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Powerful developer accused of improper lobbying in $6 billion East Bay redevelopment bid

Powerful developer accused of improper lobbying in $6 billion East Bay redevelopment bid

Lennar Urban, one of the largest Bay Area developers with thousands of units in the region, has been accused by rival Catellus Development Corp. of improperly lobbying the city of Concord over rights to develop a giant $6 billion mixed-use project at the city's former naval base. In response, Concord has cancelled a planned Tuesday vote to pick one of the developers and may investigate the claims.

The Concord City Council was set to pick either Lennar or Catellus after naming the two developers as finalists as part of a nine-year redevelopment process. The project is zoned for up to 12,000 units of housing and more than 6 million square feet of commercial space, making it one of the largest project sites in the Bay Area.

The city cancelled the vote after Catellus lawyer Andrew Giacomini, a managing partner at law firm Hanson Bridgett, wrote a letter to City Manager Valeria Barone accusing Lennar of trying to influence the decision with backroom meetings with city officials, despite signing an agreement not to lobby the city. Catellus cited the relationship between Lennar and former San Francisco Mayor Willie Brown, whom it described as "a high powered out-of-town lobbyist."

Kofi Bonner, president of Lennar Urban, served as chief economic policy adviser when Brown was mayor. Brown also awarded Lennar the contract to redevelop the Shipyard at Hunters Point in San Francisco. Brown is now a partner in Golden Gate Global, which is linking Lennar with Chinese investors to partly fund the project through the EB-5 foreign investor program.

Catellus is also concerned about donations in August from Lennar consultants to Concord Mayor Tim Grayson, who is running for state assemblyman and is a member of the City Council selecting a developer. Lennar's public relations firm G.F. Bunting & Co., Lennar's engineering firm on the Concord project Engeo, and Steven Kay, president of Golden Gate Global, made donations to Grayson of $4,200 each, the maximum allowed. Grayson returned the donations, and the city attorney later determined that those campaign donations weren't considered lobbying and declined to investigate further in August.

Lennar denied all of Catellus' charges.

‘’Lennar has not engaged in any discussions, negotiations, or lobbying prohibited under its agreement with the city, and has prohibited its consultants from doing so," Bonner said in a statement. “Lennar has full confidence that the city has engaged in a fair and thorough process. We are sorry to see that Catellus has chosen to smear the city of Concord in an apparent last-minute desperate act aimed at sabotaging the selection process.’’

“We are confident that the city’s elected officials will ultimately choose Lennar based on our deep experience converting military bases into world-class communities in partnership with local communities," he added.

According to Catellus, the strongest indication that something improper was happening was when city staff removed the recommendation on which developer should be selected in its final report on the naval base project. The omission was unexpected and broke from the expected selection process. Catellus said.

City Manager Valerie Barone directed staff to remove the recommendation, according to Guy Bjerke, the city official overseeing the project. Barone couldn't immediately be reached for comment. But Catellus suspects that a city council member may have called for the removal of the recommendation. "You put it all together, it doesn't feel right," said Antenucci. "To have that be changed at the last minute, it's very uncomfortable."

The city has now delayed the vote to "make sure the integrity of the process was protected," said Bjerke. "When a letter of this type comes in this late in the process, it's important for everyone to pause and evaluate what's going on." A new date for a vote hasn't been set, but the city should determine whether it will conduct an investigation by next week, said Bjerke. (Bjerke, a formerly city councilman, replaced Michael Wright, who is retiring, as director of the reuse project earlier this month.)

Antenucci said that Catellus didn't want to pursue legal action and it was trying to made sure the city followed proper development guidelines. "We want to be treated fairly, just as Lennar wants to and the city wants to," he said.


http://www.bizjournals.com/sanfrancisco/blog/real-estate/2015/09/lennar-catellus-concord-lobbying-complaint-len.html

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