Home » Island News

Council to request the 411 on Point proposal’s impacts

Submitted by on 1, April 21, 2009 – 5:50 am22 Comments

Tonight’s City Council agenda brings a recommendation that the council request a report on a host of potential impacts that could be caused by development plans at Alameda Point, which could be on the ballot this coming November.

The state elections code allows legislative bodies like the council to request a report on a list of seven different specific impacts, which the council is being asked by staff to request. They’re saying the report should focus on transportation impacts of the proposed development plan and fiscal impacts, which they said are the two major things people are concerned about.

Developer SunCal’s plans for the former Naval Air Station include more than 4,500 new homes, 3.2 million square feet of commercial space, retail and a host of amenities, all of which are supposed to come at no cost to the city. Funding for the development is slated to come from the developer, city bonds and future residents. But some have questioned those assertions, and also whether the cost of providing services for the new development would be covered by the taxes it might generate.

Some have also raised questions about whether the transit-boosting improvements in the plan will be attractive enough to stall a major increase in traffic, particularly through the Tubes. Last I remember, the folks at SunCal anticipated that a quarter of the residents at the Point would not be using cars to get to work, which is higher than the 17 percent of current Island residents who were going car-free at last count.

A separate study requested by the city and released in April 2008 found that at 4,050 new homes, even with transit enhancements, the morning commute through the Tube would be more crowded.

As I always say … more to come.


  • David Howard says:

    Take a look at the ballot summary and the developer agreement, I think it’s pretty clear to an educated lay-person – but perhaps not to the average voter – that current and future Alameda taxpayers will end up paying for the infrastructure ($679 million by SunCal’s estimates) and “public benefits” in this deal.

    From the ballot summary:

    “The development agreement requires the developer to provide public benefits including a sports complex, parks and open space, ferry terminal and transit hub, fire station improvements and a library. The benefits are contingent on the City redevelopment agency directing all tax increment legally allowed to the property, and forming a community facilities (Mello-Roos) district to allow the sale of bonds and collection of a special property tax paid by Alameda Point property owners to finance the improvements.”

    Apparently, to an educated lay-person, this means that SunCal doesn’t build any of the “public benefits” – sports complex, library etc. unless the City Redevelopment agency issues redevelopment bonds to the tune of around $200 million (documented elsewhere) to subsidize SunCal. So Alameda taxpayers pay for the public benefits. And the “redevelopment” mechanism sucks money from the general fund, which is used to pay for police, fire and other services.

    This phrase also apparently means that a Mello-Roos tax will be levied on the new properties – making them MORE expensive, not more affordable – to help subsidize SunCal and pay for the public benefits.

    In the Development Agreement, Exhibit F:

    “Developer shall receive a dollar for dollar credit against police and fire fees, equal to the sum of (a) the value of the lands dedicated for facilities, (b) the aggregate amount of funds expended for design and construction of fire facilities, and (c) the purchase of public safety and firefighting equipment.”

    This apparently means that taxpayers ultimately pay for the land, building and fire safety equipment by waiving fees that would otherwise be due to the City.

    also in exhibit f:

    “The City acknowledges that City shall credit Developer the sum of all costs associated with constructing, acquiring, and/or installing public infrastructure, including, without limitation, costs for design, engineering, surveying, permits fees, taxes, bonds, labor, materials, land and construction administration.”

    Again, this apparently means that taxpayers – not SunCal – foot the bill for infrastructure, which SunCal has estimated to be $679 million – call it $700 million with rounding. A $700 million bailout of the developer.

    And the kicker? This phrase:

    “The right to the foregoing credits or reimbursements shall survive the termination of the Development Agreement.”

    So the taxpayer never gets a chance to re-coup any of the fees they waived to subsidize SunCal!

    And how can the average voter estimate the cost of these fee waivers? Does it equal an amount less than the $700 million? Or more? Who knows? Will it top $1 billion? A $1 billion subsidy for SunCal?

    The average voter can’t figure this out, and this is just one reason why this is a bad initiative.

    • There actually is a handy little chart in the document package for the initiative that lays out in pretty simple terms all the different amenities and what have you (site grading, remediation, etc) and who, generally, will be expected to pay for it. It’s chart 8-1, on pages 221-222 of 288 in the package.

