Project Kickstart
- Livable El Cerrito
- Sep 19
- 5 min read
Concerned that housing development in the city has stalled, the City Council voted unanimously to extend breaks on fees and requirements to owners of four properties who submitted building permit applications for multi-unit apartment buildings but have not started construction.
The total amount of reduced fees offered for the four properties is about $3 million. The City Council approved the deal at its Sept. 16 meeting.
The properties are:
· 6501 Fairmount Ave. (at Lexington)
· 10290 San Pablo Ave. (at Eureka)
· 10919 San Pablo Ave. (at Manila)
· 6115 Potrero Ave. (across from Los Moles)
A Limited Time Offer
Community Development Melanie Mintz dubbed the plan Project Kickstart and said it is a limited time offer that will end in either 16 or 30 months depending upon the project. Any of the four developers who work within time limits will be exempt from transportation impact fees and pay only 25% of affordable housing and in-lieu fees.
Because economic conditions have changed, any of the four developers will be allowed to completely revise their projects and apply for building permits for a new project. In that case, she said, they would still get the break on including affordable housing but not on transportation or open space fees.
Asked why these four developers within the San Pablo Avenue Specific Plan area are being offered reduced fees and more flexibility, Mintz said it’s because they invested considerable money in their plans and permits but market conditions are making it very difficult to finance and build apartments. These properties are farthest along in the approval process and construction could start within months, she said.
Any of the projects would help the city reach its state-mandated Regional Housing Needs Assessment (RHNA) goal of 1,391 new housing units over the 2023-2031 period, she said.
The Break on Affordable Units
Under the agreement, all the developers may pay in-lieu fees instead of offering 10% to 12% of units at below-market rates. And the in-lieu fees will be reduced to 25% of current requirements.
Mintz said the city is still committed to affordable housing and any in-lieu fees would help to replenish the city’s Affordable Housing Trust Fund. The fund’s balance has dropped to $95,000. In recent years, the fund was used to help fund the Mayfair affordable housing project and a 70-unit affordable housing building approved for a parking lot at the Plaza BART station.
Money in the trust fund may actually generate more affordable housing over time than including units, Mintz said, because it can be used to help the city get outside grants as it did on the Plaza BART 70-unit project. A replenished Affordable Housing Fund could be leveraged to win grants for more affordable housing on other Plaza BART station parking lots.
Transportation Impact Fees
The developers would be exempt from city transportation impact fees. They might also be exempt from a subregional transportation fee.
Since the transportation impact fee was adopted by the City Council, about $1 million has been collected.
Open Space Requirements
The city would allow open space requirements for condominium projects as well as rental projects to be satisfied by paying in-lieu fees, which would be set at 25% of the usual amount.
The existing requirement is 25 square feet of publicly accessible open space per 1,000 square feet of new residential and commercial development. Including less open space would allow the owners to build more or larger apartments.
Argument Against the Plan
In public comment, Howdy Goudey asked the council not to modify the fees and requirements.
“This project is not Project Kickstart,” he said. “It’s Project Abandon Community Benefit.”
Goudey said he understands the city’s goal of building more housing and he wants that too. But he said new housing should be good for the community -- and should provide high-quality open space and address transportation impacts.
Not enough housing is a “huge, systematic problem” while giving breaks to four developers is like “throwing a Band-Aid onto the problem,” Goudey said.
Goudey also said it’s bad policy to “carve out exemptions for some people…and not be uniform in how we treat our developments.”
Will Developers Go With It?
During city council comments, Councilmember Lisa Motoyama asked whether any of the developers were present and could speak about whether the financial breaks would be enough to move their projects into construction.
Jake Matthews said he spoke for investors in the project at 6501 Fairmount but could not give a definite answer.
Originally the plan was to build a six-story building containing 45 apartments and 1,800 square feet of ground floor commercial space. Investors were not willing to go forward because the costs outweighed the anticipated revenue.
Then the investors talked with Mintz about changes that would cut their costs by about $1 million, he said. But when they checked in again a couple of months ago, costs had risen about $1 million.
“It’s unfortunate,” Matthews said. “That’s just how it works sometimes.”
Matthews said the group is now considering a new proposal to build 15 townhomes there instead, but no decision has been made.
Mintz noted that if any of the developers returns to the city with a new proposal for the same property, they will keep only the break on including affordable housing. They would need to satisfy the usual requirements for transportation impact fees and open space, she said.
Brian Beniqued, who said he is the sole investor in a 54-unit project at 10290 San Pablo Ave., said the boost “would help us very significantly.”
“I submitted my permits in 2021 and got very close to financing and then got delayed due to some additional carbon testing, then financing went away,” Baniqued said. “Now financing is coming back.”
Kim Marienthal, an investor in a project to develop housing and a brewpub restaurant at 6115 Potrero Ave. (across from Los Moles), said he has been working for four years but has not gotten financing.
“Melanie’s proposal at least gives us a chance of approaching lenders,” he said.
Praise for “Creative” Approach
Council members praised Mintz and her staff for trying to figure out how to move some housing projects forward.
Councilmember Rebecca Saltzman praised Mintz for creative thinking, saying “Right now we have $0 (in fees). If we get 25% we can leverage with other funds that are out there.”
Councilmember Gabe Quinto said he has been in constant talks with these four developers and supports the plan to give them incentives.
Motoyama said that she is concerned about precedent for future projects.
However, she added, “I think this will be great to hopefully move these four specific projects forward. If these four projects go, it’s going to be catalytic to get other developers back on track.”
Councilmember William Ktsanes said he did not comment at the meeting because he was not feeling well. He added later that Howdy Goudey raised important questions about how to work with developers to get projects done, including what incentives are needed to make a project happen.
“It’s kind of a poker game,” Ktsanes said. “No one wants to show their hand.”
Ktsanes too praised Mintz for her creative thinking and analysis. “If this gets projects going faster it will bring property taxes in sooner.”
Read the full staff report here.
Below is a map of major projects in El Cerrito’s San Pablo corridor.
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