Report: Concord Naval Weapons Station
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Transcript of Report: Concord Naval Weapons Station
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7/25/2019 Report: Concord Naval Weapons Station
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JENKINS
HOGIN
LLI
ALAW
PARTNERSHIP
MCHAEL
ENK
NSANHATTAN TOWERS
CHRISTt
HocN
23
ROSECRANS
AVENUE
SUITE
JOHN
C
COTI7
MANHATTAN
BEACH
CALIFORNIA 9 266
GcEr
ss
LAUREN LANGER
3 643
448F
643
44
TkEVOx
RustN
WWW
OCALGOVLAW
C O M
MELINDAAGREEN
NATALIECKARPELES
WRITER
S
MAIL
ADDRESS
M E N KI NSaOCALGOV LAWCOM
February
2 6
CityCouncil
City
of
Concord
95 Parkside Drive
ConcordCA 945 9
Re
Concord Naval
Weapons
Station Mas te r
Developer
Selection
Dear Members
of
the CityCouncil
As
you
a re
aware
the
City
Manager received
a
letter dated September 24 2 5
from
the Hanson Bridgett law firm on behal f ofCatellus Development
Corporation
asserting violations of th e Agreement to Negotia te by Lennar Concord
LLC Lennar
in
connection
with the
Master Developer
selection process
fo r
th e
Concord Naval
Weapons Station Specif ically the Hanson Bridgett
letter
contends that Lennar violated
the
terms
of th e
Agreement to Negotiate
with th e
City
ofConcord
by
lobbying the
City
Council
The City
received
a s e c o n d letter
from
Hanson
Bridgett
on September
25 2 5
raising
the
specter
of
litigation
against
the
City
due
to
Lennars
l leged
breach The
Citys
nterim
City
Attorney e n g a g e d this
firm
a s independent
special counsel to
investigate and report
back
to
the
City Council findings and
conclusions
with respect to
these
allegations
In
connection with
th e
preparation
of
this
report I
have
considered
both
documentary and
testamentary evidence
and where
possible
I
have drawn
inferences
a s
to
the credibility consistency and relevance of the evidence
in
order
to
determine the
facts
surrounding
this
complex
issue
What
fol lows
is a
detai led explanation of
th e
applicable law and
a n a l y s i s
of the relevant
i s s u e s
which
l e a d
me to conclude that
Lennars
orchestration of
campaign contributions
to M ayor
Tim Graysonsssembly campaign
constituted
a
form of lobbying prohibited by the Agreement to Negotiate and the
removal of th e
recommendation
from the
f inal staff report
resulted from an
il legal
serial
Se e
Sep tember
25
2 5
letter from
M
Giacomini
toM
Coon
attachedhereto as
Exhibit
YY
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JENIdNS HOGIN LLP
February
2 6
Page
2
meeting
I did
not
find
merit
with
any
of
Catellus
sther
allegations
Moreover I
conclude tha t the Agreement leaves th e
consequences
if any of
such
lobbying entirely
within the
Councils discretion
I FactualBack
ound
A
Persons of Note
Unless otherwise
indicated below
th e following
persons
were
interviewed
in
connection with this
investigation
Participation
by witnesses
was
voluntary and interviews were not conducted under
oath
Concord
City
Counc i lmembers as of Sep tember
2 5
Edi Birsan Councilmember
Tim
Grayson Mayor
during the re levant tim e
period and
candidate fo r
2 6
District
4
State
Assembly Race
Dan
Helix Councilmember
Laura
Hoffineister
Councilmember
Ron Leone
Vceayor
Mr Leone recused himself from the Master
Developer selection process due
to
the proximity of
h is
home
to portions of Phase I of the Concord Naval Weapons Station
Project
2
City Staff
Valerie
Barone
CityManager
Guy
Bjerke
Director of
Community
Reuse
Planning
Local
Reuse
Authority
Mr Bjerke assumed the position of Director of
Community Reuse Planning upon
th e
retirement of
Mr
Wright
onor
about
September
2
2 5
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JENIaNNS
HOGIN LLP
February
2 6
Page 3
Mark
Coon
City
Attorney
Mr
Coon
was deceased
prior to the
commencemen t of
this
investigation
Jovan G rogan
Assistant
City Manage r
Michael
Wright Former
Director ofCommunity Reuse Planning Local Reuse
Auhoity
onsutan
Mr Wright
served a s
th e
Director of
Community Reuse Planning until h is retirement from h is
position
ono
about
September
2
2 5
Mr Wright
attended all of the closed sessions convened
to
discuss the
Mas te r Developer negotiation
3
City Consultants
Dahlia
Chazan
Consultant
banlanner
with
Arup
a
consulting
firm
under
contract with
th e
City
Craig
Labadie
ConsultantomeCity Attorney
Gerald
Ramiza
Consutan
oneyith
Burke
Wlliams
and Sorensen
a law
firm
under
contract with
th e
Ciry Mr Ramiza regularly
attended closed sessions
convened
to discuss the Master
Developer negotiation
Paul
Silvern
Consutan
conoms
with
HR
Aconsulting
firm
under
conract
with
the
City
Mr Silvern attended some of
the
closed sessions convened to discuss th e Ma ste r De veloper
negotiation
4
Contributors to MayorGraysonsssembly Campaign
Engeo
Uri Eliahu is
th e
CEO of Engeo
an
engineering
company
founded in
Concord
Engeo
wasLennars untersPoint
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JEN IaNS HOGIN
LLP
February
2 6
Page
4
Project
geotechnical engineer and has worked on Lennar
s
Treasure
Island Project Engeo is
Lennar
sroposed
geotechnical
engineer fo r
th e
Concord
Naval Weapons
Station
GF
BunngCo
lenn Bunting is
president
and founder ofG
unng
Co
G
unting provided
public
relations
services
fo r Lennar
s
Hunters Point project
and
potentia lly other Lennar
projects
Noelle
Bonner
daughter of
Kofi Bonner Regional
Vice
President
of Lennar Urban is
a consultant
toGunting
Steven
Kay
M
Kay
is
president
of
Goden Gate
Global Golden Gate
Global
had
worked with Lennar
International
to
raise over
25 million dolla rs for
Lennar
s
unters Point
Project As
an
attorney
Mr Kay has represented
both Lennar
Homes and
Lennar
Community
Builders
M
Kay
declined
to
be
interviewed in
connection
with this
investigation
S e e Engeo
Portfolio
regarding
Hunters
Point
htp
wngeocomooo
unes
pnb
shipyardeuse
nd Treasure Island
htp
ww
ngeocom
oooeasue
andeuna
isand
euset ta c h ed he reto a s Exhibit
A
S e e staff
report
from MrWright
to
th e City Council regarding Introductory Presentations by Master
Developer
Candidates on Implementat ion
of th e
Concord Reuse
Project
Area
Plan dated February
2 5
attached
hereto
a s
Exhibit
B
4 S e e Community awaits benefits a s
Lennar
finally breaks
ground
in Hunters
Point
by
Steven T
Jones
printed
in the San
Francisco
Bay Guardian onJuly 2 3
htp
wwfb
com
c
23
ommnyne s
e
n
e
rnd
huners
ontta c h ed he re to a s Exhibit
C
5 Interview ofMr Bunring
Also s e eG
Funting
Website
hww
bunng
w
en
printout from
which is
attached hereto a s Exhibit D
6 S e e Golden Gate Global Website
htp
ww3gund
comew
ou
omany
ou
e
printout
from
which
is
attached hereto as ExhibitE
S e e Golden
Gate
Global
Webs i te
htp
ww
ud
omewoecs
ues
pnhpyad
printout from
which is
attached hereto a s Exhibit F
8
Se e
Exhibit
E
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JENIQNS
HOGIN LLP
February
l
6
Page 5
Fred
Naran jo
Fred Naranjo
is
a partner
of Scarborough
Insu rance wh ich
is
based
in
San
Francisco
Mr Naranjo has attended and
contributed to fundraisers at the Bay View Opera H ouse
along with Mr
Brown
and h is
daughter
Susan Brown
Additionally
Mr
Naranjo is a resident of the Bayview
neighborhood in San
Francisco and
was a vocal
supporter
of
Lennar
s
unters Point project
Mr
Naranjo
declined
to be
interviewed in
connection
with this investigation
Mary
Jo
Rossi
Mary Jo Rossi is a former employee ofMr
Wllie
Brown
and
currently serves a s
Mayor
Graysons
ssembly campaign
manager Ms Rossi a lso represents local business
interests
such a s Garaventa Ms Rossi
declined
to be
interviewed in
connection
with this
investigation
