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| Point Molate Poker, I Raise You
$30 Million! September 29, 2004 |
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So now we have two corporate giants in a multi-million dollar bidding war over Point Molate – or do we? The Chevron offer is attached in a PDF file, and stories from today’s West County Times and San Francisco Chronicle are copied below. You decide.
You should know by now that I have always said “the devil’s in the details” for this project. My 9/27 E-FORUM “Point Molate Campaign at Fever Pitch” included my in-depth analysis of the Upstream proposal.
At this time, there are scant details to analyze in the Chevron Proposal, which is more of a fleeting concept buried in legal double speak than a proposal. Certainly, it’s no formal offer. Chevron has at least until next Tuesday to flesh it out. I would consider it if it was to be turned into a formal, actionable offer and included the following:
The above is roughly modeled after the non-residential alternative of the Reuse Plan, which has already undergone the scrutiny of an EIS/EIR and could therefore be implemented on an accelerated schedule. At this time, I am less concerned about the “purchase price” than I am about the level of development commitment. I have already stated what I think the property is worth, although since Chevron is solely responsible for depressing the value by ruling out housing, they should throw in a “sweetener” just as good faith. The value of the developable 52 acres as housing would have been at least another $25 million.
I really want to see a modest conference center, mainly for day use, but with overnight lodging limited to what the existing cottages will sustain. Somehow connecting the WW II history of the project as a fuel depot to Richmond’s other 59 WW II industrial sites (including Chevron) and the Rosie the Riveter WW II / Home Front National Historical Park would be a nice touch. Certainly ChevronTeaxaco can relate to the importance of FUEL., both historically and otherwise. Chevron might even want to include their own interpretive center dealing with the history of petroleum production and refining in California. People Do!
Point Molate could be designated a redevelopment area, and the City would benefit from substantial tax increment revenues, sales taxes, business license taxes and utility user taxes, providing a substantial annual revenue indefinitely. In any event, a substantial number of jobs would be provided, and there should be commitments to Richmond residents who most need them.
I am not interested in selling Point San Pablo (Terminal 4) as a part of the package, and it would have to go through the Surplus Property Act, anyway. Chevron, which just finished litigation with the City over this is hypocritical to turn around and suggest the City could sell Point San Pablo without first offering it to other public agencies or nonprofits for parks or housing.
Finally, If Chevron really wants my vote, they will throw in a combination of grants and loans to the City for approximately $10 million to rehabilitate and expand the Richmond Plunge in accordance with the approved master plan. Whether a destination resort or something less ambitious happens at Point Molate, the residents of Point Richmond will bear the most impact from increased traffic and congestion at the I-580 and Western Drive interchange. Taking care of the Plunge would be a gesture, aimed squarely at an appropriate nexus, that would warm the cockles of Point Richmonders hearts while providing a critical recreation facility used predominantly by residents of the Atchison Village, Iron Triangle, Santa Fe and Coronado neighborhoods.
If Chevron can’t get it together, I am inclined to strongly consider the Upstream proposal, but only if they revise the terms to conform to my recommendations in my 9/27 E-FORUM “Point Molate Campaign at Fever Pitch.”
Stay
tuned.
Ante upped on sale of Pt. Molate RICHMOND - Hours after Richmond's agreement to negotiate solely with a casino developer lapsed early Tuesday morning, ChevronTexaco officials submitted an $80 million offer to buy Point Molate, trumping the developer's $50 million bid. In a letter delivered to City Hall, ChevronTexaco offered the cash-strapped city $55 million up front and $1 million a year in maintenance costs for the next 25 years. In addition to the shuttered naval fuel depot, Chevron wants a city-owned port terminal perched nearby at the tip of Point San Pablo. Tuesday night, the City Council delayed for one week a proposal to finalize the sale of Point Molate to Upstream Point Molate LLC, which proposed a luxury hotel and casino complex there that could give Richmond up to $12 million in annual revenues. "This is something we need to take a closer look at," interim City Attorney Everett Jenkins said of Chevron's offer. "We're encouraged that now the window has opened up," said Chevron spokesman Dean O'Hair. "We understood the city was interested in a serious offer, and we came up with a serious and generous offer. Now we can start talking about creating a shoreline park and open space preserve." Last month, Chevron offered the city $34 million for Point Molate. Upstream, working with the Guidiville Band of Pomo Indians and Harrah's Operating Company, plans a gaming complex with a hotel, entertainment venue and high-end shopping mall. Spokesmen for Harrah's say the complex could pump $450 million to $550 million in capital into the local economy with a new and predictable revenue stream of $8 million to $12 million annually. After a judge rejected Chevron's legal challenge to the sale, Mayor Irma Anderson said she knew the oil company would not accept a casino as a neighbor without a fight. "(Chevron's offer) is a stall tactic," said Upstream's Jim Levine. "This deal could never close as it's written. If you read it carefully, it's no commitment of any kind. "It has no economic development, it would exclude the public from the hillsides and there is no provision for historic restoration of those buildings," Levine said. "We spent a year on a magnificent revitalization plan with positive benefits for the whole city." Levine did not rule out legal action, saying Chevron engaged in illegal discussions because officials formulated the proposal during a period in which Upstream had an exclusive right to negotiate with the city. There is some question whether Point San Pablo, which houses a 7.5-acre tank farm at the tip of the peninsula, could be sold outright to a private entity. Earlier this month, a judge ruled that any lands formerly used by a city must first be made available to interested public agencies to comply with the state Surplus Lands Act. Chevron's letter did not spell out how much of Point Molate the company would devote to parkland and how much it would restrict as buffer zone. "Chevron would endeavor to cooperate with an open space coalition ... to develop a reasonable comprehensive open space plan for the properties," it says. Chevron, which owns all the land surrounding Point Molate, once fought making Point Molate into a public park. Now company officials say that is the best use of the site, partly because it would serve as a security buffer for the nearby refinery. Revenues at the Point San Pablo port terminal have steadily declined at the 7.5-acre port terminal after its two major tenants shipped out in the mid-1990s, and the city has pursued no new ones. "Chevron does like to overreach," said Councilman Tom Butt. "As far as I can tell, (Point San Pablo) is worth about $1 million an acre. The good news is they are moving in the right direction." Chevron did not bid on the property when the city first sought developers.
