Firm Competing for Concord Naval Base Reuse Project Allowed to Withdraw Bid

March 29, 2016 12:21 pm · 41 comments

The Concord City Council decided Monday to allow one of two competing firms to drop out of a head-spinning selection process for a developer on a major reuse project delayed for months by impropriety accusations.

The City Council was slated to convene on April 5 to finally choose between Catellus Development Corp. and Lennar Urban, two firms vying for a contract to be part of the $6 billion redevelopment of the 5,046-acre Concord Naval Weapons Station site.

But a special meeting was called Monday in which the City Council denied a request made by Catellus that city officials said would shift between $350,000 and $700,000 in financial risk from the firm to the city in the event the firm is selected.

Mayor Laura Hoffmeister said it appeared Catellus’ preference in that case was to exit the selection process and have its original deposit of $250,000 refunded to it. The City Council in a 2-1 vote allowed the firm to withdraw and have its deposit back.

The latest development comes after months of delays following accusations Catellus made in September that Lennar lobbied City Councilman and then-Mayor Tim Grayson.

The allegations were investigated by Michael Jenkins, an independent attorney hired after the Oct. 6 suicide of City Attorney Mark Coon, who was drafting a report on the allegations.

Although no evidence was found that Grayson was aware that the contributions were connected to Lennar, he later recused himself from the selection process.

The report left it up to the City Council to decide whether to proceed by disqualifying Lennar from the selection process.

The City Council in a meeting on Feb. 23 voted to allow Lennar to continue in the selection process, saying they wanted to consider the proposals on their merits and that it was in the city’s interest to have multiple bidders.

The next step was to have Catellus and Lennar make presentations and to hear public comment during the April 5 meeting, wherein Hoffmeister and Councilmembers Dan Helix and Edi Birsan would come to a decision or the final selection would be pushed to April 13.

Ahead of that meeting, Catellus asked that a deposit covering city expenses associated with further negotiation be made reimbursable in the case that the talks break down when it’s selected.

A March 22 letter from the firm’s CEO, Ted Antenucci, to the city’s staff argued that the changes proposed by Catellus reflected that “the economics and structure of our proposal are significantly better for the city than those of Lennar’s.”

Antenucci’s letter also implied that the relationship between his firm and the city was eroding.

“Catellus would prefer to continue moving forward in this process, yet every week, there seem to be new mistruths, fabricated by certain individuals, which make it difficult for us to have confidence that the city wants a successful, long-term partnership,” Antenucci wrote.

Helix, the sole voice of support for granting Catellus’ request on Monday, said he fully understood the reasons for it.

“I want very much for them to be here next week, competing as a master developer applicant,” Helix said, adding that Catellus was justified in thinking “someone was stacking the deck against them.”

Hope Johnson, a Concord resident, said during a public comment period that the City Council “demonized Catellus and created a hostile environment for them.”

Jenkins in his report himself suggested that the City Council had a hurdle to acting dispassionately because they were frustrated with Catellus making allegations that disrupted progress on the project.

Ultimately, Jenkins’ report read, Catellus’ allegations “do not appear to have been motivated by anything other than the desire to have a fair shot at being awarded the contract.”

During Monday’s meeting, Birsan was still skeptical about the firm’s motivations.

“They complained about having a fair shot,” he said. “What in their current proposal addresses having a fair shot? What it is – it’s a financial out.”

Birsan said, “This is not about trust – this is a billion-dollar deal.”

Birsan said allowing late term sheet changes would shift negotiation power away from the city.

Hoffmeister expressed hopes that Catellus would remain in the selection process, despite her joining Birsan in a motion to refund their deposit in exchange for the firm’s voluntary withdrawal.

With only Lennar potentially remaining in the master developer selection, the City Council will meet again to discuss the matter at 6:30 p.m. on April 5 at the Concord Senior Center at 2727 Parkside Circle.

TK March 29, 2016 at 12:32 PM

This whole situation stinks from the ineptitude by the City of Concord’s elected officials and at-will executive management.

