Berkeley Tower Owners Face Foreclosure Due To Unoccupied Offices
Monday, June 21, 2010
Category: News > City
After a year of vacancy, the seven-story Berkeley Tower office building at the corner of Shattuck and University avenues has fallen into foreclosure amidst city efforts to revitalize the downtown area. The Berkeley Tower, built in 1983, occupies about 0.2 acres on University, about a block west of campus.
Scanlan Kemper Bard Cos. - a real estate firm based in Portland, Ore., that owns the 43,000-square-foot building - is voluntarily surrendering the tower along with the eight-story Jackson Center complex building in Downtown Oakland to the lender, Bank of America.
In 2007, the real estate firm purchased both properties at a price of $61.5 million, according to a 2007 company statement. The foreclosure comes after Bank of America filed a notice of default June 8 for a delinquent loan of $47.1 million.
"Since SKB's purchase of the assets in 2007, economic conditions have made it impossible to maintain tenant occupancy sufficient to ensure viability of the investments," the firm said in a June 15 statement. "SKB has agreed to work with Bank of America to return the properties to the lender."
The real estate firm declined to comment further on the two East Bay foreclosures. The firm has no other assets or properties in the Berkeley area, according to company spokesperson Shannon Berg.
With the foreclosure, the primary tenants of the Oakland building have also announced their plans to leave the offices.
The Berkeley offices have been empty since the building's primary tenant, Lawrence Berkeley National Laboratory, moved out in 2009 after a decade of occupancy.
The laboratory's human resource department, among others, had occupied the entirety of the office portion of the tower - located on floors two through seven - since 1999. The ground floor of the building remains occupied by the Biryani House restaurant.
Mayor Tom Bates said the foreclosure is "not a good sign" for the city, but comes as no surprise given the vacancies in the building.
"It's a sign of the downturn in the economy," Bates said.
But, he added, the foreclosure "won't have long-term impacts" on the Downtown Area Plan, an ongoing, controversial plan aimed at revitalizing the Downtown atmosphere and stimulating business.
The plan, which was approved by the Berkeley City Council, will be on the November ballot.
"(The Berkeley Tower) is not housing, it's a commercial property," he said. "The Downtown plan's mission is to bring more people Downtown. It doesn't really affect our vision at all."
Additionally, Bates said the tower still yields property tax to the city, making it less of a significant impact on the local economy and the city's budget.
At the State of the City luncheon Tuesday, Bates said the plan to improve Downtown allows for five buildings higher than 75 feet, two of which would be up to 120 feet tall and most likely be used for new office spaces.
According to Julie Sinai, Bates' chief of staff, the Downtown Area Plan is a "long-term plan" that will not be impacted by the foreclosure.
"We all know that we're in an economic slump right now," she said, "As a community we have to weather through this economic downturn, but that doesn't mean we don't continue to plan and create a vision."
Contact Matt Burris at [email protected]
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