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Interim City Manager Ann Marie Gallant Recommends that City Council Deny SunCal’s Requests

In a City staff report to be presented to Alameda City Council on Tuesday evening, Interim City Manager Ann Marie Gallant recommends that Council deny SunCal’s requests to extend their exclusive negotiating agreement (ENA) with the City for two years, and to retract the notice of default the City sent to SunCal last week.

In the report, Gallant explains that “Given the decisive defeat of the [Measure B] Initiative at the polls, SunCal’s pending default under the ENA, and concerns regarding other SunCal development projects in bankruptcy or subject to foreclosure proceedings, circumstances to not presently exist under which an ENA extension should be granted.”

The report goes on to recommend that City Council deny both of SunCal’s requests, opening the door for City Council to terminate the ENA in early March, should SunCal not cure the default.

1 comment to Interim City Manager Ann Marie Gallant Recommends that City Council Deny SunCal’s Requests

  • localyokel

    Here’s a comment from the Alameda Journal (following the article on the default notice), which says essentially that the city is trying to preserve its rights in the event of a SunCal bankruptcy.

    “The various Alameda blogs, websites and local papers have been filled with outrage, speculation, defensiveness and outright silly comments on this Notice of Default.

    So let’s cut to the chase. This Notice of Default letter was written by lawyers for the City of Alameda, to be ready by lawyers for the SunCal entity which is the party to the exclusive right to negotiate contract to buy Alameda Point. The Notice of Default is worded in a way that would make to a bankruptcy court judge, who sees these sorts of notices all the time.


    The reason the City of Alameda sent the letter is crystal clear to lawyers who have any familiarity with bankruptcy. When a contract very important to a company is about to be canceled, the company can file a Chapter 11 case to prevent that contract cancellation, as long as no formal Notice of Default has been served by the other party to the contract. However, if a Notice of Default has been served, and the alleged default is a non-monetary default, especially one which has a stated deadline for performance by the debtor, bankruptcy case law makes it very hard for the Bankruptcy Court judge to force the not-bankrupt party to the contract to accept a late cure of a non-monetary default.


    It looks to me like the City Attorney and Acting City Manager of Alameda are getting very good advice from bankruptcy specialist lawyers. What exactly the Alameda City Council members understand, from closed session discussions of what SunCal can do in court, is open to great interpretation. In my experience at least 3/5ths of all city council members across the state are too unsophisticated in legal matters, or too unfocused, or just too plain dumb, to understand complicated legal issues which are explained to them in closed session.

    So my conclusion, as to 2 out of the 5 city council members from Alameda is that they should shut up, because they are displaying their ignorance, let alone their self-promoting and self-serving motivations rather than any interest in discharging their fiduciary duty to the City of Alameda and its taxpayers.

    Never heard of a fiduciary duty to your city and the taxpayers ladies? Perhaps you should phone Patrick Fitzgerald, the Deputy U.S. Attorney who is prosecuting ex-Illinois Governor Blagojevich in Chicago. I am sure Mr. Fitzgerald could find the time to explain to you dimbulbs the perilous path you follow when you disclose what you think occurred in closed City Council sessions, or you leak closed session information to your friends at development companies.

    Remember that there were two very tasteful ladies, a Mormon mother of 5 named Erin Kenney, and a kindly grandmother of 3 named Mary Kincaid Chauncey, who as Clark County, Nevada Commissioners (aka Board of Supervisors members) spent approximately 3 years in Federal Prisons because they used their elected positions to help their “friends in the business community” and received very nominal favors in return for that help.”