Redevelopment cooked Lennar grantOfficials with the San Francisco Redevelopment Agency admitted yesterday that they cooked a state grant application, by claiming that they needed the funds to fill a $25 million gap in the budget of a project that the City is developing with Lennar at Hunters Point Shipyard.
But what they really wanted the monies for, the agency claimed, was to boost a shrinking community benefit fund that was supposedly to be derived from development profits.
The admission came during a hearing into Lennar’s fiscal health. The hearing was requested by Sup. Chris Daly, following the discovery that the San Francisco Redevelopment Agency had applied for, but been denied, a $25 million grant from the state’s Department of Housing and Community Development to subsidize infrastructure costs.
The June 10 grant application discovery, coupled with Lennar's June 7 bankruptcy filing at Mare Island, heightened concerns that Lennar was planning to mothball the Shipyard/Candlestick redevelopment project, even though voters had greenlighted an increase in the size of that project, just days earlier, on June 3.
Daly’s mothballing concerns were understandable, given that Stephen Maduli-Williams, SFRA’s Deputy Executive Director of Community and Economic Development had claimed, in a May 23 letter to the state that, “without the requested $25,021,079 Infill grant allocation, our infrastructure project faces a serious risk of being mothballed. The project would face increased costs from work stoppage, remobilization efforts and substantial change orders.”
At yesterday’s hearing, Maduli-Williams repeatedly denied that there was any hole in the project's budget. Instead, he argued that he had manufactured the hole in an effort to increase funds to the project's community benefit fund.
“This was one of the resources we felt compelled to apply for, because, if successful, it would be a direct benefit to the Legacy Fund,” Maduli-Williams said, noting that 60 percent of the profits from the development go to Lennar, while only 40 percent to the Redevelopment Agency, who will turn these funds over to the Bayview.
Maduli-Williams noted that had the agency received the grant, “it would, if anything, have been a pass-through to the agency, not Lennar.”
As for the “hole in the project,” that these monies allegedly would have filled, Maduli Willians claimed he invented the hole after being turned down in the first round of applications, in which $1 billion worth of applications were vying for only $240 million in grants.
“Without this hole, we were told, we would not qualify,” Maduli-Williams said. “It’s part of our job to turn over every rock we can to benefit the Bayview.”
“Lennar is not in severe financial difficulty,” he added, observing that pursuant to the deposition and development agreement that Lennar signed, a developer is deemed to be in default, if its net worth falls below $400 million.
“Currently, Lennar has $900 milion in cash and has zero corporate debt,” Maduli-Williams claimed. “Yes, there is money to complete the project.”
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Comments (2)
I love it. Chris Daly was so voluminously vulcanized over the prop G/F thing, and what we find out later is that he was right all along. San Francisco is full of lollipops. The masses need to stop reading and believing the Chronicle.
Posted by Jerry | August 8, 2008 06:17 PM
Good work, Sarah. Thanks for continuing to be the only journalist giving an objective report on the facts surrounding Lennar's being in bed with SF elites.
Posted by C. Cassidy | August 9, 2008 10:48 AM