June 7, 2010              

Planning Commission Votes To Open Up Protections on Wholesale
Trade & Warehouse Space, Leaves Manufacturing Protections

Sincere thanks to the many people who took their valuable time on the 19th to come out and speak for the vision of a Berkeley that supports its sustainable, vital industrial & arts economy and culture, a Berkeley committed to providing good jobs for the full spectrum of its population, and a City that does its part to bring our lives into balance in our relationship with the Earth through supporting green collar work as well as green technology.

This and previous turnouts on your part are the reason the Planning Commission did not vote to open up protections on West Berkeley's manufacturers, helping to preserve 148 companies & thousands of good jobs.  While acknowledging this positive outcome, WEBAIC asks that you continue the effort with us to overturn the Commission's shortsighted vote on the 19th to open up protections on wholesale trade & warehouse companies that provide important revenue to the City, vital goods & services, and well over 1000 family wage jobs.

• Planning Commission Opens Up Industrial Protections on Wholesale Trade & Warehouse Companies •

As the industrial protection policies in the zoning ordinance are the key to assuring appropriately zoned, affordable space for industry and arts in West Berkeley, any weakening of them threatens the future of these businesses and jobs.  Instead of celebrating these protections as successfully enabling Berkeley (in this economy) to maintain a robust PDRR (Production, Distribution, Repair, Recycling) sector encompassing 320 companies and the almost 7000 family-wage jobs they provide, a majority of the Planning Commission voted to open up these protections on all Wholesale Trade and Warehouse space to R&D uses that BT Commercial data shows pay on average 3 times more for space than wholesale & warehouse uses. There are many problems with this proposal:

Opening up the Industrial Protections is a Clear Violation of West Berkeley Plan & Berkeley
General Plan Goals, Policies, and Implementation Measures:

Staff released a document pledging to "Maintain (the) West Berkeley Plan Goals and Policies" at the beginning of the West Berkeley Project.  Opening up protections on Wholesale Trade and Warehouse uses violates this pledge since the WB Plan and Berkeley General Plan view these uses as central elements of the revenue and job producing industrial economy they strenuously seek to preserve and promote:

•  WB Plan- Land Use:  "Most important among these (principles which guided the development of the land use concept)  

   were: Manufacturing, wholesaling, and warehousing space should be maintained in those uses as much as possible.

•  WB Plan Implementation Measures: "The West Berkeley Plan's regulation of "conversions" (technically

   "changes of use)" from manufacturing and wholesale trade is a central element of the Plan's land use concept."

•  Berkeley General Plan:  Goal #2 Rationale: "The Plan supports continued implementation of the West Berkeley

   Plan with its emphasis on protecting industry."

•  Land Use Element Objectives:  #4. "Maintain and protect Berkeley’s remaining industrial areas."

•  Policy LU-34 Industrial Protections: "Protect industrial uses in West Berkeley."

•  Economic Element:  Element Objectives: 6. " Promote a strong industrial base as a vital foundation of a stable

    economy. 7. Increase social and economic equity in land use decisions."

•  Policy ED-2 West Berkeley Industry  - Actions: A. " Publicize the economic, social, and environmental benefits of

   industry,... and the community value of well-paying, high-benefit, low-bar-of-entry industrial employment".

• No Data to Support Busting Industrial Protections  •

The West Berkeley Project has been conspicuous for the limited amount of data supplied throughout, and the absence of City-supplied data as to where and who the spaces and companies are that will be put at risk by this latest proposal continues this record.  WEBAIC-supplied maps showing percentages of land subject to the Master Use Permit at different thresholds prodded the City to finally supply maps showing which properties and what total acreage would be subject to the MUP, and it appears WEBAIC may also be required to supply data on this new proposal.  On the same track, the City has offered no quantitative analysis as to what it believes it will gain economically or socially from converting existing revenue and job producing property to R&D uses (while ample property for R&D now exists), especially in comparison to the revenue, business, and jobs losses likely to result from these proposals.

  Existing Data: 1.) Shows No Need To Bust Protections, 2.) Supports Balanced WEBAIC Proposal,
& 3.) Projects Negative Consequences from Converting Industrial Land:

Existing zoning provisions plus WEBAIC-agreed to proposals provide several times more property for R&D than a UC Masters Fellows' study (in concert with the City's Draft Environmental Impact Report) show will possibly be required by R&D over the next 20 years, revealing proposals to open up protections as counter to the public interest:

•    A UC Planning Dept (Masters Fellows) study using the highest projections of Lawrence Berkeley Lab (the   
      centerpiece of the City's efforts to capture R&D) shows that LBL can be expected to spin off only 175 jobs by 2016. •     

•   The same UC Planning Dept study quantifies that the 28 acres of Master Use Permit property (6 sites)  

     WEBAIC has agreed to allow R&D on can accomodate up to 3 million sq ft of development.