5
Master
Developer Finalists
Catellus
Ted
Antenucci
is CEO of
Catellus
and Steve Buster is Vice
President of Catellus
9
S e e S c a r b o r o u g h
I n s u r a n c e
W e b s i tehtpagencyneonacnprintout f r om which i s a t t a c h e d
hereto
a s
E
btG
S e e Legendary
Sarah
Vaughn
d r e s s
auct ion benef it
finds
Bayview Hunte rs Po in t
global arts
program by
AldrichM
Tan
printed in
th e
Fog City Jouma l on
Apri 28
2 6
htpogctyounacomew
n
be
pea
ouseunaser6 525
html
and Bayview kids
h e a d to Africa a n d France
thanks t o Bayview
Opera
House
by
P a t
Murphy printed in
the
F o g City
Journal
on May 26
2 6
htt
www
fogciryjoumal
comews
n
beayview
opea
ouse
undase6 4 8
html attached
hereto
as
ExhibitH
S e e Catellus c r i e s foul o v e r L e n n a r
contributions
to C o n c o r d M a y o r
T im
Grayson
s
s s e m b l y
campaign
by Richa rd Eber
printed in th e Contra Costa Bee
on August
23 2 5
https
conacosabee
om
ou
o
enna
onbuons
motason
assembyampa
n
t tached
hereto
a s ExhibitI
z Interview
of
Councilmember Birsan
3
Interview
of
Ms
Barone
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JENKINS
HOGIN LLP
February
2 6
Page
6
Lennar
Kofi Bonner is CEO of Lennar During his term a s mayor of
San
F rancis co Mayor B rown
appointed Mr Bonne r to serve
a s his Chief
Economic
Policy
Advisor
Mr Bonner declined
to be interviewed in connection with this investigation
6
Others
Garaventa
Garaventa Enterprises is a
recycling and
resource
recovery
company that serves Concord Pittsburg Bay
Point
Antioch
County O ak le y Discovery
Bay
Brentwoodounyyron
Knightsen Rio Vista
Bethel
Is land Rio
Vista
County a s
well a s th e entire East Bay through the
Mt Diablo
Recycling
Center
Garaventa has
been
known to pa rtic ipa te in
local
politics
and has shown
its
support fo r
local politicians though
campaign
contributions
Garaventa
and
two individuals
associated
with
Garaventa
contributed
2
o
Mayor
Graysonsssembly
campaign Garaventa was not
contacted
in connection
with
this investigation
because its
involvement
in th e ma tte rs
addressed
herein appears
to be pe riphe ra l to
th e
focus
of the investigation
Seeno
ADeeno
Construction
Co
is a
local
Concord
conractoreveloper
involved in
residential
and
commerc ia l
projects
includingmuamlyeve lopments re al es ta te and
subdivision
development
new
home
construction
and
property
management
Seeno
has been
known
to par tic ipate
in
local politics and has shown
its
support for local
politicians
4
S e e
UC
Berkley College of
Environmental Design 2 5
Distinguished
Alumni
Award
htp
e
eu
e
umend
sngushed
aum
awd
um
25
ko
ttached
hereto
a s
Exhibit J
S e e
Garaventa
Enterprises Websitehtpwwaavenaencomprintout from
which
is
attached
hereto
as Exhibit
K
6
S e e
Discovery Homes
Website
htpw scoveyhomescobouueenoprintout from
which
is
attachedhereto asExhibitL
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JENKINS HOGIN LLP
February
2 6
Page 7
though
campaign
contributions Seeno was not contacted in
connection with this investigation
because
its involvement in
th e
matters addressed herein appears to be
peripheral
to
th e
focus
of th e investigation
Wllie
L Brown
Forme r Assemb ly
Speaker and San Francisco Mayor In 2 4
Mr
Brown was a registered lobbyist with the San Francisco
Ethics Commission Mr Brown is connected
to
Lennar s
Hunters Point
Project
throughGolden
Gate
Global formerly
known
a s San
Francisco
Bay Area
Regional Center
and was
Mayo r of San Francisco w hen Lennar was awarded th e
Hunters
Point
project
M
Brown
declined
to be
interviewed in connection with this investigation
B
Commencement o
f
Master
Developer
Selection
Process
Catellus
Lennar
Named as Finalists
In January 2 4 th e City commenced a n a rdu ou s threeatelection
process
in
order to
ultimately identify
a
M as te r Deve lope r
fo r
Phase I of the Concord Reuse
Project
Area
Plan
Project
The process was m anaged by
Mr Wright
and a team of
consultants consist ing of
Mr
Ramiza
Mr
Labadie
Mr
Silvern and Ms Chazan
The first part of th e selection
process
th e qualification
review resulted
in
submittals
by
over
22
development companies By March
2 4
theIcal
Reuse
Authority
LRA
was
presented
with
eigh t qualification packages
Following
an
independent
review
this
list
was
ultimately
reduced
to
four qualified
f irms recom m ended
by
staff
these
f i rms included Catel lus Development
Corporation
Catellus Lennar
7 See San Francisco
Ethics Commission Website
htp
e
com
u gh
obb
Z4
O
537 printout
from
which is at tached
hereto as
Exhibit
M
8 S e e Bographyom
ebsite
htpwogaphy
com
eope
ow
5printout from
which
is
attached
hereto as ExhibitN
9 Interview of Ms Valerie
Barone
and Interview ofMrWright
Also
s e e Exhibit B
2
S e e
Exhibit
B
Z
Interview
of
MsBarone
and
Interview
of
M
Bjerke
Also
see Exhibit
B
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JENIQNS HOGIN
LLP
February
2 6
Page 8
Lennar
J
F
hea
Company
and SunCal Corporation SunCal While
Council
ultimately approved staffs
ecommendation
on
June
2 4 several Councilmembers
reported
receiving
criticism
principally
from
Seeno
that the Council was rubber
stamping
staffsecommendat ion B y
May 26
2 5Jh e a
dropped
out
SunCal
w a s
eliminated and
th e
list of four
was
narrowed to Catel lus and Lennar both of which
entered
into
Agreements
to
Negotiate
with
the
City
Agreement
The
identical
Agreements included
among
other things
a
prohibition on lobbying
betw een th e
developers and either the City Counci l Planning Commiss ion or
other
City employees
designated
by
the LRA Executive
Director
It was generally understood tha t th e Maste r
Developer selection
process
would culminate in
th e
recommendat ion of one
Mas te r
Developer
via
a staff report
prepare d by th e
LRA Executive Director and h is team
Negotiation
Team
C
N
tiaionsContributions and Closed
Sessions
On
or a bou t
April 22
2 5
Mayor
Grayson
arranged
fo r
a
one
on
neeeting
with
M
Brown
in
order to seek
advice
about his nascen
Assembly
campaign
M
Brown was aware of the pending
Project
however
according
to Mayor Grayson
th e
two
didnot
discuss
the
Master
Developer
selection
or
any
Project
specif ics
28
z z Interview of
Ms
Barone and Interview ofMr Silvern Also s e e Exhibit B
2 3
Interview
of Councilmember Leone
Interview
of Mayor Grayson a n d
Interview
of Councilmember
Hoffineister
2 4
Interview
of
Ms
Barone
Interview
of
Mr
Wright
Interview
of Mr
Grogan
a n d
Interview
of
Mr
Silvern
Also s e e
staff
report
from MrWright
to
th e City Council
regarding
Consideration and Approval
of th e Agreements to Negotia te Between
he City of Concord Local R e u s e
Authority
and Catellus
DevelopmentCorporation and 2
he
City
of Concord Local
Reuse Authority and
Lennar
Concord
LLC
dated
May 26
2 5 at tached
hereto
a s Exhibit
O
z s S ee
May
26
2 5
Agreement to Negotiate between
the
City of Concord a n d Catellus Section p a g e
9 and May 26 2 5 Agreement to Negotiate be tween the City of Concord and
Lennar
Section
page
9
Exhibit P
Z 6 Interview
of
Mr Bjerke Interview
of
Mr Grogan Interview ofMr Wright
and
Interview
of
Mr
Silvern
Z
Interview
of Mayor Grayson
Interview
of Mr
Wrigh t
and
Interview
of Mr G r o g a n
28
Interview
of
Mayor
Grayson
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February
2 6
Page 9
On
June
5 2 5 Mayo r
Grayson
and Counci lmembers Birsan and Hoffineister
along with C ity s ta ff
attended a
special m eeting consis ting of
a
site
visit
to Catelluss
Muel ler Project in
Austin
Texas
Ms Rossi and
MrAntenucci attended
the site
visit
Mr Antenucci reports
that
at some
point during the site
