Tom Butt
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  SunCal sues city of Richmond over Point Molate
May 31, 2022

As expected, SunCal has filed a lawsuit against the City of Richmond, which will cost the City millions to litigate and perhaps tens of millions to settle or pay a judgment. Stopping Point Molate development is perhaps the highest public policy priority for the Richmond Progressive Alliance (RPA) City Council members (McLaughlin, Jimenez, Willis and Martinez). The millions of dollars this will cost taxpayers will mean that community priorities such as cleaning up Richmond and law enforcement will continue to suffer. And Eduardo Martinez wants to be your next mayor. Elections have consequences.

It was former mayor, and current councilmember, Gayle McLaughlin who caused the ten years of litigation that brought us to this point by abusing her discretion as mayor and violating the implied duty of good faith and fair dealing. Instead of learning from their mistakes, these RPA people just double down and throwing good public money after bad.

SunCal sues city of Richmond over Point Molate

Would-be developer SunCal is suing the city of Richmond over what it says was a bad-faith effort to derail its already approved project at the site of Point Molate.
Would-be developer SunCal is suing the city of Richmond over what it says was a bad-faith effort to derail its already approved project at the site of Point Molate.

By Sarah Klearman  –  Staff Reporter, San Francisco Business Times
May 27, 2022 Updated May 31, 2022, 9:39am PDT

It didn’t take SunCal long to make good on its promise to sue the city of Richmond.

The Irvine-based developer filed a suit against Richmond and its City Council in Contra Costa County Superior Court Thursday, just two days after council members voted 5-2 to confirm SunCal had not met the conditions necessary to allow it to close on the purchase of the 272-acre Point Molate. 

SunCal affiliate Winehaven Legacy LLC’s plans to redevelop the former naval fuel depot into 1,450 homes and hundreds of thousands of feet of commercial space were approved in 2020, but the developer faced a deadline of May 21 to complete the purchase of the land to allow it to proceed with the project.

In a letter sent to the city of Richmond earlier this month, SunCal accused the City Council of acting in bad faith in choosing to reject the establishment of a community facilities district (CFD), a critical taxpayer funded component of SunCal’s project financing. The council majority that voted to reject the CFD has vehemently denied those allegations, saying they acted to prevent putting the city’s general fund at risk.

Per the terms of a settlement born out of lawsuit with a previous Point Molate developer, Richmond, not having sold the land to SunCal by May 21, must now offer the land for sale to that previous development team — Upstream Point Molate LLC and the Guidiville Rancheria of California tribe — for just $400. The pair intend to exercise their option to purchase the property, city officials said at the May 24 Council meeting.

SunCal's lawsuit seeks an injunction that would prevent the city from selling the land to another party before its claims are resolved, its attorneys wrote in the complaint. It's also seeking an order compelling the city to allow it to purchase the land at Point Molate. Its suit further asks the court to award it an unspecified quantity of damages, costs of suit including attorneys fees, and other relief as is determined by the court to be “just under the circumstances.”

The developer has accused the city of breach of contract and breach of the covenant of good faith and fair dealing, essentially arguing that the city violated the terms of existing agreements and acted unfairly or arbitrarily in voting not to establish the CFD. 

The suit also accused Richmond’s City Council of violating the Brown Act, which guarantees the right of the public to attend and participate in public meetings. SunCal accused Richmond City Council members of hosting a meeting that was either informal or secret in order to discuss the rejection of the establishment of the CFD. It also said the public was not given adequate advance notice of the CFD rejection via council agendas. 

“Had the public sufficiently been notified of the different CFD Decline Resolution item… representatives of Winehaven as well as the public at-large could have and would have provided substantive comments to the Council thereon,” the complaint reads.

Attorneys for SunCal, which is requesting a jury trial, wrote that the developer has spent upward of $20 million in pre-development work and investment at Point Molate. A SunCal spokesperson told me May 24 that the developer would seek to ensure its investment in the property is returned.