They should all resign their positions.

A piece of the furniture March 29, 2016 at 12:34 PM

Put it on hold.. Let a few more developers in the mix.. Do not rush this project..

Noj March 29, 2016 at 12:36 PM

This is one helluva good story. Thank you for reporting it.

aberage joe March 29, 2016 at 12:38 PM

How convenient…

Well Folks March 29, 2016 at 12:38 PM

Concord is a joke……………..The city staff and council have brought new meaning to the term “SNAFU” where this project is concerned.

primo March 29, 2016 at 12:56 PM

Has their been FBI corruption/conspiracy/RICO investigations ????????????
If not,why not ?????????????????

Hope Johnson March 29, 2016 at 1:00 PM

Birsan is wrong that contracts are not about trust. All contracts involve trust. Each party agrees to abide by certain terms and conditions, and trusts that the other parties to the contract will in exchange also abide by the agreed to terms and conditions. In this case, Lennar and Catellus agreed to submit a good faith deposit and refrain from lobbying the council, while Concord agreed in return to evaluate the developers’ proposals and have a special committee make a recommendation. Lennar broke its end of the agreement by lobbying the council with campaign contributions and Concord broke its end of agreement by secretly removing the agreed to staff recommendation that turned out to be for Catellus. It speaks volumes that Birsan doesn’t think contracts are about trust. He must be more of the pay to play school of contract management.

Well Folks March 29, 2016 at 1:03 PM

#2 – if you were a developer and saw all the crap that has gone one would you want to ever deal with Concord? There will be no other developers. Concord has screwed this up royal

Silva March 29, 2016 at 1:05 PM

I’d have cut and run also if I were in their shoes. The fix was always in.

concord resident March 29, 2016 at 1:09 PM

Time to reopen the bidding process… if our fearless leaders decide to approve Lennar without any competition we need to recall each and every last one of them and bring in a new Council that will clean house at City Hall.

END THE CORRUPTION

grah March 29, 2016 at 1:17 PM

Voting 2-1 to not return someone else’s money

Households should vote if they want to pay property tax

Pamela Schuur March 29, 2016 at 1:20 PM

Terrific reporting – thank you. Concord’s officials have done a horrible job so far on this project. There is far too much at stake to have a situation where only three council members can participate in votes. And from what I witnessed last night, I’m not sure those three understand what is happening, what their roles are, and what the stakes are. Time to slow the city’s roll. Go back to basics. Start fresh.

Mary Fouts March 29, 2016 at 1:30 PM

There simply is no choice but to shelve the project and start anew later. But only after any ongoing investigations (hopefully some criminal) are completed and the results thereof made public.

10 years plus of work and time down the drain.

Thanks to Claycord posters that have provided a wealth of information and helpful commentary on this topic: Hope Johnson, KAD, Well Folks, and others too numerous to mention.

jtkatec March 29, 2016 at 1:34 PM

Time to put it out to bid again and start over.

.Always Right March 29, 2016 at 1:35 PM

Catellus, unlike Lennar, has been acting in good faith and deserves to have their good faith concerns addressed.

If Catellus withdraws, we should NOT proceed with Lennar as the last company standing.

Instead we should go back to restart the selection process. Invite back the semi-finalists and give this another go.

Well Folks March 29, 2016 at 2:04 PM

Hey Edi – there needs to be TRUST in creating a billion dollar deal. WTH kind of business man are you if trust is not part of your business fundamentals. Business relationships be it governmental or private sector have a necessity for trust. Without trust you have nothing. They way I see it the citizens of Concord can not trust the council so the citizens have NOTHING!!!!!!!!!!!!!!! Way to go there Edi & council…..way to go.

Always Right – fat chance in hell the others would come back to the table after this f-up. Would you be willing to do business with an entity as slimy and deceitful as Concord? I sure as hell would not.