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RICHMOND
Chevron made a last-minute $80 million bid Tuesday to buy Point Molate from the city of Richmond, potentially throwing a wrench into the city's plan to sell the former naval depot to a casino developer who offered far less money for it. The City Council was expected to formally approve a $50 million deal with Upstream Development on Tuesday night, but it postponed making a decision after receiving an 11th-hour offer from the oil giant, which has a refinery adjacent to Point Molate. City officials expected the offer and now find themselves in the difficult position of choosing Chevron's bid -- which promises a huge amount of money up front -- or Upstream's offer, which could be far more lucrative in the long run should the developer succeed in putting a casino there. "The fact that there's a casino (being considered) couldn't be more appropriate because basically this is a high-stakes poker game," Councilman Tom Butt said. "You could gamble everything on the best offer and lose it all, or take the sure thing and go home with something." Chevron offered the city $55 million in cash up front and $1 million annually for 25 years in exchange for Point Molate and nearby Point San Pablo, which the city owns and hopes to see used as a shipping port. Chevron's attorneys delivered the offer just hours after Upstream's right to exclusive negotiations for the land expired at midnight Monday. "We made a serious and a generous offer," Chevron spokesman Dean O'Hair said. "And our hope, of course, is that the city will see that as a significant offer and the up-front money helps them do a variety of things, whether that's opening a recreation center or roadwork that needs to be done." The Emeryville developer is backed by Harrah's and wants to build a Las Vegas-style casino and resort for the Guidiville Band of Pomo Indians. It has offered $20 million up front and a $30 million promissory note to be paid out over 15 years. Jim Levine, the head of Upstream, said Chevron's offer "is not worth the paper its printed on. Our offer is enticing enough as it is. We're not in a bidding war with them. They have no jobs, no economic development. ... There really is no real comparison." Chevron has been a vocal critic of the casino proposal, citing security and safety concerns. It offered to buy Point Molate last month for $34 million and make it an open space preserve, but city officials ignored the bid because they were locked into talks with Upstream. Chevron's latest offer has their undivided attention and has some city officials questioning the casino proposal. "There are a lot of hurdles," Mayor Irma Anderson said of the casino deal on Tuesday. "Chevron doesn't have all of those ifs." Should the city sell Point Molate to Upstream, any plan for a casino would still face a grueling federal approval process and likely opposition from Gov. Arnold Schwarzenegger, who has said he opposes gaming in urban areas. Another looming threat is California's pending compact with the Lytton Band of Pomos, which would bar slot machines within a 35-mile radius of the tribe's Casino San Pablo. Still, some city officials say a casino and resort at Point Molate would bring 7,500 new jobs and between $15 million and $20 million annually in taxes and other revues and is therefore a better deal in the long run. "What we don't want the City Council to do is think this is going to solve our financial problems," Assistant City Manager Rich McCoy said of Chevron's bid. McCoy is lukewarm about the Chevron offer but said if Chevron removed Point San Pablo from the deal and "if they sweetened it a little bit, I might be able to support that." Chevron would own most of the 400-acre Richmond peninsula if the deal is approved and said in its written offer to the city that it would use Point Molate and Point San Pablo as a "buffer for Chevron operations," according to the company's written offer. Chevron said it would work with environmental groups and the East Bay Regional Park District -- which supports the refinery's bid -- to develop a wildlife refuge, park, open space and a bay trail. However, Chevron's bid does not specify how much land would be used for open space. Though there may be some industrial use on the property, Chevron does not have plans to expand its refinery operations there, O'Hair said. Chevron also offered to pay Richmond $250,000 for an exclusive right to negotiate a deal -- the same amount as Upstream. Butt and other council members said they wanted more details before they could make a decision. "Regardless of what happens," Butt said, "the city of Richmond is going to benefit." E-mail Cecilia M. Vega at cvega@sfchronicle.com. |
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