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I
E
T LI
I
H
I
A LAW PARTNERSHIP
CxnE
M
JENKINS
MANHATTAN TOWERS
CHRIST HoGi
v
JOHN C CO ITI
GaeGG KErrLES
LnuxEV LnNCEx
TREVOR RUSIN
WWW
LOCALGOVLAW
COM
MELINDA A GR66N
NATALIE C KARPELES
S EMAIL ADDRESS
WRITER
ENKINS LOCALGOVLAW
M
n
COM
February 11 2016
Ciry Council
City of Concord
1950 Parkside Drive
Concord CA 94519
Re
This final report reflects my independent review and analysis of the facts as best as
I can ascertain them from the evidence reviewed Some relevant witnesses declined to be
The report addresses the allegations raised in the Giacomini letter and several
other allegations of improprieties that have been raised by other parties The report does
not include analysis related to the threat of potential litigation raised in the September
25 2016 letter from Mr Giacomini I have separately addressed that issue to the Council
JENIQNS
HOGIN LLP
February 11 2016
Page 2
and interim City Attorney That analysis is confidential related to exposure to litigation
and outside the scope of the investigation The attached report contains all of my findings
and analysis related to Catellus
s allegations that Lennar violated the prohibition on
lobbying in the agreement to negotiate
I appreciate the opportuniry to be of service to the City I am available to answer
any questions that arise concerning the attached report
V truly yours
cc
INVESTIGATIVE REPORT
ON THE CONCORD NAVAL WEAPONS STATION
MASTER DEVELOPER SELECTION (INCLUDING EXHIBITS A THROUGH YY,
ATTACHED THERETO AND INCORPORATED BY REFERENCE)
FROM MICHAEL JENKINS, ESQ., JENKINS & HOGIN, LLP,
TO THE CITY COUNCIL OF THE CITY OF CONCORD ,
DATED FEBRUARY 11, 2016
(COLLECTIVELY JENKINS REPORT)
LIMITED WAIVER
Notwithstanding the exceptions contained in the California Public
Records Act, the City Council of the City of Concord has opted to waive the
attorney-client privilege, work product protection, and the deliberative process
privilege with respect to the Jenkins Report solely for the information contained
in the report and the specific attachments disclosed herein. This limited
disclosure is not intended and shall not be construed to operate as: (a) a waiver
of any privileges and protections applicable to any materials other than the
Jenkins Report; (b) a waiver of the subject matter of the Jenkins Report,
including but not limited to any otherwise-privileged documents directly or
indirectly related to the master developer selection process for the former
Concord Naval Weapons Station; or (c) a subject matter waiver in litigation.
Y1
A LAW PARTNERSHIP
MICHAEL
JENKINS
MANHATTAN TOWERS
CHRISTI HOGIN
JoxN C Corrt
GREGG
KETrLES
LAURen
cEx
s
L
TREVOR RusIN
COM
LOCALGOVLAW
WWW
MELINDA A GREEN
NATALIE C KARPELES
S EMAIL ADDRESS
WRITER
q
MJENKINS
COM
LOCALGOVLAW
February 11 2016
City Council
Ciry 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 FivePoint Communities
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 Ciry of Concord by lobbying the City Council
The Ciry received a second letter from Hanson Bridgett on September 25 2015 raising
the specter of
litigation against
the
City due
to
s alleged breach
Lennar
The Ciry
s
Interim Ciry Attorney engaged this firm as independent special counsel to investigate and
report back to the City Council findings and conclusions with respect to these allegations
In connection with the preparation of this report I have considered both
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
surrounding
this
complex
issue
applicable law and analysis of the relevant issues which lead me to conclude that Lennar
s
removal of the recommendation from the final staff report resulted from an illegal serial
meeting
See
I did
September 25
not
to
Mr
allegations
as
Moreover I
Exhibit YY
JENKINS
HOGIN LLP
February 11 2016
Page 2
conclude that the Agreement leaves the consequences if any of such lobbying entirely
Factual Back
round
A
were
Persons of Note
investigation
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
Ciry Manager
Guy Bjerke
Director
of
Communiry
Reuse
Planning
Authority
Local
Reuse
on or
about September
21 2105
JENKINS
HOGIN LLP
February 1 l 2016
Page 3
Mark Coon
Ciry Attorney
Michael Wright
about
Dahlia Chazan
on
or
City Consultants
Craig Labadie
Gerald Ramiza
economist with HR
Consultant
A a consulting firm under
contract
with the
Ciry
Engeo
in
Concord
on
s
Lennar
JENKINS
HOGIN LLP
February 1 l 2016
Page 4
Co
Bunting
Mr
Kay
is
Communiry Builders
Mr
Kay declined
to
be
reusei
yard
shi
and Treasure Island http and
buena
yerba
reusei attached hereto as Exhibit A
island
3 See staff report from Mr Wright to the City Council regarding Introductory Presentations by Master
Developer Can
iidates on Implementation of the Concord Reuse Project Area Plan dated February 10
