Temescal Business Center 7 th & Heinz Street Berkeley, CA 94710

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1 Temescal Business Center 7 th & Heinz Street Berkeley, CA July 26, 2010 Jordon Harrison Secretary, Land Use City of Berkeley, CA jharrison@ci.berkeley.ca.us RE: Proposed MUP Draft Zoning Language and Policy Considerations Dear ers: Temescal Business Center (Temescal) is an adaptive reuse project developed by Ziegler Development Corporation in Temescal was granted the only Master Use Permit (MUP) issued under the West Berkeley Plan. Our development includes 14 buildings on 7 acres and includes tenants such as Powerlight, Powis Parker, Berkeley Mills and DSM/PTG. We are requesting the s attention to two policy items. First: if the changes the West Berkeley Zoning and the MUP definitions, we would request that the Temescal Business Center be grandfathered in to the ordinance. We would like to have the benefit of all the modifications that you may make to the West Berkeley MM zoning under our older MUP. We further would like the ability to amend our existing MUP rather than having to apply for a new MUP and start from scratch to realize the benefits of your zoning changes at an MUP site. Second: we ask the not to allow MUP sites to super size themselves by right through an unprecedented increase in height and FAR allowances. The proposed increase in permitted height allowances to 75 feet and Floor Area Ratio (FAR) to 3 will irrevocably densify the mixed use nature of West Berkeley neighborhoods. If this is allowed, by my estimation there will emerge in the next few years over 30 acres of 75 foot buildings whose scale will dwarf the existing residential and industrial users. Why? It is most profitable to redevelop to the highest possible density and developers naturally seek to maximize returns. Please maintain a three story limitation that fits within an FAR of 2 and drop the height restrictions for 3 story buildings in the MUP. 1

2 Temescal has consistently advocated through the West Berkeley stakeholder process that there be a viable MUP process in place that would allow large development sites in West Berkeley to create site specific zoning through an MUP process that addresses the needs of prospective tenants. At Temescal the MUP was utilized to make the existing West Berkeley zoning more tenant and user friendly by creating a pre-approved matrix of uses could be approved over the counter (see attached MUP case study for reference and MUP decision and Road map). Staff s proposed language for the MUP goes far beyond the using the MUP as a tool for land use flexibility. The City utilized the MUP process, in the case of Temescal, to make the West Berkeley Plan practicable for tenants and users. The new proposed MUP is essentially about super sizing by permitting on an MUP site exceptional heights of 75 feet (up from 45) and an increase of FAR to 3 (from 2) and not about zoning flexibility. I notice that Staff suggested these proposed increases to height and FAR based on the feedback at our developer community stakeholder meetings. There the development community sought an MUP for zoning flexibility ( a la Temescal) and further argued to reconcile the 3 story limitation with the 45 foot height limit. What the developer community suggested, was that the 3 story height limitation was fine, but that the City should consider increasing the height limitation to include the additional height requirements required by interstitial space needed in some modern Research & Development and laboratory buildings. The 3 story limit would be maintained, but a three story building could be taller than 45 ft. The development community has lived with the 3 story height limitation for over 20 years. Staff responded to this input by combining both zoning use flexibility and huge increases in massing into the new MUP 2.0 concept. In my high dream for the stakeholder process, I had hoped that at the end of the day a compromise might be reached so that the 3 story limit would be maintained with an allowance for the requirements of interstitial space for equipment between floors. I also hoped that the MUP would be reinstated in the form it was originally drafted into the West Berkeley Plan and used with great success at Temescal. At this time the Staff has independently raised the bar for the MUP sites (in increased height and FAR) beyond the wildest dreams of the development community at the outset of the process. Staff is suggesting you allow super sizing in MUP sites by right. As it currently stands, a developer may request a variance for height and FAR through the ZAB and City Council. Recently Wareham Development procured such variances for additional height, FAR and additional stories from the City Council for the Copra/Garr Research and Development and Laboratory building on Heinz Ave. 2

3 The existing process allowed the community and neighbors to be fully engaged in a variance process that would transform their landscape. Please leave increased height and FAR determinations to the case by case review of the ZAB and City Council. If a developer wants to increase the number of building stories beyond 3 and site density beyond the current FAR of 2, then they should be required to apply for a variance to allow for public input and a fair process in which neighborhood stakeholders can participate in the destiny of their blocks. Thank you for your consideration of these important policy issues. Michael Ziegler President, Ziegler Development Corporation For Temescal Business Center

4 The Temescal Business Center A Case Study for the Master Use Permit Concept Temescal Business Center (Temescal) is an example of an adaptive reuse project within the MM district that was done using a Master Use Permit (MUP). This MUP process was done in accordance with the West Berkeley Plan (WBP) in careful collaboration between the Planning staff, the ZAB and the developer (myself) In the case of Temescal the MUP allowed for the consideration of an expanded envelope of permitted industrial uses that went far beyond the scope of the zoning ordinance but which stayed true to the West Berkeley Land Use Plan. The MUP was intended and used to address land use flexibility and never to increase height or FAR allowances. The case study of the MUP at the Temescal Business Center provides a model that demonstrates what should be included in the deliverables of the new flexibility changes that are being considered: West Berkeley Zoning should provide an MUP process that can provide an over the counter approval process for permitted industrial uses on an MUP site, regardless of size, if they satisfy the existing environmental thresholds (noise, air, hazardous materials, odors, etc.). The code should be based on the NAICS codes and not the SIC codes, to reflect changes in industrial sectors through time. Laboratory space and Research and Development space should be allowed in the MM district without restriction. Public policy wants to create in West Berkeley incubator space for industrial and new sector start ups that can not locate anywhere else in the City. The MUP process should incorporate the best features of what was included successfully in the MUP used at Temescal. A functional MUP should have the flexibility to allow a variety of uses that accomplish broad City goals. In the Temescal MUP a broader range of uses were allowed at the site than were permitted by the code. It is important to reinstate a functional and expedited MUP process into the code that allows for flexibility in uses and development visions. For permitted uses, there should be very limited restrictions on the amounts of ancillary support area to the industrial use. This means that office, lab, conference rooms, show rooms, HR, legal departments, food service, employee lounges, employee assembly areas, etc. should be permitted to be built within an industrial users facilities (without restriction) which support the user s normal business activities. A permitted use should be allowed to design and use their facilities in the manner that 4

