SAN JOSE — Google has pushed ahead with efforts to salvage parts of older buildings as well as rescue complete historic structures that are within the footprint of the search giant’s downtown San Jose transit village.

The tech titan has offered the public pieces of the now-shuttered Patty’s Inn, whose roots as a downtown San Jose watering hole date back to the Great Depression.

Google also offered up for salvage sections of the former Sunlite Bakery Bread Depot building and will rescue the ornate entryway to the old structure, preserving the entrance elsewhere in the company’s project footprint.

Across the street from the bakery site, the old Hellwig Iron Works at 150 South Montgomery Street is expected to be preserved and creatively reused as a key component of Google’s new Downtown West neighborhood of office buildings, homes, shops, restaurants, hotel facilities, open spaces, entertainment centers and cultural loops.

“Google taking the time and opportunity to offer salvage of older buildings is commendable,” said Bob Staedler,  principal executive with Silicon Valley Synergy, a land-use consultancy. “It takes quite a bit of time and energy to make those salvage items available to the public. This effort shouldn’t be taken for granted.”

One of the numerous documents prepared in connection with the Downtown West proposal addressed Google’s plans to preserve several key buildings in the footprint of the game-changing project, where the search giant eventually intends to employ 20,000 to 25,000 tech workers.

The former Hellwig Iron Works building, constructed sometime around 1935, is one of the buildings that’s expected to be reused as it exists, although it’s likely some additions could be made to the structure.

After the ironworks closed its doors, Navlet’s Florists and a Taiko performance studio also operated in the distinctive brick building.

“150 South Montgomery Street, last occupied by San Jose Taiko, is being repurposed for adaptive reuse,” a Google spokesperson said.

It’s likely that the Hellwig Ironworks could be expanded as part of the building’s reuse, according to documents on file with city officials.

“One or more additions and adaptive reuse of the building to accommodate new arts and cultural uses” are envisioned as part of the Hellwig structure’s future, the city documents show.

Among the other historic or noteworthy buildings that are being retained, reused adaptively, or relocated:

• Kearney Pattern Works and Foundry at 40 South Montgomery Street, constructed in 1922. The historic sections of the building will be relocated about 30 feet to the south. “Once relocated, the building would be expanded and adaptively reused to accommodate new retail, cultural, arts, education, and/or other active uses,” the city report stated, with the new frontage on Montgomery Street. The non-historic portions of this building on South Autumn Street would be demolished.
• San Jose Water Works building at 374 West Santa Clara Street, constructed in 1934. The building is being preserved and renovated.
• Stephens Meat Co. “dancing pig sign.” Google removed and preserved the iconic sign that for decades was a fixture near the Diridon train station and the SAP Center. The sign, temporarily at San Jose History Park, will eventually find a permanent long-term home in the Downtown West project.
• Sunlite Bakery at 145 South Montgomery Street, constructed in 1936. Google has decided to rescue the Art Moderne-style entrance of the structure and relocate it elsewhere in the company’s new transit-oriented neighborhood.

The office building is slated to become “a cornerstone of the Downtown West neighborhood that we are developing,” Kent Walker, president of global affairs of Google owner Alphabet, said in April 2022 during a San Jose event to discuss the tech titan’s investments in the Bay Area.

The preservation of so many historic and existing prominent buildings will help Google’s new neighborhood to blend in with the existing areas on the western edges of downtown San Jose, in Staedler’s view.

“This shows a commitment to honoring the historical elements of San Jose while making way for the next evolution of the Diridon Station area,” Staedler said.

”Survey says” looks at various rankings and scorecards judging geographic locations while noting these grades are best seen as a mix of artful interpretation and data.

Buzz: Economic reality has hit California landlords, and their tenants are the winners with four consecutive months of falling rents.

Source: My trusty spreadsheet looked at December’s estimates of lease rates for new tenants in 56 large California cities, compiled by ApartmentList.

Topline

California big-city rents ran $2,110 a month, according to my populated-weighted average of the cities. That’s down 1.1% in a month as 88% of the big cities tracked had falling rents for the month. Rents are off $86 or 4% since August.

