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SunCal Flailing in Wake of Measure B Defeat

Tuesday night’s City Council discussion over SunCal’s requests to the City of an extension of their exclusive negotiation agreement (ENA) for Alameda Point, and for the Council to veto the Interim City Manager’s notice of default on the ENA, turned out to be a non-event as SunCal didn’t show for the meeting, and by the prior Friday afternoon, had sent formal signed letters to the City retracting their request for a retraction of the default, and for an extension.

At the end of January, perhaps sensing defeat at the polls on February 2nd, SunCal had asked the City of Alameda for a two-year extension to their agreement to negotiate with the City for a plan for Alameda Point. On February 4th, after Measure B was defeated at the ballot box, the Interim City Manager, Ann Marie Gallant, sent SunCal notice that they have defaulted on the ENA by providing neither a voter-approved plan that includes the necessary changes to local laws, nor an alternate plan that complies with existing laws.

On February 6th, SunCal’s Pat Keliher evidently sent an e-mail to the press – but not to City Hall – making accusations against the Interim City Manager that SunCal would not substantiate to Action Alameda News on request, and asking the City to retract the Notice of Default (NOD).

Subsequent to that, the Interim City Manager put an item on the agenda for Tuesday’s City Council session, giving Council a chance to extend the ENA per SunCal’s request, and overrule the Interim City Manager on the NOD.

In the interim, there apparently was a flurry of e-mails from SunCal to the City, asking them to remove the request-to-retract and the ENA extension item from Tuesday’s meeting. Those e-mails culminated in two signed letters on SunCal letterhead from Pat Keliher, dated Friday, February 12 – one business day before the Council meeting – wherein Mr. Keliher wrote “We respectfully withdraw our request that Alameda ‘consider and approve an Addendum to the Exclusive Negotiation Agreeement (ENA) between SunCal and Alameda requesting modification to certain terms including extending the term of the ENA to the July 20, 2012’, which is…on the agenda for the February 16, 2010” meeting.

However, that same letter went on to say “We continue to request that Alameda retract the notice of default sent by Alameda regarding SunCal’s performance under the ENA…We will be transmitting a formal request for retraction prior to that meeting.”

A second letter from SunCal, instead of including a formal request to retract the notice of default, instead asked the City to withdraw the item from the agenda, including the notice of default. SunCal’s Pat Keliher concluded the letter with “In the meantime, we would appreciate the opportunity to discuss the issues raised in the NOD at your earliest convenience.” Consequently when City Council got to the agenda item on Tuesday evening, there was nothing to do, and public speakers who had filed speaker slips had either left or had little to say.

In any event, it’s not clear how SunCal plans to cure the default, or if they can cure it, by the March 8th. It appears that they have not spent any time preparing a base Measure A compliant plan which might cure the default and open the door for them to expand on such a plan using the density-bonus law, which they referenced in their January 14th alternative plan submission.

If the default is not cured by March 8th, City Council will have the opportunity to vote to terminate negotiations with SunCal.

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