Page One

Paper Trail Reveals Kennedy and Maio Financial Dealings

By Richard Brenneman
Thursday November 13, 2008 - 09:29:00 AM

A battle over the installation of a cluster of cell phone antennas atop a building owned by Patrick Kennedy has revealed a paper trail and testimony focusing on his financial dealings with City Councilmember Linda Maio. 

Maio has sometimes voted on council matters involving Kennedy, the city’s most controversial developer, and sometimes recused herself from votes, citing her financial relationship with the developer. 

But it is her votes that allowed Kennedy to install cell phone antennas—erected and maintained by the carriers—that resulted in a subpoena and deposition by a lawyer representing neighbors of the UC Storage Building at 2721 Shattuck Ave. 

Stephan Volker, a fixture in regional land use litigation, grilled the councilmember on behalf of the Berkeley Neighborhood Antenna-Free Union and co-plaintiffs Michael Barglow, Ellen McGovern and Pamela Speich. 

Maio had no personal attorney of her own, but was represented as a councilmember by Kirk E. Troost, a Sacramento attorney hired to represent the city and City Council in the lawsuit. 

Also on hand for the Oct. 15 deposition were San Francisco lawyer James A. Heard in a dual role as representative for both GTE Mobilnet and cellular service brand Verizon and 2721 Shattuck, LLC, Kennedy’s corporate mantle for the building otherwise known as UC Storage. Nicholas Selby of Palo Alto represented Nextel Communication. 

“We have produced some six or eight inches of documents here,” Troost said as the questioning began, referring to a collection of notes, emails and official documents produced by the councilmember. 

Troost had agreed to allow only limited questions about Maio’s financial relationship with parties specifically named in the subpoena, but not including conversations with her husband Rob Browning about their jointly owned Talavera Ceramics. Questions were off limits when it came to “communications, negotiations, ownership interests, letters of credit, credit facilities between her and Rob Browning and Talavera Ceramics.” But the lawyer and his client did provide e-mails between Browning and Maio about the property sales. 

Browning, Maio’s spouse, runs the ceramics business, which operates out of a commercial condominium on the ground floor of University Lofts, a building located at the northeast corner of the intersection of University and Grant Street. 

Three buildings developed by Kennedy figure in the story: University Lofts, the UC Storage building and the Gaia Building at 2116 Allston Way, which was subject to several city council votes. 

Another player is Congregation Beth El, a Berkeley Jewish congregation of which Kennedy’s spouse, Julie Matlof Kennedy, is the immediate past president. 

While Maio recused herself from most recent votes involving the Gaia Building, citing her relationship to Kennedy as a tenant at University Lofts, she participated in all the votes on the UC storage building’s cell phone antennas, which are the subject of the ongoing lawsuit. 

Volker has announced his intention to conduct a second deposition of the councilmember, and he is also seeking Kennedy’s testimony. 

What follows is a chronology derived from the depositions, documents filed with the Alameda County Recorder’s office and records of the Berkeley City Council and Zoning Adjustments Board, as well as previous reporting in this newspaper. 



• Oct. 15, 1996: A Certificate of Limited Partnership for University Lofts filed with the state lists Patrick C. Kennedy as general partner. His signature on the document is dated November 14, a month after the document was actually filed.  

• 2000: Rob Browning and Linda Maio purchase Talavera Ceramics at 1805 University Ave. “We jointly own it,” she testified, adding that the business has one employee.  

• Feb. 10, 2000: A Certificate of Dissolution for University Lofts Limited Partnership is filed with the Secretary of State, signed by Kennedy as general partner, ending the partnership’s paper trail with the agency. 

• Jan. 21, 2003: Browning makes a note which appears in the file about his interest in acquiring the leasehold at 1801 University should tenant Anna De Leon vacate the premises, which she held on a 10-year lease then in its fifth year. (De Leon soon vacated and Berkeley Youth Radio became the new tenant.) 

• June 16, 2004, Nextel Communications files an application for a use permit to install twelve antennas and related equipment at the UC Storage building, at 2721 Shattuck Ave. 



• 2005 or 2006: Browning learns from discussions with Ellen O’Leary that Youth Radio plans to vacate the adjacent space at 1801 University. He and Maio discuss acquisition of the space. 

• April 25, 2006: Maio votes with the council majority to support the Gaia Building cultural use letter signed by former planning department staff member Carol Barrett, which developer/owner Patrick Kennedy supports, despite objections from the Zoning Adjustments Board. 

• May 25, 2006: The Zoning Adjustments Board (ZAB) approves Nextel’s application to install antennas at the UC Storage building. 

