The Deal With Treasure Island

Tony Hall's firing casts the spotlight on a real estate mega-deal that slogs along under a veil of secrecy

In July, Tony Hall went to a conference in Denver where he met the top Navy official in charge of converting former military bases to civilian use and heard something that surprised him: The Navy was no longer talking about turning over the former Treasure Island Naval Air Station to San Francisco at no cost -- as has long been the popular assumption -- but wanted to be a financial player in the ambitious plans for the island's future.

It was the first time Hall had heard such a thing, although he was then executive director of the Treasure Island Development Authority -- this occurring before his well-publicized ouster in October -- and despite the city's having been involved in negotiations with the Navy over the transfer of the 405-acre island for more than five years.

But what Hall, a former member of the San Francisco Board of Supervisors who held the Treasure Island job for barely a year, learned in Denver was nothing new.

James Sanders
Treasure Island's 1930s Administration Building was 
intended to have been the terminal for a future San 
Francisco airport.
James Sanders
Treasure Island's 1930s Administration Building was intended to have been the terminal for a future San Francisco airport.

Since at least 2001, the Navy privately has made it increasingly clear that it no longer intends to merely give away the choice piece of real estate in San Francisco Bay that it abandoned in 1997. Instead, the Navy is looking to be paid, either up front or from the revenue of a long-hoped-for island real estate development that would be among the largest and most ambitious in the city's history.

Those plans call for the man-made island, with its spectacular city skyline views -- and built to host the 1939 Golden Gate International Exposition -- to be home to perhaps 5,000 to 10,000 or more people. They would reside in a kind of urban village to include a luxury hotel or two, a new marina, restaurants, shops, and an attraction such as a museum or cultural center.

Hall's unawareness of the Navy's ambitions despite heading the agency ostensibly entrusted with overseeing the island's transfer and shepherding its redevelopment may seem unusual. But in practice, Treasure Island decision-making has long rested with Mayor Gavin Newsom and his predecessor, Willie Brown. If anything, the ex-TIDA director's being out of the loop on such a matter illustrates the secrecy surrounding not only the city's dealings with the Navy, but with the politically influential development team known as Treasure Island Community Developers, or TICD. Its principals include lobbyist Darius Anderson of Sonoma, a political supporter of the mayor, and Los Angeles grocery billionaire Ron Burkle, along with the Lennar Corp., one of the nation's largest home builders. Anderson and Burkle were both longtime political supporters of Brown, and Anderson has helped raise campaign money for Newsom since he became mayor.

Indeed, it was after Hall raised the specter of a "sweetheart deal" between Newsom and the development team that he was summarily fired "without cause" in October by the TIDA board -- which in theory is an autonomous body but all of whose seven members are appointed by the mayor. This came after the board voted in September to extend by another three years an "exclusive negotiating agreement" granted to TICD in 2003 to develop the island once the Navy turns it over even though the developer had failed to meet several deadlines for advancing the project.

The mayor's office vehemently denies any favoritism, and the mayor has personally dismissed Hall's accusation as "laughable." It also denies that Newsom had anything to do with Hall's departure, insisting that the TIDA board acted on its own after questions were raised about Hall's effectiveness. "At a certain point long ago, we thought that Tony would be able to perform the duty well, but it became increasingly clear over the past several months that that wasn't the case," insists Peter Ragone, the mayor's spokesman.

If nothing else, the brouhaha provides a glimpse into machinations involving the future of perhaps the city's last and best undeveloped urban oasis. Nearly a decade after the Navy closed up shop on the island and two years into the city's exclusive relationship with the Anderson/Burkle/Lennar team, there are more questions than answers about the island's future as it pertains to both the Navy and the nature of the project itself.

For instance, early concepts of what a future Treasure Island community might look like envisioned 2,800 housing units -- with about 30% of them being "affordable" units -- configured in low-rise buildings of three to five stories and dispersed over much of the island. But in recent months, the developers have begun to float the idea of building high-rises of up to 40 stories on the sandy, seismically vulnerable island -- apparently both to answer critics who insist that any future community there should be big enough to be self-sustaining, and, presumably, to make the project more profitable.

The idea surfaced as part of an interim report prepared by TICD in the summer that contained a conceptual drawing showing a skyscraper of 40 stories accompanied by buildings half to three-quarters as tall strung out along the length of the island from north to south -- suggesting a far greater number of housing units than the 2,800 first proposed. Yet the report made no mention of how many more units the developer may now have in mind, offering little clue as to how populous a future community there may be.

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