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Redevelopment Planning Land Grab In Hunters Point, a Gentrification Plan
We need to moblize for the SFRA Commission meeting at City Hall on December 2nd @ 4pm.
Redevelopment Planning Land Grab In Hunters Point, a Gentrification Plan
We have just learned that Redevelopment is making a move to grab the whole neighborhood!!
We were tracking special interest efforts to ram through the DDA (Disposition and Development Agreement) for Lennar to develop the Ship Yard, when we also discovered Redevelopment’s plot to gentrify practically all of BVHP. It appears as an Amendment to the current Hunters Point Redevelopment Project, so they can avoid a public process that would reveal the full dimensions of this total land grab (putting it out in local newspapers for comment).
This takes away the whole Hill and other huge chunks of the neighborhood, and once they’re gone, you won’t have an opportunity to get them back.
You need to go down to the Redevelopment meeting on December 2nd because both of these issues affects your future very seriously. You can comment on both —the neighborhood takeover “Amendment” and the Lennar Development agreement for the Ship Yard (the “DDA” — Disposition and Development Agreement).
REDEVELOPMENT COMMISSION MEETING
4 PM, December 2, 2003
At City Hall Room 416
• Ask them to put in writing Guaranteed Housing for anyone evicted because of this Amended Project Area Plan, and a Guaranteed Right of Return (at the same prices) for everyone currently living in the Hunters Point Amended Redevelopment Project Area
• The Redevelopment Commission plans to vote on the Disposition and Development Agreement (DDA) for Lennar’s plan at this meeting. Ask them to wait until the community is more familiar with what they’re voting on.
• CALL SAN FRANCISCO SUPERVISORS TODAY AND ASK THEM TO HOLD AN INFORMATIONAL HEARING BEFORE ANY VOTE BY THE REDEVELOPMENT COMMISSION!! Let’s have Redevelopment, the City Attorney, and Lennar come down and answer questions about the DDA and this “Amendment” to redevelop the whole neighborhood!
Two Redevelopment Plans — Neither Benefits BVHP Residents
The general outline of Redevelopment’s plan for the Ship Yard has been known for a while, but the devil is in the details. That’s why it is so important for the Supervisors to review the agreement with Lennar (the “DDA”) before Redevelopment votes to approve it. What BVHP residents want most — business development providing long term jobs for local residents — may be delayed for years, while upscale housing is the main focus.
Business is what generates jobs, not expensive homes which many people in the community can’t afford.
Now this new “Amendment” of the Hunters Point Redevelopment Project would clear away the low-income Black population from the area around the Ship Yard — and add to the future value of Lennar’s housing.
Neither of these two Redevelopment projects helps the people who live here. If so ask them to explain how?
Redevelopment’s “Amendment” to Gentrify BVHP
The proposed San Francisco Redevelopment Agency Plan Amendment dated November 4, 2003 adds 1600 acres to the current 137 acre Hunters Point Redevelopment Project area. It includes Public Housing bordering on the Ship Yard, and other sections of the neighborhood all the way to Bayshore (see map).
Notice the only areas of BVHP that are not included are labeled “Project areas to be amended” meaning they could be added later! Being “amended” means being declared “blighted,” then bulldozed and rebuilt by developers.
The Black population in SF has gone from over 14% to less than 6% in this City. If you look at Redevelopment’s brochure describing the Amended Project Area, all the people in the pictures look White.
Well we are not Western Addition, where Redevelopment wiped out the Black population! We need to make that clear to the powers that be we don’t want to be gentrified. We want and will maintain our multicultural diversity which includes Black people.
Let the Redevelopment Commission know on December 2nd that you want to be heard, and you don’t want any rush vote for acceptance of the Project Area Amendment or the DDA — you want time to review the recommendations, since it affects your future, and you want the Board of Supervisors involved.
Do you remember lately that many residents were concerned about eviction and the Hope Vl program, and after a hearing at a Board of Supervisors committee, it was found Tenants were not given enough notice to comment, which really terrorized them because they thought they were going to be evicted shortly?
Don’t be swayed by special interests because they have been bought and paid for many times over. Don’t get suckered into rushing or any form of pressure that would make us regret our decision.
Let them know that if you get rushed by the Redevelopment Commission you will get even at the ballot box in the Mayoral Election and other future elections.
Redevelopment Wants to Lock in Lennar
Redevelopment’s agreement with Lennar Corporation for the first phase of development of Hunters Point Ship Yard is called the Disposition Development Agreement, or “DDA.” It is not yet a done deal, but the lame duck administration is pressuring everyone to approve the DDA without seriously examining it.
Rather than rushing to approve the DDA, this is our only opportunity for negotiation, to get more benefit for the community. Once the commission votes it then becomes a legally binding document and it is almost impossible to be undone. The DDA locks Lennar into place.
The DDA is an enormously complicated document, over 1000 pages, but they wanted the Citizens Advisory Committee (CAC) to ok it in “30 days”. Some of us who are on the CAC said hey, there’s a lot of attachments that aren’t even here, and there’s other information promised and not delivered. The community should know what’s being signed, and it’s our responsibility as the CAC to find out.
Everything got divided into subcommittees to look at different pieces and we had more than 26 meetings in just the last month, because they’re in such a hurry! We’ve spent over 60 days reviewing it and making recommendations but we’re still just getting the recommended changes and additions to the DDA right.
The CAC worked really hard to get as much community comments as possible included. “Not enough community outreach for the workshops,” “not enough of the community was notified,” “being micro managed,” “rush to judgment,” “pressured to meet a deadline.” “Not getting answers from Redevelopment, written and oral.” “Not seeing a very important document from Redevelopment until 6pm 11/24/03 the time of our final meeting.”
This document is Redevelopment staff’s description of the CAC recommendations to the Commission. It breaks down the recommendations into three areas: (1) acceptable to Redevelopment, (2) acceptable to the developer and (3) other — not acceptable or requires further discussion — that area especially would have to be argued by the public at the next commission meeting.
This is unfair to the CAC members who should have gotten more time to review the changes, and be able to provide specific responses.
The DDA includes the basic obligations of the developer, the City and the Navy such as toxic cleanup and employment opportunities, and sets up the “horizontal” development (“horizontal” means the infrastructure like roads, water and sewers). This includes the important decisions on open space, community facilities and housing density.
The DDA is a legally binding document. The Board of Supervisors has no say, and the decision is left up to the Redevelopment Commission.
SF Redevelopment is a quasi State Agency — unlike most redevelopment agencies that are part of city governments, some time back this one was placed under State control, so it is much harder for local people to influence. This is why we need the San Francisco Supervisors to get involved.
What’s the Rush??
What’s the big hurry, really, it will be months before anybody can build anything. They’re acting like Lennar is doing us a big favor to come here and develop our Shipyard. The reality is that it is a valuable property and a number of developers that are capable with good reputations have expressed interest. Lennar has built on its own Toxic sites in Florida.
It is the DDA along with the ENA (The Exclusive Negotiating Agreement) that locks in Lennar as the Master Developer. The Exclusive Negotiating Agreement comes up for review by the Board of Supervisors in December. If we can head off Redevelopment approval of the DDA until then, we could examine the relationship with Lennar very closely. If we get a chance to “play the field” then other developers can come to the community with a better deal. Instead of taking us for granted, Lennar would have to do better, and others would not doubt offer the community much more than Lennar.
The Developer Must Wait for Clearance from the Navy and the Regulators
What mystifies us about this big rush is there are a lot of obstacles in the way of starting work on developing the Ship Yard. There can be no transfer of land to the City from the Navy because the following conditions have not been met: the Conveyance Agreement between the City of San Francisco, the Community and the Navy has not been signed, and the Regulators — EPA (Environmental Protection Agency), DTSC (Department of Toxic Substance Control), Water Resource Board, have not yet signed off on a FOST (Finding Of Suitability for Transfer) for Parcel A. In addition, the Record of Decision on Parcel B just recently went through its five year review where community comments were received, and there is still a lot of work to be done on Parcel B.
Some of the problems that are holding up the transfer are:
(1) There is a methane problem on Parcel E (where they had the fire). Parcel E is an “adjacent” parcel of land (in other words, “next to” the Redevelopment area) and it is covered in the plan through “adjacency” issues. It is also in the Conveyance agreement.
(2) The HRA (Historical Radiological Assessment) has not been released and may not be released until first quarter 2004 or later. (This document is also about the thickness of two phone books, more than 800 pages.)
It is better to take our time and make sure the community gets the very best deal. You know the more you study the details, the more you understand what’s being offered and what is not there, and then you can negotiate a better deal. Many of you have bought Cars, Homes — or Cellphone plans. Did you cave in to the high pressure sales person and regret it later?, Well this is about the future of Hunters Point, this is about the whole community where you live
We know this is right here in the midst of all the Holidays and everybody’s really busy but this is the time to take a stand. Give the Children something they can be proud of — a Community for all the people who live here, not a Gentrified Community for somebody else.
Please read Arrested Development by Lisa Davis in the SF Weekly. It provides a lot of background to what is going on. http://www.sfweekly.com/issues/2003-11-19/feature.html/1/index.html
You can look at the DDA online at http://www.hunterspointshipyard.com/dda.html
We have just learned that Redevelopment is making a move to grab the whole neighborhood!!
We were tracking special interest efforts to ram through the DDA (Disposition and Development Agreement) for Lennar to develop the Ship Yard, when we also discovered Redevelopment’s plot to gentrify practically all of BVHP. It appears as an Amendment to the current Hunters Point Redevelopment Project, so they can avoid a public process that would reveal the full dimensions of this total land grab (putting it out in local newspapers for comment).
This takes away the whole Hill and other huge chunks of the neighborhood, and once they’re gone, you won’t have an opportunity to get them back.
You need to go down to the Redevelopment meeting on December 2nd because both of these issues affects your future very seriously. You can comment on both —the neighborhood takeover “Amendment” and the Lennar Development agreement for the Ship Yard (the “DDA” — Disposition and Development Agreement).
REDEVELOPMENT COMMISSION MEETING
4 PM, December 2, 2003
At City Hall Room 416
• Ask them to put in writing Guaranteed Housing for anyone evicted because of this Amended Project Area Plan, and a Guaranteed Right of Return (at the same prices) for everyone currently living in the Hunters Point Amended Redevelopment Project Area
• The Redevelopment Commission plans to vote on the Disposition and Development Agreement (DDA) for Lennar’s plan at this meeting. Ask them to wait until the community is more familiar with what they’re voting on.
• CALL SAN FRANCISCO SUPERVISORS TODAY AND ASK THEM TO HOLD AN INFORMATIONAL HEARING BEFORE ANY VOTE BY THE REDEVELOPMENT COMMISSION!! Let’s have Redevelopment, the City Attorney, and Lennar come down and answer questions about the DDA and this “Amendment” to redevelop the whole neighborhood!
Two Redevelopment Plans — Neither Benefits BVHP Residents
The general outline of Redevelopment’s plan for the Ship Yard has been known for a while, but the devil is in the details. That’s why it is so important for the Supervisors to review the agreement with Lennar (the “DDA”) before Redevelopment votes to approve it. What BVHP residents want most — business development providing long term jobs for local residents — may be delayed for years, while upscale housing is the main focus.
Business is what generates jobs, not expensive homes which many people in the community can’t afford.
Now this new “Amendment” of the Hunters Point Redevelopment Project would clear away the low-income Black population from the area around the Ship Yard — and add to the future value of Lennar’s housing.
Neither of these two Redevelopment projects helps the people who live here. If so ask them to explain how?
Redevelopment’s “Amendment” to Gentrify BVHP
The proposed San Francisco Redevelopment Agency Plan Amendment dated November 4, 2003 adds 1600 acres to the current 137 acre Hunters Point Redevelopment Project area. It includes Public Housing bordering on the Ship Yard, and other sections of the neighborhood all the way to Bayshore (see map).
Notice the only areas of BVHP that are not included are labeled “Project areas to be amended” meaning they could be added later! Being “amended” means being declared “blighted,” then bulldozed and rebuilt by developers.
The Black population in SF has gone from over 14% to less than 6% in this City. If you look at Redevelopment’s brochure describing the Amended Project Area, all the people in the pictures look White.
Well we are not Western Addition, where Redevelopment wiped out the Black population! We need to make that clear to the powers that be we don’t want to be gentrified. We want and will maintain our multicultural diversity which includes Black people.
Let the Redevelopment Commission know on December 2nd that you want to be heard, and you don’t want any rush vote for acceptance of the Project Area Amendment or the DDA — you want time to review the recommendations, since it affects your future, and you want the Board of Supervisors involved.
Do you remember lately that many residents were concerned about eviction and the Hope Vl program, and after a hearing at a Board of Supervisors committee, it was found Tenants were not given enough notice to comment, which really terrorized them because they thought they were going to be evicted shortly?
Don’t be swayed by special interests because they have been bought and paid for many times over. Don’t get suckered into rushing or any form of pressure that would make us regret our decision.
Let them know that if you get rushed by the Redevelopment Commission you will get even at the ballot box in the Mayoral Election and other future elections.
Redevelopment Wants to Lock in Lennar
Redevelopment’s agreement with Lennar Corporation for the first phase of development of Hunters Point Ship Yard is called the Disposition Development Agreement, or “DDA.” It is not yet a done deal, but the lame duck administration is pressuring everyone to approve the DDA without seriously examining it.
Rather than rushing to approve the DDA, this is our only opportunity for negotiation, to get more benefit for the community. Once the commission votes it then becomes a legally binding document and it is almost impossible to be undone. The DDA locks Lennar into place.
The DDA is an enormously complicated document, over 1000 pages, but they wanted the Citizens Advisory Committee (CAC) to ok it in “30 days”. Some of us who are on the CAC said hey, there’s a lot of attachments that aren’t even here, and there’s other information promised and not delivered. The community should know what’s being signed, and it’s our responsibility as the CAC to find out.
Everything got divided into subcommittees to look at different pieces and we had more than 26 meetings in just the last month, because they’re in such a hurry! We’ve spent over 60 days reviewing it and making recommendations but we’re still just getting the recommended changes and additions to the DDA right.
The CAC worked really hard to get as much community comments as possible included. “Not enough community outreach for the workshops,” “not enough of the community was notified,” “being micro managed,” “rush to judgment,” “pressured to meet a deadline.” “Not getting answers from Redevelopment, written and oral.” “Not seeing a very important document from Redevelopment until 6pm 11/24/03 the time of our final meeting.”
This document is Redevelopment staff’s description of the CAC recommendations to the Commission. It breaks down the recommendations into three areas: (1) acceptable to Redevelopment, (2) acceptable to the developer and (3) other — not acceptable or requires further discussion — that area especially would have to be argued by the public at the next commission meeting.
This is unfair to the CAC members who should have gotten more time to review the changes, and be able to provide specific responses.
