Community awaits benefits as Lennar finally breaks ground in Hunters Point

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Artist rendering of bayfront homes soon to be built after years of waiting.

More than five years after San Francisco voters approved a massive redevelopment plan for the Hunters Point Shipyard and much the southeast part of the city -- giving Lennar Corp., the country’s biggest home builder, the largest tracts of open land in the city -- that project is now finally, slowly, getting underway.

But activists who have been following the project say the city is getting played by Lennar because of an agreement that lacks performance standards and has allowed the company to drag its feet to maximize its profits despite an affordable housing crisis in the city. And some community members say Lennar hasn’t lived up to promises of jobs and other benefits.

“The modus operandi of Lennar is bait and switch and delay,” Saul Bloom of Arc Ecology, who consulted on this development deal for the Redevelopment Agency before his contract was dropped in 2010 after publicly raising concerns, told us. Bloom and his firm have decades of experience analyzing complex development deals, and he has been tracking Lennar’s pattern of behavior around the country. 

Bloom said that when Lennar cut its initial deals with then-Mayor Willie Brown and other local officials in 1997, the company said it needed no external financing and that it would build housing affordable to Hunters Point residents, including rentals. Since then, the deal has gotten steadily better for the company and worse for San Francisco, and the groundbreaking date has been repeatedly pushed back.

“The city was not smart enough to build in liquidated damage and a performance schedule and that kind of thing,” Bloom said. “Lennar tells them what they want and the city tends to roll over, and there’s been no pushback.”

When Lennar ended up needing financing after all, the project stood by while a $1.7 billion deal with the China Development Bank Corp. was structured in 2012. Despite Mayor Lee personally participating in the quest for capital in China alongside the developer, the deal quickly collapsed. It is yet to be seen how Lennar will satisfy its commitments in the Bayview and at its separate Treasure Island site since the plug was pulled on the loan deal.

Lennar Urban Director of Community Affairs Cheryl Smith referred our questions to communications consultant David Satterfield of G.F. Bunting, who said that he passed them on to Lennar officials and, “They don’t have anything to say.” The Mayor’s Office also has not responded to our request for comment on the issues that Bloom is raising.

With a weak agreement and a lack of political will to push the company to expedite construction of affordable housing, Bloom said Lennar has simply waited for housing prices to increase and for other developers to lead the way in gentrifying Bayview Hunters Point before moving forward on the nearly 1,400 acres of land it controls in San Francisco -- an area equivalent in size to the Presidio.

“Their incentive is to wait for the property values to rise...Lennar understands how much this land is worth,” Bloom said. “What Lennar has done is crafted a strategically smart box that the city is in.”

Yet after years of delays, the project did officially get underway last week (Wed/27), with a well-attended hilltop ceremony.  Mayor Ed Lee, former Mayor Willie Brown, District 10 Sup. Malia Cohen, and Cohen’s predecessor, Sophie Maxwell, joined Lennar Urban President Kofi Bonner to speak at the long-anticipated event.

Lennar’s local subsidiary, Lennar Urban, unveiled a master plan to convert the land to a brand new mixed-use community. At the ceremony, Brown remarked that “there is no other piece of soil that is as lucrative” as the Bayview Hunters Point peninsula and that it promises to be the “ideal place to live.”

The Hunters Point Shipyard, occupies roughly 500 acres of southeastern San Francisco and when taken together with neighboring Candlestick Point and parts of Bayview, it is the largest single tract of land in San Francisco designated for redevelopment. The other big redevelopment site in the city, Treasure Island, is also controlled by Lennar and its partners.

A former naval base, the shipyard was transferred to the city in 2004. Most naval operations there had ceased in 1974 and commercial uses declined in the 20 years that followed, steadily displacing black workers employed on the premises.

Affordable housing and job creation for neighborhood locals were two major stipulations in the ballot measure San Francisco voters approved in 2008. The “Bayview Jobs, Parks, and Housing Initiative,” however, entrusted that goal fulfillment almost wholly to Lennar and Bloom now questions whether that trust was well placed.

Phase 1 of the project will consist of construction of 1,400 new residential units in the shipyard, approximately 30 percent of which will one day be affordable housing. But Bloom said that Lennar has delayed construction of the affordable units until after much of the more lucrative market rate housing is done.

