2010-07-20 Joint CC ARRA CIC MinutesMINUTES OF THE SPECIAL JOINT CITY COUNCIL,
ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY (ARRA), AND
COMMUNITY IMPROVEMENT COMMISSION (CIC) MEETING
TUESDAY- -JULY 20, 2010- -6:59 P.M.
Mayor / Chair Johnson convened the meeting at 7:29 p.m.
ROLL CALL - Present: Councilmembers / Board Members / Commissioners
deHaan, Gilmore, Matarrese, Tam and Mayor/Chair
Johnson – 5.
Absent: None.
MINUTES
(10- 372 CC/ARRA/10-54 CIC) Minutes of the Special Joint City Council, ARRA, CIC
Meeting Held on June 19, 2010; the Special Joint City Council, Alameda Public
Financing Authority, ARRA, and CIC Meeting Held on June 24, 2010; and the Special
Joint CIC and Housing Authority Board of Commissioners Meeting Held on July 6, 2010.
Approved.
Councilmembers/Board Members/Commissioners Gilmore and Tam stated that they
would abstain from voting on the June 19th minutes.
Councilmember//Board Member/Commissioner Tam provided corrections to page 14 of
the June 24th meeting.
Vice Mayor/Board Member/Commissioner deHaan moved approval of the minutes.
Councilmember/Board Member/Commissioner Matarrese seconded the motion.
On the call for the question for the June 19th meeting, the motion carried by the following
voice vote: Ayes: Councilmembers/Board Members/Commissioners deHaan and
Matarrese and Mayor/Chair Johnson – 3. Abstentions: Councilmembers/Board
Members/Commissioners Gilmore and Tam – 2.
On the call for the question for the June 24th and July 6th meetings, the motion carried
by unanimous voice vote – 5.
AGENDA ITEM
(10-373 CC/ARRA/10-55 CIC) Resolution No. 14472, “Denying a Modified Optional
Entitlement Application (MOEA), Including a General Plan Amendment, Zoning
Amendment, Master Plan, and Development Agreement Proposed by SCC Alameda
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Point LLC. (PLN10-0012).” Adopted.
The Deputy City Manager – Development Services gave a Power Point presentation.
Stan Brown, SunCal; Nick Cosla, SunCal; Jim Daisa, Kimley-Horn and Associates; gave
a Power Point presentation; Phil Tagiami and Skip Miller gave brief presentations.
Mr. Brown stated page 2 of the staff report states: “Alameda did not want to be
committed beyond July 20, 2010 to development entities that prove incapable of utilizing
the property”; SunCal has submitted a 2010 Alameda Point project and staff has
deemed the submittal complete; SunCal has funded and the City has commenced the
Environmental Impact Report (EIR), including retention of the EIR technical consultants;
the City and SunCal have also had initial scoping meetings and completed the project
description; this week, $720,000 has been deposited into the Escrow Account; the
money covers City staff salaries, cost of the EIR, and other expenses associated with
redevelopment; the application will be ready to be considered by the Planning Board
and Council in the next fifteen to eighteen months; now is the time to complete the
process; the draft resolution sets out the reasons why SunCal should be removed from
the project and the application denied; clause A-4 states: “The modified OEA provides
minimal certainly about how the property will ultimately be developed; many specifics
about number, location, and density of residential units, amount, and type of commercial
development, site design, the transportation system, and sustainability measures have
not been provided”; the statement is not true; the plan is highly detailed, sophisticated
plan use documents which include an exhaustive engineering analysis, transportation
planning, adaptive reuse planning, commitment to the LEED neighborhood
development goal, and green building standards; sustainability, design, unit layouts, and
highly detailed land plans are before Council tonight; Clause A-5 states: “There is also
substantial uncertainly regarding the relative timing of development of the residential
and commercial components of the project”; again, the statement is not true; detailed
cash flows that identify the timing of the project and project elements have been done
and shared with the City; the cash flows are part of the Disposition and Development
Agreement (DDA) and are included in the business plan; a detailed land plan clearly
sets forth timing and how residential, commercial, parks, and transportation routes
come into the project; Clause A-7: states “a balance needs to be struck between
flexibility and provision of meaningful commitments to the community”; that he agrees
the statement is correct; unfortunately, in all the weekly meetings he has attended, this
is the first time he has heard that SunCal’s plan is inadequate because a balance has
not been struck; an open, honest dialogue is part of the entitlement process that occurs
as the project is made ready for public hearings; that is why the action is premature;
Clause C-4 indicates the economic development strategy for the development of
commercial businesses within Alameda Point is a critical flaw in the Modified Optional
Entitlement Agreement (MOEA); SunCal agrees with the City that there is a well
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developed strategy for development of commercial businesses within Alameda Point;
SunCal has advised staff several months ago of SunCal’s retention of RCO, SunCal’s
child lesser company, to conduct a study and provide a Phase 1 report; however, at no
time, until he read the staff report and resolution, has there been any indication that
failure to include such a report would be a critical flaw in the 2010 Alameda Point
project; staff found the application to be complete; Clause C addresses transportation;
