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Pot Growers High on West Berkeley Real Estate

A parcel at 1350 4th St. is on the market for $2.5 million
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A parcel at 1350 4th St. is on the market for $2.5 million
 
Will new pot farm laws in Berkeley cause a land rush?

New pot farm legislation in Berkeley has kindled a renewed interest in the city’s old warehouse district.

Realtors are fielding a barrage of calls from would-be pot growers, and some industrial sites are up for sale at prices that raise eyebrows in a down real estate market.

“I get a call a week for warehouse space to grow pot,” said Steve Smith, a realtor with Norheim & Yost. “We get a lot of people who say, ‘I'm a landscaper or a horticulturist,’ and we say, ‘So you want to grow pot.’ And they pause and say, ‘Yeah but I’m legit.’”

Berkeley voters overwhelmingly passed Measure T in the November election, giving the green light to the city to permit six 30,000-square foot marijuana growing operations in West Berkeley, where the land is zoned for manufacturing operations. After Oakland, Berkeley is the second city to venture into the untested and murky waters of large-scale marijuana cultivation. 

One of the sites being eyed by growers is at 1350 4th St., a parcel of the old Flint Ink factory site near Gilman Street. The 1.43-acre site, complete with old buildings, is now owned by Emeryville’s Orton Development. It’s on the market for $2.5 million. 

“The fact of the matter is that this is the single best site in all of the East Bay for this,” crowed Orton’s James Madsen.

Madsen said that at first Orton considered leasing space to growers on another parcel of the old ink factory site across the street. But there were two problems: banks wouldn’t finance the leases, and the prospect of a big pot farm made other prospective tenants antsy.

“The bank isn't financing those kind of leases right now,” said Madsen. “The other issue is a couple very cool and very cutting-edge companies that were interested in a lease, but just didn't want to be on a site with cultivation.”

So Orton decided to sell instead. Madsen said there’s been interest from “big players” but declined to name them.

People familiar with the Berkeley pot scene say that Harborside Health Center, Oakland’s largest medical marijuana dispensary, has put out feelers about cultivation in West Berkeley.

Stephen DeAngelo — who runs Harborside and is also applying for a cultivation permit in Oakland — didn’t deny it.

“Harborside Health Center is still evaluating the various options available for legal cultivation,” DeAngelo said in an e-mail. “HHC has not made a decision.”

Berkeley Patients Group — Berkeley’s largest dispensary — is also rumored to be interested in a cultivation permit, although representatives did not a return a call seeking comment.

The $2.5 million price tag for the site owned by Orton — about $40 a square foot — is slightly on the high side for a piece of land in West Berkeley, several realtors said. Another 2.2-acre site nearby is selling for $2.8 million or $29.50 a square foot.

The price is being driven up in part by the limited number of industrial-zoned sites — and the reluctance of landlords to lease to pot growers, realtors say. In general, medical marijuana dispensaries often pay higher than market-rate rent because of the risk involved for landlords, industry sources say.

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