Stop, Drop and Roll

05 February 2007 | Alameda Community Development Forum | John Knox White

On Friday afternoon, the ARRA staff report concerning the developer RFQ was posted. The report includes a staff summary of the process and explanation of the criteria (7 separate items ranked as weak/moderate/strong). The report also includes a detailed explanation as to why each team was ranked the way they were.

[Unfortunately, as the city is wont to do, this document is not searchable or cut-and-pasteable and so I can only paste an image of the excel sheet. Some day, someone will explain to me why Alameda can’t put up PDF files that are searchable. Currently, one has to read all the way through to find the 4 sentences they need. It’s not so much of a problem with a 12-page document, but it’s a whole other ball of wax when it’s a 150 page development agreement. What make it annoying is that it isn’t anymore work to create a searchable PDF.]

As I mentioned, the details on how these criteria were applied are in the full report.

This information is all presented as if it’s equal in weight, I’d suggest that a slight re-ordering of its importance is in order. While it’s important that the developer have the ability to complete the project, possibly more important (long-term) is an ability to put together a project that reflects the needs of Alameda. I think that the “weak” evaluation of UWI’s financial capability is more a reflection on the staff’s ability to get concise info about the financing behind this project, though one would imagine that we could easily get that if we were serious about choosing this project. If there’s one thing that I feel is likely with this application, it’s that the money for their application is available.

Therefore, under financing, let’s just assume that at the end of the day, any of these applicants could manage this project (it’s a leap of faith, but for the sake of discussion, we’ll make it). If we move forward with the idea that “What” is built at the Point is more important than “how” it’s built, we need to look at the “Development Approach” criteria as the most important.

I’m surprised that Catellus received a “Strong” rating while Lennar received only “moderate/strong” since both companies have specific interests in “vertical” building (creating a specific type of development, Lennar builds housing, but partners with Commercial/Retail people, Catellus builds Commercial/Retail and partners with homebuilders). Both companies seem to have similar focuses that would have them want to focus more heavily on one certain type of development. SunCal doesn’t build vertically, and therefore, it would be safe to say that they have less reason to push for one development type over another. UWI also has a focus, heavy on research and development (a development mix that doesn’t really add to the tax collection for the city, something we need to be aware of). The staff report indicates that UWI has said they need significant changes in the PDC before they can proceed, which is probably why they were rated “moderate/weak.”

SunCal appears to be in the best position to represent Alameda’s interests. This is not to say that they don’t have their own bottom-line to feed. We should feel a bit more confident that their bottom line won’t be as influenced by internal company synergies to go heavy on a specific development mix.

Beyond this, Catellus, Lennar and SunCal all seem to have pretty similar strengths/weaknesses. With the exception of the “Acceptance of Existing Business Terms” where Lennar is rated “weak,” all three receive moderate to strong on all of them. Lennar’s weak rating should remove them from consideration. Anyone going into this project hoping to change the finances should be disqualified, it’s just not going to accomplish anything except to delay the project further and most likely, increase the costs (which is what has continued to happen in dealing with the Navy).

I’d be very concerned, if I was the ARRA, about having our two major development projects being run by the same company (Catellus), there are too many scenarios where this could come back to haunt the city. Since Catellus doesn’t stand out head and shoulder above the rest, I’d be leery of handing the contract to them.

Which leaves us with SunCal and possibly UWI.

To date, UWI has offered little for anyone to seriously believe that they are capable of completing a project of this size. To date, they have not identified a project team, though they have provided this “organizational chart” which seems to answer fewer question than it raises (like who is making the decisions? How are all these individual companies going to work together to create a project that is cohesive and satisfactory to each other?) The lack of a clear project management and decision making structure is very concerning. If I were UWI, as the one true “unknown” in this process, I’d want to make a strong, last minute pitch that focused on how they are going to complete this project, not what kind of project do they want to build. They need to do this at their community meeting (tomorrow, Tuesday February 6^th at 5:30 at Otaez) and at Wednesday night’s ARRA meeting (City Hall @ 7pm).

I would not be surprised if the ARRA decided to hold off making a decision on the master developer, but at the end of the day, SunCal has my vote as the most likely to succeed. If this were to happen, I’ll enjoy watching all the Alameda conspiracy theorists issuing their apologies after proclaiming that Catellus has already locked in the deal in back-room discussions with the council.