The Deal With Treasure Island

At Hunter's Point, a financial services firm that the city hired to evaluate the bids recommended another developer. But in 1999 the city's Redevelopment Commission effectively ignored its own consultant and picked Lennar, inciting suspicions that then-Mayor Brown, whose supporters had orchestrated a last-minute campaign for Lennar, had intervened on the company's behalf. (As SF Weeklydisclosed, Brown later assumed a financial interest in a Sacramento-area real estate development controlled by a Lennar subsidiary.)

There was a similar cloud over the Treasure Island process. In the summer of 2001 the city's redevelopment staff expressed interest in re-bidding the project to encourage more bidding after only the Anderson/Burkle/Lennar group and the one other entity chose to participate. A consultant hired by the city submitted a report saying that at least two additional firms, which it did not identify, had expressed enthusiasm for entering the competition as part of any second round. But that September the redevelopment staff did an about face, recommending that the TIDA board dispense with expanding the competition and focus instead on dealing solely with TICD.

James Sanders

James Sanders

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

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Treasure Island

off the Bay Bridge
San Francisco, CA 94130

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Region: Treasure Island

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More About

• Tony Hall
• Gavin Newsom
• Darius Anderson
• Government and Politics
• Politics

"It was really amazing," recalls attorney Eugene Brodsky, who serves on a citizens' advisory panel for Treasure Island. "One minute the talk [out of the Brown administration] was we need more competition, and then someone just mysteriously pulled the plug."

Anderson had been a fundraiser in Brown's 1995 mayoral campaign. Burkle, for whom Brown had done legal work after leaving office as Assembly Speaker, had pumped $59,000 into Brown's legislative campaigns and had donated $100,000 to underwrite his U.S. Conference of Mayors meeting in San Francisco in 1997.

Those things occurred long before Newsom became mayor.

But the decision by the Newsom-appointed TIDA board to extend TICD's exclusive agreement another three years despite the firm's failure to meet key deadlines in relation to the project -- and Hall's ouster after being critical of it -- has inevitably rekindled questions about Newsom's own reliance upon Anderson for help in raising political donations since becoming mayor.

In March of 2004, facing a campaign debt of $400,000 after his runoff victory over former Board of Supervisors President Matt Gonzalez, Newsom was the guest of honor at a fundraising reception hosted by Anderson at the lobbyist's Sacramento office. Anderson invited lobbyists, state Democrats, and others to make contributions of up to $750 apiece. Although about 30 people, including Lt. Gov. Cruz Bustamante and Oakland Mayor Jerry Brown, are said to have attended, Newsom spokesman Ragone says that the mayor raised only about $4,000 at the event.

(Hall has acknowledged that he, too, raised about $4,000 from a fundraiser sponsored by Anderson at the lobbyist's office in the Ferry Building in June 2004 while he was still a supervisor and before he had been approached about accepting the Treasure Island job. He said that $500 of the money had come from Anderson and that he later returned it.)

One of Anderson's partners at Platinum Advisors is Chris Grewell, who was Newsom's chief fundraiser in his campaign for mayor.

Ragone, the mayor's spokesman, dismissed the suggestion that Newsom acted improperly, declaring, "Gavin Newsom has not done anything inappropriate for a contributor in his career and he never will."

City voters in 1995 passed a law prohibiting campaign contributions from anyone bidding or negotiating for a city contract or development lease if the recipient has a say in the outcome. When the fundraiser was first reported last year, a Newsom campaign lawyer insisted that the law didn't apply to the mayor since the Treasure Island Development Authority, the entity that must approve any dealings involving TICD, is technically a state agency. Besides, the lawyer declared, TICD hadn't contributed to Newsom. (Although TIDA is chartered by the state, the mayor not only appoints its board members but four of those members answer directly to the mayor as city department heads. Other than the executive director, TIDA's entire 11-member staff consists of personnel attached to the city's Redevelopment Agency.)

Others, however, see a potential conflict.

"This is the kind of politics as usual that undermines the public's faith in the system," says Kathay Feng, executive director of California Common Cause. The notion that the mayor could accept campaign help from Anderson, a principal in TICD, and justify it in part because TIDA is a state agency "is a technicality without a real distinction," Feng says. "The larger question is, 'What is the public's interest and is it being served?'"

Whether the public's interest is best served by the Navy's apparent reluctance to give up the former base at no cost may depend on which taxpayer is being asked. "We have to get what's called fair compensation," says Navy realignment manager Doug Gilkey. He declined to elaborate, citing ongoing talks with San Francisco. Although those talks are in their fifth year, Gilkey says they haven't stalled, insisting that "with the complexity of a negotiation of this kind things do not ordinarily happen fast."

The Navy moved onto Treasure Island and part of neighboring Yerba Buena Island (through which the Bay Bridge passes) during World War II, using the facility for radar training. The island's art deco Administration Building, built for the 1939 exposition and intended as the terminal for what was to have been San Francisco's airport, was pressed into wartime service as headquarters for the Pacific Fleet. The fleet's commander, Admiral Chester Nimitz, occupied a spacious corner office on the second floor -- the same office used by Hall and his predecessor, Conroy.