By: Robert Cheasty
September 9, 2022
Point Molate was sold on August 29, 2022 for the sum of $400 (yes, four hundred dollars) to the Guidiville Rancheria, a Tribe of the Pomo Native Americans, and Upsteam Inc., the development partners with the Guidiville Rancheria.
This sale was required under a settlement of a lawsuit brought by the developers of a former casino proposal at Point Molate (now-defunct) against the City of Richmond that owns Point Molate.
According to Richmond's City Attorney David Aleshire, what was sold was not the entire site of Point Molate, but what are referred to as the four developable parcels which were outlined in the Settlement of the lawsuit: Guidiville v. City of Richmond in federal court.
The remainder of Point Molate, consisting of the beach and the steep hills, stayed as property of the City of Richmond, and comprises what has controversially been described as about 70% of the upland property.
In their lawsuit against Richmond, the Guidiville/Upstream group sued for repayment of the money they paid the City for development rights at Point Molate, plus potential lost profits. This was after the City of Richmond turned down the group's casino proposal.
That lawsuit was settled in 2018 when Mayor Butt wanted to develop luxury housing at Point Molate. Mr. Butt's settlement deal specified that Point Molate would be sold to a developer and the profits would be split 50/50 between the City and the Guidiville/Upstream group.
But there were three time conditions.
The deadline to sell Point Molate was May 21, 2022.
If the City missed the May 21, 2022 deadline, Guidiville/Upstream got to buy Point Molate for $400 and then have 5 years to sell and split the profits with the City, the City having final say over any developer/buyer picked.
If the property is not sold by Guidiville/Upstream within 5 years, Point Molate goes back to the City to sell.
May 21, 2022 came and went without a sale to the expected buyer (southern California developer SunCal Inc. and its affiliate Winehaven Legacy LLC). The City and SunCal had agreed upon a sale price of $45 million but SunCal balked when the City refused to help finance the project due to its high financial risk.
The City's economic analysts had determined the project was too risky for the City to back the $300 million in bonds needed for the development.
Ultimately the SunCal group were not willing to pay the $45 million, and refused to provide other documentation and requirements for the sale (including how they would finance the development). The deal fell through.
For more, see articles at richmondcommunitynews.com:
Judge Removes Restraining Order, Allows Title to Point Molate to Pass to Guidiville Tribe & Upstream Inc.; Judge Dismisses Mayor Butt’s Written Declaration Against His City as “linguistic froth” and Not Providing Any Helpful Information.
That caused the City to have to sell Point Molate for $400 to Guidiville/Upstream under Mayor Butt's settlement deal.
Guidiville/Upstream took title under the new name "Point Molate Futures LLC, a Delaware limited liability corporation, managed by the Guidiville Rancheria of California, a federally recognized Indian Tribe."
According to the documents filed by Richmond City Attorney David Aleshire, title passes subject to the terms of the settlement and Amended Judgment of the earlier lawsuit (Case No. CV121326 YGR) with both Guidiville and Upstream maintaining all the rights they have under the settlement and Amended Judgment agreed to in that case.
New Lawsuit Fails to Block Sale:
To add to the controversy of selling Point Molate for just $400, a lawsuit was filed against the City of Richmond by SunCal's affiliate Winehaven Legacy LLC. They allege their rights to purchase and develop the property were interfered with by the City.
For more, see article at richmondcommunitynews.com:
The legal action claimed violations of the Brown Act, breach of contract, and related claims, and seeks to have the Court force the City to finance the development and sell Point Molate to Winehaven Legacy LLC.
The City responded that the City bent over backwards to facilitate a sale to Winehaven Legacy LLC, but the LLC failed to move forward with the purchase, failed to provide essential information as required under the agreements and breached its contract with the City.
This matter was recently heard in Contra Costa County Superior Court where superior Court Judge Clare Maier ruled in favor of the City and against Winehaven LLC noting the evidence showed that it was Winehaven Legacy LLC that breached its contract with the City and not the other way around.
Mayor Butt had submitted a Declaration in support of Winehaven LLC lawsuit, and against his own City, alleging a grand conspiracy against the project.
The City objected to the Butt Declaration as inadmissible speculation, hearsay, legal conclusions and political mudslinging. The Court agreed.
The Court described the Butt Declaration as "linguistic froth" and not of value in helping the court reach a decision. The Court refused to block the sale to the Guidiville/Upstream group and ordered that the City "promptly" comply with the sale terms of the earlier court settlement.
The property has now been sold. The southern California developers are still suing Richmond, with the assistance and encouragement of Mayor Butt.