Lennar seeks license to kill

Lennar dumped this 65-foot high pile of dirt – uncovered – directly behind Precision Trucking, the only Black business operating at the Hunters Point Shipyard. -Photo: Bob Nichols

Part 1: The political Moby Dick

by Ahimsa Porter Sumchai, M.D.

For local governments, sports facilities generate only a limited amount of new tax revenue. Sales tax from tickets and concessions go to the state. When stadiums are part of larger developments, the local economic impact can be more favorable. Residential development generally is not exempt from property tax. Shopping centers provide sales taxes. Yet the tax return would be even larger if the stadium were not part of the package.” – Roger G. Noll, professor emeritus of economics at Stanford University and author of “Sports, Jobs and Taxes: A study of the economic impacts of sports facilities”

On Tuesday, Nov. 20, known political operatives of Lennar Corp. – in partnership with the Mayor’s Office of Economic and Workforce Development – filed their intent to sponsor on the June 2008 ballot a measure seeking voter approval of a huge mixed use revitalization project. The conceptual plan proposes the integrated redevelopment of Candlestick Point and Parcels A-3 and B through E of the Hunters Point Shipyard.

The combined project areas comprise 790 acres and make up the largest area of underutilized land in the city. It brings into legal partnership the Redevelopment Agency of the City and County of San Francisco, the City and County of San Francisco and Lennar/BVHP LLC, a California limited liability company doing business as Lennar-BVHP Partners and Lennar Corp.

The city’s lease of the stadium at Candlestick Point is scheduled to expire in 2013 and, while the 49ers announced in November of 2006 their intent to build a new stadium in Santa Clara, the June 2008 ballot measure seeks voter approval of a plan that sites a state of the art football stadium on 27 acres of Parcel E, the largest and most toxic parcel of the Hunters Point Shipyard.

Parcel E and its toxic industrial waste landfill, designated Parcel E-2, has been classified by the Environmental Protection Agency as a Superfund site, one of the most contaminated pieces of urban property in the United States. Navy and other public records show that radioactive wastes, toxic heavy metals, PCBs and other pollutants were disposed of at this site. The conceptual plan for the Shipyard-Candlestick Point development project identifies the projected cost of hazardous materials cleanup of the Shipyard to be an astounding half a billion dollars!

The 49ers have signed no binding agreement to cooperate with Lennar in its plan to site a stadium and parking lot at the Shipyard. Indeed, at a Nov. 21, 2006, hearing before the Board of Supervisors on Lennar’s stadium development plan at Candlestick Point, legal representatives for the 49ers voiced reservations about the financial risks raised by a partnership with Lennar.

“Lennar is a mortally wounded harpooned white whale adrift on the deep and bloody sea of legal and financial liability. San Francisco voters would be wise to cease pursuit of this political Moby Dick.” – Ahimsa Sumchai, M.D.

The pragmatic reality is that the 49ers fan base is centered in San Mateo County, and the proposed stadium at the Shipyard is farther away from Highway 101 than the existing stadium at Candlestick Point.

On Feb. 13, 2007, the Board of Supervisors passed Resolution No. 59-07 urging the Redevelopment Agency to amend its exclusive negotiating agreement with Lennar Corp. to provide for the integrated planning and redevelopment of both Candlestick Point and Shipyard Parcels A-3 and B through E for a mixed use project including a new 49ers stadium.

The Mayor’s Office announced this fall that former 49ers team owner Eddie DeBartolo Jr. will lead the June 2008 ballot measure campaign. DeBartolo became embroiled in a federal corruption probe after the June 1997 Proposition D and F ballot measures, which passed with less than 50.4 percent of the vote and authorized the creation of a Candlestick Point Special Use District and $100 million in city bonds towards financing of a new stadium.

Lending to its ever deepening legal and financial vulnerability is the fact that Lennar Corp. is a residential developer with no track record in commercial development of shopping malls and stadiums. Moreover, Lennar is a mortally wounded harpooned white whale adrift on the deep and bloody sea of legal and financial liability. San Francisco voters would be wise to cease pursuit of this political Moby Dick.

On Tuesday, Nov. 20, 2007, Lennar’s stock plummeted to $15 per share from a 1992 high of $30.125. The corporation was reduced to “junk status” by Moody’s. Lennar closed the third quarter of 2007 with over half a billion dollars in losses and radically downsized its workforce. Local layoffs at Lennar BVHP include Paul Mennaker, the executive named as the source of racially offensive comments and threats by three Black Lennar employees in a racial discrimination suit filed by the law office of attorney Angela Alioto, scheduled to go forward in early 2008.

While Lennar blames its financial losses on the national housing crisis and wave of mortgage defaults that have negatively impacted its mortgage and property management subsidiaries, the corporation has since 1990 accrued an “encyclopedia” of lawsuits nationwide. Additionally, Lennar faces charges of bribery, coercion and intimidation of employees and public officials both locally and across the country.

In March of 1999, under circumstances investigated by the city’s Ethics Commission, Lennar became the “master developer” of the Hunters Point Shipyard. The chair of the commission instrumental in the contractual award vacated her position shortly thereafter to become a Lennar employee.

In 2003, Lennar entered into a Disposition and Development Agreement for the development of 1,600 residential units on Shipyard Parcel A. In 2006 it changed the DDA to exclude affordable rental properties at the Shipyard.

In San Francisco Lennar has assembled a virtual army of paid “consultants,” from religious leaders to non-profit directors and city government officials to advance its dirty development agenda at the Shipyard as documented in Federal Bureau of Investigations reports made in 2004 and 2007.

