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ALAMEDA POINT: Accusations fly as SunCal exits

Submitted by on 1, August 2, 2010 – 5:00 am8 Comments

Editor’s note: This story was originally published by The Bay Citizen and ran in The New York Times. Zusha Elinson can be reached at zelinson@baycitizen.org; Michele Ellson is at michele@theislandofalameda.com. Additional stories detailing the implosion of the Point plan and what readers think should happen next will run on The Island on Tuesday and Wednesday.

By Zusha Elinson and Michele Ellson

Alameda, which has been long resistant to growth, threw a warm embrace around an unlikely suitor last year. The Southern California developer SunCal Companies proposed to build thousands of homes, sports fields, offices and a ferry terminal on 770 acres of its decommissioned naval base.

The project promised to transform the Island, and its leaders lined up in support.

Mayor Beverly Johnson recorded a robo-call that went out to every resident on March 25, 2009: “A plan has been created that deserves our support.”

One week after that call, the council promoted Ann Marie Gallant, its exacting interim finance director, to interim city manager. Within months, SunCal was no longer welcome in Alameda, and last week, the City Council officially voted the company off the Island by a 4-0 vote.

How the widespread support for SunCal transformed into bitter opposition — and Gallant’s role in that — is at the heart of the surprising implosion of one of the most ambitious development projects ever in the East Bay.

To her supporters, Gallant, a 60-year-old former teacher and itinerant public servant, engaged in a courageous act of public service that prevented Alameda from getting stuck with a bad deal. After the project was rejected, some residents thanked her with cards and flowers.

SunCal, however, claims that Gallant led a deceptive campaign to kill the development, and it is threatening litigation against her and the city. It also said that a leaks investigation begun by Gallant into SunCal’s biggest supporter on the City Council was politically motivated.

Gallant said she was just doing her job.

“It isn’t personal, it’s business,” she said in an interview, employing a favorite quotation from “The Godfather.” “It is what is objectively best for the community, and I think they’ve made it personal.”

Gallant’s background as a teacher is apparent in her manner. She is known for offering easy-to-understand breakdowns of city finances on a giant whiteboard at City Hall.

After leaving the Los Angeles redevelopment agency in 2000, Gallant bounced around small Southern California towns, always making an impression with her rapid-fire style of speaking, her sharp intelligence and quick exits.

In 2005, when she was city manager of King City, Councilwoman Susan Kleber said Gallant cleaned up the finances, and intimidated the men who did not like being told what to do. “You see women like that in the Bay Area — she’s very competent and hard-driven — but you don’t see them down here,” Kleber said.

In Desert Hot Springs, where Gallant was city manager from 2006 to 2007, she was known to scatter the police from their coffee breaks as she came or left work in the wee hours of the morning. “She was always looking for the devil in the woodpile,” said Councilman Karl Baker.

Baker led a group that sought to reinstate Gallant after the city refused to renew her contract in 2007 following clashes with Mayor Yvonne Parks.

The messiest stop for Gallant was in Carson from 2000 to 2003, where the City Council was entangled in a bid-rigging scandal. Gallant was fired from her job as general manager of development services for what was described in court documents as “back-stabbing behavior.” She alleged in a wrongful-termination suit that she was singled out for being a whistle-blower, and she won a $215,000 settlement.

“The lady is brilliant, but manipulative,” said Jerome Groomes, the Carson city manager who fired her.

Gallant became the interim city manager in Alameda just as SunCal’s $1.6-billion-dollar plan for the former Alameda Naval Air Station was reaching a critical juncture. The project, dubbed Alameda Point, would bring some 12,000 new residents to the Island, and the developer was readying Measure B, a ballot initiative seeking an exemption to the long-standing growth restrictions that give Alameda its 1950s feel.

SunCal had gotten off to a bad start. It hired aggressive, out-of-town signature gatherers who angered voters; one of them shoved a local editor’s camera into his face.

Even so, the project, designed by Peter Calthorpe, a noted urban planner based in Berkeley, had garnered some support, and negotiations with the city were progressing.

Gallant and her staff homed in on the fine print of the ballot initiative. Their report raised concerns about an annual $4.8 million hit to the city’s general fund for city services; breaks on more than $82 million in impact fees; and a $200 million cap on the amount the developer would have to spend on public infrastructure.

The last provision raised fears that residents could be liable for tens of millions of dollars in road and park work.

