bringing it to completion.”
No one from Kaiser Permanente has addressed city officials during council or zoning board meetings about the project over the past six months or so. But the medical provider assured the mayor, in Tuesday’s letter, that it is “engaged in definitive efforts … to extend our health services into the Berkeley community.” Kaiser told the mayor this would not be possible, however, without a council vote to approve its use permit.
Tuesday’s vote partially overturned a zoning board vote in January that granted the medical center its use permit but rejected its plans for an off-site parking lot on the Pardee Block, just west of 10th Street between Carleton and Pardee streets, catty-corner to the proposed medical offices. Zoning board members said, at the time of that vote, that they could not bear to see the loss of businesses on the block — Mobility Systems, Saab Replay and Commercial Titan Wraps — which said their survival would be in jeopardy as a result of Wareham’s plans.
Barlow has explained to officials repeatedly, in meeting after meeting, that the leases for those businesses would be up this year or, in the wrap shop’s case, that early-termination terms in its lease had been clear: He said the businesses would need to leave in 2019 no matter what the city wanted. Wareham has long had plans to develop the Pardee Block and has been direct about that with tenants, Barlow has told officials previously. Wareham appealed the zoning board vote soon after it happened, which is how it came before council Tuesday.
Kaiser Permanente, which is headquartered in Oakland, was founded in 1945. It describes itself as “one of the nation’s largest not-for-profit health plans, serving 12.2 million members.” Wareham submitted an application in late 2016 for a medical office and research facility at 1050 Parker St., now listed in project documents by the 10th Street address. Kaiser later expressed an interest to Wareham, which led to a change in course for the project after its use permit was initially approved, Barlow said.
During the two-hour appeal hearing, a few people told council the project was at odds with the West Berkeley Plan, which the city adopted in 1993. The loss of manufacturing and industrial uses in West Berkeley, as described in that plan, has been a consistent issue of neighborhood concern over the years. But public comment on the item was relatively brief. It was also, at times, emotional, as proponents of the Carleton Street businesses told officials how much their services matter.
Despite a range of opinions on the medical center’s proposal itself, there was widespread agreement Tuesday night that the city’s own parking requirements for medical facilities were a significant hurdle. But Barlow also told council a consultant had independently reviewed the city’s parking ratio in light of Kaiser’s needs and similar projects nearby and found it to be reasonable. Kaiser plans to offer 115 vehicle parking spots, primarily for patients, on-site in a surface lot, and another 88 spaces for staff catty-corner on the Pardee Block in another surface lot. There will also be parking for nearly 50 bicycles.
Some community members and council members contended Tuesday that Kaiser Permanente can easily afford to build a parking structure, perhaps underground, which would take less space and leave existing businesses alone. Barlow said that would not be possible because it would cost $55,000 to $65,000 per spot and delay the project.
Officials made it clear during their comments that they want the city to push hard to keep the Carleton Street businesses in Berkeley if possible. As part of the council vote, City Manager Dee Williams-Ridley promised the city’s Office of Economic Development would do what it could to help locate appropriate new spaces. Mayor Arreguín said he had faith in the possibility of a local solution for all the businesses.
The fate of Mobility Systems in particular — a more than 40-year-old auto dealer and repair shop focused on the needs of the disability community — drew significant attention Tuesday night. One person described it as a vital community service. Another speaker, Kelly Hammargren, broke down in tears recounting how important a disability van was to the quality of her husband’s life.
Councilman Ben Bartlett remarked that he saw Mobility Systems as a health care provider in its own right. He said he’d like to see Kaiser Permanente step up to help ensure the business can stay in the city.
Mobility Systems owner William Fryckman told Berkeleyside he was relieved after the vote and had been heartened by the significant support evidenced by city officials and the community. Fryckman says he already lost $40,000 when he tried to move to a nearby location but was ultimately stymied by the city. He told the city it would likely take work to tackle the challenge.
Saab Replay’s owner, Randy Roche, told council that businesses on the block and their neighbors have a strong sense of community that he will be sad to lose. Roche said two of the employees in his repair shop have been there since it opened more than 20 years ago. A newer employee, holding his young daughter in his arms, told council how much his Saab Replay job means to him and what a special place it is to work.
Roche told council he had known since he bought the shop 10 years ago from the original owner that he would one day have to move: “I don’t want to demonize Wareham. They’ve been very fair to us over the years,” he said.
Although Saab ceased operations in 2012, Roche said Berkeley is one of the biggest markets in the nation for owners of the vehicle. Saab Replay is the last specialty Saab shop in the state, he added. Roche concurred with Fryckman’s experience about the challenge of finding new space in Berkeley for auto uses due to the city’s restrictive zoning code and also because many landlords would rather rent to cannabis businesses, breweries and art galleries.
Councilwomen Sophie Hahn and Kate Harrison said they were only supporting the project in its current form grudgingly. They both argued in favor of finding a way to reduce the city’s parking requirements, but staff said the available data did not support that approach.
“I feel terrible about this. I hate this choice,” Harrison said from the dais before the vote. She said she also wished the city had looked closer at land-value recapture, but that the time for that had passed.
Hahn called Barlow’s agreement to let the businesses have four months of free rent a “devil’s bargain.” She said she was disappointed because she thought Wareham could have tried harder to find another viable option and let the businesses on the Pardee Block stay on. But she said there weren’t a lot of options at this point.
“I don’t think denying this solves any of the problems we have,” Hahn said, “And I think we have some real problems with loss of this kind of space.” She said it would ultimately, however, be up to Wareham — as the property owner — to decide what to do with the block.
Davila asked Wareham if it could provide parking across the street from the medical office at its Fantasy Studios property. As an alternative, she said Wareham should investigate whether it could lease parking at the Bank of America site nearby. Barlow said neither option was a possibility for multiple reasons.
Davila also asked Barlow to throw in a fifth month of free rent to the Pardee Block businesses. He declined.
Berkeley has grappled in recent years with the prospect of reduced access to medical care with the planned closure of Alta Bates hospital by 2030. Other medical facilities have opened in the city in the past five years, but community members say they can’t fill the void of a full-service hospital.
In 2014, One Medical opened on Shattuck Avenue. The next year, Sutter opened a new health center on Milvia Street and LifeLong Medical Care opened a new clinic in South Berkeley. 2016 brought Hana Holistic to Channing Way and LifeLong Immediate/Urgent Care to Dwight Way. Last year, John Muir Health and UCSF Health opened a 96,000-square-foot outpatient medical facility — with primary care, urgent care and specialty care — at 3100 San Pablo Ave. (near Folger Avenue).
Tuesday night, most of the other action items on the agenda were postponed due to the lateness of the hour or because of scheduling changes requested by council.
Mayor Arreguín also announced, at the beginning of the meeting, that the Berkeley City Council had, Monday in closed session, granted the city attorney the authority to initiate a lawsuit against the University of California regents over some of its student housing plans and associated campus population estimates. Berkeleyside broke that news during the council meeting.