The DDA includes the basic obligations of the developer, the City and the Navy such as toxic cleanup and employment opportunities, and sets up the “horizontal” development (“horizontal” means the infrastructure like roads, water and sewers). This includes the important decisions on open space, community facilities and housing density.
The DDA is a legally binding document. The Board of Supervisors has no say, and the decision is left up to the Redevelopment Commission.
SF Redevelopment is a quasi State Agency — unlike most redevelopment agencies that are part of city governments, some time back this one was placed under State control, so it is much harder for local people to influence. This is why we need the San Francisco Supervisors to get involved.
What’s the Rush??
What’s the big hurry, really, it will be months before anybody can build anything. They’re acting like Lennar is doing us a big favor to come here and develop our Shipyard. The reality is that it is a valuable property and a number of developers that are capable with good reputations have expressed interest. Lennar has built on its own Toxic sites in Florida.
It is the DDA along with the ENA (The Exclusive Negotiating Agreement) that locks in Lennar as the Master Developer. The Exclusive Negotiating Agreement comes up for review by the Board of Supervisors in December. If we can head off Redevelopment approval of the DDA until then, we could examine the relationship with Lennar very closely. If we get a chance to “play the field” then other developers can come to the community with a better deal. Instead of taking us for granted, Lennar would have to do better, and others would not doubt offer the community much more than Lennar.
The Developer Must Wait for Clearance from the Navy and the Regulators
What mystifies us about this big rush is there are a lot of obstacles in the way of starting work on developing the Ship Yard. There can be no transfer of land to the City from the Navy because the following conditions have not been met: the Conveyance Agreement between the City of San Francisco, the Community and the Navy has not been signed, and the Regulators — EPA (Environmental Protection Agency), DTSC (Department of Toxic Substance Control), Water Resource Board, have not yet signed off on a FOST (Finding Of Suitability for Transfer) for Parcel A. In addition, the Record of Decision on Parcel B just recently went through its five year review where community comments were received, and there is still a lot of work to be done on Parcel B.
Some of the problems that are holding up the transfer are:
(1) There is a methane problem on Parcel E (where they had the fire). Parcel E is an “adjacent” parcel of land (in other words, “next to” the Redevelopment area) and it is covered in the plan through “adjacency” issues. It is also in the Conveyance agreement.
(2) The HRA (Historical Radiological Assessment) has not been released and may not be released until first quarter 2004 or later. (This document is also about the thickness of two phone books, more than 800 pages.)
It is better to take our time and make sure the community gets the very best deal. You know the more you study the details, the more you understand what’s being offered and what is not there, and then you can negotiate a better deal. Many of you have bought Cars, Homes — or Cellphone plans. Did you cave in to the high pressure sales person and regret it later?, Well this is about the future of Hunters Point, this is about the whole community where you live
We know this is right here in the midst of all the Holidays and everybody’s really busy but this is the time to take a stand. Give the Children something they can be proud of — a Community for all the people who live here, not a Gentrified Community for somebody else.
Please read Arrested Development by Lisa Davis in the SF Weekly. It provides a lot of background to what is going on. http://www.sfweekly.com/issues/2003-11-19/feature.html/1/index.html
You can look at the DDA online at http://www.hunterspointshipyard.com/dda.html
For more information:
http://www.sfbayview.com/112603/redevelopm...
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COMMUNITY FIRST COALITION
PO Box 885111
San Francisco, CA 94188
l_brown123 [at] yahoo.com
August 25, 2003
TO: Citizens Advisory Board Executive Committee
FROM: Lynne Brown, Convener
We are very concerned that the CAC Executive Committee has been asked by Lennar to approve an inappropriately rushed schedule for endorsement of the Disposition and Development Agreement (DDA). The DDA will be a lengthy and highly technical document that will govern the relationship between Lennar, the Redevelopment Agency, and the community for many years, at least through buildout of the first phase of Shipyard redevelopment. The details of this document will ultimately determine whether Shipyard redevelopment enhances economic opportunities and quality of life for existing Bayview-Hunters Point residents and businesses or displaces us. As primary stakeholders, we must insist of a process of genuine and comprehensive public review of the DDA.
In our estimate, a minimum of 90 days of review time must be scheduled before the CAC considers approval of the DDA. The schedule must accommodate the full membership of the CAC and the general public by providing for workshops and other opportunities to analyze and evaluate the DDA that the Agency and Lennar will be proposing.
We have already expressed concerns (7/22/03 letter from Arc Ecology to the Redevelopment Commission is attached) about the Term Sheet, including the interplay between the DDA and the Exclusive Negotiating Agreement, Lennar’s and the Agency’s respective rates of return and obligations, and the community benefits process. Technical details of the DDA will determine the extent to which Lennar and the Redevelopment Agency have addressed our issues. Approving the accelerated schedule for consideration of the DDA would deprive us of the opportunity to provide the CAC, the Agency, and Lennar with informed feedback.
To assist our participation in the process of Shipyard redevelopment, we are asking you to formally request the Redevelopment Agency to provide the full CAC and the public with answers to the following questions:
· What is the schedule for review and adoption of the DDA that Agency staff is recommending?
· What is the projected schedule for approval of the Conveyance Agreement?
· What is the expected schedule regarding the development of a concurred Finding Of Suitability to Transfer (FOST) for Parcel A? What is the schedule for publication of the HRA and assessment of the methane barrier breach?
· What other approvals (e.g., environmental review) will be presented to the CAC and the Agency for concurrent consideration with the DDA?
We propose that the Executive Board invite regulators involved with the Shipyard (US Environmental Protection Agency, California Department of Toxic Substances Control, the Regional Water Quality Control Board, and the Air Resources Board) and the Navy to make a presentation to enable the CAC and the public to better understand the relationship between the DDA and cleanup issues.
We would also appreciate your asking the Agency to provide the CAC and the public with the following financial information:
· Total expenditures, by year and general line item category, for the Shipyard Project Area;
· Revenues contributed to the Agency by Lennar;
· Revenues loaned to or provided from other sources; and
· Agency payments or reimbursements to Lennar.
In addition, we respectfully request the Mayor's Hunters Point Shipyard Citizens Advisory Committee to consider a motion at their next meeting urging Lennar/BVHP Partners to disclose publicly the names of all individuals and organizations, excepting officers and direct employees of Lennar/BVHP Partners, to whom they have made payments or contributions, or delivered by any means considerations of value, whether directly or through third parties, including contributions to public officials and candidates for public office, since initiating efforts to obtain exclusive negotiating rights and a disposition and development agreement for the Hunters Point Shipyard redevelopment project.
Finally, we would like you to add to the agenda of the next CAC meeting a discussion clarifying the jurisdiction of the Project Area Committee; in particular, whether they have any formal advisory responsibilities with respect to redevelopment of the Shipyard.
Thank you for your consideration. Please contact us if we can answer any questions or otherwise be of assistance.
Attachment
ATTACHMENT
Arc Ecology
833 Market Street ¨ San Francisco, California 94103
phone: 415 495 1786 ¨ fax: 415 495 1787 ¨ e-mail: evebach [at] mindspring.com
July 22, 2003
San Francisco Redevelopment Agency Commission
San Francisco Redevelopment Agency
770 Golden Gate Avenue
San Francisco, CA 94102
RE: Hunters Point Shipyard Term Sheet
Dear Commissioners:
We are submitting the following comments on the proposed Term Sheet for Hunters Point Shipyard on behalf of the Community First Coalition. We hope you will take them into account as you consider the Term Sheet and as you move forward.
Yours truly,
/S/
Eve Bach
Staff Economist/Planner
Cc: Maurice Campbell
Lynne Brown
Marcia Rosen, Director
Don Capobres
Erwin R. Tanjuaquio, Secretary
Questions/Comments on Conceptual Framework for Phase I
of
Hunters Point Shipyard Redevelopment
1. Decoupling the Phase I Term Sheet from agreement for the rest of Shipyard is disadvantageous to the City and the community.
The proposed Term Sheet that disconnects redevelopment of Phase I (Parcel A and part of Parcel B) from the rest of the Shipyard erases whatever benefit the City and community might have gained from engaging a master developer for the entire Shipyard. Unfortunately this decoupling does not cure the lack of competition that is the primary disadvantage of using a master developer since the Exclusive Negotiation Agreement (ENA) continues to privilege Lennar. The result is that Lennar would be able walk away from redeveloping the rest of the Shipyard if it is not lucrative, but they retain their exclusive relationship with the City if it is. This enormously strengthens Lennar’s leverage in negotiations with the City.
Benefits Sacrificed by the Term Sheet - Theoretically there are several potential advantages to the City of have a single agreement with a master developer:
· It could ensure that all of the Shipyard parcels would be developed according to the Redevelopment Plan. (For the sake of discussion let us set aside community concerns about the Plan.)
· The costs of less profitable uses (such as industrial, open space, and public facilities) could be internally subsidized by more profitable ones (such as housing).
· Financial risk could to be spread over the entire project.
· Profits generated in the early stages of development would become available to finance subsequent development, reducing the need for outside capital (both public and private).
The City loses these benefits by decoupling the most lucrative Shipyard sites from the rest. Under the provisions of the Term Sheet, the City will be no better off in negotiating the next phases than if a master developer had not been chosen. The City’s starting point for negotiations with Lennar will be no better than if the City had to negotiate with a different developer. But since the ENA prohibits other developers from competing, the City may have to give Lennar a higher return than it would give to other developers under competitive conditions. If market conditions are bad, the proposed Term Sheet would increase Lennar’s negotiating leverage since it has no obligation to develop the more difficult Shipyard parcels. If the real estate market rebounds - especially if there is a great increase in land values due to major public investment in improved access - Lennar can capture a substantial proportion of the capitalized value of nearby public improvements, due to the lack of competition.
Subsequent phases of Shipyard redevelopment could be far less lucrative than Phase I. The sites are more contaminated and are to be developed primarily as industrial, public and open space uses with less housing as an economic engine. The City will probably have to give Lennar substantial public resources to develop the next Phases due to the collapsed market for commercial and industrial land. However, as a practical matter, Lennar can demand as a baseline return on capital it invests into the next phases of the Project the rate of return available to them elsewhere - on sites unencumbered with contamination or plans that mandate industrial uses and open space. In future negotiations, the City will in effect have to compete against Lennar’s investment opportunities everywhere else. Terminating the ENA with Lennar will not fully solve the City’s problem because other for-profit developers will demand similar return.
Having a stand-alone Phase I deal also means that in negotiating Phase II, Lennar can make the demand that the City match their potential return elsewhere, irrespective of their actual profits in Phase I. If Phase I profits exceed projections, Lennar will have no obligation to accept a correspondingly lower return in Phase II. If Phase I turns out to deliver only the projected return or less, there is some question, however, whether the City is committed to pay Lennar a higher-than-market rate of return in the next phase . The City, in the Response to Community Comments, claims that it is providing a rate of return to Lennar that it considers to be lower-than-market (if Lennar’s pre-DDA contributions are factored in -13%) in order to motivate Lennar to participate in subsequent phases, presumably to achieve a market rate of return (Lennar is seeking 25%) for the Shipyard as a whole. Since this commitment does not appear in the Phase I Agreement, we need clarification about this and any other undocumented commitments.
Even though the community’s highest priority for Shipyard redevelopment has been jobs and business opportunities, Lennar has consistently deferred most of the development that would generate these benefits to future phases. Burdening subsequent phases with the additional obligation to provide Lennar with higher-than-market returns suggests that community priorities will slip badly.
2. The City’s projected rate or return should be at least equal to Lennar’s?
The Term Sheet is structured to provide a nominal rate of return on capital contributed after finalization of the DDA of 25% to Lennar and 11% to the City. However the picture is more complicated because the Term Sheet is apparently designed to repay Lennar 12% on funds they loaned (between $10 million and $13.5 million) the Project prior to the DDA. The blended rate of return for Lennar is targeted by the Term Sheet at 13%.
The most obvious question triggered by this arrangement: What is the basis for assuming a lower rate of return for the City’s capital than for Lennar’s?
The differential does not appear to be related to a difference in risk since the City’s risk in this project is at least equivalent to Lennar’s.
· The financial risks are evenly shared by the City and Lennar (except to the extent that Lennar’s rate of return is higher).
· The risk that the City ultimately might not approve their project is not greater than the City’s risk that Lennar will not ultimately propose an acceptable project.
· Lennar’s risk of non-repayment is far less than the City’s. The Term Sheet assigns the first $10 million in Mello-Roos revenues (which are not subject to the vagaries of the real estate market and create no liability for Lennar) to Lennar, in effect subordinating the City’s claims to Lennar’s. The City is repaid only out of the proceeds of land sales.
· By committing only to horizontal development, Lennar avoids the larger risks related to vertical development, while capturing speculative increases in land value, and the capitalized value of public (e.g., federal cleanup funds, federal and state highway funds for new roadways, Mello-Roos) investment.
· Since Lennar will be in charge of Project accounting practices, and they will be structuring the transactions with vertical developers, the City risks reductions in its share of land sale revenue because of complicated deals that provide Lennar with financial advantages at the expense of sales price. The City’s right to audit does not fully address this risk.
· And, as explained above, Lennar does not face the risk of being outbid by competing proposals, but the City faces competition from Lennar’s other investment opportunities.
Lennar’s higher rate of return is not due to the relative size of its investment. Lennar is contributing $25 million; the City’s is contributing $30 million plus Mello-Roos proceeds.
The City could have borrowed funds for pre-DDA expenses at a lower cost than the 12% called for by the Term Sheet. For example, the City might have borrowed the funds from other redevelopment project areas or from City or County accrual funds at the City’s earning rate, or from a bank at a public borrowing rates.
In the final analysis, it is not even clear how Lennar’s return compares to the City’s because the Term Sheet is unclear about details: :
· Which of Lennar’s pre-DDA expenses were legitimate loans to the City that were needed for Shipyard redevelopment to go forward, and which were expenses bolstering their negotiating position? For example, does the City intend to repay Lennar the costs of outreach (by both Lennar and the City) to build public support for approval of the Term Sheet? For support of the various iterations of their proposal? For lobbying for a bridge across Yosemite Slough?
· Does the Term Sheet provide a return on funds the City fronted (i.e., those funds not loaned by Lennar) for pre-DDA expenses? What is the City’s rate of return on its pre-DDA expenses? What would the blended rate be if the City’s 11% return were spread to cover pre-DDA City expenses?
3. The very substantial value of the ENA itself does not appear to be taken into account by the Term Sheet.
There is no indication that the value of the ENA was backed out of the City’s debt to Lennar or factored into the rate of return in any other way, even though the City has given Lennar an asset with high value. The ENA, in reserving the entire Shipyard for Lennar to develop in both the near and far .future, has given them many of the benefits of land ownership (Even though Lennar must receive Redevelopment Agency approval for any Shipyard projects, they would have a comparable obligation if they owned a property outright in a redevelopment project area.) These benefits of ownership come unencumbered with any of the carrying costs (e.g., land costs, taxes, liability, operations and maintenance) or risks (toxic wastes, devaluation of the property for any other reason) an owner would have to bear. Some of the ownership expenses that Lennar avoids are direct costs to the City (e.g., foregone property taxes). The value of this asset needs to be included in the rate of return calculus so that it is not given to Lennar as a gift. .
