City pushes Bayer to increase community benefits program by $ 30 million
City officials are pushing Bayer to spend more money on a community benefit package tied to the pharmaceutical giant’s plans for a major expansion of its West Berkeley campus.
Bayer will host an online public meeting to discuss its plans for expanding West Berkeley and the proposed community benefit package on August 18, starting at 6:30 p.m. You can register for the event by clicking here.
Already the city’s largest private sector employer, Bayer plans to double its workforce at Berkeley over the next few decades by building a dozen or more new structures within its existing footprint, adding nearly 1 million square feet of space. additional support that will support a wider range of pharmaceutical manufacturing. Key to these plans is an extension of the development agreement that the city and Bayer entered into in 1992, and the community benefits package it contains which has funded a list of local programs over the past three decades.
Earlier this summer, Bayer officials presented their proposal for the next 30 years of community benefits. The package includes annual payments starting at $ 720,000 in 2022 and increasing by 2% each year, to reach $ 1.3 million in 2052, for a total of $ 30 million over the term of the agreement.
Educational programs, such as “hands-on science education” for middle school and college students and internships for high school and community college students, would receive 60% of the funding. Another 20% would be invested in community programs, with a focus on areas such as health equity and support for local businesses; the remaining 20% would go to the Berkeley Housing Trust Fund.
Mayor Jesse Arreguín hailed Bayer as “a very good business partner” and called the benefits proposal “a good starting point”.
But, added Arreguín, “I think they can do more.”
Specifically, how much more is unclear – Arreguín said the city had yet to draft a written counter-offer to Bayer’s proposal, which he said would be made public once it was prepared. When asked if there was a dollar amount that the city thought the company should provide each year, the mayor replied that this was still under discussion.
Bayer officials declined to comment on Arreguín’s call for a more generous benefits package.
“Whatever shape the city gives us, we look forward to it,” Bayer spokeswoman Cathy Keck said. “We came up with a really solid partner offer. “
Unlike the city’s recently completed negotiations with UC Berkeley, however, Bayer also noted during public discussions on the Benefits Package that its expansion plans are unrelated to the West Berkeley campus.
“What the site team is trying to do is work with Berkeley to ensure the city of Berkeley can be competitive in attracting Bayer’s global infrastructure dollars,” Keck said. “And it’s competitive with places like Raleigh, Boston, Toronto – if we’re just going to stay in North America. If we want to become European, we will talk about Germany, Spain, etc.
The company will hold an online public meeting to discuss the development agreement and benefits next week. Bayer and city negotiators are expected to reach consensus on the deal by September, when it will be submitted to the town planning commission and city council.
According to Bayer, at stake in the talks is 1,000 jobs the expansion would create on campus and about $ 15 million in broader economic benefits for the city.
“It’s a delicate balance,” said board member Terry Taplin, whose District 2 includes the Bayer campus and who has worked with Arreguín in negotiations with the company. “You don’t want to be crushed, you don’t want to chase the other partner away, and you don’t want to come away with nothing.”
The agreement paves the way for the planned expansion, providing Bayer with a predictable licensing schedule and allowing it to build new production facilities up to 80 feet tall. The current limit in the area is 45 feet.
It also expands the type of work Bayer can do at the facility, lifting restrictions in the original development agreement that prohibited research using recombinant DNA.
This provision has raised concerns from some neighbors and others, who fear that this will allow research in the facility that could pose a risk to the entire community. Bayer officials counter that their West Berkeley facility will continue to operate at the same biosecurity levels as before, and stressed that the facility houses production and manufacturing work – not research. Neither Taplin nor Arreguín expressed concerns about the research provisions of the development agreement during the negotiations.
City officials are also drafting other details in the development agreement, including how they will distribute the company’s payments. To this end, Arreguín and Taplin convened an ad hoc committee made up of more than 20 members, including representatives from schools, businesses, community groups and religious leaders, among others.
And Arreguín said he was raising concerns about the impact of 1,000 new workers commuting through West Berkeley each working day, calling Bayer’s plans to build a new parking lot at the site “excessive.”
Yet the main sticking point in the talks between Bayer and the city remains how much the company will pay each year.
The community benefit package is based on the idea that the terms of the development agreement will save Bayer time and money in building the expansion. Arreguín argues that the rules in the deal allowing taller buildings are worth more than Bayer’s offer judged.
“If it was another developer, they would have to get a waiver” to build the 65 and 80 foot facilities that Bayer’s plans call for, Arreguín said, “which is a very, very difficult thing to do. do”.
“We believe that an additional value must be taken into account in determining the amount of community benefits that Bayer should provide to the city,” he added.
Drew Johnston, vice president of engineering for the Bayer site, said that when calculating the benefit package, “I pushed it as far as I could,” assuming the development agreement would provide the maximum value to the business and, in return, the highest payments to the city. Johnson also reiterated Bayer’s take on the importance of the deal to its future at West Berkeley.
“The heights we have requested allow us to do our business here,” he said. “And without the heights, especially on the manufacturing side, other Bayer sites will get the project – it’s that simple.”