You can read some of the special report funded by community members like yourself through the links below. Our editorial partners - the SF Public Press did a thorough job. I mean, seriously - when was the last time you saw this much reporting on Treasure Island? The won an SPJ Northern California award in recognition of their work.
If you wanted to know what's happening with the redevelopment, you can find out below. This was also in partnership with Shareable.net. UPDATE: SF Public Press holds a public forum to discuss findings from the Treasure Island Investigation with audio (below).
Treasure Island Timeline: 1933 - 2010 - CLICK TO LAUNCH 
By Jeremy Adam Smith - Shareable.net/SF Public Press — Jun 25 2010 - 4:29pm
Master plan aims high. Will big money and hardball politics bring it down?What does the massive redevelopment of Treasure Island give to San Francisco?
First and foremost, it funnels public money into jobs for construction workers and profits for the contractors who will do the building. The project also promises to loosen up a housing market that has stayed tight through the recession, creating 8,000 new residential units, 30 percent of it affordable housing. Bonus: All those new residents (around 20,000) and businesses will add significantly to the city’s tax base.
But the Treasure Island redevelopment, which aims to be the most ecologically sustainable community in the world, delivers something else as well: a positive self-image of San Francisco as a forward-looking, avant-garde, socially and environmentally responsible metropolis. Nothing excites the utopian impulse more than a blank slate — and Treasure Island’s 486 acres have been semi-abandoned since the Navy shut down its base in 1997.
Thus the island provides an almost-ideal laboratory for the latest green building and urban design techniques. In fact, reading the Treasure Island redevelopment plan (which you can do yourself at www.sftreasureisland.org) instantly reminded me of Ernest Callenbach’s classic 1975 novel “Ecotopia,” which speculates what would happen if Northern California, Oregon and Washington separated from the United States and tried to develop an ideal “stable-state” economy and culture.
Branded by some as a hippie-dippie relic, the book holds up shockingly well in 2010—and it continues to be discussed after having sold more than a million copies in nine languages. Some of Callenbach’s wacky, far-out proposals — like requiring every Ecotopian household to sort waste into compost and recycling — are now the twenty-first-century reality in Bay Area cities. Other ideas — like carbon neutrality — have come to seem perfectly reasonable in the age of rising sea levels. The following laundry list could come from Callenbach’s “Ecotopia”— but, in fact, these items come straight out of the Treasure Island sustainability plan:
Open space planning that minimizes energy and water consumption, encourages native plant usage and promotes biodiversity.
Great. But will this vision become a reality? The funny, but predicable, thing is that Treasure Island’s Ecotopia has some big, big bucks behind it, an estimated $5 billion. A lot can happen over the course of the two decades it will take to build Treasure Island — and with that much money at stake, the Ecotopian vision might not survive the ground-breaking and ribbon-cutting. It’s this tension between big vision and big money that makes the project interesting — and reveals both sides of San Francisco’s split personality.
On one side, stand the visionaries — people like Ernest Callenbach, who’d like to see urban life restructured along ecological lines. On the other side, we find the big money and hardball politics that make the Bay Area one of the wealthiest and most expensive regions in the world. Massive developments like Treasure Island don’t happen in velvet boxes. As this issue’s report by Victoria Schlesinger, Bernice Yeung, Alison Hawkes and Christopher Cook reveals, it took a lot of backroom deals to make this Ecotopia possible — and the players wouldn’t have gotten in the game if they hadn’t smelled a profit.
“Redevelopment in San Francisco has a bad reputation going to back to the ’60s,” says Chris Carlsson, director of the Shaping San Francisco oral history project, lead instigator of the Critical Mass bike ride and author of the 2008 book “Nowtopia.” “Without the strong public support, they don’t get permission to do it.” Indeed, the more one learns about the stake lobbyists and developers have in Treasure Island, the more one wonders if the Ecotopian vision isn’t just a way to sell development to a skeptical public.
Treasure Island isn’t the only, or even the first, eco-city under the sun. Other grand Ecotopias have not gone as planned: Critics like Christina Larson, writing in Yale Environment 360, argue that master-planned ecocities like Huangbaiyu, Liuzhou and Dongtan in China, which were all greeted by waves of fawning press, have so far fallen far short of their goals:
Dongtan and other highly touted eco-cities across China were meant to be models of sustainable design for the future. Instead they’ve become models of bold visions that mostly stayed on the drawing boards — or collapsed from shoddy implementation. More often than not, these vaunted eco-cities have been designed by big-name foreign architectural and engineering firms who plunged into the projects … with little feel for the needs of local residents whom the utopian communities were designed to serve.
But Treasure Island is in some ways quite different from those projects. Its commitments to stormwater wetlands and clean energy are legally binding, unlike in China. And unlike the Chinese projects, the Treasure Island redevelopment has been subjected to 15 years of intense expert scrutiny and public involvement. During a recent trip to Treasure Island, I saw signs everywhere advertising meetings for residents to give feedback on the project. When I asked one two-year resident if he’d had a chance to make his voice heard, he just laughed. “I’ve had too much opportunity!” he said. “I’m sick of hearing about it!”