SunCal’s transportation plan is robust; Clause D addresses the Biological Opinion (BO);
over the past several years, SunCal has worked closely with staff, consultants, the
Navy, and Veterans’ Affair Department to review and amend the existing BO; the results
of the process will determine appropriate mitigation of land uses adjacent to the
property; staff has been engaged in the process; full disclosure has been provided with
staff’s concurrence; SunCal agrees that the 2010 Alameda Point project and 2008
Master Plan are very similar in design; the 2008 Master Plan was submitted to the Navy
along with the joint project pro forma as the City’s and SCC Alameda joint submittal of
2008; the joint pro forma was submitted after exhaustive review by the City and SCC
Alameda; the joint pro forma was prepared by Economic & Planning Systems (EPS),
the City’s consultant; the City, SCC Alameda, and EPS reviewed and discussed with the
Navy the joint pro forma submitted for the first quarter of 2009, at which point the City
cut off any further contact between SCC Alameda and the Navy; in 2009, the City and
EPS agreed with SunCal’s plan, and a joint pro forma and plan were submitted to the
Navy; a year later, EPS and City staff claim that SunCal’s assumptions are overly
optimistic; in 2009, EPS and City staff agreed with SunCal’s revenue assumptions and
now do not; inquired what has changed; stated in 2009, EPS and City staff agreed with
SunCal’s home construction costs and now do not; inquired what has changed; in 2009,
City staff agreed with SunCal’s revenue and cost escalation assumptions and now do
not; inquired what has changed; stated in 2009, EPS and City staff agreed with
SunCal’s premium analysis and now do not; the change between the current and joint
pro forma is that the sale has increased to $108,500,000 at the Navy’s request; said
amount is what the Navy wants and the amount that SunCal is committed to pay; that
he is sure the City’s consultants will point to the recession’s impacts on the
development industry; the recession started in early 2007 and was already a year old
when the joint pro forma was prepared and submitted; the Lehman Brothers’ bankruptcy
occurred in September 2008, well before the joint pro forma was submitted to the Navy;
the joint pro forma assumptions and 2010 Alameda Point project pro forma were
reasonable and appropriate; the development will take twenty years to development;
having the project pro forma reflect concerted, long-term trends is important; EPS and
City staff agreed with assumptions that were appropriate and concerted in 2009;
assumptions are still appropriate today; SunCal knows that serving government is a lot
of work; the law and the Exclusive Negotiating Agreement (ENA) specify a very critical
process that has repeatedly been ignored and violated; the decision is simple – let the
process continue.
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Mr. Miller stated that he is new [to the project]; he is a litigation lawyer; he read the ENA
and he respectfully submits that terminating the ENA is premature; a vote should not
take place today and would not be legally valid; the judgment is rushed; ENA’s are
legally enforceable in California; SunCal has spent almost four years and close to $15
million pursuant to the Agreement and relies on the Agreement; SunCal is entitled to the
completion of a good faith negotiation process; the issue is about due process of law,
fundamental fairness and providing an opportunity; the project is very important to the
City; ultimately, Council would have the vote but the vote should not occur until the
process has been completed; that he strongly believes the process has been set up;
tonight’s vote would not be legal or valid; that he wrote a letter last week saying that the
term sheet with the Navy was frustrating because SunCal could not get cooperation
from the City; City officials recognize that he is right; the milestone was prevented; the
next step, after admitting that the milestone with the Navy was not met, has been to
have a vote on the whole project; the EIR and California Environmental Quality Act
(CEQA) process is not complete; the matter has not gone through the Planning Board
process; SunCal has bargained for a full, fair hearing on the development; SunCal has
invested a tremendous amount of time and money; SunCal requests that the matter not
be voted on today; the process should run its course; otherwise, SunCal will be in court
to enforce its rights under the Agreement seeking very substantial damages, if
necessary; the choice is not his; SunCal will enforce its rights under the Agreement, if
necessary; SunCal is entitled to the benefit of the deal and is not getting any benefit by
virtue of voting the project down tonight; the vote is premature; requested that SunCal
and SCC Alameda have the benefit of a full CEQA process and let everything play out;
the former Naval Base needs to be redeveloped; SunCal has done a lot of big land
developments over the years; that he has represented SunCal for several years; he is
hearing that one City official, who came on the scene about a year ago, has voiced an
opinion that having a public project, instead of a private developer, would be better;
SunCal made a deal in the ENA to complete the full process, go the full way, not to be
truncated, and stopped in midstream; the decision is up to Council; SunCal is entitled to
go to the end of the road and should not be co-opted or prevented by somebody who
wants to do things differently; the matter will be the subject of litigation, lawsuits, and
claims if the resolution is adopted.