At the event, Bonner enthusiastically outlined the goal of having 800 of 1,100 market rate homes in this first phase constructed and occupied within 36 months time and Mayor Lee opened his remarks with the celebratory chant “Welcome to The Bayview! We need housing for everybody!”

But Bloom said that the city is rapidly gentrifying as Lennar waits to meet its affordable housing obligations, noting that the city was 11 percent African-American when Lennar cuts its first deal to develop Hunters Point in 1997, and that population is now 4 percent and falling.

Reconstruction of the Alice Griffith Public Housing Project will help Lennar to satisfy its affordable housing quota. Announcements of these plans garnered large applause from community activists in attendance, though they are slated for the project’s second phase, which likely won’t begin for years.

“They could build all of Alice Griffith on Parcel A, but they’re not going to do it,” Bloom said. “When is this community going to get what was promised to them?”

A group of picketers from Aboriginal Blackman United (ABU) was contained by SFPD at the bottom of the hill during the afternoon’s proceedings. As black town cars chauffeured officials to the event site, the protesters’ cries were drowned out by the music of Miles Davis playing from stage speakers.

ABU was protesting non-inclusive hiring practices at the shipyard site. Members, who were outnumbered by police 2-to-1, argued that they were being wrongfully barred access to the ceremony above and by the event’s conclusion, they had been relocated from the main intersection at Innes Avenue and Donahue Street to a side access road.

Job creation was trumpeted generally in the afternoon’s speeches, with Sup. Cohen applauding the public-private partnership between Lennar and Bayview organizations and Mayor Lee praising the project for “honoring labor and honoring local residents.” However, ABU’s founder and president, James Richards, said “we’re not getting the jobs or the contracts that the community people are supposed to get and that’s why we’re out here.”

Though ABU wants to see local residents of color placed in many of the new positions opening up, workers in the community have only been promised good faith consideration rather than actual job guarantees by the San Francisco Building and Construction Trades Council, which is in charge of staffing the project. Attempts to reach Michael Theriault, Secretary-General of the Council, were unsuccessful.

Bloom said Lennar has insulated itself from community criticism with an agreement that promises money to community groups that refrain from publicly criticizing Lennar or the project. He said Lennar has followed a similar pattern here as it has elsewhere, using its clout and political contacts to get lucrative redevelopment deals, then using delay and bait-and-switch tactics to make those projects more lucrative. He cited Lennar’s Mare Island project, which is now in bankruptcy, and its massive Newhall Ranch project north of Los Angeles.

In that latter deal, the California Public Employees’ Retirement System lost the $970 million it paid Lennar in 2007 for part of its stake in Newhall Land Development Co., which went bankrupt when the housing market crashed the next year. But Lennar built in an option to reclaim the shares, which a bankruptcy judge allowed Lennar to do in 2009 for just $138 million.

Bloom said that deal is typical behavior for a manipulative company that has a history of acting contrary to the public interest, but in which local political officials have given tremendous control over the city’s future.

“We remain skeptical about their commitment to getting it done,” Bloom said of the affordable housing that Lennar has promised. “What we’d like to see is some real action on the promises that were made to the public.”

Comments

The lack of a balanced development of affordable rental essential units pushes out the existing communities.

Without a real vision for rental housing similar to how parkmerced was built post ww2 there is no family affordable housing in that district when they replace the apartments with condos and high end units.

Secondly the transit along 3rd st ignores linking and looping to balboa park immediately up front or the possibility of routing on oak dale to San Bruno ave to help alleviate transit congestion.

Not to mention the concerns Saul bloom has noted about Lenard's financial practices concerns over toxicity, and the attempt to finance and than shovel the money into the treasure island and later parkmerced project which is still in court on CEQA grounds.

Posted by Goodmaab50 on Jul. 02, 2013 @ 5:55 am

"Affordable" housing is just housing where someone other than the occupier pays the full cost of living there. There's nothing to stop these activists raising funds for affordable housing, rather than just whining that someone else should pay for it.

Why not invest in the land, build some homes and form a co-op? Do something - don;t just talk about what others should do.

