Developers halt plans for Downtown hotel pending November vote on ballot initiative

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Developers have halted plans for a Downtown Berkeley high-rise hotel, fearing that a ballot initiative to alter the city’s building requirements would hinder development.

Proposed by Councilmember Jesse Arreguin, the initiative, among other changes, would require the hotel to be smaller and would require deviating from zoning code — which the building planners intend to do — to be approved by a citywide vote. Currently, permits can be granted by the Zoning Adjustments Board to allow deviations from code.

Although Arreguin has said the initiative would provide environmentally sustainable community benefits, the plan has been controversial among developers and other city officials.

“There are numerous additional requirements, which together heap too much additional cost and uncertainty onto the project,” said Matthew Taecker, who was working as a consulting developer for Jim Didion and Center Street Partners LLC, which proposed the project, until the plans were put on hold. “Any one of those additional requirements could be a matter of negotiation, but together they are poison pills that make a poison cocktail.”

The 16-story hotel, which was in the process of obtaining zoning approval by the city, would be located above the Bank of America building at 2129 Shattuck Ave. Developers said they will cancel the plans if the initiative passes.

“I think it’s a cynical PR move,” Arreguin said. “It’s to their advantage to create concern about the initiative so that voters are less likely to support it.”

Regardless of whether the initiative passes, the project the developers submitted does not conform to current city law and must be narrower, according to Arreguin.

But Taecker said if the initiative passes, the project will no longer be financially viable, because the hotel has to contain more rooms than the initiative allows in order to yield enough profit.

In addition to the reduction of rooms, the initiative would hold the hotel to a LEED platinum standard instead of the current LEED gold standard, a system based on points gained through satisfying criteria for environmental sustainability. Developers said this requirement is too difficult and expensive to reach.

Arreguin said the initiative would function as a further realization of the Downtown Area Plan, which was passed in 2010 and put into effect in 2012, by promoting affordable housing, fair wages and strong environmental requirements.

Mayor Tom Bates disagreed, saying if the initiative is passed, the city’s low-income housing trust fund will lose $28 million.

“(The initiative) is written with no public input, and it’s a situation that means that all the work and effort for the plan that just passed in 2010 gets thrown out the window,” Bates said.

Taecker said visitors to the city often stay in Emeryville due to the lack of hotels in Berkeley, directing possible revenue out of the city. The hotel would generate more than a million dollars a year in transient occupancy tax and attract more consumers to the Downtown area, he said.

Simone Arpaio, the co-owner of Almare Gelato Italiano, said while he supports development Downtown, he believes the city should prioritize existing problems in the area, such as crime and grime.

“The problem is that Downtown Berkeley is a place that many of my friends from Europe don’t want to come to because it is ugly,” Arpaio, whose shop is located near the Downtown Berkeley BART station, said. “That’s the problem, not the buildings being too high.”

Contact Madeleine Pauker at [email protected] and follow her on Twitter @madeleinepauker.

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  • AnthonySanchez

    Cynical indeed. FACT: the Hotel cannot be built as is under existing law without very difficult findings under a Variance.

    FACT: Jesse brought forth an item that would have enabled certain findings to make a variance for a Hotel easier, a variance that would be needed regardless of an initiative and would have helped in either instance. Such a variance is extremely helpful and valuable to the Hotel.

    FACT: Taecker created confusion and advocated against the beneficial variance change, a short term loss, for the long term gain of defeating a Downtown initiative that chips into their hefty bottom-line. While initially counter-intuitive, a scorched earth policy is quite strategic in the larger context of maximizing bottom-lines.

    FACT: They have no credibility and it is in their rational interest to do whatever they can to defeat a measure and evade giving the community a fair deal. Only you use a rational analysis can you truly see what is behind every superficial bit of rhetorical.

    Remember: politics is fundamentally about who pays and who benefits -why would developers rationally want to pay more unless they were compelled.


      Jesse Arreguin and his cohort Sophie Hahn, do not have the best interest
      of Berkeley. Anthony Sanchez is a hypocrite, he lives in Walnut
      Creek, talk about developed, anything he says about development cannot
      be taken seriously.
      Too bad no one is running to oppose Arreguin,
      hard to believe. This man lives at the edge of his district, not
      downtown at all, speaks for downtown yet has zero clue about what it is
      like to live there.
      The initiative pretends it will save the Post
      Office, it will not. That is not what the initiative is about. The
      initiative is against development, against jobs and against a downtown
      that is safe and livable. Just vote NO and teach this man a lesson.