•   Approximately 3/4 million sq ft of protected space in MULI & MUR is allowed to convert to R&D now.

•   Approximately 3.5 million sq ft of W. Berkeley property has never had any protections and much of this

     is potentially available for R&D.   

•   The City's West Berkeley Project Draft Environmental Impact Report projects at most 3.5 mil sq ft of total

     development in all sectors by 2035.  Even if R&D was half of this, existing provisions are more than sufficient.

•   Hausrath Economics' Study for the Metropolitan Transportation Commission, "Goods Movement/Land Use

     Project For The San Francisco Bay Area", concludes that significant negative consequences to the areas
     of the Economy, Environment (Greenhouse Gas Emissions, Congestion, Vehicle Miles Traveled,) Health
     of the Population along I 580, Natural Resources, Agricultural Land, Jobs/Housing Balance & Match,
     Social Justice and Equity, & Smart Growth Vision will result from the conversion of industrial land to uses
     such as R&D, housing, and retail.  The PC proposal to open up protected Wholesale Trade/Warehouse
     space to R&D is exactly what this study details as resulting in these negative consequences.

City-supplied documents using CBRE Real Estate data show 2,337,799 sq ft (54 acres) of warehouse space in West Berkeley (likely including Wholesale Trade).  Adding to this the 28 acres available on the six Master Use Permit sites (that WEBAIC and the City have agreed to allow R&D on in the next ten years) plus at least 10 acres from the 25% of manufacturing space in the MULI & MUR zones allowed to be converted to R&D now, and we're looking at 92 new acres for R&D while the UC Study projects 175 new R&D jobs by 2016.  According to the City's estimate of 3 R&D employees per 1000 sq ft, this acreage would accomodate almost 12,000 employees.  These grossly mismatched figures show the extreme overreach of the proposal to open up warehouse and wholesale trade to R&D. Additionally, CBRE data shows 1,264,615 sq ft of existing space presently devoted to R&D now.

Even if the UC study's figure of 175 jobs by 2016 is a serious underestimation, all data points to the fact that existing and agreed upon provisions will provide more space than could possibly be needed by R&D, revealing the latest proposal to further convert productive, protected wholesale trade and warehouse space to be not only unnecessary, but a revenue, business, and job destroying land grab.

•  Why West Berkeley Has a Vibrant Industrial Base - How It Can Be Forced Out  •

Berkeley has retained a robust industrial base because 1.) The West Berkeley Plan created protections that assure appropriately zoned, affordable space, and 2.) In the face of outsourcing and off shoring, our local, creative companies have strategized ways to ensure that the goods and services they provide are essential to their customers' success.  Though these companies are successful and provide stable revenue to the City, important goods and services, and essential employment to thousands of people, their cost/profit structures are such that they are unable to afford the same amount per square foot as highly capitalized R&D uses, which BT Commercial's latest Report show as paying on average $2.30 per sq ft versus $.70 for Wholesale Trade and Warehouse.  If protections are opened, as the West Berkeley Plan projects, this differential will surely force most of these companies and jobs out of Berkeley over time. Looking at cities that have lost their industrial base gives a good idea of the dire costs of losing these businesses and the good employment opportunities they provide, particularly for people already under the most economic pressure in our society.  That our own government, not macroeconomics, would be the engine behind this dislocation, should be a fact both sobering and awakening to the citizenry.

