Allocated Security Service Payments and Reimbursement from GoMentum

Recommendations 1

• R3

  Page 22
  a For future RFQs and RFPs used to select a master developer for the CNWS project, there should be a full analysis and report issued by LRA staff. Concord City Loans to Local Reuse Authority Through fiscal year 2019-2020, the City of Concord loaned the LRA $14.06 million to pay for CNWS expenses not paid from funds from governmental entities or the initial master developer, Lennar. These loans began in fiscal year 2012-2013 and were made through fiscal year 2019- 2020. In fiscal year 2019-2020, they totaled $3.35 million.37 These loans came from three Concord revenue sources: General Fund reserves of $9.91 million and Workers’ Compensation Fund of $3.15 million and Pavilion Fund of $1.0 million that total $14.06 million.38 Table 3 –CNWS Expenses Paid with City Loans ($ million) - February 2020 Prior Fiscal Year 10.46 Fiscal Year 19-20 2.73 Unencumbered Funds 0.87 Total 14.06 These loan agreements state that the Lender (General Fund or Workers’ Compensation Fund or Pavilion Fund) agree to lend to Borrower (Local Reuse Authority) and that Borrower agrees to repay to Lender an amount not to exceed the Loan amount plus applicable interest. Regarding payment of the loan, the agreement states “…principal payments shall be paid by the Borrower to the Lender at the time that sale proceeds of raw land at the Community Reuse Project are available…”.39 The sale of land regarding these loans is not the transfer to the LRA but a subsequent sale to a master developer. This will not occur until after a master developer is selected, the Navy and Concord have completed all regulatory requirements for transfer of the CNWS land to the LRA and the LRA has sold the land to the master developer. The grand jury was advised it would be two to three years following the master developer selection before the Navy would transfer land to the LRA and there would be two years of infrastructure development at CNWS before residential construction would begin. The December 2022 term sheet proposal negotiated with CFP called for paying Concord approximately $5 million before issuance of building permits for 90 percent of the market rate dwelling units (2,180) in phase one, and paying the City approximately $10 million before issuance of building permits for 90 percent of the market rate dwelling units (3,777) in phase two.40 Using, the timelines from these statements and contracts, the loans to the LRA would repaid in two payments four to five years after a master developer is selected plus the time required to buildout the units specified in phases one and two. There are many issues to be addressed before construction at CNWS can begin, including hydrology, air quality, traffic flow, hazardous materials, soil geology, BRAC disposition activities, and affordable housing that require analysis and study involving public and private Contra Costa County 2022-2023 Civil Grand Jury Report 2305 are posted at https://www.cc-courts.org/civil/grand-jury-reports.aspx