Shamann Walton’s YCD subsidiary got a no-bid contract on shipyard homes — but where’s the money?

On Dec. 17, 2014, the late Mayor Ed Lee and Lennar Urban broke ground on Pacific Pointe at the Shipyard, 60 permanently affordable family homes in Bayview-Hunters Point shipyard. “I am excited to see the wonderful opportunities that have been available in our community finally come to fruition. One hundred percent affordable housing demonstrates that YCD is serious about keeping our community whole,” beamed Shamann Walton, then executive director of Young Community Developers (YCD).

I’ve been writing about YCD since my 2020 exposé on the San Francisco Public Utility Commission’s Community Benefits pay-to-play scheme. YCD was one of the most prolific beneficiaries of big developer “nonprofit donations,” thanks to Walton and his mentor, YCD’s former executive director turned Community Benefits middleman Dwayne Jones (who was recently charged with 59 counts of fraud).

What does YCD do? They claim to train troubled youth and place them in jobs, often with city departments like the Department of Public Works (DPW). Insiders say, despite the huge cost and number of people who go through programs, it doesn’t work out for most participants. Still, Walton blatantly tells firms wanting to build in his district they must pay to play. At a rally about Amazon’s desire to build a logistics center, Walton screamed into a megaphone that Amazon would have to negotiate a community benefits package similar to deals struck with major waterfront developers. “You can go and ask Pier 70. You can ask the Potrero Power Station. If you are going to come into our neighborhoods, you are going to talk to the people in the neighborhoods. You are going to provide them with community benefits.”

After pouring over documents from the Pacific Pointe development at the shipyard, however, it seems more important that companies include Walton on the payroll.

WALTON’S SHADOWY FOR-PROFIT ENTITY

On Aug. 19, 2014, Walton filed Articles of Organization of a Limited Liability Company (LLC) with the California secretary of state for YCD MGP I, listing himself as the sole agent. The address, 1715 Yosemite Avenue, is YCD’s San Francisco office. Walton signed the document as “President of Young Community Developers, which is the sole member and manager of YCD MGP I, LLC.”

So why would Walton quietly start a for-profit arm of YCD? Let’s go back to Pacific Pointe at the shipyard. The project was developed by AMCAL Multi-Housing, “a leading affordable housing developer,” with Lennar providing a $10 million construction subsidy and the site infrastructure.

While Walton frequently says he has never “personally benefited from Lennar or any other developer,” he certainly managed to horn in on the Pacific Pointe project with an apparent no-bid contract as the managing general partner. What experience does Walton or YCD have to get such a plumb gig? None that I can see. The other thing I can’t see is where YCD MGP I, LLC’s cut of the multimillion-dollar venture went.

On Oct. 1, 2014 — just a month and a half after Walton created YCD MGP I, LLC — the California Municipal Finance Authority and U.S. Bank National Association issued a trust indenture for $17,511,200 for series 2014a-1 and $2,963,800 for series 2014a-2 in multifamily housing revenue bonds for Pacific Pointe, with Bank of America as the lender.

In the trust indenture document, Lennar — despite providing an additional $10 million “subsidy” — isn’t mentioned, but AMCAL Pacific Pointe Fund is listed as the borrower by AMCAL Multi-Housing Two, its administrative general partner. YCD MGP I is listed as managing general partner by Young Community Developers. The document is signed by AMCAL president Arjun Nagarkatti and by YCD MGP I’s sole member and manager, Shamann Walton. The witness to the signatures is Dionjay Brookter, YCD’s deputy director under Walton from 2010 through May 2016, who took over as executive director when Walton was elected District 10 supervisor.

Interestingly, the $20 million-plus project was AMCAL’s first in San Francisco, and it also appears to be a no-bid deal. Where did they come from? In later articles about Pacific Pointe, Walton says he co-developed the 60 units with Five Point Holdings, Lennar’s residential division. Lennar also contracted with YCD to provide job training and social services for its low-income residents, fulfilling part of a “community benefits agreement” that required Lennar to spend $8.5 million on workforce development in Walton’s district.

On the campaign trail, Walton bragged that when he took over YCD in 2010, the organization had a nine-person staff and a $750,000 annual budget, and under his direction YCD grew to 40 employees and a $7.9 million budget. Clearly those “community benefits” helped.

CONNECTIONS

Walton gets prickly when critics mention his relationship with Lennar, but it has clearly been mutually advantageous. YCD’s IRS Form 990 (required for nonprofits) shows compensation for the executive director and other salaries and wages grew from zero in 2010 to $256,529 for Walton, with other salaries and wages of $2,955,828 in 2016. Starting in 2017, when Walton was considering a run for supervisor, YCD’s 990 lists zero again for executive director compensation (Brookter currently makes $205,350).

In a contentious 2018 candidate debate, one of Walton’s challengers, Theo Ellington, attacked him over “funds that your community organization and you personally in your campaign have taken from Lennar.” In response, Walton confirmed that YCD “receives funding from Lennar” but “less than 7 percent of the nonprofit’s budget was from the private sector.” What he didn’t mention, however, was YCD MGP I’s managing general partner job on Pacific Pointe, and where their cut of the money has gone. A check of YCD’s 990 from 2014, when the project began, shows approximately 90 percent of its income is from grants — and not a single dime from the for-profit YCD MGP I, LLC. Subsequent YCD filings show the same pattern, again with zero funding coming from YCD MGP I, LLC.

Pacific Pointe was completed in 2016, the same year Walton co-sponsored Proposition O, a ballot measure that allowed Lennar to build five million square feet of office space at the shipyard faster than city regulations allowed.

He also wrote a letter of support for Lennar Urban, which at the time was bidding for a contract to develop a Naval Weapons Station in Concord. In the letter, Walton states that YCD developed Pacific Pointe “in partnership with for-profit developer AMCAL, using a $10 million subsidy and infrastructure provided by Lennar Urban.”

He proudly (or perhaps defensively) told the San Francisco Examiner that he supported “a company that has provided $80 million in community benefits to San Francisco,” though Bayview Hunters Point advocates and residents continue to say they haven’t seen the promised results.

Walton has more conflicts than your family talking politics at the holiday table, so which side of the table is he on?

At an Oct. 15, 2013, Commission on Community Investment and Infrastructure meeting, Walton said, “there are other partners that are part of this project with us and so you have AMCAL and Young Community Developers and of course Lennar as the master developer . . . YCD’s role, just for clarification, we are managing general partner on this and we will actually receive a set asset management fee each year, as well as receive a portion of developer fees . . .”

Walton also mistakenly refers to Hunters Point as “Hunters View” — perhaps a slithery slip of the tongue as to where his loyalties really lie.