Office of the
City Manager
COUNCIL ACTION
November 13, 2001
CF 111
To: Honorable Mayor and
Members of the City Council
From: Weldon Rucker, City Manager
Subject: CLARIFICATION
OF REMAINING “DEVELOPMENT RIGHTS” ON THE NORTH BASIN STRIP OF THE BERKELEY
WATERFRONT
RECOMMENDATION
Discuss the advice contained
in this memo and direct staff as to whether to place a measure on the ballot
that would explicitly give the City Council authority to adopt land use
regulations that reduce the maximum development potential on the remaining
privately owned land at the Berkeley Waterfront.
BACKGROUND
On June 12, 2001 the Council
directed the City Manager to clarify “the amount of development allowed by
voter approved Berkeley Waterfront Measure Q on the remaining privately owned
portion of the North Basin strip; and [to] return to Council for approval of a
maximum square footage allowed after researching the issue.”
Measure Q set both numerical
and geographical limits on development of privately-owned land at the Berkeley
Waterfront, as depicted in the attached diagram. The State has since acquired
most of the remaining privately-owned land at the Berkeley Waterfront, also as
depicted on the attached diagram. Because the State did not purchase the entire
North Basin Strip, it did not purchase all of the potentially developable land
under Measure Q.
Accordingly, under Measure Q
the maximum potential development that could occur on the remaining
privately-owned land is as follows:
North Basin Strip, Phase 2 Stables (aka Horse Barns)
50,000 square feet of
retail/restaurant 165,000 square foot hotel
10,000 square foot freestanding
restaurant
200 parking spaces 360 parking spaces
It should be stressed that
these numbers are maximums, which would almost certainly be reduced--
perhaps substantially-- based on project impacts on traffic, views and other
land use factors, as required by Measure Q.
Measure Q and the Waterfront
Specific Plan
In 1986, the voters adopted
Measure Q (BMC chapter 11.56) to regulate development of the then
privately-owned land at the Berkeley Waterfront. Measure Q limited most of the land to open space, but permitted
development of the North Basin Strip and “Horse Barns”.[1]
In brief, Measure Q contemplated a maximum of 565,000 square feet of
development in these areas, subject to specified height limits, and imposed
various additional environmental performance standards on future development.
Thus, the maximum amount of 565,000 square feet of development could be substantially
reduced during the permit process. Measure Q referred to the then draft
Waterfront Specific Plan to define the permissible uses in these areas. The
Waterfront Specific Plan was finalized and adopted in October 1986 and has been
considered since then as the document that implements Measure Q. A diagram depicting permissible land uses
under Measure Q, excerpted from the Waterfront Specific Plan, is attached.
Measure Q’s maximum
development potential of 565,000 square feet was based on economic studies the
City performed at that time, which concluded that this amount of development
represented the minimum reasonable economic use to which the former owner was
entitled under the U.S. Constitution, based on the private property ownership
at that time. Measure Q’s overall strategy was to concentrate the development
potential in the North Basin Strip and Stables area in order to keep the
remainder of the land in open space. As we discuss next however, relevant
circumstances have changed significantly since Measure Q was formulated and
adopted.
The 1999 Purchase
In 1999, the State, through
the East Bay Regional Park District, acquired most of the privately-owned land
on the Berkeley Waterfront. The attached diagram from the Waterfront Specific
plan indicates the approximate northern boundary of the land acquired by the
State in 1999.
The State’s appraisal
reflected the development potential of the land it purchased. Thus, the price
the State paid for the land designated as open space under Measure Q reflected
its value as open space and the price it paid for the land it purchased in the
North Basin Strip (“Phase 1”) reflected the development potential in that
location. Consequently, the price the State paid did not reflect the
development potential of land it did not purchase: Phase 2 of the North Basin
Strip and Horse Barns/Stables area.
In addition, Measure Q was
based on the then-current understanding that the Golden Gate Fields race track
would close in 1997 when its lease expired. In fact, however, the current owner
appears interested in retaining and even expanding this use as part of an
entertainment complex. The continuing
existence of Golden Gate Fields is a significant change in circumstances that
suggests the appropriateness of revisiting both the maximum amount of
development potential and types of uses contemplated by Measure Q.
The June 2001 Council Action
In June 2001, the Council
directed staff to clarify the remaining “development rights” on the North Basin
Strip. Staff has interpreted this directive to include any remaining
development potential at the Horse Barn/Stable area as well.
