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Submitted by on 1, July 21, 2010 – 5:00 am10 Comments

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.


  • Richard Bangert says:

    We’re not exactly back at square one. We can go back to one of the squares we skipped over. Now that the SunCal drama is over, I’ll throw this back on the table to include in the discussions about where we go from here.

  • Barbara Thomas says:

    Yes Ashley, the decision was obvious to all.
    If SUNCAL is the wonderful company it says it was last night, it will have plenty of communities vying for its presence. It can employ all the union members that spoke last nite in those communities.
    Alternatively, the unions can work on whatever project(s) ultimately gets built at the Point.

    It is a shame the degree of protection that city staff has been forced to go to after the plethora of charges alleged against TAM. Better to be safe than sorry. The sooner the District Attorney resolves those complaints, the better.
    For those who believe the best way to defend TAM is to make unfounded allegations against City staff, I am still waiting for any citations to any code sections they claim staff violated.

    I would add the following allegation against SUNCAL attorney Skippy (“I am going to sue you”) Miller, California State Bar Rules of Professional Conduct:

    “Rule 5-100 Threatening Criminal, Administrative, or Disciplinary Charges
    (A) A member shall not threaten to present criminal, administrative, or disciplinary charges to obtain an advantage in a civil dispute.”

    His threats last night were typical of SUNCAL’s entire performance in our town. How could anyone trust a company that would retain such a member of the bar and ask him to speak on its behalf?

  • Scott says:

    No more Suncal talk they are dead to Alameda. Now we need to know who is going to develope the point and how soon will it start. The days of Doing nothing are no longer an option. Please let me know when the bull dozing will start. Let’s get the golf course concept back on the table. Let’s get walking trails and parks with San Francisco’s skyline in people’s face. Let’s get restaurants, shops, and homes setup. Let’s get get a new ferry terminal setup. Let’s start creating jobs for thousands of bay area residents. Let’s go.

  • Incredulous says:

    “Skippy” will do his worst, as predicted.

    However, reflecting on last night’s activities, the more interesting fact is WHO is representing Bruce Elieff in the simple case of Elieff’s failure to pay $9 Million on a loan guarantee: Jeffrey Benice, Esq.

    Here’s Mr. Benice’s online resume: http://jeffreybenice.com/criminal/

    Currently, Mr. Elieff has been a no show for his deposition on the creditor’s questions of “Where did all your assets go? Why can’t we find them to attach/execute/seize them to pay the $9 Million jury verdict?” The hearing before the Orange County Superior Court Judge, on Mr. Elieff’s refusal to show up for his deposition, is August 18th. I think City Attorney Highsmith and Alameda’s outside counsel in “Skippy’s lawsuit” need to be at that deposition, watching, listening and taking notes, since his answers are highly relevant to Skippy’s claims that SunCal had an ability to perform on a new contract with Alameda.

    Meanwhile, note that in various publications Bruce Elieff proudly says his father Boris immigrated to the U.S. from Macedonia, and founded SunCal 70 years ago. On Wikipedia, for example, look up Macedonia. It was/is an ethnic region, not a country, and only a small portion of it forms the tiny, dirt poor country of Macedonia formed in 1991. You’ll see that a large part of Macedonia is in Bulgaria.

    Then research why the European Union wouldn’t grant full membership to Bulgaria. You’ll then know a whole lot more about the cultural environment which forms Mr. Elieff’s values and guides him in his activities. It probably also explains why he’s got Jeffrey Benice representing him in the simple case of $9 Million and other assets which have “disappeared”. Of course, I forgot to mention that the extended Elieff Family is one of the most prominent families in Bulgaria.

  • Mark Irons says:

    Scott, if you really want all that, and soon! then maybe you should lament SunCal leaving, and I don’t say that as a supporter of their project because I have become neutral. Who do people think is going to rush in to save us, in this political and economic climate? SunCal is not dead to us if they are suing us. How much might we lose in combined legal fees and damages should they win? I’m not even saying we should not terminate business with them eventually, but without being a lawyer myself, I’m not as sanguine as all those who have had the tar and feathers out for months on end. I do not think the City is in any position to develop this tract itself through a development corporation, which means we will have to turn to a developer. But all developers are evil by definition remember? Catch-22.

  • Incredulous says:

    By the way, I found it interesting that SunCal chose “Stan Brown” to be its pleasant face in dealing the the Alameda Council last night. Stan Brown is SunCal’s Regional VP for the Southern California/Inland Empire Region. Mr. Brown is the one who has been bsing the City of San Clemente for more than 2 years as to why their roads haven’t been built.

    No one in Alameda’s blogosphere sufficiently investigated all of SunCal faux pas in other California communities where they actually started development activities and then stopped when Lehman went bankrupt and SunCal had no money of its own (or chose not to spend its own money) to fulfill its promises to the City and complete the public roads which SunCal had already torn up.

    See, for example: http://san-clemente.org/sc/Meetings/CityCouncil/Minutes/Download/819%2006-10-08M.pdf

    This is one of the projects where Bruce Elieff indemnified and guaranteed payment to Arch Insurance if that “subdivision improvement bonding company” had to perform on the Subdivision Improvement Agreements when SunCal defaulted. SunCal didn’t perform, San Clemente had to sue the insurance/bonding company, the trial judge browbeat the bonding company to “settling” and now the natives are restless in San Clemente saying that the insurance company has breached the settlement agreement.

    There are gigantic piles of litigation documents in the Orange County Superior Court on this mess, as well as tons of “unpublished” discovery materials on SunCal’s basic inability or unwillingness to perform econcomically.

    The fact that SunCal sent “Stan Brown” to Alameda, to be its happy pleasant face at last night’s meeting simply shows the utter contempt in which Mr. Elieff holds Alameda. “Stan Brown” has been bsing San Clemente for more than two years, and now Elieff thinks Alamedans will accept Stan Brown’s assurances?

    Alameda dodged one bullet last night.

    Now it’s time for Alameda’s attorneys to start talking, in earnest, to all of the attorneys who are opposing counsel to SunCal throughout California and New Mexico, in both state court and bankruptcy court cases. There is a lot of information to be shared and a lot of “who is who and who does what” to be learned about the SunCal operations.

  • Scott says:


    Check out what the Point has the potential to look like. The time is now!

  • alameda says:

    Anybody know more about why Highsmith’s report could only be viewed in her office???? What gives?

  • Kate Quick says:

    Marie Gilmore said last night that Ms. Highsmith did not want to send her the report because it might get into the hands of Lena who might give it to others. I think Lena is still a sitting Council member and as such, nothing can be kept from her as she is still responsible for representing us as an elected official. Until the DA opines, she has the right to all the tools she needs to make an informed vote and so do all the other council people. I think Ms. Highsmith may have overreached in refusing to give Marie Gilmore ready access to a document she requested. I believe the public records act was followed by Council Member Gilmore – she requested the information in writing – and was violated when access was made difficult for her deliberately. I am glad the council decided to continue the work of the Sunshine Task Force – I think we need a good deal more8VZF sunshine in our city government.

  • Betty says:

    Do you think it would be beneficial to write to the California Bar
    regarding Mr. Miller and Rule 5-100?

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