Rumors fly that Board can't amend Lennar deal, after all

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For the past month, fireworks and deals have been going on at City Hall as the Board prepares to vote on Lennar’s massive redevelopment plan for Candlestick Point-Hunters Point Shipyard. And recently, the Board vowed to make a slew of amendments to the plan, even as they approved the project's environmental impact report.

But now it’s beginning to look like the only winners could be the developer—and perhaps those folks at city hall who are staking their political careers on jamming this deal over the finish line, come hell or high water, before the November election comes around and they go into the private sector as real estate developers.

I say this because two weeks ago, the progressives on the Board were saying that they had been told that they couldn’t amend the EIR July 14, but that they could amend the actual redevelopment plan when it comes before them on July 27. It was for this reason, they said, that they decided to vote to accept the EIR in an 8-3 vote, with only Sups. John Avalos, Chris Daly and Eric Mar, voting to reject the project’s key environmental document.

But today, with less than two working days before the Board’s July 27 meeting, I’m hearing rumors that the Board will only be able to take an up and down vote, when they consider Lennar’s actual redevelopment plan.

In other words, the only way the Board would be able to change anything would be to reject the plan in its entirety.But everyone knows that this is a pigs-may-fly scenario, given the massive pressure the Mayor’s Office, labor and Lennar have been exerting on the Board.

So, if these “up-and-down-vote only” rumors turn out to be true, folks who care about environmental and economic justice better start sounding the alarm. Because there is a plethora of unresolved issues that Sups. John Avalos, David Campos, Chris Daly, Eric Mar, and Ross Mirkarimi identified July 13 as needing shoring up, before the actual redevelopment plan would ever pass their sniff test.

These concerns included fears that the project’s financing plan amounts to daylight bank robbery, that the proposed bridge across the Yosemite Slough is unnecessary, and that the amount of projected air pollution related to the development is unacceptable.

And then there’s the fact that the Controller’s “economic benefits” report only used averaged figures, and therefore did not give any details about how many jobs and benefits the project would create in this economically depressed community in the next few years.

And did I mention the part about liquidated damages and watershed concerns? Or the fact that there are no maritime uses in the current plan, even though these uses could translate directly into relatively unskilled jobs, if old ships were broken up at the shipyard.

But despite the hours of discussion on July 13 that the Board sat through last week, I do not recall anyone from the Mayor’s or City Attorney’s Office advising the supervisors that they would not be able to amend the actual plan when it comes before them July 27.

Right now, a lot of confusion is swirling as folks point to the fact that Board President David Chiu introduced five amendments at a July 12 Land Use Committee hearing that eight supervisors subsequently voted to accept. This move led the rest of the Board to believe that they too could make amendments to the final plan.

But a review of Chiu’s amendments and the project’s EIR suggests that these changes are in fact repackaged pieces of the EIR, and that the move misled other supervisors into believing that that they would have a chance to amend the actual redevelopment plan.

So far, no one from the Mayor’s Office has returned my calls seeking clarification on this process. But if it turns out that the only way the Board can have input is to kick the plan to the curb, or ask the Planning Commission to make new findings, then democracy in San Francisco has been replaced with an empty charade.

“The Board can make changes along the line that David made in the Land Use Committee, “ Chiu’s legislative aide Judson True told me today. But he wasn’t clear on the process next week, and suggested that I call Cohen’s office, which I did (only to find myself shunted to Cohen’s voice mail.)

So, what gives? And why would the Board allow an out-of-town developer in partnership with the Mayor’s Office to sidestep its responsibility in this way?

“We were told we could not make amendments to the EIR, but could make amendments to the plan that we will be voting on this Tuesday,” Campos told me today, noting that he and Mirkarimi were prepared to make changes July 13, but were then told they could not do that.

“The biggest fear I have with this project, and any project this size in this economy, is that a lot is promised, but will anything get developed, or will we be stuck holding the bag,” Campos added.

Similar questions led the Alameda city council to kick developer SunCal to the curb last week. Ironically, the move could open the door to a developer like Lennar to try and swoop in and pick up the pieces in the island city across the Bay from San Francisco.

But folks in Alameda are pointing to San Francisco as an example of how difficult it is to nail down developers, noting that Michael Cohen, Mayor Gavin Newsom’s top financial advisor, recently admitted that investment money is scarce, even though the city’s EIR for the project has been approved.

Actually, Cohen went a step further by intimating that all the benefits that the community wants out of the plan would deter investors even more—comments that were perhaps just a precursor to this potential bombshell that the Board won't actually be able to amend the deal, after all? Stay tuned.

