Bayer Moves Administrative Offices to West Berkeley

By Riya Bhattacharjee
Thursday June 26, 2008 - 09:31:00 AM

The Berkeley Zoning Adjustments Board (ZAB) approved a use permit for Bayer Healthcare earlier this month, giving the pharmaceutical giant the green light to move some of its administrative offices into 921 Parker St., a space zoned specifically for industrial use. 

The zoning ordinance for the West Berkeley Mixed Use–Light Industrial (MULI) district states that manufacturing or industrial space cannot be converted into office space unless it is mitigated by providing replacement manufacturing space or paying a fee. 

ZAB approved the use permit by including the Parker Street building as part of the main Bayer lot at 800 Dwight Way, and ruling that, since the conversion space constituted less than 25 percent of Bayer’s total manufacturing space on that lot, it was exempt from the MULI requirements. 

Thus, according to the decision, Bayer is exempt from creating replacement manufacturing space or paying a fee but is required to convert the 36,948 square feet of office space back to its original use at the end of its 10-year lease. 

Although this kind of exemption, based on the less-than-25 percent threshold, is supposed to apply only to property owners and would not ordinarily apply to Bayer, which leases the site, ZAB decided that it would extend this provision to Bayer to save the company the conversion fee. 

Rick Auerbach, who spoke on behalf of West Berkeley Artisans and Industrial Companies, said the group was opposed to the loss of manufacturing space in Berkeley and demanded that Bayer pay the required fee. 

“We appreciate Bayer as a corporation, but this project will have major implications,” he said. “Manufacturing wholesale space should be maintained. It’s the central aspect of the land-use concept. We believe Bayer should pay a fee. Make it a reasonable fee if you want to, but don’t stretch this ordinance to the point that it has no meaning anymore. We support Bayer expanding in the city, but find a way of doing it without setting a precedent of losing industrial presence.” 

Zoning staff asked the board to make an exception for Bayer since the company owned the largest manufacturing property in the city. Bayer paid $7 million in property taxes to the City of Berkeley last year, staff said. 

Debbie Sanderson, the city’s planning manager, said it was difficult for applicants to pay the $75 per square foot fee, which she described as prohibitive, and requested that it be waived. 

“It comes to tens of millions of dollars, which is not economically feasible,” she said. “So nobody does it.” 

She added that zoning staff struggled over the change of use but pointed out that the conversion would continue to create jobs in the city. 

Bayer currently has 15,000 employees working at its Berkeley campus. 

“The special limitations for manufacturing wholesale space is extremely complex in the MULI district,” she told the board at the meeting, adding that the zoning restrictions had allowed only two properties to change use since the West Berkeley Plan was established. 

“Bayer made this request to serve their larger campus until further changes. It has been the primary contributor to new manufacturing jobs and the primary contributor to new manufacturing space in West Berkeley. ” 

ZAB Chair Rick Judd dismissed concerns about Bayer’s use permit setting a precedent for other companies. 

“A primary goal of the West Berkeley Plan is to preserve jobs, and I don’t think anyone has done that better than Bayer,” he said. 

“Only Bayer is building industrial space in West Berkeley right now, and there is no question of setting a precedent.” 

ZAB commissioner Terry Doran said before the public hearing was held that he was in favor of the project, something community members were critical of in their comments to the board later that evening. 

“I am very disturbed by the tenor and tone of some of the board members, assuming that this was going to be ap-proved,” Auerbach told the board. 

Doran apologized to the public later, saying he had not intended to support the project before the public hearing was held.  

“I don’t believe board members’ comments expressed any kind of pre-set judgment,” Judd said. 

ZAB also approved parking space for the Parker site, which will be relinquished once Bayer converts the site into an office space. 

Trina Ostrander, director of Bayer’s public policy and community relations, said the company’s 45-acre site on Dwight Way was being developed under a 30-year improvement plan. 

“When Bayer signed a lease for 921 Parker, we were paying rent for six months without being able to use it,” she said. 

The Parker site, which will employ 100 people, is adjacent to Bayer’s Berkeley campus, which is located right next to Aquatic Park.  

The campus is the company’s global center for hemophilia and cardiology pharmaceuticals and manufactures Kogenate, a large protein pharmaceutical that treats hemophilia.  

The permit will allow Bayer to build modular office space inside the Parker Street building, which will be dismantled when the lease runs out, Ostrander said. 

“We are looking at long-term expansion in West Berkeley that will bring economic stability,” she said. “Bayer is the right kind of light industry for the West Berkeley Plan.” 

ZAB Vice Chair Bob Allen asked if all 100 employees would be moved to the main campus at the end of the 10-year lease. 

Ostrander said it was difficult to predict the future of a global company. 

“We need the space at Parker Street,” she said. “We are very much overcrowded.”