      My understanding of the breakdown at this point is that they’ll have a maximum of $200 million for amenities from the developer, a maximum of $184 million from the city in the form of tax increment bonds (for infrastructure and affordable housing, transit improvements, amenities) per city officials and an undetermined amount from property taxes for folks who live/own property at the site, which are to cap out at 2 percent.

      SunCal is not releasing cost estimates for the development, but based on a recent staff presentation to the redevelopment board, it sounds like getting the land ready to build could cost $1.6 billion.

  • Jayne Smythe says:

    Yeah, but Michele, if you only look at that chart and don’t see the “or cause to be funded” line right next to “the developer will fund” then you can’t see part of it. We can all see how much it will cost, and have seen this from the start. “Fiscally neutral” means bonding and tax increment payback by the tax paying public. But this city can only credibly show itself able to bond for a max of $184mil because of the total bonded indebtedness it already has on the books from previous stuff.

    Have you looked into the Gann limitations on bonding? This may be why they are shooting for the “separate but equal” (if I can use that as a simile here) zoning that separates Shawville (“West Alameda”) from Alameda proper, and neatly takes the power away from Alameda city council, giving it over to the uberdevelopment director.

    If they can change the zoning that much, the sky will be the limit for bonding, is what I am thinking.

    But then I don’t know much about it and could be way off base.

    I would appreciate your thoughts on this.

    • Sure. The way I read that is that the developer could rely on other sources of income they pull in to pay for stuff – so for example, if they are able to get the state to provide a matching grant to pay for a road. (I think if memory serves you may be seeing the “or cause to be funded” clause at work out at Alameda Landing, where they’re pulling in some state funds to help pay for the Stargell extension.)

      As far as the bonding goes, I can only really report the information that is available, which is that the city is saying they looked at the numbers and that $184 million is the maximum that they can or will bond out. At this moment, I don’t have any hard information that contradicts that. Could you elaborate on the Gann Limit bit and what that has to do with these numbers?

  • DL Morrison says:

    Thanks for covering this issue in such an informative, concise manner. I also saw that chart you’re referring to (8.1), but I didn’t view it as being quite so helpful. This chart lists “TIF” as a “Potential Initiative Project Funding Source” for virtually ALL public improvements at Alameda Point — including all the infrastructure (grading, roads, drainage), transit (bus and ferry improvements), for the fire station, the library — everything. (It also shows the developer or property assessment as a potential source.)

    I saw this chart, and my first thought was “Gee, that sounds like a lot for $184M…” I mean, are they going to divvy up it among all these projects, or just pick a few big ones and leave the rest for later? This chart doesn’t make any sense at all.

    SunCal gave an original estimate of $700M for infrastructure — which Michele is saying above has now ballooned to $1.6B (!!) — is that correct?.

    For the sake of argument, let’s say that it costs $1.2B for the infrastructure and public benefits, and let’s say that the city is contributing $200M, and SunCal is contributing $200M, so that’s:

    $1,200M – (200M from city + 200M from SunCal) = $800M unaccounted for.

    If it’s the property assessment, then I guess this is retroactive, since all this stuff has to be built before anyone can live on it. Otherwise, it’s SunCal — right? So do we know that for sure?

    I’d say that this is typical of the plan in general: Like nailing jello to a tree. Even with a sum of $1B or more, we have no certainty at all over who’s paying for what.

  • Jayne Smythe says:

    Well, I ain’t no math whiz. But the Gann Spending Limitation Initiative was supposed to limit annual “appropriations of tax proceeds”–kinda to help cities keep from becoming overly bonded to the point of bankruptcy–or, if I read this correctly, limit the amount of spending debt based on income.

    The reason I am asking is because this sort of factors in to the Special election Prop 1A, coming up in May. The Jarvis people are saying this is a bad one to vote yes on.

    But, I am thinking that IF this “West Alameda” initiative passes, then the change of zoning for the island will have some serious implications with regard to bonding and taking on debt.

    In other words, I am thinking that with the zoning changes, there might be no limit to how much could be bonded for for West Alameda.