4. Lennar’s Project must achieve baseline City objectives without relying on the City to pay for them as “enhanced community benefits.”
The Term Sheet needs to clearly state the minimum requirements and redevelopment objectives that any Project for the Shipyard must be designed to satisfy – i.e., threshold community benefits that must be provided by the development itself, not out of the City’s profits. Those objectives have been articulated in the many public meetings that gave rise to the Shipyard Redevelopment Plan, have been summarized by the Community Advisory Committee, and added to the Plan.
Given the substantial subsidies that Lennar will be receiving (free land and Mello-Roos funding), and the reasonable rate of return they are projected to receive (especially if they were recalculated to account for the value of the ENA), the Term Sheet should unambiguously require Lennar to meet those community’s objectives for Shipyard redevelopment as a part of the basic Project. This means that the Project itself must be structured to meet Redevelopment Agency goals for local employment and business opportunities, housing, affordable artists’ studios, open space, and educational other public facilities. These objectives must not be delegated to the City to meet with its share of Project profits, as the Term Sheet contemplates. The City’s community benefits funds must be reserved for amenities and programs that supplement the threshold benefits that the Project itself must provide.
5. A process must be specified prior to DDA finalization for allocating community benefits.
There are two main dangers associated with the proposed community benefits fund envisioned in the Term Sheet. First, there is the danger that DDA negotiations will assume that threshold community benefits can be paid for by the fund, rather than requiring them to be incorporated into the basic configuration of the Project. It appears, for example, that negotiation to date have already decided that the community benefits fund will have to bear the cost of making affordable units accessible to Bayview-Hunters Point residents rather than residents of the 3-county area of Marin, San Mateo and San Francisco. During the continuing negotiations of the DDA, City and Lennar must not be allowed reconcile their differences by assuming that the community benefits fund will pay for basic Project features (such as neighborhood-based standards of housing affordability, local contracting and hiring, on-site stormwater treatment and EIR traffic mitigations).
The second danger is that the community fund will become a political slush fund used to build support for the project that Lennar proposes. A process for allocating funds and for oversight, needs to be defined well in advance of fund allocations.
6. The City’s commitment to spend 100% of land sale proceeds on community benefits needs to be clarified.
The City needs to adopt a policy that does not allow the community benefits fund to be diverted into Project costs (including Project administration), into the costs of administering fund programs , or to pay the City for services that it should provide without supplemental funding.
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COMMUNITY FIRST COALITION
PO Box 885111
San Francisco, CA 94188
l_brown123 [at] yahoo.com
August 25, 2003
TO: Citizens Advisory Board Executive Committee
FROM: Lynne Brown, Convener
We are very concerned that the CAC Executive Committee has been asked by Lennar to approve an inappropriately rushed schedule for endorsement of the Disposition and Development Agreement (DDA). The DDA will be a lengthy and highly technical document that will govern the relationship between Lennar, the Redevelopment Agency, and the community for many years, at least through buildout of the first phase of Shipyard redevelopment. The details of this document will ultimately determine whether Shipyard redevelopment enhances economic opportunities and quality of life for existing Bayview-Hunters Point residents and businesses or displaces us. As primary stakeholders, we must insist of a process of genuine and comprehensive public review of the DDA.
In our estimate, a minimum of 90 days of review time must be scheduled before the CAC considers approval of the DDA. The schedule must accommodate the full membership of the CAC and the general public by providing for workshops and other opportunities to analyze and evaluate the DDA that the Agency and Lennar will be proposing.
We have already expressed concerns (7/22/03 letter from Arc Ecology to the Redevelopment Commission is attached) about the Term Sheet, including the interplay between the DDA and the Exclusive Negotiating Agreement, Lennar’s and the Agency’s respective rates of return and obligations, and the community benefits process. Technical details of the DDA will determine the extent to which Lennar and the Redevelopment Agency have addressed our issues. Approving the accelerated schedule for consideration of the DDA would deprive us of the opportunity to provide the CAC, the Agency, and Lennar with informed feedback.
To assist our participation in the process of Shipyard redevelopment, we are asking you to formally request the Redevelopment Agency to provide the full CAC and the public with answers to the following questions:
· What is the schedule for review and adoption of the DDA that Agency staff is recommending?
· What is the projected schedule for approval of the Conveyance Agreement?
· What is the expected schedule regarding the development of a concurred Finding Of Suitability to Transfer (FOST) for Parcel A? What is the schedule for publication of the HRA and assessment of the methane barrier breach?
· What other approvals (e.g., environmental review) will be presented to the CAC and the Agency for concurrent consideration with the DDA?
We propose that the Executive Board invite regulators involved with the Shipyard (US Environmental Protection Agency, California Department of Toxic Substances Control, the Regional Water Quality Control Board, and the Air Resources Board) and the Navy to make a presentation to enable the CAC and the public to better understand the relationship between the DDA and cleanup issues.
We would also appreciate your asking the Agency to provide the CAC and the public with the following financial information:
· Total expenditures, by year and general line item category, for the Shipyard Project Area;
· Revenues contributed to the Agency by Lennar;
· Revenues loaned to or provided from other sources; and
· Agency payments or reimbursements to Lennar.
In addition, we respectfully request the Mayor's Hunters Point Shipyard Citizens Advisory Committee to consider a motion at their next meeting urging Lennar/BVHP Partners to disclose publicly the names of all individuals and organizations, excepting officers and direct employees of Lennar/BVHP Partners, to whom they have made payments or contributions, or delivered by any means considerations of value, whether directly or through third parties, including contributions to public officials and candidates for public office, since initiating efforts to obtain exclusive negotiating rights and a disposition and development agreement for the Hunters Point Shipyard redevelopment project.
Finally, we would like you to add to the agenda of the next CAC meeting a discussion clarifying the jurisdiction of the Project Area Committee; in particular, whether they have any formal advisory responsibilities with respect to redevelopment of the Shipyard.
Thank you for your consideration. Please contact us if we can answer any questions or otherwise be of assistance.
Attachment
ATTACHMENT
Arc Ecology
833 Market Street ¨ San Francisco, California 94103
phone: 415 495 1786 ¨ fax: 415 495 1787 ¨ e-mail: evebach [at] mindspring.com
July 22, 2003
San Francisco Redevelopment Agency Commission
San Francisco Redevelopment Agency
770 Golden Gate Avenue
San Francisco, CA 94102
RE: Hunters Point Shipyard Term Sheet
Dear Commissioners:
We are submitting the following comments on the proposed Term Sheet for Hunters Point Shipyard on behalf of the Community First Coalition. We hope you will take them into account as you consider the Term Sheet and as you move forward.
Yours truly,
/S/
Eve Bach
Staff Economist/Planner
Cc: Maurice Campbell
Lynne Brown
Marcia Rosen, Director
Don Capobres
Erwin R. Tanjuaquio, Secretary
Questions/Comments on Conceptual Framework for Phase I
of
Hunters Point Shipyard Redevelopment
1. Decoupling the Phase I Term Sheet from agreement for the rest of Shipyard is disadvantageous to the City and the community.
The proposed Term Sheet that disconnects redevelopment of Phase I (Parcel A and part of Parcel B) from the rest of the Shipyard erases whatever benefit the City and community might have gained from engaging a master developer for the entire Shipyard. Unfortunately this decoupling does not cure the lack of competition that is the primary disadvantage of using a master developer since the Exclusive Negotiation Agreement (ENA) continues to privilege Lennar. The result is that Lennar would be able walk away from redeveloping the rest of the Shipyard if it is not lucrative, but they retain their exclusive relationship with the City if it is. This enormously strengthens Lennar’s leverage in negotiations with the City.
Benefits Sacrificed by the Term Sheet - Theoretically there are several potential advantages to the City of have a single agreement with a master developer:
· It could ensure that all of the Shipyard parcels would be developed according to the Redevelopment Plan. (For the sake of discussion let us set aside community concerns about the Plan.)
· The costs of less profitable uses (such as industrial, open space, and public facilities) could be internally subsidized by more profitable ones (such as housing).
· Financial risk could to be spread over the entire project.
· Profits generated in the early stages of development would become available to finance subsequent development, reducing the need for outside capital (both public and private).
The City loses these benefits by decoupling the most lucrative Shipyard sites from the rest. Under the provisions of the Term Sheet, the City will be no better off in negotiating the next phases than if a master developer had not been chosen. The City’s starting point for negotiations with Lennar will be no better than if the City had to negotiate with a different developer. But since the ENA prohibits other developers from competing, the City may have to give Lennar a higher return than it would give to other developers under competitive conditions. If market conditions are bad, the proposed Term Sheet would increase Lennar’s negotiating leverage since it has no obligation to develop the more difficult Shipyard parcels. If the real estate market rebounds - especially if there is a great increase in land values due to major public investment in improved access - Lennar can capture a substantial proportion of the capitalized value of nearby public improvements, due to the lack of competition.
Subsequent phases of Shipyard redevelopment could be far less lucrative than Phase I. The sites are more contaminated and are to be developed primarily as industrial, public and open space uses with less housing as an economic engine. The City will probably have to give Lennar substantial public resources to develop the next Phases due to the collapsed market for commercial and industrial land. However, as a practical matter, Lennar can demand as a baseline return on capital it invests into the next phases of the Project the rate of return available to them elsewhere - on sites unencumbered with contamination or plans that mandate industrial uses and open space. In future negotiations, the City will in effect have to compete against Lennar’s investment opportunities everywhere else. Terminating the ENA with Lennar will not fully solve the City’s problem because other for-profit developers will demand similar return.
Having a stand-alone Phase I deal also means that in negotiating Phase II, Lennar can make the demand that the City match their potential return elsewhere, irrespective of their actual profits in Phase I. If Phase I profits exceed projections, Lennar will have no obligation to accept a correspondingly lower return in Phase II. If Phase I turns out to deliver only the projected return or less, there is some question, however, whether the City is committed to pay Lennar a higher-than-market rate of return in the next phase . The City, in the Response to Community Comments, claims that it is providing a rate of return to Lennar that it considers to be lower-than-market (if Lennar’s pre-DDA contributions are factored in -13%) in order to motivate Lennar to participate in subsequent phases, presumably to achieve a market rate of return (Lennar is seeking 25%) for the Shipyard as a whole. Since this commitment does not appear in the Phase I Agreement, we need clarification about this and any other undocumented commitments.
Even though the community’s highest priority for Shipyard redevelopment has been jobs and business opportunities, Lennar has consistently deferred most of the development that would generate these benefits to future phases. Burdening subsequent phases with the additional obligation to provide Lennar with higher-than-market returns suggests that community priorities will slip badly.
2. The City’s projected rate or return should be at least equal to Lennar’s?
The Term Sheet is structured to provide a nominal rate of return on capital contributed after finalization of the DDA of 25% to Lennar and 11% to the City. However the picture is more complicated because the Term Sheet is apparently designed to repay Lennar 12% on funds they loaned (between $10 million and $13.5 million) the Project prior to the DDA. The blended rate of return for Lennar is targeted by the Term Sheet at 13%.
The most obvious question triggered by this arrangement: What is the basis for assuming a lower rate of return for the City’s capital than for Lennar’s?
The differential does not appear to be related to a difference in risk since the City’s risk in this project is at least equivalent to Lennar’s.
· The financial risks are evenly shared by the City and Lennar (except to the extent that Lennar’s rate of return is higher).
· The risk that the City ultimately might not approve their project is not greater than the City’s risk that Lennar will not ultimately propose an acceptable project.
· Lennar’s risk of non-repayment is far less than the City’s. The Term Sheet assigns the first $10 million in Mello-Roos revenues (which are not subject to the vagaries of the real estate market and create no liability for Lennar) to Lennar, in effect subordinating the City’s claims to Lennar’s. The City is repaid only out of the proceeds of land sales.
· By committing only to horizontal development, Lennar avoids the larger risks related to vertical development, while capturing speculative increases in land value, and the capitalized value of public (e.g., federal cleanup funds, federal and state highway funds for new roadways, Mello-Roos) investment.
· Since Lennar will be in charge of Project accounting practices, and they will be structuring the transactions with vertical developers, the City risks reductions in its share of land sale revenue because of complicated deals that provide Lennar with financial advantages at the expense of sales price. The City’s right to audit does not fully address this risk.
· And, as explained above, Lennar does not face the risk of being outbid by competing proposals, but the City faces competition from Lennar’s other investment opportunities.
Lennar’s higher rate of return is not due to the relative size of its investment. Lennar is contributing $25 million; the City’s is contributing $30 million plus Mello-Roos proceeds.
The City could have borrowed funds for pre-DDA expenses at a lower cost than the 12% called for by the Term Sheet. For example, the City might have borrowed the funds from other redevelopment project areas or from City or County accrual funds at the City’s earning rate, or from a bank at a public borrowing rates.
In the final analysis, it is not even clear how Lennar’s return compares to the City’s because the Term Sheet is unclear about details: :
· Which of Lennar’s pre-DDA expenses were legitimate loans to the City that were needed for Shipyard redevelopment to go forward, and which were expenses bolstering their negotiating position? For example, does the City intend to repay Lennar the costs of outreach (by both Lennar and the City) to build public support for approval of the Term Sheet? For support of the various iterations of their proposal? For lobbying for a bridge across Yosemite Slough?
· Does the Term Sheet provide a return on funds the City fronted (i.e., those funds not loaned by Lennar) for pre-DDA expenses? What is the City’s rate of return on its pre-DDA expenses? What would the blended rate be if the City’s 11% return were spread to cover pre-DDA City expenses?
3. The very substantial value of the ENA itself does not appear to be taken into account by the Term Sheet.
There is no indication that the value of the ENA was backed out of the City’s debt to Lennar or factored into the rate of return in any other way, even though the City has given Lennar an asset with high value. The ENA, in reserving the entire Shipyard for Lennar to develop in both the near and far .future, has given them many of the benefits of land ownership (Even though Lennar must receive Redevelopment Agency approval for any Shipyard projects, they would have a comparable obligation if they owned a property outright in a redevelopment project area.) These benefits of ownership come unencumbered with any of the carrying costs (e.g., land costs, taxes, liability, operations and maintenance) or risks (toxic wastes, devaluation of the property for any other reason) an owner would have to bear. Some of the ownership expenses that Lennar avoids are direct costs to the City (e.g., foregone property taxes). The value of this asset needs to be included in the rate of return calculus so that it is not given to Lennar as a gift. .
4. Lennar’s Project must achieve baseline City objectives without relying on the City to pay for them as “enhanced community benefits.”
