Berkeley City Council
January 31, 2023

ZONING ADJUSTMENTS BOARD 2065 KITTREDGE STREET
September 22, 2022 Page 9 of 22

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Table 3: Project Chronology
Date Action
July 26, 2021 SB 330 Preliminary Application deemed complete October 25, 2021 SB 330 Use Permit Application submitted June 1, 2022 Application deemed complete; level of CEQA review determined by staff – EIR Addendum
April 21 2022 DRC Design Review Referral for LMSAP2021-0004 June 2, 2022 LPC Structural Alterations Permit LMSAP2021-0004 Hearing August 4, 2022 LPC Structural Alterations Permit LMSAP2021-0004 Hearing September 8, 2022 Public hearing notices mailed/posted
September 22, 2022 ZAB Hearing

Table 4: Development Standards
C-DMU Standards,
Core Sub-Area Existing Proposed Permitted/Required
Lot Area (sq. ft.) 33,5821 33,582 n/a
Gross Floor Area (sq. ft.) 92,531 186,354 n/a
Commercial Floor Area 95,000 4,9932 n/a
FAR 2.8 5.5 n/a
Dwelling Units 0 183 n/a
Live/Work Units 0 4 n/a
Building
Height
Maximum 36’-0” 87’-0”
50’ min./60’ max.
(75’ max. w/use permit 3;
5’ max. parapet by right)
Stories 3 8 n/a
Building
Setbacks

Front
(Kittredge) 0’-0” 0’-0”
0’–5’ (bldg. ht.≤20’)
0’ (bldg. ht.>20’ and ≤75’)
15’ (bldg. ht.>75’)
Front
(Harold) 0’-0”
0’-0”
(2’-6” overhang
into ROW)
0’–5’ (bldg. ht.≤20’)
0’ (bldg. ht.>20’ and ≤75’)
15’ (bldg. ht.>75’)
Front
(Allston) 0’-0” 0’-0”
0’–5’ (bldg. ht.≤20’)
0’ (bldg. ht.>20’ and ≤75’)
15’ (bldg. ht.>75’)
Lot Coverage (%) 100 82 n/a
Usable Open Space (sq. ft.) n/a 11,916 14,960 min.
(80 s.f./d.u.)
Privately Owned Public Open Space
(sq. ft.) n/a 4,5934 100
(1 s.f./50 s.f. of commercial)

ZONING ADJUSTMENTS BOARD 2065 KITTREDGE STREET
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C-DMU Standards,
Core Sub-Area Existing Proposed Permitted/Required
Parking
Commercial
(4,993 sq. ft.) 0 0 8 min.
(1.5 space/1,000 s.f.)
Residential 0 41 0 min./92 max.
(0.5 spaces/du max.)
Carshare 0 2 2 min.

Total 0 43 6 min./92 max.

Bicycle
Parking
Commercial - Short
Term (4,993 sq. ft.) 0 3 3
(1 spc/2,000 s.f. commercial)
Residential - Long Term 0 122 112
(1 space/3 bedrooms)
Residential - Short
Term 0 8 8
(1 space/40 bedrooms, or 2)
Total
122/11
(long term/short
term)
112/11
(long term/short term)
1 Area of Unit B of Parcel Map 6889
2 Includes commercial area in live/work units, 4 x 433.5 sq.ft.=1,734 sq.ft.. 3 The use permit to allow height up to 75 feet is included in the Base Project for the calculation of the density bonus, and is not a requested waiver. Additional height beyond 75’ is being requested as a waiver. 4 Each square foot of usable open space provided as privately-owned public open space is counted as two square feet of required on-site usable open space.

________ = Waiver requested to modify the district standard.

________ = Concession, pursuant to State Density Bonus Law, requested to modify the district standard.

II. Project Setting

A. Neighborhood/Area Description: The project site is located within the Downtown Mixed-Use District (C-DMU), Core Sub-Area, as identified in the City’s Downtown Area Plan (DAP). Directly adjacent to the project site and on the same block is the Shattuck Hotel, a City of Berkeley Landmark, whose main lobby and entrance are on Allston Way but which also occupies the airspace above the ground floor retail along the entire block’s frontage on Shattuck Avenue. Below the hotel rooms along Shattuck Avenue is a row of commercial storefronts, as well as the entrance to the former commercial occupant, Shattuck Cinemas, which is now closed. The hotel consists of guest rooms, a restaurant, a bar, and meeting rooms.

Commercial uses are located along Shattuck Avenue north of and across from the project site. South of the project site on Shattuck Avenue and across Kittredge Street is the Berkeley Central Library, a City of Berkeley and National historic landmark. West of the project site across Harold Way are the Dharma College and the Mangalam Center, both City of Berkeley Landmarks. Commercial land uses and a public parking structure are located north of the project site across Allston Way. (See Figure 1: Zoning Map and Figure 2: Project Location.)

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Building heights in the vicinity range from two to three-stories (portions of the Dharma College complex on Harold Way and U.S. Post Office along Kittredge Street) to the 12-story 2140–2144 Shattuck Avenue Chamber of Commerce Building (173 feet) and 14-story 2150 Shattuck Avenue First Savings/Great Western Building (180 feet). The adjacent Shattuck Hotel is five stories in height, not including the basement. Most buildings around the project site are in the two- to five-story range. One block north, around the intersection of Center Street and Shattuck Avenue, are several AC Transit and UC Berkeley Shuttle bus stops serving a number of bus lines, as well as the Downtown Berkeley BART Station on Shattuck Avenue between Allston Way and Addison Street.

B. Site Conditions/Background: The project site is a portion of the fully urbanized city block discussed above, which is generally level, sloping slightly downward towards the west and south. The project site is a single parcel that encompasses an entire City block with street frontage on Allston Way (north), Shattuck Avenue (east), Kittredge Street (south) and Harold Way (west) that is subdivided into condominium parcels A, B, and C of Parcel Map 6889. (See Figure 3: City Landmarks and Demolition Boundaries) The site is occupied by a City Landmark, The Shattuck Hotel, which has four primary components: the original hotel building constructed in 1910; 1913 hotel expansion and Hink’s Department store addition facing Shattuck Avenue and Kittredge Street; 1926 Hink’s expansion facing Kittredge and Harold Way; and the 1959 Hink’s addition facing Harold Way and Allston Way. The 1913 expansion previously housed the Shattuck Cinema’s movie theaters, part of the Habitot Children’s Museum, and office space. Both the Shattuck Cinemas and Habitot spaces are currently vacant. All portions of the expansions proposed to be demolished are two stories in height with a partial third story and a basement level.

The project site is Unit B of the condominium subdivision, Parcel Map 6889, which was created December, 2020. Entitlements were previously obtained for the project site in 2015 (UP13-10000010 and LM13-40000002, under the address 2211 Harold Way) to demolish historic structures and construct an 18-story, 302-unit, mixed-use building, with approximately 10,877 square feet of commercial space, a ten- theater cinema complex, and 177 underground parking spaces. Building permits were never obtained for the project, and the City deemed the permits expired on January 17, 2020.

III. Project Description

A. The proposed project would demolish a portion of the City Landmark Shattuck Hotel (the 1913 expansion) and fully demolish the City Landmarks 1926 and 1959 Hink’s department store expansions; and construct a mixed-use building with the following main components:
• Eight stories, 87 feet in height
• 183 dwelling units – 41 studios, 30 one-bedroom 101 two-bedroom, and 11 three- bedroom
• Four live/work units

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• 583 bedrooms total
• Nine Very Low Income (VLI) units
• 4,993 square feet of ground-floor commercial space
• 1 1,916 square feet of usable open space – two ground-floor public plazas (off of Kittredge and Allston frontages) and a seventh-floor roof deck • 43 residential vehicle parking spaces in ground-level garage (two carshare spaces) • 122-space bike room
(See Figure 4, 5 and 6: Elevations.)
B. Base Project and Density Bonus: By committing to provide nine VLI units, the project is eligible for a density bonus under Government Code Section 65915. Under the City’s density bonus procedures, the Base Project was calculated to have 163 units, as the maximum allowable density for the site. 1 The Base Project has an average unit size of 995 square feet in a 7-story building. Nine VLI units, or 5 percent of the Base Project, qualifies the project for a 20 percent density bonus or 33 bonus units, of which the project would utilize 24. The resulting Proposed Project would be an eight -story building with 187 units, with an average unit size of 997 square feet. (See Table 5 :

Density Bonus.)