See Community awaits benefits as Lennar finally breaks ground in Hunters Point by Steven T Jones
l
o
c
g
sfb
www
http
r
b
finally
lennar
benefits
awaits
muni
con
01
07
s
k
2013
ieics
ea ound
http ard
www
See Exhibit E
JENKINS
HOGIN LLP
February 11 2016
Page 5
Fred
Naranjo
in San
Francisco
Rossi
Catellus
See
Scarborough
Insurance Website
hereto as Exhibit G
10 See Legendary Sarah Vaughn dress auction benefit finds Bayview Hunters Point global arts program by
in
era
brief
head to Africa and France thanks to Bayview Opera House by Pat Murphy printed in the Fog City
hereto as Exhibit H
house
era
iew
fundraiser 060428
shtml
attached
Se Catellus cries foul over Lennar contributions to Concord Mayor Tim Grayson
s Assembly
campaign by Richard Eber printed in the Contra Costa Bee on August 23 2015
Interview of Ms Barone
JENKINS
HOGIN LLP
February 11 2016
Page 6
Lennar
Others
Garaventa
well
as the entire East Bay through the Mt Diablo Recycling
Center
politics and has shown its support for local politicians though
campaign contributions
D
A
Seeno
Construction
Co
is
local
Concord
development
new
home
construction
and
in local politics and has shown its support for local politicians
1http
See UC Berkley College of Environmental Design 2015 Distinguished Alumni Award
berkele
iiced
y
hereto as Exhibit J
award
d
ce
edu
a
l
distinguishe
friends
kofi
2015
alumni
lumni attached
hereto as Exhibit K
16which
See Discovery
Homes Website
discoveryhomes com
www
https
seeno a printout from
us
about
attached hereto
Exhibir
is
as
JENKINS
HOGIN LLP
February 11 2016
Page 7
Point
project
Mr
Brown
declined
to
be
Commencement
Master Develo
er
Lennar
Named as Finalists
Project
Plan
by
22
independent review this list was ultimately reduced to four qualified firms recommended
by staff these firms included Catellus Development Corporation Catellus FivePoint
See San Francisco Ethics Commission Website
Lbbyist
ht
o
s
Sunlight
com
Details
netfile 2014 153710
SFO a printout from which is attached
3
hereto as Exhibit M
13 See Biography
com Website http
w
i
brown
willie
people
com
biography
40059a
ww printout from
which is attached hereto as Exhibit N
20 See Exhibit B
Z
Bjerke Also
see
Exhibit B
JENKINS
HOGIN LLP
February 1 l 2016
Page 8
Lennar
Communities
SunCal
Lennar
F Shea
J
Company
and
SunCal
Corporation
was
stamping
rubber
criticism
staffs recommendation
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 Ciry
Agreement The identical Agreements included among other things a prohibition
on lobbying between the developers and either the Ciry Council Planning Commission
or
other
understood
LRA Executive
Director
It was generally
recommendation of one Master Developer via a staff report prepared by the LRA
Executive Director and his team Negotiation Team
C
in
order
to
nascent
Assembly campaign
Mr
Brown was aware of the pending Project however according to Mayor Grayson the two
did
not
Developer selection
or
any
Project specifics
28
Interview of Ms Barc
ne and Interview of Mr Silvern Also sec Exhibit B
See May 26 2015 Agreement to Negotiate between the Ciry of Concord and Catellus Section 11 page
9 and May 26 2015 Agreement to Negotiate between the City of Concord and Lennar Section 1 l page
9 Exhibit P
Mayor Grayson
JENKINS
HOGIN LLP
February 11 2016
Page 9
along with Ciry 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 third
party
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
appropriate
Councilmembers
measures
to
prevent
interactions
between
inevitably
took
and
among
the
during this site visit Mayor Grayson in passing mentioned his upcoming Assembly race
that G
F Bunting consider making a contribution to Mayor Grayson
s Assembly
campaign
campaign
On June 16 2015 G
F Bunting donated 1
000 to Mayor Grayson
s
33 Interview of Mr Wright
38
See
Campaign
Grayson
For State
Assembly
2016
htt
cal
Commit2015
n
Campai
ov
ca
ss
access
1376431session
id
aspx
Detail
tees
received
view
attached hereto
as
Exhibit R
JENKINS
HOGIN LLP
February 11 2016
Page 10
On June 18 2015 G
F Bunting donated another 3
200 to Mayor Grayson
s
The total amount donated by G
F Bunting to Mayor Grayson
s Assembly
campaign
campaign was 4
200 the maximum allowable contribution to individual candidates for
the
Legislature By the end of June 2015 three other entities with ties to Lennar
Scarborough Engeo and Mr Kay each donated 4
200 to Mayor Grayson
s campaign
unnamed source
also
in
attendance
Mr
Brown
was
the
lead
presenter
At this tour
over what he believed to be inappropriate private meetings between Mayor Grayson and
Mr Brown
39 See Minutes of the June 17 2015 City Council site visit attached hereto as Exhibit S
See Exhibit S
See Exhibit R
4Z See Exhibit R
4j
85300 et seq
44 See Exhibit R
4s Interview of Mr Antenucci
