Space - The Issue:
Protected Industrial Space On The Table at City Council March 29th
March 29th, 7:15, City Council Chambers - 2134 Martin Luther King Jr.
Way (between Center & Allston)
the Future Availability of Affordable Space for Manufacturing,
Warehouse, Wholesale Trade, Arts & Crafts, Recycling, Contracting,
& Retailing Is At Stake and What This Means
February meeting, the City Council took a 5 to 4 sense vote to open up
ALL Protected Industrial Wholesale Trade and Warehouse space (an
unverified 2 million sq ft) to Research and Development
(R&D). WEBAIC has proposed opening up a smaller subset of
this space (100,000 sq ft) so as not to create destructive displacement
pressure on valuable industrial & arts enterprises and good jobs
and more closely match projected R&D demand.
29th the City Council
will discuss this issue, public comment will be taken, and Council may
direct staff to write actual zoning language that would open a
Council-directed amount of protected industrial space to R&D.
Whatever the amount, this directive will have far reaching consequences
for the future viability of industry and arts, the sustainability of
our economy and culture, and the economic equity and ethnic diversity
of our community and region. WEBAIC has been in discussions with
City Council members on this issue over the last 2 months. Your
presence on the 29th provides the best chance of a positive resolution
to this issue for our companies, studios, jobs, and for Berkeley.
The Core Question: How do
we equitably balance support for our sustainable industrial and arts
economy and culture and the good jobs these sectors provide for the
large portion of our population without a college education with
providing adequate space for Research & Development activities,
particularly start up companies coming out of Lawrence Berkeley Lab.
WEBAIC believes that as a city
are in the ideal position of being able to accomplish the positive goal
of providing more (than adequate) space for R&D activity without
setting in motion a destructive displacement of our robust industrial
and artistic enterprises and the good, family wage blue and green
collar jobs they provide.
This can be done by
six Master Use Permits (MUP) that will allow the industrially protected
space on approximately 30 acres to be used for R&D and
an additional 100,000 sq ft of protected Wholesale Trade &
Warehouse space (in the MM and MULI zones) to be opened up to
R&D. The MUP sites can provide at least 3 million sq ft for
R&D in addition to the existing 3.5 million sq ft of unprotected
space now available to be permitted for this use. Additionally,
another .5-1 million sq ft of protected space is allowed to be
converted to R&D under present zoning. These figures reveal
that well over half of all West Berkeley built space will soon be
available for R&D, an amount way beyond any party’s most optimistic
projections for R&D demand.
• Enough Space
for R&D: The MUP sites plus 100,000 sq ft of protected
Wholesale Trade and
outside the MUPs provide more than adequate space for all known
demand now and in
the foreseeable future.
• Opening up All Protected
Wholesale and Warehouse space will result unnecessary and destructive
pressure on all
manufacturing, warehousing, arts, crafts, recycling, contracting, and
retail companies and their
good blue and
collar jobs occupying this protected space, threatening our local
serving economy and culture.
• R&D capitalization
will result in displacement of industry & arts: Real estate
statistics and on the ground
R&D can pay significantly more for space than protected uses and
will displace them.
• Opening up All Protected
Wholesale & Warehouse space violates the West Berkeley Plan &
to maintain a diverse economy by installing the industrial protections
to mitigate market forces.
intended to protect Wholesale Trade and Warehouse uses and jobs.
intended to maintain the ethnic and economic diversity of our city and
• The West Berkeley Project
did not study the opening up of All Protected Wholesale and Warehouse
environmental impacts and is therefore inadequate.
Points in Detail:
The Question of Now - How do we
provide R&D space until the Master Use Permit properties develop?
• 25% of all
protected space in the MULI & MM zones (.5 – 1 million square
feet) is allowed to
be converted to
R&D space under existing zoning.
• Approximately 3.5 million
square feet of unprotected space now exists in West Berkeley, a large
can be converted to R&D uses under existing zoning.
• A large percentage of the
City-identified “legacy” Master Use Permit sites are now unprotected,
them to be
now for R&D now without having to go through the MUP process.
• 25% of all industrially
protected property on the City-identified “legacy” Master Use Permit
50,000 sq ft on
Peerless site) can be converted to R&D use under existing zoning.
• Over 40 West Berkeley
scientific companies are presently engaged in R&D and production
these companies are able to locate in West Berkeley now.
- Demand for R&D
• Providing space for
start-up spin offs from LBL (particularly clean tech) has been given as
reason to open up
now-protected industrial space throughout the West Berkeley Project.
agreed that this is an important goal.
• It makes economic sense
to closely match space provided for R&D in reasonable proportion to
demand. Otherwise the City risks the loss of important economic
activity and good jobs.
• Michael Cohen, Director
of UC Berkeley Office of IP & Industry Research Alliances has made
showing that on average 15 spin-offs come out of LBL each year.