Table 5: Density Bonus
– CA Gov’t Code 65915
Base Project
Units* Qualifying Units Percent Density
Bonus
Number of
Density Bonus
Units*
Proposed
Project Units
163 9 VLI
(5% of BP) 20% 24 (33 max.)
(20%x163) 187
*Per Gov’t Code 65915(q), all unit calculations are rounded up to the nearest whole number.

C. Housing Accountability Act: The Housing Accountability Act (HAA), California Government Code Section 65589.5(j), requires that when a proposed housing development complies with the applicable, objective general plan and zoning standards, but a local agency proposes to deny the project or approve it only if the density is reduced, the agency must base its decision on written findings supported by substantial evidence that:

1) The development would have a specific adverse impact on public health or safety unless disapproved, or approved at a lower density; and 2) There is no feasible method to satisfactorily mitigate or avoid the specific adverse impact, other than the disapproval, or approval at a lower density.

1 Per the City’s Density Bonus Procedures (DBP), the Base Project is the largest project allowed on the site that is fully compliant with district development standards (i.e. height, setbacks, usable open space, parking, etc.), or, the maximum allowable density for the site. The City uses the DBP to calculate the maximum allowable density for a site where there is no density standard in the zoning district, and to determine the number of units in the Proposed Project, which is the number of Base Project units plus the number of density bonus units that can be added according to the percentage of BMR units proposed, per Government Code, §65915(f).

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The Base Project complies with applicable, objective general plan and zoning standards. Further, Section 65589.5(j)(3) provides that a request for a density bonus “shall not constitute a valid basis on which to find a proposed housing development project is inconsistent, not in compliance, or not in conformity, with an applicable plan, program, policy, ordinance, standard, requirement, or other similar provision specified in this subdivision.” Therefore, the City may not deny the Base Project or density bonus request or reduce the density with respect to those units without basing its decision on the written findings under Section 65589.5(j), above. Staff is aware of no specific adverse impacts that could occur with the construction of the Base Project or the density bonus units. Therefore, Section 65589.5(j) does apply to the Proposed Project. All findings discussed below are subject to the requirements of Government Code Section 65589.5.

IV. Community Discussion
A. Neighbor/Community Concerns: Prior to submitting the application to the City on October 25, 2021, the applicant installed yellow Proposed Development Project signs at the project site.

October 6, 2021 a neighborhood outreach meeting was held by the applicant. Four members of the public attended and discussed questions about: construction timeline and noise mitigation, shared service access on the alley at Allston Way; the extent of the demolition and impact to internal circulation in the existing buildings to remain; the proposed retail and shared utilities with existing buildings to remain; and exterior materials and finishes.

On March 2, 2022, staff received a letter from a neighbor raising concerns over the demolition of a portion of the Shattuck Cinemas. On April 20 and 21, 2022, prior to the Design Review Committee referral meeting, staff received two letters letter from neighbors raising similar concerns about the demolition of the movie theater, and the loss of a “cultural resource”.

On September 8, 2022, the City mailed public hearing notices to property owners and occupants, and to interested neighborhood organizations, and posted notices within the neighborhood in three locations. No further communications regarding the project were received as of the writing of this staff report.

B. Design Review Committee Referral and Landmarks Preservation Commission:

In accordance with BMC Section 3.24.200 of the Landmarks Preservation Ordinance and BMC Section 23.406.070 of the Zoning Ordinance, the Landmarks Preservation Commission (LPC) must grant approval of the proposed demolition and complete Design Review for the new development under a Structural Alteration Permit, because the new construction shares the site with the landmarked structures. The project proposes to demolish the rear portion of the Shattuck Hotel (1913 expansion) and the 1926 and 1959 Hink’s depar tment store expansions . All are components of the designated Shattuck Hotel City Landmark, and two structures – the 1913 and 1926 expansions – are eligible for listing on the National Register of Historic Places as well

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as the California Register of Historic Resources. 2 Staff referred the project to the Design Review Committee (DRC) to obtain advisory comments on the design of the new building and its adherence to the Downtown Design Guidelines for consideration by both the ZAB and LPC.

The DRC met to review the project on April 21, 2022, and forwarded comments and recommendations for improvements to the project design. The applicant made revisions per DRC recommendations and the revised project was reviewed by the LPC under the Structural Alteration Permit (LMSAP2021-0004) on June 2, 2022 and August 4, 2022.

At the August 4, 2022 meeting, the LPC approved the Structural Alteration Permit (SAP) for demolition and new construction at the Shattuck Hotel site, adopted an Addendum to a previous EIR, and conditioned further refinements for Final Design Review (Vote: 5-2-1-1). The SAP Findings and Conditions can be found at this link .

Further revisions to the project were made based on comments received from the LPC at this meeting, including the elimination of one unit (two bedrooms), the addition of 812 square feet of commercial area, and other minor revisions. (See Attachment 2.) The revisions did not affect the conclusion of the EIR Addendum (discussed in section V.B).

V. Environmental Review
A. CEQA Approach: Pursuant to Section 15164 of the CEQA Guidelines, codified in Sections 15000 et seq. of Title 14 of the California Code of Regulations, a lead agency shall prepare an addendum to a previously certified EIR if some changes or additions are necessary but none of the conditions described in Section 15612 calling for preparation of a subsequent EIR have occurred. Under Section 15162 (a), where an EIR has been certified for a project, no subsequent EIR shall be prepared for the project unless the lead agency determines, on the basis of substantial evidence in light of the whole record, that there are substantial changes in the project or circumstances or substantially important new information that will cause the project to have significant new impacts or substantially increase previously identified significant impacts.

As discussed in detail in the EIR Addendum, potential impacts associated with the modified project (the proposed changes compared to the project evaluated in the Final EIR) are consistent with potential impacts characterized and mitigated for in the Final EIR. Substantive revisions to the Final EIR are not necessary because no new significant impacts or significant impacts of substantially greater severity than previously described would occur. Thus, the conditions outlined in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would not be met.

B. EIR Addendum and Revised MMRP: An Addendum to the 2211 Harold Way Mixed- Use Project (UP 13-10000010) Final EIR, which was certified in December 2015, was prepared to evaluate the potentially significant environmental impacts of the proposed

2 The 1959 Hink’s expansion does not have cultural resource status pursuant to CEQA.

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project, pursuant to the California Environmental Quality Act. The Addendum considered the Final EIR and Statement of Overriding Considerations, and evaluated the modified project (see Figure 7). The modified project was found to be smaller and less impactful than the Final EIR project. The impacts related to demolition and alteration of historic buildings, would remain significant and unavoidable, and the same overriding considerations would apply to the modified project, except that the project is no longer required to provide community benefits , and cultural resource impacts were addressed in the modified design.

Figure 7: Changes to Previously Approved Project (from EIR Addendum)

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The Addendum described the changes in the modified project, and addressed the following issues in detail: Air Quality, Cultural Resources, Greenhouse Gas Emissions, Noise, Transportation, and Utilities and Service Systems. All other environmental issues were evaluated for impact from the modified project as well, with the conclusion that impacts to these areas would be less than significant with mitigation, similar to the original project. For each of the above-listed areas of evaluation, the EIR Addendum findings supported the conclusion that impacts from the modified project would not result in new significant effects or a substantial increase in the severity of previously identified significant effects on the environment. Therefore, no new mitigation measures would be necessary for any of these evaluated areas. Furthermore, several mitigation measures for C ultural Resources are no longer required, as discussed below.

Cultural Resources. No new or substantially more severe significant effects would occur to cultural resources, and no new mitigation measures would be necessary.

Design changes in the modified project include a reduction in building height, design strategies to break up massing with varied rooflines and materials, and the projection of the second-floor level above the double-height street level, aligning with the cornice of the 1912 portion of the Shattuck Hotel. These design modifications have responded to the design measures adopted in Mitigation Measures CR-2(a), (b) and (c) of the Final EIR; therefore the measures do not apply to the modified project . In particular, the modified project avoids impact to the Allston Way elevation, in response to Mitigation Measure CR-2(a); the redesign of the Kittredge Street “hyphen” responds to Mitigation Measure CR-2(b); and the removal of large-scale use of aluminum glazing systems responds to Mitigation Measure CR-2(c).

In conclusion, similar to the original project, cultural resource impacts from the modified project would be less than significant with mitigation, with the exception of impacts related to demolition and alteration of historic buildings, which would remain significant and unavoidable. Mitigation Measures CR -2(a) through (c) would be removed f
rom the Miti gation Monitoring and Reporting Program (MMRP). All other measures adopted in the Final EIR for the purposes of mitigating cultural resources impacts remain applicable.

