Berkeley officials approved plans Tuesday night for a 61,000-square-foot Kaiser Permanente medical office building on San Pablo Avenue south of Parker Street after property owner Wareham Development agreed to give four months of free rent to several of its struggling tenants who have to move.
Shortly after 11 p.m., the Berkeley City Council voted 8-0-1 in favor of Kaiser’s plans in response to a motion by Mayor Jesse Arreguín. Arreguín said he is confident the medical offices, at 2621 10th St., will bring significant benefits to Berkeley and that the city will find a way to keep the impacted local businesses in town. West Berkeley Councilwoman Cheryl Davila, who represents the district where the medical facility would be located, was the lone abstention from the vote.
Kaiser Permanente could open in Berkeley as soon as 2021, Wareham Development executive Chris Barlow estimated after the vote. The project, designed by San Francisco architecture firm Gould Evans, rises three stories and would offer adult family medicine services, pediatrics, mental health care, a pharmacy and other outpatient offerings as well as a café. In an April 30 letter to the mayor, Kaiser said it expects the new facility to employ more than 136 people and serve its 58,000 members who live in Berkeley. Berkeleyside broke the news in December about the health care giant’s interest in Berkeley.
As part of the late-night deal — brokered from the dais by Councilwoman Susan Wengraf — Barlow agreed, with just a touch of hesitation, to give three of Wareham’s Carleton Street tenants free rent from July through October. The relief was palpable at the end of the night, as Barlow exchanged vigorous handshakes with the owners of two of those businesses — who have repeatedly expressed dismay about the loss of their longtime locations and concerns about the future — in recognition of the hard-won agreement.
“We’re delighted that, after a long process, that the council has approved this project,” Barlow said after the vote. “We think it’s going to be a fabulous asset to the city of Berkeley and its citizens and we look forward to bringing it to completion.”
No one from Kaiser Permanente has addressed city officials during council or zoning board meetings about the project over the past six months or so. But the medical provider assured the mayor, in Tuesday’s letter, that it is “engaged in definitive efforts … to extend our health services into the Berkeley community.” Kaiser told the mayor this would not be possible, however, without a council vote to approve its use permit.
Tuesday’s vote partially overturned a zoning board vote in January that granted the medical center its use permit but rejected its plans for an off-site parking lot on the Pardee Block, just west of 10th Street between Carleton and Pardee streets, catty-corner to the proposed medical offices. Zoning board members said, at the time of that vote, that they could not bear to see the loss of businesses on the block — Mobility Systems, Saab Replay and Commercial Titan Wraps — which said their survival would be in jeopardy as a result of Wareham’s plans.
Barlow has explained to officials repeatedly, in meeting after meeting, that the leases for those businesses would be up this year or, in the wrap shop’s case, that early-termination terms in its lease had been clear: He said the businesses would need to leave in 2019 no matter what the city wanted. Wareham has long had plans to develop the Pardee Block and has been direct about that with tenants, Barlow has told officials previously. Wareham appealed the zoning board vote soon after it happened, which is how it came before council Tuesday.
Kaiser Permanente, which is headquartered in Oakland, was founded in 1945. It describes itself as “one of the nation’s largest not-for-profit health plans, serving 12.2 million members.” Wareham submitted an application in late 2016 for a medical office and research facility at 1050 Parker St., now listed in project documents by the 10th Street address. Kaiser later expressed an interest to Wareham, which led to a change in course for the project after its use permit was initially approved, Barlow said.
During the two-hour appeal hearing, a few people told council the project was at odds with the West Berkeley Plan, which the city adopted in 1993. The loss of manufacturing and industrial uses in West Berkeley, as described in that plan, has been a consistent issue of neighborhood concern over the years. But public comment on the item was relatively brief. It was also, at times, emotional, as proponents of the Carleton Street businesses told officials how much their services matter.
Despite a range of opinions on the medical center’s proposal itself, there was widespread agreement Tuesday night that the city’s own parking requirements for medical facilities were a significant hurdle. But Barlow also told council a consultant had independently reviewed the city’s parking ratio in light of Kaiser’s needs and similar projects nearby and found it to be reasonable. Kaiser plans to offer 115 vehicle parking spots, primarily for patients, on-site in a surface lot, and another 88 spaces for staff catty-corner on the Pardee Block in another surface lot. There will also be parking for nearly 50 bicycles.
Some community members and council members contended Tuesday that Kaiser Permanente can easily afford to build a parking structure, perhaps underground, which would take less space and leave existing businesses alone. Barlow said that would not be possible because it would cost $55,000 to $65,000 per spot and delay the project.
