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ALAMEDA POINT: ‘Their arrogance is exceeded only by their arrogance’

Submitted by on 1, August 3, 2010 – 5:00 am7 Comments

By Michele Ellson and Zusha Elinson

Even the most fervent supporters of SunCal Companies’ proposal to turn Alameda’s rotting former Naval Air Station into a new, mixed-use community admit that the company was its own worst enemy in its quest to win support for its plan.

The company routinely ignored advice from city staff, politically active locals and even its own highly paid political consultants, they said, angering Alameda voters and local policymakers, who sent them packing on July 20.

“They thought we were just bumpkins. That we were just urban city bumpkins that they could roll through,” said Vice Mayor Doug deHaan, who voted to bring SunCal to town but dropped his support of the developer when they failed to seek his input on their project.

SunCal’s insistence on placing Measure B on the ballot with a business deal many saw as deeply unfavorable for the city put them on a path of no return, supporters and opponents said. The developer claims they had city buy-in on the ballot measure.

“The developer with the ballot measure provided the hammer and the nails for the coffin top,” said Bill Smith, a Sierra Club member and affordable housing advocate who continued to support the project once Measure B was defeated.

A SunCal spokesman accused detractors of seeking to distance themselves from the breakdown of their efforts to develop the Point and faulted Interim City Manager Ann Marie Gallant for the failure of negotiations with the company. And he accused city officials of focusing on the development’s potential negatives instead of considering the benefits it could offer.

“Our contention is that things started to not go well when the person we’re dealing with came on to the scene,” SunCal’s David Soyka said, referring to Gallant.

SunCal did not get off to the most auspicious start. City staff, who recommended the council choose Catellus to develop the Point after a hoped-for partnership between that developer and Lennar failed to materialize, almost didn’t invite SunCal to the 2007 meeting where they ultimately won the job.

During the company’s first week as master developer, city staff learned that SunCal’s Point project engineer, James Winzler, once headed a company that was sued by the federal government for failing to forward employee contributions into their retirement plans. According to a Department of Labor press release, Winzler and the company were ordered in 2006 to repay $142,578 into the former employees’ 401(k) plans.

David Brandt, who served as assistant city manager during SunCal’s early tenure as Point developer, said the company – which he said had less experience dealing with the Navy than Catellus or Lennar – ignored city staff’s advice on how to work with the Navy and made “a number of blunders” in early meetings.

“They said some pretty stupid things, made promises they decided they couldn’t keep. We were constantly trying to keep them out of trouble,” Brandt said.

But by 2008, SunCal had started figuring out what to do and how to work with the key players on the Point deal, Brandt said. And they gathered public input and support for their emerging plans with a series of public meetings. They also hired a team of top experts to piece the development plan together, including Peter Calthorpe, who is considered a leading urban planner.

“I wouldn’t say we had complete consensus, (but) we had a very strong group of people that understood the trade-offs,” Calthorpe said.

The plans involved nearly three times more residential development than had been envisioned before SunCal came on board. But some members of the council said the developer made a strong case for them.

SunCal had argued that earlier plans to build about 1,700 homes – less than the 4,841 SunCal envisioned – weren’t financially feasible. The residual cleanup and engineering costs of developing the Point, which is a Superfund site that sits on a flood plain and young Bay mud, would be high; replacing its aged roads, water pipes and other infrastructure alone would cost more than $650 million. The company also said that it needed to build more homes to attract transit.

But in order to enact their high-density vision for the Point, the company had clear a delicate hurdle: They had to ask voters to exempt the project from Measure A.

Councilwoman Marie Gilmore said she felt the company made its case to the council for the increased development. But she thought that they, and not the council, should make that same case to voters.

“I think we individually came to realization that the council wouldn’t put Measure A on the ballot,” Gilmore said. “If some developer couldn’t get the required number of signatures, to have the council do it would be a waste of time and money. So the theory was, anyone who wanted to change Measure A would have to get the signatures themselves.”

But the company decided to put more on the ballot than a Measure A exemption. The 288-page ballot measure included the developer’s land plan for the Point plus a business deal that is typically negotiated with the city.

Brandt said he and other staffers begged SunCal to leave the business agreement off the ballot, to no avail. SunCal’s political consultant, Larry Tramutola, said he also urged the developer to streamline their plea to voters. Tramutola said the company feared they could win a Measure A exemption but get kicked off the project.

