The property tax on my business (808 Gilman St. LLC) will go up 13.1% in just this year, largely due to three property tax measures which all concurrently passed. Measure FF (a new tax which is 0.25/sf for businesses, crafted as a voter initiative requiring only a simple majority) was especially impactful on my business - an old 10,000sf warehouse converted into class C office and lab space. Along with the 0.09/sf increase from Measure X, and 0.043/sf increase from Measure Y, these will collectively result in an aggregate property tax rate of 4% of my property's assessed valuation (the building was purchased in 2012).
The "needs" behind the measures all appear worthy, but instead of constantly seeking new taxes at every election, the City really needs to reduce unnecessary projects elsewhere, execute projects far more efficiently, better contain overtime usage, and negotiate increased employee pension contribution portions for new hires (see 2023 compensation data. A city of only 124,000 should not require a morbidly obese budget of $750MM per year ( see summary on Page 10).
One truly worries about Berkeley's future when it seems to have an increasing number of empty storefronts
One truly worries about Berkeley's future when it seems to have an increasing number of empty storefronts, especially in the western portion, and when the two largest West Berkeley R&D campuses are mostly empty, and put on hold, respectively. I, and other small business people I talk to, believe that as a developer or business evaluates purchasing a site or building in Berkeley, they come to realize that the aggregate annual property tax and other business taxes are collectively higher than anywhere nearby, and will be a significant drain on their operations. They further see that they will lose at least 3.5% of the equity when they eventually sell it, due to Berkeley's unusually high RETT (increased to 3.5% by Measure W of this past election). The city's other numerous and heavy business taxes (e.g. large gross receipts taxes regardless of whether the business is even profitable, and a 7.5% Berkeley utility tax - even on clean electricity) will further burden their business.
Business owners come to realize that the aggregate annual property tax and other business taxes are collectively higher than anywhere nearby
With a history of multiple new heavy taxes on every single Berkeley ballot, and virtually no sunsetting ever, and with many taxes (like FF) auto-increasing with inflation, savvy developers and business owners will do the fairly simple math and simply steer clear of Berkeley, as appears to be happening, at least from where I sit here in West Berkeley.
Berkeley has great potential, thanks to its progressive and intellectual culture and what is one of the best universities in the world, but at some point the viability of a location goes beyond ideologies, and is brutally governed by basic economics.
Is there something we can collectively do, well before the next election, to stem this unrelenting and damaging trend?
Best regards,
Joel Libove
P.S. Despite measure FF (Sidewalk and Street Repairs Parcel Tax) having passed, I received a letter from the City of Berkeley demanding that I fix the City sidewalk near my building that was damaged by a city tree root.
Tonight, October 14, 2025 I attended the City Council meeting and Mayor Ishii took the alarm noise and prior difficulty with the sound system to push for new council chambers and a large meeting room, agenda item 5 was the application for a FEMA Grant of $16,500,000 with a City match of $5,400,000 for seismic retrofit of Maudelle Shirek and Veterans Buildings. Item 6 is FEMA grant for home hardening.
ReplyDeleteMayor Ishii "Adding on my thanks for 5 and 6, in particular, the State of the City is next week and I was like WOW,It's amazing we don't have a venue to have our own State of the City. In so many times people tell me they're shocked we don't have acivic space that holds more people and our alarm thing going off today is a good reminder not having our own council chambers has an impact on our meetings. We've had many audio and recording issues over the last year. The list is exciting and I know it's also the beginning we have work to do to get the funding in place..."
Why is it that each entity must have it's own spaces rather than to think in terms of utilizing resources / buildings more fully. The Council and the School Board currently use the same space. It was built/remodeled to be used by both. Why is utilizing one building meeting room more fully so unsavory when the idea of having two meeting rooms that are empty most of the time is so appealing, especially at a time when the public can join the meetings by ZOOM.
Additionally, what is wrong with giving the State of the City at the Freight and Salvage a location that sits empty most of the time. It is not open for entertainment every night.
There is no way to construct a building without using resources that impact the environment somewhere else. Am I the only person that pays attention to Earth Overshoot Day, the date when humanity has exhausted more resources than nature can restore in a year? If everyone lived to the same level of consumption as the United States that date for 2025 was March 13. For the planet as a whole that date was July 24, 2025.
I know Climate Change and caring for the planet is out of favor these days, but using the resources/the buildings we already have is more economical.
The full repair to usefulness of the Maudelle Shirek and the Veterans Building is over $100,000,000. The City wants a new pier and the Fire Department needs upgrades and new construction.
My vote is for the Fire Department. One of the issues with the Fire Department is current buildings/stations do not have adequate separation from work and sleeping quarters from decontamination of equipment and people areas after fire fighting. That is a big deal as fire fighters have higher incidences of cancer and chronic diseases from exposure to smoke and chemicals.
Maybe the rest of the City residents have bottomless pockets to satisfy every City desire, but I don't.
All this need for money for projects takes a heavy toll on the City as in the process that quest pushes out the diversity that made Berkeley so attractive in the first place.