Proponents (In Favor of Staff Recommendation Denying MOEA): Former
Councilmember Barbara Thomas, Alameda; Jean Noroian, Alameda; Ashley Jones,
Alameda; Robbie Delio, Alameda; Dorothy Freeman, Alameda; Bob Sikora, Alameda;
Birgitt Evans, Alameda; Jean Sweeney, Alameda; Jim Sweeney, Alameda; Reyla
Graber, Alameda; Eugenie Thomson, Alameda; Nancy Gordon, Alameda; Jay Ingram,
Alameda; Mary Fetherolf, Alameda; Gretchen Lipow, Alameda (submitted document);
Rosemary McNally, Alameda; Chuck Millar, Alameda; Former Councilmember Lil
Arnerich, Alameda; Dave Needle, Alameda; Robb Ratto, Park Street Business
Association; Michael Karayasales, Alameda; Karen Miller, Alameda; Karen Bey,
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Alameda; Janet Davis, Alameda; Gail deHaan, Alameda; Noel Folsom, Alameda; Adam
Gillitt, Alameda; Alan Tubs, Alameda; Kevin Frederick, Alameda.
Opponents (Not In Favor of Staff Recommendation Denying MOEA): Former
Councilmember Tony Daysog, Alameda; Andreas Kluever, Building Trades Council;
Andre Slivka, Carpenters Union Alameda County and Alameda Resident; Jon Spangler,
Alameda; Richard Tren, ULI & Swingrton Builders; Lois Pryor, Alameda; Irwin Huebsch,
Alameda and Local 2850; Wilhelminia Slater, Alameda; Nischit Hegde, Local 2850;
Auram Gurarye, Berkeley; Jeremy Madsen, Greenbelt Alliance and Alameda resident
(submitted comments); Diane Lichtenstein, Alameda; Ajit Rana, Alameda resident and
Painters Local 3; Fernando Estrada, Laborers Union 304; Kathy Moehring, Alameda;
Honora Murphy, Alameda; DG Blackburn; Sally Fauilhaber, Alameda; Mike Henneberry,
Alameda and Local 5; Mark Chandler, Veterans Administration and Alameda; Amy
Freilich, SLL Alameda Point LLC (submitted letter); Carl Chan, Alameda; William Smith,
Sierra Club and Renewed Hope; Bruce Knopf, Alameda.
Neutral: Irma Garcia Sinclair, Alameda.
* * *
Mayor/Chair Johnson called a recess at 11:03 p.m. and reconvened the meeting at
11:32 p.m.
* * *
Vice Mayor/Board Member/Commissioner deHaan stated SunCal wants to retain only
certain [historic] buildings, which is not want the Navy is recommending; removing the
buildings would remove close to $2 million of lease revenue; the Sports Complex
became SunCal’s centerpiece and is almost identical to the one built in 1997; the
original study shows what type of resources would be needed; Council had the wisdom
to put use of union labor in the Request for Proposal (RFP); Council is not anti union in
any way; long-term jobs should considered, not short-term jobs; traffic impact has
always been a major concern; SunCal has not brought a consultant on board until five
weeks ago; the community is brighter now and has made it loud and clear that it
understands the process, desires, and needs; that he had been supportive of SunCal;
later, he realized that he might be over his head; SunCal insulted him by offering two
tickets to the Warriors playoff; staff and the community has gelled and has come a long
way.
***
(10-374 CC/ARRA/10-56 CIC) Councilmember/Board Member/Commissioner
Matarrese moved approval of continuing the meeting past 12:00 midnight.
Councilmember/Board Member/Commissioner Gilmore seconded the motion, which
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carried by unanimous voice vote – 5.
* * *
Councilmember/Board Member/Commissioner Matarrese stated tonight’s discussion
has been good and spirited; the most important issue in the City is to maintain solvency;
the next important issue is what to do with the future of one-third of the island that still
belongs to the Navy; that he sees the same flaws in the MOEA as in the project
Development Agreement (DA), Charter amendment, and General Plan Agreement
change in Measure B; he would be willing to move forward if he thought an extension
would provide some hope that issues could be resolved and there would be a
downscaled project that would fit Alameda and be solvent; however, he does not see
such a thing; that he does not have any faith the City will see anything come out of the
ground or jobs forthcoming within a reasonable amount of time; concurred with Vice
Mayor/Board Member/Commissioner deHaan regarding the project labor agreement
always being a condition of the project and always being a future condition; SunCal took
three years to get on board regarding the matter; the fit is not good; that he would like
the City to go forward unencumbered; the ENA expires today because all mandatory
milestone have not been met; the City has a chance to go forward and take a different
direction that fits the times.
