ALAMEDA -- The City Council will pay SunCal Companies more than $4 million to settle a lawsuit that the developer filed after its bid for exclusive rights to redevelop the former Alameda Naval Air Station fell through.

The council unanimously approved the settlement during a closed session Tuesday, a move that Alameda officials say now clears the way for other development projects to get under way at the former base.

The city will pay SunCal about $3.1 million over the next 18 months under the settlement. SunCal also will get back the approximately $1 million the developer deposited with the city.

Settling made financial sense, City Attorney Janet Kern said.

Court costs would likely surpass the settlement amount if the case had gone to trial next year, especially since both sides were set to start discovery proceedings, Kern said.

SunCal was initially seeking $100 million from the city in what it said was lost profit. Its proposals for the former base, now known as Alameda Point, included 4,800 homes, a 60-acre sports complex, a ferry terminal and about 4 million square feet of commercial space.

U.S. District Judge Charles Breyer dismissed the lost profits claim in January and in September he also dismissed a bid by the developer to recoup out-of-pocket costs.

Breyer limited SunCal claims to its $1 million deposit, plus interest. That decision, however, could be appealed.


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SunCal maintained city officials failed to act in good faith during negotiations, and that former interim City Manager Ann Marie Gallant wanted to take over the redevelopment of the former Navy base herself, including for personal profit.

The Irvine-based developer faced widespread opposition from Alameda residents, who overwhelmingly rejected a ballot initiative in February 2010 that would have allowed higher-density housing at the former base as part of the project. SunCal said it was necessary to make the project profitable, but opponents said too many homes were proposed and that it would increase traffic and cause other problems.

Reach Peter Hegarty at 510-748-1654 or follow him on Twitter.com/Peter_Hegarty/.