“Like many, I was initially enthusiastic about the SunCal initiative”, Mayor Johnson explained, “But, it is now a question of fairness – what voters expected versus what we are now told in the initiative. After thorough review of the measure, I believe that the SunCal initiative will have devastating financial impacts on the City.”

I have seen it posted that D.E. Shaw can replace SunCal at will should it be dissatisfied with SunCal’s performance. Can anyone confirm or refute this hearsay?

As a successful hedge fund I would expect D.E. Shaw to exert more control over its investments than banks, whose foreclosure practices have shown that they have previously taken a hands off approach to managing their real estate investments.

The innovative Alameda Point Initiative may well have had some, even considerable, input from D.E. Shaw. The Inititiative was drafted shortly after D.E. Shaw funded SunCal. Renewed Hope’s substitution of the phrase SunCal/Shaw Hedge Fund for the term “Revitalization” substitutes a factual phrase conveying information about the principals behind the Initiative for a judgemental or visionary term.

Who played what role in drafting the Initiative isn’t nearly as important a consideration as what the Initiative does. All the comments above on financing mechanisms were, to me, much more relevant.

Not to nitpick, but as you know, TID bonds are issued after ground has been broken and based on expected tax collection from proposed plans that are underway. Which means that the Redevelopment money available is directly related to the assumed property value in the future.

The total amount of Redevelopment money available for the SunCal project is nowhere near the $700+ needed to repair infrastructure. I believe that the maximum amount available through redevelopment, based on the assumptions of the current plan is $180-220 million (but I haven’t double checked my memory).

Maybe I’m missing it, but I don’t think your post actually corrects what Jon said, which is that the City doesn’t have the financial capacity to do the needed infrastructure upgrades for any development at the Point.

We all agree on one point, I don’t think Alamedans are going to vote for a 30-year annual parcel tax of $1100 to support the infrastructure needs at the Point.

WRT bonds and financing, you do not know what you are talking about.

Taking apart your third paragraph above, the city does indeed have such a funding mechanisms available (it’s called tax increment financing, aka redevelopment debt) and explicitly plans to use it for a least a few hundred million dollars and very likely much more.

In a nutshell, the city forgoes the bulk of the general fund property taxes generated from the area; these funds are siphoned off by the TID and used for debt service on the bonds above (et al). It has the effect of draining city coffers because the revenue collected from new area is extremely limited while the responsibilities of government are the same as for the rest of the city. This is the key, essential problem with the Suncal plan’s financing scheme.

You are right about 1 thing though, the taxpayers likely wouldn’t support such debt. Fortunately for Suncal, their consent is not required. All it takes to issue that debt it 3 councilmembers’ votes, and it is clear that Suncal has those votes secured.

This is not the first time I have exhorted you to to learn the workings of the financing scheme in this and other blogs. I suggest so again.

Redeveloping Alameda point is, indeed, the best “fix” for “the problems we now have in town” that you mention. The successful “peace conversion” of the former base is a high priority for me, and the plan that Peter Calthorpe has developed for SunCal is an exemplary model of sustainable, appropriate-density, mixed-use development.

Where do you suggest that the City of Alameda get the $700 million to replace the failing infrastructure (streets, roads, power grid, sewers, etc.) at AP, not to mention paying to detoxify the land and military buildings beyond the basic standards the US Navy will fund?
The City of Alameda does not have any funding mechanisms available to it that come close to taking on these financial burdens, and I am certain that the taxpayers of Alameda would not support a $1 billion bond issue for Alameda point, even if it were legally and financially possible to float one that big…

The City does not lose complete control over the redevelopment of AP even if the initiative passes. There is the complete EIR and all the mitigations (paid for by SunCal) that it will identify. plus the normal design review process at the Planning Board, and the Disposition & Development Agreement (DDA) that must be negotiated between the City and SunCal. (And the City has negotiated several of these satisfactorily with prior developers.) And I believe that SunCal is negotiating in good faith with the City on many fronts, and will continue to do so.

I would not be opposed to some sort of public solution in principle, but as a practical matter, I’m highly skeptical that a super-majority of the electorate would be willing to pay the higher taxes that would be required to preserve, redevelop, or otherwise re-purpose Alameda Point without private funds, no matter how fantastic the plan sounded. I could be wrong, of course, but consider the results of the last school parcel tax vote.

Michael, Yes, I would be willing to pay higher taxes if I thought the plan for the Point was a good one. I don’t think it is.