Councilmember/Board Member/Commissioner Gilmore thanked everyone for the time,
energy, effort, and passion regarding the issue; stated former Councilmember Arnerich
stated that the decision is monumental for the City; ensuring that homework and due
diligence is done is important; that she can satisfy herself as she gets ready to take the
vote; many of the MOEA problems come down to financing; questioned when solid
financial assurance would be provided and whether the assurance would be in writing;
stated the City received a last, best, and final offer from SunCal last week which she
presumes has financial terms that could have some bearing on the matter; that she has
not seen the document, a staff report analyzing the document, or a staff
recommendation regarding the document; financial assurances seem to have a hole on
both sides.
Mr. Brown responded this week, SunCal made another deposit to escrow; SunCal has
never missed a payment; SunCal has spent a lot of time reviewing the DDA’s terms and
elements with City staff; the DDA provides a mechanism to ensure financial assurances
are set forth prior to each stage of close of escrow so that the City would be assured
that the money to acquire the property and develop the property would be available to
fully develop each phase of the property; said assurances are not in the last, best, final
offer.
The Deputy City Manager – Development Services stated SunCal’s last, best, and final
offer was delivered on July 15, 2010 after 6:00 p.m.; the offer was on file in the City
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Clerk’s office by 3:00 p.m. the following day; the offer was reviewed over the weekend;
nothing in the last, best and final offer changes staff’s recommendation; inquired
whether Councilmembers/Board Members/Commissioners want to focus on financial
issues.
Councilmember/Board Member/Commissioner Gilmore responded in the affirmative;
stated that she understands the timing but is uncomfortable with not having a chance to
review the offer and ask questions; the public has not been able to review and digest
the offer.
The Deputy City Manager – Development Services stated staff requested that the
financing plan be attached to the DDA, including the pro forma; the pro forma submitted
with the last, best and final offer did not include the financing plan; the financing plan
would be due before the close of Phase 1.
Councilmember/Board Member/Commissioner Gilmore inquired whether SunCal has
made promises to pay without a document showing how payment would be made.
The Deputy City Manager – Development Services responded in the affirmative; stated
the pro forma was the same as the pro forma attached to previous staff reports; Section
7.8 contains the financial assurances of the last, best, and final offer; staff wants to have
financial assurances up front; SunCal has provided financial assurances that cover the
period of time from the execution of the DDA up until the close of Phase 1; staff wants
to ensure that SunCal has enough money to get through the project, not just the
development period.
Councilmember/Board Member/Commissioner Gilmore inquired how terms would be
written to prevent land banking.
The Deputy City Manager – Development Services responded terms would be written in
the DDA; stated scheduled performances would be included in addition to default
provisions; fiscal neutrality would be guaranteed; SunCal would provide a guarantee
from an entity that has a net worth of $100 million; the guarantee would not be for
project implementation; staff wants more than guarantees for fiscal neutrality; staff does
not think the financial assurances are sufficient.
Councilmember/Board Member/Commissioner Gilmore inquired who would the shortfall
fall on if the project is fiscally neutral and there are no guarantees for the rest of the
project.
The Deputy City Manager – Development Services responded the project might not be
built; stated nothing guarantees that milestones would be met; scheduled performances
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are not backed up with strong commitments to meet performance milestones; Footnote
4 of the scheduled performances addresses a milestone for vertical development that
would apply to each water parcel in a phase and sixty months after the day the
developer would transfer a lot or parcel to a vertical builder; stated there is no date for
when the transfer has to occur; an initial phase could be taken down and a subsequent
phase could be taken down but nothing requires SunCal to finish the first phase or to
develop a commercial phase; timelines build off of phantom dates; force majeure, things
beyond control, provisions are very broadly worded and allow way too much flexibility;
Section 17.8.1 discusses changes in laws which could be broadly interpreted; a
provision addresses actions of public agencies that regulate land use, development, or
the provision of services to Alameda Point property that prevents, prohibits, or delays
either the construction funding or development of the Alameda Point project under the
conveyance of the property to developers; the City is a public agency that regulates
land use; some of the provisions undermine the whole concept of the scheduled
performance.
Councilmember/Board Member/Commissioner Gilmore inquired whether SunCal would
need to abide by whatever is in the last, best, and final offer if the City decides to accept
said offer, to which the Deputy City Manager – Development Services responded in the
affirmative.
Councilmember/Board Member/Commissioner Gilmore inquired whether the offer would
need to be accepted or rejected, and there would be no room for negotiations.