Posted by Guest on Jul. 02, 2013 @ 8:37 am

This is public land being handed to a private developer, and there is a legitimate public interest in building affordable housing in this city, which is why Lennar is being required to exceed the affordability levels required of every other developer in town. Do you really think the public deserves nothing in exchange for this land? Also, given that homeowners get mortgage exemptions on their federal taxes, it would seem that none of them "pays the full cost of living there," so I imagine you're probably opposed to the mortgage exemption then, too, right? Fair is fair, right, or do you reserve your ire for the poor?

Posted by steven on Jul. 02, 2013 @ 10:13 am

"Also, given that homeowners get mortgage exemptions on their federal taxes, it would seem that none of them "pays the full cost of living there,"

Hate to break it to little Steven, but all the mortgage exemption does is jack up the price you have to pay for the house in the first place.

You still pay "the full cost of living".

Posted by Guest on Jul. 02, 2013 @ 11:54 am

Whether that's true or not, and I'm not sure that it is, homeowners are still being subsidized by the federal government, and in turn all of us taxpayers who don't get this benefit. Similarly, on the local level, when a development project doesn't pay the full cost of local infrastructure needed to serve it, those residents are also getting their living costs subsidized. Same thing with car drivers, who don't come close to paying the full cost of their societal impacts. It's easy to take pot shots at the poor and the assistance they need while ignoring the many subsidies provided to people like you.

Posted by steven on Jul. 02, 2013 @ 12:29 pm

"All of us taxpayers" only includes 53%. The other 47% don't need the benefit. Your argument would make more sense if EVERYONE filed income taxes, and paid a minimal amount. Unfortunately, that is not true, as is most of your argument.
The real crime is that government should not manage public housing. The fact that there are multiple generations living in public housing shows it is a failure. Just like most anti-poverty programs, they end up creating a culture of dependence on these programs, and give NO incentive to get out, as it is easier to stay than it is to leave, despite the rats, gangs, guns and mold.
Anti-poverty programs ensure the continuation of poverty - because without them, government workers who administer these programs would lose their jobs.

Posted by Richmondman on Jul. 02, 2013 @ 1:22 pm

you claim that homeowners are being subsidized by the tax payers for the mortgage deduction. What about the obscene amount of property taxes that homeowners pay for local and state services? Talk about subsidizing.

Posted by Whackamole on Jul. 02, 2013 @ 1:59 pm

There's nothing obscene about property taxes, a long-accepted method for taxing wealth. In fact, one might argue that Prop. 13 has kept California property taxes obscenely low for longtime property owners, and corporations that make it appear they've owned properties for a long time. Renters also end up paying for the property taxes on the buildings where they rent, but unlike homeowners, renters can't write those payments off on their income taxes. Hate to break to you, buddy, but most Americans pay less in taxes than our counterparts in other industrialized countries. And we have the crumbling infrastructure and lack of other investments in future generations to show for it.  

Posted by steven on Jul. 02, 2013 @ 5:22 pm

True, but they get less. No medical care, for one thing. And no , Obamacare will not fix this as long as the AMA and the Pharma industry is in charge.

Posted by Guest on Dec. 23, 2013 @ 9:28 am

Don't know where Steven gets some of this stuff. The mortgage deduction doesn't just benefit homeowners, it also benefits a landlord providing rental housing, and presumably it figures into the amount that they must charge to make renting feasible.

Also, would LOVE to see Steven's calculations showing that car owners don't come close to paying the full cost of their societal impacts, but I suspect that it is just something that he said without worrying about a basis. Car owners pay huge registration fees and $.72 a gallon in taxes. In San Francisco they subsidize mass transit with their parking fees.

I guess that Steven is referring to the open ended Greenhouse gas effect. And he is well within his rights to do so. The SFBG is NOT delivered to news machines via truck. I'm sure that nothing that Steven buys is delivered by truck. Everybody who gathers at Burning Man walks or bikes there. That is why he has the right to pontificate about the 78% of people with a car being a subsidized faction.

Posted by Guest on Jul. 02, 2013 @ 5:39 pm

The academic research on car ownership in the US being subsidized by the rest of us is clear, and that doesn't even take into account global warming, which makes the case even more clear. The cost of freeway and road construction and maintenance alone dwarfs what drivers pay in federal gas taxes. Then there's the subsidized parking and fuel costs (gee, ever wonder why gas is so much cheaper in the US than most countries?), plus the public health impacts of air pollution and collisions, and environmental cleanup costs that stem from our voracious use of fossil fuels, mostly because of driving. You can get some data from the links here, http://en.wikipedia.org/wiki/Effects_of_the_automobile_on_societies#Costs, and there's much more out there. 