And December’s rent was up only 2.4% in a year. That’s the smallest year-over-year increase in 19 months.

But let’s note this recent dip doesn’t wipe away pandemic-era pain for renters. California rents are still up 13% in three years, or $240 a month.

Topline

Let’s look at some extremes among the 56 California cities tracked for December …

Where were the largest rent declines?

1-month drop: Oceanside, off 3.9% to $2,622.

12-month drop: Ventura, off 4.4% to $2,063.

3-year drop: Oakland, off 15% to $1,628.

And which cities had the biggest rent gains?

1-month gain: Ventura, up 1.3% to $2,058.

12-month gain: Escondido, up 11.8% to $2,231.

3-year gain: Escondido, up 40% to $2,231.

And the monthly rent extremes?

Priciest city? Irvine at $3,068.

Cheapest? Fresno at $1,299.

Consider that rents fell in December in nine of California’s 10 most-populated cities. Here are the cities, ranked by one-month rent change …

Santa Ana: $2,111 monthly median new lease rate, down 1.9% in a month, up 0.5% in a year, and up 22% in three years.

San Francisco: $2,196 monthly, down 1.7% in a month, up 2% in a year, and down 13% in three years.

San Diego: $2,345 monthly, down 1.4% in a month, up 4.6% in a year, and up 27% in three years.

San Jose: $2,386 monthly, down 1.3% in a month, up 6.6% in a year, and up 3% in three years.

Los Angeles: $1,873 monthly, down 1% in a month, up 1.7% in a year, and up 6% in three years.

Long Beach: $1,678 monthly, down 0.9% in a month, up 4% in a year, and up 17% in three years.

Sacramento: $1,624 monthly, down 0.8% in a month, down 1.8% in a year, and up 20% in three years.

Oakland: $1,628 monthly, down 0.7% in a month, down 2.8% in a year, down 15% in three years.

Fresno: $1,299 monthly, down 0.2% in a month, up 1.6% in a year, and up 23% in three years.

Anaheim: $2,227 monthly, up 0.2% in a month, up 3.8% in a year, and up 26% in three years.

Bottom line

Ponder 2022’s economic timeline: Reduced coronavirus fears. Workers going back to the office. Students return to classrooms. On top of that, toss in some economic anxieties.

That nudged many renters, or potential renters, to think they no longer needed separate or larger living spaces. This took the steam out of demand for housing, translating to extra empty rentals for many landlords.

So now we’re seeing a sale on rents – discounting that could run throughout much of 2023.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

The December median price figure, released this week by the county assessor’s office, is down nearly 30% from a peak of $2.12 million in April. The median price in December 2021 was about $1.49 million.

The median price is the point at which half the homes sold for more money and half for less. The county logged 118 sales of detached homes last month, down from 170 the prior December.

Properties selling at the $1.5 million median price in Marin last month included several four-bedroom homes in San Rafael, a three-bedroom home in the Cascade Canyon area of Fairfax and a two-bedroom, one-bathroom home in the Heather Gardens neighborhood of Larkspur, according to the real estate data firm Zillow.

Spirit Wiseman, the sellers’ agent in the Fairfax deal, said the real estate market is following the “law of Tao,” ebbing and flowing like tidal cycles. She said the decline in home prices is a healthy adjustment after last year’s ramped-up bidding and all-cash offers.

“It’s a little bit distressing to see prices go so high,” said Wiseman, who works for Engel & Völkers. “I really want ordinary people to be able to buy.”

Jennifer Bowes, the buyers’ agent in the Larkspur sale, said she represented a family moving for school considerations. Her clients were able to get the property after another buyer backed out during the relatively slow holiday period.

“We actually got a little lucky,” said Bowes, a Compass agent based in Novato. “I think we got a good value there.”

Bowes said the market has “a lot of pent-up buyer demand now that the interest rates have ticked down.” She said she hopes the first fiscal quarter will pick up steam once the rain eases and more homes come on the market.

