The long-running saga of the Drayage is nearing an end with the sale of the West Berkeley building to the development firm Hudson McDonald expected to clear some time next month.
The furor over the sheet-metal-clad building at Addison and Third streets began after owner Lawrence White agreed to sell to developer Ali Kashani early this year.
Kashani pulled out, reportedly after discovering that the building was illegally occupied by live/work tenants, and soon after that, a spot city inspection of the property recorded more than 200 building and fire code violations.
The property was considered a fire hazard because of the countless internal modifications—including wiring and installation of gas appliances—carried out without inspections or permits, which the tenants resisted.
White was forced to pay for a standing watch by Berkeley firefighters until they were withdrawn after someone from the building fired a pellet gun in their direction.
He then hired a private security company to stand watch.
All the while, city fines were accumulating at the pace of $2,500 a day until the last of the tenants had relocated by November, clearing the way for White to sell the property.
While the total dollar amount of fines leveled by the city and the Fire Department had topped the $450,000 mark, after ongoing negotiations with White, City Manager Phil Kamlarz reach a settlement figure of $45,000.
“The goal was to get them to move on the safety issues,” the city manager said.
Deputy Fire Chief David P. Orth, who had been serving as city fire marshal at the time of the inspections, said there were legal issues that clouded the picture.
“A dispute could have cost both sides, and the intent was not about getting a bunch of money for the city but in getting a resolution,” Orth said. “The owner’s attorney was going to argue for anything he could.”
Among the issues was the question of whether or not city paperwork had been legally served.
“There were all kinds of questions,” Kamlarz said, “including the potential costs of long-term litigation.”
“Everybody had some fault here, including myself,” Orth said. “The owner missed several appeal deadlines, too, and we were threatening to put a lien on the property.”
“It’s to everyone’s advantage to have it resolved. The city got their problem taken care of, the tenants weren’t thrown out, and my interest was to correct a huge fire hazard.”
Kamlarz agreed. “We settled on a fine of $250 a day because that recovered our actual costs.”
Orth said he and the city had encouraged White earlier on to offer larger incentives to motivate tenants to relocate.
In the end, Orth said, “He put up over $100,000 in cash payments to get people to leave.”
After Kashani had pulled out of his original deal and while tenants were still in the building, the Northern California Land Trust also negotiated to buy the building, hoping to keep it as live/work space.
That, too, fell through.
Evan McDonald, one of the two principals of Hudson McDonald, declined to comment on the project.
“We also tend not to comment on our projects until the use permit has been issued,” he said.
While developer Ali Kashani had earlier made an offer on the building and then pulled out, White said he had declined to consider him.
Hudson McDonald LLC, formerly associated with developer Patrick Kennedy and his Panoramic Interests developments, has been working on developing projects of its own.
Their largest proposal is The Grove, a five-story apartments over commercial project at the site of the Kragen Auto Parts store and mini-mall at the corner of University Avenue and Martin Luther King Jr. Way.
The project is currently pending before the Zoning Adjustments Board.