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Alameda Councilmember Lena Tam Says SunCal CEO Bruce Elieff’s Legal Problems Are Unrelated to Alameda Point

In an e-mail discussion with Action Alameda News, Alameda City Councilmember Lena Tam said that a legal claim by Gray 1 CPB LLC of San Diego against SunCal CEO Bruce Elieff and SCC Acquisitions, Inc. will have no impact on SunCal’s efforts to develop Alameda Point. However, archived City documents suggest otherwise.

Previously, Action Alameda News reported that a real estate investor fund called Gray 1 CPB LLC of San Diego had obtained a “pre-judgment writ of attachment” to the tune of $7.9 million against SunCal Acquisitions, Inc. and Bruce Elieff’s, SunCal’s CEO, property; subject to a pending court hearing on the matter, Gray 1 CPB could begin seizing SunCal and Bruce Elieff assets to satisfy the judgment.

Action Alameda News asked City of Alameda officials if this could impact the City’s negotiations with SunCal over Alameda Point – in the event that a scheduled hearing on the matter be ruled in Gray 1 CPB’s favor, would the City have to begin negotiating with Gray 1 CPB LLC, or Ayres Advisors, a firm linked to Gray 1? SunCal is secretive about the complex relationships between the many different entities in their various real estate projects.

Councilmember Lena Tam responded:

The timing of the financing at Alameda Point is fortuitous, as it is not tied to Lehman Brothers, which went bankrupt and caused a domino effect on several major projects throughout the nation. Notably, Lennar LLC was the most heavily impacted with Lehman’s bankruptcy. The ENA [Exclusive Negotiation Agreement] with Suncal is between the City of Alameda and SCC Alameda. The company is owned by Cal Land which is a partnership between DE Shaw and Steve Elieff. None of the issues you cited in your e-mail have any relevance or effect on Alameda Point.

Councilmember Lena Tam

SunCal Measure B Mailer with Councilmember Lena Tam's Picture

Earlier this year, Ms. Tam lent her name and picture to SunCal campaign materials in support of SunCal’s Measure B, which was defeated at the polls on February 2nd with 85% of voters rejecting SunCal’s initiative. Ms. Tam did not respond to a request to clarify whether this was her own opinion, or that of the City Attorney. (Steve Elieff is Bruce Elieff’s brother; both are sons of Boris Elieff, who founded SunCal.)

Subsequent to this exchange, Action Alameda News found a City staff report to Alameda City Council from October, 2008,

In that report, which included a recommendation to allow SunCal bring DE Shaw into the Alameda Point deal, then-City Manager Debra Kurita described the joint venture between DE Shaw and SunCal as being realized through “WM Development Group, LLC, a wholly owned affiliate of SunCal.”

“The Developer is proposing to transfer ownership of SCC Alameda Point LLC to a new entity called Cal Land Venture, LLC (Cal Land). Cal Land is a joint venture of D. E. Shaw Real Estate Portfolios 20, LLC (D. E. Shaw) and WM Development Group, LLC, a wholly owned affiliate of SunCal (SunCal).”

Alameda City Council approved the action in 2008. Action Alameda News asked Ms. Tam to clarify whether or not the language “wholly owned affiliate of SunCal” meant that SCC Alameda Point LLC is in fact related to SCC Acquisitions, Inc. That point is important, because if Gray 1 CPB LLC seizes SCC Acquisitions, Inc., they would have control over an interest in SCC Alameda Point, through WM Development Group.

Additionally, in a July, 2009 sworn declaration in United States Bankruptcy Court, pertaining to several bankrupt SunCal projects, SunCal CEO Bruce Elieff wrote “I am CEO of SCC Acquisitions, Inc. or “SCC.” SCC is the parent entity in an integrated network of companies that operate under the common dba [doing business as] “the SunCal Companies” or “SunCal,” and is a direct or indirect owner of all of the twenty-six administratively-consolidated Debtors.”