KAD March 29, 2016 at 2:11 PM

The only good thing the staff did during the whole process of deciding which developers were qualified to be in the final 4 was to leave Seeno in the bottom 4. Leone questioned this during a City Council meeting when they were voting on whether to accept the Staff recommendation. He was so upset at this that he recused himself from voting. I wrote a letter to City staff asking them if Leone had recused himself because of where he lived. I received a response from Mark Coon telling me that he just choose to recuse himself and it had nothing to do with where he lived. That tells me everything I need to know about Seeno and Leone.

Why does everything have to be so hard? March 29, 2016 at 2:14 PM

The city should have realized that the negotiation process is more than they could handle and hired a outside firm to advise them!

Concord used to be such a great place to live… Before we had a counsel that had to show everyone how important they are?

Can you say Clayton Valley Charter School….

Remember absolute power corrupts absolutely!

Probably some very nice people who are in way over there heads and should maybe realize this before this gets any worse.. I am asking you please seek some help. Thank you.. A concerned citizen.

KAD March 29, 2016 at 2:17 PM

Please excuse the typos and grammar in my comment. I am just plain mad and my eyesight is not that good right now.

foonman March 29, 2016 at 2:18 PM

Can’t believe there’s only two willing to do this?

Divided and Concord March 29, 2016 at 2:37 PM

Why the City of Concord would want to do business with Lennar defies logic. There’s so much evidence proving they are a company of ill repute. They’ll wheel and deal and make promises but in the end they’ll come out the winner and Concord the loser. It’s all about greed and the profits for themselves and their investors. What is $350,000 – $700,000 cost to the City compared to Catellus’ willingness to absorb millions in costs associated with building infrastructure. Lennar is shifting those costs to us and we’re talking millions. Roads need to be built and existing ones expanded to accommodate this development. The developer should pay not the citizens of Concord. Lennar is a master schemer not a master developer. That was clear from last night’s performance.

No Excuses March 29, 2016 at 2:55 PM

I saw nothing in the agreement to withdraw that would preclude exposure of exactly who the “certain individuals” are, and what the “mistruths” are. We do know that Catellus was accused (by staff) of threatening a lawsuit. We know that Catellus clearly denied that accusation. What else don’t we know.

What we don’t know is what was really said in Bjerke’s private meetings with the firms between Feb 23 and Catellus’ first March letter. We’re expected to simply accept Bjerke’s “rendition” without Catellus’ confirmation?

Somewhere, there must be some minutes, memos, etc.

Someone needs to do a real investigation.

What is “really” going on? Lennar and every single Friend of Lennar reneged on their promise to co-operate with the city investigation. Obviously, each and every one of them knew they couldn’t afford to tell the truth – or be caught in a lie.

Nor could they afford to say something that would prove “the lie” in Grayson’s claims of ignorance.

Whatever happens in April, I would hope the political careers of Birsan, Hoffmeister and Grayson come to a screeching halt.

Momosfriend March 29, 2016 at 3:01 PM

3 people to pick a multi billion $ project from one bidder. Catellus knows their a fraud and they want their honest money back.
Stinks from all sides.
Thanks Non elected council for embarrassing the city with your shady dealings and utter contempt of the citizens of Concord.
Closed door dealings.
If it walks like a duck and talks like a duck, it must be a duck.
FRAUD that’s the new way to spell Concord. Sleazy Willie teaches them well.

ConcordMike March 29, 2016 at 4:09 PM

This whole thing stinks like Seeno has plotted this all from the beginning. Grand Jury investigation I say! Do it right, or don’t do it at all. Hell, I’m not a Raider fan, but maybe them building a stadium there isn’t a bad idea after all this.

No Excuses March 29, 2016 at 4:19 PM

Bjerke, Hoffmeister and Birsan put “$50,000 – $700,000 on one side of the scale — put $50,000,000 of surrounding infrastructure on the other side — and then voted that the “light side” should prevail. Throughout it all Hoffmeister pretended she “just didn’t understand” what Helix was suggesting.

