Richmond Mayor Tom Butt Blames Vast Conspiracy for Court Ruling Against Developers SunCal/Winehaven;

Ignores Simple Truth that SunCal/Winehaven Breached Its Agreements with the City


By Robert Cheasty

August 25, 2022


After losing in court (more about that below) Richmond Mayor Tom Butt is complaining about some vast secret conspiracy sneaking around behind his back to stop his preferred luxury housing development at Point Molate.


Some secret?! The effort to get a park at Point Molate has been open, public and continuous for more than 20 years and has been brought up publicly before the City at virtually every opportunity over that time. Hundreds of speeches, comments, written letters and documents have been submitted by literally hundreds of Richmond and East Bay residents and groups in support of this. Point Molate is designated as a Park in the General Plan of the East Bay Regional Park District, plus Point Molate is designated as a park in BCDC's San Francisco Bay Plan - the blueprint for land uses around the Bay.


The East Bay and the Richmond community have been advocating for a park at Point Molate for decades. Starting way back in 2004, park advocates, along with Chevron and the East Bay Regional Park District, approached the City with an offer of $50 million to buy Point Molate and turn it over to the East Bay Regional Park District for a park. Chevron agreed to pay that amount, along with a long list of other benefits for Richmond, as Chevron wanted to avoid any conflict with housing next to its oil refinery. Mayor Butt was a city Councilmember then and he helped kill that deal and instead pushed for gambling at Point Molate.


So it is preposterous that founding a park at Point Molate is some conspiracy that was concealed from anyone.


Additionally, the efforts of community groups to raise funds so that Point Molate could be bought was also discussed openly and frequently in meetings about how to resolve the lawsuits involving the City, the community groups and the two sets of developers (SunCal/Winehaven and Guidiville/Upstream).


Some secret?! The effort to get a park at Point Molate has been open, public and continuous for more than 20 years and has been brought up publicly before the City at virtually every opportunity over that time.

Regardless of which entity ultimately ended up with title to Point Molate, everyone knew that money would be needed if Point Molate were to become a park. These two sets of developers had well known financial claims over Point Molate. SunCal/Winehhaven's interest came from a Development Agreement with the City, and the Guidiville/Upstream interest came from a settlement agreement of an earlier federal court lawsuit against the City. Money would be needed to buy out those interests.


Because SunCal (Winehaven's parent company) has a history of flipping properties, it was expected that SunCal and its affiliate Winehaven Legacy LLC would sell, especially as multiple economic analyses showed their development project would be a money loser. For their part, the Guidiville/Upstream group had already agreed in 2021 to accept $22.5 million for their interests in Point Molate. So regardless of what entity had title, community groups would need to raise a sizeable amount of funds for a park-related buyout whenever that could happen.


However, after suffering a major defeat in state Court on August 18, 2022 Mayor Butt claimed the efforts to establish a park, and find the funds to accomplish that, are part of a grand conspiracy. It seems Mr. Butt has a basic misunderstanding about competition.


Because one group competes with another does not make it a conspiracy. The 49ers are not in a conspiracy to beat the Cowboys during football season. They are competing. Dallas does not attend the prep sessions of the 49ers nor do the 49ers get to attend the prep sessions for the Cowboys. Each side works out its game plan and they compete. No conspiracy – just competition.


Regarding that court defeat, SunCal and its affiliate Winehaven Legacy LLC (Winehaven) had sued Richmond, and Mayor Butt had joined forces with them, assisting the lawsuit against his own City.


Winehaven’s lawsuit included multiple claims and asked the court to block the sale of Point Molate to anyone but Winehaven. Ultimately the goal was two-fold: to force the City 1.) to finance the project Winehaven proposed to build at Point Molate and 2.) to sell Point Molate to Winehaven.


Although it was a preliminary skirmish, the judge hearing the case (Winehaven Legacy LLC v. City of Richmond heard in Contra Costa County Superior court) ruled solidly against Winehaven and in favor of the City of Richmond. Addressing the pending sale of Point Molate to the Guidiville Tribe and Upstream Inc., the Court refused to block the sale, allowing the sale of Point Molate to proceed, and instructing title be passed promptly, without delay. (The City was obligated by its prior federal court settlement agreement with Guidiville/Upstream to sell Point Molate to them if SunCal/Winehaven failed to complete the purchase of Point Molate by the deadline.)


The judge found the pleadings and documents filed on behalf of the City were factual and persuasive. In contrast, the judge found that Winehaven's pleadings were not persuasive.

 

See Article:

Judge Removes Restraining Order, Allows Title to Point Molate to Pass to Guidiville Tribe & Upstream.


 

In the court's decision, the judge commented that the declaration filed by Mayor Butt in support of Winehaven included inadmissible speculations, unfounded conclusions and hyperbole. The judge found the Butt declaration's speculations offered no information of value to the court's deliberations, using the term "linguistic froth" in characterizing their hyperbolic and ungrounded nature. The court added that Butt's allegations about all the parties and agencies involved in a vast conspiracy amounted to baseless speculation. The judge chided Winehaven's attorneys for filing such useless documents.


The judge found that the admissible evidence showed that Winehaven had violated the terms of the contract while the City had not, and that the City gave Winehaven every opportunity to complete their agreements and to acquire Point Molate.


The evidence also showed that the City Attorney, City staff and City consultants tried repeatedly to get Winehaven to submit the documents required for the sale, and to move forward with the purchase of Point Molate. The staff was met with a combination of failures to respond, failures to provide the complete documentation when documents were provided, and failures due to inaccuracy in documents that were provided.


Winehaven continually breached the agreement until finally the deadline passed for buying Point Molate, the evidence showed. The City Attorney was left with no choice but to advise the City Council that it was their duty to act responsibly and to vote not to back the project financially and, thereafter, to vote not to sell Point Molate to Winehaven Legacy.


No conspiracy, just an instance where SunCal decided not to put its money at risk to purchase Point Molate, just as the City decided not to put the City's funds at risk to finance the development.

Winehaven made the decision to not take the steps required to buy Point Molate before the deadline. In short, the judge found that Winehaven breached the agreements.


In the end, Winehaven chose not to put its own money on the line and take the risk of losing it.


No conspiracy, just an instance where SunCal decided not to put its money at risk to purchase Point Molate, just as the City decided not to put the City's funds at risk to finance the development.


(Update Note – Winehaven Legacy has just appealed the ruling of the superior court and claims it wants to go forward with buying Point Molate. The Court of Appeal has issued a stay on transferring title to Point Molate. Likely the City of Richmond, the Guidiville/Upstream Group and the federal judge may have something to say about all this. We will keep you posted.)

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