Critics like Carlsson remain unconvinced, faulting the master-planned nature of the project. “The problem with master planning is that it’s a fantasy that you can engineer a good social life and sustainable living through architecture and design,” he said. And building a new city in the middle of the Bay is far from carbon neutral; two decades of construction will inevitably have a massive impact on the Bay’s ecology. It would be far better, Carlsson argues, for the island to become a laboratory and educational resource dedicated to “reintegrating the Bay as a food source and ecological resource for the community, not just something pretty to look at.”
But Carlsson emphasizes that even the most flawed development can be transformed by the people who live there. “I can imagine in 25 years people taking it back from the planners and turned it into a funky space where people live,” he says. Ernest Callenbach, ever hopeful, made a similar point, choosing to see Treasure Island as a process and an opportunity. "It's rare for a city to get the chance at spinning off a better self,” he told me. “Mitosis happens in biology. Now let's see if San Francisco can do it in ordinary life!”
In the end, the only thing we can do is watchdog the project as it unfolds over the course of the next 20 years, and try to hold developers and city officials to their promises — indeed, that’s why we launched our research into Treasure Island. From this perspective, Treasure Island stands to become a battleground, not utopia — and this shouldn’t surprise us. The word “utopia” is a Greek pun that simultaneously means “perfect place” and “no place,” suggesting that perfection is impossible. But the meaning of “ecotopia” is quite different: “eco” means home, and “ecotopia” is simply a human habitat. Treasure Island will never be utopia, but the plan does give us an ideal worth fighting for.
By Victoria Schlesinger SF Public Press
Most of Treasure Island will be inundated by the end of this century, if the documented progression of the ocean’s rise caused by climate change continues as predicted. Studies foresee sea-level rise ranging from as little as five inches to as much as six feet. The lowest parts of Treasure Island lie just four feet above the Bay’s low tide.
To buffer the island from the Bay, project officials say they have hit upon a solution that protects the development from ever-changing climate change assumptions.
They will build up the ground on 100 acres of the island to accommodate as much as 36 inches of sea-level rise, set back development from the shore and leave room for future levees or other adaptations.
The currently planned work, including geotechnical improvements, is estimated to cost $137 million. If the developers are wrong, and sea-level rise is more extreme, the costs would climb higher.
“There are projections that range all over the map,” said Jack Sylvan, redevelopment director of the Treasure Island Development Authority, which oversees the island’s transformation for the city. “The challenge is, how do you actually plan for something that you don’t know what it’s going to look like?”
Absent a fixed upper limit for sea levels this century, the rationale for a three-foot lift — as opposed to any other height — is based partially on optimistic scientific projections, cost considerations and the challenges of building on an unstable manmade island that has been sinking in one corner. Without being able to point to any concrete financial, technical or scientific limitation, the city says it is comfortable taking a chance on 36 inches. The city Planning Department’s forthcoming Treasure Island environmental impact report, obtained through a public-records request, finds the approach acceptable.
Phase four of the Treasure Island redevelopment plan is scheduled to start in 2016. Courtesy of TIDA.
The city and developer consortium reviewed seven climate change research papers published between 1987 and 2007 with sea-level-rise estimates ranging from five to 55 inches by the end of the century. The latter, worst-case scenario was predicated on a disastrous 5.8-degree Celsius rise in the global average temperature.
They also looked to the Bay Conservation and Development Commission, the state’s California Climate Adaptation Strategy, and to Gov. Arnold Schwarzenegger’s Delta Vision Blue Ribbon Task Force. All use 16 inches by 2050 and 55 inches by 2100 as upper benchmarks, though labeling those numbers as improbable.
Based on their review, the developer and the Treasure Island Development Authority together concluded that in 2075 sea-level rise may reach 36 inches, a scenario they all said makes the planning workable.
But increasing attention to climate change and its broader effects has led to a flurry of new research. Sea-level rise predictions still range widely, and developers and governments worldwide combine the data in a variety of ways.
The three most recent studies use semi-empirical models, which incorporate increasing rates of change. If global temperatures increase by 2.8 C — a likely scenario — sea levels will, on average, rise between 33 and 57 inches by 2100.
A few years ago, a 55-inch rise seemed like a fringe scenario. But according to these most recent studies, that is likely to happen.
And if the unthinkable were to occur, and global temperatures increased by 6.1 C, the ocean could rise by 70 inches, calculates Potsdam University ocean physicist Stefan Rahmstorf in his 2009 paper.
These modeling experiments take into account melting land ice — a significant factor set aside in many sea-level-rise estimates, including reports issued in 2007 by the United Nations Intergovernmental Panel on Climate Change, an international body of scientists.
BUILDING IN THE DARK
State and local agencies have provided little concrete guidance on Bay Area coastal development projects grappling with sea level rise. The Treasure Island build-up plan has not yet received the official blessing of the San Francisco Bay Conservation and Development Commission, a key regional regulator that recommends that all builders look at how future sea level will impact their projects. Treasure Island Community Development, the project’s developer consortium, has informally shared its sea-level-rise plans with the commission.
“The commission has no formal opinion on this project,” said Steve Goldbeck, the commission’s deputy director for climate change and legislation. “But I can say that the approach they’re taking, I think, makes a lot of sense.”
