Arrested Development

Mayor Brown is pushing for quick approval of a Hunters Point Shipyard redevelopment plan that gives a lot to homebuilding giant Lennar, and not nearly enough to the city or the shipyard's neighbors

Even when the transfer agreement is signed, the shipyard land where community facilities and retail space would be built -- the facilities and space that would bring the permanent jobs promised to the Bayview community in the first phase of development -- will not be available until Lennar builds and sells the houses that compose most of the project's first phase. Commercial and industrial space -- a more important source of future jobs -- is not included in this phase of development at all. And the Bayview Hunters Point Center for Arts and Technology -- a replica of a successful education, job training, and arts center in Pittsburgh that was once the crown jewel of the shipyard redevelopment plan -- tired of waiting for the Navy's cleanup to be finished and found a new home elsewhere.

Meanwhile, significant environmental questions remain unresolved, including those surrounding radiation contamination. Between 1946 and 1969, the shipyard was home to an applied radiological research laboratory involved in numerous experiments on the base, as well as every nuclear weapons test the U.S. military performed during that time. The Navy has not yet completed its Historical Radiation Assessment of the shipyard, which comprises years of research into possible locations and sources of contamination. A draft of the report in 2002 identified more than 100 radioactive substances -- from those whose effects last only seconds to those that remain poisonous for thousands of years -- used at Hunters Point Shipyard. Since then, Navy officials have found several areas where radioactive material was stored or used, information that will likely be included in the new report.

That's not to mention the methane gas that continues to migrate underground from an old landfill located in the southern part of the shipyard. State and federal regulators will not sign off on the transfer of even the cleanest parcel of land -- a hilltop and hillside overlooking the bay where Lennar plans to build homes -- while there are problems like migrating gas in the land around it.

Lennar/BVHP's Willis and District 10 
Supervisor Sophie Maxwell talk after a 
presentation on shipyard development 
plans.
James Sanders
Lennar/BVHP's Willis and District 10 Supervisor Sophie Maxwell talk after a presentation on shipyard development plans.
Bayview citizens listen to plans for the 
shipyard's development.
James Sanders
Bayview citizens listen to plans for the shipyard's development.

Perhaps more troubling for the project's immediate future, though, is the Navy's most recent schedule for transfer of the land. This first phase of development -- the subject of the present deal heading to the Redevelopment Commission -- is planned for land known as Parcels A and B. Parcel A is composed of a hilltop and hillside overlooking the base and the bay, while Parcel B is the northernmost section of the shipyard.

But the Navy's transfer schedule is based on when it will complete environmental cleanup of the land, not when the city wants to develop it. And the Navy plans to transfer Parcel D, an area in the center of the shipyard, before it completes Parcel B. According to the shipyard general plan, Parcel D is designated for unspecified commercial or industrial use, but is not included in the present deal between the city and Lennar. The end result may well be that the Lennar group cannot complete its scheduled development for years, while the city has vacant land that it cannot develop until the shipyard cleanup is more complete.

Most of the stated community benefits of the project -- public facilities, some 300,000 square feet of retail space, more than a third of the housing designated as affordable, and a significant stretch of open space -- are in Parcel B, which, under the Navy's present cleanup schedule, will not be ready for development until sometime after 2008.

The redevelopment of a former military base tends to be a unique undertaking, driven largely by the circumstances surrounding each base's closure; it is, therefore, all but impossible to compare one such redevelopment effort to the next. The deal between Lennar/BVHP and San Francisco is a complicated tangle that includes numerous different profit splits along the way. But in the end, the developer is set to make a handsome profit, despite having invested literally for years without any return.

Rather than sell the shipyard property outright or hire a developer to build out the shipyard for civilian use, the San Francisco Redevelopment Agency has, in effect, created a partnership with Lennar/BVHP. After shipyard land is cleaned and transferred to San Francisco, the city will, in turn, transfer it to the Lennar group. The developer will build infrastructure, creating streets, utilities, and so forth, and then sell the improved land. Proceeds from the land sale are then divided between city and developer through a multi-layered plan. Lennar has the option of selling the land to itself at market rate, or to another developer who would build on it.

The city's investment in the first phase of the development is its 93 acres of land, valued in the deal (even though it was never appraised) at $30 million. Under the terms of its contract with Lennar, San Francisco will likely receive the $30 million land value, plus an additional $6.3 million. Because the project is designated as a redevelopment zone, that total $36.3 million must be reinvested within the area. The money will go into a community benefits fund that the Citizens Advisory Committee will determine how to spend, whether it be to build a community center, to lower housing prices, or for some other use. The city also will get six acres of land for a community use that has yet to be determined.

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