Recusals didn’t keep Mayor Butt from meddling in zoning, lawsuit claims.
on May 26, 2021
This is the second story in a four-part series about how Richmond Mayor Tom Butt navigates the conflicts that arise from his roles of public official, business owner and real estate investor.
Richmond attorney Joshua Genser and Mayor Tom Butt were business partners before they were friends.
They went into business together decades ago when Butt suggested that they work together to develop some vacant property in Point Richmond, Genser said. After developing the property together in the 1990s and early 2000s, their business partnership grew, and they became friends. The two sometimes took fishing trips and their businesses — Genser’s law office, and Butt’s architecture-engineering firm — were two doors down from each other, with Genser’s firm occupying a Point Richmond office building the two had developed together.
In 2010, that friendship unraveled. It began when Butt, by then a member of City Council, announced his support for a decision that would have barred any large-scale development of a sweeping plot of shoreline property in north Richmond that Genser owned with a business partner. Genser and his partner had been holding onto the property for years, searching for the best — and most profitable — project to build on it. But environmental groups were actively pushing against any large development on the property.
At a City Council study session, Butt announced his support for downzoning the tract to open space as part of an update to Richmond’s General Plan. That zoning designation would effectively keep any significant construction from occurring there. Genser said he was shocked.
“He’s a business person,” Genser said. “You would think he would recognize the importance of an investment, you know, not just to the investors but to the city.” Potential investors could be wary of buying property in a city where zoning requirements appear to be changing constantly, he said.
Genser and four others who owned land in the tract sued Butt and the city in 2017, claiming the mayor used inappropriate, private communications with another council member to push for the downzoning, in violation of California’s Political Reform Act.
Butt’s first attempt to downzone the land began with his announcement supporting open space zoning in early 2010, and his subsequent motion that February to downzone the land, Genser’s lawsuit claimed. Though the motion failed to pass, Butt embarked on an email campaign to push for the downzoning, the lawsuit said. Genser challenged the ethicality of Butt’s involvement in decisions about the property and demanded that he recuse himself. Butt took the question to the Fair Political Practices Commission in a June 8, 2011, letter. And Genser’s attorneys responded with their own letter arguing that Butt’s participation would be unethical.
While FPPC complaints about public officials usually arise from concerns that they might use their office to further their own or their partners’ interests, Genser had the opposite concern. He feared that despite their partnership on the joint ventures, Butt would use his office to steer a decision that Genser believed could slash the value of his property by millions of dollars. In a 2011 letter to Butt, the FPPC agreed that under the Political Reform Act, Butt couldn’t participate in any decision regarding the tract containing Genser’s land, regardless of whether that decision would help or hurt Genser’s bottom line.
In 2012, as part of a compromise with the landowners, the city agreed to create a light industrial zoning category that would allow them to build a profitable project while keeping construction to a minimum. The City Council voted in early 2012 to apply the new zoning category to Genser’s land, with Butt recusing himself from the vote.
Yet in 2016, the lawsuit claimed, when Butt saw another opportunity to pass an ordinance that would downzone Genser’s property, he took it — despite the FPPC’s bar on his participation. According to the lawsuit, Butt defied the FPPC’s advice and pushed from behind the scenes for legislation that would halt the landowners’ efforts to develop the property and would give it a zoning designation that would effectively bar the most profitable potential uses of the land, but allow the cultivation of cannabis.
That would eliminate a huge swath of potential projects that Genser’s land could attract. It would also benefit the mayor’s architectural firm, the suit claimed, because it had a client who was a cannabis developer.
In an April interview, Butt said he believed the conflict of interest he had in 2011 was erased when Genser moved out of the space he had rented for his law office in one of their jointly managed properties. The two still jointly manage other Point Richmond properties, Butt said.
“When Genser moved out and ceased to be a tenant, you know, that relationship was no longer there. And so … I concluded that I no longer had the same conflict of interest the FPPC advised me about earlier,” Butt said.
In a tentative ruling issued in May 2018, a judge disagreed. “There is no persuasive evidence before the court that Mayor Butt had any less of an interest [in his partnership with Genser] in January and February 2017 than he had in 2011,” the judge said.