visitMs Rossi
approached
him and suggested that it wou ld b ene fit C ate llu s to connect with local
thrd
arty
developers
in order to improve its chances of
being selected
a s
th e
Master
Developer
and
he
stated
tha t
sh e had
also communicated
th e s a m e
message to Lennar
While
staff
took
appropriate
measures
to
prevent
interactions
between
and
among
the
Councilmembers
side
conversations
of this kind
inevitably
took
place For instance
during
this site visit
Mayor
Grayson in passing
mentioned
his upcoming
Assembly
race
and according
to
Mr
Antenucci commented on
th e
difficulty of
r ais ing cam pa ign funds
within
earshot ofMr
Antenucci
Mayor Grayson denies mak ing th is
commen t
At some
time prior to June 6 2 5
Mr
Bonner
contacted Mr Bunting
to suggest
thatG
unting consider
mak ing
a contribution to Mayo r Grayson
s
ssembly
campaign
On
June
6
2 5
G
unting
donated
o
Mayor
Grayson
s
campaign
z 9 Interview of Councilmember
Birsan
Interview of Councilmember
Hoffineister and
Interview ofMr
Wright Also s e e
Minutes of the
June 5 2 5
City
Council site
visit
at tached
hereto
a s Exhibit
Q
3 Interview
of
Ms Barone Interview
of
Mr Bjerke Interview ofMayor
Grayson
and Interview ofMr
Wright
Also
s e e
Exhibit
Q
3 Interview ofMr Antenucci
3 2 Interview of
Mr Antenucci
3 3 Interview ofMrWright
3 4 Interview
ofCouncilmember
Hoffmeister Interview
of
MrAntenucci Interview
of
Ms Barone
and
Interview of Mayor Grayson
3 s
Interview ofMayor
Grayson
3 6 Interview ofMr Anetenucci
3 7 Interview ofMr Glenn Bunting
38
See
Campa ign
Finance
Information for
Grayson
For
State
Assembly
2 6
ht
cal
aces
ssa
o
magn
ommees
ap764esson
5eweceved
attached
hereto
asExhibit
R
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JENKINS
HOGIN LLP
February
2 6
Page
On
June
7
2 5 Mayo r
Grayson
and Counci lmembers Birsan and
Hoffineister
attended
a
special meeting consisting of
a
site visit to Lennar l Toro Project in Orange
County
Ms
Rossi
was also present
at
th e site
visit
On June 8
2 5
Gunting donated
another
3
o Mayo r
Graysons
campaign
The total
amount do na te d
byGunting to Mayor Grayson
s
ssembly
campaign was4
he
maximum allowable contribution
to
individual candidates
for
the
Legislature
By the end
of
June
2 5
three
other entities
with ties to
Lennar
Scarborough Engeo
andM
Kay
each
donated4
to
Mayor Graysonsampaign
In July of 2 5 Catellus learned of the f oregoing campa ign
contributions
ftom an
unnamed source
On July 27 2 5 Mayo r
Grayson
and Counci lmembers Birsan and Hoffineister
attended a public tour of
Catellus
slam eda Landing
Development
On August
4 2 5 Mayo r
Grayson
and Counc i lmember
Hoffineister
attended a
public tour
of
Lennar
s
an
Francisco Shipyard Development Ms
Rossi
and Mr Buster
wee
also
in
attendance M
Brown
was
the
lead
presenter
At this tour
Counc i lmember
Hoffineister reports that Mr Bus te r a pp roa ch e d h e r
to
express
concern
over what
he
believed
to be inapp rop ria te p r iva te
meet ings between Mayor Grayson
and
MrBrown
3 9
S e e Minutes of th e June
7
2 5 City
Council
site visit attached here to a s Exhibit
S
o S e e
Exhibit
S
4 S e e
Exhibit R
4 Z S e e
Exhibit R
43
See Gov Code
853 et seq
S e e
Exhibit R
4 s Interview
of
MrAntenucci
a b
S e e
Minutes of th e July
27
2 5
City Council
site visit attached hereto a s Exhibit
T
4 7
Interview of Counci lmember
Hoffmeister
Interview of Mayor Grayson and Interview of
MrWright
Also s e e notes from the August 4 2 5 site
visit
at tached hereto a s Exhibit U
4 8 S e e
Exhibit
U
4 9
Interview ofMrWright and Interview of Counci lmember Hoffineister
Also s e e
Exhibit U
s o
Interview of Counci lmember Hoffineister It
should b e
noted
however
that
accord ing toMr Buster
he
was
no
present
a
the
Lennar
Shipyard
Tour
a
factconfirmed
by
the
noesfrom
the
Augus t
4
2 5
site
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February
2 6
Page
In response to
a
question
raised
by one of th e Master Developer finalists on
August 3
2 5
Mr Wright s e n t an
email
to certain consultants working on the Project
requesting
tha t
they
disclose
any
ongoing contracts
with
either Catellus or
Lennar one of
these consultants
was
Mr Silvern In response Mr Silvern disclosed tha t
between
2 8
and
2 3HR
Asew
York City
office
provided services to Catel lus Mr Silvern
was
not involved
in this assignment
More
distantly in
the
99 sHRA
s
s Angeles
office
worked on an
economic
impact
a n a l y s i s concerning a Specific
Plan
for
property
around Union
Station in
Los
Angeles then owned by a
joint
venture
including
Catel lus
T he
property has since been
sold to
LA County
Metro Lastly
Mr Silvern disclosed
that theHRAew York office w a s
awarded
assignment by a
partnership
including
SunCal Mr Silvern
was not
involved in this project On August 4
2 5
Mr Wrigh t
considered
Mr Silvern
s
isclosures and concluded tha t
th ey did
not create a
conflict of
interest
On August 7
2 5
Catellus
received
a phone call
from an unnamed
source
stating
tha t
certain
of
Mayor
Grayson
s
ampaign
contributors
were
connected
to
Lennar
On or before August 9
2 5
according
to an emai l sent from Ms
Barone
to
Councilmember Birsan Mayor Grayson indicated to her tha t
he may
no t want
a
staff
recommendation
a s
to which
Master Developer
to select
visit attached hereto a s ExhibitUurthermore Mr Buster
denies
having eve r made a
comment
to
Counci lmember
Hoffineister
regarding Mayor Graysonseetings with Mr Brown
a t
all
s
S e e
E m a i l
from
Mr
Wright
to
Mr
S ilvem as well
a s
Shawn
Zovod
S t e v e
Rottenborn Mark
O
rien
Mr
Ramiza
and
Am y
He rman
about
COI
check sent
A ug ust 3
2 4 attached hereto
a s Exhibit V
5 2
S e e
E m a i l
f r om Mr S i lv e r n to Mr Wright r e g a r d i n g COI
check
s e n t A u g u s t
3
2 4
a t t a c h e d h e r e to
as
Exhibit
V
5 3
S e e
Email from Mr Silvem to Mr Wright regarding
COI check
s e n t August 3 2 4 attached hereto
as
ExhibitV
s 4 S e e Email from Mr Silvern to Mr Wright regarding COI check s e n t August
3
2 4 attached hereto
as
ExhibitV
s s
S e e
Email from Mr Wright t o Mr Silvem regarding COI
check
s e n t August
4
2 4 attached hereto
as ExhibitV
s b
S e e September
24 2 5 letter to
Ms
Barone from
Mr
Giacomini of
Hanson
Bridgett attached
hereto
as
Exhibit W
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February 2 6
Page 2
On August 2
2 5 Catellussawyer
Mr
Andrew
Giacomini of
Hansen
Bridgett sent
a
letter to the Concord City Attorney requesting an investigation a s to the
campaign contributions Apparently Mr
Coon
refused Catellussequest to investigate
at
that
time
On
August 24
2 5
Mr
Wrigh t
sent a letter to both Lennar
and
Catellus stating
the deadline for presenting their last and best offer
to
the City
was
September 2 2 5
On
August 26
2 5 Mayor Grayson
returned the
campaign
contributions
from
GF
Bunting
M
Kay Engeo
and
Scarborough Mayo r
Grayson
later
delivered
to Mr
Coon a
letter from Jim
Sutton his private counsel on th e matter
concluding
tha t th e
campaign
contributions would
not
require
h is disqualification from th e Master Developer
selection
Between August and September
of
2 5 Mayor Grayson and Ms Rossi
m et
with
Mr
Brown
to
obtain
advice for
Mayor
Grayson
s
tate
Assembly
Campaign
5 7 S ee
Email
from Ms
Barone to
Mr Birsan regarding Deal
Points meeting
Lennar
a n d Catellus s e n t
August 9 2 5 at tached hereto a s Exhibit X
5 8
S e e Exhibit I
s 9 S e e
Exhibit W
b o S e e August 24 2 5
letter
from MrWright
to
representatives
of
both Catellus and Lennar
attached
hereto as Exhibit Y
6
S e e
Concord
Mayor Retums Donations Linked
to
P o s s i b l e
Weapons
