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The city of Alameda recently won another legal battle against SunCal. Judge Charles Breyer of the United States District Court dismissed the developer's $100 million lost profits claim against the city.
When the city and SunCal negotiated the terms of their joint development agreement, they stated that if the city breached the contract, SunCal would be entitled to $1 million in damages. When the city's relationship with SunCal fell apart in 2010, the developer not only sued the city for the $1 million, but also for $17 million in lost expenses and $100 million in lost profits.
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A federal judge has dismissed a claim for $100 million against the city of Alameda by SunCal Companies, the amount of potential profit the developer said it has lost since its bid to redevelop the former Alameda Naval Air Station fell through.
But U.S. District Court Judge Charles Breyer said he still would consider SunCal's claim that it spent $17 million on the project and so should be compensated by the city.
The dismissal of the claim for lost profits was announced Tuesday.
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The developer that planned to build a 12,000-resident community at Alameda's former Naval Air Station has lost the biggest part of its breach-of-contract suit against the city: a claim for more than $100 million in lost profits.
Developer Suncal Loses $100M Claim Against Alameda
February 14, 2012
United States District Court Judge Charles Breyer dismissed Suncal's claim for $100M against the City of Alameda, which alleged lost profits from potential development at Alameda Point.
Judge Breyer ruled that future anticipated profits could not be recovered under California law because there had been no agreement or approval as to the development plan. He stated that future profits would be speculative since it was not certain that there would have been an agreement on the development plan.
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City of Alameda officials are claiming a victory after a federal judge decided to limit the lawsuit that SunCal Companies has filed over Alameda Point to cover just whether the terms of their former exclusive negotiating agreement prevent SunCal recovering damages.
Judge Charles Breyer said he had "a serious concern" with the legal viability of SunCal's claims for $100 million in lost profits, but would not rule on it until discovery was complete, according to city officials.
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In soundly rejecting Measure BSunCal's ballot measure to redevelop Alameda Point. It was defeated by a vote of 85 to 15 percent on February 2, 2010. on Feb. 2, Alameda voters sent the developer SunCal a clear message. Guy Span of The San Francisco Examiner put it very well. "What SunCal did not expect is that the poorly funded opposition ($50,000) could overcome the million dollar mailers, happy talk, TV commercials and glossy plans they put before the voters," Span stated. "Only 15,000 voters showed up at the polls but 85 percent of them told SunCal, the developer, to take a hike."
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The company seeking to redevelop the former Navy base here is seeking more than $100 million in damages against the city of Alameda because it says local officials acted in bad faith in a bid to sideline its efforts so they could redevelop the site on their own.
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Suncal Cos. is suing the City of Alameda, seeking $100 million in damages after the city dumped the firm as master developer of Alameda Point, a former naval air station.
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After threatening legal action if the city decided to part ways, developer SunCal filed a complaint against Alameda for breach of contract and a violation of the Constitutional contract clause over the Alameda Point development.