The cannabis developer, Richard Trieber, had approached Genser and the other landowners in late 2015 or early 2016, Genser said. Trieber was an entrepreneurial jack-of-all-trades from Marin County and envisioned building a revolutionary business campus for cannabis growers on Genser’s land. It would sport dozens of greenhouses equipped with the necessary appliances for growing high-quality cannabis. Growers would just have to bring their plants, sign a lease and get started. The project would be called PowerPlant Park.
The green wave
To Andrew Butt — the mayor’s son and the lead architect on the project at Interactive Resources — Trieber’s proposal seemed like a timely opportunity. Cannabis was transitioning into a legitimate industry: Medical marijuana cultivation was already allowed in Richmond, and in November 2016, Californians voted to decriminalize recreational cannabis at the state level. A legalized cannabis industry would present new building frontiers for architects and engineers, and Trieber’s proposal was on the cutting edge. If properly designed, PowerPlant Park could be the most professional, state-of-the-art grow facility in the state, if not the country, Andrew Butt said in a recent interview.
“We wanted to ride the green wave too,” he added.
PowerPlant Park also came with financial incentives for the city. In addition to the 400 jobs developers claimed would come with the completed campus, the city would levy its 5% cannabis business tax on the development, and collect tens of thousands of dollars on top of that in fees.
By late 2016, Genser saw his plans for the land eroding. After candidates backed by the Richmond Progressive Alliance won a majority on the City Council in November of that year, Genser knew a vote to downzone the property would soon follow.
Genser believed from the open space supporters’ discussion of his property over the years that cannabis was the one profitable venture they would accept there. So although he didn’t want to gamble on a cannabis project on his property, a zoning change would make him see it as his only option if he wanted significant returns on his investment.
“There’s no question we feel pushed into it,” Genser said. “It was the path of least resistance.”
Interactive Resources started working with Trieber in the fall of 2016 and sent him an initial proposal for the design of PowerPlant Park on Sept. 7, Andrew Butt said in an April email.
According to the Genser lawsuit, Mayor Butt exchanged multiple emails with council member Gayle McLaughlin from Dec. 12, 2016, to February 13, 2017. In them, the lawsuit claims, they discussed how best to conduct the downzoning effort, with the mayor counseling McLaughlin on key steps in the process of introducing an ordinance.
First, he urged her to introduce the zoning ordinance quickly to the newly seated council, whose progressive majority was likely to support any zoning change that would bar industrial projects like those Genser had originally hoped to build on the land.
“You would have to move fast before any of these projects gets vested. I suggest January 17,” Butt wrote in a Dec. 12, 2016, email filed as an exhibit in the lawsuit.
Then, the lawsuit said, Butt recommended introducing a moratorium that would immediately halt all proposals for projects on the land — including proposals submitted by various affected property owners. McLaughlin asked if it was possible to halt project proposals that hadn’t yet been reviewed by the city’s design board. “I think so, but that’s a legal question,” Butt wrote back in a Jan. 18, 2017, email cited in the lawsuit. “Maybe do it and sort out the legal issues later.”
The moratorium required six votes to pass, and with Butt recusing himself, all remaining council members would have to vote in its favor. According to one of the email exchanges between McLaughlin and Butt, then-council member Ben Choi was concerned that because his employer, the electricity provider Marin Clean Energy, was in a contract to buy power from a partner on the PowerPlant Park project, he would have a conflict of interest on any vote involving the north Richmond property. Butt — who is a member of Marin Clean Energy’s board — disagreed.
“That’s no no conflict for him because he has no financial interest in it,” Butt wrote to McLaughlin in a Jan. 21, 2017, email included in the lawsuit, adding that Choi should talk to MCE’s counsel.
McLaughlin also twice suggested they speak about the zoning issue over the phone, the emails show. She also suggested meeting in person to discuss it in a Feb. 13, 2017, email, to which Butt responded, “yes, okay.”
In late January, McLaughlin introduced a resolution directing city staff to start downzoning the Northshore land for agricultural use. (The resolution mirrored the one Butt had proposed in 2010, McLaughlin noted at a council meeting). The council passed it unanimously on Jan. 24, with Butt recusing himself. Two weeks later, the council also passed McLaughlin’s proposals to halt the progress of the landowners’ development applications, and to allow cannabis cultivation in agricultural zones, with Butt again recusing himself.
McLaughlin said she knew when Butt first emailed her that he would have to recuse himself from the decisions they were discussing, but that the responsibility of ensuring his actions — and communications — fell on the right side of political ethics laws was ultimately his.
