Crab Cove – the final chapter

For nearly 10 years, the East Bay Regional Park District has been seeking to acquire a 3.89-acre parcel located at Crab Cove in order to expand Crown Memorial State Beach.

This Thursday, the Park District announced it finally would achieve its goal:  the federal government had agreed to sell the property to EBRPD for $2,182,500.

For this successful outcome, the credit goes to . . . the Honorable William H. Alsup, United States District Judge for the Northern District of California.

Say who?

Sure, EBRPD and the citizens’ group known as the Friends of Crown Beach made the deal possible by forcing the former Council to re‑zone the parcel from residential to open space.  (More kudos to be handed out later).  This decision rendered the property worth far less to the federal government than it had counted on.

But it took Judge Alsup to make the deal happen by bringing the feds to their senses – or at least to the bargaining table.

As part of the feds’ scheme to sell the Crab Cove parcel to a private developer, they had filed a condemnation action to seize McKay Avenue, the street that provided the only access to the property, from the State of California.  Back in June, Judge Alsup held that the taking had been done for a legitimate “public purpose,” but, as those commentators on legal issues affecting Alameda who are actually lawyers pointed out, the judge stated that “the issue of just compensation [i.e., the amount the feds owed the State for the street] remains to be resolved.”

The feds promptly asked Judge Alsup to rule, as a matter of law, that the compensation due was “nominal” – lawyerese for next-to-nothing.

Not so fast, the State and EBRPD responded.  McKay Avenue, they argued, was “only part of the parkland facilities (commonly known as Crown Beach Park) that are owned by the State and operated by the Park District.”  By taking the street, the feds had made it necessary for the Park District to construct new parking facilities for Crown Beach visitors.  Moreover, the loss of control over access had diminished the value of the parkland itself.

Backed by a report from an expert appraiser, the State and EBRPD insisted that the feds must compensate the State for the additional costs and the decreased value caused by the taking – to the tune of $1.41 million, or whatever other amount a jury determined.

Judge Alsup agreed.  On August 14, he issued an order denying the feds’ motion, holding that “the harm to the value of Crown Beach as a result of the taking of McKay Avenue must be determined by a jury.”

The tables had turned.  The feds already knew that, as a result of the re-zoning, they weren’t going to be able to command residential-development prices when and if they ever found a buyer for the Crab Cove property.  But now Judge Alsup’s ruling meant that they might have to shell out big bucks to the State for McKay Avenue before they ever saw a dime from the sale of the land.  Who knows – they might end up actually losing money on the entire transaction!

According to the docket sheet, settlement discussions began immediately.  A month later, the feds, the State, and EBPRD told the judge they had reached an agreement in principle to resolve the case.

So the Merry-Go-Round urges the victors and their Friends, as they’re toasting their success, to hold their glasses high for Judge Alsup, too.

Three years ago, it didn’t look like any of this was going to happen.  Instead, the skids had been greased for a residential development consisting of 48 luxury homes on the waterfront land across from Crown Memorial State Beach.  It took a combination of actions, by the Park District, by the State, and by the Friends of Crown Beach, to keep the ship from sliding into the water.

Here’s the way it played out:

The feds had declared the Crab Cove parcel “surplus” when they closed some of their offices along McKay Avenue.  Spurning a request from EBRPD for a “public benefit conveyance” and a subsequent offer from the Park District to buy the land for appraised fair market value, the feds put the property up for auction.  The winning bidder was Tim Lewis Communities, a Roseville-based residential developer.

Tim Lewis then asked the City to re-zone the property, which was designated for use only as government offices, to permit residential development.  The City planners promptly complied.  In their first draft of the 2007-14 Housing Element, the Crab Cove property – now christened, for marketing purposes, “Neptune Pointe” – appeared on the list of sites to be re-zoned for residential use.  Then, as part of the planners’ effort to curry favor with housing advocates such as Renewed Hope, they slapped the “multi-family overlay” on the parcel.  (Later, the City’s defenders argued that “state law” mandated this change; in fact, it did not).