“We don’t, however, have some fixed number that people have to design to,” he added. “The reason for that is because we don’t know how much sea level is going to rise because we don’t know how much greenhouse gas we’re going to emit going forward.”
The city and developers gave various, and at times conflicting, answers as to why exactly 36 inches was the most appropriate height to raise the developed parts of the island, instead of the more cautious 55 inches, suggesting there are geotechnical and financial limits to what can be built.
“If we always took the most conservative approach, a lot of things wouldn’t happen,” Sylvan said.
To bulk up Treasure Island for sea-level risks, Treasure Island Community Development turned to Moffatt & Nichol, an international engineering firm known locally for its work on the new Bay Bridge and Ferry Building.
Moffatt & Nichol proposed adding enough soil to raise 100 acres of the island, where the building pads and infrastructure will sit, by 36 inches above the 9.1-foot, 100-year high tide. They also added six inches of “freeboard,” a term engineers refer to as a “fudge factor.” The remaining 230 acres will be left at their current height. (Yerba Buena Island, an adjacent outcropping of bedrock measuring at its peak roughly 338 feet tall, does not need to be raised.)
Treasure Island being built in 1936. Photo credit: Department of the Army, Corps of Engineers, San Francisco. Reproduced from “Treasure Island: San Francisco’s Exposition Years,” by Richard Reinhardt (Scrimshaw Press, 1973).
SEA WALLS
New properties will be set back 300 feet from the shore allowing room for adaptation should the sea rise more than 36 inches. One plan is to increase the height of the perimeter’s rip-rap retaining wall, which currently stands between 12 and 14 feet, by piling more rocks on it. This is the least expensive of various adaptation options, which will be paid for through a tax on Treasure Island residents.
The project’s managers have not yet calculated the cost of raising the perimeter or other strategies, but all parties assume that option will be cheaper than building for a 55-inch rise. That expense has not been formally calculated either.
The city guessed it might cost an additional $130 million to build the development pads to 55 inches. And yet, cost may not be the significant obstacle. Instead officials said that adding more soil weight could jeopardize the island’s stability and impact the rest of the design plans.
Dilip Trivedi, a Moffatt & Nichol coastal engineer working on the Treasure Island project, said mounding to 55 inches would be “a huge cost difference.”
“You could go to 55 inches,” he said, “but at some point it doesn’t become cost effective. At that point then the project suffers, we can’t do the project anymore.”
So while technically possible, he said the height increase would also leave the federally owned Job Corps Center, which the development will not own or alter, at the bottom of a hole in the center of the new neighborhood.
“In the end it was, ‘Why 55 inches?’ Even that could be wrong,” Trivedi said. “How is it that we don’t build for the 1,000-year earthquake then? We don’t. It’s a matter of acceptable levels of risk over your planning horizon.”
The major variable is the pace of global warming and climate change. Scientists say they still need to better understand how polar ice sheets and mountain glaciers are responding to climate change in order to make more accurate predictions. In particular the Greenland and Antarctica sheets “have started to flow much faster towards the sea in recent decades, which contributes to rising sea levels,” Rahmstorf, author of multiple studies on sea-level rise, wrote in an e-mail.
“That this would happen so rapidly was unexpected,” Rahmstorf said. “That is probably the main reason why sea level rise has been underestimated in the past."
By Victoria Schlesinger SF Public Press
— Jun 29 2010 - 4:32pmThere is a high probability that a Loma Prieta magnitude or greater earthquake will shake the Bay Area during the projected 18-year redevelopment of Treasure Island. However, city development officials say the island will ultimately be safer than the liquefaction-prone areas of downtown San Francisco and the Marina.
Parts of the city’s shoreline and all of Treasure Island are manmade. The island was constructed in the 1930s out of sand and silt dredged from the Bay and held in place with a riprap retaining wall. When loose water-saturated soil is shaken intensely, it turns into a thick, unstable liquid, a process called liquefaction.
The city and developer plan to compact the 100 acres of soil that will lie beneath the new buildings and around existing ones, as well as reinforce the island’s perimeter. They estimate the geotechnical improvements will cost $137 million.
“The buildings should structurally perform well on such soil assuming they are built to code,” said Thomas Holzer, a U.S. Geological Survey research geologist who studied Treasure Island following the 1989 Loma Prieta earthquake. “The untreated open space area could be pretty exciting in a large earthquake with water and sand spouting out of the ground.”
Water and sand can push up to the ground’s surface and produce sand boils, resembling geysers, during liquefaction. About 300 acres of open space and parks on Treasure Island will remain untreated.
Graphic by Shawn Allen, Stamen Design.
This has another expert concerned. “Treasure Island has a significant problem. It was very poorly engineered when it was built, in terms of geotechnical engineering,” said Jack Boatwright, U.S. Geological Survey senior seismologist
There is a two-out-of-three chance that the Bay Area will experience another earthquake of a 6.7 magnitude or greater within the coming 30 years, according to the 2008 Uniform California Earthquake Rupture Forecast.
A 7.0 magnitude earthquake along the nearby Hayward-Rodgers Creek fault system would cause Treasure Island to shake with an acceleration of .5 g-force, which is strong enough to knock people to the ground, said Boatwright.
In comparison, Loma Prieta measured 6.9 magnitude and was 60 miles from Treasure Island, producing about .3 gs there during its roughly four-second peak.