As mentioned in section IV.B, revisions to the project were made after the LPC meeting on August 4, 2022, including the elimination of one unit (two bedrooms), the addition of 812 square feet of commercial area, and other minor revisions. The City reviewed the revised plans and concluded that the revisions d id not change the conclusion of the EIR Addendum (see Attachment 4).

Public Resources Code Section 21081.6 and CEQA Guidelines Section 15091(d) require the City to adopt a reporting or monitoring program for the changes to the project that it has adopted or made a condition of approval in order to avoid or substantially lessen significant effects on the environment. The monitoring program is designed to ensure compliance during project implementation. The MMRP for the 2211 Harold Way Mixed-Use Project Final EIR has been revised to reflect the changes

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to the mitigation measures that were described in the Addendum. The revised MMRP is attached to the permit (see Attachment 1, Exhibit B).

VI. Issues and Analysis
A. SB 330 – Housing Crisis Act of 2019: The Housing Crisis Act, also known as Senate Bill 330, seeks to boost homebuilding throughout the State with a focus on urbanized zones by expediting the approval process for and suspending or eliminating restrictions on housing development projects. A “housing development project” means a use that is: all residential; mixed use with at least two- thirds of the square footage as residential; or transitional or supportive housing. Sections of SB 330 that apply to the proposed project include the following:

1. Government Code Section 65905.5(a) states that if a proposed housing development project complies with the applicable, objective general plan and zoning standards in effect at the time an application is deemed complete, then the city shall not conduct more than five hearings in connection with the approval of that housing development project. This includes all public hearings in connection with the approval of the housing development project and any continuances of such public hearings. The city must consider and either approve or disapprove the project at any of the five hearings consistent with applicable timelines under the Permit Streamlining Act [Chapter 4.5 (commencing with Section 65920)].

The September 22, 2022 ZAB Hearing represents the fourth public hearing for the proposed project since the project was deemed complete. The City can hold one additional public hearing on this project, if needed. That hearing must be reserved for a potential appeal to the City Council.

2. Government Code Section 65913.10(a) requires that the C ity determine whether the proposed development project site is an historic site at the time the application for the housing development project is deemed complete. The determination as to whether the parcel is an historic site must remain valid during the pendency of the housing development project, unless any archaeological, paleontological, or tribal cultural resources are encountered during any grading, site disturbance, or building alteration activities.

As discussed in Section IV.B, the structures proposed to be demolished – the rear portion of the Shattuck Hotel (1913 expansion) and the 1926 and 1959 Hink’s department store expansions – components of the designated Shattuck Hotel City Landmark, and two structures – 1913 and 1926 expansions – are eligible for listing on the National Register of Historic Places as well as the California Register of Historic Resources. Since the project would involve demolition of these historic resources, and an EIR was previously prepared in 2015 for a project proposal with a similar demolition scope, the City determined that an EIR Addendum was required to evaluate the modified project’s impacts on the historic resources. (See Section V for more information regarding the CEQA review ). Further, standard

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conditions of approval have been included to halt work if any unanticipated discovery of archeological, paleontological, or tribal cultural resources.

3. Government Code 65950(a)(2) requires a public agency to approve or disapprove a project within 90 days from the date of certification by the lead agency of the environmental impact report for a housing development project. The project was deemed complete on June 1, 2022. An EIR was certified in December 2015 for a similar project on the project site, and Staff determined on this date that the appropriate level of CEQA review was preparation of an EIR Addendum to evaluate the modified project’s impacts on the environment. (See Section V for details on the CEQA Approach and EIR Addendum.) Therefore, this section does not apply to the project.

4. Government Code Section 66300(d) prohibits the demolition of residential dwelling units unless the project will create at least as many residential units as will be demolished. The project does not propose the demolition of housing unit s.

Therefore, this section does not apply to the project.

B. Density Bonus Waivers and Concessions: The project is entitled to one concession (or incentive) , under Government Code Section 65915(d) for providing at least 5 percent of total units to very low-income households, and an unlimited number of waivers, under Section 65915(e).

Concession. A concession or incentive is a modification of a zoning code requirement that results in identifiable and actual cost reductions to provide for affordable housing costs. The applicant is requesting one concession to reduce the Usable Open Space requirement to eliminate the cost of providing an additional roof deck or balconies.

The City may only deny the concessions if it finds that the concessions would have a specific adverse impact upon public health and safety, or the physical environment, or on any real property listed in the California Register of Historical Resources, and there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact 3 without rendering the development unaffordable to low income, very low income, and moderate-income households, or if the concession would be contrary to State or Federal law. Staff has identified no basis for making such a finding.

Waiver. A waiver is a modification of a development standard that would otherwise physically preclude the construction of the project with the permitted density bonus and concessions. Waivers for height (maximum height and rooftop projections ), setbacks, commercial parking, and the amount of landscaped open space are requested because they are necessary to physically accommodate the full density bonus project on the site.

3 A “specific, adverse impact” means “a significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety standards, policies, or conditions as they existed on the date the application was deemed complete.”

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The City may only deny the waivers if it finds that the waivers would have a specific adverse impact upon public health and safety, or the physical environment, or on any real property listed in the California Register of Historical Resources, and there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the development unaffordable to low income, very low income, and moderate income households, or if the waiver would be contrary to State or Federal law. Staff has not identified any evidence that would support such a finding.

VI. Other Considerations
The following analyses of conformance with district purposes, use permit findings for non- detriment, and the 2002 General Plan goals and policies are provided for informational purposes only, to provide context; they are not required because the proposed project is HAA- compliant.

A. Use Permit for Demolition of Commercial Structures: Pursuant to BMC Section

23.326.070(A), in order to approve a Use Permit to demolish a commercial structure, the Board must make the findings in BMC Section 23.326.070(D)(2), including the finding that the demolition would not be materially detrimental to the commercial needs and public interest of any affected neighborhood of the City , and if demolishing a building more than forty years old, the LPC, upon review, does not recommend against granting the permit.

The
proposed demolition of the rear portion of the Shattuck Hotel (1913 expansion) and the 1926 and 1959 Hink’s department store expansions would not be materially detrimental to the commercial needs and public interest of the neighborhood because the proposed project would provide r
eplacement commercial floor area, public open
space, and new dwelling units within a mixed- use building that would bring more diversity of services to residents and workers in the vicinity and new housing to the neighborhood and the City at large. The exi sting structures to be demolished contain approximately 95,000 square feet of office, food service, and cinema uses. These uses would be replaced by approximately 4,993 square feet of commercial space (retail , food service, and live/work ), 183 units of new residential units (four live/work units ), and approximately 4,600 square feet in two privately-owned plazas (at Allston and Kittredge) that would be open for public use. The demolition is required in order to allow the proposed new mixed-use project to be built. The structures that are proposed for demolition are two stories in height with a basement level, and can be considered to be underutilized, as the DAP identifies two-story buildings near BART as Potential Development Opportunity Sites.

Further, as described above in Section IV.B., the proposed demolition referral and SAP were approved by the LPC on August 4, 2022.

A. Findings for Use Permit s in C -DMU District: Pursuant to BMC Section

23.204.130(I), in order to approve any Use Permit in the district, the Board must make the findings that the proposed use or structure:

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1. Is compatible with the purposes of the district:

The project would include 183 housing units, four live/work units, 4,993 square feet of ground floor commercial uses in Downtown Berkeley and within walking distance of the University of California. It is located in an area that is well served by transit; the Downtown Berkeley BART station is within one block of the site, and multiple AC Transit lines run on Shattuck Avenue and University Avenue. The Project is within the C-DMU Downtown Mixed-Use District, and as per Provisions of the BMC, the purpose of this district is to implement the vision and goals of the Downtown Area Plan (adopted 2012), which include: Environmental Sustainability, Land Use, Access, Historic Preservation and Urban Design, Streets and Open Space, Housing and Community Health and Services, and Economic Development.

• E
nvironmental Sustainability and Access : DAP Goals ES-3, UL-1 AC-1, AC-4.

The project provides higher-density development in proximity to regional transit, shops and amenities, and it would improve options to increase access to Downtown on foot, by bicycle and via transit would promote transit as an efficient and attractive choice through its location and through its Transportation Demand Management Plan and other associated Conditions of Approval. • Land Use: DAP Goal LU-1 (Policies LU-1.1 and LU-1.3). The Project will include residential, and commercial uses that allow people who live, work and learn in the Downtown to meet daily needs on foot.
• Historic Preservation and Urban Design: The LPC referred the project to DRC for design review recommendations, and considered the project in relation to its urban context, focusing on the application of the Downtown Design Guidelines, which implement the objectives and policies of the Historic Preservation and Urban Design chapter of the DAP. The LPC approved the SAP with findings for consistency with Landmarks Preservation, the Secretary of Interior standards for rehabilitation, and DAP design review standards. (See section IV.B for details.)
• Streets and Open Space: DAP Goal OS-1. T he project would enhance public open spaces and streets to benefit pedestrians, improve Downtown’s livability, and foster a sense of place.
• Housing and Community Health and Services : DAP Goals HC- 1, HC-2, HC-3.