“I don’t think it will be double-digit gains, but I think it will be stable, maybe single-digit appreciation,” she said.

The U.S. weekly average for a 30-year fixed-rate mortgage was 6.33% as of Thursday, down from 6.48% the prior week, according to Freddie Mac, the federally chartered mortgage company. A year ago, the average was 3.45%.

“While mortgage rates have resumed their decline, the market remains hypersensitive to rate movements, with purchase demand experiencing large swings relative to small changes in rates,” Sam Khater, chief economist of Freddie Mac, said in a released statement. “Over the last few weeks latent demand has been on display with buyers jumping in and out of the market as rates move.”

Rob Spinosa, a mortgage banker in San Anselmo, said many homeowners remain reluctant to list their properties because they already have favorable loan terms and home prices are still relatively high.

Traditionally, he said, more owners decide to list around mid-February. He said motivated buyers are out there.

“I think they’re still waiting to see what comes on the market,” said Spinosa, who works for Guaranteed Rate. “The mortgage industry, everyone’s kind of waiting for that day.”

Belvedere had the highest median home price in Marin last month at $4.65 million on three sales, according to the county data. Tiburon followed closely at nearly $4.5 million on two sales. Ross, normally a price leader, had no home sales in December.

In the Marin County condominium and townhome market, the median price last month was $809,950, up nearly 4% from $780,000 the prior December. The county recorded 46 such sales last month, down from 61 the prior year.

At the upper end of the condo market, three sold in Tiburon last month at a median price of $1.3 million. The most expensive one was $2.8 million.

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  Up for grabs at $3.8 million is the former Palm Springs home of socialite Magda Gabor, seen here in 1954, newly made over by designer Tracy Turco. (Composite by Sandra Barrera, Southern California News Group; Inset: AFP via Getty Images; House: Michael Roth)

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  The veranda. (Photo by Michael Roth)

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  The living room. (Photo by Michael Roth)

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  The kitchen. (Photo by Michael Roth)

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  The dining room. (Photo by Michael Roth)

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  The primary bedroom. (Photo by Michael Roth)

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  The soaking tub in the primary bathroom. (Photo by Michael Roth)

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  The pool. (Photo by Michael Roth)

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  A 1954 file photo of the actress Zsa Zsa Gabor and her sisters Eva and Magda. (Photo by AFP via Getty Images)

The former Palm Springs home of late socialite Magda Gabor boasting a glamorous new makeover has hit the market for $3.8 million.

Bursting with color and original fabrics and wall coverings, the revamped three-bedroom, 3,441-square-foot home with four bathrooms is the vision of designer Tracy Turco.

“It’s such a unique property, and then Tracy takes it to a whole other level,” said Conrad Miller of Avenue 8, the co-listing agent.

Property records show Turco and her real estate developer husband, Jerry, picked up the home on a nearly two-third-acre hilltop lot in Little Tuscany in August 2020 for $1.74 million. The couple is known for buying and renovating neglected mid-century properties like a 1961 home by William Krisel listed for $1.149 million and the retro boutique hotels the Art Hotel, Tiki Hotel, Cheetah Hotel and Deco Palm Hotel.

Turco puts her spin on the 1964 abode while incorporating furnishings and treatments that are original to the eldest and only redhead of the famous Gabor sisters.

As Southern California News Group previously reported, Gabor bought the home in the late 1960s at the urging of her countess mother. The property had been the site of star-studded parties and even fashion shoots during her tenure.

County records indicate the property remained in her name and that of her sister Zsa Zsa through separate trusts until August 1998, when the property sold for $440,000.

According to the listing, the sisters “separately occupied the estate for over 30 years.”

A painting of Magda Gabor, who died in 1997 at 81, hangs on the foyer’s wall.

Her first initial is etched on the home’s mirrored walls, including the one that runs the length of the combined living and dining room with its hidden closet. The mirror reflects the veranda.

With its pink overhang and striped black and white valance, the veranda overlooks the mosaic-tiled pool and mountains beyond.