Treasure Island is flanked by two of the region’s most volatile faults — the San Andreas lies 18 miles to the west and the Hayward is 7 miles to the east — the Hayward-Rodgers Creek Fault system is due to move soon. Its last quake was in 1868, with a 6.8 to 7.0 magnitude, and scientists estimate that the fault shifts every 140 years.
Areas such as Foster City, where the fill has been compacted, suffered little damage during Loma Prieta, according to Boatwright.
Treasure Island Community Development will improve the island’s perimeter, possibly by strengthening it with stone or soil cement columns and rock berms. The interior areas beneath the new development will undergo densification through deep dynamic compaction, which entails repeatedly dropping a very heavy weight on the ground.
The developers also will siphon water from deeper layers of mud and sand to the surface though a process called surcharging that helps settle the soil. Vibratory compaction methods, which compact the soil through shaking, will be used as well.
Many Treasure Island sites have been decontaminated through soil removal or capping, which entails covering the remaining toxic soil with a clay cap. But there is growing concern that coastal sites once considered sufficiently remediated may become problematic as sea levels rise. Contaminated soil could come in contact with ground water as the sea pushes it higher. Bay Area scientists and regulators are beginning to explore the problem given the large number of former military sites in the region.
As a former military site, Treasure and Yerba Buena islands suffer from environmental pollution problems affecting their soil, water, air and existing buildings. Not only does the Navy have environmental remediation to complete – from the removal of DDT and petroleum products to PCBs and lead – but also the developers anticipate that additional clean up will cost them $33 million. But because the Navy is only required to remediate an area to current use standards, if the developers want to build homes where an auto shop once stood, more cleaning will be required.
In addition to soil concerns, the construction on Treasure Island will last at least 18 years causing unavoidable and significant increases in traffic, ground vibrations, noise and air pollution, according to the forthcoming Treasure and Yerba Buena Islands draft Environmental Impact Report, which the Public Press obtained through a public records request. The draft EIR is subject to change prior to its official release in mid-July.
Particulate matter measuring the size of a human red blood cell or smaller is of concern and “may lead to adverse health effects” in people exposed to substantial amounts of it.
The report also says traffic will increase – despite plans to mitigate construction traffic and discourage the use of cars on the island – during peak hours on the Bay Bridge and downtown San Francisco.
The city will likely adopt a statement of overriding consideration, concluding that the project’s environmental damage is unavoidable and outweighed by its potential benefits, said city officials.
Site 13
Storm water outfalls and offshore sediment
LU: The 538-acre off shore perimeter of Treasure and Yerba
Buena Islands.
P: Metals, PAHs, PCBs, DDT, TPH.
S: Closed in 2005.
Site 12
Old Bunker Area
LU: Was Navy ammunition bunker and storage yard, currently housing, and will become housing and open space.
P: Refuse and incinerated solid waste containing PCBs,
PAHs, dioxins, arsenic, lead, radium 226, and trash spread over 93 acres.
S: Groundwater study underway.
Site 31
Former South Storage Yard
LU: Was storage yard and trash dump, currently a paved elementary school playground
P: Lead, DDT, PCBs, motor and diesel oil, dioxins.
S: Scheduled to be closed in 2010.
Site 2
Decontamination Training Area
LU: Was used for radiation decontamination training for 20 years, is currently housing, and will be housing.
P: Radioactive materials.
S: Closed in 1988.
Site 20
Auto Hobby Shop/Transportation Center
LU: Was the site of auto repair and storage center with underground storage tanks, the buildings were demolished, land will become housing.
P: Petroleum, oils, lubricants, VOCs.
S: Closed in 2004.
Site 27
Clipper Cove Skeet Range
LU: Was a clay skeet Navy target range for 10 years, to become a marina.
P: Lead shot, lead, and PAHs, water pollution.
S: Scheduled to be closed in January 2013.
Site 25
Seaplane Maintenance Area
LU: Was an airplane and vehicle maintenance area with underground storage tanks, pipelines and fuel pump house, and will become a new marina.
P: Petroleum, oil, lubricants, water pollution.
S: Currently requesting closure.
Site 21
Vessel Waste Storage Recovery Area
LU: Was a vessel oil recovery site for 50 years, and will become commercial area.
P: Petroleum, VOC, water pollution.
S: Treatability study underway.
Site 24/building 99
Dry Cleaning Facility
LU: Was at different times a facility for laundry and dry cleaning, meat processing, and printing, today it’s an office, and will become open space.
P: Petroleum, oil, lubricants, and chlorinated solvents.
S: Groundwater pollution treatability study underway for closure in 2016.
Site 32
Former Training and Storage Area
LU: Was hazardous materials storage and training area, and will be open space
P: PCBs, TPH, dioxins, pesticides.
S: Clean up underway.
Site 10
Bus Painting Shop
LU: Was used to paint buses, mix paint and store pesticides, and will be open space
P: Iron, carcinogens such as benzo(a)pyrene, dibenz(a,h) anthracene, water pollution.
S: Closed in 2007.
Residents of Yerba Buena and Treasure islands are divided on the relocation plan city officials have presented to the public. While many Yerba Buena residents expressed concern over maintaining their quality of life through more than a decade of construction, Treasure Island residents tended to express more support.
