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Wednesday, February 19, 2014

With No Returns Coming, Why Should We Say OK to the Sherwin Williams Development?

We're Not Legally Required to Say Yes to Developer's Projects
So Shouldn't We Hold Out For Real Benefits for the Neighborhoods?

Everybody knows Emeryville City Hall gets revenue from business development.  But how much revenue does the City get from residential development?   The answer may surprise some; it's less than zero.  It's negative revenue.  Residential development in Emeryville actually costs City Hall money because residents use a little more in services than they pay in.  As it turns out this dynamic is pretty normal in the world of municipal budgeting and financing.  Cities generally don't use residents to generate cash, they don't imagine making money off the residents.  Emeryville is no exception, we lose money on residents.  It makes sense because after all, Emeryville is us.

So residential development costs us money.  We should get other non-monetary benefits from developers of large scale residential projects then, right?
Sherwin Williams Project
They're going to dump thousands of cars into
our city as the developer seeks to maximize
his profits.  Shouldn't we maximize OUR profits?

Against this backdrop, picture an alternative Emeryville where the City Council was working wholly in the interests of the residents and not the developers (you'll have to use your imagination with this).  In this imaginary Emeryville, developers would have to show real benefits to the residents in trade for approving development proposals.
Now imagine a lousy proposal from a developer for a residential project with little or no benefits.  That fictitious City Council could say NO to the developer, right?  Well, because of constitutionally ensconced private property rights, the answer is they would have to say YES to the project.  State law forces any city hall to allow a developer to build a residential project, regardless of any benefits to the residents, for any project up to 20 units per acre. If the developer wanted to build a project at more than 20 units per acre, well then the imaginary Emeryville City Council could force the developer to negotiate.  That's the leverage point where residents could see benefits emerge.  The Council could trade increased units per acre for resident amenities.

But this is just a thought experiment, albeit a pleasant one.  In the real Emeryville, the City Council majority simply grants the developer whatever he wants without asking for benefits.
It's happening right now with the Sherwin Williams project on Horton Street.  The Developer, SRM Ernst Development Partners has done the obligatory shopping of the project around town and they're now quietly working to secure entitlements to build their residential project at 80 apartment units per acre.  Remember, we're only legally required to allow them to build 20 units per acre.  Those additional 60 units per acre are going to massively impact our town, especially the Park Avenue neighborhood.  The project is going to add thousands of vehicle trips per day on our already crowded streets.
Councilman Kurt Brinkman
We're not in any position in Emeryville
to ask developers for anything.  Besides
developers are already looking out
after our interests.  We're in good hands
when we let them run the show.
  The "benefit" for this project essentially amounts to a center green space proudly touted by the developer.  But this isn't really a space meant to be used by residents outside the project.  This greenery is meant to serve as bling to increase cache for the project to help SRM Ernst's bottom line.  It's meant to be used as a device to bump up the rents at the Sherwin Williams apartments.  The small amount of green space proposed on the periphery of the project is land already owned by the City of Emeryville.
The greenery is the sum total of project benefits at the Sherwin Williams project.  So the City Council is  giving away 60 units per acre for that.

We need to do a proper costs/benefits analysis with Sherwin Williams as it's being proposed.  If we add up all the losses and compare that with the benefits, it's no contest: we're on the losing side with this project.  We see the down side, but where's the up side?  Since we don't legally have to make this lousy deal, and since City Hall is going to perpetually lose money with it, then why should we allow it?  What's in it for us?  It seems crazy that we would allow this deal.

We already know the three Council members, Nora Davis, Kurt Brinkman and Ruth Atkin are pro-developer ideologues.  We know they're not going to ask the developer for any resident benefits in trade for approving this project.  But this is the last large piece of fallow land left in Emeryville.  It's our last big hurrah.  Why should we accept the imaginary Emeryville scenario where the City Council operates in our interests, strictly as fantasy?  The Sherwin Williams developer is working to maximize his profits with this project.  We're about to give away something extremely valuable on this site.  Shouldn't we expect our government to work to maximize OUR profits?


  1. People need places to live. San Francisco is under a lot of pressure, there is no housing for tech workers. Adding more living spaces here builds credibility for Emeryville as a place to think about living in. It helps supports restaurants and shops both here and in Berkeley and Oakland. The complex where I live is finally full and the community is diverse and caring.

    I'm happy with higher density. Higher density supports public transit.

    There are two things I WOULD like to see, and think are worth lobbying for:

    1. More two and three bedroom units, to provide housing for families instead of just singletons and couples. I'd like to see people feel better about staying in Emeryville longer term.

    2. A higher contribution from new developments to the Emery Go Round. Emery Go Round is under pressure from Ken's lobbying efforts - on a cost/benefit basis some property owners pay a lot for very little in direct benefits - but developments like this new one definitely get benefits from Emery Go Round and should throw more $$$ in the pot to support it.

    Finally - if we really want to encourage families, maybe we should think about doing something daring, like offering ECDC (Emeryville Child Development Center) schooling for pre-shoolers for FREE. NYC is considering making pre-school available to all parents free of charge, that age is so critical for early development. Sadly, my kids are no longer pre-school, and my savings account severely depleted from putting them through pre-school. But other families need this golden opportunity.

  2. It sounds like Sherman Williams is building this project by right and they're just being nice by allowing others to discuss the future of this site. Since the project is not involving ownership units, the City Council should immediately sit down with the planning director, Charles Bryant, and ask him how he plans to valuate this property. The problem is that they will be valuating the property on an investment basis rather than a real market value per unit cost which will cost the city millions. For example, one, one bedroom apartment would have a selling market value of $300,000 and the same unit taxed on an investment basis of land value and price to build will be $100,000. If the city did this, and decides to value the project at market unit rates, the developers would then change the build to ownership units rather than apartments. This would be much better for our city financially and communally. By the way, this project does not need subsidies nor the Redevelopment Agency to build.

  3. In some ways Emeryville is run like a banana republic, with favors granted to moneyed interests and burdens borne by the masses.

    The difference is that here the favors are visible enough for everyone to see, and the local government is local enough that residents can actually do something about the problem by taking their concerns to City Hall and to the voting booth.

    Thanks to the Emeryville Tattler for not letting up the pressure on the city to do right by its residents.