The Term Sheet needs to clearly state the minimum requirements and redevelopment objectives that any Project for the Shipyard must be designed to satisfy – i.e., threshold community benefits that must be provided by the development itself, not out of the City’s profits. Those objectives have been articulated in the many public meetings that gave rise to the Shipyard Redevelopment Plan, have been summarized by the Community Advisory Committee, and added to the Plan.
Given the substantial subsidies that Lennar will be receiving (free land and Mello-Roos funding), and the reasonable rate of return they are projected to receive (especially if they were recalculated to account for the value of the ENA), the Term Sheet should unambiguously require Lennar to meet those community’s objectives for Shipyard redevelopment as a part of the basic Project. This means that the Project itself must be structured to meet Redevelopment Agency goals for local employment and business opportunities, housing, affordable artists’ studios, open space, and educational other public facilities. These objectives must not be delegated to the City to meet with its share of Project profits, as the Term Sheet contemplates. The City’s community benefits funds must be reserved for amenities and programs that supplement the threshold benefits that the Project itself must provide.
5. A process must be specified prior to DDA finalization for allocating community benefits.
There are two main dangers associated with the proposed community benefits fund envisioned in the Term Sheet. First, there is the danger that DDA negotiations will assume that threshold community benefits can be paid for by the fund, rather than requiring them to be incorporated into the basic configuration of the Project. It appears, for example, that negotiation to date have already decided that the community benefits fund will have to bear the cost of making affordable units accessible to Bayview-Hunters Point residents rather than residents of the 3-county area of Marin, San Mateo and San Francisco. During the continuing negotiations of the DDA, City and Lennar must not be allowed reconcile their differences by assuming that the community benefits fund will pay for basic Project features (such as neighborhood-based standards of housing affordability, local contracting and hiring, on-site stormwater treatment and EIR traffic mitigations).
The second danger is that the community fund will become a political slush fund used to build support for the project that Lennar proposes. A process for allocating funds and for oversight, needs to be defined well in advance of fund allocations.
6. The City’s commitment to spend 100% of land sale proceeds on community benefits needs to be clarified.
The City needs to adopt a policy that does not allow the community benefits fund to be diverted into Project costs (including Project administration), into the costs of administering fund programs , or to pay the City for services that it should provide without supplemental funding.
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Hunters Point Development
FBI probe focuses on bayfront property proposals
2 projects involved mayor's pal Charlie Walker
By Chuck Finnie and Lance Williams
OF THE EXAMINER STAFF, Aug 11, 1999
More recently, according to authoritative information obtained by The Examiner, the FBI demanded that a city agency turn over records related to Lennar Homes, a subsidiary of Lennar Corp. of Florida, which won Redevelopment Commission approval in March to build housing on the 500-acre Hunters Point Naval Shipyard.
The Port industrial park proposal and the shipyard redevelopment project both involved controversial city trucker Charlie Walker, a friend, political supporter and former law client of Mayor Brown. Walker is a focus of the FBI city contracting probe.
Source: http://www.examiner.com/990811/0811probe.html
When a Florida development firm, Lennar Corp., began assembling a team last year for a bid on the rights to another piece of the southeast Bayfront, the 500-acre Hunters Point Naval Shipyard, it also turned to Walker. As its local jobs broker — a firm that would be charged with ensuring people from the Bayview were hired to work on the project — Lennar retained the Bayview Hunters Point Builders Exchange, another of Walker's companies.
Joe Petrillo, a lawyer for Lennar, said the developer wanted to get better connected to the people in the neighborhood.
Walker also brought connections — not only to Brown, but also to the then-Redevelopment Commission President Lynette Sweet, treasurer of Walker's nonprofit.
On March 30, when the commission selected a developer for the shipyard, Sweet voted to give the contract to Lennar, joining three other commissioners on a 4-3 vote to reject a consultant's recommendation that the project go to another firm.
Source: http://www.examiner.com/990627/0627walker.html
Lennar steals Hunters Point deal
San Francisco's redevelopment agency gave development rights for Hunters Point Naval Shipyard to a team led by Lennar Corp. -- abandoning the recommendation of an outside consultant. The Lennar team, which is also redeveloping Mare Island in Vallejo, won a 7-0 vote and beat out Catellus Corp. and the consultant's pick, Forest City Enterprises. The agency said Lennar had done a better job mustering community support and was the best off financially
Source: http://www.amcity.com/sanfrancisco/stories/1999/03/29/daily15.html
--
Current Status of CA Base Reuse: Hunters Point Naval Annex http://www.cedar.ca.gov/military/current_reuse/hunterpt.htm
A report is prepared by: California Trade and Commerce Agency Office of Business Development - February 1999
--------------------------------------------------------------------------------
The City of San Francisco has retained Peat Marwick to analyze three development proposals for the 500-acre former Hunter's Point Naval Annex (BRAC 1991). Three development groups were chosen to implement the City's reuse plan from among those that responded to an RFQ in 1998. The Plan includes a master-planned, waterfront community of residential, commercial mixed-use and light industrial uses. The three successful respondents include Forest City Development, Lennar/BVHP Partners/ Mariposa Management/Luster Group and the Catellus Development Corporation/WDG Ventures, Inc.
Upon receipt of Peat Marwick's recommendations and following a public hearing, the Redevelopment Agency Commission is expected to make a final decision on March 23, 1999.
Source: http://www.cedar.ca.gov/military/bc_news/99mar/story8.htm
Related Links:
Lennar Corp. -
#5 at Builder 100
Profile - Lennar Corporation (NYSE:LEN)
ArtSpan produces San Francisco Open Studios
http://www.artspan.org/
The Artists Community at Hunters Point
http://www.zpub.com/sf/thepoint/
Hunters Point Shipyard at SF Redevelopment Agency
http://www.ci.sf.ca.us/sfra/hps.htm
Discuss
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Last update: Monday, June 17, 2002 at 10:47:23 AM.
The domain name brasscheck.com
and all intellectual property contained on web sites under brasscheck.com
has become the property of the First Amendment Defense Trust
which is solely responsible for its contents.
Investigation into Allegations of Organized Fraud
in the June 1997 Stadium Bond Election in San Francisco
Exclusive Internet report
Read the evidence and
decide for yourself
This web site has been on the case since June 5, 1997
If you are a witness or if you would like
regular updates on the case write to us
Brief Summary of the San Francisco case
Web Site Overview
--------------------------------------------------------------------------------
This site is dedicated to the memory of Dolores Evans, polling place supervisor and an active and generous member of the Bayview-Hunters Point community, who died in a suspicious fire - along with five children - just days before she was to have been interviewed by a private investigator about this case.
In a highly uncharacteristic act, Mayor Willie Brown personally visited Evans' public housing apartment the day after the fire pointing out flaws in the building's construction to news cameras. The Fire Deparment ruled out foul play - before they had completed their investigation.
Bystanders say that help was slow in coming. "A man whose name was not released by authorities but was identified by neighbors as Henry Redmond was reportedly seen calmly leaving the apartment at 132 West Point Road minutes before it ignited." "None of the victims were able to escape the apartment even though their access to the fire escape was unobstructed."
The final police version of events as reported by the Examiner makes little sense. Redmond's claim that he sought help was contradicted by numerous eye witnesses. Evans' role as a polling place supervisor in the most suspect election in recent San Francisco history was never reported by the local media.
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Over 15,000 San Francisco voters have signed the petition calling for a new election in the face of a total news media blackout
Here's what the local media refers to
as a "thorough investitgation"
The city's two "newspapers," the Chronicle and the Examiner published headlines declaring there was "no fraud" just days after the election before the matter had even been investigated.
California Secretary of State Bill Jones issued a report debunking fraud allegations that had been drafted in part by the City Attorney of San Francisco Louise Renne at the same time she was defending the mayor against a lawsuit alleging fraud in the stadium election.
The San Francisco District Attorney, an ardent supporter of the stadium deal, chose to give the "Yes of D & F" precinct captain who was caught voting twice under an assumed name (a felony), a slap on the wrist.
The San Francisco judge who refused to hear a civil lawsuit against the city on the allegations then ordered the Department of Elections to reject a petition signed by over 15,000 citizens seeking to hold a referendum to overturn the results of the stadium election.
Learn how the local San Francisco news media has participated in suppressing information about this story. Less than 1% of what appears on this site has been reported to the public.
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The Latest
In a letter dated May 17, 2001, then Acting Director of the San Francisco Department of Elections, Dr. Phillip Sanches-Paris alleged, in the words of the San Francisco Chronicle, "a series of misdeeds and potentially criminal acts in the city's Department of Elections." The letter was addressed to City Attorney Louise Renne and was entitled "Re: Second Request for Outside Counsel due to City Attorney's Conflict of Interest"
The City Attorney responded by investigating Dr. Sanches-Paris. The local press acted confused and specifically did not publish the text of his allegations though the letter appeared on numerous web sites including this one. The mainstream press acount: Effect of lost S.F. ballots on last November's election downplayed - Business as usual in Scam Francisco.
'Investigators' hired by City Attorney Louise Renne have declared that Dr. Paris' assertions do not merit further investigation.
As a result of threats made by Dale Minami of the law firm of Minami, Lew & Tamaki on behalf of Christiane Hayashi and Jennifer Novak, the original text of the Sanches-Paris letter - a letter from a public official to a public official about a matter of public interest - has been removed from this web site. In the absense of anyone stepping foreward to assist in defending against these threats, the Trustees of the First Amendment Defense Trust have regretfully decided to remove the letter so that we can use the limited resources to continue reporting news that 'mainstream' news outlets will not.
We agree with many election fraud investigators, including University of Virginia Professor Larry J. Sabato (author of "The Persistence of Corruption in American Politics"), who have stated that it is institutionalized incompetence and mismanagement that makes election fraud possible and so widespread in the United States.
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May 18, 2001 - Ronnie Davis, Willie Brown pal and operator of sercret public housing polling places, is in hot water again. This time federal auditors say $18,000,000 in public funds he had control of as head of San Francisco public housing cannot be accounted for
Full text of the indictment
March 23, 2001 - Ronnie Davis, who opened secret polling places with HUD money on behalf of the 49er stadium campaign, indicted for theft and fraud by an Ohio Grand Jury. Davis is a close friend and ally of San Francisco mayor Willie Brown.
This is the second major player in the election fraud story to be indicted on serious corruption charges, the first being Eddie DeBartolo who bankrolled the campagin. Details on the Ronnie Davis indictment. Note: the last San Francisco Public Housing official to receive attention like this was Jim Jones of Jonestown infamy, who coincidentally (or not) was implicated in an election fraud scheme that benefited Willie Brown.
November 2, 1999 - The official response to election fraud in San Francisco as quoted in today's Wall Street Journal:
"Despite worries about the possibility of voter fraud in San Francisco elections, city officials can do little more than hope for the best when it comes to protecting the ballot box."
This statement, which appeared in the the San Francisco Chronicle, sums up the situation perfectly. In the total absense of enforcement of election laws by the SFPD, DA Terrence Hallinan, Secretary of State Bill Jones, and the San Francisco judiciary, "hope" is the only thing protecting San Francisco's ballot boxes. The problem is clear. The only question now is what are San Franciscans going to do about it.
October 25, 1999 - Your pre-season guide to this year's election fraud, provided, remarkably enough, by the San Francisco Chronicle.
Get ready for a strong sense of deja vu: fraudulent registrations organized by Brown allies; DA Hallinan sits on the evidence; Secretary of State Bill Jones feigns concern, does nothing. Both papers do their best to not discuss the fraud in the 1997 stadium election or the long history of election fraud in the city. Information about ongoing citizen efforts to prevent election fraud in San Francisco, including poll watching in this election, is, characteristically, not provided.
October 23, 1999
October 25, 1999
October 18, 1999 - The Bay View/Hunter's Point Pay Off: Here's what turned up recently in the Examiner - like everything else in San Francisco "journalism", a day late and a dollar short. Or in this case two and a half years after even the greenest reporter could have dug it out of the public record:
"Walker led voter-turnout efforts in Hunters Point for the mayor's 49ers football stadium initiative, which was narrowly approved in 1997."
Three days after the vote, on June 6, 1997, Brown told Redevelopment Director Jim Morales to give $100,000 to the (Walker's) Third Street firm, city documents show..."
"Mayor Willie Brown's office can't seem to get mayoral friend Charlie Walker to show that a corporation he founded was legally entitled to receive a $100,000 city grant..." - Examiner story
October 15, 1999 - Nearly ten years after he arrived in San Francisco to babysit Edward DeBartolo's son, the felon Eddie Jr, and one year after he left town, the San Francisco news media finally discovers the pre-49er career of Carmen Policy: top mob lawyer between New York and Chicago.
"... he certainly defended the best-known Mafioso, at a time when the mobsters were bombing and shooting each other to death with unprecedented regularity." - SF Weekly Story
"Policy" is mob slang for numbers, a form of illegal betting, not an Italian surname. It would be interesting to trace how Policy got his name.
October 27, 1998 -Twenty two years of citizen protest against election fraud in San Francisco.
October 24, 1998 - A petition with the signatures of 15,000+ San Francisco voters calling for a new stadium vote is presented to the Elections Department (only 10,500 signatures are required to put it on the ballot.) Naomi Nishioka, acting director of the Department of Elections, says she will ignore the petition.
October 7, 1998DeBartolo pleads guilt to felony in Louisiana bribery and political corruption case. Official San Francisco expresses its sympathy for the "ordeal" he suffered.
August 19, 1998 - The San Franciso Weekly becomes the first locally published paper to report on the connections between TURF founder Thomas Mayfield, Willie Brown, and the employment of drug dealers by the San Francisco Housing Authority more than one year after this web site raised the question.
August 12, 1998 - The San Francisco Weekly reports details on some of the criminals, crack dealers, and violent offenders who have been hired by San Francisco Public Housing since Willie Brown was elected mayor.
Several of these men have ties to TURF, an organization which participated in the 49er "get out the vote" campaign and served as "official" poll observers. TURF members were also employed by the Election Department during this same election. Note: Under Germane Wong, the records of the names of the people who transported ballot boxes the night of the 49er election were destroyed.
July 3, 1998 - Without comment, a three-judge panel headed by presiding Judge Gary Strankman upholds the ban against the Committee to Stop the Giveaway's petition. Over 10,000 San Franciscans (population approx. 700,000) have signed it. Here is a statement from the Voting Integrity Project.
June 28, 1998 - The investigation of Ronnie Davis on fraud and corruption charges by the FBI and HUD for his activities as COO of Cleveland Public Hosuing has been completed and a Grand Jury will be convening this coming week to hear testimony. Davis, handpicked by Willie Brown to head SF's Public Housing Authority, worked with the mayor's office to set up early, secret polling places on behalf of the 49er campaign.
June 21, 1998 - Mayor Brown is leading a behind-the-scenes campaign to derail State Senator Kopp's bill to regulate early polling places. Coincidentally, today's Sunday paper has an article on the effect of Brown's budget on San Francisco's most vulnerable citizens.