The revised Housing Element and zoning ordinance sailed through the Planning Board, and they were approved by the Council led by former Mayor Marie Gilmore despite last-minute opposition from residents who claimed they had been given insufficient notice of the City’s plans.  The minutes do not reflect any discussion specifically concerning the Crab Cove parcel at any of the meetings.

By mid-July 2012, the chances that the Park District ever would be able to get the land it wanted to expand the park seemed remote.  The feds had agreed to sell the Crab Cove property to Tim Lewis.  The Gilmore‑led Council had re-zoned it for residential use.  All that remained, it would appear, was a development application.

The Park District registered its displeasure in a letter to then City Manager John Russo, but Mr. Russo responded that there was nothing to discuss.  If the Park District wanted to “expend precious taxpayer dollars” suing the City “over an issue so arcane” as the zoning for Crab Cove, Mr. Russo said, well, bring it on.

The Park District accepted Mr. Russo’s challenge.  Alleging that the City had violated the California Environmental Protection Act and its own Charter and General Plan, EBRPD filed a mandamus action in Alameda Superior Court.   The relief sought wasn’t limited to restoring the governmental-use designation for the Crab Cove parcel.  Instead, the suit asked the court to order the City to “vacate, set aside, and void” the entire revised Housing Element and zoning ordinance.

Mr. Russo went bonkers.  The EBRPD’s suit, he told the San Francisco Chronicle, was “evidence of an agency that’s arrogant and out of control.  They didn’t get the property, so now they’re holding their breath, stomping their feet and having a tantrum.”  He followed up in a similar vein by publishing an op-ed in the Alameda Sun – rare for him – in which he accused the Park District of displaying an “arrogant disregard for your tax dollars and the city’s obligations to comply with state of California housing requirements” and “recklessly abusing the true purposes of” CEQA.

Small wonder the City Manager was so irate.  The suit not only created significant risks for the City if it permitted Tim Lewis to develop the Crab Cove parcel, but it also jeopardized the City’s strategy of catering to housing advocates – who themselves had been threatening to sue – by enacting a new Housing Element and zoning ordinance.  If the EBRPD suit succeeded in toppling the apple cart, more than just one apple would spill onto the ground.

But, as the City Hall spin machine quickly reminded everyone, the City didn’t own the Crab Cove parcel; the feds did.  So the next step in the battle to preserve the property for park expansion was to get leverage over the feds.

McKay Avenue provided the opportunity.  The feds may have owned the land on which the government offices sat, but the State of California owned the street that provided access to them.  All the feds had were easements to allow ingress and egress and to run utilities.  But these easements were crucial to any future residential development of the property.  Without them, a developer could build houses – but who would buy them if no one could get there?

The invitation for bids issued by the feds made no promises about the easements, but Tim Lewis apparently didn’t think access and utility rights posed much of a problem.  The State Department of Parks and Recreation begged to differ.  From the outset, it (and EBRPD) maintained that the easements had been granted specifically to the federal government, and they would terminate if the parcel was transferred to a private developer.  And the State had no intention of granting any new easements over McKay Avenue to Tim Lewis.

Just as the EBRPD suit created risks for the City if it allowed Tim Lewis’s plans for residential development to proceed, the State’s stance on the easements created problems for the feds.  They could try to force Tim Lewis to take the property without access or utility rights.  But, as City Planner Andrew Thomas told The Alamedan, the City was unlikely to approve a development that lacked street access.

The feds’ only alternative would be to seize the street through a condemnation action so they could provide the easement themselves.  But the State made it clear that, if the feds sought to condemn the street, they’d have a fight on their hands.  Through the office of Attorney General Kamala Harris (whose name undoubtedly was well known in Washington), the State told the Justice Department that it would contest any attempt to wrest away ownership of the street.  Moreover, Ms. Harris’s deputy warned, if the feds sued, the State also would challenge the process by which the feds sold the Crab Cove parcel to Tim Lewis in the first place.