See Minutes of the July 27 2015 City Council site visit attached hereto as Exhibit T
Also see notes from the August 4 2015 site visit attached hereto as Exhibit U
4s 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 Ciry office provided services to Catellus Mr Silvern was
A
office worked on an economic impact analysis concerning a Specific Plan for property
around Union Station in Los Angeles then owned by a joint venture including Catellus
to
LA
that the HR
A New York office was awarded 000
30 assignment by a partnership
a
including SunCal Mr Silvern was not involvec in this project On August 14 2015
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
s meetings with Mr Brown at all
See Email from Mr Wright to Mr Silvern 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
s See Email from Mr Silvem to Mr Wright regarding COI check sent August 13 2014 attached hereto
as Exhibit V
See Email from Mr Silvern to Mr Wright regarding COI check sent August 13 2014 attached hereto
as Exhibit V
See Email from Mr Silvern to Mr Wright regarding COI check sent August 13 2014 attached hereto
as Exhibit V
See Email from Mr Wright to Mr Silvem regarding COI check sent August 14 2014 attached hereto
as Exhibit V
5e See
September 24 2015 letter to Ms Barone from Mr Giacomini of Hanson Bridgert aerached hereto
Exhibit W
as
JENKINS
HOGIN LLP
February 11 2016
Page 12
Bridgett sent a letter to the Concord Ciry 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
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
59 See Exhibit W
bo See August 24 2015 letter from Mr Wright to representatives of both Catellus and Lennar attached
hereto as Exhibit Y
See Concord Mayor Returns Donations Linked to Possible Weapons Station Developer by Lisa P
White printed in the Contra Costa Times on September 1 2015
tracostatimes
w
i
http
o
c
w
ord
miconc
co
w
nci 40
87
2
linked
ns
donatio
retums
mayor
507iconcord
station attached hereto as Exhibit Z Additionally see Minutes of the September 1
weapons
ossible
2015 Ciry Council Meeting attached hereto as Exhibit AA and August 28 2015 letter from Mr Jim
Sutton to Mayor Grayson attached hereto as Exhibit BB
62 On January 1 2016 Ms Christine Callahan counsel for Ms Mary Jo Rossi contacted my colleague Ms
Natalie Karpeles and indicatea 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
JENKINS
HOGIN LLP
February 11 2016
Page 13
On September l 2015 the Ciry Council met in closed session to discuss the
Master Developer process and the then
current term sheets
was a
A
past client of HR
follows I was having questions and in my own mind had developed questions about
s objectiviry and
A
HR
was
doing
my
own
research
Grayson to HR
s website where he discovered that Catellus is named as a client
A
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 includea both developers
position on afforaable housing
Prior to the conclusion of the September 1 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 presentea at the conclusion of the Master Developer selection
6 Interview of Mr Bjerke Interview of Mayor Grayson Interview of Mr Silvern and Interview of Mr
Wright Also see Minutes of the September 1 2015 City Council Closed Session Meeting attached
hereto as Exhibit CC
66
67
68
69
Interview of Mr Wright and Interview of Mr Silvern Also see staff report from Mr Wright to the Ciry
Council regarding Report on Master Developer Term Sheets and Selection Process dated September 1
2015 attached hereto
as
Exhibit 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
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 Ciry Council met in closed session to discuss the
Master Developer process and term sheets Dtiring the meeting staff answered questions
raised by Council during the September 1 closed session and presented it with a draft
sent on
September 10
2015
attached hereto
as
Exhibit FF
JENKINS
HOGIN LLP
February 1 l 2016
Page 15
transfers
circumstances
transfers
provision
to
or
nments
assi
in
certain
well
defined
limited
Both semi
finalists term sheets allow as a permitted transfer
allowing
transfers
opportunities
O ther
absolure aiscretion
to
76 Interview of Mr Wright Interview of Mr Silvern Inrerview of Mr Grogan I am pretry 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 Silvern and Interview of Mr Bjerke
i See email exchange between Ms Barone and Messrs Wright and Coon regarding Contidential sent on
September 17 2015 artached 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 attache hereto as
Exhibit HH
JENKINS
HOGIN LLP
February 11 2016
Page 16
Ms Barone and Mr Wright both stated during their interviews their opinions that
Mayor
s concerns were unfounded as Catellus a privately held corporation
Grayson
woula
not
be
susceptible
to
takeover
ro
both finalists
telephone to Lennar
