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UPDATED Point developer postpones ballot measure

Submitted by on 1, June 16, 2009 – 6:00 am15 Comments

Updated 1:10 p.m. Tuesday, June 16

SunCal Companies has opted to postpone a proposed ballot measure spelling out its plan to develop Alameda Point in order to buy itself and the city more time to work out a land deal with the Navy.

Company representatives, who say they have collected enough signatures to qualify the measure for an election, now hope to get the plan on the ballot in early 2010. They had originally hoped to put the plan to a vote this coming November.

“While our desire is to get this important issue before the voters as soon as possible, targeting a 2010 election is prudent and allows all parties time to complete the necessary discussions before this revitalization plan is voted on,” Pat Keliher, acting project manager for SunCal, was quoted as saying in a press release.

City council members I reached Monday night said they’re not surprised by the delay, and they’re hopeful the additional time will give SunCal and the city the chance to put some more of the proposed development’s many moving parts into place.

“We’ve got a negotiating agreement (with SunCal). Those negotiations haven’t stopped,” said Councilman Frank Matarrese, who has come out in support of the plan. “This is just one more twist and turn in that road.”

The city’s exclusive negotiating agreement with SunCal is up in July 2010, though it can be extended under certain circumstances.

Doug deHaan, who has become SunCal’s most vocal critic on the council, said he thought the developer would have accomplished much more at this point than they have.

“We’re way ahead of the process,” deHaan said.

The folks out at Protect the Point, which opposes the development plan and ballot measure, said they think SunCal is walking away in the face of strong community opposition and potential legal challenges to the measure (the city just got a second letter from a local attorney, this one questioning whether the title and summary of the measure are impatial). Here’s a clip from their press release:

No matter the spin from the developer and the supporters of this initiative the facts are, that facing potential legal challenges and staunch, organized community opposition SunCal decided against engaging in an expensive and uncertain campaign.

SunCal’s reps deny that opposition to the plan influenced their decision to wait on the ballot measure.

The city and SunCal have been negotiating with the Navy for changes in the terms of their deal to purchase the former Naval base. SunCal reps had asked the Navy to drop its $108.5 million price tag for the land by $50 million, but the Navy said no.

But I’m hearing the Obama administration is just getting around to putting its own folks in the Navy office the city and SunCal have been negotiating with, though, which has stirred hopes a new deal for transfer of the land could be reached.

SunCal would have needed to turn their signatures in this week in order to ensure a spot on the November ballot. But they’ve actually got until the end of September to hand in the 8,083 signatures they say they have (they needed around 6,600) in order to qualify for a ballot (or 180 days as of March 31, the date the city gave them a title and summary for the proposed measure).

From there, the Alameda County Registrar of Voters would have 30 working days to validate the signatures, and then the City Council needs to place it on the ballot and call the election (and I think the election has to be held between 88 and 103 days after the council calls it). The original timeline is here.


  • David Howard says:

    I'll give it to SunCal, they've got nerve… the Navy's $108 Million price tag was based on 1,800 homes. That was their cut of the developer revenue. Increase the number of homes and you could expect the Navy to increase their cut by a corresponding amount, not decrease it.

    The Navy's investing, what, $500 million to a billion dollars or so, when it's all said and done, in cleaning up the land, and they're not going to try to recover some of that money? Just give the land away after cleaning it up?

  • Kevin says:

    Isn't it the Navy that polluted the land? Of course they should be cleaning up their mess regardless of the cost. And they shouldn't get a dime for the military base. How much did they pay for it? I believe it was given to them by the City.

  • David Howard says:

    The purpose of the clean-up is so that the land can be re-used. If the re-use generates revenue, the Navy wants a cut. They could leave the land contaminated, and spend no money, but that lessens the likelihood it would be re-used.

  • Jon Spangler says:

    SunCal wants to know if the development will be possible before investing any more money in an election campaign.

    The Navy has never moved quickly in its negotiations with the City or with developers, and this is one more example of the USN's glacial pace. (The Navy took 6 months to respond to SunCal's business plan, too.)

    If the Navy wanted to get more $$$ out of the former ANAS, they should have cleaned up their act decades ago and not made such a toxic mess of it in the first place. The US Navy–which you and I fund with our federal tax dollars–needs to clean up Alameda Point and stop dragging its feet in the negotiations. We need our $1 property back.

  • Richard B. says:

    Dave, you say: The Navy "could leave the land contaminated, and spend no money." Not true.

    Base reuse legislation requires that cleanup be done to at least industrial standards, which is a lot better than "superfund site." Generally speaking the Navy cleans up to a better standard than industrial, depending on the LOCAL base reuse plan, also required by law.

    Leaving it and walking away is NOT an option for the Navy under the BRAC (base realignment and closure) law, although foot-dragging does not carry any penalties.

    As for the fair market price that the Navy wants for the land, all that talk might have resonated with the public 5 years ago. Today after hundreds of billions of dollars have been given away to Wall Street losers, asking for more than $1 for this old Navy base is pure hubris; it's an insult. I'm not interested in helping SunCal balance their books, though. What would be a better outcome for Alameda, if the whole thing become a reality, is that the Navy agrees to a "cash-back" deal. In other words, the $108 goes from SunCal's bank account to Alameda's bank account with no refund possible if SunCal or another developer walks away. That way, regardless of uncertainties about SunCal's abilities or intentions, at least Alameda would have the cash to pursue possibilities on the Northwest Territories or whatever the community decides.

  • Barbara Thomas says:

    Right you are Jon, "We need our property back" and not to give to SUNCAL or other "developer" to add some profit on before re-selling to someone else, while paying our staff to do their work.

