According to letters sent to the Richmond city attorney by attorneys for the Guidiville Rancheria of California and Upstream (Crowell law Offices) and SunCal (Cox Castle Nicholson), the City of Richmond has decided not to defend the consolidated lawsuits challenging the Point Molate project. The letters can be seen by clicking on Cox Letter and Crowell Letter. Guidiville and SunCal claim that the City is violating multiple provisions of the Development Agreement and the Development and Disposition Agreement as well as violating the fundamental requirement applicable to all contracts for good faith and fair dealing.
The Cox letter warns that the City is repeating the grievous mistake made by former Mayor Gayle McLaughlin that led the Ninth Circuit to reverse a previous decision favorable to the City and, based on a breach of the covenant of good faith and fair dealing, remand the litigation back to the District Court where it was subsequently settled. That settlement was the basis for the subsequent adoption in 2020 by the City Council of a Development Agreement and a Disposition and Development Agreement with SunCal that the letters claim the City Council is now attempting to breach. If the letters are correct, the City Council is not just playing with matches, it is playing with fire and literally putting the City at risk of bankruptcy, not to mention the immediate cost of litigation that could exceed a million dollars.
It is clear that the City Council majority opposes the Point Molate project as entitled by the City, and they have joined their RPA colleagues in encouraging the legal challenges based on an alleged Brown Act violation and an alleged CEQA flaw. Both of these are in the courts and will eventually be decided. The City Council majority should prudently wait to see the results of the legal challenges rather than taking poorly conceived actions that place the City at perhaps the greatest financial risk it has ever faced