Mr Giacomini inquiring why the Ciry will no longer provide a staff recommendation in
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 rhat Catellus had authorized him to transmit a
letter to the Ciry raising concerns about the Master Developer selection process
si Interview of Mr Antenucci
8222See201email
exchange between Ms Barone and Mr Helix regarding Closing the Loop sent on September
S 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
8iSeptember
See email 23
exchange
between Mr Wright and Ms Laperchia regarding 15
29 Staff Report sent on
9
2015 attached hereto as Exhibit KK
gb 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
attached hereto
as
Exhibit LL
JENKINS
HOGIN LLP
February 11 20l 6
Page 17
Wright in August ultimately led Mr Coon to conclude that Catellus and Lennar were
Silvern and the City of Concord nor have they engaged in any conduct suggesting
favoritism of Catellus over Lennar in the Master Developer selection process
D
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
See Exhibit MM
JENKINS
HOGIN LLP
February 11 2016
Page 18
Mr Giacomini
specific allegations made by
Mr Bonner states that Lennar will
in
the City
cooperate
s efforts to evaluate Catellus claims When contacted in
connection with this investigation in December 2015 Mr Bonner and his associates
declined
be
to
investigation
to
interviewed
its
agreement
wrongdoing by
Catellus
with the
City
Catellus wrongdoing that have been brought to my attention during the course of the
ation
investi
F
with the Ciry Attorney Mr Wright and Mr Ramiza cancelled the September 29 2015
scheduled
public hearing
have its lawyer send the letter and derail the selection process Mr Wright suggested a
meeting with Catellus the 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
process could move ahead without furrher delay Following the meeting it was clear to
staff that Catellus
s allegations 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
9
9
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
In a letter dated Deceinber 24 2015 Vigo Nielsen counsel for Mr Kay and Mr
did he
meet or
communicate
with Mayor
Grayson Additionally Mr
Mr Nielsen
s response does not indicate whether Mr Kay or Mr Naranjo haa any
communications with Lennar regarding the contributions and specifically whether
anyone acting on behalf of Lennar solicited them
l Lennar has not given any money to the Committee for Councilmember
Tim Grayson
s campaign for State Assembly even though it would not
96 See December 24 2015 letter from Vigo Nielsen to Mr Jenkins attached hereto as Exhibit 00
97 See January 6 2016 letter fr
m Mr Marroso to Mr Jenkins attached hereto as Exhibit PP
g
See
January 25
tu
Mr
i
hcret
nkins attache
J
as
Exhibit
JENKINS
HOGIN LLP
February 11 2016
Page 20
3 As a matter of law c
ampaign contributions are not forbiaden 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
io3
See Exhibit
JENKINS
HOGIN LLP
February 11 2016
Page 21
5 Lennar
did not discuss the Master Developer selection process with Mayor
Grayson through Mr Brown io5
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 sheers with the two finalists
interference in essence a decision that would be made strictly on the merits of the two
proposals
Lobbving Prohibition
DDA Stage negotiations shall take place with the LRA Execurive Director
the City
s legal financial and planning advisers and such other Ciry parties as
Team for specific purposes related to the negoriations Nothing in this Section
11 shall prevent i responses to requests for inforniation from one or more
Excluded Ciry Parties providea such responses are directed to the Ciry
See Exhibit
JENKINS
HOGIN LLP
February 11 2016
Page 22
intended
are
to
influence
the
Preliminary Stage
or
DDA
Stage
violation
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
Ciry einployees or officials as may be aesignated 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
The California Civil Code governs the interpretation of contracts
Section 1644 of that Code provides that t
he words of a contract are to be understood
in their ordinary and popular sense rather than according to strict legal meaning Unless
used by the parties in a technical sense ar unless a special meaning is given to them by
usage in which case the latter must be followed The paramount rule in interpreting a
The issue that arises here is whether Section 11 was intended to use the word
to use
it in the
technical
sense
Political Reform Act where campaign contributions are excluded from the definition of
lobbying
1636
1641
JENKINS
HOGIN LLP
February 11 2016
Page 23
makers
decision
from outside influences whatever they might be or however they might
conveyed
be
sense
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 suggestinginfluence
