Stop, Drop and Roll

19 August 2008 | Alameda City Council, Measure A, redevelopment | John Knox White

Tonight, the City Council, sitting as the ARRA, will be asked to approve a change in the Alameda Point Exclusive Negotiating Agreement between the city and SunCal. The overall changes, as described in the staff report, essentially allow SunCal, the current master developer, to add Alameda Point to a larger agreement between SunCal and D.E. Shaw, a financial partner.

Currently, Alameda Point is a separate entity, which has kept it moving forward while some other projects that SunCal is working on have had financial problems. The concern becomes that by adding AP to a larger portfolio, it becomes more vulnerable to problems related to the other projects in the portfolio.

Of course, in the current market, one would probably be safe in assuming that lare real estate financing being what they are, the risks are just as great as a solo project, and perhaps SunCal is unable to attract the financing that it wanted as an individual project.

The Council/ARRA has some heavy lifting to do tonight.

As background, I’ll quickly say that SunCal has been moving the project forward in an open and public way. Their workshops have been honest about their hopes and dreams and they have presented plans for projects that show a lot of thought beyond “How do I keep my head down.” (One type of planning that brings nothing but trouble). It’s funny (of the ha-ha type) to see the “Aha” reactions of some folks regarding the staff report which talks about taking Alameda Point to the voters. Somehow, Suncal presenting two non-measure A plans didn’t acknowledge that they are preparing plans that would require voter approval of changes to Measure A at the Point. They’ve been presenting these plans in pulbic since last year as well as talking about how the PDC plan is unworkable. What was expected?

I think that given how badly Catellus and Lennar are currently struggling. Mare Island (Lennar) is in bankruptcy, Alameda Landing (Catellus) has lost it’s prestige client and is going nowhere fast, we’ve been lucky to have chosen a developer that so far has delivered on what they promised. And done so in a pretty straightforward manner. I can’t see what choices for major changes the city has, but it’s certainly in all of our best interest to make sure that the proposed changes in the ENA meet Alameda’s needs. The current ENA is protecting us pretty well, staff (and the council) should be commended for putting together a document the keeps ajor decisions resting with the city, not anyone else.

An interesting sub-plot on all of this is talk of a Ron Cowan/Don Perata push to get Cowan’s Doric Realty in as the Master Developer at the Point. I heard from multiple places that “advice” is being handed out that perhaps SunCal isn’t financially stable enough to move forward and that Cowan’s Doric Realty would be a great fit. If true, one would assume that Doric would have to partner with another developer like Lennar to pull it off (and they are all hurting right now). Also begging an answer is why Doric didn’t submit a proposal when the Point was looking for a new developer for the Point. It makes for great gossip. But I wonder whether any councilpeople would actually be willing to pull the trigger on that kind of backroom deal. (“Hey, lets give it to this politically connected developer who never went through the public process. That’ll pay dividends for me in the future!”) I don’t want to oversell this, it may just be a couple of emails to the entire council and not some grand plot. But personally, I would think that the campaign financing conspirasists would finally have their proof if something like this went down.