Action Alameda News also asked Ms. Tam if she could produce documents proving the separation between the Alameda Point entity and the assets subject to seizure by Gray 1 CPB LLC.

As of press time, Ms. Tam had not responded to either request.

Action Alameda News also e-mailed SunCal Chief Operating Officer Frank Faye, who, in March, stood before Alameda City Council and pledged greater transparency on behalf of SunCal. We asked Mr. Faye if SunCal could share documents showing the ownership structure of SCC Alameda Point LLC up through the SunCal hierarchy to conclusively show whether or not SCC Acquisitions, Inc. has an ownership interest, however indirectly, in the Alameda Point entity.

Mr. Faye referred Action Alameda News to SunCal Senior Vice-President for Public Affairs, David Soyka; as of press time, Mr. Soyka had not responded.

Action Alameda News also made a public records request to the City of Alameda for a copy of the operating agreements for SCC Alameda Point LLC and for WM Development Group LLC, the joint SunCal/DE Shaw entity that owns SCC Alameda Point LLC.

As of press time, the City of Alameda had not responded.

9 comments to Alameda Councilmember Lena Tam Says SunCal CEO Bruce Elieff’s Legal Problems Are Unrelated to Alameda Point

  • Barb

    Councilmember Lena Tam gives new meaning to the old saying that with friends like her, Alameda doesn’t need any enemies. Her ignorance and outright lack of research on the issues surrounding SUNCAL is startling. To think she has anything to do with EBMUD does not bode well for future water supplies either.

  • propubliceducation

    Councilmember Lena Tam was also the architect of pushing Measure WW funds to go to building the new Boys and Girls Club. Yet, the top 3 reasons people voted for WW were to “to preserve the environment,” “support parks,” and “use parks.” http://www.ebparks.org/files/Measure_WW_Exit_Poll_Final_APPROVED.pdf
    “Building a new Boys and Girls Club” was not mentioned on the approved ballot language nor one reasons people voted for WW.

  • The state of municipal bonds. Presumably development at Alameda Point would require big bond issues. Remember Peter Calthorpe’s grand vision for a PRT system?

    http://www.smartmoney.com/investing/bonds/muni-bonds-derailed/

  • Incredulous

    Why not force the City of Alameda to produce for public inspection, under the California Public Records Act, the limited liability company operating agreement and the audited financial statement of D. E. Shaw Real Estate Portfolios 20, LLC, which is the entity supposed to be providing the developer’s share of the funding to develop Alameda Point?

    It would be interesting to see how much money the investors in D. E. Shaw Real Estate Portfolios 20, LLC are obligated to “put into the pot” and not withdraw from that entity, even if the going gets rough. (Remember that Lehman and its pension fund investors were allowed to pull their money out of Oak Knoll as soon the going got rough for that project.)

    Similarly, it would be interesting to see the limited liability company operating agreement for Cal Land Venture, LLC, a Delaware limited liability company, to learn how much money D. E. Shaw Real Estate Portfolios 20, LLC is obligated to “put into the pot”, and not withdraw, from Cal Land Venture, LLC, which the city staff says will be the “buyer” of the Alameda Point land from the city. It would be interesting to see the financial statements and bank account records of Cal Land Venture, LLC to see if the investors’ money is there already.

    Given the history of failed SunCal projects in at least 15 California cities, and in Albuquerque, it is ludicrous for Councilwoman Lena Tam, or any other Alameda City Council member to operate with D.E. Shaw and SunCal on this “trust me” basis.

    The reason I make these points is that the Delaware bankruptcy court records previously posted by Action Alameda show that with respect to its 55,000 acre “SunCal” project in Albuquerque, D. E. Shaw Real Estate Portfolios 1, LLC DID NOT provide all of the money necessary to develop the project. Instead, they got a huge mortgage from Barclays Capital of England, bought the land and then simply walked away from the project, economically, when the State of New Mexico would not redevelopment type financing for the infrastructure.

