By Michael Krueger
(This ran in the Alameda Journal on Friday.)
Rosemary McNally's My Word on Nov. 20 is unfortunately full of inaccuracies that do not help readers understand what is truly at stake in the Feb. 2 election to determine the future of Alameda Point. Below are listed McNally's chief objections along with the corresponding facts.
Bankruptcies: Each SunCal project is a separate entity. The recent bankruptcies were all projects financed with Lehman Brothers. The financial partner for Alameda Point is D.E. Shaw, which backs up the investment with $29 billion in worldwide assets; Lehman is not involved in any way.
Control of the land: Once an agreement is reached, the Navy conveys the land to the city, not to the developer. The city has control of the release of land for development. Laws cannot be changed "at whim" by the developer or anybody else.
Fiscal neutrality: Alameda Resolution 13642 requires that the project pay for itself and not burden the City of Alameda or residents outside of Alameda Point. The project must pay its own way for all city services.
City fees: The project is required to pay for public benefits directly rather than paying for them via impact fees.
Rent revenue: The city is spending about $2 million more per year ($2.3 million last year alone) in maintenance and security costs than it collects in rent revenue, and this loss is rising every year due to the deteriorating conditions of the Point. Redeveloping Alameda Point will increase revenue through transfer, sales and property taxes. Financial projections indicate a long-term surplus of funds for the city from the project.
Selling parcels: SunCal based its proposal on the fact that it does the infrastructure and master planning, then sells to vertical developers who specialize in certain aspects such as building homes, business sites, transportation infrastructure, parks, etc. When the City Council selected SunCal two years ago, they considered this a good thing; it means that the project is not tied to only one type of development.
Profit: We should hope that SunCal makes a profit on this project, because there is a profit-sharing mechanism in place between SunCal and the city.
Risks: Alameda Point is blighted, full of toxins (the Navy is only required to clean below ground, not the lead and asbestos above ground), largely unusable, and costs the city millions in lost revenue each year. That is the real risk that looms larger for each day the project lies undeveloped.
This February, let's make a decision based on the facts.
