Controversial Point Molate development could be sunk in Richmond
RICHMOND — Decade-old efforts to redevelop a prime slice of Richmond’s scenic Point Molate peninsula have weathered contentious debates, lawsuits and millions of dollars in legal fees.
Now, with the latest potential developer poised to build more than 1,450 homes and 400,000 square feet of retail space on a 270-acre section of waterfront property, Richmond City Council has swept the rug from under its feet.
The council’s action dealt a blow to those who say development is badly needed amid housing shortages across the region, but pleased others who counter that open spaces are equally important and must be preserved as far as possible.
“This is definitely a win for people who want to see Point Molate preserved and conserved for the community,” said Robert Cheasty, executive director of Citizens for East Shore Parks. Although the development planned to preserve 193 acres as open space, Cheasty said the entire site should be left alone to avoid damage to an eelgrass habitat that is home to osprey, bald eagles and Dungeness crabs.
“In terms of the ecology of this place, it’s still in very rare, undeveloped raw space, and because of that, it has a value that you can’t replace – there’s no other place like this in the East Bay,” he mentioned.
Others who hoped to see the development did not view Point Molate – a former US Navy fuel storage and transfer facility site – as a wildlife sanctuary, including small business owner Richard Weiss .
“This project will generate billions in economic impact and create thousands of local jobs,” Weiss said when the project was first approved a year and a half ago. “Our community is ready for the fences to come down and the abandoned oil tanks to be removed at Point Molate. We are ready for the beautiful new community planned by (Winehaven Legacy LLC) and the benefits it will bring to all of Richmond.
Winehaven Legacy development plans were effectively scuttled at a special meeting on March 18 when four council members known as the Richmond Progressive Alliance voted against creating a community amenities district to pay for the project’s infrastructure.
Such a neighborhood would have used property taxes from future homes and offices in Point Molate to pay off a municipal bond covering the costs of pre-development capital improvements such as roads, sewers, streets, levees, and parks.
Under a court settlement, the city must establish the neighborhood before it can sell the land to Winehaven – a subsidiary of development company SunCal – for $45 million.
Winehaven’s attorneys sent a letter to the city on Monday asking the council to reverse its decision or face legal action. Company attorney Dan Engler issued the same warning at the meeting.
“I am disheartened to hear that Mr. Engler does not understand that people can refuse in good faith,” Deputy Mayor Eduardo Martinez said at the time. “I’m sure if he had any questions we had, he would refuse in good faith as well.”
Those questions arose after city council approved the development in September 2020, Martinez said.
Although he attended the meeting, Mayor Tom Butt voted on the project he has long championed. Council members Nathaniel Bates and Demnlus Johnson, who previously voted for the development, were absent.
Council member Claudia Jimenez said the assumptions made when the development plan began to take shape – before she and Gayle McLaughlin joined the council in January 2021, giving the progressive alliance a majority voice – do did not take into account a pandemic, the growing concern about rising sea levels or the emerging impacts of the Russian invasion of Ukraine.
“We are here in a legal and difficult situation that was made by the previous city council – we cannot deny it,” Jimenez said. “I just think we’re trying to support something that’s already broken.”
This is not the first time the council has canceled development plans for Point Molate.
In 2011, the council rejected a plan by the Guidiville Rancheria Tribe of California and developer Upstream Point Molate, LLC, to build a mega-casino there. The tribe and developer later sued the city for $750 million in damages.
A federal court upheld the council’s action but forged a settlement that required the city to share the profits of any land sales fairly with the tribe.
The settlement also said that if not sold within 48 months – by May 21, 2022 – the land would have to be sold to the tribe for $400. It’s unclear if that deadline can be extended, and the tribe has yet to indicate whether it intends to press the issue.
In deciding not to create a facilities district, the council considered whether homes built in Point Molate would fetch between $1 million and $1.8 million, as originally planned, or whether townhouses and condos could sell for between $521,000 and $1.35 million.
A September 2020 report from consultants Strategic Economics indicated that homes would likely sell for significantly less due to Point Molate’s remote location, lack of amenities, fire hazard, and proximity to the Chevron Richmond refinery. .
Strategic Economics also concluded that the original project would take 20 years to complete and lease – not the nine years assumed by Winehaven’s analysis.
Hoping to assure the city that it would not be at financial risk, Winehaven offered to tax itself up to $6.3 million annually if property taxes were lower than projected, starting in 2026.
Council members were unswayed, however, saying there was too much conflicting financial information.
Mike Medve, a tax consultant hired by the city, said he thought Winehaven’s offer was a good one. “It’s not perfect security, but it’s better security for the interim period than I’ve seen in any other project,” he said.
But Mark Northcross, a director at financial consultancy NHA Advisors, stressed that if Winehaven did not perform as promised, Richmond’s only recourse would be to foreclose on the property.
“Numbers are all over the place, and it certainly makes everyone’s job a little harder when you have such a variety of opinions on the sale price of Point Molate homes,” Northcross said.
“Time to be safe, time to be safe, time to be safe,” McLaughlin agreed. “It’s time to uplift our community and not blindly trust developers.”
Dozens of residents who spoke at the meeting urged council to oppose the development.
“The city has no such protections in this scam,” said Pam Stello, co-chair of the Point Molate Alliance. She said the developer “has come back with increasingly promising plans, but independent analysis shows their consultant’s numbers are based on false assumptions, inflated selling prices and burn rates, and… ‘other sleight of hand’.
Butt said in an interview after the meeting that he believed the council’s progressive alliance had been “obsessed” from the start with finding a way to “torpedo Point Molate”. And the city could soon pay for it, he warned.
“We’re going to be looking at hundreds of millions of dollars in litigation and issues with the Ninth Circuit and federal court,” Butt said. “That’s really what we should be talking about.”