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City to SunCal: New Point plan must be Measure A compliant

Submitted by on 1, February 5, 2010 – 5:08 pm11 Comments

apUpdated 11:31 a.m. Sunday, February 7

City officials have notified SunCal that the developer is in default of its exclusive agreement to negotiate a development deal at Alameda Point because the plan they submitted doesn’t comply with Measure A.

The developer has 30 days from Friday to fix the problem. If they don’t, the city can terminate its negotiating agreement with SunCal and seek a new developer for the Point.

In a letter sent Thursday to SunCal’s Pat Keliher, Interim City Manager Ann Marie Gallant said the developer ran afoul of the agreement because the development plan it turned in to the city isn’t Measure A compliant. Gallant said the developer has no other choice but to submit a Measure A-compliant plan – and that they can’t go back to the voters to seek another Measure A exemption.

“To the extent SunCal seeks yet another election on a non-Measure A compliant project, such further election is simply not permitted under the terms of the (agreement),” Gallant wrote.

A cover letter submitted with SunCal’s plan contemplated the use of the city’s recently passed “density bonus” ordinance – which allows developers to build more on their land than they would normally be allowed if they build affordable housing and child care centers – to construct its 4,841-unit plan. But Gallant wrote that the developer’s plan isn’t eligible for the density bonus because SunCal didn’t submit an application to request it, among other reasons.

A SunCal rep did not immediately respond to a reporter’s e-mailed request for comment. Update: SunCal released a statement Sunday morning; it’s in the comments section, below.

Under amended terms of the negotiating agreement, SunCal had the option to submit an alternate plan directly to the city for its consideration, which the developer did on January 14. The plan appears almost identical to the one SunCal placed on the ballot.

On Tuesday, voters rejected Measure B, which included a land plan, Measure A exemption for Alameda Point and a business agreement with the city, by a margin of 85 percent to 15 percent.

Gallant’s letter says SunCal initially committed to develop the Point with a Measure A-compliant plan. But the developer later said it wouldn’t be financially feasible to do so. A previous developer, Alameda Point Community Partners, pulled out of the project in 2006 due to a downturn in the market that they said would prevent the project from supporting the Navy’s $108.5 million asking price for the Point.

The city announced it had issued the notice in a press release that says Alameda is moving forward to develop the base. “The City remains confident that numerous options – public, private and non-profit – remain available to the City in developing a physically viable and economically sustainable plan for base development,” the press release said.

The press release says the city will continue to negotiate with SunCal. Its exclusive negotiating agreement with the developer ends on July 20, though the city has the option of extending it.

The default notice is below. And I’ll have more on the way forward for Alameda Point on Monday, so stay tuned.


  • Jon Spangler says:

    Marie Gilmore told me today that she did not know anything about this filing of the notice of default until she read the press release.

    Were Mayor Johnson or any members of the City Council informed of this decision before the filing occurred? Was it a legal action that should have required Council authorization beforehand? (I do not know.)

    Gilmore has asked for a closed-session Council meeting in which to discuss this further, and says she is "hopping mad" about the filing of default having occurred the way it did. (If I were a Council member, I would be mad, too–or worse.)

  • Former Island Reside says:

    The Veteran's Administration Hospital is good option.

  • Betty says:

    1) City Manager Gallant is my hero.

    2) The sooner SunCal is out of Alameda the better off we'll be.

    3) Marie Gillmore will not get my vote. Let her be "hopping mad".

    The voters who voted no on B were "hopping mad" especially having to

    pay over $300,000. for a unnecessary vote. SunCal needs to go back to the other cities and people they screwed and take responsibility for their deeds. Have

    you read the stories of what these people and towns are going through? They are self centered, greedy, with big egos…they should go back to Irvine.

    We need to start anew and create an Alameda Point everyone will be proud of…

    we need to do it right. Not like South Shore. What a mess. Why can't they get decent stories? Who wants to go out to dinner at the mall? Why do we need to look like Foster City, Emeryville etc. We live in Alameda because of the way it is…

    So, Jon…get over it. Measure B lost.

  • ben says:

    did gilmore hire spangler as a press agent?

  • Dave Needle says:

    SunCal must be recognizing the weakness of their position, if they are choosing an attack/denial position in their response to the City's NOD. Were they not paying attention during the Measure B campaign? Did they not see how the people of Alameda learned the truth about the SunCal process and the SunCal behavior pattern? We, the voters of Alameda, have stated quite loudly that we do not want the SunCal deal, and now that SunCal has exposed its true behavior, we don't want SunCal in Alameda.

  • Miriam says:

    All that SunCal is being asked to do is the comply with the agreement that they signed. Voters turned down their ballot measure and they now need to submit a proposal that complies with Measure A. SunCal knew this years ago. All the City Manager is doing is seeking compliance with the agreement. SunCal now has 30 days to file their plan with the City. It was Pat Keliher himself who said that SunCal would be submitting such a plan in case the measure failed.

    "Councilmember/Board Member/Commissioner deHaan inquired what SunCal’s position would be if the measure did not pass.

