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UPDATED On Point: A recap

Submitted by on 1, February 8, 2010 – 6:00 am11 Comments

apUpdated 1:53 p.m. Monday, February 8

Last Tuesday, Measure B took a decisive drubbing at the polls – putting the decisions about what to do with Alameda Point and whether to move forward with SunCal back into the hands of city leaders. SunCal still has an exclusive agreement with the city to negotiate a development deal at the Point, and they have submitted the same plan voters rejected directly to the city for its consideration. Would city leaders try to work out a deal, or walk away?

Just three short days later, Interim City Manager Ann Marie Gallant offered her answer in the form of a notice of default to SunCal. She’s saying the developer should have submitted a Measure A-compliant plan for the former Naval base. If SunCal fails to “cure” the default within 30 days, the city can terminate its agreement with SunCal. SunCal’s Pat Keliher responded Sunday by challenging the notice and by questioning whether the city is complying with the agreement. So we have a showdown, folks.

So what happens next? SunCal could submit a Measure A-compliant plan. The developer has intimated that they could build their 4,841 units of housing using the city’s “density bonus” ordinance, but they have not yet said how this could be done. SunCal could also walk away, though the company – which has invested an estimated $10 million to $15 million in the Point project to date – has shown no signs it wants to do that. And if the developer feels the city has not negotiated in good faith or has breached its agreement, the negotiating agreement does allow SunCal to sue to get its money back.

If SunCal exits the picture, city leaders will have to make some fresh decisions about what to do with the base (provided the Navy doesn’t decide to auction it off, which is a whole other story for another day). I talked to council members this week who said they think Measure B’s loss at the polls showed that they need to take the reins on Point development, and they are generating some new ideas about what should be done there.

But will those ideas include a smaller development? Not necessarily. Keliher’s letter contained an interesting claim, which I’ll leave you with: Keliher’s letter claims Gallant:

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.

Not true, says Gallant, who was working to draft a response to SunCal on Monday afternoon.

As always, more to come.


  • Scott says:

    That would be awesome to be sued by Suncal and have to pay them $10 to $15 million dollars back. We have got to start some sort of development going out there. No more talk, more action. This project or some sort of project should have been started 10 years ago. Let's Go Alameda

  • Richard Bangert says:

    Before we start letting our imaginations run wild with speculation about the city being sued for a large sum of money and imagining damages to run into the tens of millions, it would be instructive to read the minutes from the January, 2009 ARRA meeting.

    "Member Gilmore asked what would happen if the City breached its obligations under the ENA. Donna Mooney, Asst. General Counsel, replied that the ENA is a contract and if the City doesn’t fulfill an obligation to it, it would be considered a breach of contract. SunCal would have a legal remedy to this breach, which could include asking a court to make us come back and continue negotiating, or it could be that the contract is terminated and we give back the $1 million deposit." http://alameda.granicus.com/DocumentViewer.php?fi

    Also worth noting is the fact that since this Master Plan Presentation did not comply with Measure A, it was not considered an actionable item for the ARRA to approve or not approve. Therefore, there was no city staff report on this item, which would have been the appropriate public vehicle for the Interim City Manager to make her views on housing density as referenced in the article under which this comment appears. So, re my previous post, we should await the Interim City Manager's response which, if not sooner, will certainly come at the March ARRA meeting.

    • Hey Richard,

      Thanks for posting the link to that ARRA meeting, that is useful information. Let me see if I can get the section from the ENA I'm reading from regarding liability to supplement that:

      7.4 Remedies. In any action at law or equity or other legal or administrative proceeding to remedy a Developer Event of Default or an Alameda Event of Default or otherwise enforce this Agreement, or that otherwise may arise our of this Agreement neither Alameda nor Developer shall be entitled to damages or monetary relief other than as set forth in this Section 7.4. Permitted remedies shall include (i) mandatory or injunctive relief, (ii) writ of mandate, (iii) termination of this Agreement, or (iv) a contract Claim (as defined in Section 15.5 below) to recover money due to Alameda or Developer as a payment of Pre-Development Costs or reimbursement of excess Pre-Development Cost deposits under Section 6 of this Agreement; provided, however, neither Alameda nor Developer shall be liable, regardless of whether the Claim is based on contract or tort, for any special, indirect or consequential damages.

  • Scott says:


    Many positive projects are going on along the Alameda and Oakland water fronts. Some day we will be able to add the Point and landing to this list. Waterfront Action is a great group for the community to get involved with to help mak more positive changes to our community.

  • dlm says:

    I agree with Richard: "Let’s hear the Interim City Manager’s version of events before we start creating a narrative about the Interim City Manager’s performance based on confidential meetings and speculation."

    I'm also surprised by the emphasis on Keliher's claims regarding the city manager and her supposed opinions on Measure A, when there is absolutely no proof whatsoever that any of Keliher's claims have any basis.

  • Richard Bangert says:

    From the SunCal letter quoted in the article above: “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.”

    Without the meeting transcript, this statement does not make a whole lot of sense. The inclusion of the term “OEA plan” hints that this expanded density idea might have been introduced in the last three weeks since the OEA plan was submitted. On what basis would the CEO of the city translate an 85% No vote as a signal to go denser, especially without the lifting of Measure A for Alameda Point?

