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| San Francisco Business Times:As a crucial project deadline fast approaches, Richmond braces for legal blowback over Point Molate
Point Molate. SunCal has until May 21 to close on the sale of the land at the site — a deadline city officials say they do not believe the developer can meet.
By Sarah Klearman – Staff Reporter, San Francisco Business Times
May 19, 2022
The city of Richmond is bracing for litigation over the development of Point Molate as developer SunCal’s window of opportunity to purchase the site and proceed with a massive redevelopment closes this week.
SunCal must purchase the land from the city by May 21, 2022 — Saturday. Otherwise, per the terms of a 2019 settlement, Richmond must offer developers Upstream Point Molate LLC and the Guidiville Rancheria of California tribe the chance to purchase the land for $400. The pair sued the city in 2012 over a failed attempt to redevelop Point Molate into a billion-dollar casino project.
SunCal affiliate Winehaven Legacy LLC responded to the city's search for developers in 2018, and received approvals for a 1,450-unit community with 400,000 square feet of commercial space, 30 live-work cottages and a fire and police station in 2020.
It can’t proceed with its project until it closes on the land — and, according to multiple city officials, including Mayor Tom Butt and City Attorney Dave Aleshire, it looks increasingly as though the developer will not have its ducks in a row by the time May 21 rolls around.
SunCal said it is still working to meet the deadline, and has alleged any failure to do so is the fault of the city, city officials said in a May 17 public hearing, citing a letter sent to the city of Richmond by SunCal’s attorney May 16.
The developer believes Richmond’s City Council breached existing agreements between the city and SunCal in March, when City Council voted to not to establish a taxpayer-funded Community Facilities District to pay for the project’s projected $292 million in infrastructure costs.
City Attorney Aleshire rejected SunCal's claim, saying city staff have sought to work with SunCal to find alternative ways of financing the infrastructure.
Richmond City Council signed off on a Community Facilities District, a funding mechaism to help pay for infrastructure, when it approved the project in 2020. But the council saw turnover in 2021, and a four-member progressive majority voiced concern over the potential negative impact the CFD could have city’s general fund, Councilmember Gayle McLaughlin told me Thursday. McLaughlin voted alongside the council majority in March to reject the CFD.
The city says SunCal has not cooperated in identifying an alternative source of funding for the project's infrastructure. Doing so is a condition of closing on the land.
On Tuesday, Richmond City Council voted 4-2, with one member absent, to direct Aleshire to prepare a resolution outlining the conditions of closing that had not been met by SunCal’s affiliate for its May 24 meeting. The vote does not technically preclude the developer from closing on the land, for which it has agreed to pay $45 million cash. But SunCal would have to present an alternative funding source for the deal to close.
SunCal still has a few days left before its window to buy the property from the city closes completely. A SunCal spokesperson said via email Wednesday that the developer’s intention is to close on the property before the May 21 deadline. He declined an interview request, saying Thursday that the Point Molate team was “working overtime” to close on the property.
Mayor Tom Butt, who has been an outspoken proponent of the project, said in an interview Wednesday that he believed it highly unlikely the developer would be able to pull off the closing in time.
“I just don’t see it happening, and the City Council majority does not want it to happen,” he said to me. “I think whatever SunCal submits, they’re going to say it is unacceptable and incomplete.”
McLaughlin, whom Butt has openly criticized for her views on the project, said Thursday that SunCal has continued to say it will close on the project even as it has missed other important deadlines.
“So if now they’re saying, 'oh, we’ll get it all (done)'— that’s something I don’t have a lot of confidence in,” said McLaughlin, who was re-elected to city council in 2021 after a three year break.
She said that by voting against the CFD, the council had prevented the city from entering into a “bad scenario" at Point Molate, and added some of her council colleagues who had signed off on the CFD in 2020 have since said they felt “bullied” into doing so by Butt, another long-serving city official.
Both Butt and McLaughlin said Upstream and Guidiville, which did not respond to request for comment, have not communicated what their intentions might be for Point Molate if they are given the chance to purchase the land. The terms of that earlier settlement allow the pair five years to sell the land before the development rights revert back to the city.
The pair were in agreement on at least one thing: if SunCal does not close on the land this Saturday, the city will likely face a lawsuit.
“I am about 100% sure,” Butt said, asked about whether he thought SunCal would pursue litigation. “They have a lot of money invested in it. They are not going to walk away from this.”
