The NAACP claims the process does not give minorities an equal opportunity to bid on the property, which is considered prime real estate. Specifically, the NAACP cites the Port's process for choosing a developer for the purchase and redevelopment of property within Jack London Square,
The Board of Port Commissioners says it selected from a pool of three developers who responded to a solicitation that occurred in 1998. Originally, the port selected LCOR/WDG, a San Francisco firm that is owned by an African American woman. When negotiations with the company failed, the port accepted Jack London Square Partners' proposal. The partnership is owned by two white developers, who are known to be generous donors to several politicians.
JSL Partners ultimately purchased the property for $17.2 million, thus assuming ownership of four public-owned buildings in the heart of Jack London Square and a 66-year lease. In addition, JSL Partners can continue plans for a $250 million development of a nearby property.
The NAACP has complained to the U.S. Justice Department about the deal, saying that there was no fair competitive bidding process and that the port changed the deal to include commercial real estate in Jack London Square without informing prospective bidders. Also, the NAACP claims that the property was sold for less than fair market value.
The port argues that it is not legally required to sell real estate through bidding processes, and says that its selling process was an equal opportunity to all. Port officials say that the selling price was consistent with market value reports.
The U.S. Justice Department has begun its investigation to determine whether the port is conducting bad business or sealing a fair deal.
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