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Foreclosure doesn’t dampen development plans for San Pablo Ave

3 January 2009 No Comment

By Will Jason

The 34 condominiums built on top of an abandoned gas station at 2700 San Pablo Ave. last year were supposed to signal the transformation of their southwest Berkeley neighborhood. Vacant lots and empty buildings would give way to a vibrant, mixed-use district.

Then the units didn’t sell, and the developer lost the property through foreclosure. The building failed to attract a bid when it was put up for auction in mid-December, and now, a year after its completion, it’s owned by a former lender who is renting the condos as apartments with no plans to sell.

2700 San Pablo Ave.

“About 10 units,” less than a third, “are occupied,” said Mark Seiler, a co-owner of Metrovation, the lender.

But despite the building’s troubles, hundreds of new condos are still likely to be built along San Pablo during the next few years, according to city planning documents and interviews with developers. The new developments may be welcomed by some, but they could also spark resistance from residents who fear they will make the neighborhood less affordable.

“West Berkeley is Berkeley’s last diverse, working neighborhood.” said Toni Mester, 65, a teacher who lives near the foreclosed project.

The first signs of transformation along San Pablo started before the recent condo project. Over the past few years, clusters of high-end shops and restaurants have sprung up along the street, especially near the intersection with Dwight Way. Three years ago, the neighborhood became the site of the Berkeley International Food Festival, and this spring, the Berkeley Bowl supermarket plans to open a new location on Heinz Ave., a block from San Pablo.

“There’s a lot of great things happening in west Berkeley,” said David Mayeri, who has approval to build 40 condos, with retail on the ground floor, at 2747 San Pablo Ave.

Mayeri and other developers said they believe the recent foreclosure was caused by the national credit crisis, and that there is still demand for condos in Berkeley.

“We really believe in this market coming back,” said Ali Kashani, who is planning to build 100 condos, with 12,000 square feet of commercial space, at the corner of San Pablo and Ashby avenues.

It appears the new projects could be supported by the lack of other new housing options in Berkeley, which has seen property values remain fairly stable. This fall, as the median condo price dropped by a quarter in Alameda County, it fell just 7 percent in Berkeley, according to Pacific Union Real Estate.

“There’s always been more housing demand then supply in Berkeley,” said Michael Caplan, Berkeley’s economic development manager. “I don’t see that changing.”

But Mester, who called Kashani’s project a “yuppie dormitory,” said that regardless of their financial prospects, the new developments are too dense, and the condos will appeal mainly to short-term residents because there is little open space.

“We should be building affordable family housing for people who actually want to raise children in Berkeley,” she said.

Others argue that San Pablo is precisely the type of place where high-density development should go, because residents will have access to an express bus line.

“You’ll never please everybody,” said Darryl Moore, a city councilmember who represents southwest Berkeley “I’d much rather see development occur around a transit corridor as opposed to inside a neighborhood that’s established.”

Moore said that the new projects will help create low-cost housing because Berkeley requires 15 to 20 percent of new units be priced for low-income residents. He said he does have concerns about the neighborhood’s design, but has proposed a special planning document, similar to ones created for downtown Berkeley, to guide new development in the neighborhood.

“Right now we have no development plan,” Moore said. “It’s a little haphazard.”

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