Alameda Point: East Bay Express edition

Rin Kelly has done it. Written the perfect Rorshach test for Alameda Point. And I don’t mean that in a bad way. Apparently it doesn’t matter what her article says (and says well and fairly), you can see that it has proved you right all along. Which either says something about the readers or about the writing…and I’m going with readers on this one.

With quotable quotes like:

“Gallant, a new hire…is insistent that vital parts of the measure take away Alameda’s ability to “negotiate what we think is in the best interest of the city.””

It’s easy to see whatever one wants to see in the article. Emails and blog comments are flying around insisting that this has something to do with land-use and housing numbers and all sorts of other issues, but it doesn’t. As the article clearly delineates, the issues discussed are about the City’s ability to control redevelopment funding and the capping of ongoing fees on future properties. Specifically, there are three issues that the city wants more control over:

  1. Removal of the 2% cap on additional taxes and fees (current recent residents pay a little over 1% for comparison)
  2. No $200 million cap on mitigation and amenity expenditures
  3. And possibly most importantly, they don’t want Alameda Point redevelopment funds limited to only Alameda Point.

This raises a very real issue–one that is a concern to me personally—of whether redevelopment areas should be able to merge, thereby avoiding the sunsetting of the redevelopment district. It’s amusing to watch those who decry all redevelopment all the time pointing to the city’s desire to do just that, to use redevelopment money from Alameda Point to fund things in other redevelopment areas, as proof that this project is a stinker.

The other two items are more interesting with both sides of the discussion (City/SunCal) saying different things. So far, the statements from the City are “what if” statements, the idea that caps limit the ability to react to unforeseen issues. A valid concern, but also highly speculative. I haven’t heard of one item that has been identified as not being covered under the first two bullets.

Over two years ago on a post about Alameda Landing, I wrote:

2. Don’t cap the funding – The DDA caps the amount of spending on the TDM plan at approx. $435,000 without identifying the methods used to reduce vehicle trips. This would seem to be backwards. We first need to identify the appropriate solutions needed to attain the goal the city sets, then a discussion of financing can take place.

If there is a concern in the Alameda Point initiative, this would be it. That the initiative caps the funding. Of course it also spells out the mitigations and amenities that will be provided and the City should provide specific analysis of what it expects will not be covered.

In the end, it should be noted that in 2007, the council (as currently seated) unanimously approved the Alameda Landing DDA with caps.

This continuing thread of discussion, that somehow having the council negotiate all of this is a surefire way to make sure that no caps are in place is a grasp at best. At the end of the day, no matter what the project is, you can always encumber it with “more” and therefore require more funding in order to make it become reality. The council (again, all five members) have already shown, via their votes, that they acknowledge that projects are balancing act between amenities and forcing a project to become not financially viable. Those are the trade-offs that need to be discussed.

Reading the EBX article, there was nothing surprising in what it presented, only that it was presented so bluntly. What the article most likely represents is step forward in the negotiations between SunCal and the city, with the current City Manager deciding to take her position public in order to put pressure on SunCal to negotiate some items earlier than planned and for her to be able to control aspects of the negotiations. We’ll see if it works.

At the end of the day, those hoping that this article is somehow the death knell for this project, or that it indicates that the city is somehow backing away from the land-use plan that it has supported, had best start putting their hopes somewhere else.

19 comments for “Alameda Point: East Bay Express edition

  1. AD
    June 30, 2009 at 1:55 pm

    “Emails and blog comments are flying around insisting that this has something to do with land-use and housing numbers and all sorts of other issues, but it doesn’t.”

    Please do quote a couple, since I’m lost as to what you’re talking about.

    Between this statement and Helen Souse inexplicable letter in the Journal last week, I have to wonder what alternative reality you hail from.

  2. DL Morrison
    June 30, 2009 at 4:06 pm

    Did Anne Marie Gallant or David Brandt authorize you to quote them on these issues, and if they did, then why don’t you indicate as much? You don’t know for certain what their concerns are. Further, I don’t see any indication here that you contacted Rin Kelly for further clarification on her EBX article.

