Concord ­responds to grand jury report about CNWS ‘missteps’

CONCORD, CA (Aug. 16, 2023) — The Contra Costa County Civil Grand Jury didn’t mince words, titling its recent report on Concord’s actions regarding the weapons station development “A Promise Unfulfilled.”

“Now, seventeen years after Concord was designated as the Local Reuse Authority (LRA), little has been achieved and the project is once again at a crossroads,” foreperson Cynthia Roberts wrote in the June report.

In response, the city refutes the grand jury’s basic premise about progress at the Concord Naval Weapons Station (CNWS).

“The report title and this statement demonstrates a lack of understanding as to how much progress the LRA has made working with the community, stakeholders, local agencies, regulators and the U.S. Navy on this complicated project,” wrote Guy Bjerke, Concord’s director of Economic Development and Base Reuse.

Bjerke noted several milestones made by the City Council, acting as the LRA, including:

• Adopting a Reuse Plan and Environmental Impact Report in 2010, followed by adoption of the Reuse Area Plan and environmental amendments into the city’s General Plan in 2012.
• Consulting with U.S. Fish & Wildlife Service in 2017 about development of the 5,000+ acres. Assisting the Navy in 2017 in support of a future property transfer.
• Preparing a conceptual plan for a Tournament Sports Complex and facilitating the Blue-Ribbon Committee’s Campus District Vision Framework in 2018-’19.
• Coordinating with the East Bay Regional Park District in 2019 regarding Thurgood Marshall Regional Park.

Looking into city funding

The grand jury launched an extensive investigation following a citizen complaint about city money spent on the project. The 46-page report makes a variety of recommendations to address “a series of prior missteps” and to “accelerate the productive utilization” of the area.

The grand jury reviewed a June 2022 report that showed city expenditures of $37.4 million, which includes federal grants, state redevelopment money, developer funds and city loans. Expenses paid with city loans totaled $14.06 million as of February 2020.

In response to Roberts’ suggestions on improving the reporting process, Bjerke said the city will update the February 2020 report and associated table of expenditures and will implement annual reporting on city loans to the LRA. The city will also release a record of deposits and refunds to Concord First Partners (CFP) by Sept. 30.

The report advises the city to find funding sources other than its self-insured workers compensation fund. Bjerke countered that the city is not self-insured for workers compensation claims, but only for its deductibles.

“The current loan from this fund is not creating undue risk to the fund in that it is funded to 90% certainty,” he said.

He also noted that the most recent loan to the LRA – $530,000 on June 13 – comes from unallocated General Funds.

Questions about developer selections

The report addresses problems with the 2016 selection of Lennar as the first master developer, including the decision to remove a staff recommendation for Catellus, the competing developer, from the final staff report. A subsequent investigation, called the Jenkins Report, found that the city violated the Brown Act after several council members met privately with the city manager about the matter.

According to Bjerke, the city agrees with all grand jury conclusions regarding the Jenkins Report but will not implement the proposals regarding how the city paid for the report.

Concord’s negotiations with Lennar ended in 2020 over a local project labor agreement. The council then selected CFP as the new master developer in August 2021. After 16 months of delays – and mounting concerns about the developer’s financial wherewithal, the council rejected CFP’s Term Sheet in January 2023.

According to the grand jury review, financial information CFP submitted to the city was incomplete, and the city did not perform “due diligence” to confirm that CFP partners had “sufficient financial strength to undertake and successfully complete a project of this scale.” The city’s response says they agree with all grand jury findings regarding the lack of information about CFP’s finances.

In addition, Roberts said the council should consider adding language that incomplete or nonresponsive submissions may lead to disqualification of an applicant. Bjerke said the city has already approved the next master developer selection process without such a clause. “However, the City Council has full discretion to reject respondents based on incomplete or nonresponsive submissions as outlined in Appendix F of the RFQ (Request for Qualifications),” he wrote.

Bjerke noted that the LRA has specified that there will be no extensions or second requests for missing information in the RFQ or RFP (Request for Proposals) process. Meanwhile, he said the city will not implement a recommendation that LRA staff and designated consultants be the sole evaluators of RFQ or RFP responses.

“The City Council are the directly elected governing representatives of the community and it falls within their scope of authority and responsibilities to make the decision on which firm the LRA will work with as a master developer for the CNWS project,” says the city’s response, signed by City Manager Valerie Barone.

The LRA discussed the letter at the Aug. 8 meeting and sent the response on Aug. 9. According to Bjerke, the Civil Grand Jury has no authority to oversee any changes.

“It’s the report that is the punchline, so to speak,” he told the Pioneer. “The idea is the city responds and we make commitments to take some corrective action and we will do so.”