Officials made it clear during their comments that they want the city to push hard to keep the Carleton Street businesses in Berkeley if possible. As part of the council vote, City Manager Dee Williams-Ridley promised the city’s Office of Economic Development would do what it could to help locate appropriate new spaces. Mayor Arreguín said he had faith in the possibility of a local solution for all the businesses.
The fate of Mobility Systems in particular — a more than 40-year-old auto dealer and repair shop focused on the needs of the disability community — drew significant attention Tuesday night. One person described it as a vital community service. Another speaker, Kelly Hammargren, broke down in tears recounting how important a disability van was to the quality of her husband’s life.
Councilman Ben Bartlett remarked that he saw Mobility Systems as a health care provider in its own right. He said he’d like to see Kaiser Permanente step up to help ensure the business can stay in the city.
Mobility Systems owner William Fryckman told Berkeleyside he was relieved after the vote and had been heartened by the significant support evidenced by city officials and the community. Fryckman says he already lost $40,000 when he tried to move to a nearby location but was ultimately stymied by the city. He told the city it would likely take work to tackle the challenge.
Saab Replay’s owner, Randy Roche, told council that businesses on the block and their neighbors have a strong sense of community that he will be sad to lose. Roche said two of the employees in his repair shop have been there since it opened more than 20 years ago. A newer employee, holding his young daughter in his arms, told council how much his Saab Replay job means to him and what a special place it is to work.
Roche told council he had known since he bought the shop 10 years ago from the original owner that he would one day have to move: “I don’t want to demonize Wareham. They’ve been very fair to us over the years,” he said.
Although Saab ceased operations in 2012, Roche said Berkeley is one of the biggest markets in the nation for owners of the vehicle. Saab Replay is the last specialty Saab shop in the state, he added. Roche concurred with Fryckman’s experience about the challenge of finding new space in Berkeley for auto uses due to the city’s restrictive zoning code and also because many landlords would rather rent to cannabis businesses, breweries and art galleries.
Councilwomen Sophie Hahn and Kate Harrison said they were only supporting the project in its current form grudgingly. They both argued in favor of finding a way to reduce the city’s parking requirements, but staff said the available data did not support that approach.
“I feel terrible about this. I hate this choice,” Harrison said from the dais before the vote. She said she also wished the city had looked closer at land-value recapture, but that the time for that had passed.
Hahn called Barlow’s agreement to let the businesses have four months of free rent a “devil’s bargain.” She said she was disappointed because she thought Wareham could have tried harder to find another viable option and let the businesses on the Pardee Block stay on. But she said there weren’t a lot of options at this point.
“I don’t think denying this solves any of the problems we have,” Hahn said, “And I think we have some real problems with loss of this kind of space.” She said it would ultimately, however, be up to Wareham — as the property owner — to decide what to do with the block.
Davila asked Wareham if it could provide parking across the street from the medical office at its Fantasy Studios property. As an alternative, she said Wareham should investigate whether it could lease parking at the Bank of America site nearby. Barlow said neither option was a possibility for multiple reasons.
Davila also asked Barlow to throw in a fifth month of free rent to the Pardee Block businesses. He declined.
Berkeley has grappled in recent years with the prospect of reduced access to medical care with the planned closure of Alta Bates hospital by 2030. Other medical facilities have opened in the city in the past five years, but community members say they can’t fill the void of a full-service hospital.
In 2014, One Medical opened on Shattuck Avenue. The next year, Sutter opened a new health center on Milvia Street and LifeLong Medical Care opened a new clinic in South Berkeley. 2016 brought Hana Holistic to Channing Way and LifeLong Immediate/Urgent Care to Dwight Way. Last year, John Muir Health and UCSF Health opened a 96,000-square-foot outpatient medical facility — with primary care, urgent care and specialty care — at 3100 San Pablo Ave. (near Folger Avenue).
Tuesday night, most of the other action items on the agenda were postponed due to the lateness of the hour or because of scheduling changes requested by council.
Mayor Arreguín also announced, at the beginning of the meeting, that the Berkeley City Council had, Monday in closed session, granted the city attorney the authority to initiate a lawsuit against the University of California regents over some of its student housing plans and associated campus population estimates. Berkeleyside broke that news during the council meeting.
Thanks for the report, Berkeleyside! As a west berkeley resident and Kaiser member, I’m glad this is happening. Not in love with the surface lots, though.
Now that the city council has heard the use permit system is the reason it’s hard to move are they going to fix it? It shouldn’t take a permit to move a business with a compliant use.
