The sad story of subarea 8

by V Smoothe | March 26, 2008 | 4 comments

People will tell you that the new industrial land use policy is about providing certainty and predictability to developers, business owners, and property owners. Adopting a set of objective criteria, developed through a public-input process, to use in evaluating applications for General Plan amendments is a planning tool. In theory, it should ensure that approvals are not arbitrary, or based on the political influence of any particular developer or business owner, and that the decisions made are those appropriate for the city as a whole. It would provide objective measures to evaluate whether the land in question has potential for job creation and industrial business use, what sort of economic impact the conversion will have on the city, and whether a proposed residential development will contain appropriate measures to buffer the new homes from nearby industry, in order to avoid creating the oft-threatened domino effect of conversion after conversion.

And if that were the case, all this would be fine. But it isn’t. Nancy Nadel and Pat Kernighan both stated on March 4th that the provision of community benefits in any new residential project on industrially designated land should be one of the criteria for conversion. Dan Lindheim threw a minor fit because the Council’s motion did not specifically identify community benefits as part of the criteria staff was to return with (I found this utterly bizarre – the Council didn’t give any direction as to what criteria should be, only that they be “comprehensive.” Nothing prevents staff from returning with criteria that include community benefits – in fact, I would be shocked if they didn’t.) Community benefits have nothing to do with predictability or the appropriateness of conversion.^*

As illustration, let me tell you a about a little place called subarea 8. Subarea 8, a 50 acre section of East Oakland, is bordered by 92nd and 98th Avenues, San Leandro St. and E Street.

In November 2005, the City Council approved a General Plan amendment rezoning 27 acres of subarea 8 from General Industrial to Housing and Business Mix, to allow for the Arcadia Park development by Pulte Homes. Arcadia Park was approved for 366 homes on the site of the Fleischmann’s Yeast Factory, which was demolished in 2003 (this has since been scaled back to, I think 188 units). At the time, the land was being used for container storage. Here’s an aerial image of the project site:

See that land along San Leandro right next to the development? Right now, it too is being used as container storage. A representative of the owners of this property spoke on the industrial land use policy at both the Planning Commission and the City Council, explaining that their land cannot be used for industrial purposes. Here’s a map of the Arcadia Park project as approved by the Council in 2005:

As you can see, the houses in Arcadia Park run all the way to the edge of the project site, and the Council even approved the construction of residential stub streets right up to the property line. It is clear that the intention was to ultimately put residential on the adjoining parcel, and in fact, that was the recommendation of staff in 2005. Not only does the land abut new residential, but it also has no truck access from San Leandro St, due to the BART and train tracks running along the site. In short, the property has no value for industrial users.

After Nancy Nadel introduced her motion, Larry Reid introduced a substitute motion, identical to hers, except that subarea 8 would be transitioned to Housing and Business Mix. He reminded the Council that the recommendation in 2005 was to do just that:

Jean Quan, addressing Reid’s substitute motion, said that she would not support the change in subarea 8, not because, as one might assume, housing isn’t an appropriate use for the land, but because it would be ” a huge windfall gift, quite frankly” and “It doesn’t make sense to give up benefits to the city.”:

Larry Reid reminded the Council that allowing housing on the site was the only logical option:

The case of subarea 8 and the Arcadia Park development illustrates the real concerns that need to be addressed in converting industrial land to housing. Without appropriate buffering measures in any one development, we will see a domino effect of conversions. The Council knew they weren’t taking buffering measures when they approved Arcadia Park, they knew that the adjoining property would no longer have value as industrial land, and are now refusing to live with the consequences of their actions. Or, more accurately, they are willing to live with the consequences and allow housing on the adjoining land, as Jean Quan acknowledged, but only after getting whatever they can out of the developer.

Reid’s motion failed, with Ignacio De La Fuente, Desley Brooks, Jane Brunner, Pat Kernighan, Nancy Nadel, and Jean Quan voting no. All of these Councilmembers should be ashamed of themselves. Permitting housing in subarea 8 is not a gift, nor is it a “windfall”. The property owners do not owe the City any special benefits that other developers are not required to provide. The Council made a decision over two years ago that removed any potential value from this land as an industrial property – it can’t be used for jobs, it can’t be used for a factory. As Reid points out, the five story high container stacks currently occupying the land are not appropriate neighbors for the homebuyers looking in Arcadia Park. Now the Council refuses to allow the housing on the land unless the developer meets what demands they end up creating in exchange for it. That isn’t predictability or sensible planning. It’s extortion.

---

* Please do not take this to mean that I don’t think developers of large projects should provide community benefits. I think they should, but that applies to developments throughout the city, not simply those on converted industrial sites. This should be a separate part of the planning process. Conversion applications should be evaluated based on whether the proposed new land use is appropriate for the site – economic impacts should be the priority.