Berkeley City Council will examine a report that addresses ongoing rent-related issues between the city and tenants in the Telegraph Channing Mall, as well as remedial measures that have been taken over the past year.
Submitted by Andrew Clough, the city public works director, the report cites that tenants at the northern entrance of the mall pay “significantly higher rent” — 63 percent more than other tenants.
Located between Durant Avenue and Channing Way, the city-owned mall houses nine stores, including Revolution Books and Cheese ‘n’ Stuff. The shops are also located under the Telegraph Channing Parking Garage.
During a Sept. 16, 2014 meeting, City Council approved a three-part plan to address concerns from tenants regarding rent disparity and a possessory interest tax, which required tenants with new or renewable leases to make a per-square footage payment to the city.
The report on the plan — which will be brought before City Council at its Tuesday meeting — outlines what has been accomplished in the past year, including a revised lease agreement, as well as plans for renovating the complex.
Eight of the nine current tenants have signed the revised lease, which includes a 10 percent rent decrease as well as a reduction of the annual rent adjustment from 4 to 3 percent.
Revolution Books, the final business to sign the revised lease, is moving to another unit within the complex and had been negotiating with the city on a new agreement, according to Gary Miller, a staff member at the store.
Concessions on rent will cost the city approximately $140,000 over the next four years, according to the report.
Councilmember Kriss Worthington said the city is losing additional money every day that vacancies are not filled, adding that the overall situation is “unfortunate.”
In addition, the city plans to make substantial renovations on the mall, starting with lighting, which Worthington calls an “urgent priority.” The city, according to the report, will spend an estimated $200,000 to $250,000 on renovations.
The council may look into using money from the city’s general fund for renovations so that funding is not “borne solely on the backs” of current tenants, according to Councilmember Jesse Arreguin.
The city is currently securing new tenants for vacant spaces in the mall. One lease agreement was signed with Sodoi Coffee, a coffee bean and equipment retail store, in March 2014, and another agreement with drink shop Teariffic will be brought before the council at its Tuesday meeting.
Worthington, however, said it was “strange” that the city has left vacant storefronts empty for extended periods of time, adding that several businesses had applied for spaces in the past but were ignored or turned down.
Arreguin hopes that bringing in new businesses will not only allow the mall, but also the entirety of the Telegraph Avenue area — which Arreguin said was identified as a key economic development area by the city — to flourish.
Several other city initiatives have been instituted in hopes of rejuvenating the area, the most recent being a city proposal to convert Durant Avenue into a two-way street, which will make the street safer for pedestrians and also slow down traffic, according to Arreguin.
“This is property we own, and our management of it has been abysmal,” Arreguin said. “I’m glad we’re creating a fair rent policy and filling these spaces. This is an opportunity to bring in more business and contribute to (the) revitalizing of Telegraph Avenue.”
But for Miller, the “anchor tenants” of the area were once bookshops and music stores, and that “culturally important” landscape has “radically changed” in recent years.
“(Berkeley) was once the Athens of the West,” Miller said. “It’s rare that you get a place now playing that role.”