“We were cautioning everyone to read this, and doing our due diligence with the Council in closed session,” Gallant said. “I just wanted to make it clear that it posed serious risks.”

Mayor Johnson — who lauds Gallant’s strong management and financial expertise — said it was the staff reports that made her recant her support in October, ahead of the February vote on Measure B.

“Once there was a real analysis of the deal that was proposed,” Johnson said, “that’s when things really started to turn.”

Councilman Frank Matarrese also changed his mind and withdrew his backing for SunCal, frustrating company officials.

Gallant had ordered SunCal and city staff members to meet every Thursday to work out their differences. Nick Kosla, SunCal’s forward planner, said he thought they had been making progress in the eight-hour-long sessions — but the reports to the City Council, in his view, never reflected that.

“It’s almost like these meetings where we were fixing or addressing all the issues the city had, that never got communicated to anyone,” Kosla said. “People thought of those meetings as the abyss.”

SunCal also accused Gallant and city officials of discussing their own alternate plans that could involve a city-led, nonprofit development initiative for the site, even as they negotiated with SunCal.

Gallant denied the accusations, saying that alternate ideas had been tossed around in the community and by city leaders but that no serious discussions took place.

Measure B failed spectacularly in February, getting an 85 percent ‘no’ vote. Residents felt that the SunCal deal was unfair, and they had concerns over the size of the development and increased traffic.

Some who opposed the deal said Gallant’s actions were critical.

“In the absence of the city manager, it would have been very difficult to change the city’s steps,” said Dave Needle of Protect the Point, which fought Measure B. “She had access; we didn’t.”

Although the defeat at the polls all but sealed the project’s fate, SunCal and the city continued to negotiate on a scaled-back plan.

In the weeks leading up to last week’s final City Council vote, Gallant started an investigation that singled out Lena Tam, SunCal’s remaining supporter on the Council. Tam was accused of leaking e-mails to SunCal, and the matter was referred to the district attorney.

Tam denied the accusation and called the investigation “politically motivated actions by a power-hungry interim city manager.” She abstained from the July 20 vote.

Some fear that SunCal, which said it spent more than $17 million on the project, will make good on threats to sue. They worry that SunCal’s departure could leave the former naval base barren for another decade.

“When you get rid of Plan A, you hope to have a Plan B,” said David Brandt, a former assistant city manager in Alameda who is now city manager of Redmond, Ore. “And I don’t see that there’s really a Plan B.”

But Gallant said that the SunCal plan would have been a bad deal for Alameda, and that she was not willing to roll over.

“The city manager should push the envelope when you’re negotiating — if you don’t ask and push, they’re going to walk all over you,” she said. “I’m not someone who’s gun-shy; I’m not afraid of a fight.”

8 Comments »

  • RM says:

    This article says the city and SunCal tried to negotiate a “scaled back plan”

    As I understand it, SunCal’s Measure B plan had 4,503 housing units, 3,532,000 sq.ft of commercial, and 145 acres of park.

    Then their Modified Optional Entitlement Application had 4,845 housing units, 4,313,000 sq.ft of commercial, and 146 acres of park.

    What do I not understand?

    How can their OEA plan be called “scaled back?”

  • Richard Bangert says:

    SunCal loses, and they go after individuals. In this case, it is the interim city manager.

    In Albuquerque. they went after a city councilmember who opposed their attempt to get special tax waivers for their Albuquerque project in the New Mexico Legislature. They lost in the Legislature.

    http://newmexicoindependent.com/37831/suncal-targets-cadigan-in-election-mailer

  • It was very exciting for us to get to publish the Island/Bay Citizen collaboration in Sunday’s New York Times. This was an outstanding example of the benefit of local journalists working in partnership with a big, old news organization to make sure a large audience sees important reporting. – Jim Schachter, Associate Managing Editor, The New York Times/NYTimes.com

  • ct says:

    Ann Marie Gallant became Alameda’s interim city manager in April 2009. Since then, she has:

    • Handed former out-of-town business associates (e.g., those at Westhoff, Cone & Holmstedt; Rips Consulting; Graphtek) city contracts without giving businesses in Alameda an opportunity to participate in an open bidding process (www.theislandofalameda.com/2010/06/gallants-contracting-practices-questioned/)

    • Attempted to increase her pay without review via the City Council’s consent calendar (laurendo.wordpress.com/2010/05/04/consent-compensation/)

