City of Richmond, CA Sells 270-Acre Parcel for $400

Reversal of Point Molate development costs city millions and loss of community benefits
City faces lawsuits that will adversely affect the general fund

RICHMOND, Calif., May 27, 2022 /PRNewswire/ -- On May 24, the Richmond city council voted to deny Winehaven Legacy, LLC, a special purpose entity of Irvine-based developer, Suncal, the right to develop the former Pointe Molate Naval Fuel Depot.  The deal would have added over $22.5 million to the general fund, ensured substantial environmental cleanup, rehabilitated the Winehaven Historic District, and expanded the beach park, while providing over 4,000 jobs. 

Initially inked in 2020, the contract would have also preserved more than 70% of the property as open space and paid the Guidiville Tribe and its developer, Upstream Point Malote, LLC, an additional $22.5 million.  The property will now be sold to the Guidiville Tribe for only $400 with no payment to the City's general fund.

The Navy deeded the original property to the City of Richmond with the understanding that Richmond would oversee its clean-up and would develop the area for beneficial use.

The City first agreed to sell the land to Upstream and the Guidiville Tribe.  After years of effort by Upstream and the Tribe, the City refused to approve their project. The Tribe and Upstream sued.

The City settled that lawsuit to avoid a costly verdict against it. In the settlement, the City was given one more chance to make productive use of Point Molate and serve the community's interests. The City was given a period of time to find a developer and sell the developable areas of the property to it.

Winehaven was chosen, and struck a $45 million deal with Richmond, which the City of Richmond would split with Upstream and Guidiville. This proposal included a commitment to deliver over 1400 new homes, rehabilitate the historic buildings, bring in local development jobs and create recreational access to an area that has long been fenced off and unavailable for public use.

To ensure that the project would be successful, Winehaven worked closely with city staff on the project and negotiated a Disposition and Development Agreement and a Development Agreement that included a preliminary financing plan for the construction of the project.  These documents also obligated the City to work with Winehaven to make the project successful.  The City Council approved these documents in September 2020.

In 2021, the new City Council claimed that the agreed-upon financing plan was inadequate, suggesting it would put the City's general fund at risk. City Councilmember Claudia Jimenez, admitted at the hearing the real reason they were preventing the project. She said "we don't want a high-end housing project…" at Pointe Molate, indicating the true reason for the change in project support.

"The new City Council and its law firm, Aleshire and Wynder, had no good faith basis to prevent the deal from moving forward," said a Winehaven spokesperson who noted that the claim that the project would adversely impact the City's general fund was patently false.  

Guidiville and Upstream will now get the developable areas of the 270 acre Pointe Molate property for only $400 with no payment to the City's general fund. This has caused yet another lawsuit against the city, putting the general fund at risk, and denying the City of Richmond a rehabilitated Historic District, open space trails, and shoreline park that could have been a destination for the entire Bay Area.

SOURCE SunCal