that the finalists are to avoid any activity that might be perceived as
attempting
to
the decision
makers
in the Political Reform Act has no bearing on Secrion 11 if the donarion of campaign
contributions was meant to influence Mayor Grayson then the contributions violated the
lobbying prohibition
ordinary meaning
of rhe
lobbying prohibition
in
Section
11
Neither developer
questioned its meaning nor did they at any time ask whether the word lobbying was to
be
interpreted in a technical sense or to exclude activities such as making campaign
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
campaign contributions
and Lennar to refrain from engaging in any discussions negotiations or any other actions
intended
to influence any Ciry Council or Planning Commission members or other Ciry
employees ar officials
A
Do
the
Contributions
to
Mavor
s
Gravson
n Constitute
pai
Cam
Interview of Mr Glenn
Bunting
his
company
to
make
the
contribution
as
an
JENKINS
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
evidence
that 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 campai
ns in Concord
Mr Marroso states in connection with this issue that Lennar neither coerced
contributions
nor
reimbursed
the
contributors
Aware
as he was
of this
10 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
Lennar could have contributed directly one could reasonably infer that
Mr Bonner
Ixnnar either knew or suspected that the provisions in Section 11 would
have precluaed such conduct or at least that a direct contribution would have cast a
negative light
on
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
constirutional
but
whether
they
were
made
in
are
red
herring
contributions
anonymously
The
first
is
that
Lennar
orchestrated
the
contributions
magnanimously
solicitation and additionally requires prospective bidders to supply the names of their agents or principals
to ensure
compliance
with
section
section
c 12 H
470
JENKINS
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 Mayar Grayson was even aware of it at the time Nevertheless the fact that Lennar
concealed its involvement by using at least one pro to donate at leasr one contribution
to Mayor Grayson
s campaign suggests a clandestine effort to advance its interests in the
process whether or not it actually did so
Regarded in that way the
selection
no
was some
to meet
JENKINS
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February 11 2016
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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
Mr
Grayson they met twice once in April and again in August of 2015 the second
Rossi
and the two never discussed the Master Developer selection
time with Ms
process
The
concerns
raisea
by
Catellus
are
purely
circumstantial
While Mayor
saecision to kick off his cainpaign during the Master Developer selection process
Grayson
seems
entirely coincidental
of
Mr
s
Brown
connections to Lennar if not the totality of those connections He certainly would have
haa 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 possibiliry that meeting privately
with Mr Brown might create the appearance of impropriery during the Master Developer
selection process Nonetheless the investigation resulted in no evidence to contradict
or
to
There is no basis to
Bjerke
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February 11 2016
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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
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 Mrform
Coon if such endorsements constituted lobbying and he opined that they were
merely
of public
comment
16
11
prior
to
l
arranging for their delivery
However as the Ciry Attorney noted at the time they were delivered to the Council as
part ofand within the framework of the public process established for consideration of the
two
proposals
framework of the process the letters were not directed to a single Councilmember with
the
rebuttal
at
the
abiliry 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 1 l
D
to
attend
an
NBA
i l
s
game
Interview of Mr Bjerke
110 Interview of Ms Barone
i Interview of Mr Wright
See email from Mayor Grayson to Mr Coon regardin News Alert Developer accused of improper
lobbying in 6
billion East
Bay project
sent
September 26 2015
attached hereto
as
Exhibit RR
JENKINS
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February 11 2016
Page 29
principally
seeing
least
two
Councilmembers
Steve Buster
and
talking
to
report
Bonner
at
an
event
Durin
those
occasions
Councilmembers report that conversations were social and no mention was made of the
Master Developer selection process
Catellus representatives state and Mr Wright
confirms
that they
askea Mr
Wright
if attendance
at
communiry
events
was