Views also abound from the breakfast room nearest the kitchen, with its custom-trowelled ceiling and original Hungarian rotisserie, to the primary bathroom. It has dual vanities, a shower and a soaking tub. A curtain closes the bathroom from the rest of the primary suite’s bedroom, with its sitting room/office, dressing room, makeup room and two walk-in closets.

Other Gabor-era originals include a grand piano, a dining room table and crystal chandeliers.

The patio table belonged to Zsa Zsa Gabor.

Brandon Holland of Avenue 8 shares the listing, which is available turnkey.

“Survey says” looks at various rankings and scorecards judging geographic locations while noting these grades are best seen as a mix of artful interpretation and data.

Buzz: The Inland Empire is home to California’s wildest home-price swings.

Source: My trusty spreadsheet tallied annual changes in home values in seven big California markets, as calculated by Federal Housing Finance Agency indexes dating to 1978. Rankings tracked four factors: the gap between best and worst years; the share of down years; a geeky measure of price-swing variations called “standard deviation;” and the 44-year average price gain. The final grade was an average ranking of these four yardsticks.

Topline

As California housing seems headed toward a price correction in 2023, it’s time to see what history tells us where large gyrations in home values happen the most frequently in the state.

The housing market of Riverside and San Bernardino counties took the top spot because it was No. 1 in all four volatility yardsticks. The Inland Empire’s housing market has an up-and-down history due the region’s fast-growth and erratic economic history.

Next came the Sacramento metro area, followed by Los Angeles, Orange and San Diego counties, then the San Jose and San Francisco metro areas.

Details

Let’s look inside the rankings to see how values within these markets have varied since 1978.

No. 1 Inland Empire: There’s a 57 percentage-point gap between the biggest gain of 29% in 2004 and the largest loss of 28% in 2008. This market suffered down years 30% of the time, with a typical 10.6 percentage-point variation in year-to-year price swings. Local prices have gained an average 5.8% a year.

No. 2 Sacramento: The metro area’s 45-point gap between its biggest gain of 25% in 1978 and the largest loss of 20% in 2008. Down years 25% of the time. A 9.8-point price-swing variation. Average gain of 6% a year.

No. 3 Los Angeles County: A 43-point gap between its biggest gain of 26% in 2005 and largest loss of 17% in 2008. Down years 30% of the time. A 9.5-point price-swing variation. Average gain of 6.3% a year.

No. 4 Orange County: A 44-point gap between biggest gain of 26% in 2004 and the largest loss of 18% in 2008. Down years 25% of the time. A 9.1-point price-swing variation. Average gain of 6.1% a year.

No. 5 San Diego County: A 42-point gap between biggest gain of 25% 2004) and the largest loss of 17% (2008). Down years 27% of the time. A 8.8-point price-swing variation. Average gain of 6.2% a year.

No. 6 San Jose: The metro area’s 43-point gap between biggest gain of 30% (1989) and largest loss of 12% (2009). Down years 25% of the time. A 9-point price-swing variation. Average gain of 6.9% a year.

No. 7 San Francisco: The metro area’s 32-point gap between biggest gain of 23% (2000) and largest loss of 9% (2008). Down years 27% of the time. A 8.8% price-swing variation. Average gain of 6.9% a year.

Caveat

Let’s remember, California’s overall housing market has historically gone through wilder peaks and valleys than the rest of the U.S. This means most national home-price forecasts have little value to a California property watcher.

Look at the differences in these volatility measures for the California and U.S. FHFA indexes – with a stock average (Wilshire 500 index) tossed in for comparative purposes.

Best year: Up 24% (2005) for California homes, up 14% (1978) for U.S. homes and up 37% (1983) for stocks.

Worst year: Off 20% (2008) for California homes, off 6% (2009). for U.S. homes and off 22% (2009) for stocks.

Extremes gap: 43 percentage points between best and worst years for California homes, 20 for U.S. homes, and 59 for stocks.

Down years since 1978: 27% for California homes, 11% for U.S. homes, and 18% for stocks.

Price-swing variance: 9.1 percentage points for California homes, 4.3 for U.S. homes, and 13 for stocks.

