POT GROWERS HIGH ON WEST BERKELEY REAL ESTATE

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.