Council Majority draws line in the sand with Developers with Public Market Development Agreement Rejection
Despite a housing crisis fueled by low inventory, a unanimous planning commission approval, hundreds of man-hours by staff and their subsequent recommendation for approval, concessions of public benefit including inclusion of affordable units, public art and Christie park expansion, LEED Platinum Certification and following all the legal guidelines established by the city … the Public Market development agreement proposed by City Center Realty Partners was rejected by Council 3-2 on Tuesday. The Council Majority or “R.U.L.E. Block” ultimately deemed the project not affordable/family-friendly enough for them and sent the developers back to the drawing board.
CCRP managing member Mark Stefan seemed to be scratching his head while he sat through the discussion and ultimate rejection of the project that he and his team of 18 had spent the last three years on. “We feel we were blindsided and not dealt with in good faith” noted Stefan over email when I asked him if he was surprised by the decision and if he thought the city gave them a fair shake. “After extensive meetings and negotiations, we thought we’d finally come to a good, collaborative agreement. The Planning Commission voted 100% unanimously in favor of the agreement and the City Staff recommended the agreement. No, City Council did not give this collaborative agreement a fair shake”.
Is a Developer “win” a loss for the City?
The decision wasn’t really a surprise to those tuned in to this Council though. Emeryville Tattler editor Brian Donahue, who is part of the council majority’s inner political circle, screened their sentiment the day prior in his article “Public Interest Not on Display in Market Place Development Agreement“. Donahue relished the developer defeat afterward and demonstrated the satisfaction of someone who clearly has his fingerprints all over council. The nepotism between this Council majority, R.U.L.E. and The Tattler has been apparent to most since they seized control of council last election.
Early indication that the developers had a long night ahead of them came when the Council Majority of Asher, Donahue & Martinez voted against the standard reading of the agreement “by title only” [1:09:28]. This required City Attorney Michael Guinea to read the entire eight-page ordinance verbatim which took him nearly twenty minutes (he did it all without a sip of water!). It was basically a dramatic play by Council indicating displeasure with the project. Mayor Atkin was apologetic of the council majority’s decision to force this and admonished her colleagues. “Thank you very much for reading the bible” quipped longtime resident and council meeting regular Andre Carpieux.
This was not a contentious project by most political observers I spoke with. From all indications, City Center Realty Partners was responsive, took their time and engaged the community. They were diligent in soliciting feedback through public meetings and with staff and the Planning Commission. The Planning Commission ultimately approved this unanimously and there was a sense of collaboration, responsiveness and compromise from those I spoke with. This project didn’t appear to be an example of a developer just doing the minimum to get under the guidelines and have their way with the city.
The June 25th 5-0 Planning Commission approval can be viewed above courtesy of the EPOA
The rejection also seemed to stem around the idea that developments of this nature need to be a knock-down, drag-out battle between the city and developers. An approval of the project on its first pass would be a concession of the developer having “won” and the city had not put its best effort in negotiating the best deal for itself. They bought into the meme that The Tattler has spread that if you approve something on the first pass (despite an extensive vetting process), you didn’t ask for enough.
Council Majority Dynamic at Play
The outcome was revealing of the dynamic that exists within the current Council majority. Asher states her opinions & intentions, Martinez “echo’s” whatever Asher says and Donahue generally goes along with them. If Donahue steps up to challenge anything that defies Asher’s will, she quickly shuts him down (we saw this during the minimum wage discussion when Donahue tried to argue for a youth exemption). This was apparent to all observers on Tuesday when Donahue acknowledged the benefits of the street realignment and indicated a favorable vote [2:14:22]. “Well then your votes are kind of inconsistent, right?” scolded Asher. “To do this would undermine your earlier vote.” Asher then proceeded on a nearly five-minute reminder to Donahue of the R.U.L.E. political playbook that he was apparently contradicting. “You’ve made your point” interrupted Atkin to keep the meeting moving.
While the no vote and title reading fiasco among these political allies seemed orchestrated, it is unlikely as this would be a clear violation of the Brown Act. The Brown Act expressly forbids Councilmembers from discussing policy issues outside of public meetings. Doing so jeopardizes public trust and generating concerns about backroom deals at City Hall.