    Like I said, I don’t have a full picture of this… like how much bonding we have now (which I guess that $184million must be the bursting point for the city under the current year’s income/population, after the new library and the theatre, and what have you, before a potential zoning change).

    That’s why I was asking. Thought you might know more about it than I do. Trying to find information about this on the internet is wearifying! I am not sure what to ask Google.

  • David Howard says:

    Look – the language is very clear – no public benefits without roughly $200 million in redevelopment bonds and a mello-roos tax on the properties. That means that taxpayers pay for public benefits.

    And the language is clear – a dollar-for-dollar credit against police, fire and other city fees to pay for infrastructure, fire stations and equipment etc. Those are fees to the City that they would otherwise collect – so that’s a taxpayer subsidy too.

    The infrastructure cost is $700 million (rounded to the nearest $100 million) according to SunCal.

    Now, the fee waivers are supposed to survive the development agreement, so they go on in perpeutity evidently, so apparently there is no cap at all on the fee waivers and the subsidy to suncal.

    And as for the chart, I don’t care what the chart says – I care about the language of the development agreement that SunCal wants to bind the city to.

  • David Howard says:

    Let’s reproduce a portion of Table 8-1: Implementation Proposal, from pages 221-222 in the Initiative package. Everywhere you see “TIF” or “PA” that means taxpayer-financed. “Transportation Assessment” evidently means taxpayer financed too.

    Project(Funding Sources)

    o Site Remediation (Navy, Developer, PA, TIF, state and federal grants and loans)

    o Site Grading (Developer, PA, TIF)

    o On-Site Streets & Roads(Developer, PA, TIF)

    o On-Site Street Landscaping, Lighting(Developer, PA, TIF)

    o Ferry Terminal and Transit Hub(Developer, PA, TIF, WETA)

    o Off-Site Transportation Improvements(Developer, PA, TIF)
    Shuttle Connecting Alameda Point to 12th Street BART (Developer and Transportation Assessment.)

    o Bus Rapid Transit Network(Developer, PA, TIF)

    O Queue Jumping Lanes(Developer, PA, TIF)

    o On-Site Pedestrian etc.(Developer, PA, TIF)

    o Public Parks(Developer, PA, TIF)

    o Regional Sports Complex(Developer, PA, TIF)

    o School Facilities(Developer, PA, State, General Obligation Bonds)

    o Fire Station(Developer, PA, TIF)

    o Library(Developer, PA, TIF)

    o On-Site Water and Waste Water Facilities(Developer, PA, TIF)

    o On-Site Storm Water Drainage Facilities(Developer, PA, TIF)

    o On-Site Trenched Utilities(Developer, PA, TIF, SP)

    o Flood Protection Facilities(Developer, PA, TIF)

    o Geological Hazard Management Facilities((Developer, PA, TIF)

    o Historic Resources (Developer, federal, state and local funds, grants and tax incentives.)

    So it’s very clear that existing and future Alameda taxpayers are on the hook for financing most everything out there, except the for-profit homes and commercial buildings, either through PA – Property Assessment, TIF – Tax Increment Financing, G.O. – General Obligation Bonds, and Transportation Asessment. Never mind that taxpayer money inherent in the federal and state grants.

    THAT’s why this is another massive bailout of a private enterprise for their profit, at our expense.

  • Jayne Smythe says:

    Wow, now that you put it that way, it looks a lot clearer. And that part way answers my question about GO bonds, but not completely. I still don’t know if this town has any BUSINESS bonding, considering that they already have so much indebtedness, that $190mil of deferred maintenance (was ithat she said at the meeting last night?), not to mention all that worker’s comp money, from Michele’s other post. There been so many folks bangin’ the can to say that the city ain’t bankrupt, but sure sounds like bankruptcy to me!

    So, I still don’t know how to find out about that Gann limit for our city–I mean, I ain’t no bean counter, but this looks ridiculous to me. My grandchildren can play monopoly better than city hall seems to be handling our municipal affairs. That Ann Marie Gallant looks like a sharp cookie, though.