Joanna Luddington lives on Treasure Island. She endorsed the redevelopment and the relocation plan after a community meeting sponsored by the Treasure Island Development Authority Thursday.
“I’m looking forward to it,” Luddington said. “I’m not too worried.”
But Nate Yeakel, an eight-year resident of Yerba Buena Island, had questions about the phasing of the construction, and suspected that it might get bogged down, making the relocation of residents premature.
“We’ve really developed a sense of community,” Yeakel said. “I find it a little sad that that community is going to be dispersed.
We’re being forced to move without a lot of transparency and due process.” The process of relocating the residents has reached its early stages. The authority has begun to inform residents of about 1,000 households about their relocation options and transition benefits.
Click Below To Launch YouTube Video
• Homebuilders Lennar uses federal taxpayer funds to balance its books
In 2006, things were looking good for Lennar, America's second-biggest homebuilder. That year, before the U.S. housing market's epic collapse, the Miami-based giant pulled down $15.6 billion in revenues and closed sales on 29,568 homes. The ink was just drying on a massive and potentially lucrative deal to transform Treasure Island with new housing complexes, and the well-connected Lennar already had secured a deal to develop the Hunters Point Shipyard that the Navy was turning over to San Francisco.
Business was booming and Lennar's books looked good — but the financial page was about to turn to a depressingly long chapter that Lennar and other homebuilding corporations helped write.
Before the deluge, Lennar parlayed its profits — and considerable political capital — into securing the trust of San Francisco leaders, who have bestowed two major military base redevelopments on the corporation. But substantial evidence suggests that Lennar's finances, much like Treasure Island itself, are not exactly resting on bedrock.
An examination of Lennar’s financial documents, and a raft of well-documented critical reports, suggests the company suffered especially deep wounds from a home-mortgage crisis that Lennar and other builders helped fuel through speculative over-building and their widespread issuing of subprime loans through subsidiary underwriting firms. Then, in a calculated bid to shore up its balance sheet, Lennar turned to Congress, the tax code, bank regulators and high-risk debt for financial salvation.
By Victoria Schlesinger SF Public Press — Jul 1 2010 - 1:34pm
The developers of Treasure Island stand to earn a potential 20.6 percent return on their investments if the 18-year, phased construction plan and land sales proceed as they predict. That does not include possible future real estate sales.
But San Francisco officials say the potential private upside is laced with long-term economic risks — only some of which are calculable — that will be borne mostly by the partner firms in Treasure Island Community Development, and their investors.
The massive and long-term project is complex and inherently uncertain, with homes and businesses to accommodate up to 20,000 people. Much of the uncertainty centers on the inexact science of predicting property values, as amply demonstrated by the recent housing bust.
Though many of the details have yet to be worked out, the Treasure Island Development Authority says that much of the payback from land sales will occur in later phases of the project, encouraging the developers to stick with it for the long haul and follow through with hundreds of millions of dollars in up-front investments before making a profit.
“In the first phase, they will not get their return,” said Jack Sylvan, redevelopment director for the Treasure Island Development Authority, the city’s agent negotiating the public-private partnership with the developer consortium. “And it’s likely that in the second phase they won’t have been able to get their return. Their ability to get their return is by being successful over a very long time period. Unless they hit some massive upswing in the market.”
Under the current agreement, San Francisco will earn roughly $13 million a year for the city’s general fund — as the project nears completion — due to the expanding real estate tax base. Nonmonetary benefits include a slew of public goods, such as 300 acres of open space and parks, an additional 2,260 units of affordable housing, 2,590 new jobs, and environmentally advanced architecture, landscaping and energy systems.
But not all city officials have concluded that the redevelopment plan is a good financial investment, especially because the land will require $1.5 billion in investment just to prepare the ground for building.
“Anyone in their right mind would say that in this current economy, it’s a stretch,” said Aaron Peskin, former president of the Board of Supervisors. “The economy has changed forever, and it’s become more rational. No one is going to give a government or developer major amounts of capital to shore up an island built on fill.”
Keith Oriesk, director of design for Treasure Island Community Development, discusses how the plan addresses wind and transportation. Photo by Monica Jensen/SF Public Press.
Peskin called Treasure Island “a blob of Jell-O in the Bay,” adding: “The best thing is to let natural processes do its thing, and allow it to return to that which it came.”
Sylvan acknowledged that Treasure Island “is about as risky a project as you can find.” But he argued that the risk will mostly accrue to the developers, who are putting up at least $548 million in performance bonds on the private market over the life of the project. Sylvan said the partners in Treasure Island Community Development expect a return based on their economic projections. And they need to show these projections to investors to get any investment.
The risks are many, Sylvan said:
Treasure Island Community Development is made up of several developers and investors. Lennar, a national homebuilder, will cover half of the consortium’s horizontal costs, which amount to $274 million. The other half will be paid by Stockbridge Real Estate Funds, a private San Francisco-based investment firm. Stockbridge is partnering with Wilson Meany Sullivan, a real estate and development company known for its rehabilitation of the San Francisco Ferry Building. Kenwood Investments, one of Democratic lobbyist Darius Anderson’s many investment operations, is also part of the partnership, although it will contribute no money. Kenwood representatives declined to comment publicly on their role.
