A years-long, million-dollar effort to develop Richmond’s Point Molate has unraveled, and hundreds of acres of prime Bay Area shoreline property now may be sold for a bargain $400 to the Native American tribe that once wanted to build a mega casino there.
It’s unclear what the Guidiville Rancheria of California tribe and its developer, Upstream Point Molate, LLC, will do with the land. Their attorney could not be reached for comment.
The envisioned development was officially killed when the Richmond City Council voted 4-2 Tuesday against proceeding with a planned $45 million sale of the land to Winehaven Legacy LLC. Mayor Tom Butt and Councilmember Nathaniel Bates dissented. Councilmember Demnlus Johnson was absent.
Winehaven had proposed building more than 1,450 homes and 400,000 square feet of commercial space on a 270-acre section of Point Molate.
After a previous City Council approved the development in September 2020, the current council majority said it wasn’t convinced Winehaven could finance the entire project without counting on city funding.
In backing off from the sale, the city will lose the $22.5 million it would have reaped as its cut of the land transfer. The arrangement stemmed from a federal settlement agreement reached after the tribe sued Richmond for rejecting its casino project years ago. The court upheld the council’s action but forged a settlement that required the city to evenly split profits from any land sale with the tribe and its developer.
And now the Guidiville Rancheria of California tribe could take over Point Molate’s developable land after Saturday by paying the city $400. The tribe will have five years to decide what — if anything — to build on the bayside property.
While Richmond could still reap 50% of the proceeds if the tribe later sells the property, city officials can only speculate about whether Point Molate will be developed as envisioned by Winehaven, turned into a wildlife refuge or even host a mega-casino like the one rejected in 2011.
Interim City Attorney Dave Aleshire told the council one thing is certain — Richmond will find itself back in court.
“I think it’s too bad,” Aleshire said, adding that Upstream has already threatened to sue Richmond to recoup the $22.5 million it lost out on because of the scrapped sale to Winehaven.
“Despite all the history here, that everybody doubts each other, your staff worked hard to try and get things together so that you would have a reasonable opportunity to make this decision,” Aleshire said. “I think that the items that are missing are critical pieces to the equation.”
The council’s decision dealt a blow to those who say the development was sorely needed amid a regional housing shortage but pleased others who counter that open spaces are just as important and need to be preserved whenever possible.
The proposed development ran into trouble in March, when four council members known as the Richmond Progressive Alliance questioned whether Winehaven could successfully finance the project without tapping into the city’s general fund.
The alliance council members, who opposed the project from the start, also challenged the notion that houses built at Point Molate would fetch $1 million to $1.8 million as initially projected, because of the development’s remote location, lack of amenities, fire risks and proximity to the Chevron Richmond Refinery.
After the council subsequently voted against setting up a community facilities district to pay for the project’s infrastructure, Winehaven couldn’t come up with another way to pay for that work or prove it would be able to obtain enough cash to build the homes.
Both the city and developer have been blaming each other for the project’s unraveling. Winehaven is alleging that city officials breached their contract while the city argues that the developer’s financial opacity violated Point Molate’s development agreements and ultimately derailed the deal.
Councilmember Claudia Jimenez said she was shocked the developer didn’t divulge its financial uncertainties sooner.
“For me, I don’t think it’s bad faith to make sure that the city and the public has all the right information to make sure that this project is going to be successful,” Jimenez said.
Mayor Butt, who has supported Winehaven’s proposal from the beginning, was vexed by the turn of events.
“I think what we’ve heard tonight is a remarkably creative narrative blaming the victim,” Butt said in defending Winehaven. “The four Council members who are going to vote to terminate this contract have been committed to stop this project from the time they took office. That is evidence of serial bad faith action.”
Linda Klein, Winehaven’s land use attorney, agreed. “If not for the city’s wrongful denial of the CFD (community facilities district), we would be closing this week,” she said.
By terminating the agreement, Butt said he thinks the city will not only lose control of the land and potential profit off its value but will also risk losing hundreds of millions of dollars fighting lawsuits from SunCal, Winehaven’s parent company.
“It’s like you guys are playing with Monopoly money,” Butt said. “I got to tell you, that’s enough money to bankrupt the city of Richmond, and you guys are looking at that like it’s a joke. This is like Christmas and New Year’s for attorneys all rolled into one.”
Aleshire replied that the city — including outside real estate counsel Anne Lanphar and finance consultant Mark Northcross — worked vigorously to make the project’s financing work. While the developer continually dodged questions about its financial health and commitment, Aleshire said, the city had no warning until Monday morning when a letter arrived saying, without explanation, that Winehaven would not provide a guarantor or provide bonds.
That was a red flag for Richmond’s legal team.
Richmond resident Sally Tobin said she was grateful for the council’s rigorous, penetrating questions throughout the project’s “muddy mess.”
“Through this process, it’s been very hard to see the city of Richmond and Point Molate mistreated and taken for granted. Let’s go with Upstream and Guidiville. To the best of my knowledge, they have not lied to us, and that is genuinely refreshing.”
Source: www.mercurynews.com