    David, what I get a sense of when I reread this stuff is that the developer is looking to make an enclave that the city will be beholden unto without reciprocity. That’s why I been calling it Shawville–it don’t look like our city government is going to be overseeing, calling the shots, protecting or anything in this here scenario. Like the development director is gonna be the “mayor” of “Shawville” and Alameda will be footing the bill for stretching the school district and public safety and what have you on the rest of the town (plus the mello roos thingies).

    Am I off base with that?

    And, you know, I been looking at these color maps of the zoning that they included in all this paperwork. Well there’s two of them that show zoning for the existing town of Alameda (without showing the Point), but they are two DIFFERENT map explanations of zoning, and neither is labeled something like “before” and “after” For someone, like me, who don’t have a clue which is which or what significance one has over the other, it looks to me like they are trying to redefine the zoning on the rest of the island. Do you know which maps I mean? Of course, if they was in some particular order, I wouldn’t know at this point because I have had all the stuff spread out on the table and have mixed the pages up–so’s I could put the maps side by side–, some of which are not numbered, but they all have the same date stamp.

    But, ultimately, the picture I get is deliberately as clear and crunchy as Mississippi Mud. I can’t believe something this big, having multiple issues (not just Measure A) could be allowed on a ballot! They got a whole pile of different things that they are trying to package as one thing.

    Yeah, as for your picture above, it seems like most everything is financed by a whole load of tax payers’–but how is that developer portion defined? Is there some formula somewhere that I missed– that might say how much the developer is committed? Or is it all “contingent” on something?

    I like that word “contingent” but it don’t seem to have a clarifying quality to it.

  • Barbara Thomas says:


    Your summation of Table 8-1 shows the undeniable truth- SUNCAL equals TAXPAYER BAILOUT. Except BAILOUT’s usually occur AFTER the entity goes belly up. This is a BAILFORWARD. Can just take up a collection and pay SUNCAL to go away? Or do we have to wait for our prescient City Council to sit there and wonder once again “How DID this happen to us?”

    Come on folks!!! Watching that display by the new Interim City Manager pointing out 10 years of the City of Alameda operating at a loss and running deficits that the Council wasn’t even aware of was extremely painful. It happened on their watch. Just goes to show that making proclamations and being nice and everyone’s friend isn’t what it takes to run a city. We need someone who can deal with cut throat developers, staff paid by developers and who can get us out of this mess. Can you imagine how bad off this City is going to be once SUNCAL gets it hooks into our pockets for perpetuity? At least Marina Village and Harbor Bay Isle had time limits. If this initiative passes, our Council simply isn’t equipped to handle its complexity. One Interim City Manager cannot save our City when the Council is apparently Stuck on Stupid and in love with the idea of doing something at the Base during their terms. Please give this foolishness up. Alameda cannot take more of this fiscal irresponsibilty. Our environment and children deserve better.

  • DK says:

    I wish more of the public were more aware of what this SunCal deal means. Evidently even CC may not yet have a clue about the loss of control and potential debt. I’ll thank everyone for trying to shed more public light on the actual details.

    As per re-development debt limits, I remember once seeing the ‘City of Industry’ had re-dev debt amounting to over $1M per capita. I checked their population – it’s over 45,000.

    The sad thing about TIF financing as I understand it, is that most of the debt really hurts the State as a whole – like our education dollars, public transportation $ etc. That’s because most of the TI would go to the State if they weren’t repaying de-dev debt. I think CA’s re-dev laws are among the most abused rip-offs prior to the recent stimulus bailout.

    Now, despite the fact that voters passed Prop 98 to adequately fund education, the State can raid the Prop 98 money and tell us we have to pass 1a & 1b in order to get our Prop 98 $ back.

    Well shoot if we voted for 98 and it just gets siphoned away, why should we vote for our edu $ again? So it can get siphoned off again?

    • Let’s talk about that, because I think it’s important for people to get a clear picture of what they may be asked to vote on (and I’m thinking I may lay out the pros and cons as I can see them to this point next week). For now, can you spell out a little more what you mean when you say ‘loss of control’?