East Bay Times:Richmond: Point Molate to be sold for $400 to Native American tribe after 270-acre development plan fizzles
The Guidiville Rancheria of California tribe and its developer, Upstream Point Molate, LLC, are now poised to purchase the shoreline property
RICHMOND, CALIFORNIA – MARCH 22: The Point Molate area and Winehaven Castle, left, are seen from this drone view in Richmond, Calif., on Tuesday, March 22, 2022. (Jane Tyska/Bay Area News Group)
By KATIE LAUER | klauer@bayareanewsgroup.com | Bay Area News Group
PUBLISHED: May 18, 2022 at 5:30 p.m. | UPDATED: May 19, 2022 at 9:33 a.m.
A years-long, million-dollar effort to develop Richmond’s Point Molate has unraveled, and hundreds of acres of prime Bay Area shoreline property now may be sold for a bargain $400 to the Native American tribe that once wanted to build a mega casino there.
It’s unclear what the Guidiville Rancheria of California tribe and its developer, Upstream Point Molate, LLC, will do with the land. Their attorney could not be reached for comment.
The envisioned development was officially killed when the Richmond City Council voted 4-2 Tuesday against proceeding with a planned $45 million sale of the land to Winehaven Legacy LLC. Mayor Tom Butt and Councilmember Nathaniel Bates dissented. Councilmember Demnlus Johnson was absent.
Winehaven had proposed building more than 1,450 homes and 400,000 square feet of commercial space on a 270-acre section of Point Molate.
After a previous City Council approved the development in September 2020, the current council majority said it wasn’t convinced Winehaven could finance the entire project without counting on city funding.
In backing off from the sale, the city will lose the $22.5 million it would have reaped as its cut of the land transfer. The arrangement stemmed from a federal settlement agreement reached after the tribe sued Richmond for rejecting its casino project years ago. The court upheld the council’s action but forged a settlement that required the city to evenly split profits from any land sale with the tribe and its developer.
And now the Guidiville Rancheria of California tribe could take over Point Molate’s developable land after Saturday by paying the city $400. The tribe will have five years to decide what — if anything — to build on the bayside property.
While Richmond could still reap 50% of the proceeds if the tribe later sells the property, city officials can only speculate about whether Point Molate will be developed as envisioned by Winehaven, turned into a wildlife refuge or even host a mega-casino like the one rejected in 2011.
Interim City Attorney Dave Aleshire told the council one thing is certain — Richmond will find itself back in court.
“I think it’s too bad,” Aleshire said, adding that Upstream has already threatened to sue Richmond to recoup the $22.5 million it lost out on because of the scrapped sale to Winehaven.
“Despite all the history here, that everybody doubts each other, your staff worked hard to try and get things together so that you would have a reasonable opportunity to make this decision,” Aleshire said. “I think that the items that are missing are critical pieces to the equation.”
The council’s decision dealt a blow to those who say the development was sorely needed amid a regional housing shortage but pleased others who counter that open spaces are just as important and need to be preserved whenever possible.
The proposed development ran into trouble in March, when four council members known as the Richmond Progressive Alliance questioned whether Winehaven could successfully finance the project without tapping into the city’s general fund.
The alliance council members, who opposed the project from the start, also challenged the notion that houses built at Point Molate would fetch $1 million to $1.8 million as initially projected, because of the development’s remote location, lack of amenities, fire risks and proximity to the Chevron Richmond Refinery.
After the council subsequently voted against setting up a community facilities district to pay for the project’s infrastructure, Winehaven couldn’t come up with another way to pay for that work or prove it would be able to obtain enough cash to build the homes.
Both the city and developer have been blaming each other for the project’s unraveling. Winehaven is alleging that city officials breached their contract while the city argues that the developer’s financial opacity violated Point Molate’s development agreements and ultimately derailed the deal.
Councilmember Claudia Jimenez said she was shocked the developer didn’t divulge its financial uncertainties sooner.
“For me, I don’t think it’s bad faith to make sure that the city and the public has all the right information to make sure that this project is going to be successful,” Jimenez said.
Mayor Butt, who has supported Winehaven’s proposal from the beginning, was vexed by the turn of events.
“I think what we’ve heard tonight is a remarkably creative narrative blaming the victim,” Butt said in defending Winehaven. “The four Council members who are going to vote to terminate this contract have been committed to stop this project from the time they took office. That is evidence of serial bad faith action.”
