S.F. Shipyard homeowners sue developer

S.F. Shipyard homeowners sue developer

Source: San Francisco Chronicle, July 25, 2018
Posted on: http://www.advisen.com

The developer of the former Hunters Point Naval Shipyard, already beleaguered by a cleanup scandal and slumping condominium sales, now has another problem to worry about: lawsuits by homeowners.

On Tuesday, attorneys for two families who bought homes in the Bayview district development in 2015 and 2016 filed lawsuits against both the developer and the environmental engineering firm accused of botching the cleanup of the Superfund site, which was home to the Naval Radiological Defense Laboratory from 1946 to 1969.

In the lawsuits, the homeowners, Theo Ellington and his wife Victoria Trusty, and Linda Parker Pennington and husband Greg Pennington, claim that developer FivePoint and property owner Lennar failed to disclose to prospective residents the extent of contamination of the property. They also claim the developer didn’t inform home buyers about allegations that Tetra Tech, the environmental engineering company that was paid more than $250 million for the cleanup, had faked soil samples in order to pass off parts of the shipyard as being less contaminated than they were.

The lawsuits state that the “defendants are all responsible for the loss of value in plaintiffs’ homes due to the continuing toxic nature of the Superfund and former nuclear testing site upon and near plaintiffs’ homes, and the ensuing health and other issues that waste has caused, is causing, and will continue to cause until it is remediated.”

The plaintiffs are seeking unspecified monetary damages.

The lawsuit charges that Lennar/FivePoint, as well as Tetra Tech, engaged in fraud and negligence. It claims the defendants “created or assisted in the creation of a public nuisance”; engaged in “unfair and unlawful competition”; violated “false advertising” laws and didn’t sufficiently disclose the condition of the property upon transfer of the condos to the buyers.

The complaint comes as the U.S. Navy and the Environmental Protection Agency are finalizing plans to retest portions of the property where Tetra Tech previously worked. Both the Navy and EPA have concluded over the last year that much of the data gathered to determine whether the property is free of radioactive waste were flawed. The data include samples collected mostly between 2006 and 2012 from 300,000 cubic yards of soil, 20 buildings, 30 former building sites and 28 miles of storm drains, according to a Navy report.

In May, two former Tetra Tech EC supervisors, Justin Hubbard and Stephen Rolfe, pleaded guilty in federal court to crimes related to their fraud and were sentenced to federal prison.

Attorney Joe Cotchett of Cotchett, Pitre & McCarthy, who is representing the plaintiffs, called the case “unlike any toxic real estate scam in history.”

“It will cost billions of dollars to address the toxic mess in the S.F. Shipyards neighborhood – there is no solution but relocation and lifetime monitoring of the hundreds of residents who have already moved into the San Francisco Shipyard neighborhood,” he said. There are 450 units either completed or under construction on Parcel A, where sales started in 2014.

A spokesman for FivePoint declined to comment because the company has yet to read the lawsuit. Sam Singer, a spokesman for Tetra Tech, said: “It doesn’t seem like a very strong lawsuit on the face of it.

“Tetra Tech EC doesn’t believe the lawsuit has any merit and ultimately will be dismissed by the court,” he said.

While a previous lawsuit was filed against Tetra Tech on behalf of residents in the surrounding Hunters Point and Bayview districts, the complaint filed Tuesday is the first by home buyers who have bought condos on Parcel A, the first phase of a massive redevelopment project slated eventually to have 12,000 housing units, 300 acres of parkland, three schools, and millions of square feet of commercial space.

While state and federal regulators have always insisted that Parcel A was never contaminated – it was home to barracks rather than the top-secret radiological defense labs that existed on other parts of the property – several former Tetra Tech employees-turned-whistle blowers have questioned that conclusion.

Ellington, a Bayview native who is running for the Board of Supervisors in the November election, said the homeowners were sold “a false dream.” Ellington said he and his wife are expecting their first child and are stuck living in a condo that may or may not be safe, and that he wouldn’t be able to sell for fair market value because of the uncertainty hanging over the project.

“This is personal for me because I’m expecting a kid and I totally anticipated raising my family in the Shipyard,” he said. “At this point, I need more certainty that the site is safe, but I’m left with no other options. Who in their right mind would purchase a unit here right now? I feel like I’m being held hostage with very few options.”

Fellow plaintiff Linda Parker Pennington, who moved in in 2015, said several units in her building were pulled from the market and then rented out because of lack of interest from buyers.

“I have never sued anyone before in my life – it was a hard decision and I had to weigh a lot of different things,” she said. “But after digging into the data and trying to understand how we got to this point it struck me what the injustice was.”

The complaint states that the developer “focused on its history as a naval base and omitted the site’s history as a nuclear laboratory and a shipyard that dumped industrial waste into landfills in the area and treated radioactive waste as common garbage.”

“Lennar Inc. did not disclose the potential health hazards of living on or near a former EPA Superfund and nuclear warfare testing site,” states the complaint.

Both Pennington and Ellington have said that they were drawn to the promises Lennar and FivePoint made about the new community being built on the long-mothballed military base. The complaint says they were promised “bay views, office space, supermarkets, an outdoor mall, a thriving commercial center with restaurants, bars, shops, schools, parks and other public services including public transportation. This has not come to be.”

In recent interviews, FivePoint Co-Chief Operating Officer Kofi Bonner has said his company has been the victim of the alleged Tetra Tech fraud, and that the developer only receives land once all the local, state and federal environmental agencies sign off on it as being clean and healthy.

He called the situation “frustrating and exasperating.”

“Clearly, there has been a significant shift downward in enthusiasm, I would say, on the part of the home purchasers,” Bonner said at a recent meeting with The Chronicle editorial board. “It’s just rational, I would say. If people have other options, they are going to buy in a place they can be assured is healthy and safe.”

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