Hunters Point homeowners sue developer and scandalized engineering firm

A pair of homeowners in the new housing development built at the former Navy shipyard at Hunters Point filed lawsuits on Tuesday against both the property developer and the environmental engineering firm at the center of an ongoing fraud scandal at the toxic Superfund site.

The suits, filed in San Francisco Superior Court by a prominent and politically connected Peninsula-based litigation firm, allege that the nearby toxic contamination is jeopardizing the value of their homes. They also allege that Lennar Corp. and FivePoint Holdings, the companies developing the land and selling the townhomes at the SF Shipyard, “knew they were selling badly contaminated land, yet they marketed the residential development to prospective homeowners as clean and safe.”

“When the SF Shipyard Residents purchased their homes from Lennar and/or FivePoint, they had no reason to believe they were purchasing residential property on a site contaminated with radioactive and/or industrial waste at levels potentially deleterious to their health,” allege homeowners Linda Pennington, Greg Pennington, Theo Ellington, and Victoria Trusty. “At no point before the purchase did Lennar and/or FivePoint disclose this essential information.”

Hunters Point was a major military base and prominent employer in the area from World War II until 1974, when the Navy ceased shipyard repair operations. The Navy also operated a nuclear warfare research lab, the Naval Radiological Defense Laboratory, from 1946 until 1969.

Residual contamination from experiments and from shipyard repair includes radioactive waste dumped down storm and sewer lines and radioactive materials tossed in a 44-acre landfill that still remains on-site.

“Lennar and FivePoint have...sold approximately 300-350 newly built homes to current residents…all the while publicly averring that these homes were safe to inhabit,” the suits allege. And, when selling the properties, “Lennar 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.”

The suits were filed by attorneys from Cotchett, Pitre, and McCarthy.

A spokesman for FivePoint said the firm would have no comment.

Sam Singer, a spokesperson for Tetra Tech EC—the multibillion-dollar engineering firm whose former workers admitted to federal prosecutors that they deliberately faked part of the $250 million cleanup job—told the San Francisco Chronicle that the lawsuit “doesn’t seem…very strong.”

One of the plaintiffs, shipyard homeowner Theo Ellington, a neighborhood native, is also a candidate for district supervisor in November’s election. The saga at the shipyard has become a central campaign issue.

The 450-acre former Navy shipyard and nuclear warfare research lab in the city’s southeastern corner was designated a U.S. Environmental Protection Agency Superfund site in 1989.

The Navy has paid a number of engineering firms, including Tetra Tech EC, roughly $1.1 billion to clean the shipyard of radioactive and toxic contamination.

After those firms’ work was completed and declared adequate by the EPA and other regulators, the Navy transferred the land to the city, which then handed it over to Lennar and FivePoint for development.

The first areas of the shipyard were declared clean and transferred to Lennar Corp. for development in 2004. By 2014, when the first units at the Shipyard SF were released to the market, the Navy was aware that there were serious problems with Tetra Tech’s work.

However, it was not revealed until earlier this year that up to 97 percent of Tetra Tech’s work showed signs of fraud.

Subsequent revelations from whistleblowers alleging that perfunctory surface scans failed to find contamination in the area were homes are now built have led the California Department of Public Health to conduct a surface scan of the area.

That scan is currently ongoing.

All land transfers at the shipyard have been on hold since 2016. As Curbed SF reported, San Francisco’s Office of Community Investment and Infrastructure accepted land that may still be dirty. It’s still not clear what the city plans to do with this land.

Photo by Chris Roberts

According to real estate website Zillow, there are 22 homes in and around the shipyard currently for sale. Earlier reports have stated that the roughly 350 homes built to date at the shipyard are sold out, but some properties for sale on the website have been listed for several months—with several properties once listed at more than $1 million now selling for less.

The suit may also signal some dissension behind the scenes in high-level political circles. Cotchett was once floated as a potential candidate for attorney general by former San Francisco mayor Willie Brown, in Brown’s Sunday San Francisco Chronicle column. Brown is also closely associated with the shipyard development, politically and personally: Brown is principal of an investment firm that’s been wooing overseas investors to sink capital into the shipyard with the promise of visas.