    • Recommended that the City Council vote in favor of a campaign finance reform ordinance that would give an unfair advantage to incumbents running for office (www.theislandofalameda.com/2010/06/council-stalls-on-campaign-finance-rules/)

    • Had a Civic Center revitalization plan produced without public input (laurendo.wordpress.com/2010/03/10/amg-its-a-lot-closer-than-yall-think/)

    • Hired an attorney to secretly root through the emails of a council member in an effort to have them unseated (www.theislandofalameda.com/2010/07/city-manager-seeks-tams-ouster/), which is looking increasingly like a politically motivated move (laurendo.wordpress.com/2010/08/02/the-agony-and-the-ecstasy/)

    These facts are also part of Gallant’s history that we should know about.

  • Barbara Thomas says:

    What facts? Ann Marie Gallant violated no rules, statutes or other policies set by the Council. It is interesting to see who her attackers are. Could they be Tam / “unbiased” League supporters. Apparently the best defense when charged with specific violations of penal statutes and the Brown Act, with factual support for those violations, is to try to dirty someone else up. And when asked to provide specific statutes or codes that Gallant is inferred to have violated, none has been provided to date. Her employers with the power to fire her are standing behind her. That means the policy makers or City Council, to those who think the citizens have the right to weigh in on every decision. Gallant has followed City policies to the hilt. If one doesn’t like them, ask Tam to change them or run for office oneself. The City issues thousands of contracts every year. Do you really want to pay for the costs and delay to put each and every one of them out to bid? Evaluate the bids? Publically award them? Notify everyone who has a business license of every potential contract? Do you have any concept of how much that would cost, or how much delay would be factored into every decision? Or would you rather have at least a few police, firefighters, public works, parks and other city workers on the job? That is why the Council gave the CM, any CM, the discretion. To stop paralysis of the City’s operations based on inane archaic practices that appeal to those with nothing better to do than complain about minutiae.
    The Council has been expecting an end run by SUNCAL to get 3 votes and thus a majority on the Council to overrule the majority vote of 85% of the people. Tam and others keep trying to put a positive spin on that vote, for example at the ENA calendar event. No means No. No matter how one parses it, no one wants SUNCAL. Neither the island nor the economy will sustain it. Once SUNCAL gets 3 votes, it will vote to pay Tam’s $900 an hour legal fees, all SUNCAL’s “damages” and screw this City into traffic oblivion. And funding the ever increasing deficits of mass transit so that developers can take the maximum amount of profit out of our City.
    It is shortsighted to think the campaign limits were to help incumbents who have articulated opposition to SUNCAL. Lack of campaign limits was designed to allow SUNCAL to rape our City by seducing politicians who are for sale. Duping the voters into electing them by funding their campaigns with tens of thousands of dollars. Isn’t it time the City/residents benefited from the resources of our island, instead of a few glorified and about to become rich councilmembers? Does everyone really want AUSD and the City to put parcel tax after parcel tax on the ballot year after year? Or does anyone think it is time to stop letting developers siphon off the cream, leaving us with the traffic, noise and pollution?

    Gallant has singlehandedly pulled the City out of the bed of bankruptcy that it was headed for under the incompetent Kurita and thief Flint. She is worth every penny she has been paid and more. As I understand it, she put medical benefits for her on the calendar. Doesn’t the Council and every other fulltime City employee have medical and dental benefits paid for by this City? The School Board? Do we really want the Chief Executive Officer of our City to not have medical coverage that benefits from being in the same medical plan coverage as the Council? Pennywise but pound foolish.

    A Civic Center revitalization plan wihtout City input? My gosh which of the City’s Civic Center revitalization Plans are you talking about? There have been at least 10 starting with when Don Perata was on the Planning Board. They all contain basically the same components, plans and dreams. More parking, better access, loading,etc. What did she call for that was not in the previous plans and was not implemented before due to the wonders of Kurita and Flint?
    The best her detractors can say is that “She’s brilliant but manipulative”. That she won a lawsuit after being called names by her opponents? Isn’t is time we had someone like that on our side? How else could Alameda hold its own with the likes of SUNCAL? We have Councilmembers who think it is fine to send confidential attorney client privileged documents to the other side, and each other without any concern for even the appearance of propriety. The problem isn’t Tam and Gilmore and SUNCAL. It is that Gallant was smart enough to catch them. Now they are unhappy and think that calling Gallant names will mitigate the impacts of getting caught. It won’t. Their actions were reprehensible and violative of the public trust. They speak for themselves to any objective person who reads the reports.