The project would encourage Downtown as a thriving, livable, diverse residential neighborhood with a mix of supportive uses, and play a significant role in meeting Berkeley’s continuing need for additional housing. • Economic Development: DAP Goal ED-

1. The project would serve the needs
of the neighborhood and the City, make Downtown a more attractive regional destination, by promoting successful retail businesses and other attractions, with daytime and night-time populations to support them.

2. Is com
patible with surrounding uses and buildings.

The project site currently includes office and retail uses. ( Previous cinema and museum uses no longer occupy the site. ) The proposed project would change uses

ZONING ADJUSTMENTS BOARD 2065 KITTREDGE STREET
September 22, 2022 Page 21 of 22

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on the site to ground- floor commercial (retail and food service) and residential uses above. Uses on the surrounding properties include retail, public parking, office, library, hotel, and residential. The p roject would not introduce new land uses that do not already exist in the Downtown, and as described above, would further the vision and goals of the DAP.

As noted above, the DRC forwarded a positive recommendation for the project design, and the LPC voted to approve the SAP, with findings for consistency with Landmarks Preservation, the Secretary of Interior standards for rehabilitation, and DAP design review standards.

B. General Non- Detriment Finding: BMC Section 23.406.040 states that before the ZAB approves an application for a Use Permit, it must find that the project, under the circumstances of this particular case existing at the time at which the application is granted, would not be detrimental to the health, safety, peace, morals, comfort, and general welfare of the persons residing or working in the neighborhood of such proposed use or be detrimental or injurious to property and improvements of the adjacent properties, the surrounding area or neighborhood, or to the general welfare of the City.

Shadows: According to the shadow studies submitted for the p roject (See Attachment
2, Project Plans – Sheets A3-301 through A3-303). New shadow impacts would occur in the summer months, affecting commercial buildings on adjacent blocks to the west (Dharma College) and south (Downtown city public library) of the project site and the commercial buildings (offices and Shattuck hotel) that share the city block with the project site. New shadow impacts would also occur in the winter months, affecting commercial buildings on adjacent blocks to the northeast and north of the project site (YMCA, parking, and Walgreens) and the commercial buildings that share the city block with the project site (offices and Shattuck hotel). No residential buildings would be affected by new shadows from the project.

Non-Detriment: The project is subject to the City’s standard conditions of approval regarding construction noise and air quality, waste diversion, toxics, and stormwater requirements, thereby ensuring the project would not be detrimental to the health, safety, peace, morals, comfort or general welfare of persons residing or working in the area or neighborhood of such proposed use or be detrimental or injurious to property and improvements of the adjacent properties, the surrounding area or neighborhood or to the general welfare of the City.

VI. Recommendation

Because of the project’s consistency with the Zoning Ordinance and General Plan, and minimal impact on surrounding properties, staff recommends that the Zoning Adjustments Board:

A. ADOPT the EIR Addendum and Revised Mitigation Monitoring and Reporting Program (MMRP)

ZONING ADJUSTMENTS BOARD 2065 KITTREDGE STREET
September 22, 2022 Page 22 of 22

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B. APPROVE Use Permit ZP2021-0193, pursuant to BMC Section 23.406.040 and subject to the attached Findings and Conditions and MMRP (see Attachment 1, Exhibit A and B).

Attachments:

1. Findings and Conditions
a. Exhibit A, Findings and Conditions
b. Exhibit B, Mitigation Monitoring and Reporting Program, Revised July 2022 c. The SAP Findings and Conditions document is available at this link:
https://berkeleyca.gov/sites/default/files/legislative-body-meeting-agendas/2022-08- 04_LPC_Agenda_linked_0.pdf

2. Project Plans, received September 1, 2022

3. EIR Addendum for 2065 Kittredge Mixed-Use Project
The 2211 Harold Mixed-Use Project Final EIR and Statement of Overriding Considerations are available at this link: https://aca.cityofberkeley.info/CitizenAccess/Default.aspx. Click on Zoning tab; enter permit number ZP2021-0193; select permit ZP2021-0193; click on the “Record Info” drop down menu; click on Attachments for a list of all application materials.

4. Supplemental Analysis Memorandum to EIR Addendum, dated September 8, 2022

5. Notice of Public Hearing

Staff Planner: Sharon Gong, [email protected], (510) 981-7429

Administrative Record
This attachment is on file and available for review at
the City Clerk Department, or can be accessed from
the City Council Website. Copies of the attachment
are available upon request.

City Clerk Department
2180 Milvia Street
Berkeley, CA 94704
(510) 981-6900
or from:

The City of Berkeley, City Council’s Web site
http://www.cityofberkeley.info/citycouncil/
Attachments 4-5

Attachment 6
NOTICE OF PUBLIC HEARING – BERKELEY CITY COUNCIL
ZAB APPEAL: 2065 KITTREDGE STREET, USE PERMIT #ZP2021-0193 The public may participate in this hearing by remote video or in-person.

Notice is hereby given by the City Council of the City of Berkeley that on TUESDAY, JANUARY 31, 2023 at 6:00 P.M. a public hearing will be conducted to consider an appeal of the decision by the Zoning Adjustments Board to APPROVE Zoning Permit #ZP2021-0095 to demolish portions of existing City Landmark commercial buildings and construct an eight-story, mixed-use building with 187 dwelling units (including four live/work units and nine Very Low-Income units), 4,993 square feet commercial space and 43 parking spaces.

The hearing will be held at the Berkeley Unified School District Board Room located at 1231 Addison Street, Berkeley CA 94702.

A copy of the agenda material for this hearing will be available on the City’s website at www.CityofBerkeley.info as of January 19, 2023. Once posted, the agenda for this meeting will include a link for public participation using Zoom video technology, as well as any health and safety requirements for in-person attendance.

For further information, please contact Sharon Gong, Project Planner, (510) 981-7429 or [email protected]. Written comments should be mailed or delivered directly to the City Clerk, 2180 Milvia Street, Berkeley, CA 94704, in order to ensure delivery to all Councilmembers and inclusion in the agenda packet.

Communications to the Berkeley City Council are public record and will become part of the City’s electronic records, which are accessible through the City’s website. Please note: e- mail addresses, names, addresses, and other contact information are not required, but if included in any communication to the City Council, will become part of the public record. If you do not want your e-mail address or any other contact information to be made public, you may deliver communications via U.S. Postal Service or in person to the City Clerk. If you do not want your contact information included in the public record, please do not include that information in your communication. Please contact the City Clerk at 981-6900 or [email protected] for further information.
________________________________
Mark Numainville, City Clerk
Mailed: JANUARY 17, 2023
NOTICE CONCERNING YOUR LEGAL RIGHTS: If you object to a decision by the City Council to approve or deny (Code Civ. Proc. 1094.6(b)) or approve (Gov. Code 65009(c)(5) an appeal, the following requirements and restrictions apply: 1) Pursuant to Code of Civil Procedure Section 1094.6, no lawsuit challenging a City decision to deny or approve a Zoning Adjustments Board decision may be filed more than 90 days after the date the Notice of Decision of the action of the City Council is mailed.

Any lawsuit not filed within that 90-day period will be barred. 2) In any lawsuit that may be filed against a City Council decision to approve or deny a Zoning Adjustments Board decision, the issues and evidence will be limited to those raised by you or someone else, orally or in writing, at a public hearing or prior to the close of the last public hearing on the project.

If you challenge the above in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the City of Berkeley at, or prior to, the public hearing. Background information concerning this proposal will be available by request from the City Clerk Department and posted on the City of Berkeley webpage at least 10 days prior to the public hearing.

ACTION CALENDAR
January 31, 2023
To: Honorable Members of the City Council
From: Mayor Jesse Arreguín
Subject: Resolution Authorizing Regional Early Action Planning Grants (REAP 2.0) for Higher Impact Transformative Activities

RECOMMENDATION
Adopt a resolution authorizing the City of Berkeley to request an allocation of Early Action Planning Grants (REAP 2.0) for Higher Impact Transformative Activities.

