After a development project to transform the Millbrae BART station went to the buddy of BART director James Fang, the losing bidder, some BART officials and even the Millbrae mayor say it's a bad deal that will cost the agency millions of dollars.
Republic Urban, a San Jose real estate and development firm, had proposed building a mixed-use office complex on the empty parking lots surrounding the Millbrae station, an important transit hub that is also a Caltrain stop.
But after two years of closed-door meetings, the BART board of directors voted three weeks ago to give the exclusive negotiating rights to Lawrence Lui, a close friend and campaign donor of Fang who wants to build a hotel on the site.
Republic Urban officials claim that their office complex would earn $5.2 million more than the hotel for BART because it would generate more users of the transit system.
"How does an office development that is in a location that's arguably very well positioned, that is willing to pay market-rate ground rent, that is consistent with the city of Millbrae's plans lose out here?" said Michael Van Every, senior vice president at Republic Urban. "How did we not get the right to proceed forward?"
Van Every said that Republic estimated that it would pay between $300,000 to $700,000 every year to BART to lease the land. He said studies by BART and the city of Millbrae show that a hotel could not pay as much and would need a public subsidy.
"There is a clear conflict of interest with Mr. Lui and Mr. Fang," said Van Every.
As first noted by The Bay Citizen three months ago, Lui donated $1,000 to Fang’s re-election campaign in September and helped pay for a $10,000 trip to China for local officials organized by Fang last summer. Unlike some cities in the Bay Area, companies seeking contracts with BART are allowed under BART campaign finance rules to donate up to $1,000 to campaigns.
Fang’s mother owns a large office building around the corner from the Millbrae BART station. Fang insists that his decision won’t affect the value of her property.
Neither Fang nor Lui returned calls seeking comment Monday.