The Deputy City Manager – Development Services responded DDA negotiations would
continue if the MOEA is not denied and Councilmembers/Board
Members/Commissioners direct staff to move forward and negotiate with SunCal.
Councilmember/Board Member/Commissioner Gilmore inquired whether the offer is a
take-it-or-leave-it offer for the City.
The Deputy City Manager – Development Services responded not if the City continues
with SunCal; stated Section 7.6.12 addresses modifications to development phasing
requested by the developer; the developer wants to be able to request modifications to
the phasing plan; Section 7.6.12 further states that the DDA would continue to give
SunCal broad authority to change both the phasing and the context of any particular
phase in response to new information, change in market conditions, improved
technologies or techniques, new funding strategies, and opportunities; “new information”
is so broad; staff thinks that the City’s ability to enforce certain commitments is under
minded by the provisions.
The Interim City Manager/Executive Director stated there are very specific City
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expectations with respect to guarantees.
The Deputy City Manager – Development Services stated the DDA has hurdle rates
whereby SunCal wants to be able to meet a 25% Internal Return Rate (IRR) and 25%
profit; the CIC would not be participating in the profits until SunCal meets both the 25%
IRR and 25% profit.
The City Attorney/Legal Counsel stated Section 7.5.2.3.1 requires the CIC to make up
the difference in the event that SunCal does not receive the 25% IRR.
Mayor/Chair Johnson inquired whether the last, best, and final offer is a public
document, to which the Deputy City Manager – Development Services responded in the
affirmative.
Jim Musbach, EPS, stated five determination dates have been established; any cash
flow over the 25% goes to the City; the City would get 30% of the cash flow; half would
go to a reconciliation account; at the fifth reconciliation date, the City would have to
remit money from the account to make SunCal whole at 25%; the City would have a
15% participation subordinate to a 25% return with some upside potential to get to 30%.
Councilmember/Board Member/Commissioner Gilmore inquired whether the City would
be coming up with new cash or cash would be coming out of the project, to which Mr.
Musbach responded cash would come out of the project.
Councilmember/Board Member/Commissioner Tam inquired what staff would like to see
in the DDA.
The Deputy City Manager – Development Services responded staff would recommend
starting to participate sooner than both of the 25% hurdle rates.
Councilmember/Board Member/Commissioner Tam inquired whether said information
has been communicated with SunCal.
The Deputy City Manager – Development Services responded staff has not had detailed
discussions with SunCal regarding profit participation; the pro forma attached to the
DDA shows a 20% return, which would not meet the hurdle rates; provisions were
incomplete in the first draft that staff received.
The Public Works Director stated staff expected to see the last, best and final offer
sooner rather than later and expected that all concerns would be addressed; some
concerns were addressed; the last, best, and final offer became more restrictive, is in
the best interest of SunCal, and is against what the City was negotiating for.
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Councilmember/Board Member/Commissioner Tam requested clarification on SunCal’s
intent and interpretation.
Mr. Brown stated the form is complicated and is based on a prior DDA; staff has a
misunderstanding of many elements; SunCal’s intent is to continue a process with the
City to get to a final public hearing; the document could be modified through the
process; completion bonds, subdivision bonds, cash collateral, firm financing
commitments, capital stack of debt, equity, all come together to deliver financial security
at the close of every escrow so that the property could be acquired and fully developed;
the financing plan is contained in the document; the financial plan cannot identify the
loaning bank two years in the future; the financial plan shows how much cash would be
coming from equity and debt to acquire and make infrastructure improvements; SunCal
has provided the best estimate at this time; figures may be different down the road; the
estimate is a good faith, solid estimate today; the scheduled performance states that the
horizontal development would be completed within a specified time, that all residential
land would be transferred to builders within a specified timeframe, and that vertical
builders, who would build residential and commercial buildings, would all build within
five years of the time the property is acquired; all schedules build and tee off one
another in case of a delay or acceleration; SunCal cannot predict unexpected events
that would change the schedule; the penalty for not achieving the schedule would be
that SunCal would not have the right to proceed on the project; SunCal feels that
providing for force majeure is fair.
Councilmember/Board Member/Commissioner Tam stated it is difficult to give policy
direction on the fly on a document that she has not seen based upon interpretations that
seem different for each party.
The Public Works Director stated that infrastructure costs have not been agreed upon;
the transportation plan is not detailed and is more of a transportation concept; the pro
forma shows a plan based upon bus rapid transit used in Eugene, Oregon; staff has not
been able to find out if the unit price for the bus rapid transit is applicable; SunCal
added $5 million because its engineer miscalculated the mileage; the Water Emergency
Transit Authority [WETA] has not agreed to a ferry terminal cost nor has agreed to
relocating the ferry terminal to the seaplane lagoon; issues should have been
addressed over the last three years.
