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Alameda Point Developer Sues City Of Alameda, Alleging Breach Of Contract

ALAMEDA, Calif. - The developer under contract to redevelop Naval Air Station Alameda on Aug. 4 filed a lawsuit in the U.S. District Court for the Central District Court of California in Santa Ana, alleging that the City of Alameda breached the contract and violated the constitutional rights of the developer, SCC Alameda (SCC Alameda Point, LLC v. City of Alameda, et al., No. SACV10-01171 CJC [RNBx], C.D. Calif.).

The federal court lawsuit claims that the interim city manager, Ann Marie Gallant, and other city officials "have corrupted the entitlement process and prevented its completion."

The City of Alameda selected SCC Alameda Point LLC as the master developer in 2007, and entered into an Exclusive Negotiating Agreement (ENA). As the master developer, SCC Alameda put together a comprehensive mixed-use redevelopment plan that calls for approximately 4,700 homes and 146 acres of parks and recreational space, a project which would generate much needed jobs for the community. The developer has spent more than $17 million in its efforts to redevelop the 770-acre property in Alameda.

"Until last year, the parties cooperated and negotiated in good faith toward completion of the entitlement process," Skip Miller of Miller Barondess LLP, attorneys for SCC Alameda, wrote in the complaint. "But in the last year, everything changed. Instead of cooperation and good faith negotiations, defendants repeatedly changed course and threw up one roadblock after another to stall and ultimately destroy the project. SCC Alameda, on the other hand, tried over and over again to work through the process, not knowing that defendants had resolutely determined to reverse course and kill the project."

The City Council met on July 20, 2010, to vote on, and prematurely deny, SCC Alameda's application for the project entitlements which had the practical effect of terminating the ENA. SCC Alameda said that the city reneged on its obligation to honor the ENA, that the ENA is automatically extended and that the vote was unnecessary and invalid.

"The Exclusivity Agreement provides that so long as SCC Alameda meets certain milestones, the exclusive negotiation period would automatically extend beyond the expiration date of July 20, 2010," Miller wrote. "SCC Alameda satisfied these milestones including, among other things, submitting a master plan for the property, an infrastructure plan, a sports complex master plan, the Development and Disposition Agreement ('DDA') and an entitlement application, which includes a project description."

SCC Alameda believes that, after three years of collaborative planning with the City of Alameda, and coinciding with the installation of Gallant as interim city manager in April 2009, the process abruptly devolved into a scheme that was designed to stop the project.

Miller also wrote, "The motive of the Interim City Manager, previously concealed, has now been exposed: She and others want to oust SCC Alameda as the developer, make the project a 'public' development and effectively take it over. She, and others, are seeking to put themselves in charge of a multi-year multi-million dollar project, despite having no development experience or expertise, so they can perpetuate themselves in public office and receive remuneration for 'services rendered' indefinitely. This is about public officials setting themselves up to feed at the public trough.

"Gallant has undermined SCC Alameda's ability to move forward with the Exclusivity Agreement; has impaired and impeded the entitlement process; has prematurely cut off state-mandated environmental review; and has destroyed SCC Alameda's right to a full, fair and complete review of its application for entitlements," wrote Miller. "She, and others, have corrupted the entitlement process and prevented its completion."

Download the complaint.