Average gain since 1978: 6.2% for California homes, 4.7% for U.S. homes, and 10.1% for stocks.

Bottom line

Falling home prices in California are not just the result of events surrounding the 2008 global financial meltdown and housing collapse.

In the decade of recovery from the mid-2000s housing bust, the seven markets have had a total of five down years. So, even before you ponder overvalued homes, high mortgage rates and growing economic uncertainty, California housing seems overdue for a price correction.

And recent gains seem unsustainable, especially since mortgage rates soared in much of 2022.

Peek at the one-year home-price gains for the seven markets through September, the latest FHFA indexes available, and how that gain would rank among all other full-year results back to 1978.

Inland Empire’s 18% increase would be its seventh-best since 1978. Orange County’s 17% would be No. 5; San Diego 17% (No. 6); San Jose 15% (No. 8); Los Angeles County 15% (No. 9); San Francisco 12% (No. 17); Sacramento 10% (No. 16).

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

The headwinds are plenty: Higher interest rates for construction loans. Rising labor and material costs. Slowing demand from homebuyers squeezed by more expensive mortgages. And fears of a looming recession as cities continue to recover from the pandemic.

That’s all raising the specter of a widespread housing construction downturn.

“There already is a slowdown, but I think it will magnify itself in 2023,” said Ken Rosen, chair of UC Berkeley’s Fisher Center for Real Estate and Urban Economics. “A lot of developers may put projects on hold until construction costs come down.”

The decline threatens to thwart the Bay Area’s effort to meet its state-mandated goal of approving more than 441,000 homes of all income levels over the next eight years, representing a roughly 15% increase in the region’s housing stock. Already, most cities and counties haven’t come close to meeting their individual targets in past decades. And housing experts and advocates contend that chronic underproduction — in part because many local officials have sought to limit growth — is at the root of the region’s astronomical rents and home prices.

Mathew Reed, policy director with Silicon Valley pro-housing group SV@Home, said the mounting economic uncertainty will require officials at all levels of government to remove barriers to development and unlock more money for desperately needed affordable homes.

“Because there are ongoing challenges, there’s a lot we can do that’s going to be critical in the longer term,” Reed said.

Signs of a homebuilding decline are already clear. From the start of last year through November, the San Francisco metro area — which includes the East Bay and Peninsula — permitted just over 10,000 homes, a 16% decline from the same period in 2021, according to U.S. Census Bureau data. The San Jose metro area, which has seen a spate of new housing planned for its urban center, actually saw permits increase from around 4,000 to 6,000 new units.

But just because projects have construction permits, that doesn’t automatically mean they’ll be built. In San Francisco, for instance, several of the city’s biggest housing developments are reportedly stalled. And in Concord, a 16,000-unit megaproject still in the planning stages is on hold after the developer asked the city to approve the addition of about 3,000 more homes to offset growing costs.

“You have deals going to the sidelines because of interest rates,” said Chris Neighbor, president of SummerHill Homes, which develops houses, condos and apartments throughout the South Bay.

The rising cost of borrowing has sent typical mortgage rates doubling over the past year, to 6.3% last week, boosting monthly home payments by thousands of dollars and pushing many would-be buyers out of the market. In turn, developers are increasingly pulling back on new single-family homes and condos.

On top of that, financing projects has become more expensive as rates for construction loans also have jumped to around 6%. Neighbor said that’s adding roughly $20,000 to the per-unit cost of large multimillion-dollar developments – a seemingly small amount that can still make all the difference.

“That just upended all of the financial models that determine whether or not something is a feasible project,” said Chris Thornberg, an economist and founder of Beacon Economics.

Another roadblock: swelling material and labor costs since the start of the pandemic. Neighbor said inflation and supply chain issues for lumber and other materials, coupled with worker shortages, have sent hard costs soaring by around 20% the past few years, though prices are now starting to stabilize.

The cost of ​lumber, which has been especially volatile during the pandemic, recently returned to pre-COVID levels. Prices averaged around $377 per thousand board feet this month, down from a peak of $1,495 in May 2021.

