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The fallout has begun at Berkeley City Hall following last week’s revelation that two mixed residential-commercial properties developed and managed by prominent developer Patrick Kennedy are not currently being billed for City of Berkeley and Berkeley Unified School District property fees and assessments. 

The charge about one of the Kennedy properties—the Gaia Building—was originally made at last Tuesday’s City Council special working session by Barbara Gilbert, a former aide to ex-Mayor Shirley Dean. The information concerning the second building—the Berkeleyan—was reported last Friday in the Berkeley Daily Planet. 

The Gaia Building, with a taxable value in excess of $12 million, currently pays only $2,800 per year in special charges on its county property tax bill, none of which goes to City of Berkeley and BUSD fees and assessments. By comparison, the medical building at 3021 Telegraph Ave. with a taxable value of $300,000 pays more than $3,000 per year to the county in special charges, more than $2,800 of which goes to Berkeley fees and assessments. Berkeley fees and assessments not currently being billed to the Gaia Building and the Berkeleyan combined by the city could total in the neighborhood of $75,000 a year. 

Deputy City Manager Paul Navazio said that a summit meeting will be held this week between staff members of the City Manager’s office and the city’s Finance, Planning, and Information Technology departments to determine how the lack of billing occurred, as well as to make recommendations for possible changes in city property billing policy. 

A report from the city manager’s office on the property billing matter is scheduled to be given to Mayor Bates and City Council at Council’s 5 p.m. ballot measure working session on Tuesday, Nov. 4. 

“If we have situations where properties are operating under temporary occupancy permits for extended periods of time, it’s certainly not the intent nor the desire of the city for [the city’s billing policy] to serve as a way for somebody to not pay the appropriate assessments,” Navazio said. 

“If [city] policy or [city] internal procedures are that the tax rolls are updated upon final permits, and a temporary occupancy permit doesn’t currently trigger the reassessment, I think we want to revisit that policy at the staff level, particularly in cases when there’s a long period of time [that a building is operating under a temporary occupancy permit],” Navazio said. 

The Gaia Building on Allston Way has not yet received a permanent occupancy permit from the city, but has been occupied under a temporary occupancy permit since 2001. The Berkeleyan, on the other hand, received its permanent occupancy permit in 2000. 

Heather Murphy, Berkeley’s Revenue Collection Manager, said last week that the Gaia Building’s billings were consistent with current city tax billing policy, while the Berkeleyan’s city fees and assessments billings “fell through the cracks.” 

Berkeley fees and assessments not being billed the two properties include streetlighting, landscaping and parks, library services, paramedic supplement, emergency disabled services, Measure Q fire equipment, Berkeley Unified School District school tax, and Berkeley Unified School District school maintenance. 

Deputy City Manager Navazio added that city staff is “also looking at what other properties we can identify that may fall under the same circumstances [as the Gaia and the Berkeleyan]. Frankly, it’s unlikely that these are the only two properties in the entire city [with this situation].”