BACKGROUND
The Regional Early Action Planning Grants of 2021 (REAP 2.0) Higher Impact Transformative (HIT) Allocation is intended to made funding available to regional entities including Metropolitan Planning Organizations, rural counties, and tribal entities on a competitive basis to support novel, unique or innovative approaches that are scalable and that further REAP 2.0’s Goals and Objectives. REAP 2.0 makes funding available to meet the state’s Housing and equity goals, reduce Vehicle Miles Traveled (VMT) Per Capita, and advance implementation of the region’s Sustainable Communities Strategy (SCS) or Alternative Planning Strategy.

The BART Equitable Transit-Oriented Development (TOD) Accelerator proposal aims to address two systemic challenges to advancing development near BART stations: a shortage of predevelopment financing for affordable housing, and the need to capture value of new development to support nearby communities who are vulnerable to displacement. The Equitable TOD Accelerator addresses these challenges through the innovative use of a revolving loan fund and enhanced infrastructure financing districts (EIFD).

Use #1: Revolving Loan Fund for Predevelopment Needs on BART-Owned Land Smaller scale affordable housing developers working with BART have reported difficulties advancing projects due to the scale of financing needed to complete predevelopment activities for multiphase projects. BART would use the HIT grant to work with consultants and a Community Development Financial Institution (CDFI) to set up and operate a revolving loan fund specifically for predevelopment costs at affordable housing projects.

The CDFI will also be tasked with leveraging the HIT grant to expand the fund, with the

HIT grant in a first-loss position. This structure would reduce the risk on these uncollateralized loans to a more standard level, making them attractive to private predevelopment investments. The initial loan would be made to the Lake Merritt/Chinatown TOD Senior Affordable Housing project, which has received its final approvals from the City of Oakland and, if funding is secured, could break ground as early as 1st Quarter 2024. Upon repayment at close of construction financing, BART would cycle funds to another affordable housing project in BART's portfolio, creating a perpetual loan fund to address the high predevelopment costs of multi-phase development on BART land. BART’s robust TOD pipeline contains ample opportunities to accelerate affordable housing development at transit-rich, infill sites, and as such the HIT funds would have a lasting impact across multiple projects on public land.

Use #2: Value Capture for Community Benefits in Vulnerable Communities The City of Berkeley and BART would use HIT funding to create an EIFD designed to capture the value of development on BART land as well as land nearby the Ashby Station, and create a reliable financing source to accelerate the development of affordable housing and other community-serving infrastructure. The EIFD would leverage tax increment financing to specifically fund anti-displacement efforts, which would be an innovative use of this tool. The scope would fund City of Berkeley staff time, consultant time, and creation of the work products needed to establish this EIFD. BART and the City of Berkeley are advancing development at the Ashby BART station with the goal of releasing a developer solicitation for BART property in mid-2023. BART and the City have a goal of making 50% of the homes on BART property affordable, and understand that the community wants the value generated by the development to accrue to the neighborhood, primarily through the funding of affordable housing. We believe this work, coupled with the development of a 700 – 1,200-unit housing project on the Ashby BART property, could create a new model for equitable infill development that ensures this development is truly serving the local community and benefiting surrounding areas.

FINANCIAL IMPLICATIONS
The City Manager or their designee is authorized to enter into, execute, and deliver a State of California Standard Agreement for the amount of a maximum of $10,000,000 and any and all other documents required or deemed necessary or appropriate to evidence and secure the REAP 2.0 Allocation, the City of Berkeley obligations related thereto and all amendments the Department of Housing and Community Development deems necessary.

CONTACT PERSON
Jesse Arreguín, Mayor, 510-981-7100
Attachments:

1. Resolution

Internal
RESOLUTION NO. ##,###-N.S.

Authorizing Regional Early Action Planning Grants (REAP 2.0) for Higher Impact Transformative Activities
WHEREAS, the State of California (the “State”), Department of Housing and Community Development (“Department”) Department is authorized to provide up to $30,000,000 to Eligible Entities (“Applicant”) listed in Health and Safety Code Section 50515.08, subdivisions (a)(1)-(6) under the Higher Impact Transformative (HIT) Allocation of the Regional Early Action Planning grants program (REAP 2.0), as detailed in Health and Safety Code Section 50515.08-10; and
WHEREAS, the Department issued a Notice of Funding Availability on November 9, 2022 for REAP 2.0 HIT Allocation funds available to Eligible Entities and WHEREAS, the City of Berkeley is an Eligible Entity eligible to submit a Request for Funds pursuant to Health and Safety Code Section 50515.08(c) to develop and accelerate the implementation of the requirements described in Health and Safety Code section 50515.08(c)(1); and
WHEREAS, the San Francisco Bay Area Rapid Transit District (“BART”) has been working on transit-oriented development (“TOD”) at multiple Stations including ones located in disadvantaged communities such as Lake Merritt, and historically underserved communities such as South Berkeley, and has conducted extensive community engagement as part of these efforts; and
WHEREAS, BART has a formal relationship with the City of Berkeley (“City”) to advance TOD at the North Berkeley and Ashby stations as evidenced by a Board- and Council- authorized Memorandum of Understanding dated March 6, 2020 and a Board- and Council-authorized Memorandum of Agreement dated June 30, 2022; and WHEREAS, the Department requires that the BART BoardBerkeley City Council adopt this Resolution authorizing City of Berkeley staff to apply for funds and to partner with BART; and
WHEREAS, the Department shall approve the Request for Funds, subject to the terms and conditions of Eligibility, Guidelines, NOFAs, Program requirements, and the Standard Agreement by and between the Department and REAP 2.0 Grant Recipients.

NOW THEREFORE, BE IT RESOLVED by the Council of the City of Berkeley that the City of Berkeley is hereby authorized and directed to request an allocation of funds not to exceed $10,000,000.

BE IT FURTHER RESOLVED that the City Manager or their designee is authorized to execute the Request for Funds, on behalf of the City of Berkeley as required by the Department for receipt of REAP 2.0 funds.

BE IT FURTHER RESOLVED that when the City of Berkeley receives an allocation of REAP 2.0 funds in the authorized amount of a maximum of $10,000,000 from the Department pursuant to the above referenced Request for Funds, it represents and certifies that it will use all such funds only for eligible activities as set forth in Health and Safety Code section 50515.08(c)(1), as approved by the Department and in accordance with all REAP 2.0 requirements, guidelines, all applicable state and federal statutes, rules, regulations, and the Standard Agreement executed by and between the City of Berkeley and the Department.

BE IT FURTHER RESOLVED that the City Manager or their designee is authorized to enter into, execute, and deliver a State of California Standard Agreement for the amount of a maximum of $10,000,000 and any and all other documents required or deemed necessary or appropriate to evidence and secure the REAP 2.0 Allocation, the City of Berkeley obligations related thereto and all amendments the Department deems necessary and in accordance with REAP 2.0.

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ACTION CALENDAR
January 31, 2023
To: Honorable Mayor and Members of the City Council
From: Councilmember Ben Bartlett
Subject: Outcomes Based Funding, Pay-For-Success and Social Impact Bonds

RECOMMENDATION
Qualified Positive Recommendation from the Berkeley City Council Budget & Finance Committee to:

Refer to the City Attorney to provide guidance on how the City can implement an Outcomes Based Funding initiative; request implementation analysis from the City Manager; and request information on whether or not this program can be used with external funds (e.g. grants) or city funds only

POLICY COMMITTEE RECOMMENDATION
On October 13, 2022, the Budget & Finance Committee adopted the following action:

M/S/C (Arreguin/Harrison) to send the item to the City Council with a Qualified Positive Recommendation to refer to the City Attorney to provide guidance on how the City can implement an Outcomes Based Funding initiative; request implementation analysis from the City Manager; and request information on whether or not this program can be used with external funds (e.g. grants) or city funds only. Vote: Ayes – Harrison, Arreguin; Noes – None; Abstain – None; Absent – Droste.

BACKGROUND
Outcome Based Funding is a financing strategy in which Government allocates funding to vendors only upon the demonstrable achievement of specific outcomes. Under an Outcome Based Funding approach, Government enters into Contracts with non-internal-government organizations to deliver services intended to result in positive measurable outcomes. Often, in outcomes based fundings, private investors provide the funding and are repaid later by the government only if the service meets agreed-on performance benchmarks.1Outcomes Based Funding, Social Impact Bonds, or Pay for Success (PFS) Contracts can be an effective way for Government to reduce its spending while simultaneously achieving better social outcomes.

