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Saturday, November 7, 2015

People of Emeryville Pay Swinerton $1.2 million For What?

Swindled By Swinerton

Shame on Swinerton?  Sure But Even More, Shame on the City Council (& School District)

News Analysis/Opinion
$1.2 million.  That's quite a bit of money for a town the size of Emeryville.
It's how much the people of Emeryville are paying to make sure the builder of the Center of 'Community' Life, Turner Construction, doesn't rip us off.  That's a lot of money but for a $100 million+ project, it seems like a prudent and reasonable expenditure.  After all, if our interests aren't assiduously looked out after, Turner Construction, ever mindful of its bottom line and its shareholder's demands for maximum returns on their investment, could cut corners and we'd be on the loosing side.
So the School District has hired another construction firm, Swinerton Builders, to oversee Turner and represent our interests.  Swinerton is supposed to report back to the City Council and the School Board and provide helpful information.  But if Swinerton isn't on the up and up, we will have wasted $1.2 million of taxpayer money.

And that's exactly what has happened.

Swinerton has taken our money and they've been representing not our interests, rather, they've been representing Turner's interests.   That's quite a charge...but that's exactly and demonstrably what they've been doing.  Swinerton works for Turner and Turner works for their shareholders...and us?  Who works for us?  We're the deep pockets, we pay the bills.

Two recent issues highlight the breakdown here; the issue of the community pool and the issue of a recent Turner request for a noise waiver, relief from the constraints of our Noise Ordinance.

They're Not Working For Us
The community pool fiasco has been previously reported on by the Tattler, but for sake of illustrating how Swinerton is not working for us, the salient point is that Swinerton used the issue to make excuses for Turner for the 200% cost overrun there.  What we didn't hear from Swinerton is how we (the City of Emeryville and the School District, the owners of the community pool) could use what contractual leverage we have to effect a better outcome for us.  Instead, Swinerton simply reported the problem, stated Turner's reasons for why we need to pay more than twice what they originally said we would need to pay, and then Swinerton recommended we pay the higher amount.  Swinerton's loyalty, shamelessly fell on the side of Turner, a fellow builder.  

Again, They're Not Working For Us
And then there's last Tuesday's performance by Swinerton.
Turner is under contractual obligation to finish the Center of 'Community' Life on time.  If they fail to meet the deadline, there will be financial penalties.  It's standard contractual stuff.  So Turner has an interest in making sure they finish on time.  They came before the City Council on Tuesday requesting permission to work starting now, on Saturdays.  But the contract doesn't provide for that and Emeryville's Noise Ordinance forbids it specifically.
And so Turner is seeking some padding in their schedule to make sure they'll finish on time, hence their request for a waiver from the Noise Ordinance.  Actually, Turner didn't even ask themselves, rather they sent their colleagues at Swinerton to ask for them.  The City Council granted a waiver but the point here is not whether the people of Emeryville have interest in giving Turner more time to assure the project will finish on schedule, the issue is that Swinerton didn't inform the Council where their (the Council's) leverage lies.
Oops!  They misspelled their 
own name in their logo: 
Make that 'Swindleton' Builders

If Swinerton were working for us, they would have explained how the City Council could use their leverage over Turner to extract concessions in trade for the noise waiver.  But Swinerton isn't working for the people of Emeryville, they're working for Turner Construction (and collecting our $1.2 million for their efforts).

Turner Construction is a publicly traded corporation.  They're in the business of looking out after their shareholder's interests.  That's how it's supposed to be.  But conversely, our City Council and our School Board is supposed to be looking out after OUR interests.  That's how it's supposed to work.  Turner would never give anything to us for free.  We wouldn't expect that and their shareholders would be understandably up in arms.  But neither should we expect our representatives to give Turner anything away free.  We have something the profit seeking corporation wants: the ability to disrupt our peaceful Saturdays.  We should negotiate with the corporation.  Give away our peaceful Saturdays, fine.  But get something in our interest in return.  We don't send representatives to City Council or the School Board to give away our stuff for free.  We expect them to work for us just like we expect Swinerton to work for us.  Both Swinerton and the City Council is being paid by us after all.  What happened to 'fee for services rendered'?

Where Does the Allegiance Naturally Fall?
Swinerton has allegiance in this equation, to Turner.  That's not surprising.  These contractor builder developer corporations look out for each other.  In San Fransisco right now Turner Construction is being paid to be the overseer to Webcor Builders for the massive Transbay Terminal project. And Webcor is likely overseeing a different contractor elsewhere.
Here, the City/Schools in Emeryville has a 'one off' relationship with Swinerton.  But Turner and Swinerton have an ongoing business relationship.    In Emeryville Swinerton is overseeing Turner now.  But next year perhaps it'll be Turner overseeing Swinerton in a different project in a different town.  That what these guys do. They trade places with each other as paid consultant overseers.  It's a very cozy business relationship and in Emeryville it's costing us $1.2 million.
It's cozy and it's also highly lucrative.  Swinerton is paying one person to be the liaison between Turner and the City/Schools.  Probably paying him $100,000 or so.  The rest of the $1.1 million is pure profit for Swinerton.  It's a nice gig if you can swing it.  And Swinerton (this time) can swing it.  Maybe next time it'll be Turner on the receiving end of the rotating door.

We don't expect Council members Nora Davis or Ruth Atkin to demand the people's interests be looked out for.  That wouldn't be in their character.  They've always sided with the developers over the residents in our town.  But the new progressive Council majority?*  This is unexpected.  Come on guys.  This isn't why we elected you.  Do your job.  We want our interests represented at City Hall.

* Councilwoman Jac Asher was absent Tuesday 


  1. Nice article but you didn't provide an alternative. Since another construction firm would be equally as bad as Swinerton, what should be done? Who should oversee? Certainly not the city council. They know nothing about building. Seems to be a catch 22.

    1. Finding a solution is a job for the elected officials. That's why we hired them.