Exorbitant costs could kill 13000 homes planned in Bay Area’s biggest housing proposal

“We have re-examined our assumptions over and over. We are applying actual construction costs based upon our knowledge of the area,” the letter states. “The conclusion is that the project, as we have analyzed it in its current form, does not work for any responsible development entity.”

In the letter, Concord First Partners asks for a 90-day extension of the exclusive negotiating agreement, which is set to expire on May 26.

In addition, the developer wants an extra year in which to get the project approved, which would move that date from May 2024 to May 2025.

In addition, the development partnership — led by Albert Seeno Jr., Discovery Builders President Louis Parsons, and well-known Oakland builder Phil Tagami — is asking the city to guarantee that it will be reimbursed for some third-party costs should the City Council eventually reject their proposal. The reimbursement would only cover pre-development work that is used by subsequent developers.

They are also asking that the “development and disposition agreement” — which outlines what the developer will pay for the land and when it will be transferred by the Navy — be shifted from the end of the approval process to the beginning.

The dispute comes more than three years after the previous developers, Lennar and FivePoint, walked away from the project after they were unable to come to terms with the Contra Costa County Building Trades Council. That plan had called for 13,000 new homes, 2,700 acres of parks and 6 million square feet of commercial and academic space.

In October, the Concord City Council picked the Seeno group over two other builders, one of which was Brookfield Properties, among the largest developers in the world.

So far, the Concord First Partners request has not gone over well with Concord city officials. A report to the Concord City Council economic development staff recommends that a one-month extension on the exclusive negotiating agreement be granted, but that the rest of the request be rejected.

In particular, guaranteeing that the developer be reimbursed for costs accrued during the entitlements — engineering, architecture, transportation studies — could leave the city on the hook for millions, said Guy Bjerke, Concord’s director of economic development and base reuse.

“That is asking for long-term trouble,” Bjerke said in an interview. “They are asking for an enforceable right to the property before they will spend any money on the specific plan or the environmental impact report.

“We understand they are looking to limit their political and financial risks, but we have analyzed it and come to the conclusion that it would not be in the best interest of the Local Reuse Authority.”

In winning City Council approval, the Concord First group signed a “project labor agreement” with the building trades, something Lennar had been unwilling to do. That allowed it to beat out Brookfield Properties, which is behind mega Bay Area projects like Pier 70, 5M and the Stonestown Galleria redevelopment, all of which are in San Francisco.

At the time Lennar quit the project, it had spent $15 million on its plan, and the city had shelled out about $14 million.

In a statement Wednesday afternoon, Concord First Partners said, “All we’re asking for is an agreement that confirms Concord First Partners as the Master Developer prior to our making a material financial investment into this opportunity.

“We are ready to invest millions and millions of dollars and to devote multiple years studying and preparing environmental and development plans for this project,” the group said.

Matt Regan, senior vice president of policy for the business advocacy group Bay Area Council, called the disagreement between the developer and the reuse agency “one massive mess.”

“We are probably getting close to the time when we have to ask the question, ‘Is the city of Concord capable of getting this project done?’” Regan said. “We are at the point where we are on our third developer, tens of millions of dollars have been spent, and we have made zero progress. It’s becoming a bit of a laughingstock.”

The lack of progress on the redevelopment is particularly upsetting because the site represents “such a phenomenal opportunity,” he said. “The East Bay desperately needs the jobs and housing. We can’t afford to stumble along.”