    Where are the FACTS, I ask you?

    As it happens, EBX restricted the article to less than feature length, and that plus SunCal’s sudden change in plans may have made it difficult for Rin to cover all the issues that were raised in her city hall interviews. If anything, I think she covered the issues as succinctly as possible under the circumstances.

    In any event, you have not provided any basis for claiming that the city is only concerned w/ the $200M cap on public amenities. Let me quote David Brandt again: “Brandt characterizes the scope of the initiative differently. “If you’re going to do it, might as well grab everything you can,” he said.”

    That sounds ot me like a pretty wide-ranging criticism. How to explain this in terms of FACTS? Perhaps you could get your sources at City Hall to go on the record and enlighten us.

  3. RK
    June 30, 2009 at 5:24 pm

    DL: With regard to that quote, Brandt was speaking of the inclusion of all the extras in the initiative beyond the Measure A exemption, but the focus of our conversation was the development agreement–it was said in that context. The financial provisions of the DA were, indeed, the concerns I heard about, and the DA was the focus of my interviews.

    It wasn’t a focus anyone in city staff steered me toward, however. They’ve obviously come forward with their concerns but did so only because I was asking and had decided to take my research/story in that direction.

  4. June 30, 2009 at 5:30 pm

    Thanks Rin. I meant what I implied (if I didn’t say it explicitly). I thought it was a good, solid article.

  5. David Kirwin
    June 30, 2009 at 8:32 pm

    This raises a very real issue–one that is a concern to me personally—of whether redevelopment areas should be able to merge, thereby avoiding the sunsetting of the redevelopment district.

    JK-Aren’t you aware that the city has already been merging re-development zones? Is this news to you?

  6. DL Morrison
    June 30, 2009 at 8:41 pm

    RK: To tell you the truth, that’s what I thought he meant — the inclusion of revisions to the city’s land use controls within the initiative, the planning documents, zoning and so forth, beyond the charter amendment per se.

    JKW: You can claim almost anything on this blog. You never have to verify it or explain what you’re including or omitting. If facts are that important, then by all means, practice what you preach.

  7. Jon Spangler
    June 30, 2009 at 8:53 pm

    I have no personal objections to the City improving its negotiating position with Suncal, but I am not sure how much the details of the redevelopment initiative can be altered before one creates a whole new initiative, requiring a new petition drive as well.

    I would be happier if Suncal can legally agree to fund more public amenities (say, $500-700 million instead of $200, just for the sake of argument) as well as additional TDM/TDA funding and other transportation mitigations. Perhaps a permanent funding source (such as a transportation bond or a percentage of property taxes per year to be spent on transportation) should be identified instead of an absolute budget?

    But would a ballot initiative altered after the signatures have been gathered be a legal one? This gives me real pause, and I would like to see more info on how much modification is legally possible with a petition-based initiative after the signatures are gathered.

  8. June 30, 2009 at 9:24 pm

    DL: I know you think that the David Brandt quote is a critique of the SunCal initiative, but I read it as much more matter-of-fact. In that, if you are going to do it, go whole hog. Go big or go home.

    SunCal had to move forward with an initiative so they might as well go for everything that they think will be able th ensure that the project that they envision can move forward.

    There is nothing inherently negative about the statement made other than what you choose to attribute to it.

  9. DL Morrison
    June 30, 2009 at 11:11 pm

    Lauren: I think you’re rationalizing, and I don’t know whether you literally believe this or not. How is it possible to say, as SunCal has, that this is what the “community” wants, and then turn around and say, “We’re just going for broke here”? From a realistic standpoint, it’s everything but the kitchen sink, not in an effort to be “transparent”, but in an effort to get their agenda done and over with. Then I guess it isn’t what the community wants, which is pretty much apparent, right?

    So when the mayor tried to give the initiative credibility, then I guess she wasn’t looking at the city’s best interest? Part of the issue here is the pro-message coming from much of the city council and city staff, which just went down the tube.