So far the developers have spent almost $53 million on the deal, $6 million of which has covered the costs of the city’s redevelopment staff and consultant expenses. Treasure Island Community Development has been in exclusive negotiations with the city since 2003.
According to the 2010 term sheet — the development contract approved by the Board of Supervisors in May — Treasure Island Community Development will contribute a total of $548 million to prepare the island for “horizontal” development, which includes seismic stabilization, underground infrastructure, environmental remediation, roads and a ferry quay. The developers will also contribute $91.7 million in subsidies toward of affordable housing construction.
Treasure Island Community Development will pay the Navy $55 million plus interest over 10 years. They then will compensate the Navy an additional $50 million if the developer achieves an 18 percent annual internal rate of return, which is projected by 2021.
Higher levels of profit will be further split between the developer, Navy and the city. The deal puts the Navy first in line for revenues, and then the developers. The Treasure Island Development Authority comes later.
Michael Tymoff, the redevelopment project manager for the city, insisted that the city will not be responsible for problems with project financing. No money for the development will come from the city’s general fund.
Instead, the city will tap Treasure Island newcomers for $944 million, through community facilities district taxes known as Mello-Roos bonds, and tax-increment financing, to be repaid by the new residents over the next 30 years.
The city has designed several financial benchmarks to ensure that it does not shoulder undue economic risk. It has divided up the horizontal development into several phases and sub-phases, anticipated to last through 2028. Before each phase begins and the city hands over a portion of property, Treasure Island Community Development must find a third party to put up a performance bond, or guarantee, that equals the value of the phase’s cost. If the developers default at any point during a phase, the city retains the value of the bond, allowing it to complete the phase with a new contractor.
For example, during the first phase, currently slotted to span from 2011 to 2013, Treasure Island Community Development will spend $196 million before it earns any revenue, and will be required to complete a portion of the public benefits and horizontal development before proceeding to the next phase. The details of each phase — its length and what must be completed — are still under negotiation, said city officials.
The developers’ potential reward for shouldering so much risk comes in the form of real estate. The term sheet specifies that the city will retain ownership of the developed public spaces, several historic buildings and 1,984 housing pads. The city will partner with affordable housing groups to build those homes.
Of those, 435 units will be operated by the Treasure Island Homeless Development Initiative, a collaboration of community organizations that carry out the federal Base Closure Community Redevelopment and Homeless Assistance Act of 1994, which requires that all former military sites assist homeless people in some way. The collaboration currently oversees 250 units on the island that will be rebuilt and will be given an additional 185.
But Treasure Island Community Development will own the lion’s share of the property. It has the right to retain 60 percent of the remaining 5,280 housing pads, as well as half of the next 20 percent of the pads. They have the right to build on the lots or sell them.
The remaining 20 percent must be auctioned to other builders. Five percent, or 275, of all the new units, must be sold or rented to people whose household income is below or equal to the area’s median household income — $73,127 for San Francisco in 2008, according to the most recent figures from the U.S. Census Bureau.
The developer estimates that the commercially priced units will range from a low of $597,000 for a low-rise flat to a high of $1.2 million for the 200 townhouses to be built on Yerba Buena Island, based on current market prices.
Based on the contract between the city and Treasure Island Development Authority, which is limited to the horizontal development, it is not possible to calculate the developer’s total revenue or profit, the majority of which could be earned through home and commercial real estate sales.
Treasure Island Community Development also has the right, and in some instances a requirement, to develop all of the commercial space, including two hotels with a total of 500 rooms.
The agreement also requires the Treasure Island Development Authority to enforce greenbuilding design standards with all builders. But many of the environmental big ideas have still to be worked out in detail. Everything from the alternative energy and a large organic garden to maintaining the island’s parks hinges on the city developing new partnerships with companies and organizations to share the costs of these green amenities. Sylvan said that developing these new partnerships.
In the next six months, local officials and a consortium of private developers will begin to finalize legal papers for Treasure Island’s future as a high-density eco-city. Renderings of the gleaming towers, parks and gardens suggest harmony and community. Yet the promise of an urban Treasure Island, one of the most complex and risky redevelopments in San Francisco’s recent history, has for more than a decade been wrapped up in a process driven by power and influence. The mayor got neartotal control. Political friends got plum jobs and contracts. Critics were exiled. City and state conflict-of-interest laws were waived. Independent inquiries and the will of voters were nakedly rebuffed.
Big projects naturally draw big money. Treasure Island, currently slated for $6 billion in residential and commercial development, was an unusually large prize. But companies with political and social ties to two mayors won the two major projects related to the redevelopment — with the master development drawing only one serious bid.
The winning bidder was a group that included Darius Anderson, an influential Democratic Party lobbyist and fundraiser for both outgoing Mayor Willie Brown and incoming Mayor Gavin Newsom.
One partner was the Miami-based homebuilder Lennar, then the second-largest in the nation, also now leading the concurrent $7 billion Hunters Point Shipyard redevelopment and the conversion of the former Mare Island Shipyard in Vallejo. Other companies, backed in part with public employee pension funds, have also joined the team now known as Treasure Island Community Development.