As for your point about the necessity of driving, yes, I accept that automobiles and trucks are useful tools in modern society. But most people rely too much of them and don't understand the impact those choices have on society. More than 30 percent of San Francisco households are car-free, and most studies project that rate will continue to rise -- and it would rise much faster if automobile ownership, like home ownership, wasn't so heavily subsidized.

Posted by steven on Jul. 03, 2013 @ 10:55 am

OK...I asked "where does Steven get this stuff" and I got an answer . Wikipedia.

Thanks, 'journalist'.

Still disagree on one point: "cost of freeway and road construction and maintenance alone dwarfs what drivers pay in federal gas taxes".

I think that roads and freeways are essential for the delivery of foods and other necessary goods and that everyone in the country benefits from them. But I wouldn't dare to differ from a Wikipedia journalist.

Posted by Guest on Jul. 03, 2013 @ 11:43 am

Also, Steven made this part up:

"our voracious use of fossil fuels, mostly because of driving"

Only 28% of greenhouse emissions are transportation related. This includes passenger vehicles, medium- and heavy-duty trucks, buses, and rail, marine, and air transport. About 16% is related to light vehicles.

http://www.c2es.org/energy/use/transportation

and

http://www.epa.gov/climatechange/ghgemissions/usinventoryreport.html

Steven makes up a LOT of stuff, peeps. But I'm sure that you already knew that.

Posted by Guest on Jul. 03, 2013 @ 12:04 pm

San Francisco Bay Area Regional Center
2012

Chinese pay to play visa game

Source: San Francisco Business Times, March 16, 2012

Regional centers have drawn many investors outside of the U.S. to participate in the EB-5 program. This program aims to attract investment abroad to the current national projects and offers foreign investors green cards in return. It has maintained its popularity since its establishment and has created many job opportunities nationwide. Competitions exist among regional centers which help to raise the standard and quality of their projects.

Hunters Point Shipyard

The San Francisco Bay Area Regional Center is currently offering a unique project to foreign nationals seeking to gain permanent residency in the United States. After more than a decade of planning, the development of the Shipyard, San Francisco's newest neighborhood, is underway. The multi-billion dollar undertaking will transform the long-dormant Hunters Point Naval Shipyard, a 495 acre de-commissioned Navy base along San Francisco's southeast waterfront, into a vibrant master-planned community located just minutes from downtown San Francisco.

Development of the horizontal infrastructure for Phase I of the Shipyard has already commenced, clearing the way for vertical development to begin almost immediately. The 75-acre Phase I will consist of approximately 1,400 homes and 10,000 square feet of retail, including 25 acres of parks and open space. The eventual build-out of Phase I is projected to occur over the next five to seven years.

UNSURPASSED LOCATION

The Shipyard is located on prime real estate just minutes from downtown San Francisco. Residents will enjoy gorgeous views of the downtown skyline as well as the Bay Bridge, Yerba Buena Island, downtown Oakland, Berkeley and the East Bay hills.

The proximity to jobs, convenient transportation, beautiful outdoor recreational amenities, and lively new retail shopping districts will contribute greatly to the desirability of this development.

UNIQUE HOUSING OPPORTUNITY

The Shipyard represents a unique opportunity for new housing in San Francisco. There is little, if any, land left for the construction of new housing units and for the most part new housing units are being constructed only in high-rise buildings. The Shipyard will offer new housing in low-rise townhomes and condominium flats on the San Francisco Bay.

BAY AREA'S MOST SUSTAINABLE COMMUNITY

Approximately 25 acres of parks and open space will be built in Phase I. The Shipyard will become one of the Bay Area's most sustainable communities and the first Northern California mixed-use community to receive 100% renewable "clean power" from hydropower and solar energy.

SPURRING ECONOMIC DEVELOPMENT

The redevelopment of this underutilized area as well as the subsequent sale and/or leasing of newly created structures is expected to drive the creation of approximately 1,933 new, full-time jobs by the year 2013 and an additional 4,264 jobs by the completion of Phase I.

http://www.sfbarc.com/news/san-francisco-bay-area-regional-center

Posted by anon on Jul. 02, 2013 @ 7:19 am

Unaware that NFL commissioner Roger Goodell, in a published June 15, 2011 letter, vowed, the NFL "supports communities that support us"; the struggling Black community of San Francisco's BayView Hunters Point have plenty other reasons to feel as though they, got the short end of "The Stick."