    Pat Keliher, SunCal, responded that SunCal wants to have some type of fallback plan; stated SunCal is looking at Measure A compliant plans internally.

    Councilmember/Board Member/Commissioner deHaan inquired whether SunCal would still be willing to be in the process if the plan was Measure A compliant.

    Mr. Keliher responded that today, SunCal would not want to walk away from Alameda Point; stated SunCal would like to look at other alternatives."




    TUESDAY- -AUGUST 19, 2008- -7:27 P.M.

    All the City Manager is doing is saying that the plan is now due. If SunCal hasn't submitted that plan, that is SunCal's fault and they need to take responsibility for that failure rather than blaming others.



  • Folks,

    SunCal just released a response to the Notice of Default issued by the city on Friday. I’ll write more about this Monday, but in the interests of time and transparency, here’s the response in full.

    Subject: SunCal’s Response to City of Alameda’s NOD and Press Release

    Dear Mayor and City Council members,

    We were shocked that we received a notice of default on February 4, 2010 for the Optional Entitlement Application (OEA) that we submitted on January 14, 2010 with the full knowledge of the Interim City Manager. The notice is littered with inaccurate and misleading statements. Moreover, the legal argument for determining the default is specious and relies on alleged requirements that simply do not exist in the ENA.

    For example, there is no requirement in the ENA that SunCal submit a Measure A compliant plan as is alleged in the NOD. In fact, that would be counter to the master plan and business plan accepted by the City, which has been the basis of our negotiations for two years. On numerous occasions, the Interim City Manager maintains that a Measure A compliant plan is not financially feasible. At several of our meetings, she has frequently sought additional residential and commercial densities in excess of the OEA plan, rather than a reduction in density. The Notice of Default alleges obligations that do not exist in the ENA when it states that a density bonus application was a required submittal to meet a Mandatory Milestone, nor is it true when it states the plan submitted in the OEA cannot conform to a density bonus approach, when the City Council can make appropriate findings during the normal entitlement process.

    Moreover, we were even more surprised and disturbed to see that these specious legal claims used to determine the non-existent default, were the subject of a City-issued press release. It is simply bad form to deliver this notice of default as a press strategy and we do not understand why the City desires to create public controversy at every step of this process, rather than in working together in a mutually beneficial manner to implement a financial and environmentally viable plan for Alameda Point. While we are preparing a more thorough response to the Notice of Default, we are compelled to respond immediately because of the City’s erroneous press release.

    Following Tuesday’s February 2, 2010 election, SunCal has become acutely aware that the community’s desire for a better future for Alameda Point must follow a more traditional development process. We want to respect the community’s desire, and will take our lead from the City Council. In accordance with the ENA, we are actively pursuing that vision and are eager to work with the City Council and the community of Alameda in good faith to ensure the future of Alameda Point and the City is secured.

    As clearly noted in the OEA submittal, the Plan can be entitled either by City Council decision to place a charter amendment on the ballot or by use of a density bonus. Rather than pre-determine the course the City would choose to take, we assumed that the City would work with us in good faith to craft the plan in a manner that met the City’s preferred goals. In the absence of an ulterior motive, the proper way to handle this matter would have been to advise us through the planning department of the City’s preferences and to advise us of additional submittals that might be required to conform to the newly adopted density bonus ordinance, if that were the City’s preference.

    While we remain committed to working with the City Council and the community of Alameda in good faith, the City’s actions over the last two days raise questions about whether it shares this commitment. As a result, we must begin to doubt the City’s desire to ensure that the vision for Alameda Point is realized in a manner consistent with the City’s responsibilities under the ENA, despite the numerous public statements to the contrary.

    SunCal has, and is, currently expending significant financial and staff resources on the preparation of an Environmental Impact Report, which was approved by the City Council last October by a unanimous vote. We are continuing to perform under the terms of the ENA.

    Unfortunately, the use of City press releases for damaging unsubstantiated claims is becoming a major distraction and obstacle to the success of our mutual Alameda Point effort.

    We respectfully request that you withdraw this notice of default and that we work collaboratively on a plan that is best for the City of Alameda.


    Pat Keliher

    SunCal Companies

  • Barbara Thomas says:

    Keliher’s “The notice is littered with inaccurate and misleading statements.” and the assumption, “that the City would work with us in good faith” are priceless. The pot calling the kettle black? This from an entity that duped over 8000 persons into putting its measure on the ballot at Alameda’s cost, yet could only garner 2300 votes out of that 8000? After spending over $1,000,000? Working with the community in good faith? I think not. SUNCAL has been working for itself, to maximize its profits, overturn our laws, and force Alameda to spend $375,000 on SUNCAL’s special election to bypass the development process itself?

    SUNCAL don’t take your lead from the City Council, whose election coffers can be easily stuffed and might want to posture on this point. SUNCAL may control GILMORE and TAM but the others seem to have been awakened by SUNCAL’s tactics, and dishonesty. Take your cue from the 13,419 voters who have had enough of SUNCAL.