•  Important Job Base & Consistent Demand for Space  •

While the City has supplied no data on how much now-protected space exists in these sectors, previously supplied charts from the Office of Economic Development show West Berkeley as having between approximately 1100 and 1500 jobs in Wholesale Trade, depending on which of the seven employment statistic charts the City has supplied over the course of the West Berkeley Project in trying to prove that industry is leaving West Berkeley.  Warehousing isn't listed as a separate category in any of these charts so it's impossible to tell whether these figures include this use.  WEBAIC as identified at least 47 Wholesale Trade and Warehouse companies in West Berkeley.  What is clear from all of these statistics combined is that there is fluctuation over time in this sector's employment as with all job sectors, but that a consistent baseline 1991 figure of 1488 employees is very close to 2008's figure of 1426, with Wholesale Trade employment rising 19% from 2001 to 2008.  These figures do not reveal a "disappearing" sector and neither do vacancy rates bear this out.  While the recessionary first quarter (Q1) 2010 figures show a West Berkeley warehouse vacancy rate of 10%, this is the third lowest rate of the nine East Bay cities from Richmond to Fremont, with third and fourth quarter 09 vacancy rates at 3.4% and .07%, revealing consistent historical demand for this space, despite market gyrations.  These figures and the present 4.8% manufacturing vacancy rate contrast well with existing 13.5% West Berkeley and 12.2% Downtown office vacancy rates.  Hausrath Economics' Study for the MTC projects continuing future demand for wholesale trade and warehouse space and growth in these sectors in the East Bay.

• Berkeley's Population, Education, & Jobs Match - More Family Wage Jobs for High School Grads, Not Less •

Of the approximately 66,000 jobs in Berkeley, only West Berkeley's 7000 industrial jobs provide a significant amount of family wage employment available to those without a college degree.  Matching this number with the 18,344, or approximately 33% of Berkeley's 55,588 working age people that don't have a college degree, reveals that as a City, we're providing less than half of the good jobs for that part of our population that could benefit by them, yet the Planning Commission is proposing policies almost surely to result in the loss of many of these jobs.

The West Berkeley Industrial & Arts Network Supply Chain  •

The West Berkeley industrial and arts complex is a network of economic (and social) relationships that is poorly documented, but is essentially analogous to an ecosystem that remains healthy only while intact. WEBAIC has begun to document the incredible web of relationships and multiplier effects between businesses that exist and it's clear that the losing a number of important component parts weakens the network to the point that it loses it's economic viability.  The wholesale trade and warehouse companies provide vital goods and services (and jobs) within this network and contemplating their dislocation without understanding their contributions is economically and socially irresponsible as well as being just plain poor planning policy.

•  Fatal Flaws in Proposal to Open Up Industrial Protections  •

Beyond being a violation of West Berkeley Plan Goals & Policies and an unnecessary, economically and socially destructive land grab, the proposal to open up Wholesale Trade and Warehouse space to R&D will ultimately result in the loss of manufacturing space.  Since the City has no inventory of what space is used for manufacturing, wholesale trade, or warehousing, a landowner can simply choose not to renew a lease or raise rents beyond a manufacturing tenant's ability to pay, then replace it with a warehouse use and voila!, what was once manufacturing space is now a warehouse convertible to R&D. Or as one small-scale developer half-jokingly said as he was leaving the Planning Commission meeting:  "I think I'll go out and buy some warehouse space."

•  The Definition of R&D  •

The second item voted on by the PC was the definition of R&D.  WEBAIC's main objective on this issue has been to clarify that there are two types of R&D, one requiring industrial square footage such as lab or bench space, the other requiring only office space with office-type uses (i.e. computer simulations, etc.).  Strictly office R&D shouldn't be allowed to occupy protected industrial space on Master Use Permit properties that WEBAIC has agreed can convert to R&D space.  Additionally, this type of office use shouldn't be allowed in the M district (whose purpose is to be "unequivocally" an industrial district), in contrast with the MULI district whose purposes encompass a wider latitude of uses.  The WEBAIC steering committee is still analyzing the Commission's actions on this matter.

•  West Berkeley Project Meeting Schedule Going Forward  •

Planning staff projects two important Planning Commission meetings in July.  The 14th will likely address critical Master Use Permit issues and July 28th is expected to address critical Industrial Protection and R&D issues.  These will be the final meetings before the City's summer recess and are projected to be the last before the Planning Commission holds its decision-making Public Hearing on the West Berkeley Project proposals this fall. Planning Commission-passed proposals are projected to be voted on by the City Council at a Public Hearing in late fall.

West Berkeley Works!

WEBAIC  •  info@webaic.org  •  510-549-0190


            Helps the public understand West Berkeley industries' contributions to the community;

            Helps businesses maintain and increase their contributions to Berkeley's economy and cultural richness, including how to adopt sustainable practices;

            Serves as a liaison between WeBAIC's members, the community, and local government;

            Promotes the development of sustainable industries as envisioned in the West Berkeley Plan.


WEBAIC • West Berkeley Artisans & Industrial Companies
(510) 549-0190 • PO Box 2307, Berkeley CA 94702