Richmond hit with another Point Molate lawsuit, indefinitely delaying any development
on June 9, 2022
Point Molate, a scenic stretch of San Francisco Bay shoreline, has faced one legal battle after another over its ownership and development potential.
A new lawsuit, filed on May 27 in Contra Costa County Superior Court, seeks $20 million from the City of Richmond and threatens to tie up the 425-acre plot indefinitely. Winehaven Legacy LLC, a subsidiary of developer SunCal, has accused the city of breaching its contract and breaking the Brown Act, which governs public meetings in California.
“Winehaven spent thousands of hours and advanced millions of dollars for the benefit” of the city, the company claimed in its complaint.
The land’s future is now uncertain. And Richmond stands to lose $22.5 million, which would have been its share of the $45 million Winehaven land purchase. The remaining half would have gone to the Pomo Native American tribe Guidiville Rancheria of California and developer Upstream Point Molate LLC, under a 2004 agreement with the city.
In May, Richmond City Council rejected Winehaven’s plan for a mixed-use development of more than 1,400 homes at Point Molate, which means the tribe and Upstream can buy the land for $400, under a settlement from a previous lawsuit that put a May 21, 2022, deadline for any land sale. If the tribe buys the land, it will have five years to develop it or it will return to the city, according to Councilmember Claudia Jimenez, who voted with the majority on March 18 against the special taxing district that Winehaven had been counting on to proceed with development.
“I am not against development, but I feel like we need development that really gives the city revenue and gives this city a certainty that there is going to be revenue,” Jimenez said.
She and Councilmember Gayle McLaughlin, who also voted against the taxing district, were not on the council in 2020, when the council agreed to a Disposition and Development Agreement that obligated the city to work with Winehaven to establish the special taxing, or Community Facilities District, for Point Molate. The CFD was a critical part of Winehaven’s plan to finance roads, drainage and other property improvements.
Weeks after the DDA was approved, Jimenez and McLaughlin were voted on the council, joining incumbents Melvin Willis and Eduardo Martinez, who opposed the project. After raising concerns about the financial risk the city was taking in the deal, all four voted at a special March 18 meeting for a resolution denying Winehaven the CFD, essentially killing the project.
“We discussed the CFD item fully at the regular City Council meeting of March 15 and the City Attorney was clear that a majority of the Council had deep concerns about the financial impact of approving the CFD,” McLaughlin said in an email last week, “The resolution of denial was prepared for the special meeting on March 18 based on the council’s discussion on March 15.”
Mayor Tom Butt, who favored the CFD, was out of town and unable to connect to the March 18 meeting remotely. Councilmember Nathaniel Bates said he was absent because of a prior commitment. And Councilmember Demnlus Johnson III did not respond to a question about why he missed the meeting.
Interim city attorney Dave Aleshire could not be reached for comment.
The lawsuit asserts “the Council’s new majority expressed hostility toward the Project approvals the City Council had granted Winehaven.” It also contends that the short amount of time between the two meetings and the lack of deliberation on March 18 “strongly suggests that the Council violated the Brown Act by surreptitiously taking action through conducting a “secret meeting” or “serial meeting,” meaning it was conducted through intermediaries or email.
Concern about financing
The Brown Act prohibits a council from discussing or acting on an item that is not on the public agenda, and also requires that all meetings between members be open.
McLaughlin and Jimenez said there were no secret meetings.
“I think, independently, each of us arrived at the same solution, that we could not support a CFD that left the rest of the city at risk,” McLaughlin said in a phone interview.
The City Council gave Winehaven two months to present a new financial plan, without the CFD. On May 17, the council voted 5-2 to pull the plug on the project, finding that Winehaven did not meet the contract’s requirements for financing it.
“They provided no financial plan, no fees paid, no adequate evidence of having the funds, no commitment of the guarantor,” McLaughlin said. “Any financial plan that they were putting forward had a CFD, a community facilities district associated with it, and we had already rejected that because of the impact that it would have caused on our general fund.”
In its complaint, Winehaven says that without the CFD, it could not overcome its financial obstacles in those two months. It is asking the court for the right to buy the property and to stop any sale to another developer.
The tract’s history has made it difficult to develop, not only because of contamination but also because it includes Ohlone burial sites. It sits just northwest of the Chevron Refinery and was a ship fueling depot until 1995. The federal government later conveyed it to Richmond. Under SunCal’s plan, the development would include homes, businesses and new police and fire stations. About 70% of the land would remain open space.
Butt has championed the project on the council and after it unraveled, said, “I hope development occurs similar to the SunCal project.”
In 2003, Upstream planned to build a casino on the site and sell it to Guidiville Rancheria. That plan hit a snag when Upstream was unable to secure federal approvals, prompting the city to withdraw its support, and Upstream and the tribe to sue Richmond for allegedly violating the development agreement. The lawsuit was resolved with a settlement that led to the revenue-sharing agreement on the land’s future development and to the proposed sale of the land to Winehaven.
Point Molate also includes a century-old complex of 35 buildings that once housed one of the world’s largest wineries. SunCal’s plan included the preservation and redevelopment of those buildings.
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