If you've been tracking Lennar Corp.'s massive redevelopment project at Hunters Point Shipyard in San Francisco, then you probably know that several years ago, after the Florida-based megadeveloper won an exclusive negotiating agreement with the city, it formed a limited liability company, Lennar-BVHP, LLC, to handle operations on Parcel A of the former naval shipyard.
Parcel A is the only parcel of the shipyard that the Navy has released to the city as cleaned up and ready for development. And since "Lennar-BVHP" pops up in court filings related to the developer's failures to properly monitor asbestos at Parcel A failures that led Lennar to enter into a half-million dollar settlement with the local air district in July that entity has been central to activists' efforts to uncover the giant developer's local business secrets.
So we noted with interest the fact that that "Lennar-BVHP" has now sold its development rights at Candlestick and the Shipyard to "HPS Development Co., LLC" just as an environmental review is being prepared of the entire shipyard, including some of its most toxic and radiologically impaired hot spots.
The transaction took place quietly in August, but was mentioned at a Dec. 16 meeting of the San Francisco Redevelopment Commission, during which the Agency authorized a reimbursement-related amendment to the "Lennar-BVHP-HPS Development Co." acquisition agreement.
During this same Dec. 16 meeting, the SFRC also amended a contract with environmental consultants PBS&J/EIP Associates to add tasks and increase the budget so as to complete the long-awaited environmental review of the combined Hunters Point Shipyard/Candlestick development project. Until the EIR is complete and certified, nothing can move forward.
But before we get to the implications of the environmental review for Lennar's proposed Candlestick Point/Shipyard development, it's worth rewinding the tape to early 2008 to clarify just how, why, and when Lennar-BVHP became HPS Development and what that transfer means.
In the first six months of 2008 (see "Promises and reality," 04/23/08), Lennar spent more than $5 million to help ensure the victory of Proposition G, which folded the Shipyard and Candlestick Point into one huge redevelopment project, one that could include a new stadium for the 49ers.
And just as urban planners were beginning to wonder if Lennar really would be able to sell proposed luxury condominium complexes on heavily polluted Shipyard land in the face of a nationwide real estate nosedive the Irvine-based investment and development company Scala Real Estate Partners announced, in February 2008, that it had signed a multimillion-dollar letter of intent related to Lennar-BVHP's development.
Founded by former executives of the Perot Group's real estate division, Scala said it planned to invest up to $200 million and have equal ownership interests in the project.
The investment fulfilled a city-issued mandate that Lennar find a financial backer to guarantee its proposed multibillion-dollar project, regardless of market conditions.
Then this fall, Lennar demanded and got approval from the Redevelopment Commission for an additional 500 homes and a 7.5 percent increase in its profit margins (see "Bait and Switch," 11/05/08), as part of an Oct. 27 draft financing plan for the Candlestick Point/Shipyard proposal.
But at the time that this financing plan was negotiated, Lennar-BVHP had, in fact, already sold all of its title and interest in the project land and assigned all its rights and obligations under the related financing documents to HPS Development Co., LP, which filed a business license with the state on Aug.
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