Station
Developer
b y L i s a
P
White
printed in the Contra Costa T imes on
Sep tember
2 5
htp
wonracosames
co
oncod
c
874 5 7
oncodm
eunsonaonnke
possbeeaponsaonttached hereto a s Exhibit Z Additionally
s e e
Minutes of the September
2 5 City Council Meeting at tached hereto
a s
ExhibitAAand August 28 2 5 etter from
Mr
Jim
Sutton to Mayor Grayson at tached hereto
a s
Exhibit
BB
6 z On January l
2 6
Ms Christine
Cal lahan
counsel fo r Ms
Mary
Jo
Rossi
contacted
my colleague
Ms
Natalie Karpeles
and
indicated that
Ms Rossi
will not
voluntarily
participate or provide
an
interview
However
Ms
Callahan indicated that per
Ms
Rossi Mayor
Grayson
Wllie Brown and
Ms Rossi
met
one time in August of 2 5 and there
was
no discussion of either the Naval Base or campaign
contributions
63
Interview
of
Mayor Grayson
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February
2 6
Page 3
On
September
2 5 the
City
Council
m et
in
closed
session to discuss
th e
Mas te r
Developer
process and
th e then
urrenterm sheets
During
this
closed session
Mayor Grayson
raised a concern a s to whe th e rHR
A
and
Mr Silvern in
part icular had
a disqualifying conflict
of
interest
due
to
the
fact tha t
Catellus
wasa
past
client of
HR
A
Mayo r
Grayson
explained
h is
concern
to
m e
a s
follows Ia s
having
questions and in my
own
mind had developed questions
about
HRA
s
objectivity
and
I
was
doing my
own
research
This
research led
Mayor
Grayson
to
HR
A
sebsite
where
he
discovered
that
Catel lus
is
named
a s a
client
Th is
inform ation coupled with
his observations that
HRAeaned
more tow ards
Catellus than Lennar c a u s e d Mayor Grayson to
believe
that
there
w a s
a
preference
and
he
wanted to s e e whether there w a s
a n y
validity to that perception s o
he
did
his
own research
One of th e items d i s c u s s e d
during
this
c l o s e d
s e s s i o n
included
both developers
position on
affordable
housing
Prior to th e
conclusion
of th e
September
ls closed session Mr Wrigh t asked the
Council whe th e r or
no t it
wanted a recommendation
from the
Negotiation
Team in the
final
staff
report
it
w a s h is longstanding belief and that of other m e m b e r s of the
team
that the Council had directed the
t e a m
to
p r e p a r e
a
staff recomm endation
a s part of the
staff report
tha t
would
be presented
at
th e
conclusion
of the Master Developer se lection
6 4
Interview
of
Mr
Bjerke Interv iew
of
Mayor Grayson Interview
of Mr
Silvern
a n d
Interview
of Mr
Wrigh t
Also
s e e
Minutes
of
the September
2 5 City Council Closed
S e s s i o n
Meeting
attached
hereto
as
Exhibit
CC
b s Interview
of
Mayor
Grayson
6 6 Interview
of
Mayor
Grayson
6 7 Interview of Mayor
Grayson
6 8 Interview of Mayor
Grayson
6 9 Interview ofMayor
Grayson
7
Interview
of Mr Silvem a n d
Interview
of Mr
Wrigh t
Also
s e e
Exhibit AA
Interview of
Mr Wright
a n d Interview of
Mr
S ilvern A lso
s e e staff
report from
Mr Wright
to
the
City
Council regarding Report on Master Developer Term Sheets and Selection Process da ted September
2 5
attached
hereto
as
ExhibitDD
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JENKINS
HOGIN LLP
February
2 6
Page 4
process
T he
Council confirmed tha t understanding a s reflected in the Closed
Session
Minutes of
Septemberl
5
There was a discussion
a s
to
whether
the City Counc il wished to haetaff make a
recommendation
in the
staff report
for
the
meet ing
on
September 29 when
the
selection will be
made
Ultimaeyh e councilmembers concluded tha t consistent
a
ith g e n e r a l c i t y policy
staff
s h o u ld m a k e a recommendat ion
Furthermore
it had been communicated to both Lennar and Catellus that there
would be
a staf f recomm endation
at the conclusion of the
negotiation
process
On
or a bout
September
2 5
eight
d a y s after the deadline imposed
on both
developers by Mr
Wright
to
provide the
Negotiation
Team
with
their
b e s t and final
offers Lennar sent
staff
an upda ted te rm sheet address ing
affordable
housing and
relenting
on its
prior insistence on obtaining
a commitment for
P h a s e
II
of
the Project
T he
proposed
modifications
to th e te rm
sheet
were
not
accepted
On September 6 2 5 th e
City Council m et
in closed session
to
discuss th e
Master Developer process and term sheets During th e
meet ing staff
answered
questions
r a i s e d
by Council during the
September
ls
c l o s e d
session and
presented
it
with a
draft
Interview
of
MrWright Interview
of
Mr Bjerke Interv iew
of
Mr Grogan Interview
of
Mr Silvern
Interview
of
Mr
Ramiza
Interview
of
MsChazan and Interview
ofCouncilmember
Brisan My
impression
w a s
that they
w e r e
going to
g i v e
a
recommendation there
wasn
t
vote on
it
I
felt that when
Wright walked ou t of th e room
that
there was going to be a recommendation
7 3
See
Exhibit
CC
italics
in
original
7 4 Interview
of
Mr
Wright
Interview
of
Mr
Bjerke
Interview
of
Mr Grogan and Interview ofMr
Silvern
7 5
Interview of MrWright Interview ofMr Silvern Interview of Mr Bjerke and Interview of
Ms
Barone
Also s e e
emai l from Suheil
Totah with Lennar
to MrWright regarding
affordable
hous ing sent on September 2 5
and
resulting
emai l
exchange between MrWright Mr Ramiza Mr
Silvern Mr Labadie and
Ms
Chazan be tween September and 2 5 attached hereto a s Exhibit
EE and
2
email from Matthew
Gray
counsel
fo r
Lennar to MrWrightMr Silvern Mr Ramiza
Ms
Chazan
and
M
Labadie
re
CNWS Lennar
Highlight Summa r y
9
5
tatus
on Requested
Items sent
on
Sep tember
2 5
attached
hereto as
Exhibit
FF
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HOGIN LLP
February 2 6
Page 5
staff report disclosing staffs recomm endation of Catellus a s Master
Developer
At the
conclusion of this meeting the Negotiation Team
m e m b e r s
present Messrs Wrigh t
Silvern a n d Ramiza
u n d e r s t o o d
that
t h e y w o u l d p r e p a r e
a
final
v e r s i o n of
t h e
staff
r e p o r t
and th e Council
selection of
the
Master Developer would take
place on September
29
2 5
On
September
7
2 5
Mayor Grayson contacted M s
B a r o n e
regarding h is
concerns that
according to
an
unspecified source
Catellus w a s negotiating
with
S e e n o
and that
S e e n o w a s trying
to
gain control of the
project through Catellus
Specifically
Mayor Grayson
w a s concerned that the City did not h a v e
enough
protections
in
place
under the term sheet
to p re vent a
thrdatyeve loper from
gaining
control of the
Project during Phase2
On
September
2
2 5
in a mem orandum to Mr Wrigh t
and
Mr Coon prepared
in response to Mayo r
Graysons
bovetaedoncern
Mr
Ramiza concluded that
bothMaster Developerseminalists have agreed to
be
bound by a DDA tha t
only
allows transfers or
assignments
in certain
well
defined
limited
circumstances Bothseminalists term
sheets
allow a s
a
permitted transfer
transfers
to
affiliated
entities
and
vertical
developers
Lennar also includes a
provision allowing
transfers to
non
filiaed entities for
special
opportunities
Other assignments would
only be allowed
in
Citysole and
absolute discretion
7 6
Interview
of Mr
Wrigh t Interview
of Mr Silvem
Interview
of Mr GroganIm pretty s u r e
that
the
staff report
presented
to Council on th e 6 contained a staff recommendat ion that does no t shock m e
They
presented asem
ompete
version
because
we were ready to
go
Interview of
Mr Grogan
Interview of Mr Silvem and Interview of Mr Bjerke
7 8 S e e email
exchange
between M s
Barone a n d
Messrs Wright
a n d
Coon regarding Confidential s e n t
on
Sep tember 7 2 5 at tached hereto a s Exhibit GG
7 9 S e e
Exhibit
GG
8 S e e Confidential M e m o r a n d u m
f r om
