The developer who proposed to transform the lot at 2211 Harold Way into an 18-story high-rise, which has stirred up opposition among some Berkeley residents since before 2015, pulled out of its contract last week.
The project’s former contract holder, Joseph Penner of Los Angeles-based Hill Street Realty, cut off progress on the lot by ending its plan to turn it into an 18-story mixed-use space, including rental units, retail space and a proposed movie theater valued at more than $17 million. After failing to pay building permit application review fees, the firm sent the city a note stating its intention to withdraw from the project.
While the lot’s future is now unconfirmed, City Councilmember Kate Harrison, who represents the area containing the lot, said, “This doesn’t mean that (new construction Downtown) won’t happen. It just means it won’t happen at this site and at this time.”
The lot sits about two blocks from UC Berkeley’s campus, a block from the Downtown Berkeley BART station and a block from the Civic Center. The project has faced opposition from local community members for several reasons, including its possible disruption to Berkeley High School, which is also located about a block away from the Harold Way site.
Two consolidated petitions brought forth by Berkeley residents against the project also raised concerns over the project’s displacement of local businesses, such as Shattuck Cinemas and the Habitot Children’s Museum.
The petitions questioned the project’s alignment with community interests and the California Environmental Quality Act but were eventually struck down in 2016 because they failed to prove the city lacked discretion in its approval of the development.
The project also faced early disapproval from the city’s Landmarks Preservation Commission, or LPC, in 2015 since the high-rise would have altered the currently landmarked area on Kittredge Street and Harold Way. The project, however, eventually received LPC approval the same year.
City Councilmember Sophie Hahn added that those who served on the zoning and design review boards spent hundreds and “possibly thousands” of hours to ensure the project would receive approval.
“I don’t know why this project or this team was not able to get it together, while many other projects have been permitted, completed and built,” Hahn said in an email. “The ball has been in their court.”
Hill Street Realty’s decision to pull out of the project signifies a loss of about $10 million in contributions to Berkeley’s affordable housing fund, which was included in the project’s contract. The developer’s original choice to pay this affordable housing mitigation fee rather than creating on-site affordable housing had received criticism in the past.
Despite this lost contribution, the city of Berkeley identifies 16 local nonprofit developers’ subsidized housing locations in the city on its website. These developments continue to aim to make affordable housing options available to qualifying individuals and families.
“Berkeley is building housing at unprecedented rates,” Hahn said in the email. “While it’s too bad that the units in the Harold Way project will not be among them, we have lots of other housing recently built, in the process of being built, permitted and in the permitting pipeline.”