He details the present
scenario that shows existing efforts at attraction and retention, plus
natural attrition, result in just
two of these
companies remaining in the East Bay Green Corridor (Richmond to
Fremont) after five years. He
also details a
“Leveraging” scenario showing that with cities doing everything right
to attract and retain spin-
offs, 27 of them
would remain here after 5 years. With these companies occupying
1500 to 3000 square feet
and having 6-7
employees, this LBL study shows that the entire East Bay Green
Corridor, not just Berkeley,
can expect less
100,000 sq ft of space demand and under 200 jobs created from LBL
spin-offs by 2016.
• R&D is
dependent upon the ups and downs of government and venture capital
funding climates that
seen great swings. The West Berkeley Plan’s emphasis on a diverse
served the City
in buffering it from the wild economic swings that result from too
great a dependence
on any one
Facts - Availability of
• The City’s
Impact report projects a total of 3.8 million sq ft of development over
20 years in West
• WEBAIC has agreed with
the City and developers that all industrially-protected property on six
Use Permit sites
at least 30 acres be allowed to be used for R&D. At the
City-proposed Floor Area Ratio
of 3 (FAR) this
would allow 3.9 million square feet of development. Allowing for
parking requirements and
million sq ft of development for R&D on these sites is possible and
• There now exists
approximately 3.5 million sq ft of unprotected space in West Berkeley
available to be
R&D while another .5 -1 million sq ft of protected space is allowed
to be converted to R&D
zoning. This is well over half of all West Berkeley built space
available for R&D.
Facts - Why Industry and Arts
need protected industrial space:
• Industry and arts can
typically afford to pay a similar amount for space, approximately 60
cents to $1.00 per
sq ft, depending
space size. Anomalies exist, but these are the averages.
• Real estate figures
on the ground research show that R&D typically pays significantly
more for space.
Cassidy Turley BT
Commercial lists R&D as paying on average $2.30 per sq ft.
• Real estate is based
the concept that the “highest and best use”, the use able to pay the
most for space, will
available space if market forces are unmitigated. Economic
history has shown this to be true.
• Of the four R&D
companies the City has sited as examples of R&D it would like to
see in West Berkeley,
three of the four
are in West Berkeley. The fourth was here but appears to now be out of
business. All four
successful private equity offerings of government and VC funding of
between 1 and 10 million
Industry and arts do not regularly receive this type of capitalization.
Facts - Why Protected
Trade and Warehouse space is also critically important to
Manufacturing, Arts & Crafts, Recycling, Contracting, and Retail
• All Protected
space is intended as a pool of flexible space to provide habitat for
Trade, Arts & Crafts, Recycling, & Contracting uses to locate
and expand into. Many
companies are here only because protected Warehouse and Wholesale Trade
looked to locate or expand in West Berkeley. Beyond industry and
arts, numerous Berkeley
also rely on their West Berkeley warehouses to operate economically and
Facts – The West
view of R&D and its relation to industrial and arts uses. How
R&D into protected space violates West Berkeley Plan and Berkeley
General Plan Goals & Policies:
• The West Berkeley Plan
clear on the need to specifically locate R&D outside of the
Protected Uses category:
“While support for
services (research laboratories) ...is also important, these
sectors are generally
threatened, by market developments. Thus, the policy structure for
The Plan clearly acknowledges that, unmitigated by the Protections,
R&D’s more highly
would result in the displacement of protected uses over time (Land Use
– “Market forces
...strongly support the
development of advanced services (e.g. research
laboratories)”. The Protected Uses
category is also meant
protect jobs for those without advanced education while the Plan
generally provide jobs
solely for the highly trained...” – Economic
The West Berkeley
Plan and Berkeley General Plan are unequivocal in their language and
policies intended to maintain an ethnically and economically diverse
population and economy:
• Berkeley General
Economic Element Objectives: 7. Increase social and economic
equity in land use decisions.
and Employment Element - Policy Background: ...skyrocketing
property values and
rents...threaten(ing) the economic, social, and cultural diversity that
distinguishes Berkeley life
• Goal #2: To
maintain Berkeley’s unique character and quality of life, Berkeley must
strive to maintain the cultural,
diversity that is such an important aspect of the character of
Berkeley. If Berkeley is to
remain a diverse
community with a wide range of races, incomes, cultures, and ideas,
Berkeley must take steps
to maintain… a
of jobs, and a variety of local goods and services. One major
threat to Berkeley’s character
and to its
• West Berkeley Plan:
broadest Purposes of the Plan: Maintain the ethnic and economic
II. The Economic Rationale of
the Plan - A. The Rationale
Overall: The City's
economic policy must seek to create
and maintain jobs
for its citizens, most importantly for its citizens who would have the
most difficulty obtaining jobs.
Continue to create employment opportunities, especially for Berkeley
Berkeley residents. It is
important to find these
opportunities for economically disadvantaged
Berkeley and W. Berkeley residents.