Early last year, would-be housing developer James Gaskins came before the Berkeley City Council and asked for money. His project–a new South Berkeley lodge for the African-American Prince Hall Masons, as well as 37 units of low-income senior housing–was on the ropes again, and unless the council gave him $150,000 in emergency funds, the Masons would be unable to complete construction before the end of the year. If that happened, the patchwork of tax-credit subsidies they had assembled would collapse, and the project would be dead in the water.
This was hardly welcome news to the City Council. For years, the Masons had been trying to rehabilitate their crumbling old lodge, but eventually they realized that if they slapped 37 units of low-income housing on the upper floors, they could get the city to help foot the construction bill. Beginning in 1996, Gaskins and the Masons applied for a city housing subsidy that swelled to staggering proportions, until by the end of 1999, the City Council had pumped $2.3 million into the project. So councilmembers were clearly unhappy to see Gaskins coming back for more, especially since he tinged his pleas with suggestions that the council’s questions about the project’s viability were racist. But faced with the prospect that the lodge and the housing would never be built, they bit the bullet and cut him a check.
Anyone who drives by the site at the corner of Fairview and Adeline can take one look at the empty lot and see that last year’s last-minute subsidy did nothing to save the Masons’ troubled project. After the City Council bailed out the Masons last year, Gaskins concluded that he needed yet more money, this time in the form of additional tax credits from the state. But City Attorney Manuela Albuquerque ruled that the Masons did not have the city’s approval to apply for more tax credits, and the state decided that Gaskins’ application was incomplete anyway. One year ago this month, the project collapsed altogether, and Gaskins agreed to walk away from the project. The cost of this debacle was staggering: According to Interim Housing Director Steve Barton, the project ate up $1,356,000 in predevelopment and demolition expenses. The Masons swallowed most of the costs, but almost $600,000 was ponied up by the city. All to get a vacant lot and a lot of ill will around town.
Now the Masons areback. They still have dreams of building low-income housing and a community center for the ailing South Berkeley commercial corridor, and this time they have a new partner and a lot of help from the city. Despite the flawed funding process that plagued this project from its beginning back in 1996, almost everyone agrees that something has to be done with the lot, and the Masons, having been considerably abashed by their past performance, have found a more experienced partner in the Santa Monica-based developer American Community Development. Over the last year, the city’s Barton has worked with the Masons to retool their project and give it a more viable financial footing, but in less than a month, the Masons will be coming back to the Housing Advisory Committee (HAC) with a request for approximately $1.2 million in public money. This time, their project looks much better on paper, but the Masons will have to overcome six years of mismanagement in order to convince wary HAC members.
“Everybody deserves another chance, and this project has merit,” says Malcolm Westbrooks, the vice president of MW Prince Hall Arms, Inc., the nonprofit set up by the Masons to develop the project. “By and large, the people of Berkeley believe in what we’re trying to accomplish. I would just ask the people of Berkeley to indulge and assist us in this, because it’s something that people here [in South Berkeley] really believe in.”
For decades, Adeline Street has been the unwanted stepchild of the commercial corridor that stretches from downtown to the Oakland border. Thirty years ago, the Ashby BART station cut off Adeline from the healthier Shattuck Avenue, diverting would-be shoppers from its stores and laundromats. The Bank of America and the Oregon Street Safeway closed down a few years ago, removing critical services from South Berkeley. The Black Repertory Theatre was built in part to provide a cultural anchor at the heart of Adeline, but it has never lived up to its potential despite the enormous continuing city subsidy.
But lately, things have been looking up for Adeline. The Berkeley Bowl is ensconced at the old Safeway, the Cooperative Center Federal Credit Union is moving into the old Bank of America on Ashby, the Ed Roberts campus is scheduled to be built on the BART station’s eastern parking lot, and $1 million in pedestrian amenities are being spent up and down the street. If the Masons could finally build their housing, a critical gap could be filled in the corridor, and the street could have one less blighted property to scare away potential shoppers.
But this project has a history as dismal as the corridor itself. Back in 1996, the City Council revised the rules governing which projects would receive money from the Housing Trust Fund, the pot of money set aside each year to finance the construction of affordable housing. From now on, the council declared, each application would be reviewed on its merits, and the least expensive project would walk away with the money. Just months later, the council abandoned its own rules when the Masons stepped forward, handing over every dime of that year’s $850,000 in hopes of looking good to black voters. Nonprofit housing developers throughout the city fumed that their projects were complying with the new rules, yet were ignored for political expediency.
As the years passed, the Masons would return to the city and ask for more money again and again. The housing construction market was booming, and the Masons found themselves caught in a strange system: they would secure a bid from a contractor, but by the time they had secured the necessary funding, the price had gone up, and they would have to scramble for more money. It didn’t help that Gaskins was unfamiliar with the mechanics of financing such a project, or that the Masons had few connections in the nonprofit development world. But they could always rely on the city to bail them out, and so they did time and again, until the subsidy had swelled to $59,500 per unit, making the Masons’ project among the most expensive subsidized housing in the city’s history. “At the time, the market was a lot tighter, and to get everything taken care of was perhaps beyond the capacity of those who led the project,” says Prince Hall Arms, Inc. president Fred Young. “What we really lost was time. Lots and lots of time.”
But with Barton’s help, the Masons think they have finally figured out how to get their lodge built. Their new partner, American Community Development, has contractors who will promise to freeze their bids for six months, giving the Masons time to secure additional financing. And the Section 8 shortage that has plagued the rest of the city will actually benefit the Masons; because so few landlords will accept vouchers these days, there are plenty available for the Masons to accept, and this means the feds will finance the rents on their units for years. This time, Barton thinks that the Masons’ project will repay the city in months. “At the moment, we’re looking at a scenario in which they may not actually need a permanent subsidy,” he says. “The rents we can offer through the Section 8 program are up to $1,100 a month. There’s a lot of income there, and hence a lot of potential borrowing power.”
But as feasible as this project may now be, it may still need more help from the city than most projects. In order to qualify for this year’s round of tax credits, the Masons will ask the HAC and the City Council to fast-track funding their proposal and commit city money by the state deadline of June 15. That means leapfrogging the HAC’s usual timeline to consider financing a project, and putting the Masons at the front of the line. Once again, the Masons are going to ask for special treatment–and some HAC members are reportedly irritated at the ongoing tradition of accommodating this development. But now the Masons are only asking for a loan of roughly $1.2 million, which they hope to pay back with Housing and Urban Development funds. With this in mind, nearly everyone in town is eager to finally put this headache behind them–and get on with the business of revitalizing South Berkeley.