Mr
R a m i z a
to M e s s r s Wright
a n d
C o o n r e g a rd in g Transfer
a n d
Assignability under
Master
Developer DDA and Term Sheet September 2 2 5 attached
hereto
a s
Exhibit
HH
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February
2 6
Page 6
Ms Barone and
Mr
Wright
both
stated during
their
interviews
their opinions tha t
Mayor Graysonsoncerns
were
unfounded a s Catel lus
a
p riva te ly he ld corporation
would
not be
susceptible
to
a
takeover
Mr
Antenucci categorically
denies any
involvementwith
Seeno
On or
abou t Septembe r 22
2 5 Ms Barone instructed MrWright to remove
th e
staff recomm endation
from the final
staff
report Mr Wright told me that h e reported
this instruction to
both finalists
to Catellus by way of an emai l to MrAntenucci and by
telephone to Lennar
On or
about September
23
2 5
Mr Coon
received
a
telephone message from
Mr Giacomini
inquiring why
th e City will
no
longer
provide a
staff
recommendat ion in
th e f inal report
Upon
inquiry Ms Barone explained
to
Mr
Coon
tha t th e removal of
th e staf f recomm endation w a s
her
decision albeit she took input
from
Council Later
tha t day the staff
report w a s
released
to
th e
public
without
a
staff recommendation In
response
Mr
Giacomini told
Mr
Coon that
Catellus
had
authorized
him
to
transmit
a
letter
to
the Ciry raising concerns
about
the Maste r Deve loper se lection process
according
to
Mr Giacomini Mr Coon endeavored
to p ers uade
him not
to
send the
letter
Mr
Wright sim ilarly at tempted to persuade
Mr
Antenucci not to
send th e
letter
ou t of concern
tha t
it
would derail
the selection process
In
a memorandum
da te d September 24
2 5
following
h is investigation
Mr
Coon revealed to
Council
thatHRAad also worked with Lennar between 2 3 and
2 4
These facts coupled with
th e
information that Mr Silvern presented to Mr
8 Interview
ofMr
Antenucci
8 z
S e e
emai l
exchange between
Ms
Barone and Mr Helix regarding Closing th e Loop sent
on
September
22
2 5
attached hereto
a s
Exhibit
II
8 3
S e e email exchange between
Mr
Coon
and Ms Barone
Mr
Wright and Mr
Bjerke regard ing
Telephone Call fromCatellus
sent
on Sep tember 23 2 5 at tached hereto a s Exhibit J J
8 4
S e e Exhibit J J
8 5
S e e email
exchange between
Mr Wright
a n d
Ms
Laperchia
regarding
9
95
taff
Report
s e n t on
Sep tember
23 2 5 at tached
hereto a s Exhibit KK
8 6 S ee email to Mr Coon from Mr Silvern regarding Urgent Need
Contact Info o n
Any Catellus
a n d
Lennar Contects sent
on
September 2 2 5 and emai l from Mr Silvern
t o
Mr Coon regard ing COI
Check
sen
Sep tember
2
2 5
attached hereto as Exhibit
LL
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HOGIN LLP
February
2 6
Page 7
Wrigh t in Augus t ultimately
led
Mr Coon to conclude tha t Catellus and Lennar
were
basically
on
equal
footing in their relationship withHR
lvern
nd th ere is no
credible explanation a s to why Cate llus wou ld
have
been p re fe rred over Lennar a s
a
prospective
future client
and therefore
favored
in the
Maste r Deve loper
selection
process As such no confl ict of
interest
h a s at
a n y
time
existed betweenHRAau
Silvern and the
City
o f Concord nor h a v e they e n g a g e d in
a n y
conduct
s u g g e s t i n g
favoritism of Catellus over Lennar in the Master
Developer
selection process
D
September 24 2 5 Hanson Bridgett Letter
T h e H anson Bridgett
letter
signed by Mr Giacomini
asserts
tha t Lennar violated
the terms of the Agreement to Negotiate by lobbying the
City
Council Specifically the
letter contends
tha t Lennar attempted to inf luence the Maste r Deve loper
selection
process
and thus
violated
Section
of the Agreement to N eg otia te in the following
ways
Orchestrating campaign
contributions to
Mayor Graysonsssembly campaign
in an effort to curry h is favor and influence his
vote
on the Master Developer
selection
2 Engaging
Mr
Brown to lobby
Mr Grayson
in support
of
its proposal and
3
Influencing th e Ciry
to
remove
a
staff recommendat ion from the final staff
report Included w ith in
this
contention is an
allegation tha t
the
City Council
engaged in a serial
meet ing
in
violation
of
th e
Brown
Act
E
Sebtember
27 2 5
Lennar Response Letter
and
Refusal toCoorae
Following
th e Cityseceipt of the September 24 2 5
Hanson Bridgett
letter Mr
Bonner transmitted a
letter categorically denying any
wrongdoing without addressing
any
S e e
Confidentia l Mem orandum from Mr Coon to City
Council
regarding
Concord
Reuse
Project
Alleged
Confl ict of
Interest
Involving ConsultantHRAdvisors September 24 2 5 page 5
attached hereto as ExhibitMM
88
Se e
Exhibit
MM
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HOGIN LLP
February
2 6
Page 8
specific allegations
made
by
M
Giacomni
Mr Bonner
states
that
Lennar
will
cooperate
in
the
Citys
fforts
to
evaluate
Catellus
claims
When
contacted in
connection with this investigation
in
December 2 5 Mr
Bonner
and h is associa tes
declined to be
interviewed
and elected to
limt
Lennar
s
participation
in
this
investigation
to
letters from
its
attorney
David
Marroso of
O
elveny
Myers
The
Bonner
letter also
states tha t
we
rust tha t a s part of
this
effort
th e
City
will also
evaluate whether Catellus has
engaged
in
improper
activities including activities
in
breach of its
agreement
with
the
CtyThe
letter does not allege any specific
wrongdoing
by
Catellus
This
report
addresses those allegations
concerning
alleged
Catellus wrongdoing tha t have
been
b rou gh t to my attention
during
th e course of th e
investigation
F
September
29 2 5 Meeting with
Catellus
Following the receipt of th e Hanson Bridgett letter Ms Barone in consultation
with
th e
City
Attorney
Mr
Wrigh t
and Mr
Ramiza cance lled
the
September
29
2 5
scheduled
public
hearing Staff
was ext remely
frustrated that Catellus
had
chosen
to
have
it s
lawyer send th e
letter
and derail the selection process Mr Wright suggested
a
meeting with
Catel lus
th e meeting was held
on
September 29 and included Ms
Barone
Mr
Wright
Mr Bjerke Mr Coon
and
Mr Antenucci along with other officers
of
Catellus
Staff hoped that th e
meet ing
might
allay Catelluss
oncerns
so
that th e
process could
move
ahead without further delay Following th e meet ing it
was
clear to
staff tha t Catelluss
llegations
would
require
a more formal
response
8 9 S e e September 27 2 5 letter from Mr
Bonner to
Ms Barone
attached
hereto a s Exhibit NN
9 S e e
Exhibit
NN
9
Interview ofMrWright
9 2
Interview ofMrWright Interview ofMr
Ramiza
and Interview of Mr Silvern
9 3 Interview ofMrWright
9 4 Interview ofMrWright
9s
Interview of
M
Wright
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HOGIN LLP
February 2 6
Page
9
G
Lenna
r
r Kav and MrNaranio Respond to Catellusslaims
In
a
letter da ted December 24 2 5 Vigo
Nielsen
counsel
fo r Mr Kay
and
Mr
Naranjo replies to the Catellus allegations on behalf of h is
clients
a s follows
l
nder
California law there is a
clear diff erence between
lobbying
and
mak ing a
campaign contribution and that under California state law there
can
be
no
doubt
tha t
making a
campaign contribution is entirely
different
from and exclusive
of engaging in discussions negotiat ions or lobbying of
Concord off ic ia ls
as stated in
Section
of th e
negotiation
agreement
2
Mr
Kay made a
personal
contribution to
MayorGraysonsampaign
he
did
not
attend
any fundraising
events
fo r
Mayor Graysonsssembly Campaign
nor
did
he
meeo
communicatewith
Mayor
Grayson Additionally
Mr
Kay
did
not communicate at
all with
any Concord
Councilmembers
Plann ing Com m iss ioners
or
any
other Concord
officials
3
Mr Naranjo made a
personal contribution
to
Mayor Graysons
ampaign
Furthermore
he
did not communicate on any subject with Mayor Grayson
any of th e
Concord City
Counci lmembers
Planning Comm issione rs o r
any
other
Concord
City
Official
MrNielsensesponse does not indicate whetherMr Kay or Mr Naranjo h ad any
communications with Lennar re ga rding th e contributions and
specifically
whether
anyone acting on behalfof
Lennar so licited
them
In his letters of January
6
7 and January 25 2 6 on beh alf of Lennar Mr
Marroso replies to
th e
Catellus allegations a s follows
Lennar has not given any money to the Committee fo r Counc i lmember
Tim
Graysonsampa ign
fo r State Assembly
even though it
would not
9 6 S e e
December
24 2 5 etter from Vigo Nielsen
to
Mr Jenkins
attached hereto
a s Exhibit
9 7 S e e January 6 2 6 etter from Mr Marroso
to
Mr Jenkins
attached
hereto a s Exhibit
PP
98
See
January
25
2 6 etter from
MMarroso
to
M
Jenkins
attached
hereto
asExhibit
QQ
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HOGIN LLP
February
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Page 2
have
been
improper
to do
so
has not
given
money
to
others
to contribute
to
Mr Graysons
ommittee and has not
pressured or coerced anyone
to
contribute
money
toit
9
2 None of the individuals or entities tha t contributed to
Mayor
Graysons
campaign
commun ica ted
with Mayor Grayson
about
th e
Concord
Naval
Weapons
Station
3 As
a
matter of law
c
mpaigncontributions a r e not
forbidden
by
or
even
ment ioned
in Section
or anywhere
in
the
Negotiating
Agreement
Nothing
in th e Negotiating Agreement
purports to a bridg e Lennar
sr
anyone
else
sirst
Amendment rights
4
Mr
Marroso describes Lennar
s
elationship with
th e contributors
a s
follows
a
G
unting
is
a public
relations
f irm th at
does work fo r
many
companies on a multitude of projects
across
the country including
LennarCorp
b
Mr Kay is an attorney ofwhom Lennar is one ofmanyclients
c
Engeo
is
a prominent engineering firm that
has worked
with
Lennar in
th e past
d
Scarborough
is
an insurance firm
which Lennar has not
engaged or
contracted with in any capacity
9 9
S e e Exhibit PP emphasis in original
io o S e e
Exhibit
PP
lo S e e Exhibit QQ
io z S e e Exhibit
QQ
l 3 S e e Exhibit QQ
l 4
Se e
Exhibit
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HOGIN LLP
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5
Lennar did not d i s c u s s the Master
Developer
selection p r o c e s s with
Mayor
Grayson throughMrBrown
Mr
Marroso
s
etter does not
deny that
Lennar so lic it ed
th e contributions nor
does
it confirm or deny whether Lennar s p o k e to Mr
Brown
about the Master
Developer
selection p r o c e s s and whether t h o s e conversations
included
d i s c u s s i o n s about campaign
contributions
II
What is Lobbvin within the Meanin of Section
T he
architect
of th e Maste r Deve loper se lection process
was
Mr
Wright who
assembled a
team of outside
consultants to
negotia te term
sheets
with the
tw o
finalists
and
to
recommend
the superior
proposal
to the Ciry Council Mr Wrights
ntent
w a s to
create a p r o c e s s that would
yield
the
objectively superior
proposal
without
political
interference
in
essence
a
decision tha t
would
be
made
strictly on the mer its of the
two
proposals
T o
this
end
and
in
response
to concerns
tha t
th e
finalists
m ig h t a ttemp t
to
influence
th e decsonakersMr
Ramiza drafted
Section
to
the Agreement
to
Negotiate which reads as follows
Lobbying Prohibition
Developer a g r e e s and acknowledges
tha t
the
Preliminary Stage
and
DDA
Stage
negotiations s ha ll ta ke place with th e LRA
Executive
Director
th e
City
sega l f inanc ia l and planning advisers and such other City parties a s
m ay be
designated
by
th e LRA
Executive Director from tim e to t ime
collectively
the
Ctyesignated
Team
Developer
shall not engage
in
discussions
negotia tions or lob bying of
any
City Council or P la nning
Comm ission members
or other City employees or
officials
a s
may be
designated by the
LRA
Executive Director
from time
to
time
collectively
Excluded
City Parties unless
requested
to
do s o
by the
Ctyesignated
Team for specif ic purposes related
to
th e negotiations Nothing
in
this Section
shall preventiesponses
to
requests for
information
from one
or
more
Excluded
City Parties
provided such
responses are dire cted to th e City
Designated Team
iiDevelopers articipation in
any
questionandnswe
tos
Se e
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JENKINS
HOGIN LLP
February
l
6
Page
22
s e s s i o n s workshops o r
t o u r s
a p p r o v e d
in writing b y
t h e
Cryesignated
Team o r
iii
Developersarticipation in p u b l i c e v e n t s o r
community
f o r a a t
which o n e
o r
m o r e E x c l u d e d
City
P a r t i e s a re present p r o v id e d D e v e lo p e r d o e s
no t engage in communications with such Excluded City Parties at such events
that
ae
intended
to
influence the
Prel im inary
Stage
or
DDA
Stage
negotiations In the event of
Developer
siolation of its obligations under this
Section
City
m a y immediately
terminate
this Agreement by written notice
to
Developer without
affording
Developer
a n y opportunity to c u r e such
vioation
The
key
p h r a s e
in Section i s
that
neither
developer
shall engage in
discussions
negotiations or lobbying of
a n y City
Council o r Planning Commission members or
other
City e m p l o y e e s or
officials a s
m a y b e designated by the LRA Executive
Director from t ime
to
time
There
is no
definition
of
the
word
lobbying
in
the
Agreement
Section 8
states tha t
th e
Agreement shall
be construed
in
accordance
with
th e
laws of the State of
Caiforna
The
California
Civil
Code governs the
interpretation
of
contracts
Section 644 of tha t Code
provides
tha tt
ewords
of
a
contract a r e to
be understood
in their o r d i n a r y a n d p o p u l a r s e n s e r a t h e r than
a c c o rd in g to
strict
l e g a l
meaning U n l e s s
u s e d b y the p a r t i e s
in
a technical s e n s e o r
u n l e s s
a s p e c i a l m e a n i n g i s g i v e r i
t o t h em
b y
u s a g e
in which c a s e
t h e
latter
m u s t
b e
followed
The paramount
r u l e
in interpreting
a
contract
is to g ive effect to
its true intent
T he
i s s u e
tha t
a r i s e s here is whether
Section
was intended
to u s e
the word
lobbying
in
i t s o r d i n a r y
s e n s e
defined b y
Merriamebser
s influencing government
decisions and by
dictionaryoms trying to in fluence public
officials
or whethe r it
intended
to
use
it
in
the
technical
sense found in
Government Code
87
aka the
Political
Reform Act where campaign
contributions
a r e excluded f rom the definition of
lobbying
In their letters both Mr
Nielsen
and Mr Marroso contend that
th e
interpretation of
Section
is controlled by th e
Political
Reform Act
As explained to me by
the
authors of the Agreement the purpose of Section
w a s to advance Mr Wrights
oal of precluding
the
f inalists from
influencing
decision
makers
by m e a n s other
than
the merits
of their
proposals
In
other words to insulate the
lob
See Califomia
Cvil
Code
636
64
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decisionakers
f r om
o u t s i d e i n f l u e n c e s
w h a t e v e r
t h e y m i g h t
b e o r h ow e v e r
t h e y m i g h t
be
conveyed
In drafting
this
section Mr Ramiza advised m e tha t he used the
word
lobbying
a s it i s
c o m m o n ly u n d e r s to o d
in
t h e E n g lis h l a n g u a g e
not in i t s
technical
sense
Mr Ramizasnderstanding of the lobbying prohibition i s that it intended to
p re c lu d e a n
enduny either finalist directly o r indirectly
t o
the decisionakersThe
w o r d lobbying
in
Section
i s
l i s t e d with
discussions a n d negotiations
two other
v e r b s s u g g e s t i n g t h a t
th e
f i n a l i s t s
a re to
a v o i d
a n y a c t i v i t y
t h a t m i g h t
b e
p e r c e i v e d a s
attempting
to
influence the
decson
akes
T he
exclusion of campaign contributions
i n t h e P o l i t i c a l R e f o r m Act h a s n o b e a r i n g o n S e c t i o n if
th e
d o n a t i o n o f c a m p a i g n
contributions w a s
meant
to influence Mayor Grayson then the contributions violated the
lobbying prohibition
According
t o Mr
Wright a n d
Mr
Ramiza both d e v e l o p e r s u n d e r s t o o d t h i s
ordinary
meaning
of
the
lobbying
prohibition
in
Section
Nei ther developer
q u e s t i o n e d
i t s meaning nor
d id th e y a t
a n y
t i m e a s k whether t h e word lobbying w a s t o
b e
i n t e r p r e t e d
in
a
t e c h n i c a l
s en se o r
to e x c l u d e
a c t i v i t i e s
s u c h
a s
m a k i n g
c a m p a i g n
donations
H a d t h e y
not u n d e r s t o o d
t h e
prohibition both d e v e lo p e r s h a d a m p le
opportunity to
ask City
staff
fo r
clarif ication
indeed
communicat ions
between Mr
Wright a n d
Mr
R am iz a a n d
t h e r e p r e s e n ta t i v e s
of
t h e
two d e v e l o p e r s w e r e
continuous
a n d
n u m e r o u s
during
t h e t im e
period following
t h e
execution of
t h e
Agreements
I
reject the argument that the lobbying prohibition in Section
excludes
campaign
contributions
It is fair to conclude tha t the agreement bound both Catellus
a n d Lennar
t o
refrain f r o m e n g a g i n g in a n y d i s c u s s i o n s
n e g o t i a t i o n s
o r a n y other a c t i o n s
i n t e n d e d to i n f l u e n c e
a n y C i t y
C o u n c i l o r P la n n in g C o m m is s io n m e m b e r s o r o t h e r
C i t y
employees
or
officials
A
Do
the
Contributions
to
Mavor Crravsons
a
agn
Constitute
Lobbving on Behal f
o
fLennar
P r i o r t o
J u n e 6 2 5
Mr B o n n e r
contacted
Mr
Bunting
t o
s u g g e s t thatGF
Bunting c o n s id e r m a k in g
a
contribution t o Mayor
Grayson
s s e m b l y campa ign
Mr
Bunting
thereafter
arranged
for
his
company
to
make
the contribution as an
Interview of
M
Glenn
Bunting
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accommodation
to Mr Bonner something h is company d o e s for its
clients
from
time
to
time
Shortly
thereafter Mayor
Grayson a l s o received
contributions for the
maximum
a l l o w a b l e
amount f r o m
Mr
Kay Scarborough
a n d
Engeo Mayor
G r a y s o n a s s e r t s
that
h e w a s u n a w a r e
of
t h e s e
contributorso n n e c t i o n s with Lennar
a t t h e
time
t h e y
w e r e
m a d e
and
until
that connection w a s
m a d e
public
In
light
of the
direct
evidence
that M Bonner
solicitedGF
Buntings
contribution
a n d
d i s c u s s e d Engeo
s
ontribution with Mr E lia hu it
i s m o r e
likely than
not
that h e o r
s o m e o n e
a c t in g o n
h is behalf
a l s o
s o l i c i t e d
t h e
contributions f r o m
Mr
K a y
and Mr Naranjo neither
of
t h e s e donors
h a v e a n y known
connection with Concord or
with
Mayor
Graysonsampaign a s i d e
from
their connections with
Lennar
Our review
of
campaign
contribution
records
with
the
Secretary of
State indicates tha t ne ithe r h a s a
history
of
contributing
to
local
campaigns
in
Concord
Lending
further support to this
conclusion
is the
carefully chosen language
in
Mr
Marroso
swo
letters on
behal f
of
Lennar
Mr
Marroso states in connection with
this
issue that Lennar neither coerced
these
contributions
nor
reimbursed
the
contributors
Aware as
he
was
of
this
investigation
s
nterest
in the genesis of these contributions Mr Marrososetters
conspicuously do
not
deny
that Lennar so lic ited
th e
contributions
Additionally Mr Marroso concludes that
because
the Political Reform Acts
technical definition of the term lobbying excludes campaign contributions Mr Bonner
could h a v e directly contr ibuted to
Mayor
Grayson ampaign in e x e r c i s e of h is First
Amendment r ights
and
without violating th e terms of
Section
l However Mr Bonner
c h o s e
not t o d o
so
but i n s t e a d s u g g e s t e d
that
GFunting and likely
Mr
K a y
a n d
Scarborough contr ibute to
Mayor
Grayson ampaig n GivenMr
Marroso
onfidence
8
Interview of Mr Bunting
l 9
Uri
Eliahu CEO of Engeo stated that
h is
company w a s founded in
Concord
a n d is
still local
a n d h a s
an
interest
in local politics
He
said that
his company
routinely makes political contributions and that th e
contribution
to
the
G r a y s o n
campaign
w a s h is i d e a
a n d not
prompted
b y
a r e q u e s t from
Lennar Mr
Eliahu stated that b e f o r e mak ing the contribution h e a s k e d Mr Bonner whether the latter thought the
contribution
would
g e n e r a t e any
problems
a n d w a s told
it wou ld
not E n g e o
provided a
list
of
i t s 2 5
political and
charitable
contributions that
included several
campaign contributions to candidates
fo r
State
and local offices
in the Concord
area
ll o Mr Nielsens
e c e m b e r
24
2 5 letter c o n f i r m s
that
M r
N a r a n j o
a n d
Mr K a y
h a d n o
involvement
with
the
City
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that
Mr
BonnerInna
ould
h a v e contributed
directly
one
could
reasonably
infer
that
Mr
BonnerInna
ither knew or suspected that the provisions in Section would
have
precluded such
conduct
or at least that a direct contribution would
have
cast a
negative
light
onLennar
s
participation
in
the
selection
process Aside from that
Mr
BonnerInna
ould have
foreseen
that
th e
contributions m ade at their behest would
h a v e
pu t
Mayor
Grayson
in
an
awkward
position when they
c a m e to light
Lastly both Mr
Nielsen
and Mr Marroso conclude tha t campaign
contributions
iobbying
in
the technical sense constitute a
form
of s p e e c h
protected
by the First
Amendment to the Constitution
however
this is beside the point T he
i s s u e
here is no t
whether
the
contributions
wee
constitutional
but
whether
t hey
were
made in
contravention of
a
contractual provis ion to which Lennar
voluntarily
chose to be
bound
A party may voluntarily agree to
waive
constitutional rig h ts in order to
participate
in
the
process
leading
up
to
the
award of
a
conract
Some cities
preclude campaign
contributions
by
entities
actively
bidding
on
city
contracts
In
this
instance
both
Lennar and
Catellus
a g r e e d a s a
condition
of participating in the selection p r o c e s s to
a llow the ir applications to be decided on the merits
and
to
avoid any
efforts to inf luence
decsonakesThe
first
amendment
claims
ae a red
herring
The
issue
here
is
whether Lennar
acted
contrary to
th e
Agreement
Two possible
conclusions m ay be
drawn
from Lennar
solicitation of
these
campaign
contributions
The first is that Lennar orchestrated the contributions
anonymously
magnanimously
without any
expectation
of receiving
anyth ing in
return
T h is w ould be
consistent
with
Mayor Graysonsnsistence
tha t he w a s
unaware of the
Otherwise referred to a s
payto
ayaws
a
growing number of s t a t e s
a n d
municipalities
h a v e
enacted
m e a s u r e s
limiting
or prohibiting campaign
contributions from p a r t i e s
bidding for
a
prospective contract
with th e City For
instance
th e City
of Los
Angeles prohibits
a
person
who
bids on
or
submits a
proposal
or
other response
to
a contract that h a s an anticipated
value
of
a t least
nd requires
approval
by
th e
elected
City
office
that is held
or
sought by th e person
to
whom th e contribution would
b e given
from
making campaign
contribution to th e
Mayor
th e
City
Attorney th e
Controller
or a
City Council
membe r Los Angeles City Charter
section 47
c
2B
h e City
of L o s
Angeles takes
th e
provisions of its Charter one
step fu r ther
and
incorporates section
47
c2
into
every
contract
solicitation
a n d additionally
requires prospective
b i d d e r s
to supply the
n a m e s
of their
a g e n t s
or principals
to
ensure
com pliance
with section
47
c2
Los
Angeles City
Charter
section
47c2H
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relationship
between
the contributors
and
Lennar until
th e i s s u e
w a s b rou gh t to l ight by
the
press
and
by Catellus
The
al te rnative conclus ion
is that Lennar certainly orchestrated
one
and possib ly
three
contributions
with the specif ic intent of generating
goodwill
with Mayor Grayson in
order
to
enhance
its
position
in the
Master
Developer
selection
process
The
contributions
were
not
token
donations they
were
in th e
maximum amo unt
allowed
by
law T he contr ibutions m aterial ly assisted Mayor
Grayson
to
demonstrate
his fundraising
p r o w e s s
e a r l y
in
t h e
campaign
p o s s i b l y
g i v i n g h im
a n
a d v a n t a g e
o v e r
h is
competition
The re is no
evidence
that Lennar and Mayor
Grayson
collaborated in
th is e ndeavor
or
tha t
Mayor
Grayson was even aware of it at the time Nevertheless the fact tha t Lennar
concealed its
involvement
by using at
least one
proxy to donate at
least one contribution
to Mayor Grayson ampaign s u g g e s t s
a
clandestine
effort
to advance its interests in the
selection
process
whether
or
not it
actually
did
so
Regarded in that way
th e
contributions would constitute lobbying within the meaning of Section
Mayor Grayson s u g g e s t s
tha t h is return of
th e
contributions
on
August 26 2 5
establishes that no
wrongdoing
occurred
T he
relevant
inquiry
however
is why the
contributions were
made
in
th e
first
instance not
whether
t hey
were
retained
B
Did th e
Meetin
s
etween
Mr Brown and Mayor Grayson Constitute
Lobbvin on Behalf of Lennar
Ca te llu s conte nds that Mayo r
Grayson
m et with
Mr
Brown on
numerous
occasions
and
tha t Mr Brown
ostensibly
lobbied
Mayor Grayson
on behal f of Lennar
It
is
establ ished
that
Mr
Brown has a
longstanding relationship
with
Mr
Bonner going
back at least to when
Mr
Bonne r wo rk ed fo r
Mr
Brown and bus iness connections with
Lennar
and
tha t Mr Brown is a
registered lobbyist
in San Francisco
When
Mr Brown
was Mayor of San
Francisco
he favored Lenna r to serve a s Master Developer of the San
Francisco
Shipyard project
despite
a contra ry s ta ff recom m endation
in
favor
of
another
developer
Mr
Brown
appointed the selection
committee
tha t
chose Lennar
a s the
Master
Developer
for Treasure Island
From these facts Catel lus concludes that
Mr
lz Interview of Mayor GraysonIad many contributions come in within
a
very
short
period of t ime and
there
wassome
quick fundraising taking place
tomee
adeadline
for
Sacramento
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Brown
had obvious motivation and opportunity to lobby Mayor Grayson
but Catellus
h a s
no evidence tha t Mr Brown
engaged
in such lobbying
Mayor Grayson
states
tha t
he
initiated contact with Mr Brown exclusively to seek
political advice
regarding
h is
Assemb ly campa ign
in
view
of Mr
Brown
s
xtensive
political
experience and network
Mr
Brown
solitical expertise
is
wel
nown and
this
is
a
perfectly plausible reason for Mayor Grayson
to
seek Mr Browns
ounsel
According
to
M
Grayson
they
met
twice
once in April
and
again in August of
2 5
the
second
time
with Ms
Rossi
and th e
two neve r discussed
the Master Developer
selection
process
The concerns
raised
by
Catellus
ae
purely
circumstantial
While Mayor
Grayson ecision to
kick
off
h is
campaign during the Master Developer selection p r o c e s s
seems
entirely
coincidental
Mayor
Grayson
could have known of M Browns
connections to Lennar if no t the totality of those connections
He
certainly would have
had
some awareness
of
th e relationship
a s a
consequence
of
the
August
4
San
Francisco
Shipyard tour
which
was
led by
Mr Brown and of the possibility
tha t
meeting privately
with Mr Brown m igh t create the appearance of im propr iety during the Master Developer
s e l e C t i o n
process Nonetheless the investigation
resulted
in no evidence
to
contradict
or
to corroborate
Mayor
Graysonsescription
of
the
meetings
There is no basis to
conclude
that
Catellussuspicions have merit
C
The Le tte rs in Support of Lennar po Not Consti tute Lobbving on
Behal
fo
Lennar
In late September in
anticipation
of th e schedu led September 29 2 5 public
hearing on
the
selection
of
a
Master Developer the City
received numerous le tte rs
encouraging th e Council
to aw ard
the
contract to Lennar Some
of
these letters
were
local but
many
were
authored
primarily by San Franciscoasedntities companies and
Interview
of
MrWright When
we took
the Counci lmembers
to
Huntersoint Willie Brown
was
there
holding court During Brown
s
resentation he talked
about how
during
his tenure
a s mayor
h e
had done
things fo r th e neighborhood and how he had
worked
with
affordable
housing advocates and
worked closely
with
Lennar
during
this process
and l iked Lennar
la
Interview of
Ms Barone
and
Interview
of
M
Bjerke
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7/25/2019 Report: Concord Naval Weapons Station
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JENIdNNS HOGIN LLP
February 2 6
Page
28
persons who had no connection with Concord but who had some relationship with
Lennar For instance
th e
executive director of the
Fami ly
Justice
Center
contacted Mr
Bjerke and informed h im th at
he was
asked
to write
a
letter in support of Lennar and
asked
whether such letter would
be
appropriate It is unclear why the Family Justice
Cente r would have
any m otivation
or reason to
care who was ultimately selected
a s
Master
Developer
for the
Project
It is obv ious f rom
th e
timing similar
content
and
identities of the authors of the letters that Lennar orchestrated them Ms Barone recalls
asking Mr
Coon
if such endorsements
consti tuted lobbying
and
he
opined tha t they
were
merely
a
form of
public comment Lennar
did not ask Mr Wrigh t if such endorsements
would
be
permissible
under Section
prior to
arranging
fo r their delivery
The endorsement letters
unquest ionably
were
intended
to
influence
the Council
However a s
th e Ciry
Attorney noted at
th e
time they
were
delivered to
th e
Council a s
part
of and within
th e
f ramework
of th e
public process
establ ished fo r consideration of th e
two
proposals Unlike
th e cam p aig n contributions
which
were
made
ou ts ide th e
f ramework
of
th e
process
th e letters
were
not
directed
to
a
single
Counc i lmember
with
the
potential expectation
of
garnering
favor
Additionally
th e le tte rs were
subject to
rebuttal a the
public
hearing
Section
intentionally
reserves fo r
the deve lopers the
ability to
participate
in
th e
public process to
their own
advantage
This only makes
sense
Thus there
ae
material
differences between the
two
activities
While
the letters are
a
form of
lobbying
in th e broadest sense it is m y
conclusion tha t
they
were
not proscribed
by Section
D
Allegations
tha
t
a te llu s Lobb ied Citv
Staf
f
bv Offerin
Them
Tickets
to
Golden State WarriorsPavOfames
In an
emai l to Ms
Barone
Mayo r
Grayson quest ions whether
Catellus
an
affiliate
of Catellus or someone connected
in
any way to Catellus purchased or