  • Barbara Thomas says:

    DK is right. Re-dev debt hurts not only the state but keeps the money from schools, medical care and parks. There was an expose’ on Re-dev as being “Development” disguised under a politically more palatable name. There are numerous examples of roads to nowhere, etc. Alameda has Cowan’s Expressway. Could the City have made better use the tens of millions spent on that crock of asphalt? Has it helped fill Cowan’s business park to overflowing?

    Our legislative process has been taken from the people and “is of the money by the money and for the money”. In this case, Gallagher & Burke and others who get richer selling more asphalt and cement – aka infrastructure at Alameda Point, and elsewhere – have more control over what goes on in our City than the people.

    This study is just an optional study. It is also optional for SUNCAL to pay for it. And as Michele rightly points out, above, the identical topics were just thoroughly studied by grants from MTC on April 25, 2008.

    This is really an effort by SUNCAL to pay for the study of their dreams, rubber stamped by City Staff for use in SUNCAL’s campaign against Measure A. But the important point of omission is that the elections code allows for item “(8) Any other matters the City Council requests to be in the report.”

    So what did our CC think was important enough to add to what “staff” told them that SUNCAL wanted in the study?

    How about these Q’s for starters:

    1. How can AUSD run 2 more schools on only 1 mil $ per year?
    2. What does “If feasible” translate into objectively- as to the parks & recreation?
    3. How much does SUNCAL estimate it will profit if it overturns Measure A and gets approbval for its version of Alameda Point? How lohg will SUNCAl be on scene?
    4. Why can’t the City of Alameda retain the Point in trust or otherwise, and do what the people want done, when they can afford to do it, and retain all the profits? The EIR “Non-project alternative”?

    Those who don’t study their mistakes are doomed to repeat them. CC’s for the last 75 years have given away the store. Look at Ballena Bay, the marina’s etc. All valuable city properties sold/leased for pennies to developers. The General fund gets pennies while developers get millions. A new CC will come in and try to retake some of the give away but it is always too late. This CC asked on one hand “Where did all the money GO?” and at same time it is letting SUNCAL run off with the biggest cake ever. Without forcing SUNCAL to give us ANYTHING in return. The fact is, if this initiative passes, SUNCAL takes all the power from our City and our CC’s forever. We will never see a cent go into our general fund. And the CC will just sit there and wonder once again “How did this happen?”

  • Jayne Smythe says:

    Okay, I found it on the city web site–don’t know why I couldn’t find anything earlier there, I looked under appropriations limit and they didn’t have anythign posted past 2007!–but on June 5 of 2007 Kurita prepared a memo to the city council on adopting a resolution for what they are calling Prop 4 Limit.

    The amount they have for this “appropriations limit” for fiscal 2007-2008 is:


    Now we know. They ain’t got NO BUSINESS bonding for $184mil. There could not have been that much a rise in pop or income–if anything, even if the property values went up, inflation went up and so did income level. Meanwhile, how far into that $78mil have we “appropriated”? And what is the amount for fiscal 2008-2009?

    So, what’s UP with that? And why are there no documents posted past 2007?

    Go to the city website and type “gann limit” into the search box, there’s only one doc comes up.

  • E T says:

    Well, what about this Gann limit?

    How can the city bond for twice as much as allowed for the entire island for the Point development?

    Given that there won’t be any residences to sell for a good long time (2010 city signs agreement, infrastructure work gets underway on contamination remediated areas… sell off to dev companies to build actual buildings… People might be able to purchase a dwelling as soon as…??? 2015???), so what income will be coming in to pay the interest on the bond issue?

    But part of this doesn’t make sense. Maybe the Gann limit doesn’t apply to the redevelopment agency. Does anyone know?

    If that is the case, then what kind of protections are there for the amount that does get bonded there? I mean, the city is still beholden to the bonds, isn’t it? I mean, even if the redev is considered outside the city itself, it is still the city issuing the bonds, isn’t it? So the city is on the hook to make payments.

    That gets us back to the income question. What income would be coming in during the interim period between building and actual home sales? Yeah, current leases, but some of that will go away, won’t it?

  • RM says:

    If I understand the last comment: At the city council meeting Tuesday, a speaker(member of the public)pointed out that once SunCal/DEShaw have control of the property, they will collect the lease income that remains there until the buildings/tenants are gone.