“It’s up to him to recuse himself, and it’s up to him to know what he can email, or what he can’t email,” McLaughlin said. “The person who has the potential conflict of interest is the person that is responsible for determining and finding out what they can do and what they can’t do.”
She added, “He emailed me, ‘Maybe you want to put this on the agenda.’ And I thought, ‘Oh, that’s a good idea, I care about this issue.”
McLaughlin also said she had no idea about PowerPlant Park or Interactive Resources’ involvement in it at that time.
Butt says he also was unaware of his architecture firm’s relationship with PowerPlant Park when he contacted McLaughlin.
“After Genser moved out, I conclude any conflict I had was erased. However, I was not aware that others at Interactive Resources had begun a business relationship with the owners of PowerPlant partners. I was not aware of that when I emailed McLaughlin,” Butt said in a recent email.
Asked why, if he thought the conflict no longer existed, he recused himself from the downzoning vote, Butt said, “I had been recusing myself for so long, I just kept doing it without thinking that circumstances had changed.”
PowerPlant Park proceeds
The unanimous and little-debated passage of the moratorium and zoning ordinances prompted Genser’s attorneys to make a public records request for Butt’s emails. In December 2017, they filed the lawsuit in Contra Costa County Superior Court.
In their legal response, attorneys for the city argued that if Butt had violated the Political Reform Act, it didn’t affect the integrity of the council’s decisions on the ordinances.
“Plaintiffs do not and cannot allege that any of the City Council members who voted on the moratorium stated on the record or otherwise that their decision to vote for the Ordinances was influenced by Mayor Butt. … In other words, even if there was a violation, it was minor, and in no manner infected the integrity of the public process,” the response said.
In May 2018, a judge held that the city could not downzone Genser’s land while the litigation was ongoing.
But Genser soon had a change of heart and decided to cut his losses, pause his expensive legal battle, and hope that PowerPlant Park would be as profitable as Trieber promised. The judge dismissed the lawsuit in November 2018.
A year later, in late 2019, Genser signed a lease with Trieber, effectively betting the profitability of the land on the future success of PowerPlant Park.
In October 2019, Butt cast a vote that further paved the way for PowerPlant Park: Along with all but one member of the City Council, he voted to allow the use and sale of recreational cannabis in Richmond. Until then, only medical marijuana had been allowed. Opening the recreational cannabis market would open up the rental market for PowerPlant Park’s grow spaces.
“We cannot succeed as an operation without adding adult cannabis to our program,” Larry Westland, a property broker formerly involved in the PowerPlant Park project, said at that October council meeting.
The recreational cannabis vote again found Butt operating at the limits of what political ethics laws allow. Despite his obvious financial interest in the vote, Butt was free to participate due to the “Public Generally” exception in California law. Under it, officials are allowed to participate in decisions in which they have a financial stake if the impact it will have on their interests is indistinguishable from the impact it will have on a broad section of the public. The recreational cannabis vote would certainly impact others.
The mayor and his son took different approaches when given an opportunity to vote on the city’s recreational marijuana policy. Andrew Butt recused himself when the question came before the Planning Commission in June 2019. Mayor Butt, on the other hand, voted for it when it came to the City Council several months later.
“If it had been something that was specific to that … project, like a [conditional use permit] or something like that, I think it’s pretty clear I would have had a conflict, and I would not have participated in that,” Mayor Butt said in the April interview.
Five years since it was initiated, PowerPlant Park has yet to materialize, though Trieber said this month that it is still on track. Little construction beyond grading has been done on Genser’s land, and Genser says the benchmarks at which Trieber would have to start paying rent for the property keep getting delayed.
If the project falls apart, Genser has said he may revive his lawsuit, which Richmond has spent more than $400,000 to defend. It would likely further claims made in the original suit that Richmond’s city government effectively seized Genser’s land by essentially zoning it exclusively for cannabis, which remains illegal under federal law.
Genser and Butt still co-manage property, and Butt said he still considers Genser a friend. But Genser sees it differently. “We’re civil to each other,” he said. “ I see him at Rotary, or I used to … We still are business partners. But, you know — still angry at him.”
Coming Thursday: Point Molate decision sparks lawsuit claiming the mayor kept the public in the dark about controversial development. (Read Part One: Lawsuits claim Richmond mayor steered development decisions in violation of ethics laws.)
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