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Dirty Dealings at the Dock 

San Francisco is planning to take title to the decommissioned Hunters Point Naval Shipyard before the military completes an environmental cleanup. The move could cost the city hundreds of millions of dollars -- or more.

Wednesday, Feb 25 1998
Last fall, International Technologies Corp., a U.S. Navy contractor, was pounding metal sheets straight down into the lip of a landfill on the southwestern corner of the Hunters Point Naval Shipyard. The metal walls were meant to be a temporary barrier; for a time, at least, they would prevent toxic chemicals in the ground and water there from leaching into the bay.

But that purpose receded in significance shortly after the pounding began.
During their descent into the earth, the walls collided with a mysterious object. A green cloud of chlorine gas shot out of the landfill and into the air -- and chlorine gas is no laughing matter. If you breathe enough you can pass out, and, if you breathe much more, you can die.

Work stopped, and the Navy contacted the U.S. Environmental Protection Agency. But neither the EPA nor anyone else really knows everything that lurks in the landfill. No records document all the muck that was tossed, spilled, or otherwise disposed of in what the Navy has taken to calling Installation Restoration Site 1/21. What is known, though, is not pretty: Triple A Machine Shops Inc., a Navy tenant from 1976 until 1987, allegedly dumped all manner of cancer-causing substances -- mostly heavy metals and polychlorinated biphenyls (PCBs) -- on the marshy wetlands. The company settled out of court with San Francisco prosecutors in 1996, paying $1.1 million for the privilege of not having to admit guilt. One of the prosecutors' allegations had the company dumping metal shavings on the ground until the pile reached six feet high and covered the area of a football field.

At the shipyard landfill, the EPA and the Navy decided that studied ignorance was the best course. Rather than conduct thorough soil and ground water tests throughout the 46-acre landfill, the Navy merely tested around the edges, to determine the extent, rather than the contents, of the landfill.

The reasoning behind this cautious approach is simple to understand: If the EPA required the Navy to poke too many holes in the heart of the landfill, more chlorine gas incidents -- or worse -- could result. Detailing the landfill's contents seemed more dangerous than assuming the god-knows-what in the ground was extremely toxic, and sealing it in with metal walls and a clay cap.

This mystery landfill is but one small example of the toxic risks lying beneath the surface at the 500-acre shipyard. Almost every hazardous waste mentioned in state and federal law is found at exceedingly high levels in the soil and ground water at the base. Veritable lakes of cancer risk lurk in some places in the aquifer beneath the shipyard.

As hard as it may be to fathom, this land -- the city's only Superfund site -- is much coveted by Mayor Willie Brown. The mayor and the city's Redevelopment Agency have big, big plans for the shipyard: They want biotech businesses, research and development space, housing, arts centers, parks, maritime facilities, and more to locate there.

And atop the mystery landfill, Brown and the agency would like to build parks or athletic fields.

In the very near future, it seems, Willie Brown and the San Francisco Redevelopment Agency will seek to cut the most ambitious, audacious, and risky real estate deal of this real estate mayor's administration. It is a deal that could bring the underprivileged Bayview-Hunters Point area desperately needed economic development. It's also a deal that could cost the city $300 million in potential revenue and put municipal government on the hook for a toxic cleanup of enormous scope.

Since 1991, when the Hunters Point Naval Shipyard was placed on a congressional list of former military sites to be turned over to local authorities, the city has been trying to take possession of the land, so it can spark some economic development in Bayview-Hunters Point, an area of the city where crime and unemployment are pernicious problems even during boom times. When Redevelopment Agency officials, from Executive Director James Morales on down, look at the shipyard, they don't see crumbling buildings, rusting anchors, chewed-up streets, spiny weed clusters, and detritus. They see the future. The future and insanely breathtaking views of the bay -- views that any developer in his right mind would give a limb or two to take possession of.

"It's an incredibly valuable asset," says Morales.
The Navy owns the shipyard and is required by law to clean up the toxic mess it and its errant tenant made before ownership is transferred to the city. For the last 10 years, at a cost of $150 million, the Navy has been studying the nature and extent of pollution in the soil and ground water at the former base. It has also removed some of the more threatening toxic sources, underground storage tanks among them.

Under the rosiest, and most likely unrealistic, Navy projections, the base will be cleaned to EPA standards and the city will take title to the land, for free, parcel by parcel, over the next decade. The Navy says the city will take title to different portions of the base this year, in 2000, 2002, and 2007. But Redevelopment Agency officials counsel skepticism about this time line; one official says that judging from performance so far, it would be wise to add five years to any schedule the Navy asserts.

Assuming title to the land is the crucial first step in any real estate deal. No bank will talk to a developer about a loan until the developer owns land, or possesses a long-term lease on it. And no developer will talk seriously to the city about executing a redevelopment scheme at the shipyard until he is confident he can assemble the necessary financing for the project.

And that delay threatens to extend the transfer of much of the shipyard beyond Mayor Brown's term in office, which cannot last beyond 2003, even if he wins election to a second term. And the city's chief executive has made it absolutely clear, in a speech before the Redevelopment Commission in mid-December, that the shipyard is one of his two top redevelopment priorities. (The other is Mission Bay, the 250-acre-plus mixed-use development planned for the postindustrial wasteland along China Basin.)

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George Cothran


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