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.
• 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