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So with environmental risk largely eliminated, and with a profit guaranteed once the first-phase land is sold, and with the option to buy first-phase land, build houses there, and then sell them, it would seem that Lennar faces only one major financial risk in regard to the shipyard deal: Lennar, one of the nation's largest developers of homes, may lose money if it can't build and sell homes for a profit in a city with a severe housing shortage.
If the Phase 1 deal seems designed to insulate Lennar/BVHP from most financial risk, it poses a large potential risk to the city. Nothing in the present agreement prevents the developer from "cherry picking" the best parts of the shipyard land for development and leaving the rest. Lennar continues to hold an exclusive negotiation agreement that precludes the city from entertaining other development proposals, but the present development agreement only covers the first phase of the project.
In other words, Lennar is legally free to build and sell homes on the cleanest part of the base and then walk away from the rest of the project, leaving the city with no developer for areas that are designated for commercial and light industrial use -- that is to say, the areas that will bring permanent jobs. Lennar says it intends to develop the shipyard for the long haul.
"We believe ultimately that your partners are going to act in good faith," Singer says. "We believe that the Navy is going to act in good faith and clean up the land, and that the city will continue to participate, and so will we, even though this has been slower than we would like to have seen, certainly slower than the city and the neighbors would have liked to have happened."
Others, though, question whether Lennar is getting too much in the deal, and whether the claim that the developer has endured great risk is not greatly exaggerated. "The argument is kind of compromised," notes Eve Bach, a lawyer with the ARC Ecology environmental group. "We're down to a much smaller amount of money that they're putting up [than if the developer fronted construction costs]. The question is, how much is the city paying to get this front-end capital, and how does that compare with what they could borrow?"
Back in 1993, the Hunters Point Shipyard Citizens Advisory Committee issued a list of priorities for developing the former shipyard. Nearly all of them had to do with jobs. Employment, in fact, is a common concern among communities where hundreds or thousands of jobs evaporated when the military closed up shop.
For example, Sacramento County turned its former military bases into industrial parks, including an airport and a technology campus, as the military was cleaning them up. "Replacement jobs is number one," says Sacramento Economic Development Director Paul Hahn, whose city has seen three military bases close, including McClellan Air Force Base, which employed some 12,000 civilians. "You have to look at what they [the military] did, and what is the contamination, and what are the facilities, and come up with a re-use plan that makes sense.
"Industrial and commercial development came first, and housing came second. First and foremost, the county was focused on trying to get jobs."
In San Francisco, though, there is a seemingly insatiable appetite for housing, and in the current market, housing will likely make more money than commercial development, so residential construction has become a priority for developers. Because the Navy has broken just about every cleanup schedule it's ever made, the transfer of property that might be used for job-creating commercial and industrial development remains in a seemingly perpetual limbo. "The community wanted jobs, and that's a very good priority, and I understand it, but show me the jobs," says Jim Chappell, executive director of the San Francisco Planning and Urban Research Association, who believes the city should be courting employers that would locate at the shipyard. "Zoning and plans do not create jobs. Broad-based, long-term economic strategies create jobs."
There are other significant issues that must be addressed before any major commercial or industrial development at the shipyard can work, including transportation. The present entrance into the shipyard -- from Third Street down Evans Avenue -- would send increased traffic through Bayview neighborhoods. (There is no immediate plan to link the Third Street light rail that is currently under construction to the shipyard site.)
In a separate move, San Francisco is studying a southern entrance that would link the shipyard with Highway 101, through either a bridge or an expressway spur. Such a direct transportation link into the shipyard would certainly open the door for commercial development, but it would also bring additional plumes of car exhaust to a community already plagued by asthma and air pollution-related illness.
Environmental activist Saul Bloom, director of ARC Ecology, notes that his organization, for one, would fight any future transportation plan that does not include direct economic benefits to the surrounding community. And beyond a few hundred construction jobs involved with the building of housing, job creation remains a distant dream for the former Hunters Point Shipyard.
As the mayor flogs, citizens consider, and the Redevelopment Commission gets ready to vote on the long-awaited first phase of civilianization of the Hunters Point Shipyard, rumors of a plan for a new football stadium float around the old naval base like so many ghosts. Nearly any time San Francisco 49ers owners John and Denise York talk about rebuilding Candlestick Park, there is some mention of at least the possibility of an alternative location for a new stadium. One of those possible sites is Hunters Point Shipyard. Though it has no place on any of the colorful maps that illustrate all of the new development proposed for Hunters Point, the idea of a new football stadium for the San Francisco 49ers on this shipyard is not dead. Nor, it seems, is it alive.
