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On Point: The final countdown

Submitted by on 1, July 6, 2010 – 5:00 am4 Comments

In two weeks, SunCal’s agreement to negotiate a development deal for Alameda Point is set to end. The City Council has the option of either extending its negotiating agreement with SunCal or bidding the developer adieu, leaving the city in the position of searching for a third master developer or for other ways to develop the Point.

City staff is set to report to the council Wednesday that there’s pretty much no way they will be able to ink a disposition and development agreement, one of the items SunCal is on the hook to complete before the developer’s exclusive negotiating agreement sunsets on July 20. And while they have determined that SunCal’s most recently submitted development plan is complete – with fresh details about its “density bonus option” plan, which is essentially the same size development they asked for on the ballot – that determination appears to have come too late for the city and SunCal to work out a deal with the Navy for transfer of the land before the deadline, a second, required item.

(City staff are also claiming SunCal breached their agreement by asking the Navy brass to tell city staff to extend the negotiating agreement by six months; SunCal’s reps confirmed at a June 15 council meeting that they made the request, but denied that they breached the agreement. The Navy, incidentally, has not said anything public about the development process at all of late.)

In the absence of a DDA, SunCal can submit a “best and final offer” for the city to consider. But Deputy City Manager Jennifer Ott wrote in a staff report to be presented Wednesday that staff still has major concerns about the project, most of which stem from worries that it doesn’t pencil out.

SunCal’s numbers show the project generating a 20 percent profit, the low end of what their agreement with the city requires for them to move forward. But a consultant hired by the city to test SunCal’s numbers estimated that the project would actually generate a deficit of 12 percent. Even when they used the developer’s home sales price and construction cost numbers, their analysis showed the project generating a 14 percent profit, which is still less than the developer’s agreement with the city requires.

Those numbers – which include an estimated $212 million in future property tax dollars – have city staffers concerned that SunCal might stall the project, cut out later development phases or short-shrift promised public benefits like parks and transportation improvements. And they are concerned the project won’t support the $108.5 million payment the Navy wants for the land. (SunCal’s reps have disputed the consultant’s numbers.)

In the meantime, both the developer and opponents of SunCal and its development plan have been fighting to continue (or cease) work on the project, with SunCal launching a massive public outreach campaign that has included teleconferences, public meetings and events and opponents putting together a petition to tell city leaders they want SunCal out.

And what will the council do? They’re not set to vote this week on whether to deny the project or keep things going while an environmental analysis of the project’s impacts can be completed (an 18-to-24-month process) and in the hope that agreements can be reached. SunCal’s reps wrote on their blog that a vote is coming July 20.

As I always say … stay tuned.

4 Comments »

  • Barbara Thomas says:

    The teleconference data as touted by SUNCAL is suspect. I stayed on the line only to point out I was on the DO NOT CALL registry and to insist they not call me again. I am sure they counted me as a participant. There is a $500 penalty per telephone call for unsolicited calls such as this. Our City Attorney, or candidate Attorney General Jerry Brown should deter SUNCAL from further abuses. If not, maybe we shold all go to Small Claims court. If they call me again that would be $1000. Of course with SUNCAL’s bankruptcy history, I could wind up as an unsecured debtor in bankruptcy court for the next few years trying to collect.

  • Jon Spangler says:

    The City Council and staff keep pinning all of the blame on Suncal for failing to meet these deadlines. But that is not the whole story.

    The Mayor and City Council failed miserably to shoulder its fair share of responsibility and leadership years ago when Suncal asked for help in changing the City Charter (section XXVI, regarding density limits). Being politically terrified of the “third rail of Alameda politics,” the 1973 Measure A limitations, the council voted to send Suncal out in to the cold to do the job alone, without any help at all from the city government best equipped to deal with the civic governance side of redevelopment (i.e., crafting ballot measures and suggesting appropriate amendments to the City Charter).

    For the City Council or city staff to now place all the blame on Suncal for its failure to meet agreed upon deadlines and conditions, without having acted as a true partner to the developer is rather hypocritical in the eyes of this observer.
    You cannot hold someone back with all your might (apparently the goal re: Suncal of many city officials, elected and otherwise) and then criticize them for being so slow to the finish line.

    When will the City Council take its own fair share of the responsibility for this current state of affairs and the continuing delays in AP’s redevelopment?

  • Barbara Thomas says:

    Why should elected officials shoulder any responsibility for not proposing a change to a charter provision enacted by the some if not the very same persons that elected those officials to office? For the sole purpose of increasing profits for a private corporation whose sole purpose for existing is to maximize profits in communities in which they get a stakehold? And send those profits to someone else’s pocket in Southern California?

    This type of “thinking” is not only suspect as without merit, but one wonders who is paying those who make these comments. 85% of the voters have spoken. NO MORE SUNCAL. Get over it. Move on. Anything worth doing is worth doing well. If you wahnt somethign done well you might as well do it your self and we can certainly do better than that which SUNCAL proposed and at lesser expense. Why send the profits to Irvine? We have many fine needs here in town that could use the profits of development at the Point such as the schools, and transit.

  • William Smith says:

    Recently, the nationally recognized environmental groups Sierra Club and Green Belt Alliance, as well as the local affordable housing group Renewed Hope, formerly endorsed further study of the density bonus plan submitted by SunCal to the City. The Sierra Club and Greenbelt both support detailed studies of the proposed plan because it has the potential to reduce urban sprawl on the fringes of the Bay Area, to reduce greenhouse gases, and to provide all Alamedans with more transportation options. Renewed Hope finds that the plan has the potential to provide more housing and economic opportunities to those with little or modest economic means.

    All three groups recognize that there remain substantial questions regarding the plan’s environmental impact and financial feasibility. Let’s get started with the Environmental Impact Report to substantiate that promise.

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