The Interim City Manager/Executive Director stated staff does not expect Council to be
making decisions on policy without reviewing the document; tonight’s focus is on the
MOEA; SunCal has been with the City for three years; everyone knows what the
agenda process is; submitting a comprehensive DDA at 6:00 p.m. on Thursday after the
agenda deadline and having an expectation that a staff report would be submitted in
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twenty-four hours is onerous.
The City Attorney/Legal Counsel stated the DDA is not before the
Councilmembers/Board Members/Commissioners tonight; Councilmember/Board
Member/Commissioner Gilmore’s questions regarding the DDA are relevant; staff does
not believe that anything in the last, best, and final offer has a cure or changes staff’s
recommendation.
Mr. Brown stated at a previous meeting, the Councilmembers / Board Members /
Commissioners discussed the intent to have a public hearing; the intent of the public
hearing would be to discuss whether or not to continue with the ENA, not to deny the
application; SunCal wants to work cooperatively with the City; the process needs a
partner; the partner [City] has been difficult to come by over the last several months;
SunCal wants to reestablish the relationship; that he is convinced that the relationship
can be reestablished to move forward to discuss the important project issues and to
have the EIR analyze every element of the project; at the end of the day,
Councilmembers/ Board Members / Commissioners may vote to deny the project; staff
may generate EIR alternatives that would be studied and would be the appropriate time
to make judgments regarding the DDA, EIR, and project itself; rushing judgment on the
application is inappropriate; SunCal would welcome dialogue with Councilmembers /
Board Members / Commissioners and staff regarding the DDA and project itself; that he
would like to engage in conversation with the Public Works Director regarding cost
estimates and where the line would go; SunCal has a recommended bus rapid transit
location in the plan which needs to be discussed; staff did not have enough time to ask
questions regarding the DDA; SunCal has achieved the goal of having the DDA meet
the requirements under the ENA.
The Deputy City Manager – Development Services stated staff has not changed its
recommendation in response to letters provided by Skip Miller; the Councilmembers /
Board Members / Commissioners and staff have been discussing potentially denying
the MOEA for the last two months; May 18th, June 1st, and July 7th staff reports discuss
the matter; staff does not think the EIR would change any issues or recommendations
noted tonight; findings for denial are related to the commitment to a transit oriented
mixed-use development and comprehensive transportation development strategy that
fully funds costs and operations, which is not something that an EIR would study.
The Public Works Director stated SunCal had three years to address the bus rapid
transit line; that he has tried to get SunCal to meet with W ETA over the last year; he
had to force SunCal to initiate dialogue with WETA; the issue is too little too late.
Vice Mayor/Board Member/Commissioner deHaan inquired whether Mr. Brown stated
that the last, best, and final offer is a complicated document that would take a long time
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to review, to which Mr. Brown responded in the affirmative.
Vice Mayor/Board Member/Commissioner deHaan inquired why the last, best, and final
offer was provided five days before the meeting.
Mr. Brown responded SunCal has had weekly meetings with staff on the entire Alameda
Point project; stated numerous issues have been addressed; the DDA had to be written
to meet the schedule and the schedule was achieved; two or three drafts have been
shared with staff.
Vice Mayor/Board Member/Commissioner deHaan inquired whether Mr. Brown has
been privy to concerns regarding the job/housing imbalance, economic development
strategy, traffic, and endangered species prior to the staff report going out; stated
SunCal knew what needed to be tackled; that he does not know whether a requested
commercial study has been provided; SunCal’s mode of operation has been the 11th
hour.
Mr. Brown responded the traffic study has been an on-going effort for the last four
years; recently, the public has been engaged.
Vice Mayor/Board Member/Commissioner deHaan inquired what is different from the
traffic study developed from the Preliminary Development Concept (PDC).
Mr. Brown responded that he does not know, but SunCal’s Transportation Consultant
would know.
Vice Mayor/Board Member/Commissioner deHaan inquired when SunCal hired its
Transportation Consultant.
Jim Daisa, SunCal Transportation Consultant, responded he was hired approximately 9
months ago or longer.
Vice Mayor/Board Member/Commissioner deHaan inquired when the traffic study was
prepared.
Mr. Daisa responded that he has not prepared a traffic study; however, he has
developed a transportation strategy.
Vice Mayor/Board Member/Commissioner deHaan inquired how the PDC traffic study
differs.
Mr. Daisa responded the PDC study was an impact study, which is not what SunCal
prepared; SunCal’s transportation strategy is consistent with, and has some level of
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change, from the City’s 2008 transportation strategy, which has been based upon the
evolution of Alameda Point over time; the City has hired other consultants; that he has
worked on phase and stage implementation detail from a developer’s prospective.
