November 13, 2001
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
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.
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
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”. 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.
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.
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.
Manuela Albuquerque, City Attorney 981-6950
Carol Barrett, Director of Planning & Development 705-8104
Manuela Albuquerque, City Attorney
 Measure Q, refers to the area north of Gilman Street as the “Horse Barns”. The Waterfront Specific Plan refers to the area as “Stables”, although the attached diagram shows the area as the site of “Hotel No. 2”.