$1.8 MILLION DUE CITY REMAINS WITH
TREASURER ISLAND DEVELOPER
Michael Cohen, director of the Mayor's Office of Base Reuse and
Development, details funds collectible by the city.
By Pat Murphy
September 27, 2006
Some $1.8 million which could be used to pay for city services
lies uncollected in order for accumulating interest to maximize
a Treasure Island developer equity account, it was disclosed yesterday.
The disclosure came in a Board Supervisors committee hearing
convened to sort out exactly who -- de facto and de jure -- calls
the shots in Treasure Island development negotiations.
Michael Cohen, designated by Mayor Newsom to lead negotiations,
revealed $1.8 million available for city use is instead growing
financial capacity of the Treasure Island Development Corporation
Tony Hall, who maintains his position as TIDA executive director
authorizes Hall to lead negotiations, pointed to Cohen's decision
as emblematic of "a sweetheart deal" between developer
and city administration.
Authority to lead negotiations comes from predecessor job description,
TIDA executive director Tony Hall maintains.
Hall claims his negotiation authority comes from a job description
held by former TIDA executive Director Annemarie Conroy, although
Hall technically has no job description because the TIDA Board
of Directors has not issued a job description for Hall. Representatives
of the mayor's office forwarded Conroy's job description to Hall
when he was considering appointment to the post, Hall said.
However, in a legal opinion released yesterday from City Attorney
Dennis Herrera, Cohen holds negotiation authority through the
"endorsement, the understanding, and the consent" of
the TIDA Board of Directors, even though the TIDA board has not
formally appointed Cohen as chief negotiator. Cohen, who negotiated
several development contracts over the past ten years, has led
Treasure Island negotiations since early discussions began years
ago. Cohen serves as director of the Mayor's Office of Base Reuse
The 2003 contract negotiated by Cohen with TIDC empowers the
city to collect reimbursement for city consultant fees totaling
$1.8 million from TIDC, which could be applied to the city general
Cohen, saying he works in collaboration with the TIDA Board of
Directors, told the Government Audit and Oversight Committee that
the $1.8 million has not been collected in order for accruing
interest to enlarge developer financial capacity to transform
"That was done by the Mayor's Office of Base Reuse,"
"That's a pretty good deal. That's a sweetheart deal to
any developer in the world. Where 'maybe we're going to ask you
for money, but in the meantime, we're going to pay it ourselves,'
that's what's happening here," Hall stated.
The revelation came in a fleeting few moments of the three and
a half hour public hearing.
Committee member Chris Daly urged the TIDA board to collect the
$1.8 million, saying, "Not to do so is almost unthinkable."
Treasure Island falls within District 6 represented by Daly,
who also serves as the one non-voting ex officio member the TIDA
Board of Directors.
Supervisor Chris Daly
The issue of negotiation control came to the forefront September
14 when City Controller Ed Harrington concluded
Hall had placed some TIDA funds outside full city review. Harrington
went on to claim Hall had moved outside city administration participation
in TIDA matters.
However, Deputy Controller Monique Zmuda yesterday confirmed
an officer of the city treasurer's office is the only person having
expenditure control over those funds.
Hall portrayed Harrington's action as part of an effort instigated
by the mayor to distract attention from pending contract extension
for TIDC, which Hall said failed to meet deadlines for the past
In turn, Cohen termed Hall's present dissatisfaction with TIDC
as "disingenuous at best," claiming Hall and Cohen had
attended many meetings together and Hall never had said "the
developer is doing a crappy job, and should be run out of town."
For his part, Cohen said missed deadlines and contract extensions
are common place in the world of developers. Cohen, who negotiated
Hunters Point Naval Shipyards development, pointed out that contract
required ten extensions. Committee Chair Aaron Peskin added delay
doesn't mean "something untoward."
Supervisor Aaron Peskin