pages: CityCouncil/2008-10-07.pdf, 27
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CityCouncil | 2008-10-07 | 27 | Chair Johnson requested that language be added that if DE Shaw terminates SunCal for reasons insufficient for our ENA, it doesn't affect the relationship between the ARRA and SunCal. Ms. Potter explained that if SunCal is terminated for cause, the ARRA has the opportunity to approve a replacement. The path forward under either scenario would be approval of replacement, or termination if DE Shaw did something contrary to ENA. Member deHaan expressed deep concern with this issue in general. He discussed that SunCal was selected because they had multimillion dollar background. He was uncomfortable that SunCal had to get a hedge fund partner to tie them over to get through the ENA. Because he has no in-depth knowledge of the company, Member deHaan requested a financial consultant prepare a fiscal evaluation of DE Shaw and their capability to weather the storm for this project. Member Tam stated that it is clear that there have been extraordinary events in financial market, and a solvent financial partner is difficult to find. Comparing Alameda to Mare Island (Lennar) she said we have the safeguards in place, and if DE Shaw jettisons SunCal, the deal would be off and we're not absorbing any fallout or cost. In response to Member deHaan's request, Ms. Potter explained that DE Shaw had submitted their financial information to our consultant, EPS, who analyzed the data and determined that DE Shaw could take on the financial obligations of ENA. Ms. Freilich further discussed DE Shaw, stating that they have $36 billion under management and $1.8 billion in real estate. They began 20 years ago as hedgefund in global and technology, with 10 different asset classes, and have hired an experienced team to do real estate acquisitions. DE Shaw acknowledges that it is a difficult real estate market, but that they've done extensive due diligence at Alameda Point, which they view as a unique and irreplaceable opportunity. SunCal is thrilled to have a partner with the capacity and ability that DE Shaw has, and they understand the goal of tightening up the milestones, and remain a committed partner in producing the DDA. Member deHaan asked if SunCal was in such dire straits that $10m was difficult for them to invest without a financial partner. Ms. Freilich explained that because the markets have changed, lines of credit are not available under the same terms. From SunCal's standpoint, partnering with DE Shaw provides stability to the project rather than the opposite. Special Joint Meeting Alameda City Council, Alameda Reuse and 8 Redevelopment Authority, and Community Improvement Commission Meeting October 7, 2008 | CityCouncil/2008-10-07.pdf |