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Court Orders Maio To Testify Over Loan From Developer

By Richard Brenneman
Thursday October 09, 2008 - 09:15:00 AM

Controversy over a $45,000 loan from Berkeley’s most controversial developer to City Councilmember Linda Maio and her spouse has resulted in a court order compelling the councilmember’s testimony. 

The statement, which will be given under oath in the presence of a court reporter, is part of a lawsuit challenging installation of cell phone antennas atop the UC Storage building at 2721 Shattuck Ave. 

Maio is scheduled to give her statement next Wednesday, and the plaintiffs are also seeking a similar deposition from developer Patrick Kennedy, the storage building owner who gave the councilmember and her spouse a loan to help them buy parking spaces at the site of her spouse’s business in another building also built by the developer. 

Contacted by the Planet, Maio said, “I can’t say anything now. It would be imprudent of me to say anything until after the deposition has been conducted.” 

Kennedy, whose other Berkeley creations include the Gaia Building and other downtown apartments, sold most of his Berkeley holdings last year to Chicago real estate billionaire Sam Zell’s Equity Residential for $147.4 million. (Zell is also publisher of the Los Angeles Times and Chicago Tribune.) 

Over the objections of acting City Attorney Zach Cowan, Alameda County Superior Court Judge Frank Roesch issued the order allowing attorneys for the Berkeley Neighborhood Antenna- Free Union (BNAFU) to depose Maio. 

According to the filings by BNAFU attorney Stephan Volker, the neighbors want to know if Maio knew when she voted to allow installation of the antennas on Kennedy’s UC Storage building that she would later receive “substantial financial benefits” from the developer. 

While the city attorney’s office denied any conflict of interest, Volker contended in written filings with Roesch that “[b]ased on the appearance of potential wrongdoing, petitioners have a right to depose Maio to discover the details of the transactions and find out whether Maio’s vote was influenced by her desire not to offend someone with whom she and her husband had an ongoing business relationship, and from whom she foresaw the potential receipt of future financial benefits.” 

The City Council vote to approve the installation of 11 cell antennas at the UC storage building occurred on Nov. 6, 2007, well before the deeds were recorded transferring a commercial condo and two parking spaces to Maio and Browning at the end of a complex series of transactions. 

The questions involve Browning’s business, Talavera Ceramics, which is located in one of three ground-floor commercial condominium units at University Lofts, a 29-unit mixed-use building at 1801 University Ave. The shop sells Mexican ceramic tiles, tableware, planters and other products both in the store and through the Internet. 

The loan, documented in a May 15 filing with the Alameda County Recorder’s office, lists Maio and Browning as the recipients of the loan, with Kennedy and spouse Julie Kennedy as trustees for the Patrick and Julie Kennedy Revocable Trust listed as beneficiaries in a trust deed signed on April 29. 

That deed was only one in a series of complex transactions that began on June 28, 2007, and eventually made Maio and Browning the owners of the shop and two parking places in the condominium project. 

Neighbors who battled the approval of the cell phone towers had fought their way through a series of meetings of the council and Zoning Adjustments Board (ZAB), resisted at every step by Nextel and Verizon, two of the carriers involved. Three months later, BNAFU and members Michael Barglow, Ellen McGovern and Pamela Speich filed the action challenging the council’s 5-1-3 vote to approve the installation. 

Maio cast her vote with the bare majority needed to overturn a previous ZAB denial. 

The trail of transactions began with Julie Kennedy transferring her interest on the commercial property on University Avenue to her spouse as his sole and separate property. 

Then sole owner Patrick Kennedy deeded the commercial unit to Congregation Beth El “as a bonafide gift,” receiving, according to the grant deed, “nothing in return.” 

Kennedy is a member of the congregation, and his spouse is listed as its immediate past president on the organization’s website.  

Even though Kennedy had given the commercial condo away to the congregation in a deed on June 28, 2007, another deed he signed the following day transferred the property from University Lofts Limited Partnership to himself. 

The mystery deepens with a look at the California Secretary of State filings on the partnership. 

A Certificate of Limited Partnership filed with the state on Oct. 15, 1996, lists Patrick C. Kennedy as general partner. His signature on the document is dated Nov. 14, 1996, a month after the document was actually filed. His address on the form is listed as 2714 9th St. in Berkeley. 

But the partnership had ceased to exist eight years before it deeded the property to Kennedy, according to the Certificate of Dissolution it filed with the Secretary of State on Feb. 10, 2000. That document is also signed by Kennedy as general partner. 

“The above-named entity ceased doing business in December 1998 and filed its final tax returns as of December 31, 1998,” Kennedy had declared in a Secretary of State filing recorded on the same date as the dissolution. 

After receiving the property, the congregation used it to secure a $350,000 trust deed from a Berkeley investment company which was secured by a second firm. Both firms are listed in state corporate and legal filings as controlled by the same individual, Susan Peick, whose address is listed as 1431 Walnut in Berkeley. 

Because of errors in the property description, a second series of grant deeds was filed three months after the first, clearing the congregation’s title before they sold the commercial condo to the councilmember and Browning on Dec. 2, 2007. 

The city received a transfer tax fee on the property of $8,254.50, reflecting a sales price of about $550,000. The county’s fee of $605.55 likewise reveals the same sales figure. 

Maio and Browning made their purchase with the help of a mortgage from Sterling Savings Bank of Santa Rosa. The amount of the loan was not included in the trust deed filed with the county. 

The sale of the two parking spaces followed the property sale by five months, with the first document consisting of the $45,000 loan from the Kennedy family trust to the councilmember and Browning. 

That document, dated April 29, wasn’t signed until May 9, according to the notary’s signature on the document filed with the county recorder. 

The grant deeds transferring the property began with another deed transferring ownership from the legally defunct University Lofts, L.P., to Patrick Kennedy on May 2, and followed on the same day by a transfer from Kennedy to himself and his spouse as trustees of the family trust and a third deed transferring the property from the trust to Browning and Maio. 

A second grant deed signed the next day corrected an error in the property description. 

The day before the parking spaces were deeded over to Maio and Browning, Kennedy e-mailed city staffer Christopher Wolf to notify him that he controlled the limited liability corporation that controls the property at 2721 Shattuck Ave., where, he wrote, Nextel, Verizon and T-Mobile—three cell phone carriers—all had permission “to pursue cell phone antenna installation on these premises.” 

Kennedy said in the e-mail that he had reviewed and approved their plans, which are the subject of the lawsuit filed by the neighbors. 

Kennedy has had an often-contentious relationship with the city, most recently involving the so-called cultural bonus space which enabled him to add an extra floor to the Gaia Building that allowed it to exceed downtown height limits. 

Lengthy hearings before the City Council and a lawsuit finally forced the council to rescind its earlier action to uphold the developer’s contention that he was abiding by the terms of an agreement with city planning staff when he opened up the so-called cultural space to commercial catering operations and religious services. 

Maio had recused herself from two votes on that issue, one in December 2006, when the council backed Kennedy’s contention and cut short a Zoning Adjustments Board (ZAB) effort to open up the question, and again in May when the council overturned its earlier decisions. 

In both instances Maio recused herself because of Kennedy’s role in University Lofts. 

But she did cast the deciding vote when the council voted with the minimum five-member majority to approve the developer’s application to install the highly lucrative cell antennae on his Shattuck Avenue property. 

Neighbors had appealed ZAB’s approval of the application, but were unable to allege health concerns, which state and local governments are barred from using when considering applications for the antennae.  

Kennedy and Acting City Attorney Cowan did not respond to calls seeking comments for this article.