June 19, 1998 - San Francisco Superior Court Judge Raymond Williamson officially bars the Department of Elections from accepting the petitions of San Franciscans seeking to overturn the June '97 49er stadium election. Without examining any of the evidence, the judge calls the petition's claims "flat out untruths." Judge Williamson retired shortly after issuing this decision.
Specifically, he denies that:
The city set up secret polling places
Electioneering and campaigning for the stadium was subsidized by municipal funds
The secrecy of the ballot process was compromised
An account of these infractions as well as many others others has been publicly available since June 17, 1997, yet no official from the City of San Francisco or the State of California has bothered to contact any of the eye witnesses or examine the documentary evidence.
Now available: A video of public hearings in which witnesses came forward testifying to the above as well as shocking footage of the San Francico Department of Elections on election night.
The local media continues their iron clad policy of failing to disclose the evidence in the case.
June 9, 1998 - The DeBartolo Family, owners of the 49ers, sues grassroots citizens group to block their petition gathering efforts to overturn the stadium election.
May 11, 1998 - Petition to overturn the stadium election hits the streets of San Francisco.
April 27, 1998 - Recently uncovered documents cast doubt on the integrity of Secretary of State Bill Jones' January report on the June election.
March 16, 1998 - The Baltimore Sun reports that the FBI has targeted the Public Housing Authorities of New Orleans, Baltimore, and San Francisco for special investigations. Suspicion of widespread fraud, corruption, and misuse of federal funds are cited as the causes.
March 3, 1998 - The FBI is actively investigating members of TURF for cocaine dealing in city housing projects. Mayor Brown and the "Yes of D & F" campaign made extensive use of the TURF organization, an association of ex-felons, drawing on it for both campaign and election night workers.
Since becoming mayor, Brown has arranged for hundreds of thousands of dollars in city contracts for the group. Acting Housing Authority Director Ronnie Davis, who invited TURF members into city housing projects as temporary employees, is the same individual who arranged for the illegal and early polling places in the Bayview-Hunters Point projects.
Sources:
FBI Probes Drug Sales In Projects Members of Brown's S.F. youth patrol among targets
Housing chief calls voter data "irrelevant'
Mayor's aide tapped tenants for 49er votes
January 27, 1998 - District Attorney Terence Hallinan, long time ally of Mayor Brown and an ardent supporter of the stadium ballot measure, declares "legal" the secret polling places opened by operatives from the mayor's office on behalf of the "Yes on D & F" campaign based on a 24 hour investigation. Source: San Francisco Chronicle
Several months back, DA Hallinan declined to press felony charges against "Yes on D &F" precint captain John Griffin who was caught voting twice, once under an assumed name, in the stadium election.
As established in public testimony before the Board of Supervisors on October 29, 1997, the polling places in question:
- Were opened without public notice
- Were concealed from voters who called the Department of Elections to ask about early voting options
- Were known only to the "Yes of D & F" campaign and
- Were advertised at a "Yes of D & F" rally in Bayview/Hunters Point the weekend before the election at which Mayor Brown appeared
Election fraud in San Francisco?
The Mayor* denies it
The Department of Elections won't let the public see the records
The District Attorney Terence Hallinan let off the one person who was caught with just a slap on the wrist
The Board of Supervisors don't care
The City Attorney sees no problem
"Danny" Lungren*, California Attorney General and Edward DeBartolo's old college buddy, has "no comment"
The Secretary of State's* investigation moved at a leisurely pace and its final report was disappointingly superficial.
* These individuals are known to have received campaign contributions from the gambling industry.
--------------------------------------------------------------------------------
Video about this case now available
The Cast of Chactacters
Exhibits
The Local News Blackout
News
January 26, 1998 - Nearly eight months after the election, the California Secretary of States releases a disappointingly superficial and poorly informed report on irregularities in the June election.
January 26, 1998 - Details about the ongoing, and as yet unreported, coverup in the Department of Elections.
January 12, 1998 - An Examiner editorial acknowledges that aspects of the June election merit investigation. The Chronicle, Northern California's largest circulation paper, continues to fail to take the story seriously.
December 28 - The Examiner finally reports that Mayor Brown's office was directly involved in the opening of "secret" pro stadiun-only polling places in Bayview/Hunters Point.
Documentation regarding these polls, their illegality, and the fact they were opened by city government operatives and paid for with federal housing funds was presented on this web site on June 24, 1997
December 9 - The California Secretary of State issues a statement calling San Francisco's conduct during the June election illegal. The Examiner puts the news on its front page. The Chronicle doesn't report it.
A complete discussion of the illegality of the ballots used by the city for the stadium election was presented on this web site on July 13, 1997
December 3, 1997 - Lawsuit filed by the Voting Integrity Project and local activist Doug Comstock to overturn the results of the stadium election
The publishers of the Chronicle bury this news in their back pages. Meanwhile, it's a front page story in the San Francisco Examiner and the San Jose Mercury and mentioned in an article in Time Magazine.
December 1, 1997 - Edward DeBartolo resigns as chairman of the 49ers. The reason? He was caught in a federal probe into political corruption in Louisiana.
Visitors to this web site knew this was a possibility months ago.
October 29, 1997 - The Chronicle and Examiner report that Director of Elections Wong ignored the Secretary of State's warning about early polling places.
The text of Secretary of State Bill Jone's memo regarding early polling places was posted to this site on June 24, 1997.
October 26, 1997 - The Examiner finally hints at the extent and seriousness of the polling place irregularities.
Documentation of these irregularties was presented in full detail on this web site on June 17, 1997
AP and CNN pick up the story and do what the local San Francisco papers still won't do as of May 15, 1998: give people the address to this web site - August 31, 1997
--------------------------------------------------------------------------------
Brief Summary of the San Francisco case
Web Site Overview
--------------------------------------------------------------------------------
Background and Analysis
* Obvious signs: Why the 49er stadium election merits investigation
* The cast of characters
* The gambling connection
* The real Bayview-Hunters Point vs. the media image: the key to understanding the scam
* Random pointers: municipal bonds, stadiums, and organized crime
* How modern cities respond to official corruption.Three cases studies: Chicago, Hong Kong, and San Francisco
* Everything old is new again: San Francisco 1907
On the heels of Gov. Davis' recall, angry constituents are trying to oust Supervisor Sophie Maxwell
BY LISA DAVIS
lisa.davis [at] sfweekly.com
Anthony Pidgeon
Maxwell: Not long for City Hall?
From the Week of Wednesday, October 22, 2003
Mecklin
Rolling in War Bucks
How the state public employees' retirement system and the politically connected Carlyle Group profit from defense
Matt Smith
Sounds of Silence
ASCAP's legal threats kill a thriving local music scene
Night Crawler
To Hell and Back
There's no way to show all the deviltry from this year's SF Weekly Music Awards gala. But here's a hot peek.
Bay View
A Fine Mess
A monumental sewage eruption shows tenants the downside of living in the Presidio
Dog Bites
You preach/We laugh
In which we come up with our own (slightly cynical) version of Muni's new ad campaign
Letters
Letters to the Editor
Week of October 22, 2003
Recall fever has hit southeastern San Francisco, where some constituents of Supervisor Sophie Maxwell are collecting signatures for her ouster. The District 10 Alliance, a newly formed group of citizens from Bayview and Potrero Hill, charges that Maxwell has ignored residents and they want her out.
"They [politicians] don't listen," says Bayview activist Lynne Brown, one of a handful of people behind the recall effort. "[Gov. Gray Davis] didn't listen to the constituents who put him in office, and neither does Sophie."
Maxwell, a former electrician, was first elected in 2000 and re-elected after running unopposed in 2002. Her District 10 has been plagued by gang crime, high unemployment, and environmental health problems, as well as controversy over developing the former Hunters Point Shipyard and rezoning old industrial areas to make way for housing.
Under city law, recall supporters must collect signatures of at least 10 percent of the registered voters in District 10, or about 4,000 signatures. A recall election can then be held within 120 days.
San Francisco has never successfully recalled an elected official. Ex-Mayor Dianne Feinstein beat back an attempt to unseat her in 1983 and Mayor Roger Lapham held onto his job in 1946. But those who want to give Maxwell the boot are clearly drawing encouragement from the startlingly successful campaign to dump a sitting governor that recently gave us the Terminator as California's chief executive.
Maxwell seemed surprised and angered when the Weekly questioned her about the effort to oust her.
"If these people wanted to do something, why didn't they do it when I was running? I just ran a whole campaign in November and nobody ran against me," she said. "If they had a problem, they certainly could have talked about it then. I think it's because they have their own agenda and they're trying to destabilize our community and they're just on a negative trip. "
The recall is spearheaded by an unlikely coalition of residents of the Bayview-Hunters Point and Potrero Hill neighborhoods, dramatically different areas that have often stood apart on district issues. The Bayview is a primarily low-income, minority community where residents worry about joblessness, environmental illness, and gang crime. Potrero Hill is populated mostly by white, upper-middle-class professionals, many of whom feel threatened by the increased development of loft-style housing. And while each neighborhood has its own unique beefs with the supervisor, they share a common complaint: Sophie Maxwell is ignoring them.
Angry Potrero Hill residents say they assumed Maxwell was focusing her attention on the Bayview because the area was more needy. Meanwhile, the Bayview contingent thought Maxwell spent all her resources on Potrero Hill, where the majority of her votes came from. The recall was born when activists from both parts of the district met recently while fighting pollution from PG&E's Hunters Point Power Plant. By then, Maxwell had already been re-elected.
"It's like realizing that your mother has not just been abusing you, but the rest of your siblings as well," says Kepa Askenasy, a Potrero Hill architect who joined the recall effort.
Her Bayview counterparts agree.
"We get so involved in what's going on around us. ... A lot of people just don't know about what's going on," says Lynne Brown. "They don't know what's happening to this area. Unemployment is 14 percent out here. We're busy trying to make ends meet."
Proponents this week planned to take the first official step in getting a recall on the ballot, mailing in a legally required notice to city elections officials that includes a list of grievances. The notice claims Maxwell failed to actively address health hazards, did not assist District 10 residents in getting a fair share of jobs on Muni's Third Street light-rail project, hasn't done enough to help resolve clashes between police and youths in Bayview-Hunters Point, and failed to give adequate consideration to possible health consequences of the city Public Utilities Commission's power plans for the district. Moreover, the petition states, Maxwell doesn't show up for key community meetings and isn't accessible to constituents, forcing them to go to other supervisors to air their concerns.
Maxwell denies recall organizers' charge that she's hard to get ahold of.
"They're absolutely wrong," she says. "I'm probably the most available supervisor. Most of the time people like that don't try and talk. I've invited them to talk, and it's just about their own agenda and what they want."
She says that she helped secure $50 million for job training in Bayview-Hunters Point and met with Muni representatives and Third Street light-rail protesters the day before they marched on City Hall. Maxwell also says she is putting together public hearings on the police and gang-violence issues.
"When they say I'm not anywhere, where are they? I can't just be in Bayview," she says. "I have the largest geographical area in the city. I'm a county representative. I have to go to Washington to look at [federal mass transit] funds. I have to go to Sacramento to do other things. I have to meet with the neighborhoods. I'm on the [Board of Supervisors] budget committee that meets regularly. I have to meet with people. I don't know what they're talking about other than they may not understand what a supervisor does. I am a policy-maker. I have to work through a legislative process. I have to work with people."
Potrero Hill recall proponents are angry over development issues, particularly the rezoning of light industrial areas to make way for more live-work housing. Maxwell, they allege, has supported developers over the wishes of constituents in rezoning and in allowing "monster homes" to spring up around Rhode Island, De Haro, and 18th streets.
Maxwell seems stunned by the criticism, saying she has sought to inject community input into the planning process, and that the city Planning Department is now reviewing plans for the entire southeast side of San Francisco.
"People don't understand what happens and the process and how you have to go through it," she says. "Nothing has gone up. Nothing has happened with any of the developers. I am the one making sure that we have planning and a process and ... hearings on things.
"These people are very selfish and self-centered -- that's what they are and who they are."
A District 10 native, Maxwell swept into office with support from Potrero Hill, beating out Linda Richardson, who was supported by Mayor Willie Brown. The supervisor is often backed by Potrero Hill Boosters, the area's most politically powerful neighborhood group. And since her election, Maxwell also has been supported by Brown, to the chagrin of recall advocates who believe the mayor is too friendly with developers. Maxwell's failed run at the presidency of the Board of Supervisors earlier this year was backed by Brown-friendly Supervisors Gavin Newsom and Bevan Dufty.
But Maxwell has suffered some serious personal losses since she took office as well.
"My son died. My mother [well-known local activist Enola Maxwell] died. I'm raising a grandchild. I have family issues like everybody else," she says. "This community has been my first priority. I [won the election] and I believed I could deal with this because the environment and issues were important to me."
And she acknowledges that getting around her large, diverse district -- which also includes Visitacion Valley and some smaller, adjacent neighborhoods -- can be difficult.
"On one side of [Potrero] Hill I have a power plant and on the other side they're talking about rebuilding S.F. General and people losing their homes, and I have to be both places on the hill," Maxwell says with exasperation. "I have to deal with city departments who are not my departments. I don't own them. I can suggest to them what to do, but I can't hire and fire them. There is a process that you have to go through.
"I say to those people [the recall supporters] that they really don't understand the process and they're not looking at the whole; they're looking at their interests and what they want. I work day and night to be available to people. I had to run immediately when I got in here. I've been running ever since."
If Maxwell's political enemies can gather enough valid voter signatures in time, they hope to place the recall on next March's state primary election ballot. If not, a special election would have to be held later.
sfweekly.com | originally published: October 22, 2003
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Ethics panel eyes redevelopment role in Hunters Point
Phillip Matier, Andrew Ross Monday, March 17, 2003
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San Francisco -- The trio whose habit of voting together on controversial items has tagged them the "Pep Boys" of the San Francisco Redevelopment Commission -- Benny Yee, Leroy King and Darshan Singh -- were all hit with subpoenas from the city's ethics watchdog agency this past week.
Soon to join the list: City Hall insider Susan Horsfall, who works for the law firm that represents Lennar Corp. -- the developer that won the right to take over the old Hunters Point shipyard.
No one at the Ethics Commission is talking, but word among Redevelopment insiders is that a complaint came in more than a year ago alleging that Horsfall and the Pep Boys appeared to be a little too close for comfort -- often dining out together after meetings.
Right around the time, it seems, that the commission -- including the Pep Boys -- voted to disregard its consultant's findings and award the rights to develop the shipyard to Lennar.
"This is all about those same old stories about us getting gifts and dinners," King said. "It wasn't true then, and it isn't true now."
An Ethics Commission investigation isn't criminal -- but it can refer its findings to the district attorney.
For her part, Horsfall told us she has "no idea what any of this is about. We haven't had dinner together in over a year, so any reference to that is old news."