If you build it, they will come … hopefully
Ultimately the project did not contain enough affordable, family-friendly units to appease the progressive majority of Asher, Martinez and Donahue. Council appears to be looking for a silver bullet for fixing decades courting young professionals, singles and retirees and trying to morph Emeryville into a family mecca overnight. Much of this stems from the dire situation with our schools and waning enrollment. You can build the most affordable, family-friendly complex imaginable but if the schools are underperforming like Emeryville’s are, no families will want to stay and we’ll continue to see the exodus of families of school-age children. There’s definitely a “Chicken or the egg” argument that family friendly developments will bring in families.
Stefan defended the merits of the projects family-friendliness. “What could be more family-friendly than a project that will double the park space and create safer, more pedestrian-friendly streets, with healthy food options including an organic grocery store? We offered voluntarily to significantly increase the number of two and three bedrooms and, most importantly, our units did meet the City’s Family Friendly Guidelines. We made sure they did through many hours of meetings with the City’s very own family friendly design guideline guru. The City’s own attorneys have been clear throughout that these family friendly guidelines do not legally apply to the Public Market, but we have been working cooperatively and voluntarily because we understood it was important to the Council. We felt we gave them everything they asked for, but they have not responded in good faith, which is very frustrating and disappointing.”
The City’s Family Friendly Design Guidelines
Stall tactic, negotiation … or deal killer?
The leverage that the City holds with the developer is the realignment of Shellmound that would enable the development of Parcel B (An even trade with the city in land). This would enable double-facing retail which creates a cozier, more appealing shopping environment and mimics a downtown feel. It should be noted that the street alignment comes at an significant cost to the developer and there’s a benefit to the city of improved circulation according to City Attorney Michael Guinea. The council is taking a gamble that the developer will come groveling back with more affordable units to get their street realignment and enable Parcel B. If CCRP decides to “call the city’s bluff” and opts to go with its existing entitlements, the city will in fact get zero affordable units and the council majority will have egg on their collective faces.
“We have voluntarily offered more and more” noted Stefan when asked about the future of the project. “At this point, the project cannot afford to give any more. The City is jeopardizing a thoughtfully designed, exhaustively vetted project that would provide market rate and affordable units in Emeryville. We had offered to provide 33 affordable units, double the number the City would otherwise get through the payment of fees under the municipal code. Now that the City has thrown the project into question, the City may not get any – affordable or market – units at all.”
What’s next for the Project
Was it a perfect project? Absolutely not (You know where I stand on all rental projects) but by Emeryville standards it was as about as good as we’ve seen. Was it a car-less, ultra-affordable, coop utopia that seems to be the council majorities vision for the City? Definitely not. The Developer still has entitlements to develop Parcel’s C (Grocery Store & rental town-homes), D (Market Rate Apartments) and Parcel A (Mixed-used) was approved at last night’s Planning Commission meeting (This decisions can still be challenged by Council based on adherence to the General Plan and Public Welfare).
“The Mayor called this project ‘the pinnacle of smart infill.’ ” noted Stefan on the future of the Plan. “It would create a downtown, a mixed-use environment with heart and soul for Emeryville. This would bring in an organic grocery store; generate tax revenue; we would be thoughtfully expanding the Park and creating a play area for kids and a dog park. The project would contribute to impact fees and create jobs. This project would proceed with the highest quality, environmentally sustainable design guidelines. All that may be lost.”
Stefan seemed rightfully dejected but alluded to a possible legal challenge to the city. “The Bay Area is in the midst of a housing crisis. The City of Emeryville has now taken actions that are clearly contrary to its approved Housing Element and RHNA (Regional Housing Need Allocation) obligations under the State Housing Law”.
A Message sent to developers?
This Council majority has already sent the message to business that they are not welcome unless they want to play by their rules and appear to be sending the same message to developers. Council is banking on the idea that our location is enough of a draw to have the upper hand with businesses & developers. This may also been a message to the Sherwin-Williams project developers that they should be ready for a battle and any attempts to “low ball” the city would not go over in their favor. Just adhering to the guidelines was not necessarily a guarantee that their projects would gain approval for them (Will Restoration Hardware Outlet pull out of their development proposal because fear Council will reject their proposal because their furniture isn’t affordable or “Family-Friendly” enough? 😉
Insiders have indicated that the Council Majority’s hearts may be in the right place … but they’re lacking the savviness and outreach needed to get what they want. The sticking points for the Council majority continues to be the affordability and family-friendliness of developments and they have issued a statement that they will reject all projects that don’t meet this criteria. In the meantime, nothing will get built in Emeryville and there will unfortunately be no relief for the current housing crisis.
The Public Market’s complete phased plan can be seen online:
The public hearing for the project can be viewed above beginning at 30:00