“They felt that if they didn’t go for the whole enchilada that there might not be an enchilada to eat,” he said.

Soyka admits the company erred in dropping such a huge ballot measure on voters.

“We probably made an error – we were always under the assumption that more information is better,” he said. Still, he said the company believed people would feel more comfortable voting for the plan if they had all the details.

The anger and frustration city staff felt soon spread. The paid signature gatherers the company says Tramutola hired – against the advice of local supporters, they said – enraged prospective voters, who claimed they had been harassed in some cases. Others claimed the signature gatherers misrepresented what was on the ballot.

Anger over the plan grew as city staff, led by Interim City Manager Ann Marie Gallant, raised questions about financial and other impacts the ballot measure could impose on the city if passed. Meanwhile, news of SunCal’s growing list of bankrupt projects was also making the rounds.

SunCal pieced together an advisory board populated by prominent local supporters and business people and spent nearly $1.3 million to earn voter approval of their vision for the Point, but the damage was done. An overwhelming 85 percent of voters said no.

In the days leading up to the election and those following, SunCal tried to distance itself from the loss. But opponents continued to press their case with members of the City Council, who showed few signs they’d reinstate their support for the developer.

Just days before the council’s vote to send them home, SunCal offered a final salvo: They threatened to sue the city and Gallant if they didn’t allow the company to stay.

“The crux of this is, (is this) a bad faith negotiation or a good faith negotiation. We have always acted like the city is our partner,” said Soyka, who said the developer had no choice but to bring attorney Louis “Skip” Miller in.

The move infuriated council members and SunCal’s opponents, who heckled Miller as he made his pitch on July 20. For nearly two hours, the developer’s opponents blasted SunCal and their plan.

“Their arrogance is only exceeded by their arrogance,” Jim Sweeney, who opposed SunCal’s plan, said.

Contact Michele Ellson at michele@theislandofalameda.com. Contact The Bay Citizen’s Zusha Elinson at zelinson@baycitizen.org.

Alameda Point series:

Monday: Accusations fly as SunCal exits

Tuesday: ‘Their arrogance is exceeded only by their arrogance’

Navy denies SunCal lawyer’s letter claim

Wednesday: Where do we go from here?


  • Scott says:

    Whats the plan now? Spend the next 14 years talking about what a bad plan Suncal had. Doing nothing is no longer an option.

  • Barbara Thomas says:

    SUNCAL shifts the blame to everyone else but themselves. It wouldn’t even listen to its own well paid hired guns including Tramatola who probably is back at his villa in Italy counting his money. Especially culpable was that evil and notorious, brilliant but manipulative Anne Marie Gallant. Who knew that when SUNCAL had almost slipped the wool over Alameda’s eyes, with Tam giving them the inside scoop, and Gilmore casting her eyes downward to avoid seeing the obvious, that low and behold someone with courage and conviction to stand up to its slimey tactics, would be smart enough to see that there wouldn’t be enough money to fund all its promises, and blew the whistle. Alamedans all owe a debt of gratitude to Ms. Gallant. She played David to SUNCAL’s Goliath. Now we just have to suck it up and watch while SUNCAL and Skippy throw their last rotten eggs our way. When the stink and smog clear, SUNCAL will be gone, and Alameda will still be here. And no we don’t want their enchiladas either. Give them to Skippy. He needs to grow a little more body to carry that swollen head around. Time to ask Diane Feinstein to repay all the support given over the years, and get us back the Point for the $1.00 the Navy paid. Then the City can begin the process of developing the Point for the benefit of Alameda, not the detriment.

  • ct says:

    Ms Thomas,

    In the article above, a SunCal spokesman “admits the company erred in dropping [Measure B] on voters,” so your statement that “SUNCAL shifts the blame to everyone else but themselves” is incorrect. Your comic-book tale of the epic battle waged between Ann Marie Gallant and SunCal is amusing, but (as per our exchange in the comments section of Ms Ellson’s earlier post “Accusations Follow SunCal’s Failure”) I believe your depiction of Gallant is also incorrect.

    Gallant prefers closed-session Council meetings, the deletion of City email records every 30 days, and making unilateral decisions without oversight or accountability. So her sudden interest in government openness and transparency vis-a-vis Lena Tam and the Brown Act was baffling. But with each passing day, as the accused and the implicated bring the facts to light, it’s becoming increasingly obvious that Gallant’s allegations against Tam 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.

