It’s time for Concord to break off its engagement with Albert D. Seeno III’s consortium and find another partner to serve as master developer for the massive Naval Weapons Station site.
The city can do better. Seeno III pleaded guilty in 2016 to bank fraud on behalf of his home-marketing company, Discovery Sales. His consortium, Concord First Partners, already has reneged on its promises from 2021.
No deal has been finalized. The City Council next Saturday has an opportunity to start fresh, to find a suitor for the Bay Area’s largest housing project that will keep its word and doesn’t have a criminal past.
In a marriage that’s likely to last 40 years or more, Concord residents deserve better.
The city has been courted over the past eight years by two desirable and experienced developers. In 2016, Catellus Development Corp. submitted what city staff then determined was the clearly superior proposal in the first search for a developer. But the firm withdrew from contention when it couldn’t stomach the city’s ugly politics.
In 2021, the City Council passed over a deal with a partnership of multinational Brookfield Development and Sunset Development, the family-owned East Bay firm that built the Bishop Ranch business park in San Ramon. The partnership came with an impressive proposal that met the city’s union labor and housing unit requirements.
Instead, the council chose Concord First Partners, despite Seeno III’s companies’ troubled past and his propensity to sue government agencies when he doesn’t get his way. Ironically, Seeno III, the third-generation leader of a family building empire, now finds himself the target of litigation from his own father.
Albert D. Seeno Jr. sued his son seeking to oust him as CEO of five of the father’s firms. The court documents reveal how deeply financially entwined the father’s and son’s businesses are and raise troubling allegations, which Seeno III denies, about his management and his debt to and deception of his dad.
Fortunately, it’s not too late for the city to look elsewhere for a mate.
In August 2021, the City Council selected Concord First Partners — comprised of Seeno III’s Discovery Builders; California Capital & Investment Group, run by Phil Tagami, who is also seeking to build a controversial coal-export terminal in Oakland; and a subsidiary of Southern California development firm Lewis Group of Companies — from three groups seeking exclusive negotiating rights to develop the 2,275-acre site.
Since then, the consortium and city officials have been bargaining over a term sheet, a document that outlines details for the next round of the negotiations. During a nine-hour meeting Jan. 7, councilmembers heard from city staff and listened to public testimony for and against the deal. But they made no decision on whether to approve the term sheet and continue negotiating with Concord First Partners.
That decision will come in a special City Council meeting that starts at 9 a.m. Jan. 28. The council has a choice. It can vote to stick with Seeno’s consortium. Or it can find another developer.
The councilmembers’ decision carries tremendous consequence for the city and for their own political careers. Concord voters have signaled what they think of partnering with Seeno: In the only two competitive council races in the Nov. 8 election, candidates who originally backed the deal with Concord First Partners lost.
A bad match
The council selection of Concord First Partners was a bad decision from the start that keeps getting worse as the Seeno consortium repeatedly tries to change the terms it earlier agreed to.
When it was selected by the council, the consortium, like its two competitors, had agreed to comply with the bidding terms, which included a 12,200-home limit and a requirement that developers reach agreements with organized labor groups to use union workers.
Everyone was mindful of those key conditions because an earlier developer, Lennar Urban, had bailed because it could not make the deal pencil out under those conditions.
Yet, Concord First Partners, just eight months after it had won exclusive bargaining rights, suddenly said it too could not make the deal work financially and tried to leverage major concessions from the city. Fortunately, the council said no.
Now, another eight months later, the consortium is trying another bait and switch. This time, as part of the proposed term sheet, the Seeno team wants to change the original deal it agreed to so it can build 16,474 homes on the same site, a whopping 35% increase.
Concord First Partners knew what it was getting into when it submitted its proposal. To now say that it can’t afford to do the deal with the required 12,200 homes suggests that the consortium was either disingenuous from the start or did not realistically project its costs. Either explanation would be problematic.
Concord First Partners should not be given a sweetheart deal after the other bidders have been cast aside.
The 12,200-home limit was hammered out after years of city and community collaboration and was approved by the City Council in 2012 as part of a three-volume Area Plan for development of the weapons station site.
Increasing the size by 35% radically changes the economics of the deal and undermines the deal the city struck with the community a decade ago. If the council wants more housing, it should reopen discussions about the Area Plan with community leaders, get their buy-in and then let potential developers submit new proposals.
Lack of transparency
That’s not the only disturbing aspect of the term sheet. The proposed deal also calls for Concord First Partners to begin sharing profits with the city after the consortium achieves an 18% rate of return on its investment. Exactly when those payments to the city would come is unclear. The city could use the money it receives for unspecified city costs and community benefits within the project area.
Guy Bjerke, the city staff member in charge of the weapons station deal, emphasized in his report for the Jan. 7 meeting that the 18% threshold was lower than a 20% level that was in Lennar’s earlier deal. It’s a talking point that Seeno-backers glommed onto.
But it’s a deceptive apples-to-oranges comparison. The Lennar deal was only for the first phase of the weapons station project, which would be the least profitable phase for any developer, whereas the Concord First Partners deal would be for the entire buildout of the site. In the first phase, which might not be completed for a decade, Concord First Partners projects that it will fall far short of the 18% threshold and does not project any profit sharing with the city.
Moreover, any profit-sharing projections are highly speculative. City officials claim that they have had their financial experts review the consortium’s financial estimates. But the rate of return is tied to the terms of the consortium’s agreement with labor unions, known as a project labor agreement. The more generous the PLA, the less profit for the consortium and, hence, the less profit-sharing for the city.
But city officials say they have never seen the PLA. Amazingly they did not include a requirement that the consortium make the PLA public. So there’s no way to determine what financial deals might have been cut that could affect the consortium’s profits and, in turn, the city’s profit-sharing.
The lack of transparency is appalling. But the bigger issue is Seeno’s troubled past. Before Concord gets to the alter, its leaders should recognize that this could be a very bad marriage.
For the good of the city, it’s time to find another partner.
How to watch
The Concord City Council will hold a special meeting at 9 a.m. Saturday Jan. 28 to consider the term sheet with Concord First Partners. The meeting will be held in the council chambers, 1950 Parkside Drive. The public can attend the meeting or view it on Concord Cable TV Channel 28 (Comcast), 1026 (Astound) or 99 (AT&T U-verse). Meetings are also streamed live from the City of Concord website, www.cityofconcord.org.
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