Berkeley is generally hostile to Berkeley businesses. No business started in Berkeley ever went public with its headquarters still in Berkeley. There’s a never ending list of mindless things that make doing business in Berkeley very challenging, and most businesses that grow end up leaving the city despite wishing there was an option to stay.
FYI, businesses are generally started where the founders prefer, which is almost always near where they live. When a successful Berkeley business is forced to move, say to Alameda, Emmeryville, San Francisco, or Oakland, there’s a lot of Berkeley residents that suddenly need to commute from their homes in Berkeley.
I don’t understand this quote “Fryckman says he already lost $40,000 when he tried to move to a nearby location but was ultimately stymied by the city.” What was the stymied by the city problem and what caused it?
We wrote about it more in the past story , which I linked to several times.
Long story, but it was legit. If I recall, He paid approx $40K for work/permits etc. for a site on San Pablo (former tow yard) as a “new place to establish his relocated business” however since he is also listed as a “dealer-car/vehicles” the permitting in that space wasn’t allowed eventually and the city didn’t grant any waivers etc. The tow yard is now back at same location. I may have several of the terms slightly off but this guy was legit in looking for new places and invested to make it happen.
Our tax $$$ at work.
A surface parking lot in the MUR, what a waste of precious space in a zone that allows residential. Would somebody please estimate how many family sized townhouses could be built there and what Wareham would profit from building them? Would that compensate for the expense of a redesign that put all the parking on the Tenth Street lot?
I agree, it seems like a ridiculous use of the land. Why not build the parking lot into the building and either include an underground garage or make the first one or two floors into parking levels with the offices on top? Destroying businesses to make room for car storage seems absurd.
Who wants to dig when you may find a shell, artifact, bone not to mention the higher cost or the extra fight if market rate housing included?
“Wasting” a lot is easily remedied in the future. Also, it’s easy to double the parking capacity with a lift system.
Too bad this couldn’t be built near a BART station, especially downtown Berkeley BART, where so many people could walk to their appointments and many Kaiser employees could take BART to and from work.
In any case, it’s being built in the planned location and it will benefit Berkeley significantly. Certainly more than a marijuana growing site or related business.
The AC Transit 72 line, particularly the 72R and 72M, run along San Pablo Ave. It’s one of the more reliable lines, with frequent service. That will help a lot of patients and staff.
Thanks for the report, Berkeleyside! As a west berkeley resident and Kaiser member, I’m glad this is happening. Not in love with the surface lots, though.
Some council members noted it would be easy to build on them as time goes by.
That’s an interesting point. I hope it happens.
Just to be clear, I am not a fan of the parking lot going in, it is somewhat of a waste but the arguments or concerns of council seemed a bit out of tune for the type of facility and employee that would work there. You can’t reduce the parking requirements of a healthcare facility where doctors and other allied health professionals need access to their vehicles for emergencies, hospital rounds, surgery etc. Sorry but the West Side shuttle, vouchers for UBER or LYFT don’t get a surgeon to the hospital in a timely manner. Council you need to ask more intelligent questions regarding issues on healthcare.
In general, I feel for all the tenants who will have to relocate especially Mobility Systems. Ben Bartlett, had a very nice compare and contrast and rationale for helping Mobility systems. Dare I say that? They will find a home if the demand is there.
Davila was a travesty once again on her “non-vote” It would be great if Berkeleyside created a table of all her votes (or non-votes) since her arrival. Up for the task? It would be great fodder for future elections. She is almost always diametrically opposed to anything and everybody who presents UNLESS they have a cute minority child at the podium. We want leadership in District 2 not a relic and tendency to be racist in her own right. We want focus on Berkeley specific agenda items, we want our city to be safer and cleaner and it’s time after watching her last nights’ babble and bumbling comments and questions through most of the agenda items for the evening that she has very little brain power to carry any major Berkeley agenda through to the end. She doesn’t have the courage to vote one way or the other on matters IN HER OWN DISTRICT. Shame, shame, shame. Abstaining is like taking your LEGOs and going home to “mom.”
A bit more about Saab Replay, they in their own rights they are Parking Pigs in Berkeley, they take up in excess of 10-15 street parking spots for weeks on end in and around their facility on a daily basis playing the 72 hr Car Ballet of West Berkeley. They hide their cars on all the streets surrounding Parker, Carleton, 10th and 9th Street. Sad but true, Saab Replay was only a friend of other SAAB owners of the Bankrupt SAAB car company.
Why is Berkeley so stuck in the past with Old Classic cars? Volkswagen Vanogens, old school busses converted to live in and RVs from the mid to late 70s come to mind. Well here is a bit of history of SAAB and how they only made money in 3 years during the past 25 or so years before bankruptcy. Time for progress, time for better gas mileage vehicles on our streets. SAABS have modest to low gas mileage and likely worse as they get older. 19-25 MPG is for these OLD dinosaurs.