Maybe -- but from the looks of things, it's about to become news again.
SOS HOM: Real estate broker, political fund-raiser and Chinatown bigwig Ben Hom's appointment to the San Francisco Port Commission appears to be sinking as fast as the Titanic.
"I only count four votes -- he needs six," said one member of the Board of Supervisors.
That's a far cry from the seven supervisors who gave Hom the initial nod of approval a couple of months back.
But then, that was before the press had a field day revealing Hom's conflict-of-interest problems when he was on the Redevelopment and Public Utilities commissions.
"As it stands, he's got four choices," the supervisor said.
"Withdraw. Lose the vote Tuesday. Have it sent back to committee to die slowly. Or put it off until next week when (Supervisor Chris Daly) returns."
Although waiting for Daly would just be delaying the inevitable, since Hom would still come up one vote short.
MUNI MELTING: With all the attention focused on San Francisco's police crisis, it's largely escaped public notice that the Municipal Railway is having its own minor meltdown as well.
Just about the time the police indictments were being handed up, the Muni was hit with a three-day worker sickout -- one that resulted in dozens of runs being canceled.
According to an internal memo by Muni General Manager Michael Burns, "in a sudden and unexpected move, large numbers of operators failed to report to work or called in sick" during the first three days of March.
So instead of the typical seven missed runs on Saturday, the first day of the reported sickout, there were 80.
The next day there were 57 missed runs, compared with the usual 10 for a Sunday. Among other things, only half of the city's 18 cable cars made it out of the barn.
And on Monday -- when traffic is heaviest -- the Muni missed 50 runs, compared with the usual 18.
The motivation behind the sickouts appears to be the cash-strapped Muni's attempt to cut millions of dollars in worker overtime, job perks and other sacred labor practices.
Union representatives didn't want to be quoted, but privately they accused Burns of wielding the ax without consulting them.
They also emphatically denied there had been any work stoppage or sickout whatsoever.
Muni is grappling with a $16 million budget hole this year, which is projected to deepen to $52 million next year.
In response, the officials have proposed fare hikes, increased parking fines and higher city parking garage rates to raise the money.
But boss Burns also ordered an across-the-board elimination of overtime -- a serious blow to drivers who have grown accustomed to making the extra money.
And then there's his behind-the-scenes push to require all drivers to actually get out and drive.
Now that may sound strange, but as a result of a practice dating back some 30 years, the Muni has seven drivers on the payroll who conduct union business full time.
And not only do the seven union reps not drive -- they are guaranteed one hour of overtime a day.
The city's cost for this unusual little benefit: about $65,000 a year per worker, or nearly a half-million dollars overall.
School daze: It's been brought to our attention that while more than 1,100 possible layoff notices were going to teachers and staff in Oakland over the weekend, schools Superintendent Dennis Chaconas was hosting a fair Saturday aimed at -- yes, producing more teachers.
Of course, school officials emphasized that the four-hour "Teacher Reception and Credential Fair" at Jack London's Waterfront Hotel wasn't about hiring, since there are "no open positions."
No -- just lots of friendly college reps promising a rewarding career in education.
And finally: An update on the San Francisco Police Department from the home answering machine of Supervisor and mayoral hopeful Tom Ammiano: "Greetings. You've reached the acting, temporary, assistant, transitional, virtual shadow, unindictable but suspicious protege of the chief of police.
"May we help you?"
Chronicle columnists Phillip Matier and Andrew Ross appear Sundays, Mondays and Wednesdays. They can also be heard on KGO Radio on Mondays, Wednesdays and Thursdays. Phil Matier can be seen regularly on KRON-TV. Got a tip? Call them at (415) 777-8815 or drop them an e-mail at matierandross [at] sfchronicle.com.
Soon to join the list: City Hall insider Susan Horsfall, who works for the law firm that represents Lennar Corp. -- the developer that won the right to take over the old Hunters Point shipyard.
No one at the Ethics Commission is talking, but word among Redevelopment insiders is that a complaint came in more than a year ago alleging that Horsfall and the Pep Boys appeared to be a little too close for comfort -- often dining out together after meetings.
Right around the time, it seems, that the commission -- including the Pep Boys -- voted to disregard its consultant's findings and award the rights to develop the shipyard to Lennar.
"This is all about those same old stories about us getting gifts and dinners," King said. "It wasn't true then, and it isn't true now."
An Ethics Commission investigation isn't criminal -- but it can refer its findings to the district attorney.
For her part, Horsfall told us she has "no idea what any of this is about. We haven't had dinner together in over a year, so any reference to that is old news."
Maybe -- but from the looks of things, it's about to become news again.
SOS HOM: Real estate broker, political fund-raiser and Chinatown bigwig Ben Hom's appointment to the San Francisco Port Commission appears to be sinking as fast as the Titanic.
"I only count four votes -- he needs six," said one member of the Board of Supervisors.
That's a far cry from the seven supervisors who gave Hom the initial nod of approval a couple of months back.
But then, that was before the press had a field day revealing Hom's conflict-of-interest problems when he was on the Redevelopment and Public Utilities commissions.
"As it stands, he's got four choices," the supervisor said.
"Withdraw. Lose the vote Tuesday. Have it sent back to committee to die slowly. Or put it off until next week when (Supervisor Chris Daly) returns."
Although waiting for Daly would just be delaying the inevitable, since Hom would still come up one vote short.
MUNI MELTING: With all the attention focused on San Francisco's police crisis, it's largely escaped public notice that the Municipal Railway is having its own minor meltdown as well.
Just about the time the police indictments were being handed up, the Muni was hit with a three-day worker sickout -- one that resulted in dozens of runs being canceled.
According to an internal memo by Muni General Manager Michael Burns, "in a sudden and unexpected move, large numbers of operators failed to report to work or called in sick" during the first three days of March.
So instead of the typical seven missed runs on Saturday, the first day of the reported sickout, there were 80.
The next day there were 57 missed runs, compared with the usual 10 for a Sunday. Among other things, only half of the city's 18 cable cars made it out of the barn.
And on Monday -- when traffic is heaviest -- the Muni missed 50 runs, compared with the usual 18.
The motivation behind the sickouts appears to be the cash-strapped Muni's attempt to cut millions of dollars in worker overtime, job perks and other sacred labor practices.
Union representatives didn't want to be quoted, but privately they accused Burns of wielding the ax without consulting them.
They also emphatically denied there had been any work stoppage or sickout whatsoever.
Muni is grappling with a $16 million budget hole this year, which is projected to deepen to $52 million next year.
In response, the officials have proposed fare hikes, increased parking fines and higher city parking garage rates to raise the money.
But boss Burns also ordered an across-the-board elimination of overtime -- a serious blow to drivers who have grown accustomed to making the extra money.
And then there's his behind-the-scenes push to require all drivers to actually get out and drive.
Now that may sound strange, but as a result of a practice dating back some 30 years, the Muni has seven drivers on the payroll who conduct union business full time.
And not only do the seven union reps not drive -- they are guaranteed one hour of overtime a day.
The city's cost for this unusual little benefit: about $65,000 a year per worker, or nearly a half-million dollars overall.
School daze: It's been brought to our attention that while more than 1,100 possible layoff notices were going to teachers and staff in Oakland over the weekend, schools Superintendent Dennis Chaconas was hosting a fair Saturday aimed at -- yes, producing more teachers.
Of course, school officials emphasized that the four-hour "Teacher Reception and Credential Fair" at Jack London's Waterfront Hotel wasn't about hiring, since there are "no open positions."
No -- just lots of friendly college reps promising a rewarding career in education.
And finally: An update on the San Francisco Police Department from the home answering machine of Supervisor and mayoral hopeful Tom Ammiano: "Greetings. You've reached the acting, temporary, assistant, transitional, virtual shadow, unindictable but suspicious protege of the chief of police.
"May we help you?"
Chronicle columnists Phillip Matier and Andrew Ross appear Sundays, Mondays and Wednesdays. They can also be heard on KGO Radio on Mondays, Wednesdays and Thursdays. Phil Matier can be seen regularly on KRON-TV. Got a tip? Call them at (415) 777-8815 or drop them an e-mail at matierandross [at] sfchronicle.com.
That scene played out in public on a Friday afternoon in July 1999, when the FBI raided the city agency that monitors San Francisco's minority- contracting program, occupying the office for three days while agents hauled away truckloads of suspected evidence.
Investigators weren't always so public in their sleuthing. But for five years -- starting in 1998, and continuing as late as last month -- FBI agents conducted a wide-ranging corruption probe at City Hall, according to documents and interviews. From the start, witnesses who were interviewed said, agents seemed focused on the conduct of the mayor and some of his closest political allies.
Few prosecutions resulted, and Brown was never accused of wrongdoing. He charged that the investigations were politically motivated.
Over the years, agents served subpoenas on more than a dozen city departments, including the mayor's office at City Hall. At one point, court records reflected that a federal grand jury had convened and was scrutinizing more than $1 billion worth of city contracts for suspected improprieties.
In case after case, witnesses said the agents seemed intent on determining whether federal laws were being violated in the context of what Brown critics called the practice of "juice" politics at City Hall. It was a dynamic in which lobbyists, campaign donors and political players who had influence with the mayor seemed to hold the inside track on lucrative land deals, contracts and favorable regulatory decisions.
Witnesses interviewed by The Chronicle said a revolving team of more than two dozen agents worked the long-running probe.
Little to show
Despite the extraordinary scrutiny, authorities had little to show for their efforts. In five years, U.S. grand juries handed up only two corruption- related indictments. Only one city official -- a mid-level administrator accused in a bribery scandal at the Housing Authority - went to prison.
To Brown partisans, the lack of results verified what they had claimed all along: Brown ran a clean government and based decisions on merit. The unusually public way in which the FBI probe was conducted -- especially the raids and subpoenas during Brown's 1999 re-election campaign -- smacked of political interference, they said.
As Charlie Walker, a longtime Brown pal and self-described FBI target, once told a reporter: "If the FBI wanted to do something to me bad enough, rather than just make Willie Brown look bad, they would have stopped me on the street and taken me in."
But advocates of government reform contend that the FBI had every reason to scrutinize the way public business was conducted under Brown.
"The legacy of Willie Brown has been one of corruption and incompetence in government, and the probes were a reflection of that," said Fred Ridel, coordinator of the good-government group San Francisco Common Cause. He emphasized that he made his comments as a private citizen.
"Just because you don't find criminal activity you can prosecute doesn't mean everything is squeaky clean," Ridel continued. "There has been a lot of corruption, and some of it comes to the attention of law enforcement. People know about it."
Brown spokesman P.J. Johnston called the criticism irresponsible.
"The mayor's critics and opponents have lobbed so many accusations against him over the years, and none of them has been proven," he said. "That doesn't suggest guilt. If anything, it suggests how irresponsible and consistently bogus these accusations are."
Johnston also accused Brown's opponents of seeking to exploit what he styled "anxiety about African Americans in positions of power'' by making unfounded charges.
"That anxiety is often exploited by lobbing charges of corruption and cronyism that eventually fall short," he said.
The dealmaker
At issue in the investigations was the way Brown adapted his deal-making style of insider politics to governing San Francisco. The style was pure Sacramento, honed during 15 years when Brown, as speaker of the Assembly, established his reputation as a consummate political player. It had attracted FBI attention before.
Almost from the day he became speaker in 1980, Brown became a focus of an overlapping series of FBI corruption investigations, according to court records and interviews.
In the most famous, the FBI ran a sting operation involving a fake shrimp- fishing company whose executives -- actually undercover agents -- promised to pay lawmakers to ram special-interest bills through the Legislature.
The sting and cases related to it produced a dozen indictments. But Brown was never charged with wrongdoing.
In 1998, two years after he became mayor, the FBI was looking at Brown again, records show.
At first, agents probed how Brown appointees on the Airport Commission had come to award a contract to build a $116 million "people mover" transit system at SFO. Mitsubishi Heavy Industries of America, the low bidder, lost out to a competitor called Adtranz after the latter gave a $10 million subcontract to business consultant James Jefferson, a fund-raiser and friend of the mayor.
That probe, in part, focused on allegations that Zula Jones, a city employee and a friend of Jefferson, had helped steer the contract to Adtranz, records show. Jones was an official at the Human Rights Commission, the contract-compliance agency that later became the target of the FBI raid. Jones, Jefferson and Adtranz said they had done nothing wrong and no charges were ever filed.
Minority contracting
After that, court records show, the FBI began examining a long list of city contracts, permits and development deals. Many involved suspected abuse of the minority contracting program, set up to ensure an equitable share of city contracts go to businesses owned by disadvantaged minorities and women.
The agents took a close look at Walker, a trucking contractor who was Brown's former law client and his longtime friend and political backer. In 1984, Walker had been sent to prison for bilking the city's minority contracting program.
But in the years after Brown was elected mayor, city records show, Walker obtained a share of more than $800,000 worth of city trucking subcontracts at the airport. Most came via the same minority contracting program he had been convicted of abusing.
Later, the FBI sought information on Ron Tutor, head of the giant Tutor- Saliba Corp. construction company, lead contractor on the $2.8 billion airport expansion project undertaken during Brown's term. Tutor was a Brown political donor, and he had been implicated but not charged in the 1984 case, court records show.
Neither Walker nor Tutor was charged in the airport contracts probe. Tutor said the FBI had no reason to investigate him. The FBI probe "seems to have a life of its own," Tutor said at one point. "It would be humorous if it wasn't so sad."
The probe later turned to other city deals, including a series of multimillion-dollar management contracts obtained by Jacqueline Besser, wife of a former law associate of Brown, Stephen Besser. Again, no charges were ever brought. She declined comment for this story.
Agents also spent months probing the city's decision to approve the expansion of the giant Sutro Tower. Neighborhood groups had complained that Brown ordered the project approved at the behest of lobbyists for the broadcasting consortium that owns it.
In 2000, three weeks after Brown's second inaugural, the FBI served his office with a grand jury subpoena for records of meetings between Brown and Jefferson, Walker, the Bessers and others involved in city contracting.
Only 2 indictments
In the end, federal grand juries handed up only two corruption indictments.
In one, Housing Authority administrator Patricia Williams was accused of taking bribes in exchange for federal rent subsidies meant for poor people.
Williams, a career city employee and wife of a Baptist minister, was convicted after testimony by her former aide, Yolanda Jones, daughter of Charlie Walker and self-described goddaughter of Brown. Jones, who had pleaded guilty, testified she did no work for her city salary, but spent her days collecting bribe money that she split with Williams.
Williams protested her innocence, but she was convicted, and in 2001 she was sentenced to five years in federal prison -- the lone city official imprisoned during Brown's term.
"She was a scapegoat," says her husband, the Rev. Michael Williams. "I see Willie on occasion, and he doesn't look me in the eye."
In the other case, three officials of the Scott Co., a white-owned construction firm in San Leandro, were accused of using a phony minority "front company" to win $64 million in airport construction contracts intended for minority concerns.