Linda Klein, Winehaven’s land use attorney, agreed. “If not for the city’s wrongful denial of the CFD (community facilities district), we would be closing this week,” she said.
By terminating the agreement, Butt said he thinks the city will not only lose control of the land and potential profit off its value but will also risk losing hundreds of millions of dollars fighting lawsuits from SunCal, Winehaven’s parent company.
“It’s like you guys are playing with Monopoly money,” Butt said. “I got to tell you, that’s enough money to bankrupt the city of Richmond, and you guys are looking at that like it’s a joke. This is like Christmas and New Year’s for attorneys all rolled into one.”
Aleshire replied that the city — including outside real estate counsel Anne Lanphar and finance consultant Mark Northcross — worked vigorously to make the project’s financing work. While the developer continually dodged questions about its financial health and commitment, Aleshire said, the city had no warning until Monday morning when a letter arrived saying, without explanation, that Winehaven would not provide a guarantor or provide bonds.
That was a red flag for Richmond’s legal team.
Richmond resident Sally Tobin said she was grateful for the council’s rigorous, penetrating questions throughout the project’s “muddy mess.”
“Through this process, it’s been very hard to see the city of Richmond and Point Molate mistreated and taken for granted. Let’s go with Upstream and Guidiville. To the best of my knowledge, they have not lied to us, and that is genuinely refreshing.”
CBS Bay Area:
Richmond City Council rejects deal for massive development at Point MolateMAY 19, 2022 / 12:49 PM / CBS SAN FRANCISCO
RICHMOND – The Richmond City Council on Tuesday decided against selling Point Molate to a Southern California developer to build a massive development there, saying the company didn't prove it could meet the financial requirements of the development.
The council voted 4-2 to scuttle the project, with Mayor Tom Butt and councilmember Nat Bates dissenting. Councilmember Demnlus Johnson was absent.
As part of an earlier ownership agreement, the land can now be sold to the Guidiville Rancheria of California tribe for $400. If the tribe's developer, Upstream Point Molate, later sold the land for development, the city could still gain 50 percent of the sale price. The tribe has also talked about developing a casino on the land.
Point Molate in RichmondCBS
But, for now, the city is out its $22.5 million share of the $45 million price tag for not selling to developer Winehaven Legacy. The developer proposed 1,450 homes and 400,000 square feet of commercial space on 270 acres near the Richmond-San Rafael Bridge.
The four members of the council, known as the Richmond Progressive Alliance (RPA), raised questions earlier this year about Winehaven's finances and its ability to build. The council declined to create a community facilities district to pay for the project's infrastructure, and city officials said it wasn't clear Winehaven could pay for them. Members said Tuesday they weren't convinced the company had the money to move forward.
Butt wrote Wednesday in his email newsletter that "the RPA four" never wanted the Winehaven deal to work.
Bay City News: City Council Rejects Deal To Develop Point Molate
May 19, 2022
By Tony Hicks
Bay City News Foundation
The Richmond City Council on Tuesday decided against selling Point Molate to a Southern California developer to build a massive development there, saying the company didn't prove it could meet the financial requirements of the development.
The council voted 4-2 to scuttle the project, with Mayor Tom Butt and councilmember Nat Bates dissenting. Councilmember Demnlus Johnson was absent.
As part of an earlier ownership agreement, the land can now be sold to the Guidiville Rancheria of California tribe for $400. If the tribe's developer, Upstream Point Molate, later sold the land for development, the city could still gain 50 percent of the sale price. The tribe has also talked about developing a casino on the land.
But, for now, the city is out its $22.5 million share of the $45 million price tag for not selling to developer Winehaven Legacy. The developer proposed 1,450 homes and 400,000 square feet of commercial space on 270 acres near the Richmond-San Rafael Bridge.
The four members of the council, known as the Richmond Progressive Alliance (RPA), raised questions earlier this year about Winehaven's finances and its ability to build. The council declined to create a community facilities district to pay for the project's infrastructure, and city officials said it wasn't clear Winehaven could pay for them. Members said Tuesday they weren't convinced the company had the money to move forward.
Butt wrote Wednesday in his email newsletter that "the RPA four" never wanted the Winehaven deal to work.
"Their actions have now set the city up for years of expensive litigation," Butt wrote. |