Why Saab Had to Die By Frederick E. Allen; Forbes Staff, Leadership Editor of Forbes:
The autopsies for the Saab car company are rolling in. Forbes’ Joann Muller writes that the head of Spyker Cars, which bought the company from General Motors, “learned, as so many before him . . . that it takes an enormous amount of capital to operate an automotive company. And this industry already has too many brands, and too many factories for all to be profitable.” Forbes’ Patrick Hanlon adds that “Saab was never a brand at all. . . . And because the car held no real meaning for consumers, and no reason for being, it ceased to be.”
But there’s far more to the story than that, say two business school professors. Matthias Holweg, of Cambridge Judge Business School, and Nick Oliver, of University of Edinburgh Business School, have looked at the Swedish car company’s whole 62-year history and found that the heart of the story is that it wound up stuck in an impossible, deadly place, between mass-market luxury and high-end luxury.
First, don’t blame GM, they say. To GM’s credit, it supported Saab despite making losses in almost every year of its 20 year ownership of Saab (with the exception of 1994, 1995 and 2001). But GM-Europe’s configuration as a very high-volume producer of economy to mid range cars sat uncomfortably with Saab’s niche of individualism, technological sophistication and premium positioning.
The basic problem was that the company was too small, never making more than 150,000 cars a year, to get by on the prices it could command:
In its final years, Saab produced the same volumes as Porsche, yet was competing with Audi who had not only almost ten times Saab’s volumes but also benefited from well-executed platform-sharing and economies of scale within the Volkswagen Group. In simple terms Saab had the worst of both worlds—Porsche volumes and Audi prices. This was not sustainable.
The authors conclude that the sad story may repeat itself: Other smaller premium or niche manufacturers also risk being caught in the unhappy middle between high-volume luxury producers (such as Audi, BMW, Mercedes) that all produce around a million units per annum, and the high-margin/low-volume producers (such as Porsche, Ferrari, Rolls Royce) who recover their costs through high margins. Companies that fall between these camps will find it hard to generate the cash necessary to develop new products.
Saab was, in short, a “market-constrained failure.”
The proposed Kaiser facility will not be a hospital, and no surgeries will be performed there. Wareham rep Chris Barlow listed the medical services such as doctor office visits, blood draws, radiology, etc. In other words, patient health maintenance and diagnostics.
CM Davila is incompetent, and this meeting is all you need as proof. The question is who is going to run against her next year.
Yes, but doctors leave their “offices” for emergencies, unplanned or planned surgeries etc. and head to another site. eg. Hospital. What we will need to contend with in this area is likely longer hours of operation for this business possibly 7 AM to 7 PM which could create parking concerns that we have yet to anticipate. I think the idea of creating new residential townhomes/Condos above a parking scenario is interesting in the long run.
But of course I do agree about your DAVILA comment.
A redesign with parking on site the Tenth Street site could leave some spaces for those on call if Kaiser works that way, but their surgery and emergency assignments are site specific. From what we heard in past hearings, there won’t be an emergency room in Berkeley. Anybody who works for Kaiser care to comment?
Even with an outpatient medical clinic (especially one serving ~58,000 people), there are plenty of patients whose temporary or permanent disability prevents them from driving or riding a bus. They *really* need to be driven to their appointments.
Relevance…?
There was a significant plea from Saab Replay about their vital role in Berkeley. The relevance is that they are not always a good neighbor in my neighborhood. If you didn’t go to the council meeting you wouldn’t get it.
So, zero. Interesting read, anyway.
Betamax, VHS, Cassettes, Twinkies, Sears, Yugo, Pontiac, AMC cars, Burger Chef, Oldsmobile, Packard, Pan AM, TWA, TAB Cola, Kodak (At its peak in 1996, the company was the fifth most valuable company in the world with revenue reaching nearly $16 billion, compared to $16 million in 2016.), Merry-go-round-Chess King, General Cinema, Blockbuster, Saturn Cars just to name a few. Sometimes change is good, sometimes not so good and the nostalgia of it all can be interesting.
The most bewildering comment came from DAVILA (worth taking a look at on the tape–again newsworthy future election material) was when she asked if Warham could make sure or insure that the employees of the new Kaiser facility would be all Berkeley residents…..Oh my…..what sort of person can think that way? This woman represents our district, that is what we get???? Shame, shame, shame….once again! How in anybody’s right mind can say she is speaking with sound mind and judgement???
