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Voters Get to Decide on Alameda Point

Dear Editor,

Despite the will of the voters who overwhelmingly rejected Measure B, SunCal just won’t go away. They are now marketing themselves as “SCC Alameda Point LLC” because they know their image is tarnished in Alameda. Despite SunCal’s false front, the City of Alameda should face up to the facts and stop negotiating with SunCal. Forget all the glowing promises and pretty pictures, here’s the not so pretty reality.

SunCal…

• has 30 pending bankruptcies for its joint projects with Lehman;

• just attempted to file another bankruptcy for its joint project with D.E. Shaw in Albuquerque, which attempt was dismissed by a bankruptcy court, so now the lender on the project – which is Barclays Capital, not D.E. Shaw, SunCal’s supposed “financial savior” – is moving to foreclose on this project;

• gave away its huge project in San Juan Capistrano to the mortgage lender, thereby stiffing that city on bonded improvements promised to the city in return for development concessions;

• has had a multitude of foreclosures on its projects in Orange County and Kern County;

• is currently on trial in Orange County Superior Court for stiffing a bank on a $7.9 Million loan guarantee and has already had both its parent company’s and owner’s assets attached for non-payment on that guarantee; and

• has been sued in approximately 100 lawsuits by unpaid construction subcontractors.

What is more, in a recent response to a Public Records Act Request, the City of Alameda acknowledged that in the last 3 years the City, its Councilmembers and staff have not received any written communication whatsoever from the developer’s supposed financial backer, the secretive D.E. Shaw hedge fund in New York. Shaw is presumed to own 90% or more of SCC Alameda Point LLC, and without question is the real driver on this project yet the City has no communications from them.

In the real business world, as opposed to the world of planners and PR flaks, all of the foregoing shows that SunCal does not have the financial wherewithal to develop anything at Alameda Point and does not have a reliable partner in D.E. Shaw either. Green urban density projects take cash, which this developer does not have, cannot borrow, and can no longer obtain from New York investment banks, let alone ordinary commercial banks, large or small, doing business in California.

The “Alameda Point Plan” may please some people, but all of the facts above, concerning the pendency of more than $3 billion in claims against SunCal entities and their owner, shows that the City Council would be profoundly unwise to enter into any further contracts with SunCal/SCC Acquisitions, Inc., its subsidiaries, or any other entity associated with the owners.

We cannot afford to trust a nearly bankrupt developer or a secretive Wall Street hedge fund with our city’s future.

— Gretchen Lipow, Alameda

9 comments to Voters Get to Decide on Alameda Point

  • Barb

    What is the difference between a “nearly bankrupt developer” and a bankrupt developer? Who gets the money first? And how much? How could any one entrusted with a fiduciary duty towards, say its citizens, provide due diligence when researching or recommending to enter a contract with SUNCAL or DESHAW based on the foregoing facts as cited by Ms. Lipow?

  • Joise

    And yet … measure E supporters have no qualm in accepting a $20k check from SunCal.

  • Vania

    Yes, morally that $20,000 belonged to all of the subcontractors SunCal stiffed, by fraudulently inducing them to keep working on the Lehman/SunCal projects, including Oak Knoll in Alameda, well after SunCal’s senior management KNEW that Lehman was not going to provide funds for the work.

    That truth, about when SunCal knew Lehman had cut off the money, has been admitted, time and time again, by SunCal’s General Counsel, Bruce Cook, in his declarations under penalty of perjury filed with the Bankruptcy Courts in New York and Santa Ana.

    Now, SunCal is trying to fraudulently induce the City of Alameda into entering into a further contract by their ridiculous claims that they have the $1 Billion to build the infrastructure for their project.

  • Mike P

    The most terrifying thing that Ms. Lipow writes is that it would be profoundly unwise of the City Council to enter into future contracts with Suncal entities. The Council has proven time and time again that they are exactly that…profoundly unwise.

  • And yet, we the voters keep re-cycling these hacks. At least Mayor Bev failed in her bid for continued public “service” at the County level. But “Frank 4 Mare” goes on for a termed-out city councilman who gets it so wrong on Measure E, and continues to play footsie with SunCal in spite of voters overwhelming defeat of Measure B. They claim we loved the plan/hated the initiative, but that’s just post-disaster rationalizing.

    “Smart Growth,” High Density and In-fill advocates like John Knox-White, who also is spokesman for APlus and Measure E, just keep on being Stuck on Stupid. Forgive my French, but I’m losing patience with these clowns!

    D’Grrrrrreen

  • dlm

    Lehman had something like $600 BILLION in assets when it declared bankruptcy — very possibly less now, but still far more than SunCal, and Lehman is determined to get control of the SunCal projects. So far, Lehman is winning, hands down, in the Bankruptcy Court and appellate courts as well. SunCal’s plan to “emerge from bankruptcy” would necessitate eliminating Lehman as a creditor — wiping out their liens — and that doesn’t look very likely at this point. It’s far more likely that Lehman will roll right over SunCal.

    SunCal is hopelessly entangled in the Lehman bankruptcy, one way or the other, for some time to come, and their financial status will be desperate at best until the Lehman issues get resolved.

  • Anonymous

    Nothing but heartaches! And headaches! for anyone with whom SUNCAL does business.

  • Anonymous 2

    @anon, does it include the pro-measure E crowd who are now in bed with SunCal?

  • Anonymous

    Lie down with dogs and you get fleas. And I really like dogs!

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