Comments

Sarah and all,

If the problem that you raise in your article turns out to be valid, the Supervisors have a very simple remedy.

Item 27 on the Board's agenda this Tuesday is the adoption of the CEQA findings laid out in the Final Environmental Impact Report (EIR).

This item must be passed before any other Shipyard legislation can be legally approved.

So If Chiu, Campos, and Mirkarimi discover that they are unable to amend the project plan, they can simply vote No on item 27 along with Avalos, Mar, and Daly; and with these six votes, reject the environmental approval of the project.

This will kick the whole matter back to mandate a rewriting of the EIR - which is exactly what -should- have happened on the 13th...

Posted by Eric Brooks on Jul. 23, 2010 @ 6:22 pm

You hit the nail square on target Eric. But come the 27th we will see what the truth is with this current configuration of supervisors. Hopefully if they go ahead with a nod that they will before do, will give us a lengthy speech as to why.

I can be given any draft EIR and pick it apart starting with the first time I read it.

Al we can hope for that the powers that be knowingly do the right thing for San Francisco and not guess at how the game is played.

Posted by Jerry Jarvis on Jul. 23, 2010 @ 10:05 pm

We're not just sitting back and waiting. We are organizing for strong outcomes on the 27th. And we are prepared to hold supposed 'progressives' accountable if they betray us again.

Posted by Eric Brooks on Jul. 23, 2010 @ 10:48 pm

I know that I'm not the sharpest tack in the box, but the way our so called 'progressive' representatives allow themselves to swayed time and again by the lies and deceit of the power brokers and profiteers is beyond comprehension even to me; unless, like so many other politicos - labor pooh-bahs etc, they are positioning themselves for personal, pecuniary or political payback.
For years the fallacies and flaws of this fandango have been presented to numerous city bodies, and yet they still react light skunks caught in the spotlight when they realise that they've been fooled again. I remember a conversation a few years ago that I had outside the office of one particular Supervisor, a swing vote we were hoping for, only a few minutes before he went into a particularly critical meeting, I forget which one - something to do with approving an RDA report I think. I knew this particular Supervisor was an anglophile so I put on my best public school accent and engaged him in some pleasantaries before dropping the hammer. "So, Supervisor, have you decided how you're going to vote today ?". "Well actually" he mumbled " to tell the truth, it's so long and complicated that I haven't had time to read it". Of course, as we expected, his was the swing vote, and Lennar won again. The majority, by 8 - 3, of this bunch of bumbling bozos on the Board are no better.
It is inevitable that a project of this magnitude has to be rife with collusion, back room deals, pay to play, malfeasance and ineptitude; and possibly violations of Civil, Municipal or Criminal Law. Maybe it's time for some of you sharp tacks to turn over those rocks and start exposing that ugly underbelly.

Posted by Guest Patrick Monk on Jul. 24, 2010 @ 6:23 am

I think the betrayal of the three 'progressives' is a lot simpler than all that.

What it boils down to is that the San Francisco Labor Council is unconscionably pushing -hard- for this mass gentrification and literal poisoning of of thousands of residents and workers; indeed probably because its council leaders are in fact being directly bribed by the Lennar.

The three 'progressives' themselves then assume the simple (but actually mistaken) equation that if the Labor Council turns against them, they won't win their next election, and they then make the moronic and arrogant decision that they should protect their own political future instead of actually doing their job and making a vote that will keep people from being killed. The flawed logic that they employ is "How can I do anyone any good if I can't get elected?"

This is the same logic that has given us our current totally clusterfucked government in Washington, DC.

The right move for a -true- public servant is to make the ethical vote, serve one term, and move on with life having made the world a better place.

And our job Pat is to make sure that the progressive base in this city organizes against any of these jokers who doesn't reverse his position and do what's right, to throw him straight out of office in the next election.

It is a pissed off base that these three should be afraid of, not the Labor Council.

Posted by Eric Brooks on Jul. 24, 2010 @ 12:58 pm

FYI, in case you care to, see "Open letter to Supervisor Jake McGoldrick"; FogCityJournal Archives.

Posted by Guest Patrick Monk on Jul. 24, 2010 @ 7:51 am

I practiced land use law in California for 35 years, before retiring to a state where I believe the local politicians are less corrupt.

I won't address the question of whether the Supervisors could amend the EIR, because they didn't and now the question is moot.

As to the power of a majority of the Supervisors to now amend a redevelopment plan, to create a "less development-intense project" the clear answer is "Yes they can if they want to". It's merely a question of procedure.