I don’t understand why she is wasting her time on a city council? She has shown all the gravitas and judgement necessary for a Presidential run.
She actually doesn’t represent your district. With the amount of votes she abstains from, you don’t have anyone representing the district.
Even a vote for something big happening in the district, she refuses to vote. I think she has permanently impaled herself on the fence.
Surface parking so near a busy transportation corridor? Kaiser can well afford to put the parking underground but they are trying to do a little fiscal planning to lower the project cost. Dreadful to use this lot for parking with such dire housing needs. Can’t Kaiser develop a mixed-use project on the site and underground the parking?
If we were concerned about housing affordability and traffic, we wouldn’t allow the project. This is about tax revenue
Business license will be 0.36% of gross receipts.
It’s not Kaiser’s development it is Wareham who is constructing and then leasing to Kaiser but yes, underground parking was a potential solution that likely got lost in the cost per space shuffle many months ago. However, with all that said, the surface parking lot that will be created Wareham has no obligation to the tenants currently there and they were going to get booted no matter what. That property could have sat empty for many years until a different use was put into play.
Hopefully, they will get creative with that site in the distant future after parking is or isn’t a concern in this area we call the Wild, Wild West…..just get that darned OM bus off the streets and we get 3 parking spaces back for our small businesses. All day/all night RVs and Sprinter vans also perpetuate in this local creating a parking nightmare. We don’t have residential permits in our area so we also become the Airport drop off service (free parking while you travel), UBER and Lyft drivers now live in their 1st or 2nd vehicles and apartment dwellers and homeowners from other parts of Berkeley where permit parking exists dump their late model cars down here as sort of a holding area or graveyard for cars they don’t know what to do with.
You add Saab Replay and you get 15 cars dumped in the local parking milieu that create parking problems EVEN before Kaiser comes in.
Instead of parking for employees Kaiser should be required to provide local transit passes (AC and high value BART) to workers, gratis. As to patients, Kaiser already runs shuttles from the M/B’way facility to Macarthur BART; one would expect shuttles from Ashby to the new location. My only complaint is the buildings should be taller. The San Pablo corridor should be minimum 5 story for any new structure.
Ridiculous. Per their own drawings they will have to truck in 2,168 cubic yards of fill to elevate the back half of the parking lot. You will drive UP a ramp when entering from Tenth Street. There is a difference in elevation on the site of at least 5 feet that could have been exploited for two levels or parking. Sigh… guess they were jealous of the large surface lot at Sutter’s Milvia site. https://uploads.disquscdn.com/images/e80a64a9dd23b4c1a8763702536c17f513508ea12df34473ca66fe34db1637b0.jpg
Berkeley is offended by not getting its beak wet on the UC expansion. KP will wet a lot of beaks
“Berkeley is offended …” says it all.
And Berkeley is offended by the runaway growth of UC Berkeley and threatens to sue them?
Gotta laugh at the absurdity of this, but maybe with all the people being run over in the city with the growing number of cars and pedestrians more hospital rooms are a good thing.
This facility is not a hospital, but a medical office building.
Sounds good for outpatients who have Kaiser coverage. I’m hoping to hear about what might replace the ER and hospital services provided to everyone by Alta Bates.
Since Berkeley politicians are the main negotiators, probably nothing.
Quick note, this story initially described Barlow’s one condition for free rent, which was that any business that remained on the Pardee Block as of Oct. 31 would have to pay back rent. Council was silent on this issue and did not include it in the motion. I took that condition out of the story.
Given that all City of Berkeley full time employees (and dependents) are eligible for Kaiser’s no copay/ no deductible coverage, this new facility should help take the pressure off of the Kaiser facilities in Oakland and Richmond.
Is there monthly rate more than $80 a month?
The Council should never get involved in commercial leasing and the question of retention of tenants in properties that have an expiring lease. If they do, every tenant a landlord selects will be evaluated as to their potential to elicit pity when their lease is up.
The Council thinks its doing the right thing, but they are poisoning the well for many commercial tenants by their actions. When council meddles in end of lease issues, and puts pressure on Landlords to relocate tenants, give them free rent, or retain them, Landlords naturally consider the downside of leasing to any tenant that might elicit sympathy at the end of their lease. That includes not for profit commercial tenants, any arts related tenants, or any tenant with uses that involve children.
Landlords react rationally to the meddling of the Council and limit their future risk through tenant careful tenant selection. The Council shouldn’t entertain entreaties from Tenants who have an expiring lease, and Tenants shouldn’t use politics as leverage in lease negotiations for the sake of all new tenants looking to establish leases in the Berkeley market.