At the former Hunters Point Naval Shipyard on San Francisco’s south-eastern shore, a decades-long effort to build thousands of homes is mired in a botched clean-up of radioactive waste and a tangle of lawsuits, with the developer losing millions of dollars every quarter and residents fretting about contamination.
But the project remains a lucrative one for the man who played a central role in getting it off the ground more than two decades ago while serving as mayor: Willie L. Brown.
Newly unearthed public records show that Five Point Holdings, the company with the rights to develop the shipyard, paid more than $1.3 million during 2020 to a consulting firm called Shipyard Advisors that consisted of Brown and two partners. Five Point continued paying $100,000 per month from the fall of that year through at least April 29, 2021, the last date public filings were available. In exchange, Shipyard Advisors was tasked with “facilitating communications between the various federal, state and local agencies to accelerate the completion” of the Hunters Point cleanup.
The payments are the most recent example of how Brown has benefited from a property that many others consider a curse. He and his partners have also helped fund the development by brokering payments from foreigners seeking so-called “investment visas,” which allow non-Americans to immigrate if they put money into certain federally approved projects.
Brown did not respond to requests for comment.
Brown served over 30 years in the California Assembly, half that time as its speaker, and was often referred to as California’s most powerful public official. In 1996, he became mayor of San Francisco, serving two four-year terms and grooming protégés including current Mayor London Breed, Gov. Gavin Newsom and Vice President Kamala Harris.
Shipyard Advisors was established in February 2020 by Brown along with his attorney and long-time business partner Steven Kay, and his one-time mayoral economic development advisor, Kofi Bonner. The announcement quoted Brown as saying his consultancy would “join forces” with city, federal and state agencies.
Shipyard soon cut its $150,000-a-month deal with Five Point. Bonner, who had previously worked for Five Point’s predecessor company, left Shipyard Advisors in September of 2020 and the payments were then reduced to $100,000 a month. Kay filed papers Jan. 5 to renew Shipyard Advisors’ registration as a California limited liability company.
Emile Haddad, who stepped down as Five Point’s CEO in August, told financial analysts last March that his company had managed to gain new levels of access in San Francisco and Washington D.C.
“Now that we've seen the amount of influence that the State of California has in Washington, D.C., we now have started seeing a lot more movement,” Haddad said in a March conference call with financial analysts. “There's a lot of discussion going on about accelerating the process at the highest level in government,” he added during another call in August.
San Francisco, as well as California and the U.S. government, have laws requiring companies and lobbyists who seek to influence policymakers to make a record of those contacts and submit them for inclusion in a public database. But The Standard’s review of U.S. Senate lobbying disclosures, the California Secretary of State’s lobbying databases, and San Francisco Ethics Commission records found no mention of Shipyard Advisors or its work on behalf of Five Point.
Five Point did not respond to requests for comment. Bonner did not respond to messages left with his company in Detroit. Kay did not respond directly to questions about whether he and Brown might have acted as unregistered lobbyists, but emailed a statement saying “those involved in the Hunters Point Naval Shipyard project consciously comply with such laws.”
Craig Holman, a government affairs lobbyist for Public Citizen, a consumer rights group, said the lack of disclosure was an issue. If Willie Brown is “in the middle of this, he’s violating state and federal lobbying laws,” Holman said. He added that sanctions are not generally severe for failing to register, except in cases where someone might have knowingly schemed to hide such activities.
It’s clear enough why Five Point thought it needed help. The original agreement in 2000 specifying that the Navy turn over Hunters Point to the city for creation of a new 500-acre neighborhood required the Navy to clean up toxins and radioactivity. But the following year, SF Weekly reporter Lisa Davis revealed that the Navy had not been transparent about the extent of the contamination at the site. Then, in 2016, whistleblowers revealed that a contractor on the clean-up had faked soil sample results, leading to a criminal prosecution, more lawsuits and further delays.
Five Point and its former parent Lennar have already sold more than 300 homes on parcels that had earlier been deemed uncontaminated. But Five Point’s future, and stock price, is staked on building some 12,000 homes at the former shipyard and the nearby former site of Candlestick Park, where company officials have said development won’t start until Hunters Point obstacles have been removed.
The cleanup delays are costing Five Point as much as $3 million per quarter, according to a company call with analysts describing fourth quarter results from 2020. The Hunters Point delay has also tied up half the assets of the $440 million company, according to records. The company’s stock price, in fact, has served as a sort of barometer of the cleanup’s progress, according to Haddad. It’s lost nearly two-thirds its value since a 2017 IPO.
Neither the Navy nor the San Francisco Department of Public Health—the agencies responsible for toxic and radioactivity health guarantees for the sites—provided information in response to detailed inquiries from The Standard.
It is unclear whether any efforts by Shipyard Advisors have borne fruit. Navy documents from October said the cleanup was continuing, as was additional testing, and that these activities might possibly conclude by the end of 2024.
Brown and Kay also have their own reasons for wanting Hunters Point to succeed. The two have been involved in companies set up to serve as a broker for foreigners, primarily Chinese, who want to be part of a controversial program providing visas to people who invest at least $500,000 into an approved U.S. project. Aspiring immigrants buy “shares” of a company set up to provide funding for the Hunters Point development, with an opportunity for the investor to occupy a unit at the new development and gain the special EB-5 immigration visa.
The EB-5 program has been a source of capital for numerous real estate projects around the country, but critics say it is rife with abuse.
A firm called Golden Gate Global, which names Willie Brown as “principal,” described itself as an EB-5 investment fund that provides "client-focused services to enable access to American opportunity."
U.S. Citizenship and Immigration Service records show that in 2016, the firm said it intended to raise $96 million for Hunters Point, and in 2020 described $139 million to be raised. The records reviewed by The Standard did not include information on how much money actually came in.
Matt Smith can be reached at [email protected]