The corporation that ate San Francisco - Page 5

Lennar's failures at Hunters Point Shipyard highlight the risk of putting the Bay Area's prime real estate into the hands of profit-driven developers

From these results, is it reasonable to conclude that had Lennar got its monitoring right from the beginning, further shutdowns would have cost Lennar's construction subcontractors even more truckloads of money, as would have adequate watering of the site, which they didn't get right for months?

So far, the only explanation for the watering deficiencies has come from Kofi Bonner, president of Lennar Urban for Northern California, who told the Redevelopment Agency, "Given the hilly terrain, it can only be watered enough so as not to create difficult conditions for the workers going up and down the site."

Lennar didn't finally start to really control its subcontractors until January, when Lennar ordered Gordon Ball and Luster to "replace two site superintendents with new personnel who must demonstrate environmental sensitivity in conducting their work," according to public records.


Headquartered in Miami Beach, Fla., Lennar began in 1954 as a small home builder, but by 1969 it was developing, owning, and managing commercial and residential real estate. Three years later it became a publicly traded company and has been profitable ever since, spinning off new entities.

Lennar Urban is one such venture. Established in 2003 to focus on military-base reuse, Lennar Urban recently produced a glossy brochure in which it proclaimed, "Military base reuse is our business — this is what we do."

Military-base development may be good business — but it isn't always such a good deal for cities, particularly when communities don't end up receiving what was promised on the front end.

In November 2006, Lennar announced it wouldn't build any rental homes in its 1,600-unit development at the Hunters Point Shipyard. The Redevelopment Agency had originally approved a plan for 700 rental units on the 500-acre site, but Lennar said rising construction costs make rentals a losing investment.

Also in November, Arc Ecology economist Eve Bach warned the Board of Supervisors that Lennar's public-benefits package for Treasure Island could be seriously compromised.

The package includes 1,800 below-market affordable housing units, 300 acres of parks, open space and recreational amenities, thousands of permanent and construction jobs, green building standards, and innovative transportation.

Bach summed up these proposals as "good concepts, uncertain delivery" and noted the discrepancy between Lennar's stated desire for a 25 percent return and Budget Analyst Harvey Rose's conservative prediction of an 18.6 percent return.

"Particularly at risk of shortfalls are transit service levels, very-low-income housing, and open-space maintenance," Bach warned.

With community benefits up in the air, high profits expected, and Lennar's ability to regulate developers uncertain, many community activists question just what San Francisco is getting from the company.

"I can't say that Lennar is trustworthy, not when they come up with a community benefits package that has no benefit for the community," activist Marie Harrison said. "I'd like to be able to say that the bulk of our community are going to be homeowners, but I resent that Lennar is spoon-feeding that idea to folks in public housing who want a roof over their heads and don't want to live with mold and mildew but don't have jobs or good credit or a down payment. I've heard seniors say, 'I can't even afford to die.' Lennar is not being realistic, and that hurts my feelings and breaks my heart."


The story of Lennar and Muhammed University of Islam underscores the problems with a system that essentially relies on developers to regulate themselves.