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On Point: Point payments

Submitted by on 1, August 13, 2009 – 6:00 am5 Comments

Last week, I wrote a post about campaign expenditures for and against the proposed ballot measure to develop Alameda Point, which got folks talking about the payments developer SunCal makes to help cover the city’s costs for working on the Point development plans.

Some of the money is used to pay the staff costs of moving the development along – which has some people concerned that staff is being unduly influenced operate at SunCal’s behest.

A list that details the amount of SunCal’s money that could be used to pay portions of city staff salaries has been making the rounds, and one commenter linked to it from the site (it’s on the last page of the city’s Exclusive Negotiating Agreement with SunCal). So I called to check it out.

SunCal makes quarterly payments to the city to cover costs associated with moving through their negotiating agreement to develop the former Naval base, which covers a two-year period. When last year’s budget was drawn up, costs for staff time plus legal and consulting expenses were estimated at close to $1.4 million, which is what shows up on the list.

Development Services Director Leslie Little said this amount was an estimate in last year’s budget; she put the actual amount SunCal paid at just under $1.1 million. She said three-quarters of that money was used to pay outside consulting and legal expenses.

The list shows payments toward the salaries of 13 city employees for their work on the base redevelopment project, with SunCal three-quarters of Base Reuse Manager Debbie Potter’s salary, half of planning manager Andrew Thomas’s salary, 30 percent of redevelopment manager Jennifer Ott’s salary and a quarter of Little’s salary (though Little said the actual amounts for this past year ended up being less).

Little said the payment system was put in place when Alameda Point Community Partners was the Point developer, in order to pay costs the city – which had little lease revenue from the base and no tax money, since the base is not on the rolls – couldn’t afford.

“With lease revenue small in the first few years, it made sense for the developer to pay for the outside services and staff time and was probably the only way to pay for base staff,” Little said.

She said the payment system is common in California and beyond, and she likened it to the building and permit fees a homeowner or other property owner would pay the Planning and Building Department.

But some fear that with an election to come over the fate of development plans at the base, the payments put city staff squarely in the developer’s corner when they should be working to negotiate the best deal the city can get.

“Negotiating implies two sides, and who are these two sides? Who speaks for the citizens in this process if the staff is paid by SunCal (and) D.E. Shaw?” said Gretchen Lipow, a critic of the payments, referring to the developer and their financial backer. She said she thinks the city is siding with the developer.

SunCal, incidentally, made its most recent quarterly payment in July.


  • Richard Bangert says:

    I'm glad the city is getting money from SunCal for all the work they are doing. It's better than keeping a tab and hoping to get reimbursed at some later date. I don't see any other way of conducting business with a contractor that has been hired to come up with a plan.

    What does not make any sense, however, is that after working closely for two years with the city to get an acceptable plan, SunCal went off by themselves and drew up a "take it or leave it" initiative. If city staff and the community had been part of the initiative drafting process, we might well have avoided the inherent risks to the city in this initiative. Look no further than the city's own Executive Summary of the initiative to see what those risks might be.

    If the initiative-drafting process had been as inclusive as the community meetings that SunCal sponsored, perhaps we could have included one of the principles enunciated in the original 1996 Community Reuse Plan, namely, that Tube capacity would be the governing factor as to how many homes would be built. The original Community Reuse Plan upon which all of the current planning is based, involved an extensive roster of policymakers from both inside and outside of Alameda. It is clearly stated in their final plan that if another crossing to Oakland such as a tunnel or bridge proves to be infeasible, then the development of new housing would be taken one step at a time. If tube capacity was reached, then new housing construction would stop. SunCal's ballot initiative does not include such a provision.

    SunCal's "go for broke" (OK, not a good metaphor), "throw in the kitchen sink" attitude about drafting their initiative is very likely to result in a total waste of 12 months time when the election night votes are tallied. The community would be better served if SunCal withdrew this initiative and we all give it another try. This would be especially important if Alameda ends up getting the property for $1. Owning the land for $1 would place Alameda in a new and much stronger bargaining position, not the least of which would be the ability to reap millions in revenue as we sell parcels to SunCal. We could also stipulate that selling to SunCal would cease if things did not turn out well. We could have a performance-based agreement rather than one based on hope.

  • Barbara Thomas says:

    Well said Richard. There is no doubt in my mind that a place to start would be for the City of Alameda to develope and keep any marina as City property. Even with global warming etc. floating docks should be fairly easy to build and maintain. As the most beautiful and underused deep water access area in the SFBAY,why do we have to sell or lease that land to anyone? The same City staff/Engineering department can design, build and rent/lease the 600 docks that SUNCAL proposes. What is market rate? $1.00 per foot per month? $7.00 per month per foot? Times 30 feet per dock? Times 600 each docks? Times 12 months per year?

    Goodness gracious! Alameda's money problems could be solved in a few years!

    Wait, lets not think about solving Alameda's own financial deficits, or funding Alameda's firefighters. Instead, we should let SUNCAL reap this profit and give Alameda more traffic, more expenses to pay for the transit hub, and regional sports center while they sail off into the sunset.

  • Sarah says:

    There's not free lunch. If Alameda owned the land for $1, it would be required to pay for the clean-up costs, which is hundreds of millions.

  • DL Morrison says:

    Sarah: The NAVY — not SunCal — is responsible for the cleanup of soil and groundwater contamination at Alameda Point, and that responsibility remains with the Navy whether SunCal ultimately controls the site or not. If SunCal should take possession, then it will be responsible for the cleanup of asbestos and lead in the BUILDINGS, either thru demolition or rehab, but not for contamination in the GROUND.

    SunCal has made any number of assertions about "taking over" for the Navy, "cleaning up after" the Navy and so forth. Be advised that this is completely and totally misleading and untrue, and SunCal has acknowledged as much in public forums, yet it continues to try to spin this issue.

    I tend to agree with Richard, above, that SunCal ought to carry the cost of developing plans for Alameda Point, yet I can't help but note as well that the staff members directly reponsible for overseeing development, such as Leslie Little and Debbie Potter, seem to be unabashed supporters of SunCal's project, so much so that they might as well be employees of SunCal. Thank goodness for the city manager, Ann Marie Gallant, who oversaw the city's highly critical Executive Summary of the Initiative and brought us some balance.

    And thanks to Michelle for covering this issue.

  • DL Morrison says:

    For anyone who hasn't seen the city's "Executive Summary" (aka "Election Report") re: SunCal's Alameda Point Initiative, it's on the city's website — here's a direct link. Anyone who wants to understand the Initiative but can't face reading 280+ pages is well advised to take a look at the much more readable summary.


    Also see AlamedaPointInfo.com, a local website that posts a wide range of background information on Alameda Point and SunCal, at http://www.alamedapointinfo.com/

    The Executive Summary appears at the link below (following the brief commentary):

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