Outcomes Based Funding initiatives often work in close collaboration with Community Development Finance Institutions (“CDFI”). CDFI's direct resources in communities with the potential for high social returns but with a lack of resources. 1 Kasturi Rangan & Lisa A. Chase. “The Payoff of Pay-for-Success (SSIR).” Https://Ssir.Org/, Stanford Social Innovation Review, 2015, https://ssir.org/up_for_debate/article/the_payoff_of_pay_for_success#

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Outcomes-based funding supports evidence-based strategies to create better community outcomes and save taxpayer money.

Pay For Success was introduced by the Obama Administration; and is a strategy of obtaining positive social or environmental outcomes by paying, in part or in whole, for an intervention only once it produces those outcomes. Through PFS, government (or another entity) enters into a contract to pay for concrete, measurable outcomes once they are achieved for specific people or communities in need. Instead of funding services regardless of the results, payments are made only if interventions actually achieve the outcomes agreed upon in advance. For example, instead of paying for job training simply to be provided, a community might use PFS to pay only when individuals gain stable employment in good jobs. Where government employs PFS strategies, taxpayers no longer bear the risk of paying for services that are ineffective because resources are not expended until the services have produced a specific benefit2.

Social Impact Bonds are an innovative financing mechanism in which governments or commissioners enter into agreements with social service providers, such as social enterprises or non-profit organizations, and investors to pay for the delivery of pre-defined social outcomes.

More precisely, a bond-issuing organization raises funds from private-sector investors, charities or foundations. These funds are distributed to service providers to cover their operating costs. If the measurable outcomes agreed upfront are achieved, the government or the commissioner proceeds with payments to the bond-issuing organization or the investors. In reality, the term “bond” is more of a misnomer. In financial terms, SIBs are not real bonds but rather future contracts on social outcomes. They are also known as Payment-for-Success bonds (USA) or Pay-for-Benefits bonds3. There is healthy appetite for Social Impact Investing, currently there is more than $700 billion in impact investment capital seeking deployment4.

Outcomes Based Funding and Social Impact Bonds are very similar in practice. They both include the practice of entering into a conditional contract with an organization to address social welfare programs. The payment to the organization is derived from the budgetary savings and other proceeds stemming from the resulting reduction in spending. This transfer of risk from Government to the vendor helps overcome resistance to funding innovative projects within a constrained budgetary environment.

The Benefits of Outcomes Based Funding, Pay for Success, and Social Impact Bonds include:

1. Spurs Innovation

2. Saves Money

3. Transfers Risk from Tax Payer to Vendor

4. Better Outcomes for the Community
2 “Pay for Success:” The White House, 2012, https://obamawhitehouse.archives.gov/administration/eop/sicp/initiatives/pay-for- success
3 Organisation for Economic Co-operation and Development, et al. “Understanding Social Impact Bonds.” OECD Working Papers, 2016, https://www.oecd.org/cfe/leed/UnderstandingSIBsLux-WorkingPaper.pdf 4 SG Analytics. “Impact Investing Market Size Is $715 Billion: What Is the Future of Our Planet?” SG Analytics, SG Analytics, 2 Mar. 2021, https://us.sganalytics.com/blog/impact-investing-market-size-is-715-billion-what-is-the-future-of-our-planet/

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5 Here are a few examples of Outcomes Based Funding, Pay for Success, and Social Impact Bonds Models:

1. New York (1990s) – New York City dramatically changed the way it bought workforce development services from nonprofit providers working around the city. Instead of paying for the cost of services up front and hoping for the best, the city tied 100 percent of funding to measured performance. Job placement providers got paid only if they achieved clearly defined milestones (e.g., job placement, retention after set periods of time). The innovative focus on results yielded a number of benefits including, but not limited to, providers being incentivized to achieve outcomes that aligned with the city’s policy objectives, allowing the city to flexibly price (and re-price) outcomes it cared about while avoiding a more prescriptive, top-down approach to program design that can stymy innovation, and performance data helping the city make course corrections to the system as a whole. (When early program data showed poor job retention results, the city doubled down by changing payment formulas to incentivize longer-term retention outcomes.)6

2. Salt Lake City, Utah (2015) – Salt Lake County policymakers implemented innovative funding strategies to reduce incarceration and recidivism rates. In this particular case, a suite of evidence-based programs were funded through a social impact financing mechanism. If incarceration rates drop by an agreed-upon threshold percentage over a 5 Organization for Economic Co-operation and Development, et al. “Understanding Social Impact Bonds.” OECD Working Papers, 2016, https://www.oecd.org/cfe/leed/UnderstandingSIBsLux-WorkingPaper.pdf 6 Keele, Jeremy, and Sarah Peters. “HOW OUTCOMES-BASED FUNDING MODELS CAN IMPROVE THE EFFECTIVENESS OF STATE AND LOCAL GOVERNMENTS.” Sorenson Impact Center, 2017, pp. 134–

37.https://investinresults.org/sites/default/files/book-chapter/WM_14_Keele-Peters_0.pdf

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certain time frame, the county will repay the funders who provided the upfront bridge financing. If the programs are not successful, the county won’t pay.7

3. USA (2008-2016) - President Barack Obama Administration’s in Pay For Success 8 initiative: The administration dedicated nearly $100 million in funding to advance PFS through eight federal agencies. These federal dollars leveraged at least $65 million in philanthropic, state and local funds for PFS. Among other important priorities, the Administration’s PFS awards have been provided to help connect veterans with jobs9, build brighter futures for at-risk youth, support English language learners10, increase access to high-quality pre-K11, reduce childhood asthma, support at-risk moms and their children, reduce homelessness, incarceration, and recidivism, and even promote natural resources conservation12. Participants performed validation tests, feasibility studies13, transaction structuring, outcomes evaluation, outcomes payments, and cross-system data integration14. The U.S. is now the largest PFS market the world, with greater total outcome payment scale and impact investment dollars committed to projects than any other nation15.

4. Massachusetts (2014) Social Impact Bond Initiatives:
a. The Juvenile Justice Pay for Success Initiative was a managed Social Impact Bond project. The program's aim was to reduce recidivism and increase employment through intensive street outreach, targeted life skills training, education, and employment programming. The target group was 929 at-risk young men aged 17 to 23. Philanthropic grantors included The Kresge Foundation, Living Cities, Laura and John Arnold Foundation, New Profit Inc., and the Boston Foundation. Third Sector Capital Partners acted as the financial 7 Keele, Jeremy, and Sarah Peters. “HOW OUTCOMES-BASED FUNDING MODELS CAN IMPROVE THE EFFECTIVENESS OF STATE AND LOCAL GOVERNMENTS.” Sorenson Impact Center, 2017, pp. 134–

37.https://investinresults.org/sites/default/files/book-chapter/WM_14_Keele-Peters_0.pdf 8“Pay for Success:” The White House, 2012,https://obamawhitehouse.archives.gov/administration/eop/sicp/initiatives/pay-for- success
9“New VA – CNCS Collaboration to Connect Funding to Better Outcomes For.” Whitehouse.Gov, 5 Jan. 2017, https://obamawhitehouse.archives.gov/blog/2016/11/11/new-va-%E2%80%93-cncs-collaboration-connect-funding-better-outcomes- veterans
10 Office of the Press Secretary. “FACT SHEET: New Commitments Announced in Support of the My Brother’s.” Whitehouse.Gov, 17 Oct. 2016, https://obamawhitehouse.archives.gov/the-press-office/2016/10/11/fact-sheet-new-commitments-announced-support- my-brothers-keeper
11 US Department of Education (ED). “Pay for Success.” U.S. Department of Education, https://www2.ed.gov/about/inits/ed/pay-for- success/index.html. Accessed 2 July 2022.
12 Goldfuss, Christy, and David Wilkinson. “Pay for Success: New Resources for Better Conservation Outcomes.” Whitehouse.Gov, the White House, 5 Jan. 2017, https://obamawhitehouse.archives.gov/blog/2015/12/17/pay-success 13 Munoz, Cecila, and Shaun Donovan. “Administration Nearly Doubles Number of ‘Pay for Success’ Feasibility.” Whitehouse.Gov, the White House, 19 Apr. 2016, https://obamawhitehouse.archives.gov/blog/2016/04/19/administration-nearly-doubles-number-pay- success-feasibility-studies
14 Wilkinson, David, and Wendy Spencer. “How Data and Innovation Can Help People.” National Service Archived Blog, 13 Oct. 2016, https://nationalservice.tumblr.com/post/151761667357/how-data-and-innovation-can-help-people 15 “Pay for Success:” The White House, 2012,https://obamawhitehouse.archives.gov/administration/eop/sicp/initiatives/pay-for- success

