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Halloween Horror for SunCal on Alameda Point Revitalization Initiative

Evidently, Alameda City Councilmember Frank Matarresse announced today his opposition to SunCal’s Alameda Point Revitalization Initiative, primarily over financial concerns. This deals a serious blow to SunCal who was hoping to get their initiative certified for the ballot at next week’s November 3rd City Council meeting. Given the wide-spread evidence of signature-fraud, and Alameda Mayor Beverly Johnson, Alameda Vice-Mayor Doug deHaan and Matarresse declaring their opposition, SunCal may be one-vote shy of certification next week.

7 comments to Halloween Horror for SunCal on Alameda Point Revitalization Initiative

  • barb

    I think putting it on the ballot may be a ministerial act that could subject the City to liability and a court action if not done. Any court action then extends the exclusive negotiating agreement.

  • Alan

    Barb is wrong. There is a long history in California of city councils and boards of supervisors refusing to put initiatives on the ballot. There is also a long history of California Superior Court judges in charge of issuing writs of mandate refusing to order that initiatives be put on the ballot over the refusal of elected officials, on advice of counsel, to do so.

    Among the legion of reasons initiatives can be kept off the ballot: Internal inconsistency, unlawfully seeking to mandate decisions on matters which are administrative rather than legislative, unlawfully seeking to direct or forbid the expenditure of city/county funds, unlawfully seeking to impose or insulate parties from fees, assessments or taxes, initiative text inconsistent with state law or Constitution, initiative text inconsistent with General Plan. You name it, there’s an appellate case supporting keeping an initiative off the ballot for any number of reasons.

    So, the big questions are (1) Whether the City Attorney has advised the City Council whether any of the foregoing grounds to keep the initiative off the ballot have been found, and (2) Whether the majority of the City Council has the chutzpah to follow the City Attorney’s advice.

  • Thanks Alan for all your advice, sure wish you were part of our
    community. I have to say that this turn of events speaks voluumes
    about all of our hard work organizing the troops, our friends and
    neighbors and the hundreds of cups of coffee we perked and served
    and drank! Early on, like last January we brought together hundreds of people through brunches and street fairs and tabling etc. We read the many documents and published information about the details, and the word got around that this initiative was BAD for
    this island city. Somewhere a reporter did a story about the campaign and said something like this “this battle won’t be won in city hall, it’ll be won in the neighborhoods.”
    Looks like it’ll win in both arenas!

  • barb

    Alan: You assume two things that I did not. That the council had the “chutzpah” and that the “City Attorney’s advice” would allow them to keep it off. The third factor is that the ENA is kept alive by any litigation over the Initiative. My sense is that the City does not have either of the first 2, and the way things look, will not want to extend the ENA. Much as I would like to see it kept off, I see only the dark side, that SUNCAL will never willingly give up its potential stranglehold on our community.

  • barb

    P.S. If our ten member multi-million dollar City Attorneys’ staff didn’t find anything wrong before the Initiative was circulated, does it have the courage to say “we did a very poor job in preparing the City Attorneys’ summary of the initiative”?
    I can see the current $50 a meeting elected officials, who are currently campaigning for office, saying we were duped. How can the City Attorney back off now without a SUNCAL lawsuit, or argument that the City was not dealing in good faith?

    The only out I can see is if Alameda resident, District Attorney Nancy O’Malley, who was undoubtedly approached personally if she went outside the last year or so, says “Whoa.” After looking at the video of the fraudulent tactics, is there probable cause to believe misdemeanor voter fraud was perpetrated? If so, then if the DA or AG take action, how can that extend the ENA? I don’t think Judge Roesch (CEQA and writ judge in Alameda County) is going to allow anyone to benefit from their intentional criminal activity by extending the ENA.

    This will be very interesting to watch. I only hope to minimize the turmoil and division that SUNCAL has generated for our City. It came in under false pretenses, then chose to sidestep the entire development process to overturn Measure A. Such arrogance and greed amazes me. I cannot beleive that anyone still believes this kind of activity is good for the United States or the rest of the world. SUNCAL should be tarred and feathered.

  • Alan

    Barb:

    As far as I know, with local as opposed to state initiatives, there has never been a circumstance where a City Council or City Attorney has been able to keep an initiative from being circulated for signatures. That would require a preliminary injunction from a Superior Court judge, and most people who understand how judges think believe that because of free speech rights, a judge would never enjoin the circulation of an initiative petition.

    As a result, the time when a City Attorney acts to “keep a measure off the ballot” is by researching what is being circulated, and then giving closed session advice to the city council under the exception to the Brown Act (open meeting law) relating to discussion of potential litigation. The “potential litigation” being discussed is anti-initiative forces suing the city after a technically bad initiative is approved by the voters…but in reality the discussion also covers the grounds for keeping a technically bad initiative off the ballot.

    Generally, City Attorneys believe that the dollar cost in legal fees to a city is cheaper when you keep an initiative off the ballot, than the legal fees incurred when you let it go to a vote and then have to defend an attack by anti-initiative forces, because in reality as a city you are fighting both the anti-initiative forces who want to push the case to one extreme, and the pro-initiative forces who want to push the case to the other extreme. A pre-election challenge is a two party fight, in terms of running up attorneys fees, whereas a post-election challenge is a three party fight running up more attorneys fees for the city, because they have to respond to the pleadings from two adversaries.