Councilmember/Board Member/Commissioner Gilmore stated lawsuits were mentioned
in last week’s Alameda Journal headlines; tonight’s discussions have included lawsuits
potentially being an outcome of tonight’s decision; three or four letters were received
last week and came too late for the staff report; that she is not sure whether the letters
would have been included in the staff report if the letters were received in time;
requested feedback from the City Attorney on the matter.
The City Attorney/Legal Counsel inquired whether Councilmember / Board Member /
Commissioner Gilmore is talking about the damages issue.
Councilmember/Board Member/Commissioner Gilmore responded in the affirmative;
stated that she is a little disturbed about the matter; she had the opportunity to review
the City Attorney’s opinion for the first time today; the opinion’s existence became
known to her about a week ago; that she requested a copy of the opinion from the City
Attorney and was told to read the opinion in the City Attorney’s office; the opinion had to
be left at the City Attorney’s office because it would not be given out in advance of the
meeting; that she asked the City Attorney why she would not give the opinion to her; the
City Attorney cited concerns regarding the white elephant in the room; she is disturbed
by allegations regarding Councilmember/Board Member/Commissioner Tam, the
Interim City Manager, City Attorney, Mayor, and SunCal; the situation has created an
unnecessary, adversarial atmosphere around City Hall and the City; at the end of the
day, everyone is friends, neighbors, and colleagues’ and everyone will have to learn to
work together; that she has volunteered for the City for over fifteen years; she has never
seen the situation get this bad; the situation has been adversarial between the
Councilmembers/Board Members/Commissioners even with general disagreements of
opinion in addition to being adversarial between staff and the Councilmembers/Board
Members/Commissioners; the whole process has bread an atmosphere of fear and
suspicion that has driven some actions such as not letting her see the opinion; the
implication that certain members of the Council/Board/Commission could not be trusted
with confidential material applied to all the Councilmembers / Board Members /
Commissioner; that she wanted the opinion because the opinion is lengthy, and she did
not know whether she would want to review the opinion again after reading the lengthy
staff report; bouncing back and forth to the City Attorney’s office is very inconvenient;
the matter is a Charter issue because the Charter states that Councilmembers/Board
Members/ Commissioners should be able to get an opinion from the City Attorney if
requested in writing; the Charter does not state that an opinion needs to be read in a
certain place; requested the City Attorney to provide an opinion that she is comfortable
stating in public; stated that she feels the complicated opinion is difficult to digest; a
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Closed Session was not held on the matter tonight because of a clerical error; that she
does not have the benefit of her colleague’s and legal team’s thinking.
Mayor/Chair Johnson stated no allegations have been directed toward her; she
understands there have been claims and spins regarding the investigative reports.
The City Attorney./Legal Council stated SunCal’s attorneys have threatened to sue the
City if the City does not do what SunCal wants; having a litigation defense briefing
would not change the situation and would have no bearing on the
Councilmembers/Board Members’/Commissioners’ decision tonight; City staff, including
a significant legal team of land use attorneys, CEQA attorneys, and litigators, have done
a through analysis of the issues before the Councilmembers / Board Members /
Commissioners tonight and have made a recommendation to the
Councilmembers/Board Members/Commissioners; SunCal also says that it is entitled to
the benefit of the deal that SunCal has made; the deal is the ENA; the ENA specifically
states that damages would be limited to return of SunCal’s $1 million deposit in the
event of the City’s breach of its obligation to negotiate diligently and in good faith.
Councilmember/Board Member/Commissioner Gilmore inquired whether SunCal’s
damages would be limited to $1 million if SunCal sues the City and is successful.
The City Attorney/Legal Counsel responded in the negative; stated the benefit of the
bargain SunCal made set forth in black and white in the ENA specifically states
SunCal’s damages would be limited to a return of the $1 million deposit; that she does
not believe tonight’s forum is a good time to get into a legal issue debate with SunCal’s
attorneys.
Councilmember/Board Member/Commissioner Matarrese stated the ENA expired
yesterday; the City does not have a Navy term sheet; inquired whether the question on
the agenda tonight is whether or not to accept the MOEA.
The City Attorney/Legal Counsel responded the question on the agenda is whether or
not to follow the staff recommendation to deny the MOEA which could be done without
prior CEQA review; stated Councilmembers/Board Members/Commissioners cannot
approve the MOEA without CEQA review.
Councilmember/Board Member/Commissioner Matarrese moved approval of the staff
recommendation; stated the project has the same flaws as the project before the voters;
the DDA would not change the issue; opening the process up would be beneficial to the
City.