Over the years, few have been outwardly critical of the contracting process. An exception was former city supervisor and mayoral antagonist Tony Hall. During his brief tenure as head of the Treasure Island Development Authority he raised allegations — not all borne out by facts — of missed deadlines, unpaid developer fees and a “sweetheart deal” in the making.
In 1998, San Francisco voters attempted to wrest power from Brown and install good-governance practices for Treasure Island. But supervisors never implemented many of the provisions in the ballot measure, which passed easily. Even today, some current and past city supervisors say they had to pick their battles, and Treasure Island has been a remote concern.
Bill Rutland is a lobbyist and a close friend of Brown who briefly worked on behalf of Anderson, the lobbyist, to win the first part of the Treasure Island redevelopment bid. He said that despite appearances, his team won the contract on merit.
“Anybody that has the size and capacity to do these types of billion-dollar deals is going to have relationships with the powers that be,” Rutland said. “But they have to show a track record and a financial capability for doing that.”
But Charles Marsteller, a former coordinator of San Francisco Common Cause, said no matter how dazzling the eco-city seems on paper, insider politics represents a giveaway to companies with unusual access to government decision-makers.
“The public thinks we’re going to build a city in the public’s interest,” he said. “I would say we’re building a city in the private sector’s interest — and whatever they want, we’re getting. Ultimately the residents have to live with the consequences long after the developer is gone.”
From the start, Treasure Island was Brown’s pet project. In 1997, as the U.S. Navy began shuttering operations on the island, the former state Assembly speaker parlayed his influence over the Legislature to push a bill establishing a separate governing authority for Treasure Island.
The move provoked opposition. A Brown political rival, former state senator and retired judge Quentin Kopp, suspecting Brown would appoint loyalists, fought against the bill. “He could control them,” Kopp said. “The objective was always to get the development power in the hands of friends and political supporters.”
As expected, Brown won, and the articles of incorporation for the Treasure Island Development Authority listed the San Francisco mayor as the “sole incorporator.” Directors would be named by the mayor “in order to perfect the organization of the Authority.” City and state conflict of-interest laws forbidding city employees to hold dual offices were waived, making it possible for Brown to pack the authority’s board.
The authority’s governance structure is unusual for California. Although San Francisco’s mayor filled many appointments at city commissions, the agency overseeing Treasure Island is a state entity. At other converted military bases, power had been dispersed into the hands of many. March Air Force Base in Riverside County, for example, is governed by representatives from the county and three of its cities. In Monterey County, Fort Ord Army Base’s reuse authority consists of officials from the county and eight towns. McClellan and Castle Air Force bases in Sacramento and Merced counties are overseen by county boards of supervisors.
Former Planning Commissioner Gerald Green, one of Brown’s original five appointees to the Treasure Island authority board, defended the entity’s design and said knowledgeable people like him belonged on it.
“That was done not for mayoral control, but to have experienced people who could jumpstart the process,” said Green, who years later lost his planning job in an unrelated conflict-of interest scandal.
Also on the early board were the city’s directors of redevelopment and of the Port of San Francisco — both Brown campaign donors.
Among the authority’s staff were a number of “special assistants,” a cadre of city employees hired by the mayor without civil-service testing. A 2001 civil grand jury report noted that some were scrutinized in the press as patronage jobs. The report named several Treasure Island staffers, including former director Annemarie Conroy. London Breed, an unpaid intern in the mayor’s office who was promoted to development specialist and secretary to the board, now sits on the Redevelopment Commission. She defends Brown’s integrity: “He was really aggressive making sure the staff was by the book.”
But at least one critic said she was silenced. “I was pushed aside because I questioned too much,” said Lois Scott, a city planner who voiced concerns about the seismic safety of building high-rises on an artificial island. Scott said she was eventually demoted to code enforcement. (Green said the seismic issues were “thoroughly investigated.”)
By 1998, two political rivals saw an opening. Kopp and real estate millionaire Clint Reilly, who was gearing up for a mayoral run, launched Proposition K to substantially curb Brown’s power over the island. The ballot measure mandated that good-governance procedures should guide Treasure Island’s development. To blunt support for Proposition K, the Board of Supervisors preemptively adopted some of the changes, though fell short of stripping the mayor’s appointment power. Voters passed Prop. K, but it was never fully implemented. Former supervisor Michael Yaki said the voter-approved initiative was a declaration of policy, not a binding mandate, so the supervisors were under no obligation to follow it.
Yaki later had a change of heart. “I remember trying to go there one weekend and not being able to get to the base, and I thought this was very odd,” Yaki said. “I got more reports from other people.” Yaki began pushing supervisor appointments to the Treasure Island authority board. But his proposal never went anywhere.
With the Treasure Island Development Authority in place, the city began priming the pump for redevelopment, starting with modernization of the Clipper Cove marina between Yerba Buena and Treasure islands.
Among the first bidders to surface was Treasure Island Enterprises, backed by star Democratic fundraiser Anderson and his former billionaire boss, Los Angeles supermarket magnate Ron Burkle.
Their ties with Brown ran deep. Both had been part of Brown’s fundraising effort for his 1995 election campaign. Burkle was a former law client of Brown’s and donated to various Brown causes.