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intermediary and prime contractor. Third Sector was responsible for arranging project funding, overseeing project implementation, distributing funding to Roca and managing repayment to funders. It is worth noting that Third Sector Capital Partners is deferring $50 000 USD of its management fees; it will only be paid that portion of its fees if results are achieved. New Profit Inc. The Juvenile Justice Pay for Success Initiative is an individual SIB, but it is also part of the Massachusetts Social Innovation Financing Trust Fund. 16 b. The State of Massachusetts, the nonprofit Roca, the financial intermediary Third Sector Capital Partners, and a group of investors entered into a contract under which Roca was paid by investors to operate a program designed to prevent formerly incarcerated young people from returning to jail. Under an Outcomes Based Funding and Pay for Success Model, the state would repay the investors only if Roca met or exceeded the contract goals. Massachusetts was willing to repay the loan with interest to investors because the program saved even more money by keeping young people out of prison. While the result of this program was inconclusive, the State of Massachuseets will only have to pay Roca if the model is successful.17

5. New York State (2012) – New York implemented a Social Impact Bond model where the State of New York partnered with Social Finance, a nonprofit social impact financing and advisory firm, to reduce recidivism through a Social Impact Bond contract. After analyzing the needs of high-risk formerly incarcerated individuals and conducting thorough due diligence on interventions and social service providers, Social Finance selected CEO, a nonprofit employment service agency for formerly incarcerated individuals, as the entity to deliver the intervention. The State of New York, Social Finance, and CEO worked together over the next year to structure the project with the help of law firm Jones Day. The State of New York also obtained pro bono technical assistance from the Harvard Kennedy School Social Impact Bond Technical Assistance Lab (“SIB Lab'') to develop and implement the project18 This Social Impact Bond managed to reduce the number of bed days for former inmates therefore directly reducing the State of New York’s public spending and increasing the well being for the participants.

6. Ohio State (2014) – Cuyahoga County, Ohio, the local government entered into a Social Impact Bond contract with FrontLine to reduce time spent in foster care for children of homeless mothers. FrontLine had devoted 26 years to providing comprehensive services to mentally ill homeless people, with the goal of transitioning its clients to 16 Organization for Economic Co-operation and Development, et al. “Understanding Social Impact Bonds.” OECD Working Papers, 2016, https://www.oecd.org/cfe/leed/UnderstandingSIBsLux-WorkingPaper.pdf 17 Kasturi Rangan & Lisa A. Chase. “The Payoff of Pay-for-Success (SSIR).” Https://Ssir.Org/, Stanford Social Innovation Review, 2015, https://ssir.org/up_for_debate/article/the_payoff_of_pay_for_success# 18 The State of New York, et al. “Investing in What Works: ‘Pay for Success’ in New York State Increasing Employment and Improving Public Safety.” Harvard Kennedy School Government Performance Lab, 2014. https://govlab.hks.harvard.edu/, https://govlab.hks.harvard.edu/files/govlabs/files/nys_ceo_pfs_project_summary.pdf

2180 Milvia Street, Floor 5, Berkeley, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 6 of 6
permanent supportive housing. FrontLine had also demonstrated that moving homeless mothers to stable housing increased their chances of recovering and regaining custody of their children from foster care. The county’s data revealed that children of homeless mothers spent considerably more time in foster care than other children (724 days compared to 440 days) at a daily cost of $75 per child. Keeping mothers in stable housing with their children therefore represented significant savings for the county.19

7. Saskatchewan, Canada (2014) – The Canadian Province of Saskatchewan Sweet Dreams, implemented a Social Impact Bond to increase the well being of lowincome families. The Government of Saskatchewan and the Ministry of Social Services, held direct contracts with the investors and the service provider, Saskatoon Downtown Youth Centre (EGADZ). The investors provided in May 2014 $1 million CAD for a period of 60 months to the EGADZ to offer to single mothers with children under the age of eight, who are at risk of requiring services from Child and Family Services, with affordable housing and support. At the same time, the mothers can complete their education, secure employment, or participate in pre-employment activities, such as life skills training and parenting classes. In the end, the SIB succeeded in helping keep single mothers in the schools and helped keep those families together. 20 The City’s budgetary constraints are becoming more pronounced. Meanwhile a looming recession is poised to exacerbate the City’s growing social needs. Berkeley should explore new tools to drive innovation to more cheaply achieve greater community outcomes.

CURRENT SITUATION
The City has many challenges from homelessness, health, environmental impact, public safety, and many more that demands financial and external costs that could use more preventative measures to save on costs. The guidance on how the City can implement an Outcomes Based Funding and Social Impact Bond Initiative would allow the City to have more options to achieve greater outcomes for less money.

FINANCIAL IMPLICATIONS
Staff time from the City Attorney's Office.

CONTACT PERSONS
Councilmember Ben Bartlett [email protected] James Chang [email protected]
Marcelo Garcia-Sarraf 510-981-7130
19 Kasturi Rangan & Lisa A. Chase. “The Payoff of Pay-for-Success (SSIR).” Https://Ssir.Org/, Stanford Social Innovation Review, 2015, https://ssir.org/up_for_debate/article/the_payoff_of_pay_for_success# 20“Sweet Dreams Supported Living Project.” The Government Outcomes Lab, Sept. 2020, https://golab.bsg.ox.ac.uk/knowledge- bank/indigo/project-database/sweet-dreams-supported-living-project/

ACTION CALENDAR
January 31, 2023
To: Honorable Mayor and Members of the City Council
From: Councilmember Sophie Hahn (Author)
Subject: Amending City Council Rules of Procedure & Order to Allow Policy Committee Track Items with Budget Referrals to be Referred to the Budget & Finance Committee and one Subject Matter Policy Committee

RECOMMENDATION
Adopt a resolution amending the City Council Rules of Procedure & Order to allow Policy Committee Track Items that include a Budget Referral to be assigned by the Agenda Committee to the Budget & Finance Committee and one additional Policy Committee.

That the City Council sets the following deadline:

In order to be considered for the June 2023 budget process, Policy Committee Track items (as defined in the City Council Rules of Procedure and Order) that have potential budget implications must be submitted to the agenda process to allow for consideration by the Agenda & Rules Committee no later than at the March 6, 2023 meeting (setting the Agenda for the March 21, 2023 Regular Meeting of the City Council).

POLICY COMMITTEE RECOMMENDATION
On January 4, 2023, the Agenda and Rules Committee adopted the following action: M/S/C (Hahn/Arreguin) to send the item to the City Council with a qualified positive recommendation that in order to be considered for the budget process that will take place in June 2023, policy committee track items (as defined in the City Council Rules of Procedure), that have the potential for budget implications, must be submitted to the agenda process to allow for consideration by the Agenda & Rules Committee no later than its March 6, 2023 meeting. Vote:

All Ayes.

BACKGROUND
The City Council Rules of Procedure & Order currently prohibit the Agenda Committee from referring Council Policy Committee Track items to more than one Policy Committee. The purpose of this rule was to avoid delay and duplicative work by two Committees that may not result in consensus recommendations.

Subsequent to adoption of rules relating to Council Committees, numerous substantive items with “moderate to significant administrative, operational, budgetary, resource, or programmatic impacts” have come before the Agenda Committee in the form of Budget Referrals, or with budget referrals incorporated within the item.

Because the current rules only allow Policy Committee items to be sent to one Committee, items accompanied by budget requests that otherwise would have gone to one of the five other policy committees have been sent directly to the Budget & Finance Committee, without the benefit of review

by a Policy Committee with subject matter jurisdiction over the substance of the proposed policy or program.

The unintended consequence is that programs and policies that are “significant” are considered for funding without the benefit of subject matter review, including the opportunity for staff to provide input on associated costs and administrative implications, which would inform budget allocations.

To address this situation, which was not anticipated at the time Committees were first developed, this item asks that the City Council Rules of Procedure and Order be amended to allow (but not require) Policy Committee Track Council items with budget referrals to be referred by the Agenda Committee to both the Budget & Finance Committee and a Policy Committee.

This will allow funding to be considered in an appropriate timeframe while also giving subject matter Policy Committees and the City Council the opportunity to weigh in on programmatic, policy, implementation, and administrative details of proposed policies and programs with moderate to significant impacts.

In addition, this item requests that the City Manager advise as to appropriate cut-off dates for submission of Policy Committee Track budget referrals to each budget process, building in time for at least one policy committee meeting and for the City Council to vote on the policy or program prior to Council action on associated budgets.