      • AnthonySanchez

        Hello Hildah-

        I am sorry you feel the need to resort to ad hominems, such as calling me a hypocrite and citing where I live as a way ignore any merit I may have.

        Despite the handle you’ve chosen, I’m unclear what fact you’ve checked -in fact, you’ve not even responded to any part of what I wrote.

        I can understand your frustration -not everyone can have perfect representation, but I don’t think anonymous comments that speak to no issues -just charges and negative attacks – is very productive. Our democratic system works best when dialogue is inviting, not repressive.

        If you’d like to have a civil, respectful dialogue on substantive issues, I am happy to do so. This is the Daily Cal, not Berkeleyside where almost anything can be said under an anonymous guise.

        I think it may be some thought the fact that I use my real face and name -I’ve nothing to hide and have the courage to stand by what I say.

        Please contact me anything if you’re serious about a dialogue.

        • Chris J

          Where is Jesse Arraguin in this equation?

          I would love to see the application of community benefits to the city of Berkeley through the successful passage of this bill, but it’s my opinion that the requirements for the law upon developers is too onerous, too heavy, and all will be lost through the loss of developers who aren’t willing to pony up.

          It’s all about cost, and if I were a developer thinking about Berkeley, if this bill passed in its present form, we are going to lose downtown development deals. Just my feeling. Anyone who says different can provide ‘ facts’ but as always, the facts will be projections of anticipated results to their benefit, no more than the detractors.

          • AnthonySanchez

            Mr. Juricich

            The City’s own analysis when we passed the DAP established that $33k in community benefits per unit could be exacted while maintaining feasibility. These additional benefits do not exceed that threshold.

            With that in mind, you can imagine why a developer would claim they cannot meet the requirements -rational interest rationally suggests that their interest is achieving a project with minimal requirements and maximizing the bottom-line -not a critique, but an important facet our of system that bears minding.

            Having the development we need Downtown with its inherent benefits is not mutually exclusive with the benefits we need to mitigate its inherent negative impacts. Balance is key to all thought.

          • Chris J

            As the presumed assistant to Jesse A, I’m sure you have all the facts and figures at your fingertips. I guess we will simply need to see whether or not the developer in questions actually pulls out of the deal, presumably having wasted thousands or tens of thousands of dollars on initiating the project.

            If the developer bails, it may not have been simply a grandstanding political play as you suggest..or Mr Arraguin suggested. I approve of the idea of pulling community benefits from folks who develop here
            But can just as easily see those same developers opting for some other city as a result.

            We will see,

          • John Freeman

            I’d only add here, Chris, that if the developer announces he’s bailed we really don’t know why. Financing was never lined up for this project. A hotel partner was never lined up. The sale of the real estate has never been more than a hypothetical possibility.

            Was there ever anything more to this project than a few bucks speculatively spent with an architect and perhaps a few vague letters of understanding flying around? Is there any credible reason whatsoever to believe this project hadn’t essentially failed coming out of the gate?

            Historically, a Cal-centric convention center on this very site has been a Bates-machine hobby horse for over a decade. Initially Cal was going to build it and that idea fell apart completely on its own. The whole idea of a new hotel there smacks of pure “edifice complex”, not a serious business proposition.

          • AnthonySanchez

            I appreciate this civil conversation -it’s refreshing given other anonymous commenters, especially on Berkeleyside. Thank you.

            I will do my best later today to provide the study that justified a certain level of benefits per unit as feasible.

        • gwumpy_cat

          Shocked to see you finally admit that you live in Walnut Creek.

          • AnthonySanchez

            Hello anonymous-

            Before being negative, you may want to ask questions and to understand certain things about me before reflexively try to bash me, whatever your reasons.

            Did you know that I have a fiance who is 5 months pregnant and she lives in Walnut Creek? Do I live with her now? How much time do I spend in Berkeley?

            Not knowing or care to know about these question only make you look petty. Maybe that is why you’re anonymous and choose ad hominems over any substance.

            I wish you well so that you can get over whatever frustrations you have that underpin your behavior.

          • gwumpy_cat

            Complaining about ad hominems while using them in your complaint?


    • elrod

      There are many things that can go wrong with a design-construction process because it’s complex and involves liability. There’s no guarantee the developers are going to make huge profits from this hotel if it ever gets built. What downtown Berkeley needs is momentum for change and this ballot initiative kills it