COUNCIL BIDS SUNCAL ADIEU ON 4-0 VOTE
Early this morning, the City Council voted to deny SunCal’s development proposal for Alameda Point on a 4-0 vote, effectively sending the developer packing an hour after the expiration of their three-year exclusive agreement to negotiate a deal to develop the former Naval Air Station.
The six-hour hearing leading up to the decision followed more than two hours of public comment from an overflow crowd that pitted union members, environmentalists and local supporters of the plan who asked the council to proceed with SunCal’s plan against a group of mostly longtime residents who said SunCal had its chance at the ballot box and should graciously accept their loss. And it followed threats from SunCal’s attorney, Louis R. “Skip” Miller, to sue the city if the company wasn’t allowed to keep working toward a deal.
“The project represented by this optional entitlement agreement has the same flaws as the one rejected by voters. I think we do benefit to open the process up,” City Councilman Frank Matarrese said, referring to Measure B, SunCal’s February ballot measure. Matarrese said he didn’t have any confidence that a development deal would materialize if SunCal were given more time.
Vice Mayor Doug deHaan, who seconded Matarrese’s motion to deny SunCal’s development application, said he felt confident the city could move forward on the Point without SunCal.
“I feel the anxiety, but I look around, and let me tell you: This is a brighter community just because of what we went through. The community understands the process, our desires and needs,” deHaan said. “It’s marvelous to see the community and staff gel together with a single focus. If indeed the vote is to move on, we are all better prepared.”
SunCal’s Stan Brown said he was very disappointed with the vote and that he thought it was a mistake. He said the company would be examining all of its options over the next few days.
Earlier in the meeting, Miller said the council’s vote was premature. He said the city blocked SunCal’s effort to meet the terms of the negotiating agreement, which he claimed should have extended automatically.
“We bargained for a full, fair hearing on this development. We’ve invested a tremendous amount of money,” Miller said as SunCal’s opponents heckled him. “Let us complete this process, or we’re going to be in court.”
Councilwoman Lena Tam abstained from voting. Tam said she thought an environmental report detailing the proposed development’s traffic, environmental and other impacts should be completed before a decision was made. And she said that she didn’t feel comfortable making a decision without having seen SunCal’s “best and final offer” for a deal to develop the Point, which was submitted late Thursday, or an opinion on the city’s legal exposure written by City Attorney Teresa Highsmith that was apparently not shared with council members.
Councilwoman Marie Gilmore had asked about both documents but was told by Highsmith that neither was relevant to the council’s decision. And she and some of the members of the public who spoke Tuesday said the nastiness that has swelled around the SunCal issue – which reached a crescendo with the announcement that Tam was being investigated by the city for allegedly leaking confidential information to SunCal and the developer’s demand that Interim City Manager Ann Marie Gallant be investigated for her alleged actions related to the development – needed to subside.
Her comments included concerns about her inability to access Highsmith’s report, which she said she was told she and other council members would only be able to view in Highsmith’s office. Gilmore said she believed that violated the city’s charter, which she said requires documents like Highsmith’s report to be produced to council members upon written request.
“This has created an unnecessarily adversarial atmosphere around City Hall,” Gilmore said, adding that in her 15 years of service to the city, she’d never seen things get this bad. “At the end of the day, we need to work together.”
Staff recommended the council deny the project because, they said, they feared it might not be completed because they believe it isn’t financially feasible. And they said the project lacked a commitment to transit oriented development, economic development strategy and jobs-housing balance, and that it failed to properly account for impacts to traffic and the endangered California Least Tern.
Deputy City Manager Jennifer Ott said the financials SunCal submitted for the project didn’t properly account for a declining real estate market and that the company was depending on $212 million in public financing that could be subject to state takeaway. And she said that under SunCal’s best and final offer, the city could be on the hook for covering SunCal’s profits if the project missed its financial mark.
“I think the bottom line is, a project this size underwritten with unrealistic assumptions from the beginning is a risk not only to the city but to the developer,” Ott said.
Brown denied the city’s claims, saying city staff had deemed SunCal’s development application to be complete and that the company had submitted all of its required payments to the city. And he asked why the city and its financial consultant why they signed off on the same financials when they were put together in 2008.
“The (financial) assumptions were reasonable then and now,” Brown said.
Public Works Director Matt Naclerio said the city and SunCal haven’t been able to agree on basic things like how much building roads, water and sewer lines and other infrastructure will cost, and that specific details on SunCal’s transportation plan haven’t been hammered out. And he said much of what the city has gotten came at the last possible minute.
“Staff’s position is, they’ve had three years to do that,” Naclerio said. “And at the end, they’re saying, ‘Let’s get it done.’ It’s all this waiting until the end. That’s why staff is saying, ‘it’s always too little, too late.’ ”
Proponents of SunCal’s plan said they thought it was a good fit for Alameda and the Bay Area, and they said it would create badly needed jobs. And they said the city had nothing to lose by allowing SunCal more time to hammer out a deal.
“We don’t have another decade and a half to spend” on coming up with another plan, Richard Tran said.
But opponents said February’s decisive vote showed residents didn’t like SunCal or their plan, and that they thought the company should respect the results. And they, too, raised questions about the company’s finances, citing its projects that have fallen into bankruptcy.
“I would rather face a day in court than years of lying and cheating with this slimy company. Your vote should be obvious,” Ashley Jones told the council.