    Having received the City Attorney’s candid legal advice, ultimately the decision to keep a technically deficient initiative off the ballot is a decision for the Alameda City Council. They have to decide, politically, whether it’s better to fight the pro-initiative forces before or after a vote by the voters.

    The power to enact initiatives by the vote exists in many states, and there are cases from many states, not just California, which support city councils keeping technically deficient initiatives off the ballot. Earlier this year, in Las Vegas, the very powerful Culinary Union tried to put an initiative on the ballot which would have forbidden the City of Las Vegas from building any expensive buildings without prior approval of the voters. That sort of initiative violated the “you can’t decide administrative matters through an initiative rule”, the City Council voted to keep the matter off the ballot. Both the trial court and the Nevada Supreme Court agreed that the initiative was fatally defective. Both sides in the case cited “keep the defective initiative off the ballot” cases from around the country. In Las Vegas, the very well funded, politically powerful Culinary Union, which had as its attorney Nevada’s “expert” on initiative law, quietly limped away, licking its wounds because they did not think carefully and exercise restraint in writing their self-serving initiative.

    So the bottom line is that the City Council in Alamada has the power to keep this initiative off the ballot if the City Attorney has found serious flaws in it, under California’s substantive initiative case law, some of which I listed in my first post.

    Yes, of course there’s a strong chance that SunCal would then go to court to get a court order that the initiative go on the ballot anyway. If the court issued such an order, the City could temporarily nullify the order by filing an appeal, because mandatory injunctions and writs are always stayed on appeal. As a result, the initiative would be “off the ballot” for several years, as long as the City Council did not cave in on its opposition to the initiative’s content because of its negative economic effects on the city’s budget.

    The City Council could also decide to put the initiative on the ballot, and hope that it is defeated. Individual Council members could campaign against the ballot measure.

    Then, if the initiative was approved anyway, the City Council could vote to not enforce it, because of its defects, again based on the City Attorney’s legal analysis of the defects. It would then be a toss up as to whether the City sued SunCal to obtain a court declaration to invalidate the initiative, or whether SunCal would sue the City for ignoring the initiative.

    As a third possibility, the initiative opponents would sue to invalidate the initiative on grounds like those I described above. In California, there is a long history of homebuilders suing to invalidate slow growth initiatives, so thanks to SunCal’s brothers in arms, there is a lot of case law to help initiative opponents, be they private or at City Hall, attack the initiative.

    Back in the day, when Lehman was funding SunCal projects, Lehman would essentially give SunCal a blank check in terms of filing litigation to intimidate public officials who got in the way of SunCal/Lehman projects.

    The practical question in the Alameda situation is just how tight a leash D. E. Shaw keeps on SunCal, in terms of attorneys fees spending. Does D. E. Shaw use a law firm, separate from SunCal’s law firm, to second guess what SunCal is doing? Some hedge funds, like Oak Tree, do just that. Others don’t. We’ll never know until we get to see how freely SunCal spends money on attorneys fees to defend its initiative.

    What we do know, for certain, is that SunCal’s owner, Bruce Elieff, filed a declaration under penalty of perjury in the Lehman/SunCal bankruptcy cases saying that Lehman’s breaches of contract forced SunCal to use up all of ITS OWN capital to stave off being sued by creditors who Lehman stiffed.

    In the bankruptcy court diles we saw that at the same time as Lehman totally cut off the money to SunCal, SunCal shifted gears in the fight against Lehman, from using top drawer super expensive real estate law specialists to using bankruptcy lawyers known to work for lower rates than the serious $850 per hour “hot dog” bankruptcy lawyers.

    As a result, unless D. E. Shaw is willing to go “all out” in paying top drawer lawyers to defend the Alameda initiative, we can be fairly certain that if SunCal has to fund the litigation by itself they will probably be using less well known and less expensive lawyers, simply because that seems to be all they can afford to defend themselves at this time. Less expensive lawyers can and often do win; however the identity of the initiative litigators for the D.E.Shaw/SunCal joint venture will tell us a whole lot about the extent to which D. E. Shaw is willing to risk several million dollars in attorneys fees, only to find out that the initiative is invalid.

  • John

    Alan wrote on Oct 27th: Among the legion of reasons initiatives can be kept off the ballot: Internal inconsistency, unlawfully seeking to mandate decisions on matters which are administrative rather than legislative, unlawfully seeking to direct or forbid the expenditure of city/county funds, unlawfully seeking to impose or insulate parties from fees, assessments or taxes, initiative text inconsistent with state law or Constitution, initiative text inconsistent with General Plan.

    I appreciate the above information and I have heard attorneys mention the same. I have found major violations of the State codes in the Initiative and would like to reference where in the law it is stated that an initiative can be kept off the ballot, if it is unlawful.
    Alan I would really appreciate if you could provide this reference so that I may be able to put this in my letter to City Council for this coming Tuesday. Thank you kindly. I will also ask Action Alameda to follow up to you with a copy of my letter.
    Thank you kindly.

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