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.”