• June 19, 2006: A neighbor appeals ZAB’s decision to issue the Nextel antenna permit for the UC Storage building. 

• July 18, 2006: Browning is in discussions with Steve Smith of Norheim & Yost—the couple’s commercial real estate broker—over a possible offer to purchase the commercial space that houses both Talavera and Berkeley Youth Radio. “I think it was just information gathering at that point,” Maio said.  

• Sept. 26, 2006: Maio votes with the City Council majority to remand back to the Zoning Adjustments Board for reconsideration that board’s vote to deny Nextel. 

• Dec. 12, 2006: Maio recuses herself from two votes on Gaia Building cultural space use which involve Kennedy both as landlord and as a partner in a business operating in the cultural space. She cites as a reason Kennedy’s role as her landlord at University Lofts. The council capitulates to the developer. Kennedy had threatened to sue the city unless the council upheld his position. 



• Jan. 30, 2007: The Zoning Adjustments Board votes to deny permission for Nextel and Verizon Wireless to install cell phone antennas on the UC Storage building after neighbors protest the installation. 

• Late Spring, 2007: Browning in a discussion with Patrick Kennedy learns that Kennedy plans to donate the commercial condo unit that house Talavera Ceramics to Congregation Beth El. In her deposition, Maio said she believed—but was not told—that the donation was to provide a tax deduction to offset Kennedy’s profits from the sale of seven Panoramic Interests properties, including the Gaia Building. “And my speculation is that he needed a tax write-off,” she said. 

• April 6, 2007: The Daily Planet reports that Kennedy’s Panoramic Interests is selling the Gaia Building and six other Berkeley apartment buildings to Equity Residential, a Chicago-based corporation controlled by billionaire developer Sam Zell.  

• April 25, 2007: The couple consults City Councilmember Laurie Capitelli in his capacity as a real estate broker, seeking advice. “Because this is strange to us, we asked Patrick to pay for our own attorney to advise us of the legitimacy of this process,” an e-mail to Capitelli reads. Maio told Volker she consulted with Capitelli about the choice of attorney because Kennedy “didn’t follow a normal route to condoize these commercial units. He did something else. We needed to have an attorney to help us figure out what this something else was.” 

• May 8, 2007: Maio seconds Councilmember Laurie Capitelli’s motion to continue until May 22 hearings on installation of Verizon and Nextel antennas at the UC Storage building. 

• May 22, 2007: Maio votes with the council majority to remand ZAB’s denial of the cell antenna installations back to the ZAB with instructions for the board to reconsider. 

• Undated, summer 2007: Berkeley Youth Radio vacates 1801 University. 

• June 28, 2007: Kennedy deeds the commercial condo to the Congregation Beth El in a deed. It does not include the ownership parking space Talavera is then using. “What I believe happened is that he donated the two spaces to Beth El with no parking,” Maio told Volker. “We were advised to get parking. We made that known to Beth El and to the realtor. And they went and figured out how to get us the parking space that Rob wanted.”  

• June 28, 2007: Kennedy deeds the condo, the same property he has already given away to Congregation Beth El, from University Lofts Limited Partnership (which had been dissolved in February of 2000) back to himself. 

• June 28, 2007: The Zoning Adjustments Board votes 5-4 to deny permission for Nextel and Verizon Wireless to install antennas on the UC Storage building. 

• July 18, 2007: Maio meets with broker Smith to discuss separate contracts, one for purchase of the commercial space, the second for purchase of a single parking space with a storage lift. 

• Late July, 2007: Maio and Browning begin negotiations with Congregation Beth El to buy the commercial condos after they learn “they wanted to sell it quickly ... We knew that we had to get our ducks lined up to be able to actually go into acquisition,” Maio said, “which meant that we had to sell a property that we owned, put it on the market ... It was a piece of country property that had been rented for some time.” 

The property, in Nevada County, which included 13.4 acres and a house, sold for $420,000, yielding “net proceeds of about $250,000.” 

• July 31, 2007: Broker Smith advises Browning and Maio to “conserve” their use of the services of attorney Larry Neal, since Kennedy has orally agreed to pay only $2,000 of their legal expenses in just two legal issues: clearing the title to an unusual configuration of air rights and protecting the would-be buyers from the effects of the homeowners’ association lawsuit. “Patrick made the commitment to pay an attorney to research these issues and clarify them,” Maio said in the deposition. 

Two months later Kennedy agreed to double the amount because of the complexity of issues arising from the litigation. “He wouldn’t go any further, but he honored it,” Maio said. Their total legal expenses exceeded Kennedy’s $4,000 by $2,929.25. 

