Updated: Jun 30, 2022
Richmond Mayor Tom Butt and his sons Daniel and Andrew are spreading more confusion and disinformation about Point Molate– a classic distraction from the mess Mayor Butt has made there.
On May 17, 2022, the City Council evaluated the documentation that SunCal had submitted toward closing the sale of Point Molate (through its shell affiliate, "Winehaven Legacy LLC.") The Richmond City Attorney advised the City Council that the developer had already missed deadlines to provide all the required documentation about the LLC's finances, about financial guarantees, and about plans on how to move forward, basically in breach of the contract between the City and the SunCal shell corp.
During the meeting Mayor Butt badgered City Council members Claudia Jimenez and Gayle McLaughlin for asking probing questions that drew out many of the concerns and flaws in the LLC's bid to buy Point Molate. Their questions were backed up by City Attorney David Aleshire's report listing the major failings of the LLC's effort to complete the purchase.
Rather than accepting that the City had just dodged a major financial disaster, Mayor Butt openly used code words to invite the developer to sue Richmond (his own city). Then, at that same meeting, Mayor Butt incorrectly stated that the developer could just come in any time before the deadline of May 21, 2022 and buy the property for $45 million. Such a move would have endangered the City’s financial stability for many years because, among other things, substantial documentation was not provided, no financial backer was stepping up to cover costs of development and Richmond would have been left with a fiscal liability when the project failed.
Then, a few days later, just after the May 21, 2022 deadline had passed, Mayor Butt reported, incorrectly, that the developer had actually done just that - paid $45 million into escrow by the deadline. Once more Butt inaccurately promised that the City would reap $22.5 million (half the purchase price, to be shared 50-50 with the casino developers Upstream Inc. and the Guideville tribe of the Pomos). The real story is that to get the $22.5 million, the city would have to keep the $22.5 million separate and use it to subsidize losses from the project, so it would never be available to the City’s General Fund.
But then the supposed payment evaporated into thin air. It turned out that this supposed payment of $45 million, and the attempt by the SunCal shell affiliate to close the purchase, was a ghost move - no money was really paid, no guarantor for the project satisfied conditions, and there was no real anything that would constitute a serious offer and payment for the purchase of the land to do a project. Was this a fraud or a misunderstanding or a simple oversight? You decide.
The City could have simply ignored this last-minute move by the developer toward a supposed purchase because under the contract, all the related documentation to show that the developer could do the project had been due the month before. However, City Attorney David Aleshire spent his weekend studying the new proposals and running the numbers, paying attention to the actual language of this new purchase proposal and trying to resolve the things that made it an illusion instead of a proposal. He negotiated in good faith, but once again the developer did not give the required information. This proved to be the same pattern of behavior from SunCal, (non-compliance and failure to provide straightforward information) that Aleshire has had to contend with throughout his extended efforts to complete the contract with SunCal and its LLC.
So, at the most recent City Council meeting of Tuesday May 24, 2022, Mr. Aleshire provided updates to the City Council about the latest proposals by SunCal's LLC, as well as about the LLC’s continued failures to provide the proper information, guarantees and even the money to buy Point Molate for the proposed development.
It seems SunCal (Mayor Butt’s hand-picked developer) may have been bluffing all along, trying to get the City to bankroll the SunCal shell corporation's project, presumably because SunCal would not risk its own money.
All the impartial economic reviews of the project showed that no revenue would be produced for the City. Instead, the proposed development would have produced millions in losses every year into the future for the City. Estimates of the losses to the City of Richmond reached as high as $300 - $400 million.
What followed after SunCal’s LLC did not complete the purchase was completely predictable. Mr. Aleshire informed the City Council that Point Molate would be sold to Upstream Inc. and the Guideville Tribe of Pomo Indians. According to the inexplicably inept settlement deal orchestrated by Mayor Butt, the former would-be casino developers were able to pay $400 to purchase the land - with the rights and the obligation to market it for the next 5 years. If they cannot find a buyer, the land reverts to the City.
Mayor Butt, for his part, continues his disinformation campaign, blaming everyone and anyone else for his incompetent deal making. He berates the City Council for not risking the city's finances on this terrible deal. Building the Butt dynasty, Daniel Butt, a son of the Mayor, joins in with his opinion that the city was under obligation to sell to the empty shell LLC - ignoring the pile of evidence about how bad a deal this would be and ignoring the lack of performance of the LLC. Andrew Butt, another son of the Mayor, is a full throated supporter of all this nonsense. He was appointed to the Richmond Planning Commission by his father. Andrew then voted to approve the SunCal plan, all while working in the family construction and development business. Andrew is now exploring a run for city council as a candidate who favored his father’s financially disastrous deal!
In the meantime, the City Attorney, in consultation with the City's land use consultants, is moving steadily along, drafting the final resolution that will contain all the reasons why the deal presented by SunCal's LLC did not comply with the requirements of its contract with the city.
Mayor Tom Butt has made a chaotic shambles of Point Molate - including promoting a casino that Richmond residents later voted down, negotiating a terrible $400 settlement deal with Upstream, Inc. and the Tribe, making a sweetheart deal with his friend Bobby Winston to rent storage space at Winehaven (and then killing the citizen’s oversight committee for daring to ask questions about the sweetheart deal), and selecting SunCal as the Master Developer for a destructive project that would transform public land into a luxury residential neighborhood.
And in the latest development, SunCal is suing the City of Richmond for not accepting its terrible deal, and has failed to pay $990,000 that it owes to the City.
It is astonishing the number of falsehoods Mayor Butt has presented to cover his destructive deals. Fortunately, the City Council has seen through them and voted to protect the City. And because this is an election year, voters can continue to rebuild this city in a way that puts the needs of the people first and not those of predatory developers.