First, NFL owners loaned the San Francisco 49ers $200 million to leave Candlestick Park, stadium of the 49ers since 1970. Their new home, "LEVI"S Stadium" in Santa Clara CA, 35 miles south of the city.

49er's CEO, Jed York, then offered a "Host City" role for the city, in the team's bid, to host a Super Bowl contingent, on San Francisco allowing the team to opt out of its 2015 lease agreement.

At the behest of Mayor Ed Lee, June 5, 2012 SF Board of Supervisors unanimously approved an option that included an upfront fee of $1 million. The agreement released the team of its 2015 $6 million rent obligation, despite Supervisor Sean Elsbernd claim, the team, "Abandoned" the city. And City Hall never consulted with the community about doing further business with the team.

May, 21 2013, the NFL announced that San Francisco will host the 2016 Super Bowl L.

Efforts to improve the blighted area closest to Candlestick Park were decades of broken promises and delays by the 49ers. A general contractor in the area commented, "The team blocked any attempt by the city to do construction." Allegedly, the team feared the work would interfere with its, in season activities.

Now that the team has all but left the city, work to improve the area has begun with suspicious activity.
As reported by Steven T. Jones and Parker Yesko of the San Francisco Bay Guardian:
"A group of picketers from Aboriginal Blackman United (ABU) was contained by SFPD at the bottom of the hill during the afternoon’s proceedings. As black town cars chauffeured officials to the event site, the protesters’ cries were drowned out by the music of Miles Davis playing from stage speakers."

This was the third such recent protest by ABU, a Black community group that claims community Blacks are not being hired as promised. This first phase of a projected 20 year, $8 billion housing and retail project, strangely is not funded.

Meanwhile, 49er's Jed York enthusiastically proclaimed, "25 percent" of the profits from hosting Super Bowl L will go towards the "Fight against poverty."

San Francisco resident, Terrance Barnes; not a football fan, responded, "The team took a billion dollar project out of the city and now that it gets to host a Super Bowl, they are concerned about poverty."

Posted by Allen Jones on Jul. 02, 2013 @ 9:42 am

The Center for Investigative Reporting this morning posted an interesting report about the shady financing mechanisms behind this project and their connections to Mayors Brown and Lee. Very intriguing, check it out: http://cironline.org/reports/firm-tied-willie-brown-gets-political-boost...

Posted by steven on Jul. 02, 2013 @ 10:33 am

Yes, everybodies need benefits. But what can we do???((

Posted by toptermpapers on Jul. 02, 2013 @ 10:46 am

With all of the problems, it is too bad we can void the contract with Lennar and leave Hunter's Point the way it is. Right?

Posted by Richmondman on Jul. 02, 2013 @ 11:01 am

So the options are do nothing or let Lennar do whatever it wants? Talk about false choices. Here's one of a multitude of other options: choose developers who will follow through on their promises, and write a contract that includes mechanisms for enforcement of its provisions.

Posted by steven on Jul. 02, 2013 @ 2:00 pm

How many other developers do you have personal knowledge that they would be willing to work under your conditions? That have the capabilities to manage a project of this size? How many were willing to build out the low-income housing before they built the ones they could sell (none is a good bet) HPNS has been essentially abandoned for 25-30 years, so that has been the option so far.

Hey we could float more bonds, and have a corrupt government that has no ability to do anything right to manage it. Would you prefer that?

Posted by Richmondman on Jul. 02, 2013 @ 3:34 pm

Why do we need a project of this size. Who benefits.

Posted by Patrick Monk.RN. on Jul. 03, 2013 @ 11:25 am

Everyone in SF whose rent is too high

Posted by Guest on Oct. 26, 2013 @ 2:13 pm

somehow magically makes housing more affordable.

Posted by Guest on Oct. 26, 2013 @ 2:29 pm

It's hard to take seriously people who are so wrong about such basic facts

Posted by Guest on Oct. 26, 2013 @ 2:34 pm

It is nice of you to reply. masterpapers.com I completely aggre with your point!

Posted by Hugo Fo on Oct. 26, 2013 @ 1:13 pm

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