The city was not swayed by the developers’ appeal for a 260-unit complex with 130 affordable apartments.

The city of Berkeley said no, for a second and final time, to an attempt to use a contentious new state law to build a 260-unit housing complex, with half the units affordable, on Fourth Street.

In a letter to property owner Dana Ellsworth on Tuesday, Berkeley Planning Director Timothy Burroughs said the project proposed for 1900 Fourth St. does not qualify for SB35. The state law overrides the city process, granting over-the-counter approval to developments that are at least 50% affordable. The city argued that invoking SB35 for this project would violate the state constitution, which allows cities to protect landmarked areas. Even without the constitutional issue, the project would not comply with local rules around affordability and traffic, and could demolish a historic structure, making it ineligible for the state law, Burroughs said.

In March, developers West Berkeley Investors, a subsidiary of Blake Griggs Properties, became the first in the state to file an application under SB35. The developers reworked a pending proposal for a mostly market-rate complex at 1900 Fourth St., applying for a much larger building with 130 units reserved for tenants making up to 80% of the area median income. For a family of four, that would be about $80,000.

Berkeleyside reported Tuesday that Blake Griggs Properties and West Berkeley Investors dropped the project in August, though the developers declined to explain why. Property owners Ruegg & Ellsworth and Frank Spenger Company are now overseeing the development application.

Ellsworth did not respond to multiple requests for comment on how the owners plan to proceed.

Tuesday’s rejection was the second for the project, proposed for the current Spenger’s parking lot site. The city first said the project was not eligible for fast-tracking in June, but gave the developers a chance to appeal, which they did in the form of a 400-page document.

This go-round, Berkeley began its denial by arguing that using SB35 for the 260-unit development would be unconstitutional.

“To be specific, SB35 does not apply to the project because it impinges on the city of Berkeley’s legitimate municipal affairs to regulate the development and preservation of a city-designated historical landmark,” Burroughs’ letter said. “As a charter city, Berkeley has a constitutional right to govern itself as to municipal affairs.”

The project’s location within the boundaries of the landmarked West Berkeley Shellmound has made it deeply controversial. The hundreds of shellmounds around the Bay Area were piles of shells, bones and other objects sometimes used by Ohlone Indians as burial grounds. They built up the mounds over thousands of years, according to historians. Some local Ohlone have fought the 1900 Fourth St. project, saying it would desecrate a sacred site, and a rare one without a building atop it, and disrespect their heritage.

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The developers have pointed to findings from excavations and old maps that suggest the site itself, the Spenger’s parking lot, was not a shellmound or burial site but rather marshland near two shellmounds.

Corrina Gould, a spokeswoman for the Native American opposition to the project, said she is grateful the city rejected the SB35 application.

“On behalf of the Confederated Villages of Lisjan/Ohlone Tribe, we are thankful for the community support, our legal team and the city of Berkeley for finding that this project at 1900 Fourth Street does not qualify for the SB35 ministerial permit, and we must look forward to ensure that this sacred site is not ever destroyed for development,” she said in an email to Berkeleyside on Wednesday.

“The Muwekma Ohlone Tribe applauds the city of Berkeley for having the courage and leadership to protect the West Berkeley Shellmound, which is a sacred site for our people,” said Vincent Medina, a Muwekma Ohlone tribal councilman who’s also been active in the effort to stop the project, in an email. “While the 550 citizens enrolled in our tribe cautiously celebrate this meaningful victory, we collectively remain vigilant to future threats on any of our tribal sacred sites. We will work, as our people have always done, to protect our culture and identity here in our East Bay homeland against the forces of colonization and imperialism.”

In Tuesday’s letter, Burroughs also pointed to reasons he said the project would not comply with SB35’s own criteria, even if if this usage were found to be constitutional.

The letter said the project did not comply with Berkeley’s affordable housing rules, which require developers to make at least 20% of the units affordable or pay the city a mitigation fee for each unit. Although this project includes 130 affordable units — far more than were proposed in the initial application for the standard market-rate development — it’s still not in compliance with Berkeley’s ordinance, according to the city, because none of the units are for “very low income” tenants, as required. In the previous rejection, the city said the development was in violation of the affordable housing rules because the 130 units were only set to stay affordable 55 years.

The letter also said the project could have too great an impact on traffic, violating Berkeley zoning rules and thus not qualifying for SB35.

Lastly, the city said the project could violate the law by demolishing underground historic structures during the excavation process, referring to the landmarked shellmound.

Throughout the SB35 review process, Berkeley has kept the old project application on hold.

“You are welcome to reactivate that project,” Burroughs wrote. The applicants could also reapply for a new, expanded project, he said.

The last time Berkeley denied the SB35 application, in June, the developers threatened to sue the city if it did not ultimately approve the project.

A lawyer for West Berkeley Investors called the city’s assertion that the standard affordable housing rules — the 20% requirement, designed for market-rate developments — would apply to this project “a particularly weak argument.”

The developer also said the argument about the demolition of a historical structure was specious because there are no historical buildings on the property, and noted that the city had previously said it had no intention to stop development on the shellmound site.

It is unclear whether Ruegg & Ellsworth intends to follow the same course of action, now that the developers are no longer involved.

However, the letter sent to the city by the company when the developers backed out said Ruegg & Ellsworth “intend to pursue all development rights, including any rights associated with the pending applications.”

This story was updated after publication to include a statement by Vincent Medina.