Rent Increase Survey

Have you submitted your latest rent increase data to the rent increase survey?

SunCal Files for Bankruptcy in New Mexico As They Negotiate With the City of Alameda

This week news broke from Albuquerque, New Mexico, that SunCal’s partnership with DE Shaw on a massive land development project there has filed for bankruptcy. SunCal has also indicated they intend to keep negotiating with the City of Alameda over Alameda Point.

Bankruptcy court documents show that the Board of Directors of Westland HoldCo, Inc., the managing general partner of Westland DevCo, LP, the partnership between DE Shaw and SunCal, resolved on December 23, 2009, to initiate Chapter 11 bankruptcy proceedings for the partnership, even as SunCal campaigned for Measure B here in Alameda. Court records show that DE Shaw owns 92.5% of the partnership, and SunCal 7.5% and that the partnership’s estimated debts are between $100 million and $500 million.

SunCal had not responded to a request for comment by press time.

Last night, Alameda City Council was scheduled to have an update from City staff on negotiations with SunCal. In the City Council packet was a one page summary of recent events, including an item reading, in part, “SunCal indicated it intends to negotiation a DDA/DA provision that provides the Master Developer an option to apply for a density bonus that will permit the land uses, units and density similar to the Calthorpe Plan contained in Measure B.”

The summary also indicated they need more time to review SunCal’s alternative plan for Alameda Point, that could potentially provide for over 5,000 homes at Alameda Point, with a density bonus.

Suncal Westco Albuqeurque Bk

5 comments to SunCal Files for Bankruptcy in New Mexico As They Negotiate With the City of Alameda

  • Barb

    Remember the story in which the scorpion stings, and thereby kills the good turtle who graciously agreed to carry it across the river to the other side? The sting causes the scorpion to drown. The scorpion asks in typical blame shifting, “What did you expect? I am what I am.”

    Does anyone doubt that SUNCAL is going to do the same to keep its ugly fangs in Alameda to extend the ENA?

    It is a shame that the ENA did not include an escape clause/condition that precluded any SUNCAL bankruptcy or otherwise SUNCAL initiated litigation, including that by 3rd parties funded by SUNCAL, from extending the ENA. Based on SUNCAL’s history that would have been a prudent approach that a municipality interested in having a real project completed in a timely fashion by a competent developer could have used. Or that costs and fees of defending such nonsense are paid for by bond posted up front by the developer. Then if the developer didn’t perform, Alameda could have at least pursued the bond.

    Instead we have SUNCAL which has a track record of drowning many of the cities to which comes while making an erstaz offer to carry it across the river. All the while dealing itself cards to keep the turtle embogged in quicksand, while SUNCAL counts what is left of its money in IRVINE and looks for more turtles elsewhere.

  • Since most of the city officials who provided SunCal this opportunity in Alameda are running for elective office, we all have an excellent opportunity of our own: Hold them accountable. These are the same people who used redevelopment funds diverted from our schools to build a parking garage which sits empty most hours of the day and loses money, and now say they support an upcoming huge new school parcel tax to make up for such short-sightedness on their parts.

    But as I say, accountability, a rather simple form of public justice, is ours to exercise at the ballot. Mayor Bev, former councilman Daysog, current council members Matarrese and ??? (so difficult to keep straight which ones are running and which ones have decided they can “better serve the citizens of Alameda by staying where they are”)…we must ask all of them to justify their past decisions and why, exactly, we should support their continued careers in government.

    Dennis Green

  • Barb

    Did the scorpion tell us up front that “I am what I am?”

    Very hard to believe anyone, especially one running for elected office, would actually tell the truth. What justification could there possibly be when 85% plus indicate that the end result is unjustifiable? How can the formerly unpalatable plan be made to go down as anything but swill? If no one steps up to the plate, we are dooomed by default to re-elect disengenuous officials that could care less what 85% of the voters think. And think that some sort of sweet talk will make SUNCAL’s medicine go down. And if they are elected, it will prove their point. The 85% don’t really matter if you push long enough and hard enough, the 14% may win out eventually.

    Nothing proposed will ameliorate the exacerbations of traffic, noise, tax expense and general malaise that will come with dealing with an entity with SUNCAL’s dismal record. Nothing proposed comes close to living within Alameda’s physical limitations.

    It is unfortunate that we did not have elected officials at the state level (or those at the local level who communicated with our state officials) who actually understood that they represented an island in the SFBAY which depends on Oakland or the ferry for all egress/ingress to within our boundaries. Catalina has serious trade-offs in the state codes, for precisely that reason. Alameda has been so seriously lacking in competent officials at all levels, we are doomed to be included with the rest of the requirements imposed by the State on cities that have adjacent interstate higway access. So make way for the Scorpions.

  • Vania

    The part I found most interesting in the bankruptcy court documents posted online, is that this DE Shaw – SunCal Albuquerque entity has, according to their Chief Lawyer Bruce Cook, failed to pay $6,400,000 in unsecured creditors, many of whom are listed on that “20 biggest unsecured creditors list”. The companies on that list are ordinary trade creditors, consultants and contractors.

    It looks to me that SunCal has not been telling the truth, in its press releases, about why the project is in foreclosure in Albuquerque. SunCal’s P.R. guys said, in essence, our mortgage lender is being mean and not extending the due date of our loan. Apparently, they have another problem: Cash flow from the two D.E. Shaw entities who were supposed to be providing the capital for this project.

    It looks like more of the same, in terms of what happened to SunCal in the Lehman Brothers related bankruptcies around the state. SunCal kept hiring people to do work, while ultimately realizing that their money partner, before Lehman and now D.E. Shaw, were not going to come up with the cash to pay the bills.

    This leads me to two conclusions:

    (1) Why is any sane engineering/planning/design consultant working for SunCal without getting 100% cash up front?

    (2) Why should Alameda’s employees or City Council members believe that D.E. Shaw entities are the Daddy War Bucks of finance for the Alameda project, willing to supply “all the money which is needed to get the public amenities built”.

    Just do some Google searches on San Clemente and SunCal, and you’ll see the horrible problems that city is having getting major roads which were torn up by SunCal completed, after Lehman stiffed them. Apparently the same problem exists with SunCal and a big road in Palmdale.

    In my humble opinion, Alameda’s City Council was profoundly stupid in entering into this Exclusive Negotiating Agreement with SunCal in the first place. Now let’s see if some competent lawyering can get Alameda out of this agreement…because if it can’t, then I expect that when SunCal doesn’t get their way on concessions from Alameda officials, they will just have a temper fit and run off to bankruptcy court, and try to use the bankruptcy judge’s power to get what they want.

    Let’s just see if Alameda’s City Council has the spine to stand up to D.E. Shaw and SunCal, having seen what is now 31 bankruptcies playing out on the same scenario.

  • Vania

    Some feedback from the New Mexico elected official who led the opposition to what Californians would call “redevelopment financing” or “tax increment financing” for the SunCal/DE Shaw project in Albuquerque:

    And only small progress on Lehman/SunCal’s failed San Clemente project. See:

  • ,
  • ,
  • ,
  • ,
  • ,