The Anderson-Burkle bid immediately provoked claims that the outcome was a fait acompli, and a civil grand jury looked into it. The resulting 1998 report said the Clipper Cove marina’s bidding process had never been made public “in an adequately informative way,” and called on the Treasure Island authority to use competitive, open bidding procedures.
The report went on to decry the lack of public oversight, and said the process had been “hampered by concern about the concentration of power, jurisdictional squabbling, political infighting.”
In spite of these concerns, three bids came in and none was easy to dismiss. The Port of San Francisco reviewed the proposals, and each had its strengths and weaknesses.
What might have killed the Anderson-Burkle proposal was the port’s findings that it would generate about $1 million less in revenue over a 16-year period than the two other applicants.
Nevertheless, the authority’s staff recommended Treasure Island Enterprises as the winner. A selection committee concurred and in February
1999 the Anderson-Burkle team secured the bid.
The plan had merit, but it didn’t hurt that Anderson and Burkle also had gotten to the right people. Anderson told the San Francisco Chronicle that he had paid lobbyist Bill Rutland, Brown’s friend, $30,000 to learn “what were the hot buttons of the general public.”
Brown and Anderson did not respond to requests for comment on the marina or subsequent deals. A Burkle spokesman would not speak on the record about Treasure Island. Rutland said in an interview that his job with Anderson was to shepherd the proposal through a slew of public agencies. But he did not recall talking to the mayor about it. “I wouldn’t have, because the decision was going to be in the hands of the authority,” he said.
Rutland added: “I couldn’t deny being Willie Brown’s friend. I really understood the process, and my ability was to help shape a proposal that meets the expectations and quirks that makes the city of San Francisco — and believe me, there are many.”
The other bidders were disappointed.
“We put out a prospect, submitted plans and financial studies,” said Terry Cowhey, who had partnered with one of the three marina bidders, Modern Continental. “It was a couple of volumes, phone books of stuff, we submitted. And it was all an inside fix. It was all based on who was Willie Brown’s buddy, and it had nothing to do with the technical qualities.”
The marina project was a toehold onto Treasure Island. When the city was ready to open bids for the larger redevelopment, Anderson was back at the table, this time with one of the largest homebuilders in the country, Lennar.
To develop the rest of the island, the Treasure Island authority issued a public call for a master developer in October 2000. The brochure was sent out to 500 companies, and it boasted that the project was a “once-in-a-lifetime opportunity” to redevelop the “jewel of the San Francisco Bay.”
A few months later, the agency hosted a prebid conference and about 150 parties turned up. But by the February 2001 deadline, only two bids had come in.
One came from Navillus Associates, a group of investors that included an international financing expert and local actor Peter Coyote. The second bid came from a consortium called Treasure Island Community Development, which featured a familiar name from the marina development: Darius Anderson. Homebuilder Lennar was also part of the team.
By most accounts, the Navillus proposal for a “Magic City” was lackluster. Treasure Island Community Development submitted a document championing the team’s experience “developing large projects on challenging sites” and highlighting its strong financial footing.
The Treasure Island authority brought in a team of consultants — including Dean Macris, a former city planning director and Willie Brown loyalist — to judge the proposals. They dismissed Navillus for lacking relevant experience, financing and community ties.
But the Anderson-Lennar team met all the requirements. The consultants noted, in particular, that Lennar “has the financial capability to undertake this project without the financial participation of the other members” of Treasure Island Community Development.
The consultants said Lennar’s experience with Bayview-Hunters Point and the Mare Island base conversion in Vallejo, as well as Burkle and Anderson’s experience with the marina, illustrated the requisite “sensitivity to the built urban environment.”
Some Treasure Island authority staff voiced concern about the lack of competitive selection. But then-board member Gerald Green said the paucity of bidders simply reflected that “there are a lot of unknowns about what would be involved” with such a large and complex development.
Still, the agency agreed to hire yet another outside consultant to evaluate how to “improve the prospects for increased competition,” according to city records. It charged Bay Area Economics, a Berkeley-based real estate consulting firm, with anonymously interviewing five developers who had attended the pre-bid meeting but declined to submit a bid.
The firm reported that seismic issues were “10 times more important than any other concern.”
Developers also had “doubts about the financial feasibility of the project” and concerns that the cost of seismic improvements in an earthquake zone would “necessitate a level of density on the island that would be ‘unethical.’”
The report also noted that potential developers were concerned about “the political climate in San Francisco.”
The Treasure Island authority’s board discussed these findings at a September 2001 meeting and considered ways to improve the competitive process. For example, the report said, the city could explain how it would assist with the redevelopment, and it could “make a selection based solely on qualifications.”
If adjustments were made, two developers said they would feel “very positive” about submitting a bid.
Instead of reopening the bidding process, Treasure Island authority staffer Stephen Proud recommended allowing Treasure Island Community. Developers alone to submit a more detailed proposal because the staff did not think the agency would receive an “outpouring of new proposals.” (Proud later left the authority to oversee Lennar’s Bay Area projects, including Treasure Island.)
Development authority board member Marcia Rosen, then also the director of the city’s redevelopment agency, told the group that she supported Proud’s recommendation because it was “in the public interest to move forward expeditiously.”
Not everyone agreed. Six days later
Story blog postings
Spot. Us | 07 Jul 2010
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