• Aug. 6, 2007: A purchase agreement is completed but not signed. The price, which remained the same throughout negotiations between the couple and first Kennedy, then the congregation, is $525,000. 

• Week of Aug. 20, 2007: Nextel sues the city in federal court over its refusal to grant the permit to install cell phone antennas at the UC Storage building. 

• October, 2007: Neal continues to work out a detailed offer with the congregation’s attorney, Harry Pollack (another past president of Beth El, and also a Berkeley planning commissioner appointed by City Councilmember Gordon Wozniak). One complication that requires detailed work is a pending “major suit” filed by the homeowners’ association against Kennedy’s Panoramic Interests which, Maio said, had alleged “shoddy workmanship.” That litigation is still underway. 

• Oct. 15, 2007: A purchase agreement is signed by Browning, Maio and Beth El treasurer Alan Statman, subject to an agreement that because Beth El “didn’t know very much about the property, that we would make a good faith effort to find any flaws in the property.” 

• Oct. 23, 2007: City Council refuses to overturn a ZAB decision to deny installation of cell phone antennas at Patrick Kennedy’s UC Storage building. 

• Nov. 5, 2007: Maio signs a contingency agreement removing the remaining obstacles to the purchase agreement. 

• Nov. 6, 2007: Maio votes with the city council majority to reverse their Oct. 23 vote and approve installation of the antennas at the UC storage building. 

• Dec. 2, 2007: Congregation Beth El deeds the commercial condo to the councilmember and Browning. Maio said she does not believe she or her husband ever negotiated with Kennedy himself, though “there had been discussion between largely Patrick and Rob about acquiring that space (1801 University) and actually purchasing it.” 

• Dec. 11, 2007: An e-mail notes that Maio and Browning have asked their broker to notify Alan Statman that they will need additional time to close on the property to satisfy their lender’s concerns about their construction contract for modifying the units. 

• Dec. 20 or 21, 2007: On one of these days, Maio said, the commercial spaces at 1801 and 1805 University were consolidated into a single property when the sale closed. The sale included one parking space and the storage space above it. 



• January, 2008: Maio and Browning begin renovations of the space formerly occupied by Youth Radio. 

• March 21, 2008: Kennedy notifies Browning and Maio that he intends to sell the two parking spaces they are leasing, pursuant to an agreement that gives them the right of first refusal to purchase them. 

• March 25, 2008: Kennedy notifies the couple’s broker that he has an offer to purchase the Unit 4 commercial condo space at 1801 University including the two parking spaces Talavera had been leasing. 

• April 15, 2008: Browning and Maio notify their broker that they accept the terms of the proposed agreement to buy the two additional parking spaces. 

• April 29, 2008: The couple signs a $45,000 promissory note to Panoramic Interests for a loan at 7 percent interest after paying a $5,000 down payment for two additional parking spaces. Kennedy was the only available source of funding, Maio said, “since we had pretty much maxed out our ability to borrow at that point.”  

The councilmember said she had tried to negotiate a lower rate, suggesting Kennedy split the difference between his initial offer and the then-current prime rate of five percent. The developer refused. “So we had no choice but to accept 7 percent if we were going to have this arrangement,” she told Volker. The note is for interest-only payments, with principal due in a final balloon payment. 

• April 30, 2008: Browning emails Kennedy with a notification that “I intend to terminate my lease for parking space No. 4 as of May 31.”  

• May 2, 2008: Three grant deeds recorded, the first transferring ownership of the parking spaces from the legally defunct University Lofts, L.P., to Patrick Kennedy, followed by a second transferring them from Kennedy to himself and his spouse as trustees of the family trust and a third transferring the property from the trust to Browning and Maio. 

• May 8, 2008: Maio recuses herself from a vote that rescinds the council’s Dec. 12, 2006, resolution that had granted owners of the Gaia Building relaxed standards for use of its cultural bonus space. 

• May 9, 2008: Sale of the two parking spaces to Maio and Browning. 

• May 9, 2008: Kennedy e-mails city staffer Christopher Wolf that Nextel, Verizon and T-Mobile—three cell phone carriers—all had permission “to pursue cell phone antenna installation” at UC Storage, which he said he controlled through the 2721 Shattuck partnership. 

• May 10, 2008: A final grant deed for the parking spaces corrects an error in the property description. 

• May 13, 2008: A settlement statement for the sale of the two additional parking spaces is prepared and the trust deed for the loan is signed. 

• May 15, 2008: The loan document is filed with the Alameda County Recorder’s office, with Maio and Browning as the recipients and Kennedy and spouse Julie Kennedy (as trustees for the Patrick and Julie Kennedy Revocable Trust), listed as beneficiaries in trust deed signed before a notary April 29.