Indicted with the executives was Hunters Point plumber, Al Norman, a Brown backer and paroled murderer who allegedly served as the Scott Co.'s front man. Also indicted was Zula Jones, the Human Rights Commission official involved in the airport people-mover contract that began the broader FBI investigation.
But the Scott case unraveled when a federal judge ruled that evidence seized in the FBI's high-profile raid on the commission office couldn't be used in court. The agents should have obtained a search warrant before entering Jones' office, the judge ruled.
In 2001, charges against Jones, Norman and two of the Scott Co. executives were dropped. The company itself paid $2 million in fines and restitution, and one company executive, Robert Nurisso, was sentenced to house arrest.
No other cases brought
Although agents continued to contact witnesses, no other cases were ever brought. Last month, witnesses said, agents were asking about alleged misconduct involving the issuance of permits by the Department of Building Inspection.
Witnesses said that from the start, the probe seemed beset with difficulties. Although the bureau devoted significant resources to the probe - - as many as two dozen agents at a time, two witnesses estimated -- San Francisco politics and government contracting issues are complex, and often, by the time agents seemed up to speed, they would be promoted or transferred, and a new agent would come in and start from scratch, witnesses said.
One official said that at long intervals, he was interviewed by three different FBI agents. Each one asked virtually identical questions about the same issues and cast of characters, and each one explained that the previous agent had been reassigned.
"We were always starting at square one,'' the official said.
E-mail Lance Williams at lwilliams [at] sfchronicle.com
What were the effects on BVHP?
Before Brown's election, many of the city's 70,000 African-American residents had felt shut out of the city's political system, which distributes billions of dollars in contracts, jobs, and grants each year. "People just assumed," says Malik Rahim, a prisoners' rights activist working in Hunters Point, "that a black mayor would be loyal to black folks."
It was not to be.
"During the last [five] years," says vocal Brown critic Marie Harrison, "the mayor's administration has done so little for the black community that Third Street businesses have actually slid downhill during an economic boom." Harrison, who is the lead columnist for the San Francisco Bay View newspaper, is so disgruntled with the mayor's economic policies that she started running for supervisor last year. She has become a front-runner in what promises to be a close contest between African-American women. Harrison, a very outspoken community activist, has fashioned a platform centered on environmental and housing issues, but fueling her popularity is the mayor's increasing unpopularity in an ethnic group long considered to be his electoral stronghold.
"Being endorsed by Willie Brown is the kiss of death in this race," says J.R. Manuel, one of the dozen candidates for supervisor in District 10, which includes 40,000 voters in Bayview/Hunters Point, Visitacion Valley, Portola, Silver Terrace, and Potrero Hill.
Not every candidate rejects the mayor's embrace so categorically, however.
Linda Richardson, a Brown-appointed planning commissioner who resigned to run for supervisor in District 10, has been strongly endorsed by Brown and openly supports his administration. Her campaign is benefiting from more than $80,000 in soft money and is staffed by political professionals, who have certainly made her the most visible candidate by plastering campaign posters up and down Third Street and even renting a huge billboard.
Sophie Maxwell, considered by most election handicappers to be a front-runner -- along with Richardson and Harrison -- says that Brown has done a few good things, such as building the Giants baseball stadium, but that he has let the minority neighborhoods down, especially Bayview/Hunters Point. "There is not a lot of shopping to see on Third Street, when you compare it to the changes going on downtown," Maxwell says. "Brown is not strong in the neighborhoods."
Looking to garner votes from the entrenched anti-growth crowd on Potrero Hill, Maxwell supports Prop L, which Brown vehemently opposes. From Potrero Hill to Visitacion Valley there seems little to be gained for a candidate by allying with the mayor, who recently failed to unite community leaders around Richardson.
Wade Crowfoot, an election analyst with David Binder Research, observes that African-Americans rallied around Brown when he ran for mayor against Frank Jordan and Tom Ammiano, both white. But Crowfoot does not expect Brown's ringing endorsement of Richardson to "resonate" with African-American voters when they are choosing among black candidates. "A lot of people in Bayview/Hunters Point are very dissatisfied with the mayor," says Crowfoot.
A stroll down Third Street reveals a tired potpourri of liquor stores, bars, nail and hair parlors, and cheap restaurants. (The shiniest new storefront in sight is Richardson's spacious campaign headquarters.) On the street, people's complaints are pretty much the same as they were during the last election, and the election before that, too: Not enough jobs. No city money for small business. Too much pollution.
In campaign debates, Richardson tries to paint a happy face on Brown's record. When she takes credit for helping Brown expand the local sewage treatment plant, other candidates ask why Bayview/Hunters Point has been saddled with the environmental onus of treating the city's smelly sewage. When Richardson hails the mayor for rebuilding a local swimming pool, her rivals ask why the pool is over budget and behind schedule.
Harrison, in particular, wants to know what happened to the 49ers' much-ballyhooed stadium mall, which city residents, with the overwhelming support of the Bayview/Hunters Point neighborhood, voted to give $100 million in 1997. The failure of the stadium mall to materialize epitomizes, for many, the failure of the Brown administration.
"In the beginning," says Harrison, "Brown made me believe that he understood the plight of the black community, that he would at least level the playing field for black businesses and black contractors to get city contracts. We would have pushed Willie all the way to the White House, that's how much we loved him.
"We were disappointed when Brown sold off the Hunters Point Shipyard to Lennar Corporation, with whom he had done personal business. And it's been two months since the underground toxic fire at the shipyard broke out. The mayor has done nothing to protect the community from the toxic release, like declaring a health emergency.
"But the straw that broke the camel's back," says Harrison, "was the 49er stadium mall deal. When Brown promised us 6,000 jobs at the stadium, it was like a hypnotic effect. We believed every word, and so many young men were -- and still are -- out of work, we were desperate for economic salvation. Then Brown's great buddy, Eddie DeBartolo, got indicted for bribing a Louisiana politician and the whole deal blew up in our faces."
Harrison accompanied a group of African-American building contractors to a meeting with Brown last year. "The contractors were unhappy," says Harrison, "They told the mayor that African-American builders got more city contracts under Mayor Frank Jordan than under Brown."
According to contractor Willie Ratcliff, the Bay View's publisher, Brown said his policy is to bring big business into Bayview/ Hunters Point, and that the small-business people need to lower their bid prices if they want subcontracts. Brown then walked out of the meeting, says Ratcliff, leaving an aide behind to catch the flak.
At that point, Harrison says she decided to run for supervisor.
A spokesman for the mayor, P.J. Johnston, said Brown has indeed paid attention to Bayview/Hunters Point. He cited the mayor's advocacy for constructing a light rail corridor on Third Street and the installation of "Senior Crossing" signs at senior citizen housing complexes, among other examples.
A review of small-business loans administered last year by the Mayor's Office of Community Development in Bayview/ Hunters Point shows about $600,000 in loans to various community service corporations. The Third Street Economic Development Corp., run by the mayor's longtime friend Charlie Walker, received $100,000. But the largest chunk of city business loans in Bayview/Hunters Point since Brown took office in 1996 -- over $1 million -- went to printing enterprises run by the family of newspaper publisher Ted Fang. The city loans were used to buy printing presses for the Fangs, whose newspapers routinely service Brown's political agendas by attacking his opponents.
Candidate Espanola Jackson runs her own campaign for supervisor from a second-story office on Third Street, two doors down from Harrison's tiny headquarters. The key item in her political platform is opposition to the proposed light rail system, which she claims will kill off local businesses.
"I supported Brown in the last election," says Jackson. "But he has not made any positive economic changes in Bayview/Hunters Point. He does not replace black officials that leave office with blacks."
Jewell Green, age 77, has lived in the Hunters View housing project in Hunters Point since 1946. She has been a vocal advocate for the interests of public housing tenants for many decades. She does not support the Brown-endorsed candidate for supervisor.
"I worked for Willie Brown wholeheartedly when he ran for mayor," Green remembers. "I knew him when he first came to San Francisco. He was a funny guy, man, he could crack a joke. After he became mayor, I do not know what happened. Seems like people that didn't need anything got everything, and the needy people got nothing. He's been tearing down these projects, splitting up families, it's terrible.
"I know how hard I worked for Willie. You can kick me once, but you can't kick me twice."
http://www.sfweekly.com/issues/2000-11-01/bayview.html
Mayor Willie Brown has made official decisions benefiting business entities that are partners in the mayor's own private business endeavors. Is this intersection of Brown's public decisions and private finances a coincidence - or a conflict of interest?
By Peter Byrne and John Mecklin
Over the last four years, the California Public Employees' Retirement System has invested about $21 million in the development of a 1,000-acre golf course community north of Sacramento known as Whitney Oaks.
At first glance, the project seems typical of the many public/private real estate partnerships recently backed by the retirement system, widely known as CalPERS. The system, an investing giant that boasts more than $150 billion in total assets, provides most of the capital. A real estate adviser contributes financial expertise. A developer is brought on board to manage the project and, it is hoped, bring high returns to public pensioners.
In one respect, however, the Whitney Oaks project almost certainly is not a typical CalPERS real estate investment.
The partners in Whitney Oaks include a firm in which San Francisco Mayor Willie Brown has long held ownership. And two large entities involved in making the Whitney Oaks project profitable -- and, thereby, involved with Brown's personal financial fortunes -- have benefited greatly from official actions taken by Mayor Brown and his administration.
This intersection of Brown's private finances and public acts creates apparent conflicts of interest that can be summarized in a direct, if perhaps oversimplified, way:
1) Willie Brown benefits financially from a publicly funded real estate deal near Sacramento.
2) Those who help him make money near Sacramento reap the bounty of development decisions Brown and his subordinates make in San Francisco.
One potential conflict involves CalPERS itself. Since backing the Whitney Oaks project, CalPERS has benefited enormously from Willie Brown's official actions.
Almost immediately upon taking office, Mayor Brown began publicly supporting the Catellus Development Corp.'s long-stalled plans to build Mission Bay, a multibillion-dollar development in the China Basin area of San Francisco. Brown's advocacy was successful: Catellus has received city permission to press forward with the project.
Brown's support for Mission Bay benefited not just Catellus, but also CalPERS, which, according to public documents, owned more than 40 percent of Catellus at the time the Whitney Oaks project started. CalPERS subsequently was able to sell more than half its Catellus stake on extremely favorable terms -- terms made possible, at least in part, by the city's new attitude toward Mission Bay.
A second apparent conflict involves the Lennar Corp., of Miami, Fla.
A Lennar subsidiary is paying the owners of Whitney Oaks for the right to build one section of the Whitney Oaks development. Meanwhile, Lennar won a hotly contested competition and was selected as master developer for the former Hunters Point Naval Shipyard -- even though a consultant to the city Redevelopment Agency recommended another bidder get the award.
Whitney Oaks is located about 20 miles north of Sacramento, in southern Placer County, one of the state's fastest-growing contributions to urban sprawl. A mere whitecap on the tidal wave of development breaking on Sacramento's exurbs, Whitney Oaks is in many ways an unexceptional, midsized, retiree-friendly golf course development.
Its entrance is marked by stylish stone pylons embellished with distinguished deep-green signs emblazoned with a Whitney Oaks logo faintly reminiscent of a royal coat of arms. Beyond the pylons, what once was savanna and rolling woodland has been graded and laced with streets that describe a series of minicommunities, some with model homes ready for inspection. Inside one of those models, potential buyers can examine a wall-sized photograph showing that oak trees once carpeted the hills of the area. Outside the showroom, however, the developed vista is a moonscape, cleansed of vegetation except for the fringes of the golf course, where a few lonesome stands of blue oaks, valley oaks, and live oaks survive, and the corner of Old Oak Tree Street, where a handful of staked striplings shoot up in a tiny environmental preserve required by the state.
The Whitney Oaks development is split into distinct enclaves bearing high-toned, slightly WASPy names: Sterling Collection, Meritage, Springfield. Depending on the enclave and type of construction, homes will sell for anywhere from $120,000 to $500,000. The enclaves each appear to be connected to a different home builder.
For example, Renaissance Homes, a subsidiary of the Lennar Corp., is building four- to six-bedroom residences in one of the enclaves, named, for what seems an obvious reason, Renaissance Whitney Oaks. The homes are large, luxurious, and set on oddly tiny lots.
According to CalPERS documents, Whitney Oaks has about 1,800 single-family lots. The residences built on these lots will surround a golf course -- which has already been completed -- designed by professional golfer Johnny Miller. The development includes 340 acres designated for schools, parks, and other public uses.
CalPERS documents show that the retirement system is providing about 90 percent of the acquisition and development capital for the Whitney Oaks project. The remaining equity in the project comes from two sources. One involves the principals in a La Jolla-based firm called Newland Capital Advisors LLC.
The final major player in Whitney Oaks is a partnership of two lawyers that held about 4 percent of the project -- until the lawyers, CalPERS, and Newland quietly cut yet another partnership into that 4 percent piece of the deal. This secondary investor in Whitney Oaks is named Live Oak Associates III.
And Live Oak III is where Willie Brown comes in.
According to financial disclosures on file with the state and city governments, Willie Brown has acquired interests in three Live Oak Associates partnerships since 1984. These limited partnerships -- known as Live Oak Associates, Live Oak Associates II, and Live Oak Associates III -- are headed by two attorneys, William A. Falik and Jonathan A. Cohen, who also have organized other firms in which Brown has invested.
Brown is a limited partner in the Live Oak groups, meaning that he is an investor, not an active manager of the ventures. The mayor's most recent public disclosure values his interest in each of the three partnerships at somewhere between $10,000 and $100,000. It is unclear whether those values represent initial investment, or that investment plus appreciation and reinvestment of profits over the years.
Brown apparently has made relatively few public statements about his Live Oak investments, and the financial disclosures he is required to file as a public official have reported only small amounts of income from them. Attempts to contact Brown through his press office Monday were unsuccessful.
(Falik says that Brown has invested with him since 1982. Although acquainted with the mayor, Falik says, he generally talks to Brown's longtime aide, Eleanor Johns, about the mayor's Live Oak investments -- which, Falik believes, are too minor to constitute conflicts of interest. "I feel it's not fair if I was prohibited from having the CalPERS investment," Falik says, "just because a certain limited partner has a less than 1 percent interest in the partnership.")
A survey of California land records shows that the three Live Oak partnerships have invested, at times in combination with major developers, in thousands of acres of land across the state. And two of the Live Oak partnerships appear to have been quite successful.
According to a "status report" to Live Oak investors obtained recently by the Weekly, the original Live Oak Associates partnership, founded in 1984 and sometimes known as Live Oak I, had a "total return" of 685 percent by July 1995. Public and private documents suggest this partnership has invested primarily in Sacramento-area real estate.
