May 3, 2022
City Attorney's Office
DATE: May 3, 2022
TO: Mayor Butt and Members of the City Council
FROM:
Dave Aleshire, Interim City Attorney
Subject:
Point Molate Legal Services Agreement with Downey
Brand and Amendment Related to Claims and Litigation
FINANCIAL IMPACT: The additional expenditure for the Point Molate legal services amendment is $120,000. The $60,000 for Point
Molate/Guidiville work will be paid from Risk
Management/ General Liability account 50182316. The
other $60,000 is for work related to the development and the NCRA lawsuit will be reimbursed by the developer.
PREVIOUS COUNCIL
ACTION:
Previous Council action on the NCRA related legal
services agreement (LSA) occurred on October 6, 2020,
April 1, 2021, and November 2, 2021.
STATEMENT OF THE
ISSUE:
To ensure the City has appropriate legal representation relating to the Point Molate litigation and claims, including the existing NCRA v. Richmond and Guidiville v. United
States litigation matters, the City Attorney’s Office
requests approval of a legal services agreement (LSA)
amendment and new LSA for $60,000 each.
RECOMMENDED ACTION:
APPROVE a third amendment with Downey Brand, for
$60,000, for a not to exceed total amount of $1,010,000, for the Point Molate litigation and claim, and a $60,000 legal services agreement (LSA) for Guidiville work – City Attorney’s Office (Dave Aleshire 510-620-6509).
AGENDA
REPORT
May 3, 2022
DISCUSSION:
To ensure the City continues to have appropriate and adequate representation in litigation pending against the City related to Point Molate, the Interim City Attorney requests two separate approvals for legal services:
1) Approval of a Legal Services Agreement (“LSA”) with Downey Brand in the amount of $60,000 for representation of the City in Guidiville Rancheria v. United States; and
2) Amendment to the LSA with Downey Brand in the amount of $60,000 (a total contract amount of $1,010,000) for continuing representation of the City in North Coast Rivers Alliance v. City of Richmond (“NCRA Litigation”).1 The proposed amounts will allow the City to monitor and maintain independent representation in the above-referenced litigation, as well as to respond in a timely manner to the claims and other matters that may arise in the existing litigation.
Depending on how these matters proceed, it may become necessary to augment the above contract amounts.
BACKGROUND
A. Guidiville v. United States (Guidiville Litigation):
To promote redevelopment of the former Point Molate Naval Fuel Depot, the City in 2004 entered into a Land Disposition Agreement (“LDA”) with Upstream Point Molate LLC (“Upstream”) and Guidiville Rancheria Tribe (“Guidiville”) for the purposes of pursuing a possible casino project. The City prepared and certified an Environmental Impact Report (“EIR”) for the proposed redevelopment. In 2011, the City formally ceased consideration of the proposed casino project.
In 2012, Upstream and Guidiville commenced litigation against the City, alleging a breach of the LDA. After years of litigation, the City, Upstream, and Guidiville entered a settlement that was memorialized in a form of judgment entered by the U.S. District Court on April 12, 2018. The District Court entered an Amended Judgment on November 21, 2019.
The Amended Judgment contains a number of commitments by the City, Upstream, and Guidiville, including obligations to market portions of the site designated as “Development Areas” for sale to one or more qualified developers. The Amended Judgment also ordered the Parties to prepare and submit a joint report to the District Court every 120 days regarding efforts to comply with the Amended Judgment. The joint reports were suspended by the District Court when the City approved the Point Molate Mixed-Use Development Project in September 2020 (see below).
1 A third lawsuit pending against the City related to Point Molate, SPRAWLDEF v. City of Richmond, Ninth Circuit Court of Appeal (filed May 2018), involves a claim under the Brown Act challenging the settlement entered in Guidiville v. United States. The City is separately represented in that action.
May 3, 2022
In response to requests for emergency relief against the City related to its defense of a parallel lawsuit involving Point Molate (SPRAWLDEF v. City of Richmond), the District Court in November 2021 ordered the Parties to reinstate the reporting requirement of the Amended Judgment, but on a forty-five (45) day basis. Downey Brand will serve as counsel of record for the City in this re-activated case, with responsibility primarily for preparing the Parties’ joint reports, managing the case, making appearances (if necessary), coordinating among the Parties, assisting with settlement negotiations, and providing advice to and representation of the Richmond City Attorney’s Office in the proceedings.
Downey Brand’s litigation fees and expenses incurred in Guidiville v. United States are not reimbursable and shall be paid by the City’s General Fund.
B. NCRA v. City of Richmond (NCRA Litigation):
On September 8 and 15, 2020, the City Council certified a Subsequent Environmental Impact Report (“SEIR”) and approved a Disposition and Development Agreement (“DDA”) and Development Agreement (“DA”) with Winehaven Legacy LLC (“Winehaven”), as well as a series of land use entitlements for the Point Molate Mixed- Use Development Project (“Project”).
On October 9, 2020, opponents of the Project filed two lawsuits in Contra Costa County Superior Court seeking to set aside the SEIR and Project approvals, which actions were consolidated as North Coast Rivers Alliance v. City of Richmond (“NCRA Litigation”).
The NCRA Litigation asserted multiple claims under the California Environmental Quality Act (“CEQA”), state planning and zoning laws, California Constitution, and common law public trust doctrine. The Superior Court entered judgment in the City’s favor on March 15, 2022, and the case has been appealed to the First Appellate District.
Downey Brand will continue to serve as trial and appellate counsel for the City in its defense of the NCRA litigation and will have responsibility for case management and coordination among counsel, assisting with settlement negotiations, and for providing advice to and representation of the Richmond City Attorney’s Office in the proceedings.
Downey Brand’s litigation fees and expenses will be reimbursed by real party in interest Winehaven based on the indemnity provisions and conditions imposed under the entitlements and both the DDA and DA.
C. Litigation Expenses Incurred:
Downey Brand’s existing LSA for representation of the City in the NCRA Litigation is in the amount of $950,000, as approved by the City Council on November 2, 2021. Due to significant unexpected post-trial proceedings in the NCRA Litigation, as well as the need to immediately respond to the District Court’s November 2021 orders in the Guidiville v.
United States case, the City incurred another $51,062.50 in litigation expenses through February 2022 (for a total of $1,001,062.50).
May 3, 2022
To date, the City has invoiced Winehaven for reimbursements in the total amount of $850,000 pursuant to its indemnity obligations under the Project entitlements and DA/DDA. Winehaven has only paid $250,000 to date, though it had pledged to reimburse the balance invoiced ($600,000) by about April 15, 2022.
DOCUMENTS ATTACHED
Attachment 1 – Original Contract for NCRA Litigation
Attachment 2 – First Amendment to the Contract
Attachment 3 – Second Amendment to the Contract
Attachment 4 – Proposed Third Amendment to the Contract Attachment 5 – Proposed Contract for Guidiville v. United States