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SunCal Withdraws Their Latest Request in the Wee Hours

In the wee hours yesterday morning, SunCal withdrew their request to the City of Alameda for a 60-day “tolling agreement” in association with their March 22nd deadline to provide an alternate development plan for Alameda Point that complies with City laws and SunCal’s Exclusive Negotiating Agreement (ENA) with the City.

In her presentation to Council, Deputy City Manager Jennifer Ott recommended that Council deny SunCal’s request.

Councilmember Lena Tam led off the questioning of staff with a question about whether or not the language of the ENA explicitly lists “Measure A” as one of the required compliance items for an alternate plan.

City Attorney Teresa Highsmith responded with, “I suspect that you are aware that there is no such term, having, I’m sure, read it yourself,” and went on to explain that although the ENA does not explicitly mention Measure A, the ENA does say that the alternate plan must be compliant with City law, and Measure A is part of the City’s laws, ergo, the alternate plan must be Measure A compliant.

Tam then asked for an interpretation of a specific element of the ENA, to which an exasperated City Attorney responded, “Councilmember Tam, you may have gotten your second wind on this agenda item, but I have not. It is nearly two in the morning, and this particular…with the question you’re asking me, would have been more appropriately asked in a prior agenda.”

Earlier this year, Councilmember Lena Tam lent her name and picture to SunCal mailers urging voters to support Measure B on February 2nd. Measure B was defeated with 85% of the vote against the measure.

After some discussion about the process by which City staff would evaluate any newly submitted plan, the Mayor called for public speakers. Ultimately, Frank Faye, SunCal CFO came to the podium and said, “If we were going to speak tonight, it needed to be from a position of decision making authority.” In the past, local SunCal Vice President of Operations Pat Keliher has typically addressed Council at the speaker’s podium.

Mr. Faye went on to tell Council that SunCal had negotiated a preliminary labor agreement with trade groups that had been opposed to Measure B, and that SunCal intended to submit an alternate plan by the March 22nd deadline, but with a “reservation letter” – SunCal disputes that they are in default of the ENA.

He also said, “I came here today to withdraw the request for the 60-day tolling, because your council has said to us ‘we want to see the plan.'” Faye concluded his remarks at about 2:15 a.m. and other public speakers followed him.

In related SunCal news, the City of San Clemente is making progress on getting roads built that SunCal had planned in their now-bankrupt SunCal Marblehead project. The City of San Clemente may also get some $600,000 in legal expenses they incurred in the fight to force Arch Insurance Company to pay-out on performance bonds which guaranteed completion of the project.

SunCal and Arch Insurance had fought the City of San Clemente’s suit, but last week, San Clemente and Arch Insurance filed a settlement agreement with the bankruptcy court that reimburses the City for legal expenses and paves the way for Arch Insurance – and not SunCal – to move forward on completing the work, which includes roadway improvements and the construction of “dry utilities.”

The work has been stalled since SunCal’s financial partner on the project, Lehman Brothers, filed for bankruptcy in September, 2008. SunCal and the City of San Clemente originally came to agreement on the planned improvements on June 21,2005, and SunCal began work in late 2005.

The case is 8:08-bk-17206-ES in United States Bankruptcy Court, Central District of California, Santa Ana Division.

3 comments to SunCal Withdraws Their Latest Request in the Wee Hours

  • Barb

    Can SUNCAL see the writing on the wall?
    It is interesting in view of the 85% plus vote against SUNCAL’s Measure that LENA TAM still has the tenancity to serve as SUNCAL’s lead person on our City Council. Why not establish a Council subcommittee with JOHNSON and TAM and two can go dine at SUNCAL’s expense and listen to dissipate SUNCAL’s remaining interest. Maybe they can get another illegal BEVJO ROBOcall to give voters thoughtful updates.

    I am still waiting for some explanation of how TAM’s sponsoring the Boys & Girls Club request for WW tax money, showed knowledge or understanding of how real government works. It jeopardizes all that the voters throughout Alameda county supported, by risking the EBRP District’t tax exempt status on the WW bonds, thus every other project. Passing the buck to the EBRPD to turn the project down is not my idea of leadership or helping the supporters of the Club who all meant well.

    It seems as if CITY Staff finally has to stand up for what will keep the City somewhat solvent, or see that they will lose their paying jobs, if the Council led by TAM, and JOHNSON tips the brink of bankruptcy. Is this the kind of “leadership” that Alameda needs to share with the rest of the County? It is in just as deep financial straits as the City, and has far more responsibilities to many more citizens.

  • Betty

    I was sadden when Ms Tam decided not to run for the Alameda County Supervisor postion. I was going to vote for her so hopefully we could get rid of her in Alameda. It’s interesting that both Tam and Young left the race and now we have BevJo in the running. It’s kind of fishy to me.
    David, I think back in the early stages of no on B, when you met Ms. Tam and a few of her friends on Park ST. You handed them a flyer regarding no on B. One of Ms. Tam’s friends tore up the paper and dropped it on the ground and just smiled at you. Who’s smiling now?

  • Anonymous

    I too was glad when TAM declared her abandonment of the City of Alameda. Don’t think the voters in the rest of the County would be enamoured of her at all. I think with WILMA CHAN back on board at the Board of Supervisors, Alameda the City, will be in much better hands than either JOHNSON or TAM. WILMA was so thoughtful and intelligent. Did not make snap decisions on issues, such that she was forced to ever exact a total reversal after publically sponsoring some entity like SUNCAL. Just a classy lady all around.

    I understand that Ms. TAM’s protegee ROB BONTA has thrown his hat in the ring for Council. Thus far his main qualifications appear being TAM’s campaign manager and avoiding taking a position on Measure B. Apparently this was in the hopes of not being taken down with the 85% plus voters who opposed it and TAM. I am not sure how TAM can expect to dedicate enough time to the Council if she has to spend all that time testifying as an expert witness to protect the water rights at EBMUD for SUNCAl or other development to use after we scrimp and save and ration. Apparently the City of Alameda is less deserving than the County of Alameda for her time.

    At any rate its lining up as though GILMORE/MATARESSE, TAM, and BONTA, could be the three votes to give SUNCAL every extension that it wants, and whatever it wants. Time for an Initiative to force realism on these opportunists and tell SUNCAL goodbye goodbye…. Was it BONTA that tore up the flyer?