    The City Council sets policy, staff does the actual work. It is well within the powers and responsibilities of a competent City Manager to notify an entity that is is in breach of a condition or a convenant. Just like Mr. Norton did with Ballena Bay when I was on the Council. Why should Gallant have to ask permission from the Council to do her job? How many Councilmembers should she ask? Anyone care about the Brown Act any more? Why expose the process to the delay of yet another council meeting and politiking by at least two declared candidates for Mayor? Any Councilmember who interferes with staff doing their jobs is the one in hot water.

    If the Council had stood up and did its job, Alameda would not be out the $375,000 and 2 years of development delays. Thank goodness Ms. Gallant has the courage to do her job. If the Council doesn’t like the behavior of its 3 employees, it can terminate them. I suspect that firing Gallant and rehiring someone like Flint, is just about the right speed for SUNCAL. Then it can tell that Manager to sit back and let SUNCAL force additional delays in the “redevelopment of Alameda Point.” Anyone who has read TAM’s comments about the vote on Measure B meaning the populace wants to have the Point redeveloped ASAP should be delighted that Alameda is moving forward so expeditiously. If the election turnout was really an undeclared mandate for expediting development, (instead of just NO to SUNCAL which was what the ballot seemed to say)the Council should be totally thrilled.

    SUNCAL is just an anchor around sensible development of Alameda Point, no matter what goes there. The manner in which SUNCAL conducted its previous enterprises including Oak Knoll, the methods used when it gathered the signatures for Measure B, timed the election, and campaigned will be like bile in a lot of Alamedans throats. Better to cough it up and flush!

  • Jon Spangler says:

    No one with any informed economic sense about AP has demonstrated that the former base can be successfully redeveloped using a low-density model, whether the density is commercial or residential. The costs of reusing the site (cleanup, historic preservation, conveyance from the Navy for $108 M, etc.) are simply too high. And Tuesday's election results did not change any of those numbers or high costs. The new infrastructure will still cost $700 million, which is just about $700 more than the City of Alameda has available for the task from any sources.

    The City Charter's density limitations can and should still be amended for AP in order to make redevelopment feasible and cost-neutral to Alameda's taxpayers, and nothing in Tuesday;'s election precludes either the City Council or the voters placing a straightforward charter amendment (uncomplicated by Development Agreements and such) on the ballot.

    It is incumbent on the City Council to belatedly do what it should have done in 2008–place a straightforward density amendment for Alameda Point on the ballot. Most critics of SunCal and Measure B liked the Peter Calthorpe plan, which will need such a charter amendment to give Alameda the kind of visionary and sustainable Alameda Point that we need in the 21st century. And doing nothing will cost Alameda taxpayers a bundle. (No change there since Tuesday, either.)

    IF it is true that the Interim City Manager acted on her own and without consulting with, informing, or following the direction of the City Council in sending the Notice of Default, serious questions arise as to the propriety of such independent and non-consultative staff actions. Who is actually setting the policies for the City, in such a case? According to the charter, policy decisions are supposed to be made by the Mayor and City Council not the City Manager or the staff.

    Filing a Notice of Default further indicates the City staff's failure to negotiate in good faith with SunCal under the terms of the Exclusive Negotiating Agreement it signed with the developer. And negotiating in good faith, which is a two-way street, has seemingly not been the City's strong suit of late.

  • Barbara Thomas says:

    Such continued rigid thinking in face of the massive defeat of SUNCAL's project is astounding. No one has demonstrated "that the former base can be successfully redeveloped" using any model whatsoever.

    If we define "successfully redeveloped" as not seriously degrading the current quality of life for existing resdients and forcing us to pay for the amenities that the developer promised" no one has demonstrated anything yet. It is all paper. We are an island and will never get an additional west end crossing. So all that transit oriented planning doesn't apply. An express lane for buses? How would that solve and not exacerbate the problem? Developers don't want checks and balances that affect their vested rights if their planning isn't worth the paper it was printed on. Even Harbor Bay Isle built its projects in the form of 5 villages. And those in the early villages led the revolt against the completion of the later Villages.

    I think that getting the land for the $1.00 returned will change the equation. So I'd like to give our new Interim City Manager a shot at that.

    Putting an amendment to Measure A on the ballot especially in the wake of SUNCAL's overwhelming defeat – would be the kiss of death to any Councilmember or Mayor. Especially when two are declared candidates for Mayor. They know that.

    "Filing a Notice of Default further indicates the City staff’s failure to negotiate in good faith with SunCal under the terms of the Exclusive Negotiating Agreement it signed with the developer." If someone breaches a contract, such as the ENA, it is not policy to enforce the City's right or obligations under that ENA. It is only competent business practice and the City Manger's job. Whether or not the City choses to file a lawsuit to terminate any continued relationship with SUNCAL is a policy decision.

    SUNCAL hasn't done anything in good faith since it got here. That is why it was trounced at the polls. Does anyone know if SUNCAL cleaned up the mess it made at Oak Knoll yet?

  • ct says:

    Those defending the actions of Interim City Manager Ann Marie Gallant will most likely ignore any reasoned statements based on fact regarding City Hall, SunCal, and Alameda Point. Only a dogmatic ideologue could support civil servants who generate a biased City report, squander taxpayer dollars, flout protocol — it's all good if it helps your cause, right?

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