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Accusations Follow SunCal's Failure

The former naval base on Alameda island, shown July 30, 2010, is still undeveloped after a SunCal Companies plan was rejected
The former naval base on Alameda island, shown July 30, 2010, is still undeveloped after a SunCal Companies plan was rejected
Was a quick-witted city manager standing up for Alameda or playing politics?

Alameda, an island long resistant to growth, threw a warm embrace around an unlikely suitor last year. The Southern California developer SunCal Companies proposed to build thousands of homes, sports fields, offices and a ferry terminal on 770 acres of a decommissioned naval base.

The project promised to transform the island city, and its leaders lined up in support.

Mayor Beverly Johnson recorded a robo-call that went out to every resident on March 25, 2009: “A plan has been created that deserves our support.”

One week after that call, the city promoted Ann Marie Gallant, its exacting interim finance director, to interim city manager. Within months, SunCal was no longer welcome in Alameda, and last week, the City Council officially voted the company off the island by a 4 to 0 vote.

How the widespread support for SunCal transformed into bitter opposition — and Gallant’s role in that — is at the heart of the surprising implosion of one of the most ambitious development projects ever in the East Bay.

To her supporters, Gallant, a 60-year-old former teacher and itinerant public servant, engaged in a courageous act of public service that prevented Alameda from getting stuck with a bad deal. After the project was rejected, some residents thanked her with cards and flowers.

SunCal, however, claims that Gallant led a deceptive campaign to kill the development, and it is threatening litigation against her and the city. It also said that a leaks investigation begun by Gallant into SunCal’s biggest supporter on the City Council was politically motivated.

Gallant said she was just doing her job.

“It isn’t personal, it’s business,” she said in an interview, employing a favorite quotation from “The Godfather.” “It is what is objectively best for the community, and I think they’ve made it personal.”

Gallant’s background as a teacher is apparent in her manner. She is known for offering easy-to-understand breakdowns of city finances on a giant whiteboard at City Hall.

After leaving the Los Angeles redevelopment agency in 2000, Gallant bounced around small Southern California towns, always making an impression with her rapid-fire style of speaking, her sharp intelligence and quick exits.

Ann Marie Gallant, Alameda's interim city manager, at a special meeting of the City Council on Tuesday, July 27, 2010
Adithya Sambamurthy/The Bay Citizen
Ann Marie Gallant, Alameda's interim city manager, at a special meeting of the City Council on Tuesday, July 27, 2010
Adithya Sambamurthy/The Bay Citizen

In 2005, when she was city manager of King City, Councilwoman Susan Kleber said Gallant cleaned up the finances, and intimidated the men who did not like being told what to do. “You see women like that in the Bay Area — she’s very competent and hard-driven — but you don’t see them down here,” Kleber said.

In Desert Hot Springs, where Gallant was city manager from 2006 to 2007, she was known to scatter the police from their coffee breaks as she came or left work in the wee hours of the morning. “She was always looking for the devil in the woodpile,” said Councilman Karl Baker.

Baker led a group that sought to reinstate Gallant after the city refused to renew her contract in 2007 following clashes with Mayor Yvonne Parks.

The messiest stop for Gallant was in Carson from 2000 to 2003, where the City Council was entangled in a bid-rigging scandal. Gallant was fired from her job as general manager of development services for what was described in court documents as “back-stabbing behavior.” She alleged in a wrongful-termination suit that she was singled out for being a whistle-blower, and she won a $215,000 settlement.

“The lady is brilliant, but manipulative,” said Jerome Groomes, the Carson city manager who fired her.

Gallant became the interim city manager in Alameda just as SunCal’s $1.6-billion-dollar plan for the former Alameda Naval Air Station was reaching a critical juncture. The project, dubbed Alameda Point, would bring some 12,000 new residents to the island, and the developer was readying Measure B, a ballot initiative seeking an exemption to the long-standing growth restrictions that give the island its 1950s feel.

SunCal had gotten off to a bad start. It hired aggressive, out-of-town signature gatherers who angered voters; one of them shoved a local editor’s camera into his face.

Even so, the project, designed by Peter Calthorpe, a noted urban planner based in Berkeley, had garnered some support, and negotiations with the city were progressing.

Gallant and her staff homed in on the fine print of the ballot initiative. Their report raised concerns about an annual $4.8 million hit to the city’s general fund for city services; breaks on more than $82 million in impact fees; and a $200 million cap on the amount the developer would have to spend on public infrastructure.

The last provision raised fears that residents could be liable for tens of millions of dollars in road and park work.

“We were cautioning everyone to read this, and doing our due diligence with the Council in closed session,” Gallant said. “I just wanted to make it clear that it posed serious risks.”

Mayor Johnson — who lauds Gallant’s strong management and financial expertise — said it was the staff reports that made her recant her support in October, ahead of the February election and vote on Measure B.

“Once there was a real analysis of the deal that was proposed,” Johnson said, “that’s when things really started to turn.”

Councilman Frank Matarrese also changed his mind and withdrew his backing for SunCal, frustrating company officials.

Gallant had ordered SunCal and city staff members to meet every Thursday to work out their differences. Nick Kosla, SunCal’s forward planner, said he thought they had been making progress in the eight-hour-long sessions — but the reports to the City Council, in his view, never reflected that.

“It’s almost like these meetings where we were fixing or addressing all the issues the city had, that never got communicated to anyone,” Kosla said. “People thought of those meetings as the abyss.”

SunCal also accused Gallant and city officials of discussing their own alternate plans that could involve a city-led, nonprofit development initiative for the site, even as they negotiated with SunCal.

Gallant denied the accusations, saying that alternate ideas had been tossed around in the community and by city leaders but that no serious discussions took place.

Measure B failed spectacularly in February, getting an 85 percent ‘no’ vote. Residents felt that the SunCal deal was unfair, and they had concerns over the size of the development and increased traffic.

Some who opposed the deal said Gallant’s actions were critical.

“In the absence of the city manager, it would have been very difficult to change the city’s steps,” said Dave Needle of Protect the Point, which fought Measure B. “She had access; we didn’t.”

Although the defeat at the polls all but sealed the project’s fate, SunCal and the city continued to negotiate on a scaled-back plan.

In the weeks leading up to last week’s final City Council vote, Gallant started an investigation that singled out Lena Tam, SunCal’s remaining supporter on the Council. Tam was accused of leaking e-mails to SunCal, and the matter was referred to the district attorney.

Tam denied the accusation and called the investigation “politically motivated actions by a power-hungry interim city manager.” She abstained in last week’s vote.

Some fear that SunCal, which said it spent more than $17 million on the project, will make good on threats to sue. They worry that SunCal’s departure could leave the former naval base barren for another decade.

“When you get rid of Plan A, you hope to have a Plan B,” said David Brandt, a former assistant city manager in Alameda who is now city manager of Redmond, Ore. “And I don’t see that there’s really a Plan B.”

But Gallant said that the SunCal plan would have been a bad deal for Alameda, and that she was not willing to roll over.

“The city manager should push the envelope when you’re negotiating — if you don’t ask and push, they’re going to walk all over you,” she said. “I’m not someone who’s gun-shy; I’m not afraid of a fight.”

Zusha Elinson is a staff writer for The Bay Citizen. Michele Ellson is editor of The Island, a news website about Alameda.

This article also appears in the Bay Area edition of The New York Times.

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