A week ahead of a key vote by Alameda City Council regarding continuing negotiations with SunCal over Alameda Point, an attorney for the developer sent a series of letters to the City of Alameda threatening to sue if the City doesn’t continue negotiations, and warning that “the damage to our client’s reputation and business is potentially great and far in excess of what the City treasury could sustain.”
SunCal is vying to consummate a 25-year long agreement to redevelop the former Naval Air Station Alameda, now called Alameda Point; the City of Alameda once estimated the project to be worth over $5 billion when complete.
In letters dated July 12, 2010, attorney Louis “Skip” Miller, of Miller Barondess, LLP of Los Angeles, wrote to the City that an Alameda City Council vote now schedule for tomorrow is “wholly unnecessary” because the Exclusive Negotiation Agreement (ENA) between SunCal and the City will automatically be extended “by its own terms and by operation of law.” Miller asserts that Alameda Interim City Manager Ann Marie Gallant has been negotiating in bad faith and that Gallant’s hiring of an outside attorney to investigate Councilmember Lena Tam “could subject the City to millions in liability.” The report on Councilmember Tam includes allegations that Tam wrongfully provided City of Alameda negotiation secrets to SunCal. Miller ends one of his letters with, “our client reserves all rights and remedies herein including, but not limited to, claims against ms. Gallant, the City of Alameda, the attorneys who authored the Letters, and all other responsible parties.”
Miller had not responded to an e-mail inquiry about the letters by press time.
As of late 2008, SunCal had 30 pending bankruptcies related to their various development projects. Earlier this year, a Delaware court dismissed a bankruptcy filing by SunCal for their Albuquerque, New Mexico project, allowing the chief lender, Barclay’s Capital, to move forward with foreclosure on the project; the project is now in receivership. SunCal’s financial partner on the Albuquerque project is D.E. Shaw, the same financial partner they chose for the Alameda Point redevelopment.
Alameda City Council meets tomorrow night to consider a proposed resolution to deny an alternate development plan proposed by SunCal in the wake of the failure of Measure B in February of this year. The City’s apparent position is that denying the alternate plan will mean that the ENA with SunCal will expire incomplete on the 20th.