Telegraph Channing Mall’s tenants continue negotiations with city of Berkeley

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Michael Drummond/Senior Staff

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Tenants of the Telegraph Channing Mall continued their long-running negotiation with the city of Berkeley over rent reduction, the aging condition of the mall and proposed future private management of the retail space during Tuesday’s Berkeley City Council meeting.

Discussion over the mall, a city-owned facility located between Durant Avenue and Channing Way and occupied by Berkeley mainstays such as Cheese ‘n’ Stuff and Revolution Books, began last year, when tenants of the mall received a first-time bill for a property tax — referred to as a “possessory interest tax” — and took the issue up with the council in September.

At Tuesday’s meeting, these issues were brought forward again as public commenters fired back against a December report by the city that assessed local rental rates by using the businesses across the street in Sather Lane as a point of comparison.

According to the report, the average rent for the Telegraph Channing Mall, $1.77 per square foot, was lower than that of the mall’s neighbors across the street, which were assessed at $3.

But Councilmember Kriss Worthington said at the meeting that the average rent comparison of the two retail spaces was a broad stroke, like comparing “apples to oranges.”

“It seems to me (the Sather Lane shops) would have higher rents because they have a captive audience of thousands of people that have to walk through there,” Worthington said.

Merchants also voiced dissatisfaction with the aesthetic condition of the mall and a city proposal made in August to contract a professional management company to oversee tasks associated with the renting of the retail space.

Gary Miller, a volunteer at Revolution Books, said the city’s proposal to contract with a management agent would “aggravate” the rent issue rather than solve it because he believes outside management would be driven solely by profit and would obstruct communication with the city.

“The solution is not a property manager but reduced rental rates,” Miller said. “What is needed is relief from the crushing rent so that the tenants can invest in their businesses.”

But according to the December city report, “the recommended contract for these management services is seen as both cost-efficient and an effective use of personnel and consultant resources.”

According to Deputy City Manager William Rogers, the city has offered to pay tenants’ possessory interest tax charged over the summer through their current lease terms and commit to structural upgrades that include signage and lighting, among other issues. City officials also met with three tenants so far to discuss rent reductions on an individual basis.

“We want Telegraph Avenue to succeed,” Rogers said. “We want the Telegraph Channing Mall to succeed, and we want to create an environment to make that happen.”

Jeff Landa covers city news. Contact him at [email protected] and follow him on Twitter @JeffLanda.

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