Tom Butt
 
  E-Mail Forum – 2022  
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  RPA Takes Victory Lap on Point Molate
March 23, 2022
 

The Point Molate Alliance, essentially the RPA, bragged about the ill-advised vote of the RPA Four to reject a resolution of intent to establish a Community Facilities District or Point Molate, a contractual requirement between the City and Winehaven Legacy LLC.  See “RPA Four Go for the Nuclear Option on Point Molate,” March 21, 2022 and “Winehaven Legacy LLC Warns the City of Consequences for Breach of DA and DDA,” March 21, 2022.

The press release will become an exhibit in the lawsuit against the City of Richmond based on a breach of the covenant of good faith and fair dealing. Pam Stello and Robert Cheasty, listed as contacts in the press release, have already lost two lawsuits challenging the city’s Point Molate actions, one in federal; court and the other in state court.

Richmond City Council Rejects Developer’s Plan for $292M Bond for Point Molate
Saving City Millions!

  • FOR IMMEDIATE RELEASE – 
  • Point Molate Alliance 

Richmond, CA, March 22, 2022 – On Friday, March 18, the Richmond City Council rejected establishing a Community Financing District (CFD) that would allow for a  $292 million bond to pay for the infrastructure needed for SunCal, an Irvine developer, to build up to 2,000 luxury units at Point Molate, the city-owned 411 acre headland that has long been a source of controversy.  

The unanimous vote, 4 - 0, with Councilmembers McLaughin, Jimenez, Martinez and Willis voting No and Bates, Johnson and Mayor Butt absent, was, “a courageous step by the council’s progressive majority to undo the dangerous fiscal conduct of the former council,” says Point Molate Alliance (PMA) Steering Committee member Andres Soto.

Three independent economic analyses had exposed the fiscal irresponsibility of the course Mayor Butt has been advocating successfully up until now.  The council majority were convinced that the risks to the city's finances were too great and exercised their legal right under the Development Agreement to protect the city from negative General Fund impacts.  

“Approving this CFD would have put the economic future of Richmond at risk, exposing the City to millions of dollars of losses per year and ravaging the general fund,” says Pam Stello, also of PMA. 

Former Richmond Planning Commissioner Jeff Kilbreth, in his review of the proposed CFD, estimated that in the Best Case scenario where all housing units were sold in 15 years, there could be almost $400 million in operating losses over 50 years. Even if SunCal picked up the first $70 million in losses, there would still be a shortfall of over $300 million to the General Fund over 50 years.  

“The project never breaks-even for the City’s General Fund,” Kilbreth noted, “pointing to the high cost of city-funded fire and police substations required by SunCal’s insurance underwriter.  A 24 X 7 fire and police station costs over $6 million per year. The property taxes on fourteen hundred and fifty two homes aren't enough to cover either the cost of this dedicated fire and police station or repaying $292 million in bonds over 35 years, which is like saddling every homeowner with an extra two hundred thousand dollar mortgage. We can't ask Richmond taxpayers to subsidize the operating costs of a new village called ‘Tiburon East.’”

A fire and police station is required due to the limited access to Point Molate and its proximity to the Chevron refinery.  Without fire and police substations, homeowners could not get property insurance and mortgages.  

To address General Fund impacts, SunCal proposed a “Special Fiscal Impact Tax” on Undeveloped Land, but the tax would not cover all of the General Fund shortfalls as it extends only to the end of the construction period.  The City’s bond consultant, Mark Northcross of NHA said, “The Special Fiscal Impact tax is no guarantee at all.  If we levy the tax, and they don’t pay it, our only recourse is to foreclose on the property.”  

If SunCal chooses not to move forward, the city has options. The option the Mayor is promoting and that he negotiated in a Settlement Agreement between the City and Upstream, the earlier failed casino developers at Point Molate, is to sell the property to them for $300 if the City does not sell to a developer such as SunCal by May 21, 2022.  If the City does that, Upstream has four years to sell the property to a developer with a city-approved project and split the sale price with the City.

Robert Cheasty, attorney for the plaintiffs in ongoing Point Molate litigation including against that settlement agreement, argues for a different outcome, “This [CFD vote] may help us all reach a realistic assessment of this project and may allow us to settle our differences.”  

The Point Molate Alliance calls on the city to pursue a new settlement with the developers, end years of litigation and avoid the fiscal and safety risks of a high-end housing development on this unique headland and natural treasure.

Point Molate Alliance urges the city to instead partner with a willing East Bay Regional Park District to develop Point Molate as a world-class park.  Coming to an agreement of all the parties would benefit the city of Richmond while giving Richmond’s small Planning Department the time and resources to pursue not only market, but affordable and moderately priced infill housing projects in Richmond’s South Shore, Downtown and Hilltop Priority Development Areas.  

A settlement would clear the way for a world-class public park and needed housing that would benefit Richmond’s and the City’s General Fund for generations to come. 

About Point Molate Alliance
Point Molate Alliance is a broadly based community movement in Richmond California dedicated to environmental and climate justice (www.ptmolatealliance.org).

Contacts:
Pam Stello, Point Molate Alliance Steering Committee Co-Chair, pamstello@gmail.com, (510) 210-4175
Robert Cheasty, Attorney, cheasty@cheastylaw.com, (510) 701-4321

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