The only real reasons the Supervisors couldn't amend a redevelopment plan without legal repercussions, would be if the attorneys for the City had included a provision in a contract (e.g. disposition and development agreement or development agreement) promising Lennar that they would not.

There are two realities here.

I am hoping that the project's opponents have a competent California land use lawyer advising them. Such a lawyer clearly can issue press releases telling what s/he belives the Supervisors have the power to do under state law and documents previously signed by Lennar and the City. Such a person is who the press should be speaking to. These sorts of press conferences often show public officials, including those "quoting the city attorney" to be liars....allowing the voters to see the political reality even if there are not the votes to defeat a project.

The other reality is that all across California the majority of (but not all) city attorneys and county counsel are profoundly morally corrupt, giving "legal advice" on complicated land use issues which fit what the majority on the governing board want the outcome of the question to be. Giving the politically correct legal advice, rather than the unvarnished truth, is often essential in keeping one's job as a non-elected employee who acts as city attorney/county counsel. It's a rare city attorney/county counsel who will honestly give correct land use legal advice to the minority members of a governing board. In addition, attorney client privilege is usually invoked as a means of not making public legal interpretations as to the legal legitimacy of what a minority of a board want to do.

Bottom line, the fact that you have 3 Supervisors running around like chickens with their heads cut off is not surprising or unusual. They should be seeking their own independent legal advice, and making it public as a means of impeaching what the city attorney/county counsel is supposedly saying. If the 3 Supervisor opponents of the project do not do so then they are, in reality, chickens who are useless in protecting the public interest.

That fact is true everywhere in California, not just San Francisco.

Posted by Guest on Jul. 24, 2010 @ 12:32 pm

'Guest', in case the good guys don't have the legal bull pen to do as you describe, by all means see if you can, by Monday, publish an editorial in one of our local print/online media which states clearly what you are suggesting. This Guardian Politics Blog and/or Fog City Journal would likely be game for it, and are read by all of our local politicos.

Also, if you are so inclined, send the good guys some pro bono advice. I personally can be reached at brookse32@hotmail.com

Posted by Eric Brooks on Jul. 24, 2010 @ 1:14 pm

I agree with Eric Brooks' comment above, about the Supervisors having the authority to vote to reject the CEQA findings.

However, mustering a majority vote to reject the CEQA Findings is probably going to be tough to do politically.

Posted by Guest on Jul. 24, 2010 @ 12:37 pm

Real happy to see sharp tack-tichians contributing and moving beyond the rantings of a geriactic curmudgeonly radicalzenanarcho-yippiehumanistmofo.
Eric, more power to you and many thanks for your foresight and fealty.

Posted by Guest Patrick Monk on Jul. 24, 2010 @ 4:09 pm

Lennar has a wonderful ability to tie up ownership of choice real estate for development. In California alone, they have 5 big projects managed for development purposes by Five Points Communities, co-owned by Lennar and Mr. Emile Haddad out of Orange County. It's my understanding that Lennar's 5 big California projects managed by Five Points Communities are: Hunters Point, Mare Island, Newhall Ranch, Heritage Fields at Irvine Great Park and either Treasure Island or a new section of Fairbanks Ranch (San Diego area).

See: http://www.builderonline.com/business/three-new-companies-emerge-as-land...

Lennar touts itself to the financial press as being debt free.

As a result, I shocked to see this self-serving blog post from the land use lawyers for Chapter 11 Debtor Lehman Brothers as mortgage lender on one of Lennar's big California projects, Heritage Fields at Irvine Great Park:

http://www.agd-landuse.com/project4.html

A small quote: "We assisted our client, as the lender, in assisting the borrower in obtaining the approvals in 2009 of over 1,200 density bonus residential units, resulting in a project that is entitled for over 4,800 residential units and 3 million sq. ft. of commercial, retail, institutional, and other development."

In my day, mortgage lenders' lawyers didn't stick their noses into the actual business of obtaining land use entitlements for projects they financed. Obviously, for some reason, Lehman Brothers felt compelled to have their lawyers "assist" Lennar in getting 1,200 density bonus units. Why, I wondered? Was the Lehman Brothers/Lennar mortgage loan a disguised partnership? Had the mortgage loan by Lehman matured, and was Lehman involved in development management issues as part of some sort of work-out? Had bankrupt Lehman Brothers stiffed Lennar on acquisition and development mortgage loan funding for infrastructure construction?