Dean Wehrli, a principal with John Burns Real Estate Consulting, said tens of thousands of local layoffs by tech companies such as Facebook, Twitter and Salesforce also are having a “big impact on housing demand,” giving developers pause. And growing concerns about a recession freezing the local real estate market later this year are only increasing the uncertainty.

At the same time, the slow pandemic recovery of the region’s urban cores has some developers questioning whether it makes sense to pursue projects in city centers, where rents largely haven’t returned to pre-COVID prices.

“Why would you want to live in a downtown if it is dark and empty and boarded up?” asked Danny Haber, chief executive of Oakland-based developer oWOW.

Meanwhile, affordable housing developers are facing yet another set of challenges. Most low-income projects rely on public subsidies that have become increasingly oversubscribed in recent years and could soon be on the chopping block amid economic uncertainty.

Last week, Gov. Gavin Newsom, facing a projected $22.5 billion deficit, released a new budget proposal calling for $350 million in reductions from the $11.2 billion set aside for affordable housing programs over the next few years.

“In the tough times, that’s where we’ll see how committed we are to addressing this crisis,” Diaz said.

Matt Regan, a housing policy expert with the pro-business group Bay Area Council, blamed cities’ sometimes yearslong approval process for adding crushing costs to both affordable and market-rate projects. Local zoning rules have also put overly strict limits on how many homes can go where, he said.

While the state and local governments have phased in reforms, more needs to be done to rebalance the housing market in the Bay Area, Regan said.

“If it’s not already a gated country club for millionaires,” he said, “it will become that very soon.”

The details of the sprawling 14,215-square-foot contemporary home have been carefully curated from the top-of-the-line building materials to the high-tech amenities — to the collection of fine art. All the home furnishings are included in the sale, including gourmet kitchen appliances, linens and a Steinway piano.

The property boasts six bedrooms and 10 bathrooms; it also includes a 1,000-square-foot guest house, a home theater and a wine cellar, among many other amenities. In addition to the indoor and outdoor pool there is an outdoor kitchen, a fire pit and 1.3 acres of lush green space.

Michael Repka of DeLeon Realty is the listing agent.

The property was last sold in 2017 for $15.5 million, according to public records.

Last fall, Atherton was named the most expensive ZIP code in the U.S. for sixth straight year by PropertyShark.

The tense standoff erupted in the pre-dawn hours of Aug. 3, when demolition crews quickly fenced in the park and downed dozens of trees on the university-owned site three blocks south of campus, which was once a center of 1960s political protest. Over two days, protesters foiled the university’s attempt to start construction on its controversial housing project for 1,100 students and 125 unhoused residents on the historic site.

By the early afternoon on Aug. 3, hundreds of police officers in full riot gear had retreated amid growing pushback from protesters, leaving dozens of people free to pry apart barricades, cut gas lines and puncture tires of heavy machinery left behind — the most recent chapter of a fiery history of activism on the land.

The havoc’s toll includes a whopping three-quarters of a million dollars to pay for the fencing that protesters ripped out of the sidewalks around the 2.8-acre park, but the biggest cost is $2.73 million to compensate law enforcement deployed at People’s Park, according to UC Berkeley spokesperson Dan Mogulof.

The police response at the park — bounded by Telegraph Avenue, Bowditch Street, Dwight Way and Haste Street — was led by University of California Police Department officers, with help from the California Highway Patrol and California State University officers. Mogulof said that $2.73 million includes outside officers’ room and board, physical security supplies and overtime for UC Berkeley police personnel.

Fortunately for the $312 million project, there’s already wiggle room baked into the budget that the University of California Board of Regents approved in September 2021.

The plan allocated nearly $52.8 million for contingency costs, which included “anticipated delays due to litigation or special considerations relating to clearing the site for construction,” according to documents from the UC’s Capital Strategies Committee.

Mogulof, who said he was not previously aware of those funds, could not confirm if that was where the $4 million from August’s protests would be sourced.