    And you know, to be fair, if you would stop trying to rationalize this stuff and start raising some issues yourself, it would give you more credibility, and I’m not trying to be rude. Here we are, worried about having the bridges left up. worried about where the city’s finances will be, and yet everything is A-OK w/ SunCal? That isn’t possible.

    Also, I agree w/ Jon — from a process standpoint, I don’t see how the initiative could be revised at this point. That’s why they attached the entire initiative to the signature pages, right? I think it could open the city to litigation as well, since the city is responsible for placing it on the ballot in its final form, whatever that may be.

  10. July 1, 2009 at 6:58 am

    DL: The kitchen sink approach is nothing new. The inclusion of items such as the General Plan Amendment, the zoning changes, etc… all would have needed to happen anyway. Much like the development agreement. SunCal could have waited to let the City Council make those steps, or they could have included it as part of their initiative.

    Either way it was done, placing in the initiative or going through the City Council, SunCal would have requested the same zoning changes, the same General Plan Amendments. They would have submitted the same Specific Plan.

    Either way they did it, there would have been criticism by folks looking for a reason to be against the project.

    On one hand, I’ve read critiques from opponents that claim that there is too much information in the initiative that the average Joe could not manage to wade through all that documentation.

    On the other hand, I’ve read complaints that there are omissions from the initative that should have been included if they wanted to be more “transparent.”

    It can’t be both.

    Just like one can’t, say that the inititaive process was the wrong process to pass those items yet also express a mistrust for the Council majority who would, instead, be the body to push those items through.

  11. DL Morrison
    July 1, 2009 at 11:14 am

    Well, here’s where I’d start, w/ one quick question: Is this spin or do you actually believe this? If you believe it, then why don’t you understand the legislative process, and in turn why are you commenting on these issues when you have such a limited understanding?

    I’ve always assumed that you did understand these issues, and that you kept misrepresenting them as part of your spin campaign, but now I’m not so sure. I’m really no good at spin, but I keep trying to deconstruct it, nonetheless. this is “oh gee, what’s wrong w/ that?” tactic — another version would be “Why shouldn’t we pay them to build it? After all, they’re doing all the work”.

    The “legislative process” means something that goes thru the Council and commissions, with public input, public discussion among city officials, staff reports and systematic review process — which is what is supposed to happen w/ the documents attached to the initiative, and needless to say, it won’t.

    The development agreement should go thru a negotiating process; instead we have something written solely to suit one side, which we’ll enter into via binding vote. Oh swell. None of this is good for the city — at what point does the city matter to you, I have to wonder, seriously.

  12. July 1, 2009 at 11:38 am
  13. RK
    July 1, 2009 at 11:52 am

    I think what’s missing from this discussion in the comments is that, according to city staff, the development agreement contains things that should not be in a development agreement. If the DA went through the council process it wouldn’t have the elements that are really belong in the DDA.

  14. dave
    July 1, 2009 at 12:42 pm

    THIS is what bothers you most??

    This raises a very real issue–one that is a concern to me personally—of whether redevelopment areas should be able to merge, thereby avoiding the sunsetting of the redevelopment district.


    So the city & the citizenry can get fleeced as long as it ends within your kids lifespan? Dillinger wouldn’t have been a criminal if he’d only robbed a couple of banks, then?

    And on top of the insanely pedantic & myopic nature of that objection, of that objection has there ever been a redevelopment district in CA that actually did sunset?

  15. July 1, 2009 at 1:09 pm

    Rin: If you are referring “financial provisions” in the DA, I just checked the Government Code which controls Development Agreements and it says:

    The agreement may also include terms and conditions relating to applicant financing of necessary public facilities and subsequent
    reimbursement over time.

    I’m not making a judgment call on whether the inclusion of the Development Agreement sans negotiation was right or wrong. However whether the limited financial provisions should or should not have been included is not so black and white since the financial provisions that SunCal did include could be argued as being specifically used for “public facilities” as public facilities is a rather vague and large descriptor.