    The “money man” with respect to Alameda Point is not the grotesquely financially challenged Bruce Elieff, but instead Mr. George Rizk who is the head Managing Director of Real Estate for the D.E. Shaw companies. If Mr. Rizk is not at the bargaining table with the City of Alameda, producing bank account records and financial statements for D. E. Shaw Real Estate Portfolios 20, LLC, all that the City of Alameda and its labor unions have is hot air.

    It should be noted that the Delaware bankruptcy petition for the D.E. Shaw/SunCal entity contains a corporate resolution requiring that Mr. Rizk, and only Mr. Rizk, personally sign the bankruptcy petition. Apparently, he refused to do so, because the bankruptcy petition ended up being signed by SunCal’s in-house lawyer Bruce Cook. That failure of Mr. Rizk to sign the bankruptcy petition calls into doubt the basic question of whether there is any real on-going, new development relationship between D.E. Shaw and SunCal at all. The only proof of such an ongoing relationship is for the City of Alameda to get Mr. George Rizk, or Mr. D. E. Shaw himself at the bargaining table.

    If Mr. Rizk, or Mr. D. E. Shaw, won’t show up in Alameda, and personally negotiate with the City staff, and prove that they have already irrevocably put a whole lot of their money into bank accounts for the Alameda Point development entity, Alamedans should assume that claims of D.E. Shaw’s and his companies continued funding of SunCal projects is mere “chimera” created by SunCal’s desperate employees, Frank Faye and Pat Keliher.

    In plain English, “chimera” means bull sh*t.

    When you read the court files for all of the insolvent SunCal related entities, you see that Faye and Keliher are nobodies, in terms of having the power to put money into the projects.

    And in plain English, Lena Tam is either a moron or a typical bought-and-paid-for politician. Take your pick.

  • In the past, SunCal has deemed ‘confidential’ documents such as the Operating Agreements, claiming an exception under the public records act.

  • Docket information from the orange county court suggests that the hearing date for Gray 1 CPB v. SCC Acquisitions, Inc. and Bruce Elieff has been moved up from June 1 to…. today.

    Case # 30-2008-00112660

    529

    THE JURY TRIAL IS SCHEDULED FOR 05/17/2010 AT 09:00 AM IN DEPARTMENT C19. 05/10/2010

    527

    JURY TRIAL SCHEDULED FOR 05/17/2010 AT 09:00:00 AM IN C19 AT CENTRAL JUSTICE CENTER. 05/10/2010

    525
    MINUTES FINALIZED FOR JURY TRIAL 05/07/2010 09:00:00 AM. 05/07/2010 1

    524

    JURY TRIAL TRAILED TO 06/01/2010 AT 09:00 AM IN C19. 05/07/2010

  • Barb

    Why would anyone buy and pay for a moron? Oh either or. Sorry I missed your point I was laughing so hard. I don’t think the labels are mutually exclusive. I think you just pay less when you buy the moron.

  • Lennar Follower

    I don’t know where Councilwoman Tam gets her information: “Notably, Lennar LLC was the most heavily impacted with Lehman’s bankruptcy.”

    That information would be big news to Lennar.

    You can run the words Lennar through the Lehman Brothers bankruptcy court filings word search and the website below, and surprise, surprise, Lehman’s name does not appear in any of the Creditors Claims in the case, or in any court documents filed in the case.

    Search creditors claims against Lehman:

    http://chapter11.epiqsystems.com/LBH/claim/SearchClaims.aspx?rc=1&DMWin=42c729b1-5d30-4373-aae2-e083f881d8e3

    Search Lehman Brothers bankruptcy court documents:

    http://chapter11.epiqsystems.com/LBH/docket/Default.aspx?rc=1&DMWin=42c729b1-5d30-4373-aae2-e083f881d8e3

  • Jayne Smythe

    Sounds like some kinda weird shell game, or at least Rizk-y business! People been saying for too long now that the city needs to stop fiddling with this shaky outfit. These LLCs aren’t as airtight, I guess, as the boys and girls in Legal would have us all believe.

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