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Follow the Money: Part 1

Updated: Mar 19, 2018

We followed a money trail for the Brisbane Baylands development site. A development application for the Brisbane Baylands is currently going through the public approval process. This process has been heavily lobbied by various housing advocates including representatives of the Greenbelt Alliance, San Francisco Housing Action Coalition, YIMBY, politicians, and others. They have come to Brisbane’s public hearings in droves. They speak about sustainability and the housing crisis. Most of these speakers don’t understand or seem to care about the toxic nature of the land or the financial costs and liabilities that will impact the small town of Brisbane.

Universal Paragon Corporation (UPC), the developer/applicant, has been able to harness these groups to help craft a narrative that has vilified Brisbane and, not surprisingly, has been amplified by the mainstream press. It’s interesting to look behind the curtain and learn more about who funds these non-profits.

Why would Greenbelt Alliance (GA) aka People for Open Space, a non-profit dedicated to protecting land from unsustainable sprawl development, promote housing on the Brisbane Baylands? Greenbelt Alliance (GA) endorsed the Universal Paragon Corporation’s “Developer Sponsored Plan” as described in the 2011 Draft Brisbane Baylands Specific Plan for 4,400 units of housing. Did GA read any of the Environmental Impact Reports? Did they do any research into the dark history of this landfill site before rubber stamping this plan? Why in the world would this venerable organization endorse building homes on a toxic wasteland subject to liquefaction and flooding from sea level rise?

Just follow the money, folks.

In Greenbelt Alliance’s 2016 Annual Report, the Brisbane Baylands (UPC) is listed as one of the Top 7 Business Donors for their $2.6 million annual budget. The Brisbane Baylands even hosted a fundraising event for GA in 2016. Here is the link to their financial information: Considering their mission, it is surprising that the San Francisco Housing Action Coalition is also a huge donor to Greenbelt Alliance with over $450,000 donated in 2016. It looks like they have very close ties.

Who exactly is the San Francisco Housing Action Coalition (SFHAC) and why are they so intimately involved with the Greenbelt Alliance? SFHAC is a 501c3 member-supported non-profit organization that advocates for increasing the supply of new housing in San Francisco – and only new housing. They are funded through annual membership dues and fundraisers. Their dues-paying members are a collection of organizations, businesses and individuals, including both market-rate and affordable housing developers. Universal Paragon Corporation is a member. Here is the link to SFHAC’s membership list:

Who is Universal Paragon Corporation? Universal Paragon Corporation, formerly known as Tuntex (USA), Inc., a subsidiary of Taiwanese conglomerate Tuntex Corporation, is a private company that was formed in 1989 to manage major development projects in the United States. UPC has four major development projects in the pipeline, two in southern San Francisco and two in Brisbane:

  1. UPC’s Schlage Lock development is in San Francisco’s Visitacion Valley, a known toxic brownfield site, currently transitioning to a transit-oriented development including retail, office and housing project.

  2. Executive Park, a mixed-use/housing project near Candlestick Point, also in San Francisco.

  3. In Brisbane’s jurisdiction is the decades-dormant Sierra Point Hotel Project at the Brisbane Marina.

  4. The Brisbane Baylands, a 660-acre brownfield development project, is home to an unregulated garbage landfill, the former Southern Pacific Heavy Maintenance Railyard, and includes three former Superfund sites that have not been remediated.

What is a brownfield? A brownfield is a property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant.

Bayside Development LLC, a limited liability company, was created to manage the entitlement, design, and construction of these various properties within the United States real estate portfolio held by Universal Paragon Corporation’s (aka Tuntex) overseas Board of Directors. Bayside Development LCC, together with affiliates, UPC and Visitacion Investment LLC, another Tuntex limited-liability company, is developing and executing business strategies for over 3,000 currently entitled residential units within San Francisco, as well as future entitlements for nearly 12 million square feet of corporate campus, commercial, and mixed-use development in nearby Brisbane.

What is entitlement? A land entitlement is a legal right created by an agreement between a developer or property owner with a regulatory body such as a city or county. The entitlement process is often used to change existing zoning and can dictate how that property may or may not be used. In addition to the requirements to comply with the regulating body, entitlement has a profound effect on the value of the underlying land being entitled. Ensuring that land is both legally entitled for an intended use, such as housing, as well as broadly entitled for multiple uses, can substantially increase the property’s value.

In post-Proposition 13 California, developers pay for much of the additional infrastructure required to support new development: sewage systems, water delivery, and transportation improvements, as well as schools. California law provides several options to finance public infrastructure improvements but the nature of the land, the development and the benefit to public can dictate which financing mechanisms are available or applicable to greenfield development, urban infill, and brownfield development.

Typically, public facilities costs are divided among multiple levels of government depending on the benefits generated, and among various private property owners by the nexus between improvements provided and the demand for such improvements from new private developments.

Entitlement to build housing, considered a public benefit, can dramatically shift the huge burden of the financing mechanism from the private sector to the public. Who now pays for the bulk of the infrastructure and arranges the financing? The public. In the case of the Brisbane Baylands, it is likely that Brisbane will have to manage the infrastructure financing, as well as pay for public services such as fire, safety, water/sewer services, and public works. While a larger city might be better able to absorb these costs, this is a tremendous burden on any city, especially when the plan triples the existing housing stock as is the case with the Brisbane Baylands UPC housing project. This is a huge financial benefit for a developer and dramatically increases the value of the property being proposed for development.

What is eminent domain and why does it pertain to the Brisbane Baylands Development? It is the right of a government or its agent to expropriate private property for public use, with payment of just compensation, to build a public benefit project like the California High-Speed Rail or a Waste Management facility. Should a property be purchased through eminent domain, you can imagine that “just” compensation for land that is “entitled” for housing is exponentially greater than unentitled and contaminated land that is only zoned for industrial or commercial use.

Why is this relevant? The California High-Speed Rail Authority has identified the Brisbane Baylands as the only place to locate its light maintenance facility (cleaning train cars) for the San Francisco terminal. The state of California would have to pay for the “best” allowed use of the land. Changing the Brisbane General Plan to upzone the land use of the Baylands to include housing, whether or not said housing is ever built, will bestow riches on UPC. Who ultimately pays for this “just” compensation? Who would be enriching UPC? The public, more specifically, the State of California, through public taxes, would be paying.

You are the public.

Do you think that Universal Paragon donates substantial money to organizations like Greenbelt Alliance and San Francisco Housing Action Coalition, and others, because they are motivated by their philanthropic ideals about regional housing needs? Think again, and then, just follow the money.

Doesn’t this make you wonder where else UPC has donated money?



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