    So, if the city manager did not do any seeking of “additional residential and commercial densities” in the last three weeks, that would leave us with what time period? It would leave us with the past year+ since the presentation of the Alameda Point Draft Master Plan in December of 2008. When, during this period, would the city manager have argued for higher density than 4,500 residential units? Would she have argued for this after SunCal, in its Draft Master Plan, argued for amending Measure A, but gave no specific numbers? Here is what the Draft Master Plan said: “We question the rational and appropriateness of Measure A in the specific context of Alameda Point and propose that an exception be made just for development at Alameda Point.” http://www.alameda-point.com/pdf/presos/dmp12-19-08.pdf

    Or would she have done this arguing after seeing SunCal’s PowerPoint Presentation a month later in January of 2009 in which SunCal put a specific number of 4,500 on their plan?

    Or would she have begun arguing for higher density four months later following the filing of the Notice of Intent to Circulate an Initiative Petition for Alameda Point Development? Clearly, it would have made no sense to be arguing for higher density following the filing of the initiative petition and during the last nine months up to the election. Trying to change the density cap upwards in the initiative would have been a pointless exercise. Furthermore, the initiative clearly stated that amendments regarding density following passage of the initiative could only go downward.

    So, when did this arguing for higher density occur? If it occurred at all, the only time period that would have made any sense is between the Draft Master Plan presentation in December of 2008 and the filing of the initiative petition five months later. Is SunCal trying to paint itself as the sensible party in this debate by trying to keep the initiative’s density limit within reason and not caving in to the Interim City Manager’s even denser vision?

    Let’s hear the Interim City Manager’s version of events before we start creating a narrative about the Interim City Manager’s performance based on confidential meetings and speculation.

  • Richard Bangert says:

    There has been the suggestion in the community that the Interim City Manager's issuance of a Notice of Default is something about which she first should have consulted the city council.

    Back in 2008 when SunCal was late with their payment to the city, they were in default and the then-city manager made clear in the Alameda Sun article linked below that she had no intention of consulting with the city council either about the default notice or on whether to extend the payment deadline.

    The ENA rules are carefully spelled out in the ENA. In our city manager form of government, the city manager is hired to carry out the wishes of the city council. She did that. If they don't like the outcome, they should call a special closed session meeting and give her different instructions.


    The Interim City Manager's February 4th letter notifying SunCal that they are in default is well worth reading. The logic is clear and remains undiminished by SunCal's response, in my humble opinion.

  • William Smith says:

    Regarding where do we go from here …..

    For the record, I am supportive of SunCal’s submission of an alternative plan that continues to include housing that is both economical and environmentally sustainable.

    Here are some normal government processes that those who support SunCal’s plan could consider for getting it approved. Except for the third alternative, all rely on state housing law to invalidate our City’s ban on economical and sustainable housing. Those who want to see that housing only at Alameda Point may want to consider alternatives 3, sponsoring a charter amendment to do just that -courts aren’t known for surgical strikes.

    1) lobby the City Council to simply rezone Alameda Point to allow the construction of economical and sustainable housing and use the State’s requirement that Alameda provide its fair share of regional housing to defend the Council’s action in court,

    2) citizens could sue the City in State Court to permit construction of economical and sustainable housing anywhere in Alameda,not just the Point,

    3) citizens could sponsor and approve an amendment to the City Charter to permit the construction of economical and sustainable housing only at Alameda Point,

    4) a developer could, as SunCal has proposed, use the density bonus to construct a limited number of economical and sustainable homes at Alameda Point.

    Which option do you prefer? Most of us agree that the status quo is not an option.

  • Richard Bangert says:

    William Smith,

    Thank you for enumerating the possibilities on where we go from here. Having those possibilities written down for all to see is a good way to concentrate the mind.

    Options #1 and #2 involving the courts is not where I would like to see this matter resolved. I'd rather stay within the court of public opinion by ruling out the first two options. Option #2, in my non-lawyer opinion, would be extremely counterproductive and, among other things, end up freezing development for years while this suit moved its way to the Supreme Court.

    And to complicate matters even more, even if the Supreme Court overturned Measure A, that does not dispense with the impacts identified in future EIRs regarding Alameda Point. Overturning Measure A for the entire island could, in the end, have more of an impact on everywhere BUT Alameda Point when compared with what might be accomplished using the density bonus or limited charter amendment for Alameda Point.

  • Mike says:

    It seems obvious where we go from here. Either SunCal submits a Measure A compliant plan or it doesn't. Either SunCal sues or it doesn't. The ball is in SunCal's court. Developers threaten to sue all the time. Relax.

  • ct says:

    "Let's hear the Interim City Manager's version of events before we start creating a narrative about the Interim City Manager's performance based on confidential meetings and speculation," says Mr Bangert.

    With the interim city manager's closed-door meetings and control on the release of information, all we have available to us much of the time is speculation. Now that Gallant is attempting to break off the City's partnership with SunCal, I would assume she has a Plan B in place (her long-term-leases idea for Alameda Point is not a viable option), but of course we can only speculate on what that grand plan might be.

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