Steve Barton, Berkeley’s housing director, said, “It’s probably the most complicated financial structure ever put together for a non-profit development in Berkeley, and quite possibly the most complicated for any Berkeley project.”
But despite the complications, Barton said construction could start as soon as August on the David Brower Center and Oxford Plaza affordable housing building.
Proponents say the project, which would replace the city parking lot along Fulton/Oxford Street between Kittredge Street and Allston Way, will become an international showcase.
The city received word of the latest funding allocation Monday, when the U.S. Department of Housing and Urban Development (HUD) announced that the city had been awarded a $1.77 million grant and a $4 million loan earmarked for the project.
The Brower Center, as the whole project is commonly called, involves two developers and an array of funding sources, as well as invisible lines that divide up the property into different parcels for funding purposes.
The project will look like two buildings. With its greatest length along Allston Way, the David Brower Center will house offices of leading environmental organizations in a structure constructed to the highest green building standards.
“We have letters of intent for over 50 percent of the office space,” said John Clawson of Equity Community Builders, which will be building the center for the non-profit David Brower Center corporation.
“We hope to be applying for building permits in April or May,” said Carolyn Bookhart, project manager for Resources for Community Development, which will be building the 96-unit all-affordable housing building that will front along Oxford/Fulton.
Known as Oxford Plaza, the building will increase Berkeley’s housing stock for low- and very-low income families by about 20 percent, said Barton.
“It’s the only project of its kind in Berkeley,” said Barton.
“We have other projects of similar scope,” including an 80-unit senior housing complex nearing completion on University Avenue, he said. “But we really don’t have anything comparable in the way of family housing.”
Many of the Oxford Plaza units have two and three bedrooms, he said, providing homes for people who work in downtown Berkeley.
Together, the two structures—plus the underground parking lot that will replace the spaces lost from the city lot that now occupies the site—will cost about $61 million.
But because housing sources that pay for affordable housing don’t pay for creation of offices and retail spaces, the project is transected by invisible lines that reflect funding realities.
While Oxford Plaza consists of five floors of housing, the ground floor is devoted to retail—a standing policy for projects built in downtown Berkeley. So the ground floor funding is linked to the Brower Center and separate from the sources that will pay for the structure’s housing component.
Barton said the Brower Center itself is estimated to cost about $21 million, while the commercial ground floor of Oxford Plaza will cost $4 million to $5 million more. The final component, the underground parking lot, adds another $6 million to $7 million, he said.
Costs of the lot have been assigned to the two projects, with RCD to pay for two-thirds of the costs and the Brower Center for the other third, Barton said.
One component of the funding is a Brownfields Economic Development Incentive (BEDI) grant, funds awarded by the U.S. HUD to fund projects built on potentially contaminated sites—including former parking lots.
It was that grant which HUD formally announced Monday, though Barton and Clawson both said last week that preliminary word from Washington had indicated that Berkeley would receive the funds.
But the grant hasn’t come without controversy. As one condition of the funding, the city also had to pledge to commit $4 million in HUD Section 108 funding to the project, and to secure the funds by pledging an equal amount of the city’s Community Block Grant Development (CBGD) funding as collateral—a move voted down by a two-one vote in a Berkeley Housing Advisory Commission (HAC) subcommittee but approved by the commission itself.
Critics—including ousted HAC member and Berkeley Daily Planet Arts Editor Anne Wagley—cautioned that the city had committed its available Housing Trust Fund money to the project to the extent that other projects were precluded for a period of several years.
City councilmembers also expressed caution when they voted to approve the loan, which puts at risk CBDG moneys used to fund a variety of city programs that benefit lower-income residents.
“We are putting the funding for the city’s non-profit community groups at risk,” Wagley said.
Wagley, who served as chair of the city’s Housing Advisory Commission (HAC), was removed from her post by City Councilmember Gordon Wozniak at the end of last June. She had been an outspoken critic of the project.
“Both buildings will be built on top of a very expensive parking garage,” said Wagley, “and I would have been more supportive had the Brower Center been able to make a substantial contribution to its costs. But it became clear the city’s Housing Trust Fund wasn’t going to be the only contribution,” referring to the BEDI grant and the loan guarantees.
Wagley said she also objected to tying up the city’s limited housing funds on a single project that was years in development when so many other projects were in need of the money.
HAC member Jane Coulter says she wonders how the families in the 52 two- and -three bedroom units will get their children to and from school, given the project’s 40 total parking spaces and the lack of schools within walking distance.
Another critic, current HAC member Marie Bowman, declined to comment, beyond saying that she had “heard a lot of concerns from the community. But it’s not the most positive thing for me as a HAC member to comment.”
Tax credits and UC
New Market Tax Credits will be used to help fund the Brower Center and ground floor commercial space at Oxford Plaza.
“They are critical, because the cost of building new office space for environmental groups wouldn’t be feasible without them,” Barton said. “Otherwise, they would have to charge extremely high market rates, rates that would be at the high end of the market or above.”
The program is a creation of the Clinton era, and is designed to fund development in low-income census tracks by giving major tax credits to investors. Downtown Berkeley qualifies for the program mainly because of the large number of students who live in the area.
Unlike most of the housing recently built in downtown Berkeley, the majority of tenants won’t be single UC students, Barton said, because students receiving parental support aren’t eligible for the all-affordable apartments. However, students who are genuinely needy would be eligible for the studio apartments, and low-income married students and those with low incomes and families would be eligible for the larger units.
There would be no units rented to multiple singles, however.
And should the David Brower Center find itself without enough tenants to occupy its office space, there are no restrictions barring lease to the University of California, a point Barton acknowledged at the Jan. 24 City Council meeting.
As deadlines approach, officials at RCD and the Brower Center are finishing the final funding documents and agreements and architects are finishing off the last details of their plans.
“We hope to go to the city council in March with a development and disposition agreement,” said RCD Executive Director Dan Sawislak. “We’re still negotiating terms of the agreement,” which will be binding on the city and the joint development entity formed by RCD and the Brower Center.
“The financing is coming together very well,” said Clawson. “We hope to be submitting building permits in June, and our objective to is to start construction in late summer or early fall.”
Bookhart said RCD hopes to submit applications for its building permits in April or May.
“Ideally, with financing secured by August for all components, we would start clearing and shoring” for the underground lot “in late August or early September,” said Roger Asterino, the city’s Community Development Project Coordinator.
Those dates are critical because of the rainy season, which can start in late October or November.
“Ideally, construction would be complete in late 2007 or early 2008, and they could then begin marketing, with full leases by May, 2008,” he said.
“It could go another year,” added Barton.