  16. A Voice from the Other Side of the Table
    July 1, 2009 at 1:25 pm

    Interesting discussion above, with one fatal flaw in everyone’s thinking. A Chapter 11 bankruptcy has now become a developer’s tool. The bankruptcy courts will not enforce any promise by a developer to do anything, not do anything, pay for anything, etc. Essentially, what happens in the real world of developer bankruptcy is that the developer’s and construction lender’s bankruptcy lawyers decide they don’t want the property to be bound by all of the cost items, but do want the land use entitlements. Development Agreements, DDAs and old fashioned subdivision improvement agreement under the Subdivision Map Act are simply treated as contracts rejected by the bankrupt developer. However, the zone changes stick, the vesting tentative maps stick. The property is sold to a third party under Section 363 of the Bankruptcy Code “free and clear of liens, claims and encumbrances”.

    Just ask the folks from the Sand Canyon area of Los Angeles County. They had a very, very detailed statutory conservation easement which said, in effect, “no bulldozing in this area where endangered species live”. The property owner filed a Chapter 11 for tactical reasons, and contracted to sell the land adjoining the conservation easement area to Pardee. During the bankruptcy, Pardee just bulldozed the heck out of the conservation easement area, and then bought the adjoining developable land through a bankruptcy court order “free and clear of liens, claims and encumbrances”. The developer who had signed the conservation easement was left with no assets, and a pile of unpaid debts, including a breach of contract claim by the Sand Canyon area group who held the conservation easement. End score: Developers 100% Endangered Species & Public 0%.

    If the City of Alameda truly expects to receive any of the “goodies” SunCal is waiving around, the only way they can make sure they receive them is to require surety bonds for those items, delivered on the day the Development Agreement becomes effective. As most developers would say to such a request: Yeah right.

    Knowing that developers’ lawyers now view Chapter 11 as a useful tool in bait-and-switch campaigns to get basic project entitlements, I am assuming that with regard to the Point the developers are sitting in their offices thinking “These people in Alameda are complete fools”.

    Truer words were never spoken.

  17. RK
    July 1, 2009 at 1:30 pm

    Lauren: Of course financial provisions are part of a DA. The piece addresses this.

  18. DL Morrison
    July 1, 2009 at 4:40 pm

    Thanks to “Voice” for bankruptcy info. I think it illustrates one undeniable reality w/ the Initiative — the vast majority of people expected to vote on this, and the great majority of those commenting on it, have very little idea of what it really means — frankly, I sometimes wonder who does know.

    This is why the standard legislative approval process makes so much more sense — for the well-being of the community — and I think that’s entirely obvious. Never mind that it isn’t ideal either, it’s far, far more informative and public than this.

    With regard to quoting the Gov. Code — it’s just not a good idea if you don’t have any real expertise in it. With regard to the DA — it absolutely should not be in the Initiative. It’s a contract and it’s supposed to be negotiated — just as one example, I see a similar phrase thruout the document, that “X” decision can be made “at the sole discretion of developer”, meaning that the city has no control. To say that it’s just a matter of this or that one problem w/ the DA — please find me someone commenting here who would even recognize or know what all the issues are.

  19. DL Morrison
    July 1, 2009 at 4:55 pm

    I want to comment also on the Express article, on something I noticed but did not know how to interpret. I think Rin Kelly is referring to this above as well.

    From the article: “Of particular concern to Brandt are the financial provisions included in the development agreement, especially the $200 million cap on the developer’s obligation to pay for public benefits. That obligation is contingent upon the city providing funding through redevelopment mechanisms overseen by agencies not party to a development agreement. Brandt said the approach is novel. “I don’t know that the way that they’ve drafted it is per se illegal,” he said, “but I’ve never seen it done before.”

    I’m not sure what “city providing funding through redevelopment mechanisms overseen by agencies not party to a DA” means. Is it the agencies involved or the choice of redevelopment mechanisms that’s the issue? And if this is a routine process (returning money to a nonmerged redevelopment district), then what aspect of this is “novel”?

    How many people commenting here (other than RK) could answer this question? These documents are not remotely by any –honest– assessment comprehensible, let alone “transparent”.

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