Alameda Gateway Engaged in David vs. Goliath Battle With U.S. Government.

ALAMEDA, Calif.--(BUSINESS WIRE)--Oct. 30, 1998--A local developer who once envisioned the West End of Alameda as a flourishing marina development says he may find out next week whether he must pay the U.S. Army Corps of Engineers $1.7 million for their destruction of his property.

According to his attorney, the decision may be handed down November 2 in a final hearing in the case U.S. Government versus Alameda Gateway by U.S. District Court Judge Marilyn Hall Patel in San Francisco. The outcome, coupled with the uncertain future of the property, could bankrupt John Beery's company, but not before he attempts to fight back with a counter suit in the Federal Court of Claims which he predicts will be heard early in 1999. His involvement in this battle is not just personal: U.S. Government versus Alameda Gateway could set a dangerous precedent for all waterfront property owners in the country, says his attorney, Robert H. Thomas.

Alameda Gateway Ltd. purchased the former Todd Shipyards site in 1983 with plans to develop the area into a recreational marina establishment. Beery, Alameda Gateway's general partner, says that vision has been blurred by a bureaucratic nightmare involving the Port of Oakland and the Corps of Engineers, all in the name of "navigational servitude."

In 1986, Congress passed the Water Resources Development Act (WRDA 1986) to allow the deepening of the Oakland-Alameda estuary as well as port facilities improvements.

"In 1985, we submitted plans to develop this site to include retail space, light manufacturing, marine-based business, restaurants and more," said Beery, whose projects as a developer include Mariner Square in Alameda and the Alameda Ferry Terminal. The plans were rejected by the Corps of Engineers.

Soon after, according to Beery, the Port of Oakland approached Alameda Gateway to purchase some of its property that stood in the way of the Port's plans for a new turning basin. The one meeting failed to produce either a sale or a compromise.

Instead, Beery said, Port officials told him they would find a way to get his property without paying for it. "Little did I realize they would coerce the Corps of Engineers to take my property and are now attempting to make me pay for the destruction of over 10 million dollars in property improvements," Beery stated.

According to documents gathered by Beery, the Port of Oakland assigned the task to the U.S. Army Corps of Engineers, which has jurisdiction over navigable waters. The Corps, he said, arbitrarily redrew the harbor boundary lines and declared Alameda Gateway's two piers to be within the new boundary's right of way. Exercising a claim of "navigational servitude" the Corps then removed 1,000 lineal feet of Alameda Gateway's piers.

The topper came when the Corps presented Beery with a bill of $1.7 million, the cost to demolish his own piers. "I feel like I've been violated twice," Beery said.

Meanwhile, Alameda Gateway has counter-sued in federal claims court, charging that the company's property was taken and destroyed without due process or compensation. It is seeking compensation and damages against the Corps of Engineers. The Port of Oakland has been named as a third party defendant. The company's claim may be heard sometime in early 1999.

The legal battles have put Alameda Gateway's plans in permanent limbo. Beery has been unable to obtain approval or permits for the proposed development, while the legal cost of fighting the government could bankrupt the company. Moreover, if future plans for the Oakland Harbor are approved and funded, the Port and the Corps could destroy the rest of the company's piers and threaten part of the building it leases to tenants.

And the battle is a modern version of David vs. Goliath. Until recently, Beery has been single-handed in his crusade for justice. With the aid of one associate, he's worn different hats -- investigative reporter, lobbyist, and advocate.

Beery struck pay dirt several years ago when, under the Freedom of Information Act normally utilized by news gathering sources, he uncovered boxes of documents written by Corps and Port officials that support his claims.

Now, other government officials are coming to assist the City of Alameda and its property owners. At a San Francisco Bay Conservation Development Commission public hearing in October, as noted in public testimony, BCDC commissioners expressed alarm at Beery's predicament, and urged Port and Corps officials who were present to make everyone whole. Also there, Alameda Mayor Ralph Appezzato publicly petitioned the Port of Oakland for mitigation measures. According to a letter dated October 14 to the U.S. House Transportation and Infrastructure Committee Chair Bud Shuster, Congresswoman Barbara Lee recently wrote an amendment to legislation updating the Water Resources Development Act. The amendment, if attached to the bill, would give Alameda waterfront property owners just compensation for their losses.

Alameda Gateway is represented by Damon Key Leong Kupchak Hastert, a Honolulu-based law firm whose assigned attorney, Robert H. Thomas, commutes every few weeks from one island in the Pacific to the other in the East Bay. "The government is attempting to require a land owner to pay the cost of destroying its own property without ever proving the owner did anything wrong," said Thomas. "That's just not fair, and the Constitution doesn't permit it," Thomas added.

Beery says he is confident in his law firm. "They won an important Supreme Court case and a Ninth Circuit Court appeal on navigational servitude," he said.

Alameda Gateway tenants include Bay Ship & Yacht Co., Rosenblum Cellars and others, whose combined 400 employees and payroll contribute $29.0 million to the economies of their communities including Alameda, Oakland and the greater Bay Area each year.

Please note: Legal briefs on Alameda Gateway can be found at the following web site: http://www.hawaiilawyer.com/cases/agl/agl.htm