Vice Mayor/Board Member/Commissioner deHaan seconded the motion.
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Under discussion, Mayor/Chair Johnson stated the process was very thorough when
SunCal was selected; that she did not vote for SunCal but supported the position of the
majority of the Councilmembers/Board Members/Commissioners; Councilmembers/
Board Member/Commissioner Matarrese did not vote for SunCal but also supported the
selection of the majority of the Council/Board Members/Commissioners; four
Councilmembers/Board Members/Commissioners made an effort to accept the vote to
work, support, and cooperate with SunCal; that she appreciates SunCal’s community
outreach; situations leading to Measure B took a turn for the worse; the relationship
between SunCal and the City has gotten worse; the community made an effort to work
with SunCal; SunCal has not returned the community’s good faith efforts; that she has
had an open relationship with SunCal and has expressed community concerns; there is
too much development; she does not see how all the traffic could get through two lanes
in the Tube in both directions; her family members lived in Alameda at the peak of the
former Naval Base; that her grandmother could not get out of her driveway on the
1700th block of Versailles Avenue because Base workers would come over the Fruitvale
Bridge; people accepted and supported traffic backups because of Alameda’s
contribution toward national security and military efforts; allowing an inappropriate
development is different; she ran for Council twelve years ago to help guide the former
Naval Base redevelopment; the City needs a trustworthy partner; some of the things
that SunCal has done questions SunCal’s trustworthiness; that she does not think
SunCal’s threats and bullying is appropriate, particularly when a decision has not been
made; she never makes up her mind until there has been a public hearing; that she is
very concerned about the project’s financial feasibility; she does not think there could be
a 25% IRR; now she is learning there would be a 25% profit in addition.
Vice Mayor/Board Member/Commissioner deHaan stated one incident does not change
a person’s mind; that he has supported and given all to SunCal; having a developer
spend more than $1.25 million on a campaign is bizarre; spending another $1.5 million
on pre-campaign efforts is equally bizarre; the community should be proud that it
pushed back with less than $22,000; money does not buy loyalty and trust; money
should not flow inappropriately.
Councilmember/Board Member/Commissioner Tam stated that she is being attacked in
her efforts to keep Alameda government open and honest; that she wants to be clear
that the correspondence in the documents and allegations, including the ones to the fire
fighters, SunCal, and whoever has asked her questions, shows that she has diligently
followed up on the tough questions with the Interim City Manager/Executive Director
and that she has pushed to have important questions answered; having said that, with
the vote this evening, the MOEA may not be the plan the City ultimately wants at
Alameda Point; staff has made some assumptions on financial and environmental
impacts; the historic resources group has made some findings that are part of the
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eligibility of being listed in the National Registry; doing nothing is not a good option; the
issue is not really about SunCal in her mind; that she thinks of this as an EIR that
should look at the bookends of a project; the EIR should look at doing nothing and doing
the ultimate, which is the MOEA being considered this evening; that she thinks the EIR
needs to analyze the full range of impacts, and then decide whether the City can afford
to pay for the impacts and whether there is some threshold with respect to profit
sharing; that she thinks the EIR is the most open, transparent, and fair process, which is
what she is trying to underscore in terms of transparency and openness when it comes
to communications with the community; she will be abstaining from the vote for said
reasons.
Councilmember/Board Member/Commissioner Gilmore stated that the transit plan is
one of the most important things to her; everyone would suffer with an unsuccessful
transit plan; that she is intrigued by the transit plan and she would like to see an EIR go
forward and evaluate the transit plan and impacts; that she has problems with the
financials; Alameda Point Community Partners (APCP) wanted a 25% IRR; that she
voted down the 25% IRR because 25% seemed high and was something that the City
and developer should have gone back to the drawing board to flush out before going
down the path to a DDA; the financial assurances and IRR give her pause.
Councilmember/Board Member/Commissioner Matarrese stated in addition to traffic,
another concern is the Albuquerque bankruptcy and how the City would protect itself
from becoming another Albuquerque; that he does not think the City can protect itself;
questioned whether the City wants to do business with a land investor; that he would
like the process to be open and get the best deal for Alameda; the
Councilmembers/Board Members/Commissioners have a lot of experience and can do
better.
On the call for the question, the motion carried by a roll call vote: Councilmembers
Gilmore: Aye; Matarrese: Aye; Tam: Abstain; Vice Mayor deHaan: Aye; and Mayor
Johnson: Aye. Ayes: 4. Abstentions: 1.
ADJOURNMENT
There being no further business, Mayor/Chair Johnson adjourned the meeting at 1:09
a.m.
Respectfully submitted,
Lara Weisiger, City Clerk
Secretary, CIC
The agenda for this meeting was posted in accordance with the Brown Act.
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