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City Staff Serves Developers As Kennedy’s Projects Prove

Friday December 05, 2003

For several years I’ve watched in shock as the “development community” took over this town. When the escaped tax issue came to light, I thought this outrageous loss of revenue in the face of a deficit might remind city staff that their salaries are actually paid by the taxpayers of Berkeley. 

My hopes were dashed when I read a Nov. 4 memo from Acting City Manager Philip Kamlarz to City Council detailing the agreement reached between Patrick Kennedy and city staff over how much Mr. Kennedy would pay for his unbilled (escaped) special assessment property taxes. I found multiple errors in the computations—not one to the advantage of city coffers.  

A letter I wrote to Mr. Kamlarz and the City Council on Nov. 6, explaining each discrepancy and undercount, was forwarded to Finance Director Frances David for response. At the Council meeting on Nov. 18 Ms. David restated the tax estimates from the memo as though the figures were undisputed. The sum of $163,317 to be billed for the Kennedy properties for three years of escaped taxes is, I believe, tens of thousands of dollars short.  

I’ll give one example of several discrepancies: According to county records, the Gaia building is very close in usage and square feet (upon which the special assessments are based) to the Corder building at 2322 Shattuck Ave. The current year special assessments bill for the Corder building is $63,229, yet our staff are satisfied to ask only $37,014 for the same time period for the Gaia building. 

Finance Director David replied to my letter Nov. 20 but provided few answers. Rather than explain the exemptions Mr. Kennedy had been granted, she stated: “… space leased to nonprofit organizations may be exempt from taxes.” The Gaia Building Limited Liability Corporation, under which Mr. Kennedy owns the building, is not a nonprofit organization. Is Ms. David implying that he’s receiving some tax break for the alleged 19 (or is it 12) units of affordable housing in the building? Absurd. New buildings are not, and never will be, under rent control. The only buildings which really provide affordable housing are controlled units with historically low rents, and owners of these properties are definitely not receiving any tax breaks. 

In fact, the Corder building has, according to rent board records, 17 units which rent for under $550 per month, including three for under $450! I doubt the new projects in town contain even one unit for which the owner receives so little compensation. 

The one tax break received by the Gaia building which has been explained is that parking lot space is not taxed at all. A parking slot in the stacked parking of the Gaia rents for $150 per month, yielding $450 per month for a stacked trio of cars, more than the entire price for some of the truly affordable apartments in the Corder Building.  

Staff of several city departments have been knocking themselves out to promote for-profit development, and the even more profitable “nonprofit” development, while treating the citizens dreadfully. One of the prime offenders is the Planning Department—the exuberance of certain staff members for big development in spite of neighborhood opposition is legendary. 

It has become a common belief that city staff aren’t serving the community, but have focused on serving developers. Now that revenue has been lost, it’s time for the favors to stop. 


Gale Garcia is a longtime Berkeley resident and taxpayer.