Operating at the Point
Tonight, the City Council is slated to discuss the detailed operating agreement between Alameda Point developer SunCal and D.E. Shaw, the New York hedge fund that the developer has taken on as a financial partner in the midst of an economic apocalypse that has crushed the housing market and shuttered many other, more traditional funding sources.
Once again, the council is holding a closed-door session (in case you missed it, it’s listed as a “conference with real property negotiators” on a special meeting agenda for the council/Alameda Reuse and Redevelopment Authority/Community Improvement Commission, and the claim is that they are negotiating “price and terms” for Alameda Point). Not to editorialize, but the staff report on this item explicitly notes that the developer is “obligated to bear all costs associated with a dispute that the document is a public record.”
Anyhoo. Sounds like D.E. Shaw – whose folks will head a new entity called Cal Land that will take over Point development, per the staff report and this org chart released with the new development concept a few weeks ago – can fire SunCal as manager of the project for cause, which as far as we can tell would be gross negligence, willful misconduct, criminal activity – and a whole host of other “member issues” listed in the operating agreement we’re not allowed to see.
The amended agreement also sets April 30, 2009 as a date certain for SunCal to decide whether they will pursue a ballot initiative to amend Measure A, though they have already said they plan to do that. Though we are wondering if D.E. Shaw can replace SunCal as manager of the project if the measure fails and they don’t have a Plan B? And while we’re on it, if they have an issue with SunCal on any of the other projects that we’re guessing are included as part of Cal Land, can they boot SunCal from all of them? And what happens when the predevelopment agreement with the city is up?
The city has built a bunch of “outs” into the agreement and tightened the developer’s timelines for making deposits and meeting several performance milestones. If SunCal gets the boot for cause, it looks like the city has some say over their replacement. The city’s predevelopment agreement terminates on July 20, 2010 – unless there are lawsuits over this thing, apparently. That adds seven years.
Inexplicably, the staff report includes two pages of minutes from the September 8 Planning Board meeting which deal with the North of Lincoln strategic plan (maybe they just wanted to see if we were still reading).
On a completely separate note, we did learn a fun fact about SunCal rep Pat Keliher: He and Phil Tagami, the politically connected Oakland developer who may partner with SunCal to fix up historic buildings at the Point, are practically office mates! Keliher’s office at 300 Frank Ogawa Plaza in Oakland is just one door down, or two doors down, or maybe across the hall from Tagami’s California Capital Group. The things you learn from city staff reports!