These deadlines, once established, should be clearly indicated on the Clerk’s meeting timelines so all Councilmembers and members of the public are aware of deadlines to submit items with budget referrals that may qualify as Policy Committee Track items.

Councilmember items with budget referrals submitted after established deadlines may go forward and be referred to one or two Committees, but will be considered for funding in the subsequent budget cycle. Exceptions to the deadline can be made by the Agenda Committee utilizing the existing “Time Critical Track” process.

Proposed amendments to City Council Rules of Procedure & Order, Section III(G)(1) are shown in redline, below.

Policy Committee Track
Items submitted by the Mayor or Councilmembers with moderate to significant administrative, operational, budgetary, resource, or programmatic impacts will go first to the Agenda & Rules Committee on a draft City Council agenda.

The Agenda & Rules Committee must refer an item to a Policy Committee at the first meeting that the item appears before the Agenda & Rules Committee.

The Agenda & Rules Committee may only assign the item to a single Policy Committee except that Policy Committee Track items that include a budget referral may be assigned to both the Budget & Finance Committee and one other Policy Committee.

The Agenda and Rules Committee shall set deadlines for submission of Council items with budget referrals so they may be considered in time for budget processes, with exceptions for items that may qualify for the Time Critical Track.

City Council Rules of Procedure and Order - see Page 19.

FINANCIAL IMPLICATIONS
N/A

CURRENT SITUATION AND ITS EFFECTS
See Background.

ENVIRONMENTAL SUSTAINABILITY AND CLIMATE IMPACTS
N/A

CONTACT PERSON
Councilmember Sophie Hahn Council District 5 510-981-7150

ATTACHMENTS

1. Resolution

RESOLUTION #####-N.S.

AMENDING THE CITY COUNCIL RULES OF PROCEDURE & ORDER TO ADDRESS

POLICY COMMITTEE TRACK ITEMS THAT INCLUDE A BUDGET REFERRAL WHEREAS, the City Council Rules of Procedure & Order currently prohibit the Agenda Committee from referring Council Policy Committee Track items to more than one Policy Committee; and
WHEREAS, subsequent to adoption of rules relating to Council Committees, numerous substantive items with “moderate to significant administrative, operational, budgetary, resource, or programmatic impacts” have come before the Agenda Committee in the form of Budget Referrals, or with budget referrals incorporated within the item; WHEREAS, items accompanied by budget requests that otherwise would have gone to one of the five other policy committees have been sent directly to the Budget & Finance Committee, without the benefit of review by a Policy Committee with subject matter jurisdiction over the substance of the proposed policy or program;
NOW THEREFORE, BE IT RESOLVED, by the Council of the City of Berkeley that the Council Rules of Procedure and Order shall be amended so that the Agenda & Rules Committee may only assign an item to a single Policy Committee, except that Policy Committee Track items that include a budget referral may be assigned to both the Budget & Finance Committee and one other Policy Committee;
BE IT FURTHER RESOLVED, that the Agenda and Rules Committee shall set deadlines for submission of Council items with budget referrals so they may be considered in time for budget processes, with exceptions for items that may qualify for the Time Critical Track.

Office of the City Manager
2180 Milvia Street, Berkeley, CA 94704 ● Tel: (510) 981-7000 ● TDD: (510) 981-6903 ● Fax: (510) 981-7099 E-Mail: [email protected] Website: http://www.CityofBerkeley.info/Manager

INFORMATION CALENDAR
January 31, 2023
To: Honorable Mayor and Members of the City Council
From: Farimah Brown, City Attorney
Submitted by: Iris Mattes, Deputy City Attorney
Subject: Updated Sanctuary City Contracting Compliance Report for FY 2021

INTRODUCTION
City Council adopted ordinance 7,650-N.S., which is referred to as the Sanctuary City Contracting Ordinance (SCCO), in 2019. The SCCO states that the City shall not enter into a new, amended, or extended contract or agreement with any entity that provides United States Immigration and Customs Enforcement with data broker or extreme vetting services.

Section 13.105.040 requires the City Manager to report annually regarding compliance with section 13.105.030 for the prior year. Section 13.105.030 of the Berkeley Municipal Code details the prohibition on the use of City resources.

This is report is an updated version of the FY 2021 report that appeared on the July 26, 2022 agenda. This version reflects that the City Council approved a waiver of the City’s contract with AG Witt, LLC on December 13, 2022.

CURRENT SITUATION AND ITS EFFECTS
The Sanctuary City Contracting Ordinance establishes the City as a leader in social responsibility. The SCCO is a Strategic Plan Priority Project, advancing our goal to champion and demonstrate social and racial equity.

Report Requirements
(1) detail with specificity the steps taken to ensure compliance with Section 13.105.030:

City solicitations include invitations for bids (IFB), requests for proposals (RFP), and requests for qualifications (RFQ). IFB, RFP, and RFQ public postings generally contain the SCCO language. Signed compliance certificates are submitted with proposals and bid responses.

Updated Sanctuary City Contracting Compliance Report FY 2021 INFORMATION CALENDAR January 31, 2023

New and amended contracts and agreements include the Compliance Certificate attesting review of and compliance with the SCCO. Signed certificates are required as part of the City’s contract documents.
(2) disclose any issues with compliance, including any violations or potential violations of this Ordinance:

Previously reported: City Council issued a waiver of ordinance 7,650-N.S. related to Berkeley Tuolumne Camp Projects. The waiver was issued on 12/10/2019 in order to ensure compliance with FEMA contracting provisions as required for the City to receive a federal reimbursement grant for the construction project.

City Council approved a waiver of the SCCO for contracting with Westlaw, a Thomson Reuters Company, on 6/1/2021, as no reasonable alternative exists.

A contract was entered into with AG Witt, LLC, for an initial amount of $50,000.

The City’s social responsibility provisions in the contract form were left intentionally blank so that the contract did not violate federal contracting requirements. The contract scope is for disaster cost recovery and is partially reimbursable by FEMA. The contract was later amended to $150,000 with approval from City Council (Resolution 69,566-N.S.), and then amended to $250,000 with approval from City Council (Resolution 69,759-N.S.). The City anticipates this contract to be valid for several more years as cost recovery efforts for Covid-19 expenses continue.

New: The City received a notice of violation concerning its contract with AG Witt, LLC. Although the City does not believe that its contract with AG Witt, LLC violates the SCCO, the City sought a waiver out of an abundance of caution. The City Council approved the waiver on December 13, 2022.

The City also received a notice of violation alleging that the July 26, 2022 FY 21 Compliance Report was itself a violation of the SCCO, because it was issued untimely. Although any violation relating to the timeliness of the July 26, 2022 Compliance Report was cured by the act of issuing that report, this Updated report has been revised to expressly acknowledge that the July 26, 2022 report was issued untimely.
(3) detail actions taken to cure any deficiencies with compliance:

As described above, City Council approved a waiver of the AG Witt, LLC contract on December 13, 2022. This report will serve as the notice required under BMC

13.105.050. Regarding the untimeliness of the FY 21 Compliance Report, the City cured that violation by issuing the July 26, 2022 report and by issuing this updated report.

Updated Sanctuary City Contracting Compliance Report FY 2021 INFORMATION CALENDAR January 31, 2023

BACKGROUND
This report is an updated version of the report that was approved by City Council on July 26, 2022. It is intended to supplement the July 26, 2022 report for the purpose of curing alleged violations that were first raised after the issuance of the July 26, 2022 report.

ENVIRONMENTAL SUSTAINABILITY AND CLIMATE IMPACTS
There are no environmental impacts from this report.

POSSIBLE FUTURE ACTION
This report will be submitted annually.

FISCAL IMPACTS OF POSSIBLE FUTURE ACTION
None.

CONTACT PERSON
Darryl Sweet, General Services Manager, Finance, 510-981-7329 Attachments:

1. Resolution 69,907-N.S. Westlaw (Thomson Reuters)

2. Resolution 69,566-N.S. AG Witt, LLC

3. Resolution 69,756-N.S. AG Witt, LLC

4. Resolution 70,635-N.S. AG Witt, LLC

Communications

All communications submitted to the City Council are
public record. Communications are not published directly to the City’s website. Copies of individual communications are available for viewing at the City Clerk Department and through Records Online.

City Clerk Department
2180 Milvia Street
Berkeley, CA 94704
(510) 981-6900

Records Online
https://records.cityofberkeley.info/

To search for communications associated with a particular City Council meeting using Records Online:

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2. From Date: Enter the date of the Council meeting

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6. Click the desired file in the Results column to view the document as a PDF