5 they consider best serves their business model. The concept of conversion within a users premises must be abandoned as a Planning consideration. Industrial users must be able to design spaces that are functional for the totality of their needs. It should be noted that in the case of several tenants at Temescal over the course of 15 years (Powerlight, PTG-DSM, Powis Parker, XOMA), they have each reorganized their spaces (office, manufacture etc.) several times in response to their needs. The value of the MUP lies in land use flexibility rather than the FAR of the development. Land use flexibility is the critical benefit for the MUP as envisioned in the West Berkeley Plan. I am including for your review both the Master Use Permit and the Road Map prepared by Planning Staff in (see attached_ If I can draw your attention to these amazing documents, I would like to provide you with the context that framed them 15 years ago. In 1994 the concern that the Staff, ZAB, and the Developer were addressing was: How do we facilitate industrial users establishing businesses in Berkeley? At that time the Colgate facility and the Airco/Temescal facilities were sitting vacant with no prospects for reuse. Industrial users in our regional market place, then as now, ask 3 fundamental questions: 1) Is my industrial use permitted at the site? 2) When can I move in? 3) How much does it cost to operate my business in Berkeley? The Master Use Permit took the prevailing uncertainty out of a Berkeley site and answered a user s questions. Within the MUP, all of the potential uses are clearly enumerated and those uses are permitted by right and can be permitted over the counter. There is no administrative process or public hearing process for new tenants. With the issuance of the Master Use Permit the Temescal Business Center became instantly competitive with other East Bay industrial sites. A tenant thus did not have to enter into a zoning process, that could extend up to a year, just to determine if their use was acceptable in West Berkeley. The MUP also allowed for the flexible reuse of the site with regard to office space. The elimination of the question s concerning the conversion of space from 5

6 one use to another (from warehouse to ancillary retail and office) and the inclusion of flexible office build out allowances recognized the realistic needs of industrial users and gave them the latitude to conduct their businesses in the configurations that they felt were best suited for their success. Businesses know what they need for their operations far better than landlords or regulators. Previously Berkeley sites were not even considered by major East Bay industrial businesses based on the uncertainty of their getting a timely approval for their use. In Berkeley there are effectively no over the counter approvals and there also exists a challenging use review process that includes probable public hearings and appeals. In addition, even if a tenants use is permitted, the tenant s proposed use is further complicated by the challenging regulations concerning the change of use of buildings and the build out of offices. Without the flexibility of the MUP, even though an industrial business may be a permitted use, it might not be able to create a functional space for its operations due to the restrictive regulations governing the use of space. The Master Use Permit made Berkeley competitive in the market by addressing up front the permitted uses and their allowed impacts. The Road Map for Temescal Business Center Tenants that was written by the City Staff further made a very complicated and opaque permitting process transparent for the prospective industrial users. In addition, in the Temescal MUP both Staff and the ZAB concurred that new sector uses that were not included in the WBP should be included in the envelope of permitted uses in the MUP. In addition, other uses that were considered important to preserve but which were not addressed specifically in the WBP were added (For example coffee roasting was included as a nod towards the Berkeley business Peet s Coffee, that at the time was attempting to relocate their roasting plant in Berkeley- for a use that was not allowed in the code but was desired by the City). I imagine that if the Temescal MUP was submitted today, the permit would also allow such uses as Cliff Bar, Nolo Press, Tippit Studio, green energy incubators, medical cannabis cultivation and warehouse retail like Wine.com. The MUP needs to be reinstituted on the same basis that it was applied at Temescal. The Temescal MUP allowed: a pre-approved envelope of uses, flexible office configurations and the inclusion of new businesses sectors. Both the ZAB and Planning staff used the inherent flexibility of the West Berkeley land use plans to deliver its goals through the Master Use Permit process. In the process of this Master Use Permit approval, the ZAB made a special tour of the site to confirm staff s recommendations. There was a public hearing process before the ZAB and the proposed Master Use Permit was approved. The 6

7 entire process from start to finish took several months. This was a model of the West Berkeley Plan functioning as it was intended. What has happened in the intervening 15 years at Temescal? According to the Office of Economic Development: The site created 548 jobs in Gross Receipts taxes were $421,000,000 in total sales. The City has received $1,560,000 in special taxes. This all happened on a site with mostly one story buildings and an FAR of close to 0.5. We learn from the Temescal MUP case study what Berkeley businesses need: 1. zoning where the permitted uses are clearly defined, 2. a simple over the counter process for permitted tenants/users to obtain a zoning certificate and a new business license, and 3. the ability for tenants and users to configure their facilities to fit their office and ancillary support needs. When these conditions are met, industrial businesses thrive in Berkeley. These are the deliverables that should be the crux of the MUP rather than FAR and height expansions. 7

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