Live Oak Associates II also appears to have met with success since its creation in 1985, mostly through investments around Sacramento (among them a partnership with Tad Taube and Joseph Benvenuti, two of the area's most influential developers, in 1,600 acres of land in southern Placer County). Live Oak II also owns a portion of a strip mall in Los Angeles valued at more than $5 million.
Live Oak III was formed in 1991, and since then has invested in several properties in Northern California.
Its most ambitious venture was an attempt, in cooperation with other developers, to turn thousands of acres of rice fields in southern Sutter County into a series of planned communities with a projected population of 100,000. After years of bitter political and legal battles, that venture foundered. The leaders of Live Oak III looked around for opportunities to recoup their Sutter County losses.
They looked around, and found Whitney Oaks.
The so-called "Newtown" development in southern Sutter County was first proposed in 1989. Large landowners in the area wanted approval to turn low-lying rice land into planned residential communities on a massive scale. Live Oak III and Ahmanson Residential Development Inc., a firm controlled by real estate magnate Howard Ahmanson, were major players in the attempt to develop southern Sutter County, eventually buying or otherwise controlling thousands of acres of open fields, largely through a partnership known as Sutter Bay Associates. (An odd political note: In Sutter Bay Associates, Ahmanson, a noted right-wing advocate who has taken anti-reproductive choice, anti-gay rights, anti-gun control and pro-"traditional family values" stands, was technically partnered with Willie Brown, an owner of Live Oak Associates III and a stalwart of California's old-guard Democratic left.)
In 1992, the Sutter County Board of Supervisors approved a series of agreements with the prospective Newtown developers, but the approvals created enormous political turmoil, much of it based on environmental concern. The next year, an election changed the makeup of the previously pro-development board. The new board rescinded the approvals. Lawsuits were filed, but the Newtown proposal died, and subsequent attempts to gain approval for large-scale development in the area have also failed.
The failure of Sutter Bay had a profound effect on Sutter Bay Associates and Live Oak III. A spokesperson with Washington Mutual Inc., a current owner of Ahmanson's Sutter Bay interests, says the firm lost millions on the Sutter Bay venture. According to recent interviews with limited partners, Live Oak III also suffered significant losses that apparently continue to impact investors.
Many limited partners say that the Live Oak general partners, Cohen and Falik, began to branch out, seeking other real estate projects that might help recoup some of the losses their investors incurred at Sutter Bay.
Whitney Oaks was one of those projects.
Cohen and Falik apparently began negotiating with CalPERS and Newland on Whitney Oaks early in 1995. In the summer of 1995, the Live Oak III limited partners voted to invest in Whitney Oaks, after being apprised by Cohen and Falik that CalPERS was the major money player in the project, many limited partners and partnership documents say. Then-Assembly Speaker Willie Brown was one of these limited partners.
In the end, a complex partnership was formed among CalPERS, the principals of Newland Capital Advisors LLC, and Falik and Cohen. This group agreed to pay $17.5 million for a 1,075-acre plot of land in Rocklin, a small city northeast of Sacramento. The purchase was consummated in November 1995.
The public/private partnership formed to develop Whitney Oaks is, indeed, complex. Willie Brown's ownership stake is buried deep within that complexity. And CalPERS has withheld some key documents relating to the project, claiming their release would injure the retirement system's competitive position in the real estate industry.
Early this week, Bryan Bailey, the CalPERS project manager for Whitney Oaks, said that he did not know Willie Brown was an investor in the project until SF Weekly began questioning it. "We do not drill down that far," he said. A representative of Newland also said she was unaware of Brown's affiliation with Whitney Oaks.
As if its ownership structure did not provide enough complexity, the owners of Whitney Oaks have also hired a developer for the project. CalPERS documents obtained by SF Weekly are inconsistent in identifying the developer. Sometimes, the developer is listed as Live Oak Associates. In other documents, the developer is identified as Live Oak Enterprises, a business established by Falik and Cohen.
Brown is a partner in Live Oak Associates, but there is no indication he holds a stake in Live Oak Enterprises (although it does provide management services to Live Oak III).
CalPERS has declined to release documents showing how much the developer of Whitney Oaks is eligible to earn. After initially agreeing that Live Oak Associates was the developer, CalPERS and Newland staff later insisted that Live Oak Enterprises had been hired as the developer. CalPERS and Newland gave multiple, conflicting, nonconclusive explanations for CalPERS's repeated listing of Live Oak Associates as the Whitney Oaks project developer.
The developer question aside, an investigation by SF Weekly shows that Live Oak Associates III -- a partnership in which Willie Brown has long been an investor -- clearly holds ownership in the CalPERS-backed venture that is developing Whitney Oaks. More than 10 limited partners in Live Oak III spoke to the Weekly in detail about the partnership's investment with CalPERS, and correspondence Cohen and Falik have sent to Live Oak investors describes the Whitney Oaks investment in extremely precise terms.
The bottom line: A partnership between CalPERS and Newland owns 96 percent of the Whitney Oaks project. The other 4 percent is owned by a partnership between Cohen and Falik, the two general partners of the Live Oak Associates partnerships.
And Live Oak Associates III owns a little less than 1 percent of the project.
According to a July 1995 Live Oak status report, Live Oak III partners had an opportunity to invest about $200,000, for a potential (but hardly guaranteed) return of $2.2 million -- or, approximately, 1,000 percent.
When CalPERS decided to bankroll the purchase of Whitney Oaks, Willie Brown was in his final year in the state Assembly, and at the end of a 14-year run as speaker. In fact, the purchase was consummated just a few weeks before Brown won the San Francisco mayoral runoff election against Frank Jordan in early December 1995.
While he was Assembly speaker, Brown "moonlighted" as a lawyer. His private law practice was large, lucrative, and controversial. He was repeatedly criticized for accepting large legal retainers from clients with significant interests in state legislation. Brown repeatedly responded by insisting his private legal work did not involve legislative or state agency matters.
Because San Francisco mayors are forbidden from employment outside government, Brown sold his law firm before taking office. During the mayoral campaign, however, Brown's legal clients became an issue; many news reports questioned whether Brown might be tempted to favor former clients if or when he became mayor. Particularly, Brown's relationship with the Catellus Development Corp. came under fire.
According to the San Francisco Examiner's Lance Williams, then-Speaker Brown took in nearly $400,000 in legal fees from Catellus from 1982 to 1994. And it was clear Brown would have to deal with Catellus and its long-stalled Mission Bay project, somehow, if he became mayor.
Brown responded to the criticism in a variety of ways, at times suggesting he would refrain from mayoral action that would affect former clients, out of concern about the appearance of conflict of interest. At other times, he indicated he would recuse himself only when the law required it. But once elected, Brown demolished any notion he would abstain from matters relating to Catellus by fiercely advocating for a new plan for Mission Bay.
In an interview just days before Brown's mayoral inauguration, the Examiner quoted the mayor-elect as saying that building Mission Bay would be one of his top priorities, and that he'd be calling Catellus the day after he was sworn in as mayor. Brown also suggested the development could move more quickly with encouragement from Catellus' largest shareholder -- CalPERS, which then owned more than 40 percent of Catellus.
"I'll place a call to the people who actually own Mission Bay," Brown was quoted as saying. "We're not talking about a profit-seeking organization, we're talking about an entity under public control that simply must protect the beneficiaries' investment. That's a different agenda."
Catellus' hopes of developing Mission Bay had been bottled up for years. The city approved a development plan for the area in 1991, but Catellus found the plan so restrictive that it wasn't profitable to build. In 1995, the company walked away from the plan, and wrote off $84.8 million in losses.
But a reversal of fortunes followed quickly after Brown took office. Catellus gained approval of a new Mission Bay plan calling for construction of millions of square feet of office space and thousands of residential units. Approval came in October 1998 with the strong support of Brown, who actively and successfully campaigned for the University of California, San Francisco to locate a new biotech-oriented campus in Mission Bay. Some of the land for the new campus was, in fact, donated by the city.
Approval to move forward on Mission Bay removed a longtime thorn from Catellus' side. After 15 years of defeat at the hands of slow-growth activists, Catellus now had a centerpiece project -- involving hundreds of acres of prime San Francisco real estate -- ready for development.
As the fortunes of Catellus rose, so did the fortunes of the California Public Employees' Retirement System. The system had bought a huge chunk of Catellus stock in 1989, owning as much as 46 percent of the firm at one time. As a real estate recession took hold and then deepened in the early 1990s, however, the stock plummeted in value, drawing intense criticism of the investment.
Catellus' own annual reports indicate that the approval of Mission Bay -- an approval championed by Willie Brown -- improved the firm's financial position. Of course, other factors were also involved in the improvement in Catellus' fortunes, including other real estate investments in Illinois, Oregon, Colorado, and California.
Still, the trend is clear: When Brown took office, Catellus stock was hovering in the $6.50-per-share range. Early in December 1997, as Catellus' new plans for Mission Bay were sliding toward city approval, CalPERS sold nearly 19 million shares of its stake in Catellus at slightly more than $17 a share, reducing its percentage of ownership from more than 40 percent to about 18 percent. In effect, the retirement fund made some $200 million from the rise in stock prices between early 1996 and the time it sold its shares.
Somewhat paradoxically, it is this run of good fortune that helps create a two-step appearance of conflict of interest involving Willie Brown and the state retirement system:
1) Brown aids Mission Bay -- and Catellus, and, therefore, CalPERS -- in San Francisco, helping CalPERS recoup much of the paper loss it had suffered through its investment in Catellus.
2) CalPERS backs the Whitney Oaks venture and, consequently, aids Live Oak Associates III, which just happens to count San Francisco Mayor Willie Brown among its investors.
Next to Mission Bay and the Presidio, the Hunters Point Naval Shipyard is one of the most valuable pieces of soon-to-be-developed real estate in San Francisco. To be sure, sections of the former naval base have massive environmental problems. But the area also boasts some of the city's best bay views. The contract to develop the decommissioned shipyard, which is in the process of being returned to city ownership, is truly a one-of-a-kind opportunity.
The Lennar Corp. is the lead partner in a group that was recently awarded a San Francisco Redevelopment Agency contract to oversee the conversion of the shipyard to civilian use. The redevelopment contract became politically controversial in 1998 because some of Mayor Brown's close associates -- including Yber-lobbyist Billy Rutland, trucking contractor Charlie Walker (known sometimes as "The Mayor of Hunters Point"), and local Democratic Party insider Natalie Berg -- had been hired as consultants by the companies competing for the contract.
Struggling to avoid the appearance of favoritism, the Redevelopment Commission -- which is appointed by the mayor -- brought in the major accounting firm of KPMG LLC to review the qualifications of the three finalists. Then, at a public hearing last month, the commission rejected KPMG's recommendation, and, in a surprise vote, chose the Lennar-led group as master developer of the former shipyard.
All while Renaissance Homes, the Lennar subsidiary, was working away on its section of Whitney Oaks, in partnership with CalPERS, Newland, and the Willie Brown investment vehicle Live Oak Associates III.
Lennar officials did not return phone calls this week seeking comment on possible conflicts involving Whitney Oaks.
Throughout his political career, Willie Brown has been a lightning rod for ethics criticism. Much of this criticism has focused on the seemingly inherent conflict between his duties as one of the state's most powerful officeholders -- speaker of the Assembly -- and his work as a private attorney for some of the state's most prominent businesses. Time after time, critics have pointed at supposed conflicts; time after time, those conflicts have been vague, attenuated, incomplete.
While in the Legislature, Brown did indeed represent many clients who benefited from governmental action. But Brown never was shown to have represented a private client for the purpose of winning a state government approval over which Brown had official sway. He adamantly insisted his private law practice was perfectly ethical, and all but taunted critics with a personal style that included Porsche automobiles and Wilkes Bashford suits.
As revealed to this point, the public record contains no direct evidence of a tie between Willie Brown's interest in Live Oak Associates III and his actions in favor of CalPERS or the Lennar Corp. Such evidence as does exist is circumstantial, and subject to varying interpretation. In other words, there is no transcript of a conspiratorial conversation between Willie Brown, CalPERS, and Lennar to scratch one another's wallets.
But the Whitney Oaks project raises serious ethics questions about Willie Brown -- questions that differ fundamentally from those raised in the past about his former law practice.
The Whitney Oaks questions do not involve a vague, indirect, incomplete connection between Brown's actions as private lawyer and public figure.
At Whitney Oaks, documents show definitively, Brown himself stands to profit privately from the financial backing of a public agency, CalPERS. And just as definitively, the public record shows that the mayor's official support of Mission Bay has profited CalPERS.
The appearance of tit for tat seems all but inescapable:
It is clear that CalPERS funded Whitney Oaks, and that Live Oak Associates III, which counts Willie Brown as a partner, is part of the project.
It is clear that Willie Brown's successful effort to restart Catellus' Mission Bay development was a factor that helped put millions -- perhaps tens or even hundreds of millions -- of extra dollars into CalPERS's coffers.
And it is clear that Whitney Oaks and the approval of a new Mission Bay plan have moved forward during roughly the same time period.
It is unclear, however, whether Whitney Oaks and Mission Bay -- and the roles of Willie Brown and CalPERS in each -- are connected by more than appearance and shared timing.
Likewise, the simultaneous involvement of the Lennar Corp. in Whitney Oaks and a major redevelopment project in San Francisco may be simple happenstance. Lennar is, after all, a huge real estate firm with wide-ranging interests.
Still, obtaining city approvals for major projects is always a primary concern of developers who hope to make money in San Francisco, and the projects in which CalPERS and Lennar have interests here are not small, or peripheral. They are major, and central to the development of the city.
State and local conflict-of-interest laws prohibit a public official from participating in public actions in which he has a private economic stake. One section of the state Government Code puts it this way: "No public official at any level of state or local government shall make, participate in making or in any way attempt to influence a governmental decision in which he knows or has reason to know he has a financial interest."
According to his own financial disclosure statements, Mayor Brown's investment in Live Oak Associates III is significant and enduring. Other limited partners in Live Oak III have been well aware of the partnership's investment with CalPERS in Whitney Oaks. As a longtime speaker of the Assembly, Brown is, or should be, familiar with the workings of the state retirement system. In fact, one member of the CalPERS Board of Administration is appointed jointly by the speaker of the state Assembly and the Senate Rules Committee.
Brown's interest in Whitney Oaks does not appear to be huge; he has disclosed a $10,000 to $100,000 ownership in Live Oak Associates III, but that partnership apparently owns less than 1 percent of Whitney Oaks. How much Live Oak III might profit from its 1 percent stake seems likely to vary, depending on the success of the development. Whether Willie Brown's interest in Whitney Oaks has been or will be large or direct enough to reach legal definitions of conflict of interest is certainly a debatable question.
Still, Brown's own public utterances show he knew that CalPERS was a major owner of the Catellus Development Corp., and had a major stake in the Mission Bay project. The available record shows that, at the very least, he ought to have known he was also involved in a private business deal with CalPERS, and in a prima facie conflict of interest.
David Pasztor edited and helped research this article.