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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

Wednesday, Nov 9 2005
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Within hours of Hall's resigning from office, Newsom swore in as his supervisor of choice one of his own staffers, Sean Elsbernd, who, ironically, cut his political teeth as a former aide to Hall in District 7, west of Twin Peaks.

But if Hall went to Treasure Island believing that he would be in charge of negotiating with the Navy over the transfer of the former base and running interference with the politically influential team entrusted with developing the island, he may have been one of the few people who thought so.

In talks with the mayor and his aides during late July and early August of 2004, Hall says that he was repeatedly assured that if he took the job, he would be in charge on Treasure Island. On the eve of his decision to take the job, Hall says Newsom personally assured him during a late-night phone call that if he came aboard he would not be expected to play second fiddle to anyone. "The mayor wanted to know if we had a deal. He said, 'You're going to run the show. You're my man,' and he even added, 'Tony, I don't micromanage.'"

Indeed, a written job description that Hall says a mayor's aide faxed to him the next day describes the executive director's role as responsible for "oversight of negotiations with U.S. Navy for conversion of former Naval Station Treasure Island" as well as "long-term planning for redevelopment of property, including overall master developer negotiations."

But neither of those things proved true in Hall's case.

Amid little fanfare in the weeks leading up to the "triple play," Newsom created the Mayor's Office of Base Reuse and Development and installed as its head Michael Cohen, a former deputy city attorney whose considerable resume includes having played a key role in hammering out the development deal for the closed Hunters Point Naval Shipyard. (Hall says that he didn't know the base reuse office existed until after taking the Treasure Island job.) Although the office was new, Cohen's role with respect to Treasure Island was not. During the administration of former mayor Willie Brown, it was Cohen -- and not Hall's predecessor, Conroy -- who handled heavy-duty negotiations with the Navy and the developers, and that would not change.

In essence, Hall had been had.

"I was hoodwinked," he says of his deal with the mayor. "There are no excuses. After all my years in public service, I should have known better. I guess sometimes the older we get, the stupider we get."

The mayor's spokesman, Peter Ragone, paints a different picture, insisting that it was Hall who approached Newsom about the job, and not the other way around. He and others close to the mayor contend that the job description Hall was provided -- a copy of which Hall shared with SF Weekly -- was an outdated document that had become irrelevant by the time Hall accepted the post. Furthermore, they say, Hall knew from the start that Cohen had been the mayor's point-man with the Navy and developers and that the mayor intended for him to remain so. "Tony Hall has not told the truth on just about everything," Ragone says, "and that should give pause to anyone who hears anything that he says."


Relegated to a figurehead role, Hall earned high marks from the island's approximately 2,000 residents who occupy city-controlled rental units that once served as Navy housing -- and who've long considered themselves as city stepchildren -- for his attention to neighborhood issues. That attentiveness even earned him the nickname "Mayor of Treasure Island," which didn't help him at City Hall once he was perceived as overstepping the limited role expected of him.

That perception grew after Hall gave an interview to the New York Times last May in which he accused the Navy of dragging its feet in negotiating the transfer of the former base, saying the military was "holding us hostage on our own lands." Shortly afterward, the Navy renewed a long-dormant demand that the city pony up the more than $1.3 million in Treasure Island maintenance fees that the Navy claims the city owes it.

Although Navy officials insisted that the push to collect the money (which the city has yet to fork over) was not in retaliation for Hall's remarks, the incident angered Newsom's camp, including several members of TIDA's board of directors. For Hall, who had long since outlived his usefulness to the mayor, it was the beginning of the end.

By the time he went public with the "sweetheart deal" allegation in September, it appeared that a strategy to get rid of him was already unfolding. Before the September 14 session at which the TIDA board extended the developer team's exclusive negotiating agreement, city controller Ed Harrington announced that he had received an anonymous whistleblower complaint that Hall had removed some $173,000 "from under the control of the City and County of San Francisco."

The allegation soon fizzled. During a hearing of the Supervisors' Government Audit and Oversight Committee, a staffer from the city Treasurer's office acknowledged that the funds -- mostly security deposits and rent credits -- had been under TIDA's control all along in an account that could only be disbursed with the approval of the Treasurer's office.

Still, Newsom was livid upon returning from a trip to Ireland and being confronted with the "sweetheart deal" accusation. Even before his return, the mayor issued a terse memo making it clear that Cohen, not Hall, was the point-person in talks with the Navy and the developers. The TIDA board, meanwhile, hastily scheduled a vote to fire Hall. Three days before doing so -- in a closed session and over the raucous protests of Hall supporters and others who accused its members of doing the mayor's dirty work -- Hall received yet more bad news: The city's Ethics Commission notified him that he was being investigated for possible campaign violations stemming from his re-election as supervisor last year.

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Ron Russell

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