permissible Mr Wright advised both developers that they were free to attend such
events provided they did not discuss the selection process
No evidence has been
adduced to suggest that either developer violated this admonition
Further Section 11
Several members of the Negotiation Team reported that the Team uniformly held
the expectation that the final staff report to the Ciry Council would include their
19 Interview of Mr Wright
120
Intervicw of Ms Barone There was als 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
1zL Interview of Councilmember Hoffineister and Interview of Councilmember Birsan
Interview of Cc
uncilmember Birsan
Wright
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February 11 2016
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recominendarion f
team of experts precisely for the purpose of negotiating the best terms they could
concurrenrly with both finalists and informing the Council which Developer
s terin sheet
offered the best deal for the City According to Ms Barone it is customary for staff
reports in
Concord
to
include
staff recommendation
The LRA anticipates that one of the two Candidate Master Developers will
been requested by Respondent in its proposal and agreed to by the LRA in its
discretion Emphasis added
On August 19 2015 Ms Barone inaicated via email to Councilmember Birsan
recommendation
more
on
128
goal was to avoid a 2 vote between the firms That would be highly problematic
The uncertainry as to whether the Council would want a recommenaation may
have stemmed in part from the experience months earlier when the Council was stung by
the criticism that it had ceded too much authoriry to staff when it winnowed the field of
applicants from eight to four In view of this uncertainry Mr Wright expressly raised the
issue
The Council
128 The public hearing was originally scheduled for September 16 but delayed to September 29
129 See Exhibit X
130
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
s decision
session
on
recommending
September 16 2015
Catellus
on
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 majoriry 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
Ciry staff recommendation I know we discussed this in closed sessian 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 majoriry of Council who want a staff recotnmendarion
In the days following the September 16 closed session Mayor Grayson and
Councilmember Hoffineister had a change of heart regardin 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 c
uestions about Catellus that staff
believed had no validiry and created concern among rhe 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
Each of these allegations was investigated by Mr Wright Mr Ramiza and
or the
Ciry Attorney and determined to have no merit
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 ternz sheet notwithstanding that the term sheet deadline of September 2
had
passea
against ro 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 aeficient or its desire for a Phase II commitment had met
with such sriff opposition Several members of the Negotiation Team stated that ir did not
seem coincidental that Lennar sought ro improve the weakest parrs of its proposal at that
int in time and speculate that information may have been leaked from the closed
pc
session
I have not discovered any direct evidence demonstrating that the foregoing
concerns raised about Catellus or the late efforts by Lennar to iinprove its term sheet
were linkea 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
term
sheet
The culmination
ultimately directed
Mr
Wright
to remove
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HOGIN LLP
February 11 2016
Page 33
report
telephone
By this time Mr Wright had told Catellus that the staff recommendation
would favor it
133 when Mr Wright informed Mr Antenucci that the recommendation
would be removed Mr Antenucci believed that this was a direct result of Lennar
s
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
I varied from the usual protocol of including a staff recommendation that
recommended one of the two firms to Council for three reasons First because
our
selection
process has
worked
in the Nation competing to be our Phase 1 Master Developer and both firms
are
qualified
and
capable
differences
between
recommendation
its
own
was
of
on
the
two
needed
Secona
own
Tern7
Sheets
tbelieve
didn
staff
Ms Barone contends that she first made the aecision and then informed the
is
belied
The communications
13
See eniail exchange between Ms White of the Contra Costa Times and Ms Barone regarding
CNWS Staff
Report
sent on
September 30 2015
attached hereto
as
Exhibit UU
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HOGIN LLP
February 1 l 2016
Page 34
Councilmembers
Grayson Hoffineister