    Senator Feinstein should be asked to get it back for what the Navy paid. She has always been a strong supporter of the military and Alameda. Mayor Corica supported her when she wanted to Homeport the Missouri in SF, when she was still Mayor. If anyone can help, she can.

    The City and Community set forth a plan after YEARS of work. The City's staff should be put to work developing the base. Start with the small stuff first that we can afford to do. If you bought a home needing work, and had a limited budget, you would start with the small stuff and work every year- hiring others only when necessary for specialized skills – until you completed the home. YOU WOULD NOT PAY A DEVELOPER THOUSANDS (or in this case MILLIONS) to hire others to do it for you.

    We need to run our City Government like we run our own budgets. Like it is our money. Because it actually is our money. Not spend it mindlessly and then ask when we are broke, "How did this happen?"

    Alameda needs to stop subsidizing wealth for a few at the expense of the City government's total operation. We should do it ourselves, and keep the profit.

  • E T says:

    That we "need" the NAS property back is an interesting question that deserves a look. We would be turning that hunk of land (and I use the term loosely) into a giant construction zone for a huge amount of time (remember San Francisco during the 70's and 80's? Driving Market Street was like riding a buckboard in the Wild West!). How this can at all benefit Alameda anytime soon is a question people need to consider. And the fact that there will be no money from it going into the general fund except sales tax for the life of the development ought to be enough to give us all pause. The only people who will benefit from this development are the developers. The cost of buying into the eventual new development will actually make it more expensive for us all to live here (because of the current economy and the rising cost to the city of carrying ever more bonded indebtedness.

    Now I have heard the argument over and over again, and am still unconvinced by it, that the redevelopment agency shoulders all the responsibility, but we have all seen the examples popping up all over again where the lines blur and the cities involved face financial consequences of one sort or another anyway.

    When you get right down to it, and here we all are swimming in the worldwide economic meltdown, we are finally being awakened from our spending stupor to realize that someone must pay the piper. And guess who that is? Clue: it is not the Navy, not SunCal/DE Shaw and it is not ARRA.

  • Arby says:

    Alameda sold the land to the Navy for $1.00 — that doesn't mean that SunCal should get it for $1.00. Alameda should get it back $1.00, but that doesn't mean that SunCal should get it for that. It was never SunCal's to begin with, why do they think that they should own it? I agree with Richard B. It's our land, not SunCal's or whatever other developer covets it. And I agree with Barbara Thomas that the City of Alameda needs to put the effort into developing it rather than handing it over to private investors. The City of Alameda and its taxpayers do not exist to subsidize developers and investors and then take the fall when they fail.

  • Barbara Thomas says:

    Thank you Arby. If there is money to be made, let the city make it. After all, we are the city and the city is us.

  • David Howard says:

    I suspect the U.S. Navy would say that the contamination of what is now Alameda Point was done in the name of service to this country in defending the freedoms of all of us to bicker endlessly in these forums about it.

  • Jayne Smythe says:

    I'm with Arby and Barbara! I think the city should own the property. After reading the hundreds of pages, it looks like Alameda Point will be turned into Shawville and the city will have all the responsibility (overhead for public services, paying off bonds, and what not), but none of the benefits (control over what gets built, real income going to the general fund to pay for services and maintenance)! That just isn't right!

  • DL Morrison says:

    Jayne has pretty much got it. The very helpful information on redevelopment bonds which Michele posted recently has finally made clear something I never understood: where does the money come from in the long run? Even if the developer/backer put up money initially to build the infrastructure, they aren't going to wait around another 30+ years to get paid back — and certainly not a hedgefund like DE Shaw. So in the long run, the initial debt for the development is shifted to redevelopment bonds, which in turn contradicts all the promises about limited dollars coming from redevelopment. Maybe at the outset it's $184M, but ultimately city bonds are on the hook for this massive development, plus the city is on the hook for all the services. Meanwhile, SunCal has rewritten all the land use controls to suit itself.

    Just consider that it could cost over a billion dollars (!) to develop this site as proposed. There's this cheery presumption that of course the city will get all sorts of tax dollars out of this — well no. For one thing, ALL the tax increment generated by this site has to go back to the site. For another, the cost of developing this site is so staggeringly expensive that it's not even clear that the ultimate returns on property taxes will cover it. Does anybody know?

    Of course, the site is expensive because it has so many major problems, with contamination, elevation, etc. In that context, it might make sense to pursue a much more modest, locally controlled plan that doesn't require a billion dollars' worth of mitigations and rebuilding upfront. Contrary to the common assumption, the city might be better off w/ its own modest plan than it would be w/ the bonding and services on a multi-billion dollar development.

  • RM says:

    I hope all the people who worked for some reason or other supporting the SunCal/DE Shaw project will read these comments and realize that the people of Alameda will not be duped.

    Many people who live here are reasonable, sensible, educated, read widely, and have traveled. They know enough to recognize when a developer and some politicians are working to further their own careers and pocketbooks.

    There is no reason to give a developer the equivalent of the city's credit card and tell them, "Sure, we agree with whatever you want to do for years and years and years."

    Thank you Michele, for hosting this discussion.

  • David Howard says:

    My final comment on this topic…. .click my name to read the link….

    The Pacific Coast Refining Company, (now Chevron Texaco) and a borax refining company, and refiners in Oakland – the land which was eventually dredged and deposited in Alameda – were contaminating the land at Alameda point from 1890 to 1940 or thereabouts, long before the U.S. Navy began contaminating the land in defense of the nation in WWII.

    So the U.S. Navy is stuck with clean-up from private enterprise that contributed to the problem well before they took over the land. So it's only fair they get their cut from private enterprise that profits from the clean-up.

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