East Bay Express: Lehman, SunCal, and Alameda Point


Buried on the web site of major West Coast developer SunCal Companies is the story of a little girl named Courtney Faye Smith. Courtney has spinal muscular atrophy and cannot play on area playgrounds because none of them can accommodate her wheelchair. But SunCal flush with cash from its partner Lehman Brothers and newly named the master developer at Alameda Point is going to do something about that. It is going to build "Courtney's Sandcastle," a wheelchair-accessible wonderment of wind chimes, topiary creatures, and plants that "emit aromas when touched." The playground will boast an interactive musical pathway, a castle ringed by a moat, a ship sailing a simulated ocean, a sea serpent or two, a mist-breathing dragon, and a "rock mountain that comes to life with sensor-activated water features." It will all be part of San Clemente's new master-planned Marblehead Coastal development and will serve as a draw to the 8.5-acre park that SunCal "will begin building for the public this fall."

That article is dated July 2007. The playground has not been built. And according to the mayor of San Clemente, the rest of Marblehead Coastal is a "quagmire." The public infrastructure and street improvements that SunCal pledged to complete have been so far behind schedule that in March the city authorized its attorney to sue the company if it did not see progress.

SunCal's troubles in Orange County mirror the troubles the company has encountered elsewhere in California, from a bankrupt project in Bakersfield to a scotched development at Bethel Island, shuttered when the market slumped and then left to languish indefinitely. At Bethel Island, dug-up dirt blows downwind into houses and the company has to send in water trucks to dampen the stuff on windier days.

In recent years, SunCal has set its sites on the western East Bay, where the housing market isn't as bad as many other areas of the state. SunCal is the master developer at two of the region's biggest base conversions, the massive Alameda Point project, and the Oak Knoll Naval Hospital in the Oakland hills.


With greenbacks from Lehman Brothers often in hand, SunCal had developed a reputation for big thinking and bigger bids. It put up $100.5 million for Oak Knoll, a move that left local developers "astounded and amazed," according to the San Francisco Business Times. It outbid Donald Trump for a site in Los Angeles; grabbed up $250 million dollars worth of land in the now-troubled Inland Empire; planned a 25,000-home development that would have tripled the population of Barstow; and scored a 57,000-acre land grant twice the size of Boston west of Albuquerque.