Ohhh snap!

So I had promised myself that I wasn’t going to write about Alameda Point until tomorrow, because even though news about the Interim City Manager sending out a Notice of Default to SunCal about their Optional Entitlement Application (OEA) was very interesting news, it could wait given that the Planning Board meeting is tonight and there is a fairly interesting, albeit small, item of interest.

So for those who have not read the Notice of Default (Michelle Ellson has a copy) it essentially says that SunCal’s OEA is not valid because it has to Measure A compliant according to the Exclusive Negotiating Agreement.   The ICM uses some fairly reaching arguments to come to that decision too.   Recall that this is the woman who insisted that the City’s Election Reports on Measure B only discuss what was included in the body of the language itself and not the “intent” of the Developer or even other documents that were confidential due to the ENA but that she had review previously.

Now, she is claiming, it’s all about the intent of what the City wanted in the ENA because she knows as well as anyone else that the specific requirement that the OEA be Measure A compliant is not within the “four corners” of the ENA contract.    She suggests in her letter that:

As it was expected by all that an election would be held in November 2009, the Optional Entitlement Application was anticipated as a safeguard so that should the Ballot Initiative fail, SunCal could then submit a Measure A compliant plan by January 15, 2010.

Here’s the thing, while it very well may have been the intent that was not what was written in to the ENA.   The ENA is fairly clear on what the OEA can look like and there is no provision that the OEA must be Measure A compliant.   Go ahead and look through the ENA, I’ll wait.   Just to give you some guidance the OEA section begins here, but refers back to this section for under Entitlement Application as to the form of the OEA.

Even more puzzling is the news that at least one of the City Councilmembers was not made aware that the NOD was going to be sent out meaning that there was not a vote or discussion on the matter, which would appear to suggest that the ICM is acting rather unilaterally on this issue.    I wasn’t around during the Jim Flint as City Manager years but I think this was one of the real big critiques of Jim Flint.

In response to the ICM’s letter, SunCal released its own response:

Dear Mayor and City Council Members,

We were shocked that we received a notice of default on February 4, 2010 for the Optional Entitlement Application (OEA) that we submitted on January 14, 2010 with the full knowledge of the Interim City Manager. The notice is littered with inaccurate and misleading statements. Moreover, the legal argument for determining the default is specious and relies on alleged requirements that simply do not exist in the ENA.

For example, there is no requirement in the ENA that SunCal submit a Measure A compliant plan as is alleged in the NOD. In fact, that would be counter to the master plan and business plan accepted by the City, which has been the basis of our negotiations for two years. On numerous occasions, the Interim City Manager maintains that a Measure A compliant plan is not financially feasible. At several of our meetings, she has frequently sought additional residential and commercial densities in excess of the OEA plan, rather than a reduction in density. The Notice of Default alleges obligations that do not exist in the ENA when it states that a density bonus application was a required submittal to meet a Mandatory Milestone, nor is it true when it states the plan submitted in the OEA cannot conform to a density bonus approach, when the City Council can make appropriate findings during the normal entitlement process.

Moreover, we were even more surprised and disturbed to see that these specious legal claims used to determine the non-existent default, were the subject of a City-issued press release. It is simply bad form to deliver this notice of default as a press strategy and we do not understand why the City desires to create public controversy at every step of this process, rather than in working together in a mutually beneficial manner to implement a financial and environmentally viable plan for Alameda Point. While we are preparing a more thorough response to the Notice of Default, we are compelled to respond immediately because of the City’s erroneous press release.

Following Tuesday’s February 2, 2010 election, SunCal has become acutely aware that the community’s desire for a better future for Alameda Point must follow a more traditional development process. We want to respect the community’s desire, and will take our lead from the City Council. In accordance with the ENA, we are actively pursuing that vision and are eager to work with the City Council and the community of Alameda in good faith to ensure the future of Alameda Point and the City is secured.

As clearly noted in the OEA submittal, the Plan can be entitled either by City Council decision to place a charter amendment on the ballot or by use of a density bonus. Rather than pre-determine the course the City would choose to take, we assumed that the City would work with us in good faith to craft the plan in a manner that met the City’s preferred goals. In the absence of an ulterior motive, the proper way to handle this matter would have been to advise us through the planning department of the City’s preferences and to advise us of additional submittals that might be required to conform to the newly adopted density bonus ordinance, if that were the City’s preference.

While we remain committed to working with the City Council and the community of Alameda in good faith, the City’s actions over the last two days raise questions about whether it shares this commitment. As a result, we must begin to doubt the City’s desire to ensure that the vision for Alameda Point is realized in a manner consistent with the City’s responsibilities under the ENA, despite the numerous public statements to the contrary.

SunCal has, and is, currently expending significant financial and staff resources on the preparation of an Environmental Impact Report, which was approved by the City Council last October by a unanimous vote. We are continuing to perform under the terms of the ENA.

Unfortunately, the use of City press releases for damaging unsubstantiated claims is becoming a major distraction and obstacle to the success of our mutual Alameda Point effort.

We respectfully request that you withdraw this notice of default and that we work collaboratively on a plan that is best for the City of Alameda.

Sincerely,

Pat Keliher
SunCal Companies

Here are some highlights.   I’m sure that some folks would be shocked to learn:

On numerous occasions, the Interim City Manager maintains that a Measure A compliant plan is not financially feasible. At several of our meetings, she has frequently sought additional residential and commercial densities in excess of the OEA plan, rather than a reduction in density.

After all, I’m positive that some folks have been completely rah rah ICM because they believed her to be a protector of Measure A.   It must be enlightening to learn that not only is she not a Measure A lover, she would have rather seen a land use plan exceed the residential and commercial density (aka more stuff) out at Alameda Point.

And this:

Moreover, we were even more surprised and disturbed to see that these specious legal claims used to determine the non-existent default, were the subject of a City-issued press release. It is simply bad form to deliver this notice of default as a press strategy and we do not understand why the City desires to create public controversy at every step of this process, rather than in working together in a mutually beneficial manner to implement a financial and environmentally viable plan for Alameda Point.

Along with this:

While we remain committed to working with the City Council and the community of Alameda in good faith, the City’s actions over the last two days raise questions about whether it shares this commitment. As a result, we must begin to doubt the City’s desire to ensure that the vision for Alameda Point is realized in a manner consistent with the City’s responsibilities under the ENA, despite the numerous public statements to the contrary.

Hints to SunCal beginning to take the proverbial gloves off.    If the ICM keeps up with these sorts of actions, SunCal is going to have a long long list of complaints to keep the City in a whole heap of legal troubles for a while.   The City Council needs to have a heart to heart with the ICM to try to figure out what her end goal is before the City is exposed to even more legal liability.

While I’m sure that a lot of people are happy that the ICM was pivotal in the defeat of Measure B, we can’t pretend that actions that smell like bad faith negotiating isn’t being documented by SunCal and its lawyers in the case that the ENA negotiations fall apart.