After Helix’s drawn-out remarks, the immediate smile/smirk exchanged between Hoffmeister and Birsan is a picture worth publishing. It probably said more than the next hour of bantering could.

Bacon March 29, 2016 at 4:21 PM

City Hall needs to begin the search for developers again. This City cannot condone the corruption of Leone and Grayson and the catastrophe left in the wake.

Start looking for developers again, find responsible and accountable companies.

Keep the City Council out of the back room deals, away from Willie Brown and visible to public scrutiny.

Then, perhaps the People of Concord will see what is good for the City rather than what is good for the City Council.

Bob Foo March 29, 2016 at 4:22 PM

This whole ordeal didn’t just waste money and time. It drove one man to kill himself because of the stress of what’s been going on. I still wonder if there was more to that story. But obviously getting the truth to the public is not the priority of the local government.

R.I.P. Mark Coon.

No Excuses March 29, 2016 at 4:44 PM

Maybe Hoffmeister didn’t fully understand what Helix was suggesting because Birsan was mumbling to her during that last couple of minutes that Helix was talking. I recommend starting to watch at about the 47minute mark of the video, and watch closely as the camera switches. Catch a stop-frame at 49:28. Such disrespect! Birsan doesn’t know any better, but Hoffmeister should be ashamed of her lack of decorum — in addition to her hour of “pretense” of misunderstanding.

KAD March 29, 2016 at 5:25 PM

No Excuses – I saw that smile/smirk also. He was the only one making sense last night and they thought it was funny, at least Laura did. I could not see Edi’s face on the TV at that time.

SaraD March 29, 2016 at 6:31 PM

So let them leave if they want to be part of the bid, who are we to stop them. I love you you all KNOW what is actually going and that you mind read…give me a break they knew they had no chance in heck to win, their project stinks. IF you had been par of the process (other than the last months) you would know that Catellus DID NOT FOLLOW anything we the people wanted, so don’t throw them a pity party because they now see the writing the wall and know they don’t have a chance to win.

Love My City March 29, 2016 at 8:06 PM

How do we get the City Council to reopen the bidding? This whole process seems to have been poorly managed and the citizens of Concord should not be stuck with a bad deal.

Harold Diaz March 29, 2016 at 8:41 PM

Run Catellus run.

Leave it to Lennar to take away all the toxic clean up.

Concord is not an easy place to do business.

Harold Diaz March 29, 2016 at 8:46 PM

Run Catellus run.

Leave it to Lennar to take away all the toxic clean up.

Concord is not an easy place to do business.

Hope Johnson for Mayor!

KAD March 29, 2016 at 11:40 PM

My husband and I agree – Hope Johnson for Mayor.

Just think how much this project would cost in a better city like Walnut Creek or Lafayette! March 30, 2016 at 5:19 AM

I guess concord should be happy it is more like Antioch of Pittsburgh good job way to keep your cost down we may need to build a wall around your city to keep you from getting out!

1. question how bad are you people going to let things get before you realize how bad things are??? In this case it will take a city to invoke a change.

P.S. Stop with all the attitude ask for some help and let’s turn things arround!

Carol March 30, 2016 at 7:30 AM

Hope gets my vote as well.

Silva March 30, 2016 at 7:54 AM

If only we had another Hope Johnson or two or three.

SaraD = Lennar Plant March 30, 2016 at 7:57 AM

You are very obviously either a plant or a troll, and you are new here.

jtkatec March 30, 2016 at 9:36 AM

I realize the Federal Government has a mandate for a portion to allotted to low income housing, Okay, no way around getting a hold of this federal land.

The rest of it, give it to the parks and open space. No development, just give it up.

@ Edi Birsan March 30, 2016 at 4:10 PM

Your “trust” comment is beyond comprehension.

Paul Poston March 30, 2016 at 5:24 PM

Just a reminder that the votes by Edi and Laura cost the City (us the citizens) $180,000 to make up the remainder of the good faith deposit by Catellus as they had $70,000 left of the original amount.

Comments on this entry are closed.

Previous post:

Next post: