Professional Documents
Culture Documents
JENKINS
A LAW PARTNERSHIP
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MICHAEL
MANHATTAN TOWERS
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LAUREN LANGER
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LOCALGOVLAW
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MELINDA A GREEN
NATALIE C KARPELES
SEMAIL ADDRESS
WRITER
MJENKI N S
aLOCALGOVLAW COM
February 11 2016
City Council
City of Concord
1950 Parkside Drive
Concord CA 94519
Re
As you are aware the City Manager received a letter dated September 24 2015
from the Hanson Bridgett law firm on behalf of Catellus Development Corporation
asserting violations of the Agreement to Negotiate by Lennar Concord LLC Lennar
in connection with the Master Developer selection process for the Concord Naval
Weapons Station Specifically the Hanson Bridgett letter contends that Lennar violated
the terms of the Agreement to Negotiate with the City of Concord by lobbying the City
Council The City received a second letter from Hanson Bridgett on September 25 2015
raising the specter of litigation against the City due
to
salleged
Lennar
breach The
City Interim City Attorney engaged this firm as independent special counsel to
s
investigate and report back to the City Council findings and conclusions with respect to
these allegations
documentary and testamentary evidence and where possible I have drawn inferences as
to the credibility consistency and relevance of the evidence in order to determine the
facts
issue
applicable law and analysis of the relevant issues which lead me to conclude that Lennar
s
orchestration of campaign contributions to Mayor Tim s
Grayson Assembly campaign
September 25
to
Mr
as
Exhibit YY
JENIdNS
HOGIN LLP
February 11 2016
Page 2
meeting
I did
not
find
merit
with
any
s other
of Catellus
allegations
Moreover I
conclude that the Agreement leaves the consequences if any of such lobbying entirely
within the Councils discretion
I
Factual Back
round
Persons of Note
were
Edi Birsan
Councilmember
Tim Grayson
Mayor during the relevant time period and candidate for 2016
District 14 State Assembly Race
Dan Helix
Councilmember
Laura Hoffineister
Councilmember
Ron Leone
Mayor
Vice
City Staff
Valerie Barone
City Manager
Guy Bjerke
Director
of
Community
Reuse
Planning
Local
Reuse
JENIaNNS
HOGIN LLP
February 11 2016
Page 3
Mark Coon
City Attorney
Mr Coon was deceased prior to the
commencement of this investigation
Jovan Grogan
Michael
Wright
Dahlia Chazan
City Consultants
Craig Labadie
Gerald Ramiza
Developer negotiation
Paul Silvern
economist with HR
Consultant
A a consulting firm under
contract
with the
City
Engeo
sHunters Point
Engeo was Lennar
JENIaNS
HOGIN LLP
February 11 2016
Page 4
Co
Bunting
Mr
Kay
is
president
of Golden Gate
3 See staff report from Mr Wright to the City Council regarding Introductory Presentations by Master
Developer Candidates on Implementation of the Concord Reuse Project Area Plan dated February 10
2015 attached hereto as Exhibit B
4 See Community awaits benefits as Lennar finally breaks ground in Hunters Point by Steven T Jones
printed in the San Francisco Bay Guardian on July 1 2013
See Exhibit E
JENIQNS
HOGIN LLP
February 1 l 2016
Page 5
Fred
Naranjo
in
San Francisco
Rossi
Catellus
See Legendary Sarah Vaughn dress auction benefit finds Bayview Hunters Point global arts program by
Aldrich M Tan printed in the Fog City Joumal on Apri128 2006
news in brief
com
fogcityjournal
www
http
house funraiser
opera
060525 shtml and Bayview kids
head to Africa and France thanks to Bayview Opera House by Pat Murphy printed in the Fog City
Journal on May 26 2006
htt www fogciryjoumal
news
com
in
bayview opera
brief
060428 shtml
fundraiser
house
attached
hereto as Exhibit H
11 See Catellus cries foul over Lennar contributions to Concord Mayor Tim Grayson
sAssembly
campaign by Richard Eber printed in the Contra Costa Bee on August 23 2015
https contracostabee
graysons
tim
mayor
concord
to
contributions
lennar
over
foul
cries
catellus
com
n
campai
assembly
attached hereto as Exhibit I
1z Interview of Councilmember Birsan
13
Interview of Ms Barone
JENKINS
HOGIN LLP
February 11 2016
Page 6
Lennar
Others
Garaventa
D
A
Seeno
Construction
Co
is
local
Concord
is
attached hereto
as
Exhibit L
JENKINS
HOGIN LLP
February 11 2016
Page 7
Point
project
Mr
Brown
declined
to
be
Commencement
Lennar
Named as Finalists
18 See Biography
com Website http
40059a printout from
brown
willie
people
com
biography
www
which is attached hereto as Exhibit N
Bjerke Also
see
Exhibit B
JENIQNS
HOGIN LLP
February 11 2016
Page 8
Lennar J
F Shea Company and SunCal Corporation SunCal While Council
ultimately approved staff
s recommendation on June 10 2014 several Councilmembers
reported receiving
criticism
principally
from Seeno
stamping staff
s recommendation By May 26 2015 J
F Shea dropped out SunCal was
eliminated and the list of four was narrowed to Catellus 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 between the
developers and either the City Council Planning Commission or other City employees
designated by the LRA Executive Director It was generally understood that the Master
Developer selection process would culminate in the recommendation of one Master
Developer via a staff report prepared by the LRA Executive Director and his team
Negotiation Team
C
Brown was aware of the pending Project however according to Mayor Grayson the two
28
did not discuss the Master Developer selection or any Project specifics
zs See May 26 2015 Agreement to Negotiate between the City of Concord and Catellus Section 11 page
9 and May 26 2015 Agreement to Negotiate between the City of Concord and Lennar Section 11 page
9 Exhibit P
Interview of
Mayor Grayson
JENKINS
HOGIN LLP
February 11 2016
Page 9
along with City staff attended a special meeting consisting of a site visit to Catellus
s
Mueller Project in Austin Texas Ms Rossi and Mr Antenucci attended the site
visit Mr Antenucci reports that at some point during the site visit Ms Rossi approached
him and suggested that it would benefit Catellus to connect with local party
third
developers in order to improve its chances of being selected as the Master Developer
and he stated that she had also communicated the same message to Lennar While staff
took
during this site visit Mayor Grayson in passing mentioned his upcoming Assembly race
and according to Mr Antenucci commented on the difficulty of raising campaign funds
campaign
33 Interview of Mr Wright
34 Interview of Councilmember Hoffmeister Interview of Mr Antenucci Interview of Ms Barone and
Interview of Mayor Grayson
See
cal
Campaign Finance Information for Grayson For State Assembly 2016 ht
1376431session
id
aspx
Detail
Committees
Campaign
gov
ca
ss
access
received
view
2015
attached hereto
as
Exhibit R
JENKINS
HOGIN LLP
February 11 2016
Page 10
85300 et seq
44 See Exhibit R
4s Interview of Mr Antenucci
ab See Minutes of the July 27 2015 City Council site visit attached hereto as Exhibit T
47 Interview of Councilmember Hoffmeister Interview of Mayor Grayson and Interview of Mr Wright
Also see notes from the August 4 2015 site visit attached hereto as Exhibit U
48 See Exhibit U
present
at
by
the
notes
from the
August 4
2015 site
JENKINS
HOGIN LLP
February 11 2016
Page 11
August 13 2015 Mr Wright sent an email to certain consultants working on the Project
requesting that they disclose any ongoing contracts with either Catellus or Lennar one of
these consultants was Mr Silvern In response Mr Silvern disclosed that between 2008
and 2013 HR
s New York City office provided services to Catellus Mr Silvern was
A
that the HR
A New York office was awarded 000
30 assignment by a partnership
a
including SunCal Mr Silvern was not involved in this project On August 14 2015
Mr Wright considered Mr Silvern
s disclosures and concluded that they did not create a
conflict of interest
Councilmember Birsan Mayor Grayson indicated to her that he may not want a staff
recommendation as to which Master Developer to select
visit attached hereto as Exhibit U Furthermore Mr Buster denies having ever made a comment to
Councilmember Hoffineister regarding Mayor Grayson
smeetings with Mr Brown at all
s See Email from Mr Wright to Mr Silvem as well as Shawn Zovod Steve Rottenborn Mark O
Brien
Mr Ramiza and Amy Herman about COI check sent August 13 2014 attached hereto as Exhibit V
52 See Email from Mr Silvern to Mr Wright regarding COI check sent August 13 2014 attached hereto
as Exhibit V
53 See Email from Mr Silvem to Mr Wright regarding COI check sent August 13 2014 attached hereto
as Exhibit V
s4 See Email from Mr Silvern to Mr Wright regarding COI check sent August 13 2014 attached hereto
as Exhibit V
ss See Email from Mr Wright to Mr Silvem regarding COI check sent August 14 2014 attached hereto
as Exhibit V
sb See September 24 2015 letter to Ms Barone from Mr Giacomini of Hanson Bridgett attached hereto
as
Exhibit W
JENIaNS
HOGIN LLP
February 11 2016
Page 12
Bridgett sent a letter to the Concord City Attorney requesting an investigation as to the
On August 24 2015 Mr Wright sent a letter to both Lennar and Catellus stating
the deadline for presenting their last and best offer to the City was September 2 2015
On August 26 2015 Mayor Grayson returned the campaign contributions from
F
G
Bunting
Mr
Coon a letter from Jim Sutton his private counsel on the matter concluding that the
campaign contributions would not require his disqualification from the Master Developer
selection
Between August and September of 2015 Mayor Grayson and Ms Rossi met with
Mr Brown to obtain advice for Mayor Grayson
sState Assembly Campaign
57 See Email from Ms Barone to Mr Birsan regarding Deal Points meeting Lennar and Catellus sent
August 19 2015 attached hereto as Exhibit X
58 See Exhibit I
s9 See Exhibit W
bo See August 24 2015 letter from Mr Wright to representatives of both Catellus and Lennar attached
hereto as Exhibit Y
61 See Concord Mayor Retums Donations Linked to Possible Weapons Station Developer by Lisa P
White printed in the Contra Costa Times on September 1 2015
ci 28740507
concord
com
contracostatimes
www
http
linked
donations
returns
mavor
concord
6z On January l 2016 Ms Christine Callahan counsel for 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 Willie Brown and Ms Rossi met
one time in August of 2015 and there was no discussion of either the Naval Base or campaign
contributions
63
Interview of Mayor
Grayson
JENIaNS
HOGIN LLP
February 11 2016
Page 13
On September 1 2015 the City Council met in closed session to discuss the
Master Developer process and the then
current term sheets
was a
past client of
follows I was having questions and in my own mind had developed questions about
s objectivity and I
A
HR
Catellus than Lennar caused Mayor Grayson to believe that there was a preference
and he wanted to see whether there was any validity to that perception so he did his
own research
One of the items discussed during this closed session included both developers
position on affordable housing
Prior to the conclusion of the September ls closed session Mr Wright asked the
Council whether or not it wanted a recommendation from the Negotiation Team in the
final staff report it was his longstanding belief and that of other members of the team
that the Council had directed the team to prepare a staff recommendation as part of the
staff report that would be presented at the conclusion of the Master Developer selection
DD
JENKINS
HOGIN LLP
February 11 2016
Page 14
process The Council confirmed that understanding as reflected in the Closed Session
Minutes of September l 2015
There was a discussion as to whether the City Council wished to ha
ve staff make a
recommendation in the staff report for the meeting on
September 29 when the
selection will be made
developers by Mr Wright to provide the Negotiation Team with their best and final
offers Lennar sent staff an updated term sheet addressing affordable housing and
relenting on its prior insistence on obtaining a commitment for Phase II of the Project
The proposed modifications to the term sheet were not accepted
On September 16 2015 the City Council met in closed session to discuss the
Master Developer process and term sheets During the meeting staff answered questions
raised by Council during the September ls closed session and presented it with a draft
impression was that they were going to give a recommendation there wasn
ta vote on it I felt that when
Wright walked out of the room that there was going to be a recommendation
73 See Exhibit CC italics in original
sent
on
re
September
CNWS
10 2015
Lennar
attached
Highlight Summary 15
10
9
hereto
as
Exhibit FF
Status on Requested
JENKINS
HOGIN LLP
February 11 2016
Page 15
Silvern and Ramiza understood that they would prepare a final version of the staff report
and the Council
s selection of the Master Developer would take place on September 29
2015
transfers
or
assignments
in
certain
well
defined
limited
provision
to
affiliated
allowing
opportunities
entities
and vertical
transfers
to
affiliated
non
absolute discretion
76 Interview of Mr Wright Interview of Mr Silvem Interview of Mr Grogan I am pretty sure that the
staff report presented to Council on the 16 contained a staff recommendation that does not shock me
They presented a semi
complete version because we were ready to go
Interview of Mr Grogan Interview of Mr Silvem and Interview of Mr Bjerke
78 See email exchange between Ms Barone and Messrs Wright and Coon regarding Confidential sent on
September 17 2015 attached hereto as Exhibit GG
79 See Exhibit GG
80 See Confidential Memorandum from Mr Ramiza to Messrs Wright and Coon regarding Transfer and
Assignability under Master Developer DDA and Term Sheet September 21 2015 attached hereto as
Exhibit HH
JENIaNS
HOGIN LLP
February 11 2016
Page 16
Ms Barone and Mr Wright both stated during their interviews their opinions that
Mayor Grayson
s concerns were unfounded as Catellus a privately held corporation
would
not
be
susceptible
to
takeover
staff recommendation from the final staff report Mr Wright told me that he reported
this instruction
to
both finalists
telephone to Lennar
the final report Upon inquiry Ms Barone explained to Mr Coon that the removal of
the staff recommendation was her decision albeit she took input from Council Later
that day the staff report was released to the 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 Master Developer selection process
according to Mr Giacomini Mr Coon endeavored to persuade him not to send the
letter Mr Wright similarly attempted to persuade Mr Antenucci not to send the letter
2014
81 Interview of Mr Antenucci
8z See email exchange between Ms Barone and Mr Helix regarding Closing the Loop sent on September
22 2015 attached hereto as Exhibit II
83 See email exchange between Mr Coon and Ms Barone Mr Wright and Mr Bjerke regarding
Telephone Call from Catellus sent on September 23 2015 attached hereto as Exhibit JJ
84 See Exhibit JJ
86 See email to Mr Coon from Mr Silvern regarding Urgent Need Contact Info on Any Catellus and
Lennar Contects sent on September 21 2015 and email from Mr Silvern to Mr Coon regarding COI
Check
sent
September 21 2015
JENKINS
HOGIN LLP
February 11 2016
Page 17
Wright in August ultimately led Mr Coon to conclude that Catellus and Lennar were
basically on equal footing in their relationship with HR
Silvern and there is no
A
credible explanation as to why Catellus would have been preferred over Lennar as a
prospective future client and therefore favored in the Master Developer selection
The Hanson Bridgett letter signed by Mr Giacomini asserts that Lennar violated
the terms of the Agreement to Negotiate by lobbying the City Council Specifically the
letter contends that Lennar attempted to influence the Master Developer selection
process and thus violated Section 11 of the Agreement to Negotiate in the following
ways
report Included within this contention is an allegation that the City Council
engaged in a serial meeting in violation of the Brown Act
E
See Exhibit MM
JENIdNNS
HOGIN LLP
February 11 2016
Page 18
Mr Giacomini
specific allegations made by
Mr Bonner states that Lennar will
in
the
to
evaluate Catellus claims
When contacted in
cooperate
s efforts
City
connection with this investigation in December 2015 Mr Bonner and his associates
declined
to
investigation
be
to
interviewed
letters from
and
elected
to
limit
s
Lennar
participation in this
Myers The
Melveny
O
process could move ahead without further delay Following the meeting it was clear to
staff that Catellus
sallegations would require a more formal response
89 See September 27 2015 letter from Mr Bonner to Ms Barone attached hereto as Exhibit NN
90 See Exhibit NN
91
92
93
94
9s
Interview of Mr Wright
Interview of Mr Wright Interview of Mr Ramiza and Interview of Mr Silvern
Interview of Mr Wright
Interview of Mr Wright
Interview of Mr
Wright
JENKINS
HOGIN LLP
February 11 2016
Page 19
r
Lenna
Mr Kav and Mr Naranio Respond to Catellus
s Claims
In a letter dated December 24 2015 Vigo Nielsen counsel for Mr Kay and Mr
Naranjo replies to the Catellus allegations on behalf of his clients as follows
See
January 25
Jenkins
attached hereto
as
Exhibit
JENKINS
HOGIN LLP
February 11 2016
Page 20
contribute money to it
99
2 None of the individuals or entities that contributed to Mayor Grayson
s
campaign communicated with Mayor Grayson about the Concord Naval
Weapons Station
3 As a matter of law c
ampaign contributions are not forbidden by or even
mentioned in Section 11 or anywhere in the Negotiating Agreement
Nothing in the Negotiating Agreement purports to abridge Lennar
s or
anyone else
s First Amendment rights
4 Mr Marroso describes Lennar
s relationship with the contributors as
follows
Lennar Corp
b
the past
d Scarborough is an insurance firm which Lennar has not engaged or
lo See Exhibit QQ
ioz See Exhibit QQ
l03 See Exhibit QQ
l04
See Exhibit
JENKINS
HOGIN LLP
February 11 2016
Page 21
Lennar did not discuss the Master Developer selection process with Mayor
Grayson through Mr Brown
Mr Marroso
s letter does not deny that Lennar solicited the contributions nor does
it confirm or deny whether Lennar spoke to Mr Brown about the Master Developer
selection process and whether those conversations included discussions about campaign
contributions
II
The architect of the Master Developer selection process was Mr Wright who
assembled a team of outside consultants to negotiate term sheets with the two finalists
and to recommend the superior proposal to the Ciry Council Mr Wright
s intent was to
create a process that would yield the objectively superior proposal without political
interference in essence a decision that would be made strictly on the merits of the two
proposals To this end and in response to concerns that the finalists might attempt to
influence the decision
makers Mr Ramiza drafted Section 11 to the Agreement to
Negotiate which reads as follows
11
Lobbying Prohibition
the City
s legal financial and planning advisers and such other City parties as
may be designated by the LRA Executive Director from time to time
collectively the City
Designated Team Developer shall not engage in
discussions negotiations or lobbying of any City Council or Planning
See Exhibit
JENKINS
HOGIN LLP
February 1 l 2016
Page 22
are
intended
to
influence
the
Preliminary Stage
or
DDA Stage
The key phrase in Section 11 is that neither developer shall engage in discussions
negotiations or lobbying of any City Council or Planning Commission members or other
City employees or officials as may be designated by the LRA Executive Director from time
to
time
There
is
no
lobbying
in
the Agreement
Section 18
states that the Agreement shall be construed in accordance with the laws of the State of
California
in their ordinary and popular sense rather than according to strict legal meaning Unless
used by the parties in a technical sense or unless a special meaning is giveri to them by
usage in which case the latter must be followed The paramount rule in interpreting a
contract is to give effect to its true intent
The issue that arises here is whether Section 11 was intended to use the word
to use
it in the technical
sense
found
in
Government Code
Political Reform Act where campaign contributions are excluded from the definition of
lobbying
1636
1641
JENKINS
HOGIN LLP
February 11 2016
Page 23
makers from outside influences whatever they might be or however they might
decision
be
conveyed
Mr Ramiza
s understanding of the lobbying prohibition is that it intended to
preclude an end
run by either finalist directly or indirectly to the decision
makers The
word lobbying in Section 11 is listed with discussions and negotiations two other
verbs suggesting that the finalists are to avoid any activity that might be perceived as
attempting
to
in the Political Reform Act has no bearing on Section 11 if the donation of campaign
contributions was meant to influence Mayor Grayson then the contributions violated the
lobbying prohibition
in
Section
11
Neither developer
questioned its meaning nor did they at any time ask whether the word lobbying was to
donations
Had they not understood the prohibition both developers had ample
Wright and Mr Ramiza and the representatives of the two developers were continuous
and numerous during the time period following the execution of the Agreements
I reject the argument that the lobbying prohibition in Section 11 excludes
campaign contributions
and Lennar to refrain from engaging in any discussions negotiations or any other actions
intended to influence any City Council or Planning Commission members or other City
employees or officials
A
Do
the
Contributions
to
Mavor
s
Crravson
Caaign
Constitute
Bunting
for
his
company
to
make
the
contribution
as
an
JENIQNS
HOGIN LLP
February 11 2016
Page 24
accommodation to Mr Bonner something his company does for its clients from time to
time Shortly thereafter Mayor Grayson also received contributions for the maximum
allowable amount from Mr Kay Scarborough and Engeo Mayor Grayson asserts that
he was unaware of these contributor
s connections with Lennar at the time they were
made and until that connection was made public
In
Mr
Bonner
solicited
F
G
s
Bunting
of campaign contribution records with the Secretary of State indicates that neither has a
history of contributing
to
local campaigns
in
Concord
these
Mr Marroso states in connection with this issue that Lennar neither coerced
contributions
nor
reimbursed
the
contributors
Aware as he
was of this
contribution to the Grayson campaign was his idea and not prompted by a request from Lennar Mr
Eliahu stated that before making the contribution he asked Mr Bonner whether the latter thought the
contribution would generate any problems and was told it would not Engeo provided a list of its 2015
political and charitable contributions that included several campaign contributions to candidates for State
and local offices in the Concord area
llo Mr Nielsen
s December 24 2015 letter confirms that Mr Naranjo and Mr Kay had no involvement
with the
City
JENKINS
HOGIN LLP
February 11 2016
Page 25
that Mr Bonner
ennar could have contributed directly one could reasonably infer that
I
Mr Bonner
ennar either knew or suspected that the provisions in Section 11 would
I
have precluded such conduct or at least that a direct contribution would have cast a
s participation in the selection process Aside from that Mr
negative light on Lennar
ennar could have foreseen that the contributions made at their behest would
I
Bonner
have put Mayor Grayson in an awkward position when they came to light
Lastly both Mr Nielsen and Mr Marroso conclude that campaign contributions
e lobbying in the technical sense constitute a form of speech protected by the First
i
Amendment to the Constitution however this is beside the point The issue here is not
whether
the contributions
were
constitutional
but whether
they
were
made
in
in the process
contributions
by
entities
actively bidding
on
city contracts
are
red
herring
anonymously
magnanimously
solicitation and additionally requires prospective bidders to supply the names of their agents or principals
to ensure
compliance
Angeles City
JENIQNS
HOGIN LLP
February 11 2016
Page 26
relationship between the contributors and Lennar until the issue was brought to light by
the press and by Catellus
The alternative conclusion is that Lennar certainly orchestrated one and possibly
three contributions with the specific 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 the maximum amount allowed by
law The contributions materially assisted Mayor Grayson to demonstrate his fundraising
prowess early in the campaign possibly giving him an advantage over his competition
There is no evidence that Lennar and Mayor Grayson collaborated in this endeavor or
that Mayor Grayson was even aware of it at the time Nevertheless the fact that Lennar
concealed its involvement by using at least one proxy to donate at least one contribution
to Mayor Grayson
s campaign suggests a clandestine effort to advance its interests in the
selection
process
whether
or
not
it
actually did
so
occasions and that Mr Brown ostensibly lobbied Mayor Grayson on behalf of Lennar It
is established that Mr Brown has a longstanding relationship with Mr Bonner going
back at least to when Mr Bonner worked for Mr Brown and business connections with
Lennar and that Mr Brown is a registered lobbyist in San Francisco When Mr Brown
was Mayor of San Francisco he favored Lennar to serve as Master Developer of the San
Francisco Shipyard project despite a contrary staff recommendation in favor of another
developer Mr Brown appointed the selection committee that chose Lennar as the
Master
Developer
lz Interview of Mayor Grayson I had many contributions come in within a very short period of time and
there
was some
meet a
JENIQNS
HOGIN LLP
February 11 2016
Page 27
Brown had obvious motivation and opportunity to lobby Mayor Grayson but Catellus has
no evidence that Mr Brown engaged in such lobbying
Mayor Grayson states that he initiated contact with Mr Brown exclusively to seek
political advice regarding his Assembly campaign in view of Mr Brown
s extensive
political experience and network Mr Brown
s political expertise is well
known and this
is a perfectly plausible reason for Mayor Grayson to seek Mr Brown
scounsel According
to
Mr
time with Ms
Rossi
twice
process
The
concerns
raised
by Catellus
are
purely circumstantial
While Mayor
s decision to kick off his campaign during the Master Developer selection process
Grayson
seems
Mr
s
Brown
connections to Lennar if not the totality of those connections He certainly would have
had some awareness of the relationship as a consequence of the August 4 San Francisco
Shipyard tour which was led by Mr Brown and of the possibility that meeting privately
with Mr Brown might create the appearance of impropriety during the Master Developer
to
corroborate
Mayor Grayson
s description of the meetings
There is no basis to
Bjerke
JENIdNNS
HOGIN LLP
February 11 2016
Page 28
persons who had no connection with Concord but who had some relationship with
Lennar For instance the executive director of the Family Justice Center contacted Mr
Bjerke and informed him that 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
Center would have any motivation or reason to care who was ultimately selected as
Master
Developer
for the
Project
identities of the authors of the letters that Lennar orchestrated them Ms Barone recalls
asking Mr Coon if such endorsements constituted lobbying and he opined that they were
merely a form of public comment Lennar did not ask Mr Wright if such endorsements
would be permissible under Section 11 prior to arranging for their delivery
The endorsement letters unquestionably were intended to influence the Council
However as the Ciry Attorney noted at the time they were delivered to the Council as
part of and within the framework of the public process established for consideration of the
two proposals
Unlike the campaign contributions which were made outside the
framework of the process the letters were not directed to a single Councilmember with
the potential expectation of garnering favor
Additionally the letters were subject to
rebuttal at the public hearing Section 11 intentionally reserves for the developers the
ability to participate in the public process to their own advantage This only makes sense
Thus there
are
two
activities
form of lobbying in the broadest sense it is my conclusion that they were not proscribed
by Section 11
D
Allegations tha
t Catellus Lobbied Citv Staff bv Offerin Them Tickets to
Golden State Warriors Plav
Off Games
unspecified Concord City staff members with free tickets to attend an NBA game
ls Interview of Mr Bjerke
116 Interview of Ms Barone
in 6
project
sent
September 26 2015
JENKINS
HOGIN LLP
February 11 2016
Page 29
least
two
Councilmembers
report
seeing representatives
of
Catellus
Several members of the Negotiation Team reported that the Team uniformly held
the expectation that the final staff report to the City Council would include their
1 Interview of Mr Wright
9
zo Interview of Ms Barone There was also a rumor that someone on staff got tickets to a Golden State
playoff game but the timing of that rumor did not make sense because of when the playoff games were
and I had questioned staff and no one admitted to receiving any tickets and then it finally came out that
Garaventa had received the tickets and we checked with Catellus and Catellus stated that at a meeting
with the Garaventas Garaventa asked if Catellus could get them tickets and Catellus said no
1z Interview of Councilmember Hoffmeister and Interview of Councilmember Birsan
lZZ Interview of Councilmember Birsan
Wright
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February 11 2016
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recommendation of
Master
preferred
concurrently with both finalists and informing the Council which Developer
s term sheet
offered the best deal for the City According to Ms Barone it is customary for staff
reports in Concord to include a staff recommendation
Indeed the Request for
Proposals stated as follows
The LRA anticipates that one of the two Candidate Master Developers will
be recommended for desi
nation by the City Council as the Master Developer
eligible to negotiate with the LRA a proposed Disposition and Development
Agreement to be consistent with the negotiated Term Sheet and the form of
Disposition and Development attached hereto with such modifications as have
been requested by Respondent in its proposal and agreed to by the LRA in its
discretion Emphasis added
On August 19 2015 Ms Barone indicated via email to Councilmember Birsan
that she want ed direction from Council on whether it want ed or didn
t want a staff
on the 16 lzs in regards to which of the two firms staff views as meeting
recommendation
12 Interview of Ms Barone
128 The public hearing was originally scheduled for September 16 but delayed to September 29
129 See Exhibit X
See Exhibit X
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February 11 2016
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discussed the issue and the minutes of the closed session memorialize Council
sdecision
to
include
staff recommendation
in the final
A near final version of the staff report was provided to the Councilmembers in
session
September 16 2015 The report includes a paragraph expressly
closed
on
recommending Catellus
on
the basis of
its
superior
term
sheet
question or object to the presence of the recommendation or take any action to remove it
from the report Later however in the days following the September 16 closed session
as shown by this email from Ms Barone to Mr Wright a majority of Councilmembers
decided that they no longer wanted a staff recommendation
A key issue that Laura wants to discuss is her desire for there NOT to be a
City staff recommendation I know we discussed this in closed session and we
left closed session with direction to include the recommendation which you
and I both recommended happen however it is clear from my recollection of
the item in closed session and my subsequent one
ones with Council that
on
there may not be a majority of Council who want a staff recommendation
In the days following the September 16 closed session Mayor Grayson and
Councilmember Hoffineister had a change of heart regarding the inclusion of the
recommendation in the report This occurred in the context of both Mayor Grayson and
Councilmember Birsan earlier in the month raising questions about Catellus that staff
believed had no validiry and created concern among the Negotiation Team that
Councilmembers who favored
Lennar
were
attempting
to
smear
Catellus
These
13 See Exhibit CC
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February 11 2016
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Catellus was secretly negotiating a deal with Seeno Company that would give
Seeno a major role in the Project
Catellus had given Golden State Warrior tickets to City staff and
Catellus was vulnerable to being acquired by outside interests
Further within days of the September 1 closed session the Negotiation Team
received overtures from Lennar
s counsel Matthew Gray to the effect that Lennar wanted
to modify its term sheet notwithstanding that the term sheet deadline of September 2
had
passed
against to the Council in closed session At all times during the negotiation process the
term sheets were confidential and Lennar ostensibly had no reason to know that its
affordable housing proposal was deficient or its desire for a Phase II commitment had met
with such stiff opposition Several members of the Negotiation Team stated that it did not
seem coincidental that Lennar sought to improve the weakest parts of its proposal at that
point in time and speculate that information may have been leaked from the closed
session
I have not discovered any direct evidence demonstrating that the foregoing
concerns raised about Catellus or the late efforts by Lennar to improve its term sheet
were linked coordinated or the result of lobbying by Lennar They were however raised
at the 11
hour as it became more and more obvious to the Council that the Negotiation
Team
preferred and would be recommending the Catellus term sheet The culmination
of this activity occurred when three Councilmembers communicated to Ms Barone their
desire to remove the recommendation favoring Catellus from the report Ms Barone
ultimately
directed Mr
Wright
to remove
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February 11 2016
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report
telephone By this time Mr Wright had told Catellus that the staff recommendation
lobbying efforts This proved to be the final straw for Antenucci leading to the delivery
to the City of the Hanson Bridgett letter
Ms Barone subsequently has taken the position that the decision to remove the
recommendation was hers to make and that she made it in order to avoid putting the
Council in a box
selection
process has
worked
in the Nation competing to be our Phase 1 Master Developer and both firms
are
and
qualified
differences
of
capable
on
between the
recommendation
successfully accomplishing
its
two
the
project
Second
own
Tertn
Sheets
tbelieve
didn
staff
needed
was
own
by
The communications
between Ms Barone and Mr Wright show clearly that Ms Barone had heard from three
133 See email from Mr Wright to Mr Antenucci regarding Staff Recommendation sent September 22
2015 attached hereto as Exhibit TT
134 See email exchange between Ms White ofthe Contra Costa Times and Ms Barone regarding
CNWS Staff Report
sent
on
September 30 2015
JENKINS
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February 1 l 2016
Page 34
Councilmembers
2015
September 22 2015 Council has officially reversed its request for a staff
recommendation and the staff report will be issued without one over my
strong objections The Council is aware that if a recommendation were made
that it would be for Catellus
13s See email from Mr Wright to Messrs Antenucci and Buster regarding I need a Confidentialm
response ASAP sent on September 17 2015 attached hereto as Exhibit W
136 See email from Mr Wright to Mr Buster regarding Recommendation sent September 21 2015
attached hereto as Exhibit WW
137
See Exhibit TT
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February 1 l 2016
Page 35
September 25
2015
authority
to
to
four
developers
Given
that this criticism was first raised in June that dilemma was foreseeable Yet the Council
s concern about this issue was not raised in closed session either on September
majority
1 or 16 it was stirred in the days following the 16 after staff
s recommendation of
Catellus was communicated
timing of these events
the
made
aware
to
September 16
closed session
The
or not that the sudden shift in direction was a reaction to staff making explicit its
recommendation of Catellus
Ms Barone contends that her decision to remove the staff recommendation was
within her
authority
true
Council determined at its September 1 closed session that it wanted staff to recommend
a Master Developer in the final draft of the staff report This decision was memorialized
in the minutes of the meeting Ms Barone had no authoriry unilaterally to countermand
a Council decision
The Brown Act requires that decisions of the Council be made in properly noticed
The
meetings
on
one
meetings conducted
between
Ms
Barone
and
to
countermand
the s
Council direction
indeed
138 See email from Mr Wright to Mr Antenucci regarding Demand for pocument Retention sent
September 25 2015 attached hereto as Exhibit XX
139 Two Councilmembers were present in one of the meetings Email from Ms Barone to Jenkins Laura
was around for a portion of my meeting with Dan
4o
54952 1
b
2
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February 11 2016
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recommendation she did it when told to do so by a majority of the Council acting outside
a meeting
I have no direct evidence that Lennar was behind this effort and based on my
interviews with the Councilmembers I do not believe that the three Councilmembers
motives in seeking removal of the recommendation were necessarily the same
The
evidence establishes that the Council requested a staff recommendation but thereafter
independently communicated their changed positions during one
on discussions with
the Ciry Manager There is also evidence that the City Manager was acting in response
to pressure from Councilmembers indicating that a
majoriry may not want a staff
recommendation Note that a Brown Act occurs even if it is inadvertent Thus even
if the Councilmembers were unaware of each other
s conversations the Ciry Manager
s
action based on the individual communications outside a meeting transformed the
individual communications into an illegal serial meeting regardless of any other ambiguity
or conflicting evidence While the evidence obtained does not explain the reasons for the
This investigation has revealed that several local entities have made overtures to
Catellus to acquire an interest in the Project and in the course of doing so some have
promised
to
exercise
influence
over
have had to conduct this investigation and hampered further by not having been given
the opportunity to speak with all interested parties it is difficult to ascertain whether
these
overtures
played any role in the selection process All four of the participating
deny that it did Mr Antenucci reports that he both rejected the
Councilmembers
14 See Exhibit II
iaz See Exhibit CC
See Exhibit II
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February 11 2016
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and
overtures
this
Lennar
protracted period of time opportunity was created for third parties to attempt to interject
themselves into the process
The City Council was unaware of these overtures although emails from Mayor
Grayson suggest that he was troubled by what he understood to be overtures by Seeno to
Catellus Councilmember Birsan also raised a concern about the vulnerability of
Catellus to a takeover Staff took this concern seriously enough to draft a memorandum
reinforcing the limitations on transfer and assignment in the term sheets with Catellus
and Lennar
Through Mr Marosso
s January 6 2016 letter Lennar alleges that City staff was
favoring Catellus over Lennar as 1 Lennar was not informed of the removal of the staff
recommendation 2 staff did not share with Lennar accusations made by Catellus
14s In fact Mr Wright took these statements so seriously that he consulted with Mr Coon Mr Ramiza
Ms Barone and Mr Silvem and they decided to amend the Agreements to forestall third parties from
affecting the selection process by negotiating side
deals with the Master Developer candidates
146 Between September and October of 2015 legal counsel for Seeno presented the City with a Public
Records Act request for documents related to the Master Developer selection process in an effort to
determine why Seeno was eliminated from consideration 15 months earlier
14 See Exhibit GG
4s
See Exhibit HH
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February 11 2016
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against it and 3 that staff shared confidential proprietary information about Lennar
with Catellus
Catellus at this meeting Both Mr Wright and Catellus deny that any confidential
information was shared There is no evidence to support the contention that
confidential information was compromised in the meeting
It is true that the Negotiation Team concluded that the Catellus term sheet was
superior to Lennar
s and by mid
September had made Catellus aware of that This did
not constitute more favorable treatment the very point of the process was to evaluate
and compare the term sheets on their merits
VI
Movin Forward in Li
ht of the Accusations Raised
A
Section 11 provides that the City Council may in its discretion disqualify a
developer that engages in lobbying in violation of its provisions specifically Section 11
states that i
n the event of Developer
s violation of its obligations under this Section 11
City may immediately terminate this Agreement by written notice to Developer without
affording Developer any opportunity to cure such violation
In my opinion Lennar engaged in lobbying activities that are prohibited by Section
11
149
It is up
to
Interview of Mr
the Council
Wright
to
determine whether
conclusion
If the
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February 11 2016
Page 39
Council agrees the Council mav terminate the Agreement with Lennar but it does not
have
to
The Council may consider the benefit to the public of still having two
competitive proposals to choose from and to consider the fact that the campaign
contributions have been returned as part of a decision whether to hold Lennar to the
terms
of the
Agreement
informed that the City intends to apply the ordinary meaning of the word lobbying and
that campaign contributions fall within that definition
with the public interest as the sole motivation would resolve the current matter short of
termination
Alternatively the Council may terminate its Agreement and its
negotiations with Lennar
I
recommend
Effect of Catellus
s Letter on the Selection Process and Obligation of
Council to Consider it Fairlv
Reaction to the Hanson Bridgett letter and the allegations raised in it varied
Mayor Grayson and Councilmember Birsan suggested that Catellus was being overly
contentious
s more these reactions have been made public either in the press or
What
by virtue of disclosure of emails in response to a Public Records Act request City staff
was frustrated having arrived very close to the finish line they were satisfied that the
final staff report even without the recommendation sufficiently communicated their
evaluation of the
merits
of the
two
term
sheets
letter undertnined staff s efforts to bring the matter to Council on September 29 These
emotional reactions are understandable under the circumstances
However Catellus
sconcerns were not entirely without merit and do not appear to
have been motivated by anything other than the desire to have a fair shot at being
iso
Councilmember Birsan is quoted in the Contra Costa Times October 3 2015 saying that Catellus has
shot themselves in the foot This is the guy you want to be in bed with for 20 years Councilmember
Birsan expressed the same frustration to me during our interview Mayor Grayson expressed similar
frustration about the Hanson
to
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February 11 2016
Page 40
awarded the
contract
With
such
Councilmembers and staff must overcome their initial reactions and decide on a future
course that dispassionately considers the options
I appreciate the opportunity to be of service to the City
ry
uly yours
ic
ael
Jenkins