  • Jon Spangler says:

    One significant element is missing from the original story and the pro-ICM/anti-Suncal comments, especially BT’s:

    The 2007 ENA and its successor in 2008 both specified that the DDA would be the ultimate authority, even if Measure B had passed.

    Suncal held–with some legal precedent behind their position–that the numbers in the initiative, which some analysts thought so dangerous to the City, could be legally negotiated and changed to the City’s satisfaction in the disposition and development agreement (DDA). This was their consistent public position. Since modifying the terms of a development agreement (DA) in the final DDA is so common, the potential of modifying the terms of the initiative should have been in the original story. (It is clearly absent from BT’s and RM’s comments.)

    BT is wrong, BTW, in claiming that “Ann Marie Gallant violated no rules, statutes or other policies set by the Council.”

    In June the ICM recommended that the City retain the services of two financial consultants for a total of $196,000.
    In doing so, she did two things that were clearly wrong and which came out in publicCity Council deliberations in which she was chastised:

    1) The ICM failed to solicit competitive bids for contracted services in excess of $75,000. (The $196,000 fee was to be split 70/30 between the two former competitors, so the ICM was recommending the signing of a $137,000 contract without any competitive bids. Former Vice mayor Tony Daysog blew the whistle on this clear violation of city procedures *(and, I believe, ordinances) during his public comments.

    2) The ICM failed to disclose up front in her staff report that she had a previous business relationship with one of these firms, having been paid by them as a consultant or employee. (So much for full disclosure by the whistleblower.) When Council member Lena Tam pointed out this breach of ethics, the ICM acted as if it was unimportant (wrong) and protested (too loudly, as I heard her and watched her facial expressions) that no one should ever suspect her of being unethical.

    This instance–which I witnessed –is in addition to the documented instances that CT lists above. And there are others, such as the supposedly “confidential” documents that the IAFF local 689 had provided AS PUBLIC documents to Lena Tam. (The ICM and others subsequently included these documents among those that Tam was supposedly leaking –back to the firefighters who had provided them.

    And speaking of illegal and unethical activities, I understand that Barbara Thomas was caught more or less red-handed rummaging through a council member’s office without permission or authorization years ago. Would she like to disclose why she, as an attorney, might have had cause to search or burglarize a government office without the benefit of a subpoena? Is what I have heard correct?

  • j cloren says:

    only fool’s rush in !

  • ct says:

    Ms Thomas,

    First, is it a fact that you were “caught more or less red-handed rummaging through a council member’s office without permission or authorization years ago”?

    Second, a fact is “an actual occurrence.” You seem to be confusing the actual occurrences of bad judgement I’ve listed above with violations of “rules, statutes, or other policies set by the Council.”

    Third, I don’t believe that awarding city contracts through an open bidding process means the City would need to “notify everyone who has a business license of every potential contract.” A request for proposals is not, as you say, an “inane, archaic practice that appeals to those with nothing better to do than complain about minutiae.” This arrogant and condescending attitude (especially toward those who want more openness and transparency in their government) held by individuals who repeatedly exercise bad judgement or who secretly rummage through someone else’s property is precisely why such individuals should not be given the power to make unilateral decisions involving the expenditure of our limited taxpayer dollars.

    Fourth, in February 85 percent of voters voted against Measure B (85 percent did not vote against SunCal or Peter Calthorpe’s land plan).

    Fifth, ICM Ann Marie Gallant sought to increase her benefits by placing that personal concern on the City Council’s consent calendar, a list of items that is voted on as a package, without discussion. This underhanded maneuver was attempted at a time when thousands of other government workers are taking pay cuts or being laid off.

    Sixth, it appears that you don’t see the value of public input when you say, “A Civic Center revitalization plan without City input? My gosh, which of the City’s Civic Center revitalization plans are you talking about?” That’s unfortunate.

    And lastly, as the accused and the implicated bring the facts to light, it’s becoming increasingly obvious that Gallant’s allegations against Lena Tam (as far as I know, Gallant hasn’t ordered investigations on Marie Gilmore or SunCal yet) are politically motivated. In a bald-faced act of utter hypocrisy, Gallant abused the power of her office to silence Tam, recklessly squandering public funds to carry out a personal vendetta.

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