Current Development
Potential
The Council’s June 2001
directive to staff was prompted by a letter from the San Francisco Bay Chapter
of the Sierra Club (“Bay Chapter”). Since that time, staff from this office
have discussed the issue on a number of occasions with representatives of the
East Bay Regional Park District, the author of the May 1, 2001 letter from the
Bay Chapter, a representative of Citizens for an Eastshore State Park, and the
attorney that advised both the EBRPD in its negotiations to purchase the
property and the City in developing Measure Q. Our analysis is based on
information from all of these sources.
As a threshold matter, the
Council should be aware, and should bear in mind, that Measure Q did not create
development “rights”. As discussed above, it defined the maximum potential
development that could be permitted on designated private property. However,
that maximum development potential is subject to various limitations that
Measure Q contemplates will be refined through the environmental review and
permitting process. Measure Q and the Waterfront Specific Plan do not grant any
entitlements or create any development rights. It is therefore a misnomer to
use that term in this connection. In this memorandum, we therefore use the term
“development potential” or its equivalent.
In its letter, the Bay
Chapter argued, in essence, that because the State had purchased approximately
80% of the acreage of the privately-owned property at the Berkeley Waterfront,
approximately 80% of the development potential had been extinguished. The
letter concluded that the remaining development potential amounted to
approximately 110,000 square feet (about 20% of the 565,000 square feet maximum
development potential defined by Measure Q).
The Bay Chapter’s analysis
is based on two incorrect assumptions. First, it assumes that under Measure Q
development potential was spread equally throughout the formerly privately-owned
property. This disregards the land use strategy employed by Measure Q. In a
nutshell, Measure Q preserved the majority of the formerly privately-owned
property in open space, in effect by moving development potential from the
areas to be preserved to a more limited area: the North Basin Strip and Horse
Barns. It did so by designating certain areas for open space and other areas
for substantial development. The areas designated for open space-- plus Phase 1
of the North Basin Strip-- have been acquired, leaving the remaining areas--
Phase 2 of the North Basin Strip and the Stables-- in private ownership.
Second, the Bay Chapter’s
analysis assumes that the amount the State paid for the property it acquired
was based on a pro rata share of the total development potential of the
entire parcel, allocated according to acreage. As described earlier in this
report, this is not how the State calculated the value of the land it
purchased.
Under the plain terms of
Measure Q and the Waterfront Specific Plan, the remaining privately-owned areas
have the development potential described earlier in this report and shown on
the attached diagram. Moreover, the amount paid for the land acquired by the
State does not support an economic argument that the former owner was
compensated for a proportion of development potential proportional to the
number of acres acquired.
Thus, the remaining maximum
development potential on the privately-owned property at the Berkeley
Waterfront amounts to a total of 225,000 square feet, consisting of retail and
restaurant uses in Phase 2 of the North Basin Strip and a 165,000 square foot
hotel and 10,000 square foot freestanding restaurant in the Stables area, in
each case with associated parking. Any development in these locations would be
subject to the two-and three-story height limits in Measure Q (BMC
§11.56.030.C.2), as well as mitigation of environmental impacts, as set forth
in Measure Q (BMC §11.56.030.C.3). Thus, these numbers are maximums, which
would very likely be subject to reductions in the event of a permit
application, based on the criteria set forth in Measure Q.
Conclusion
The
circumstances relating to the ownership, use, economics and surrounding
environment of the privately-owned land at the Berkeley Waterfront have changed
significantly since Measure Q was adopted. While the City clearly has the
ability under Measure Q to reduce the amount of development actually permitted
at the Berkeley Waterfront based on project-specific considerations, Measure Q
does not expressly state that the City Council may adopt new land use
regulations to reduce development potential based on changed circumstances in
general. Thus, the Council may wish to consider whether to place on the ballot
an amendment to Measure Q that explicitly gives the Council that authority. Any
such amendment could be carefully drafted so as to limit any additional
authority to reductions in development potential, and not increases.
FINANCIAL
IMPLICATIONS:
The
cost of placing a measure on the ballot at a City election would be
approximately $5,000 to $10,000, depending on the length of the measure and how
many other measures are on the ballot.
CONTACT
PERSON:
Manuela
Albuquerque, City Attorney 981-6950
Carol
Barrett, Director of Planning & Development 705-8104
Approved
by:
______________________________
Manuela
Albuquerque, City Attorney