So why should the greater Berkeley community care that a $312 million UC housing project — complete with a dedicated contingency fund — will swallow an additional $4 million in expenses and ballooning interest costs during years of delays?

While no taxpayer dollars are at stake, Mogulof said the public should be concerned that a small group of people were able to temporarily shut down a project that has otherwise gleaned support from the Berkeley City Council and 68% of surveyed university students.

“UC Berkeley is a public institution, and the public has a vested interest in the fact that the university is a good steward of the funds they receive, from the public and elsewhere,” Mogulof said by phone Tuesday, adding that unforeseen expenses may put pressure on the prices students pay to live in the proposed facility.

“These costs were incurred because of unlawful behavior, and it raises the question: Who gets to decide? At the end of the day, somebody has to pay. It’s a hard pill to swallow when costs are the result of illegal activity.”

But many activists working to preserve the park are left wondering whether UC Berkeley reflected on where they went wrong in August, given the fact that they’re left with a “hefty price tag for nothing,” according to Andrea Prichett, a member of the People’s Park Council who was one of the protesters arrested for blocking the construction in August.

“When you spend $4 million and you have nothing to show for it, that’s a public policy problem,” Prichett said. “I would like to think that they would revise their approach in future, but unfortunately they have it in their minds that they can simply roll over this portion of the community and force their will upon people. It didn’t take a public policy expert to recognize that there was going to be resistance.”

Construction was approved in July by Alameda County Judge Frank Roesch, who rejected several lawsuits — filed jointly in 2021 by the Local 3299 union for UC service workers and two community groups, Make UC A Good Neighbor and Berkeley Citizens for a Better Plan — that argued the housing project violated the California Environmental Quality Act.

Redevelopment of People’s Park has remained on hold since August — at first to avoid further confrontation, but also because the university was hit with an injunction by a state appellate court. That same court appears to be on the brink of forcing UC to abandon its current plans at People’s Park.

In December, the First District Court of Appeal in San Francisco filed a tentative opinion that the University of California failed to offer a valid reason for why it did not analyze alternative locations, well-documented noise impacts and unintended population growth while developing a plan to build desperately needed homes on the historic 2.8-acre site.

Oral arguments for the case will be heard Thursday.

While the battle slogs through the courts, UC Berkeley is also on the hook to pay the project’s contractor delay fees, which are contractually required in order to compensate for costs that will be incurred while progress is stalled on the project.

Mogulof said that bill is currently $2.6 million and will continue to climb for as long as the delay continues.

The total price tag does not include the crews and equipment used to cut down several trees at the historic park, which was added to the National Register of Historic Places in June. Rather, Mogulof said those costs will be rolled into the larger project’s final bill, since those actions were already planned, regardless of any protests and damage.

More detailed financial information about the bills — from the toll of the construction equipment that was destroyed to the locations where officers were housed during the protests — is not yet available.

Moving forward, Mogulof said the university wants to start construction as soon as possible in order to complete the project and welcome new residents within two years, attempting to address the university’s student housing crisis.

About 82% of the more than 45,000 undergraduate and graduate students enrolled last fall were left to find off-campus housing — the highest percentage among the entire University of California system.

“The university’s commitment to the project is unwavering,” Mogulof said. “And we intend to proceed with construction as soon as we’re able to.”

The production operation will move to Bishop Ranch 15, which has addresses that range from 12647 to 12677 Alcosta Blvd. in San Ramon.

The relocation to San Ramon is expected to occur this summer and marks another high-profile corporate departure from San Francisco.

“The studio will focus on live sports content with the facility being built with cutting-edge production technology,” the organization said. “The office is expected to welcome more than 100 staffers and freelancers on busy game days.”

The Pac-12 leased about 42,000 square feet in Bishop Ranch 15, the sports organization stated. The athletic conference owns and operates the Pac-12 Network, which features various sporting events involving member schools, as well as numerous regional channels that spotlight local teams.

