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Alameda Point Developer Files New Complaint Based on New Evidence of Destruction of Documents, Demonstrates Breach of Contract and Fraud.

Seeks $100 million in damages from City of Alameda

OAKLAND, Calif. -- The developer of the former Alameda Naval Air Station filed an amended lawsuit (Case No. CV10-05178) in Federal Court against the City of Alameda and its interim city manager Anne Marie Gallant claiming that the city violated the developer's Constitutional rights, breached its contract with the developer and acted in bad faith. The suit also alleges that Gallant sought to enrich herself in a fraudulent scheme at the expense of Alameda's citizens and the project's developer, SCC Alameda.

The developer seeks more than $100 million in compensatory and punitive damages and in lost profits from the City of Alameda and its interim city manager.

The City of Alameda selected SCC Alameda Point LLC as the master developer in 2007, and entered into an exclusive negotiating agreement. As the master developer and in reliance on the city's obligation to act in good faith, SCC Alameda put together a comprehensive mixed-use redevelopment plan, a project which would generate much needed jobs, educational facilities and housing for the community. The developer has spent over $17 million and three years in its efforts to redevelop the 770-acre property in Alameda.

The lawsuit filed in U.S. District Court for the Northern District of California (Case No. CV10-05178) said "the real victim here, in addition to SCC Alameda, is the community. By their scheme, Gallant and others are seeking to destroy a development that will significantly enhance the environment and add value to the community." Despite the lawsuit, SSC Alameda says it is still "ready, willing and able to move forward in good faith and develop Alameda Point."

The lawsuit details all the actions the developer took to comply with its contractual obligations to Alameda to redevelop the former U.S. Navy base. The lawsuit charges that Gallant and the City Council "effectively destroyed SCC Alameda's contract and Constitutional rights" by wrongly ignoring the normal land use and California Environmental Quality Act (CEQA) approval process on the development and voting to reject SCC Alameda's development plan on July 20 of this year.

According to Skip Miller of Miller Barondess, LLP, despite the developer's good faith effort, the lawsuit demonstrates that in return, the City has, by the admission of its Interim City Manager, knowingly destroyed emails/documents needed in the developer's pursuit of justice and in violation of California law knowing well that disputes had arisen with SCC Alameda as early as 2009. Because of this action SCC Alameda has been severely and irreparably prejudiced by the actions of the Interim City Manager. According to the suit, the City of Alameda and Gallant decided, in spite of their contractual obligation to SCC Alameda, that they would secretly attempt to develop Alameda Point on their own, even though the city and the manager have no experience, funding or contractual right to develop the property.

In the lawsuit, the developer accuses the city and Gallant of "secretly meeting with the Navy, providing the Navy with false information, failing and refusing to work cooperatively with SCC Alameda and the Navy, and preventing SCC Alameda from entering into a term sheet with the Navy," all of which hurt the company's ability to proceed with its agreement with the City and purchase the property from the Navy for the benefit of Alameda and the developer, according to Miller.

While Gallant claimed to have spent 20 percent of her time working on the development project, only one email from her has been produced in SCC Alameda's Public Records Act lawsuit against Alameda. Gallant's emails have been destroyed to hide her actions against the developer, the lawsuit charges.

"Over the course of these past three years, my client has invested in this community and dedicated themselves to creating a project that will bring much-needed affordable housing, jobs, and open space to Alameda in the wake of the Navy's withdrawal in 1996," said Skip Miller of Miller Barondess, LLP.
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Comment:Alameda Point Developer Files New Complaint Based on New Evidence of Destruction of Documents, Demonstrates Breach of Contract and Fraud.
Publication:Business Wire
Geographic Code:1U9CA
Date:Nov 30, 2010
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