  • Barbara Thomas says:

    Subject matter of closed sessions is very limited. Statements that Gallant prefers them is based on some sort of notion that she has any control over the state legislature. Deletion of emails is pursuant to a policy set by Council, not Gallant. If it it too frequent, then email your elected representative (Tam) and ask for change. And until you or anyone can cite me a single statute, code section or policy that Gallant allegedly violated, you have absolutely no facts upon which to base your allegations.

    In the last hours of crucial negotiations with SUNCAL, the CA discovered Tam was leaking info. Then and only then were her emails addressed which confirmed the leaks. You can claim they were harmless all you want. But clearly someone who is elected to represent the people, and act through City staff, should not have been emailing SUNCAL anything concerning closed session reports. It defeats the very purpose of democratic elections if our officials are for sale. I expect Tam is being silent on the advice of her $900 per hour counsel.
    You may think it personal, I think it was courageous leadership and in the best interests of Alameda. I am content to sit back and await the action of Nancy O’Malley on the matter as to the legality of Tam’s actions. And to sit back and watch how the voters perceive Tam’s actions of sending emails to SUNCAL and other special interests.

  • Judy says:

    I just want to see SOMETHING DONE on Alameda Point. The no-growth attitude of our city officials is making this process unnecessarily difficult. They’ve kicked out developer after developer. The old base is a hazard to our community, and city council is not being realistic with their non profit organization that will suddenly save the Point. Instead of being constant naysayers, our community needs to get together and make SOMETHING HAPPEN. Suncal was that chance.

  • Richard Bangert says:

    SunCal submitted 9,618 signatures to get their initiative on the ballot. By election day, only 2,361 voters believed that SunCal was our chance to make SOMETHING HAPPEN. This was not naysaying. It was reading the fine print.

    City officials have not “kicked out developer after developer.” The previous, and only other, developer left, in part, because of the Navy’s exorbitant price tag for the “old base [that] is a hazard to our community.” The housing market and environmental insurance were other factors in their departure. The city’s posture toward the previous developer APCP was not one of the factors in their departure. The city was hopeful that we would soon see “SOMETHING HAPPEN.”

    If city officials had a no growth/no change attitude, they would not have torn down East Housing and given Catellus the go-ahead to build Bayport. Nor would they be ready, willing and able to work with Catellus to refashion the Alameda Landing project to make it work.

    One decision made by city leaders that has been ignored during the post-SunCal egg throwing at city hall is the decision made many years ago to not accept the base from the Navy under what’s called early conveyance. Conveying a closed military base to a reuse authority prior to cleanup was an option that entailed accepting the Navy’s estimate of the cleanup costs. The Navy said it would cost around $250 million. The city decided to do its own cost estimate, and the city’s consultant said it would cost more on the order of $450 million. Had the city given in and accepted early transfer, the Navy’s cleanup escrow account for Alameda Point would have run out long ago, and Alameda would have been stuck with contaminated land. The cleanup costs have already exceeded $400 million.

    Thankfully, our city did not accept the base early. Perhaps a little credit where credit is due.

    We’ll find out how realistic the non-profit idea is in the very near future when the city staff presents a review of the options for development. The non-profit idea is not the only one on the table.

    Doing nothing is not an option now, nor has it ever been.

  • ct says:

    Ms Thomas,

    ICM Gallant’s preference for closed-session Council meetings has somewhat less to do with the “notion that she has any control over the state Legislature” and everything to do with her avoiding public scrutiny whenever she can. I do believe the City’s email destruction policy should be changed (and will be, we can hope) to one of email retention, but Gallant has already taken advantage of the current policy. And it appears as though you missed my response to your response in the comment section of “Alameda Point: Accusations Fly as SunCal Exits”, so I will address again some concerns you repeat here.

    A fact is “an actual occurrence.” You seem to be confusing the actual occurrences of Gallant’s bad judgement that I’ve listed earlier (e.g., awarding former business associates city contracts without an open bidding process; attempting to increase her pay without City Council review; hiring an attorney to secretly root through the emails of a council member in an effort to have them unseated, etc) with “a … statute, code section, or policy that Gallant allegedly violated.”

    Gallant’s politically motivated allegations against Tam are still under investigation. They should be treated as allegations, not as fact, until proven otherwise.

    Also, 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,” as another commenter wrote?

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