Obviously, the truth will never be public. However, out of curiosity I hunted the internet for some sort of evidence that Lehman Brothers really had a mortgage loan on Heritage Fields at Irvine Great Park, let alone whether it had matured with Lennar being stiffed on infrastructure funding or unable to get a loan maturity extension.

The cryptic answer of sorts, showing the deal terms of a revised Lehman Brothers loan for Heritage Fields at Irvine Great Park became public earlier this year when the bankruptcy court appointed examiner for Lehman Brothers, an attorney at Jenner & Block, delivered his report to the court. See, for example, this copy of the summary of "big" Lehman real estate loans, including their mortgage loan on the Heritage Fields development which you can find by scrolling down to that loan description:

http://lehmanreport.jenner.com/docs/DEBTORS/LBEX-DOCID%20789172.PDF

The press, in Orange County, are generally scratching their heads at why the progress of development at Great Park has been "so slow", but I am betting it has a great deal to do with bankrupt Lehman Brothers' involvement in the project....which the OC press doesn't even mention in their news stories.

The bottom line is that the ability of even huge, economically stable developers like Lennar to obtain private, long term financing for the construction of infrastructure, let alone vertical development of promised community improvements, at mega projects like Hunters Point is very difficult, compromised and costly at this time, because of the views of the big players in the capital markets.

I frankly do not want to know what representations have been made to the San Francisco Board of Supervisors about the availability of "patient" private money to finance infrastructure or vertical construction. However, the Lehman bankruptcy's relationship to Great Park and the mercurial attitudes of "big banks" who historically did this sort of financing illustrate that absolutely nothing is guaranteed to be built at any time, by anyone, nor matter how good their intentions.

Posted by Guest on Jul. 24, 2010 @ 5:14 pm

To Lennar, this is all likely more about ongoing stock and on-paper money value than anything else.

The FDIC and other federal agencies essentially just gave Lennar a huge bailout by selling it $3 billion worth of junk home mortgages, and leverage on same, for $250 million.

To Lennar this whole nationwide game is all about simply moving electrons around through cyberspace to make a profit show up above the line on its balance sheets. If chintzy stuff gets built ok; if nothing gets built, ok.

Unfortunately, to make it look like they are creating real value, they shove the toxic dirt around to begin construction, and make people sick...

Posted by Eric Brooks on Jul. 24, 2010 @ 7:03 pm

I have been in San Francisco my entire 34 years of life and been in and around the Bayview for much of it, and am a current resident, and for years upon years upon years i saw nothing get built, nothing change. The constant was that San Francisco politicians didnt care about the Bayview, treated it like a wasteland, and for that neglect it remains along with visitacion valley the two districts in the City that never really appear in any discussions or publications about that City. Well now we have redevelopment for Bayview and Visitacion Valley upon the doorstep. And yes both are coming with a healty dose of gentrification, which in many ways is unavoidable in a city that has a shrinking blue collar jobforce juxtaposed to the massive cost of development, that has been amplified no doubt by the years of neglect.

I know i want to see the development, and if there is any delay to it i want to know it is for a deeply legitimate reason, because it has been too far in coming, sorely needed, and empty promises of it have only strengthened doubt of any real incorporation for the Bayview. We all know about the hazardous material clean up that has to happen, and of course it is a must but what else are we arguing about, on overpass and potential ecological effects to yosemite slough, well go out to yosemite slough now and tell me that the years of dumping have preserved anything. As a semi industrial area maybe that overpass will force large commercial trucks out of residential neighborhoods at all times of day and night.

Im torn because having been around here my whole life i see a district that cries out for inclusion, incorporation, and at the same time that cries out that for the status quo be maintained of people, services, residential quality, but that everything that they have helped break apart through neglect and apathy be made new again. For a long time the cries went unheard, but now people want the mountain, the land, and those cries still havent been formed into a cohesive voice, going on 30+ years. So while there are toxins in the soil, there are some in the thought that is permeating this debate. I want the inclusion, the incorporation, it comes with sacrifices, trying to kill off progress, because you dont like the means is hardly progressive, especially when the alternative is stagnancy.

Posted by Guest Rob on Jul. 26, 2010 @ 12:15 pm

Today, the City Attorney's office confirmed that  our elected body of supervisors can only vote yes or no  on a plan that was dreamed up by the Mayor's Office, hand in glove with private developers, and forwarded to the Board by a bunch of mayoral appointees over at Redevelopment. 

That isn't exactly good news for progress or democracy in San Francisco.

Hell, even the folks in Alameda have more control of their own destiny.

 

Posted by sarah on Jul. 26, 2010 @ 6:24 pm