The conference will shrink to 10 schools in 2024, when UCLA and USC will join the Big Ten conference as part of a wave of realignments that occured nationwide in recent years. The remaining schools, including UC Berkeley and Stanford, are currently negotiating what is expected to be a sizable new media contract, though the effect on basketball and football games previously aired on the network is unclear.

“For the Pac-12, this is not an office, it’s a studio,” said Alex Mehran Jr., president of San Ramon-based Sunset Development, the principal owner and developer of the Bishop Ranch office, retail, restaurant and hotel complex.

“They are building out a very significant studio here,” Mehran Jr. said. “This is an important brand to have for our region. It’s kind of cool to get this deal done with this kind of creative organization.”

The Bishop Ranch 15 office complex will be the new home for the Pac-12 state-of-the-art broadcast and content production facility, along with flexible workspace and meeting rooms for in-person meetings and events.

“This is the kind of creative use that you would normally have expected in San Francisco or Berkeley,” Mehran Jr. said. “Here they have a location and a setup in a place that’s safe and is in a great place to come to work.”

Bishop Ranch attracted another high-profile creative company in a sign that the business park continues to diversify its tenant basis.

In recent years, Striking Distance Studios signed a lease for space in Bishop Ranch at 6111 Bollinger Canyon Road. Striking Distance is a video game maker that developed “The Callisto Project,” a recently-released survival horror game.

Pac-12’s production studio and Striking Distance, along with other unique tenants such as The Lot cinema complex and Equinox fitness center, have landed in recent years at City Center Bishop Ranch.

City Center, by adding numerous restaurants and shops, has effectively become a downtown for San Ramon.

Bishop Ranch management also took steps to retain Chevron, a major occupant at the business park, with a deal to pay $174.5 million to buy the energy titan’s Chevron Park headquarters complex.

As part of that deal, Chevron agreed to lease nearly 400,000 square feet in the BR 2600 office complex in Bishop Ranch, a rental transaction that enables Chevron to keep its world headquarters in San Ramon.

Deals such as the Pac-12 production center are crucial in a post-coronavirus world where more than a few traditional corporate tenants are eyeing numerous ways to scale back their office space.

“With what’s happening in the office market, we are looking for a lot of different kinds of uses to be tenants at Bishop Ranch,” Mehran Jr. said.

The Oakland-area office vacancy rate was 18.6% during the October-through-December fourth quarter of 2022, according to a new report from CBRE, a commercial real estate firm.

The latest vacancy rate was up from a 17.4% level in the July-through-September third period. The Oakland area includes downtown Oakland, Oakland’s Jack London Square district, the Oakland airport area, Berkeley, Emeryville, Richmond and San Leandro.

Downtown Oakland endured the region’s highest office vacancy rate in the fourth quarter of 2022 at 25.3%, CBRE reported. That was up from 24.1% in the third quarter of 2022.

Emeryville posted a 23% office vacancy rate in the fourth quarter, which was a big jump from the 18.1% vacancy rate in that city in the third quarter.

Among other notable markets in the area: Office vacancies during the fourth quarter of 2022 were at 12.6% in Berkeley, 12.5% in Richmond and 11.7% in Oakland’s Jack London Square district.

Three markets managed to post single-digit office vacancy rates: the Oakland airport area was at 9.9%, Alameda was at 7.2% and San Leandro was at 4.1% in the fourth quarter.

Office rental rates were a bright spot in the report. Asking rates for office space in the Oakland market area were $4.52 a square foot per month during the fourth quarter, an increase from $4.50 a square foot in the third quarter.

The region’s largest office lease in the fourth quarter occurred in Alameda, where Exelixis leased 100,300 square feet at 1410 Harbor Bay Parkway.

CBRE stated that no notable office purchases occurred in the market during the final three months of the year. The real estate firm blamed macroeconomic challenges for this slowdown.

Despite the feeble purchasing activity over the final three months of the year, CBRE experts believe that buyers might emerge in more robust numbers in the next several months as prices weaken for office buildings and pressure intensifies on owners to sell their properties.

“Buyers eagerly await price discovery and distress opportunities, all of which will begin to present themselves in 2023,” CBRE stated in the report.