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UC Berkeley plans to develop a downtown hotel and convention center which Mayor Tom Bates hopes will capture both millions in tax revenue in the near future and the imagination of residents by restoring Strawberry Creek sometime later. 

But many remain skeptical about the mega-development, which the mayor said is estimated to cost $150-200 million. 

“This could be a wonderful contribution to the city or a horrendous nightmare,” said Councilmember Kriss Worthington. 

The university has a tentative agreement—brokered in part by Mayor Bates—to buy the Bank of America branch at the corner of Shattuck Avenue and Center Street and turn it into the centerpiece of a radically different downtown core as early as 2007. 

On the bank’s property would stand the hotel/convention center with between 175 and 200 rooms, a 15,000-square-foot conference center and room for a new Bank of America branch—all above an underground parking garage. 

Next door, the university would evict its printing press and demolish the parking lot at Addison and Oxford streets to transplant three of its highest-profile museums—the Pacific Film Archive, the Kroeber Center, and the Berkeley Art Museum—to the heart of the city’s arts district. 

UC Berkeley issued a Request for Qualification on the property last week, inviting developers to present past plans as the university looks to find a partner for the project. 

The hotel would be the second largest in town and offers tantalizing hotel tax revenues expected to run upwards of $1 million per year for a cash-strapped city facing an estimated $8-10 million budget shortfall next year. 

A survey conducted by the city’s Office of Economic Development found strong demand for a downtown hotel from visitors to the campus who now cluster in hotels and motels around Emeryville. 

What the city would lose in the deal is property tax revenue, which UC Berkeley—a state entity—doesn’t pay. Just how much property tax the bank is currently paying couldn’t be determined by presstime. 

Bates said Berkeley would receive possesory interest taxes, which local governments levy on private companies that posses exclusive use of tax-exempt properties. 

The mayor called the lost property taxes “a drop in the bucket” compared to the hotel tax revenue the city stands to gain—but with a proposed citywide parcel tax hike making property taxes a political hot potato, Bates’ colleagues in Council were leery of allowing another parcel to escape the tax rolls. 

“We in no way should sacrifice that land,” Councilmember Dona Spring said. “We can’t afford to give free rides anymore.” 

Under the terms of the deal, UC Berkeley would own the land but lease the property to a private developer to build and manage. The university refused to divulge the sale price or their financing for the purchase. 

UC Berkeley’s central role in the development worries some officials because it’s immune to Berkeley development rules. 

“The city loses leverage as soon as the university becomes the owner of something,” said Planning Commissioner Rob Wrenn. “UC doesn’t have to pay attention to anything.” 

Bates, though, said only the university had the economic interest and clout to complete the deal, adding that he thought the development would “come to all of our commissions.” UC Berkeley spokesperson Kathleen Maclay said “public comment would be solicited.” 

Maclay also said the university was committed to abiding by the city’s downtown plan which calls for the hotel/convention center to be built to “green” building standards. She said the university had no objections to transforming that block of Center Street into a pedestrian walkway—with the added possibility that Strawberry Creek might once again be daylighted on the site. 

Creek supporters have long cast their gaze on the Bank of America site as the home of a future environmentally friendly convention center that could anchor a “green” block highlighted by the restored creek. “That’s been the vision for quite some time,” Spring said, acknowledging that the plan does not call for or provide money for the creek project. 

Some obvious issues remain. Building underground parking in downtown Berkeley has never proven feasible, and the driveway for the lot would likely have to encroach the future pedestrian area of Center Street. Also, without a waiver from the current zoning laws, the development would have to fit its rooms and convention space into five stories. University and city officials refused to comment on the height of the proposed building. 

“The general concept is not bad at all,” Wrenn said. “It’s all a question of how it’s done.”