recommendation from the report
These
under considerable pressure to do so
and
Birsan
who
wanted
to
excise
the
emails
there are conversations occurring between Catellus and Seeno That Seeno is
plotting
some
way of
He
2015
September 22
2015
recommendation and the staff report will be issued without one over my
13 See email from Mr Wright to Messrs Antenucci and Buster regarding I need a Confidentialm
13ti See email from Mr Wright to Mr Buster regarding Recommendation sent September 21 1015
See Exhibit TT
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February 1 l 2016
Page 35
September 25
2015
controversy
had arisen months before when the Council was criticized for ceding too
much
authoriry
to
it winnowed
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
Catellus
was
communicated
timing of these
made
aware
events
to
the Council
in the
September 16 closed
session
The
of the staff
s recommendation
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
authoriry
Ordinarily
that would be
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
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
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February 11 2016
Page 36
recommendation she did it when told to do so by a majoriry 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
individual communications into an illegal serial meeting regardless of any other ambiguity
or conflicting eviaence While the evidence obtained does not explain the reasons for the
reversal of the direction to staff to give a recommendation the events in September
eroded a meticulously devised plan to select a Master Developer solely on the basis of
merit because Councilmembers injecte
i themselves to change the agreed procedures after
the Council became aware of the Neg
tiation Team
s recommendation
VI
This investigation has revealed that several local entities have made overrures 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
played
Councilmembers deny
overtures
14 See Exhibit II
142 See Exhibit CC
any
role
in
that it did
JENKINS
HOGIN LLP
February 11 2016
Page 37
overtures
this
and
Mr Marroso speaking for Lennar denies that such overtures were made to
Lennar
protracted period of time opportuniry was created for third parties to attempt to interject
themselves into the process
The Ciry 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 vulnerabiliry of
Catellus to a takeover Staff took this concern seriously enough to araft a memorandum
reinforcin the limitations on transfer and assignment in the term sheets with Catellus
and Lennar
Accusations A
ainst Catellus Levied bv Lennar
Through Mr Marosso
sJanuary 6 2016 letter Lennar alleges that Ciry 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
In fact Mr Wright took these starements so seriously that he consulted with Mr Coon Mr Ramiza
Ms Barone and Mr Silvern 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 Beeween September and October of 2015 legal counsel for Seeno presenred the Ciry 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
See Exhibit GG
i
See Exhibit HH
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HOGIN LLP
February 11 2016
Page 38
against it and 3 that staff shared confidential proprietary inforniation 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 rhat 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 constirute more favorable rreatment 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 Ciry Council may in its discretion disqualify a
developer rhat engages in lobbying in violation of its provisions specifically Section 11
states that i
n the event of Developer
sviolation of its obligarions under this Section 11
City may immediately terminate this Agreement by written notice to Developer without
affording Developer any opportunity to cure such violation
It is up
to
Interview of Mr
the Council
Wright
to
determine whether
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 Ciry intends to apply the ordinary meaning of the word lobbying and
that campaign contributions fall within that definition
recommend
that the
discussion
and
decision
whether
to
terminate
the
Effect of Catellus
s Letter on the Selection Process and Obli
ation o
Council to Consider it Fairly
Reacrion 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 Ciry 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
evaluaticm of the merits of the
two
term
sheets
However Catellus
s concerns 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
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 wirh for 20 years Councilmember
Birsan expressed the same frusrration to me iuring our interview Mayor Grayson expressed similar
frustration about the Hanson
Bridgett letter
in
emails
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
tins