Berkeley May End Protections for Manufacturing, Allow R&D Businesses

By Doug Oakley

Staff Writer

Bay Area News Group East Bay

doakley@bayareanewsgroup.com

In an effort to revitalize Berkeley's dilapidated industrial zone and create new jobs, officials are asking the City Council to end outdated manufacturing protections and allow research and development businesses.

Though officials say the changes are vital for job growth and competition, some businesses benefiting from the current rules worry that if highly capitalized startups enter the area, rents will rise, and they'll be pushed out.

John Curl, co-owner of Heartwood Custom Woodworking in west Berkeley, worries that  allowing research and development firms in the area will drive up rents and business like his will have to leave. (Photo by Doug Oakley) 

The area lost 2,754 manufacturing jobs over the past 20 years — and that's with the rules protecting them — according to a city manager report urging the City Council to make changes to zoning rules for west Berkeley.

"Instead of employment growth, there's been employment loss," said Dan Marks, director of planning and development during a Berkeley City Council meeting Tuesday. "Protecting manufacturing space does not protect those jobs. We've had many Berkeley (research and development) startups move to other locations because they were unable to expand, and the building stock in the area has declined." The City Council will hold a second hearing on the new rules in February, followed by a possible vote in March.

The new plan to allow research and development companies in the area and ease manufacturing protections has been aired in 30 planning commission meetings and 45 meetings with community groups over the past two years.

But even with all the meetings, city officials have not been able to convince some business owners the plan is a good way to revitalize the area. Businesses benefiting from the current protections say bringing in highly capitalized research and development firms will drive up rents, and they'll be forced out.

"Any time you take industrial space and rent it to research and development companies it's going to displace all the industrial people for the simple reason they will be able to pay a lot more for rent," said John Curl, co-owner of Heartwood Custom Woodworking on Eighth Street in Berkeley.

Curl said he and other business owners want the city to phase in the rule changes over time to "prevent this destabilizing influence."

"We have a fairly successful sector of business, and this proposal to open it all up is really destructive," Curl said. "It needs to be done slowly. That way the people are not displaced and everybody wins."

But Councilman Darryl Moore, whose district includes much of the area slated for the rule changes, said that argument does not work for him anymore.

"Unfortunately the smokestack model of manufacturing is no longer viable in west Berkeley," Moore said. "Our president, in his State of the Union address, talked about having to compete at a much higher level. So we have to look at research and development and that's where our strength is." Moore and other city officials such as Economic Development Manager Michael Caplan point to nearby UC Berkeley and Lawrence Berkeley Laboratory as two rich sources the city could tap for research and development business in west Berkeley.

"We have a billion-dollar pipeline from UC Berkeley and the labs," Caplan said. "But these research and development spin-offs often leave the area after being created at UC Berkeley because there is nowhere for them to go. The production needs to be close to the source of innovation."

Moore said he is likely to vote for the changes, but he wants to add requirements that new businesses contribute to a fund that will help with job training in south Berkeley, money for a shuttle bus to get workers from Berkeley's two BART stations and money to "protect and support our artists" of which there are about 800 working in the area.

Rick Auerbach, who works for the West Berkeley Artisans and Industrial Companies Association, said its members who benefit from the current rules just want a fair deal going forward.

"We don't believe you have to open up all that space to research and development," Auerbach said.

"We think research and development is valuable, but retaining the mix of uses and employment opportunities for people of all levels of skill and education is key to our community's economic health."