Shelley Bell, past president of the San Francisco Planning Commission, received a $100,000 grant from Lennar in her capacity as director of the Bayview Opera House in the weeks preceding the Planning Commission’s December 2004 approval of the Shipyard transfer.

Elections Commission Chair Rev. Arnold Townsend is reported to have received consulting fees from Lennar and in his commission capacity cannot promote Lennar’s June 2008 ballot initiative.

Since 2006, Lennar Corp., a limited liability company, has been sued in San Francisco in three separately filed lawsuits claiming the construction of shoddy homes at the South Beach condominium complex, racial discrimination against African American managers at the Parcel A construction site and Proposition 65 violations filed by legal representatives of victims of toxic dust exposure at Muhammad University of Islam located adjacent to Parcel A.

AIG Environmental, the insurance company providing a package of environmental liability policies to the Redevelopment Agency, the city and Lennar for Phase I development of the Shipyard, issued only $25 million in liability insurance.

On Sept. 10, 2007, the California Department of Public Health (CDPH) released findings of their analysis of air monitoring data for residents living adjacent to the Parcel A development site which, despite “significant data gaps” and “validity problems with the monitoring equipment,” documented asbestos levels exceeding the level that triggers an immediate determination of the adequacy of dust mitigation measures 83 percent of the time when Lennar’s grading occurred on the site.

During this same period, asbestos levels exceeded the threshold for shutdown of grading operations 13 percent of the time. Based on the determination that Lennar BVHP was out of compliance for a total of 384 days during grading and construction at Parcel A, the Bay Area Air Quality Management District agreed at an October 2007 hearing to fine Lennar $25,000 a day.

The CDPH Site Assessment Section explicitly recommended the inclusion of community air monitors, especially HV-7, HV-8 and HV-9 in the official asbestos monitoring plan, as regulated by the BAAQMD, noting that “these monitors, along with the on-site monitors, create better coverage of the perimeter of such a large parcel.”

Despite Lennar’s claims that grading was completed in September in 2007, community air monitors continue to document elevations in asbestos levels. One monitor, HV 12, located on Fisher Street at Building 101 where a colony of artists is sited, consistently registers asbestos concentrations at shutdown levels, according to Minister Christopher Muhammad.

In investigating the monitor, Muhammad unearthed evidence that Department of Public Health and Arc Ecology scientists agreed to disregard the readings of the HV-12 monitor.

Lennar goes ‘belly up’

The media “feeding frenzy” generated by the Nov. 6, 2007, discovery of a 23-pound fragmentation bomb in the yard of an upscale Lennar home under construction in Orlando, Florida, built at a 1940 munitions training site is just the tip of the iceberg for the beleaguered home builder.

The incident should trigger alarm in San Francisco, where Lennar is the designated master developer at a former naval base, where on Sunday, July 15, 1945, at noon Capt. Charles B. McVay, Navy commanding officer of the USS Indianapolis, said, “We were at Hunters Point and they put on us what we now know was the atomic bomb … which was later to be dropped over Hiroshima.”

Lennar Corp.’s track record of faulty home construction on toxic properties and landfills inspired one real estate agent’s internet crusade at www.defectivehomes.info. Mike Morgan, owner of a Florida real estate firm, was sued by Lennar Corp. in circuit court for libel and slander in June of 2006. Morgan vowed his campaign to expose the “shoddy building by the company will not go away!”

In 2006 Lennar Homes was named in a wrongful death lawsuit filed after an appliance deliveryman, Rafael Ugalde, was electrocuted in a room where the power was off in Clermont, Florida. A Problem Solvers Investigation concluded that due to negligent bundling of electrical wires and building code violations, a giant power circuit electrified the house, generating 110 volts of electricity that killed Ugalde as he hooked a dryer hose to a vent.

Lennar was sued in Arizona in 2003 for age discrimination by the U.S. Equal Opportunity Commission on behalf of employees 40 years and older who claimed they were laid off by Lennar. Following their termination, Lennar hired new younger sales agents.

In March of 2000, the Miami-Dade School Board was faced with a $4 million cleanup of a landfill on property it acquired from Lennar Homes without knowledge of the presence of the dump. The builder obtained a permit in July 1987 to open a five acre landfill in which the company buried construction debris, appliances, tires and household trash. The landfill was closed in 1990 and the property was deeded to the school board in 1995.

In 1992, a “storm” of lawsuits were filed in Dade County Circuit Court against Lennar Homes Inc. after Hurricane Andrew leveled 75,000 homes with construction flaws. Homeowners claimed their homes were not built according to the stringent South Florida Building Code, which mandates that structures be built to withstand winds of 120 miles an hour. The inferior wood frame homes with casually attached roofs built by Lennar would not have weathered winds at speeds of 75 miles an hour, according to Ervin A. Gonzalez, a lawyer for the homeowners, who demanded consequential damages, evacuation costs, loss of personal property and personal injury.

Next week: Lennar seeks license to kill, Part 2: Health effects of the dirty transfer of the Hunters Point Shipyard

Contact Bay View Health and Environmental Science Editor Dr. Ahimsa Porter Sumchai at (415) 835-4763 or asumchai@sfbayview.com. Dr. Sumchai was the San Francisco Giants’ emergency physician at Candlestick Park Stadium from 1989 to 1999. She was a member of the Restoration Advisory Board (RAB) for the Hunters Point Shipyard from 2000 to 2005.