Suncal

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A deeply divided Alameda City Council may end up walking away from the city’s latest proposal to prepare Alameda Point for development, with some council members saying they think the city should focus on existing tenants and forget about moving forward with new development plans for a few years. The development strategy has been in the works since the council fired former master developer SunCal in July 2010.

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Alameda city leaders are proposing an overall development strategy for Alameda Point that breaks up the former Naval Air Station into neighborhoods for possible future homes, stores and businesses.

The goal is to jump-start entitlements -- the legal process for securing the right to develop a property for a particular use -- in the wake of a deal between the city and the U.S. Navy for a no-cost conveyance of the base.

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The City Council is set tonight to consider a proposed development strategy for Alameda Point, most of which is expected to be in the city’s hands by the end of this year.

City officials want to divide the Point property into three separate areas – two commercial, one residential – that they would prepare for reuse and development, a departure from earlier efforts to get developers to do that work instead. They’re saying the new strategy would offer the city more certainty and control over development at the Point, and could expedite development efforts there.

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Oak Knoll, the sweeping, picturesque Oakland hills property that once housed a storied Navy hospital, is once again in flux.

As part of the huge Lehman Bros. bankruptcy proceedings, a federal judge recently granted control of the 167-acre site to the liquidation estate handling the Lehman remnants.

The settlement means SunCal, the Orange County developer that bought the property in 2006 for $100 million, is no longer involved in the project - and the project itself may be dead.

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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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Oct. 24 (Bloomberg) -- Lehman Brothers Holdings Inc. settled a dispute with developer SunCal Cos. over how to reorganize a group of bankrupt California housing projects.

SunCal agreed to support reorganization plans sponsored by the Lehman affiliate that helped finance about 20 developments in California, where the two companies had been partners until the investment firm filed for bankruptcy in 2008, according to court papers filed today. A SunCal affiliate will get an option to buy two of the projects for $57.5 million and be paid $3 million under the proposed settlement.