    So that rental income will go to the owners of Shawville. Alameda City Hall West will be sitting in the middle of Shawville.

    Sad. Very, very sad.

  • Jayne Smythe says:

    Well, I kinda was asking about the bonding earlier… but I guess I dn’t hit the submit button, and then I had to go pickup my grandkids. So now I don’t remember what I put except that what I meant to say is that the population might of gone up or might have gone down (considering the foreclosure stuff i JUST read in the newspaper!!) but that the income per person probably went down for people (though I said up in my earlier post)

    But, I don’t know enough about this to know what to ask, exactly. I could be wrong about this limit having anything to do with bonding for redevelopment. It just seems like it would be meant to make sure we don’t overspend ourselves (which would be good) no matter what it is for. Michele is right, lots of bad info out there, and I don’t want to add to it– just asking.

    Does anyone KNOW? Michele? David? Barbara? SOMEBODY?

  • DL Morrison says:

    Here are some links on the issue of a “tax increment cap” on redevelopment revenue.

    The first and most relevant is from the City of Fremont, and describes the process needed to raise the tax increment cap for a redevelopment district, the gist of it being that — ultimately — the city council votes to raise the tax increment cap, and that’s it. So the claims regarding the “cap on spending” for Alameda Point are not valid, the City Council can raise the cap if it wishes. I recommend that anyone interested in this process try to read thru the first 3 pages or so, as that explains pretty well — see especially the “Proposed Schedule of Major Actions”, which begins at the bottom of page 2 — that lays out the steps. Here’s the link: http://tinyurl.com/Fremont-Tax-Increment-Cap

    I also found something from the Silicon Valley Business Journal, on San Jose hiking its tax increment cap to $6B: http://women.bizjournals.com/sanjose/stories/2007/09/24/story2.html

    And a recent opinion piece from the SJ Mercury on the impact of redevelopment on school funding: http://www.mercurynews.com/opinion/ci_12006591

    In any event, note that “California tax increment cap” is the best topic to search under. I did some reading on the Gann Spending Limit, and as I suspected, it applies only to state wide taxation limits — it’s got something to do w/ what happens if the state has “excess revenue” from taxes, that it has to be refunded to taxpayers, so I guess we don’t have that problem right now.

    Also note: I wish it were a bit easier to locate the comments on the Alamedans site on the whole — if it’s possible in any way. Thanks!

  • Barbara Thomas says:

    Special districts – such as the ones being set up pursuant to the SUNCAL initiative – are exempt from the City of Alameda’s GANN limit. They can tax into perpetuity without limit.

  • DL Morrison says:

    Following on DK’s comment (re Prop 98): Bear in mind that the state can also take redev money, via ERAF, and last year it hit up Alameda for around $900,000 — as for making reliable predictions re the payback on redev spending, that’s just not possible.

    Following on ET’s comment (re the source of income before dwellings are built): Debbie Potter did a presentation for the ARRA at 3/4/09 (on the project’s “Pro Forma”), which says in sum that the project’s “fiscal impacts are projected to be negative in certain years”, and that the city’s General Fund will be losing money at times, but will be paid back eventually, in order to “assure fiscal neutrality”. See presentation, beginning at 50:00.

    Blogging Bayport did a posting on this awhile back as well: http://laurendo.wordpress.com/2009/03/13/slip-sliding-away/#comments

  • You know, just to back up to the questions about whether there is a dollar limit on redevelopment bonds, the staff report for an amendment to the plan for some of the city’s other redevelopment areas scratches the surface of this a little bit. It lists sections of community redevelopment law that I’m guessing could answer the questions you all have about how much the city could bond for.

    The way I read the staff report is that for areas set up before 1994, there is a dollar limit; after that, there is a time limit. But I’d want to read the relevant sections of law and talk with a few folks who are more expert on this before calling it an answer.

    The report is here:


Leave a comment!

Add your comment below, or trackback from your own site. You can also subscribe to these comments via RSS.

Be nice. Keep it clean. Stay on topic. No spam.

You can use these tags:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

This is a Gravatar-enabled weblog. To get your own globally-recognized-avatar, please register at Gravatar.