All of a sudden, the chances that the Park District might end up with the property for park expansion looked a lot better.

But neither the City nor the feds was ready to raise the white flag – not even close.  Both Councilwoman Marilyn Ezzy Ashcraft, who had served on the Council that approved the revised Housing Element and zoning ordinance, and Councilman Stewart Chen, D.C., who had not, published op-ed pieces in the Sun chastising the Park District and exonerating the City.  (Dr. Chen’s op-ed would come back to haunt him when he sought the endorsement of the Sierra Club in his subsequent re-election campaign.  We’ll have to see if anyone remembers Ms. Ashcraft’s when she runs for re‑election next year).  For their part, despite the State A.G.’s warning, the feds went ahead and filed their condemnation action.

Now, the time had come for Alameda citizens to get into the act.

At first, the supporters of keeping the Crab Cove parcel available for park expansion tried persuasion.

Three former Council members – Doug deHaan, Karin Lucas, and Frank Matarrese – sent a letter to the Mayor and Council asking them “to settle the litigation with the Park District without delay so that the Park District can go ahead with its plans for Neptune Point.”  But none of the authors belonged to the Inner Ring, and their plea was met with chillier-than-usual silence when Ms. Lucas and Mr. Matarrese presented it to Council in person.

The Parks and Recreation Commission was not so lucky.  Through its well-respected chair, Bill Delaney, the Commission wrote to Mayor Gilmore requesting that Council re‑zone the Crab Cove property from residential to parks and open space.  Ms. Gilmore responded by admonishing Mr. Delaney that the Commission “must not take any action that is in direct opposition to the legal position of the City.  That is not in the City’s best interest.”

Then, Ms. Gilmore, a Boalt Hall-trained lawyer, informed Mr. Delaney that, if the City re‑zoned “property it did not own” to open space, “such action would be considered a ‘taking’ of the property.  The City must acquire the property through the proper legal process and pay fair market value for the property before it could be re‑zoned as open space.”  As a legal matter, this statement was embarrassingly wrong:  the City’s zoning powers do not depend on its ownership interest in the property being zoned.  In fact, it is the rare case in which the City does own the property.  Or is the City the owner of every house in your residential-zoned neighborhood?

There appeared to be only one way to get the message across to those on the dais.  Back in 2012, a group of Alamedans had come together to write, and then secure passage of, Measure D, the initiative that banned the disposal of City parkland without a vote of the electorate.  The same stalwarts, with the cooperation of the local chapter of the Sierra Club, decided again to resort to the initiative process to force Council to carry out the “will of the voters.”

Calling themselves the Friends of Crown Beach, the group prepared a initiative petition requiring the City to amend the General Plan and zoning ordinance to change the designation of the Crab Cove property from residential to open space and to remove the parcel from the inventory of sites available for residential development.  If the initiative passed, Council’s hands would be tied.  And once the parcel was re‑zoned, Tim Lewis was likely to walk away – if it could – from a transaction that no longer seemed profitable. Maybe then the feds would be willing to start talking to the Park District.

The  Friends then sent their signature gatherers – all of them volunteers – out into the community.  Despite carping from the likes of Planning Board member and Inner Ring-leader John Knox White, they managed to collect 6,339 signatures, well above the 4,370 required (10% of the total registered voters in the City) to get the initiative placed on the ballot.  The Alameda County Registrar of Voters then certified that the initiative met the legal requirements to be included on the November ballot.

Now the ball was in Council’s court – and, for two of them, the day of reckoning had arrived.  Mayor Gilmore had touted the Housing Element and zoning ordinance that allowed residential development at Crab Cove as one of the signal achievements of her administration.  Likewise, Councilman Chen had published – or allowed to be published under his name – an op-ed sympathizing with the feds’ “frustration” at the actions by EBRPD that were “interfering with [the feds’] sale of the property to Tim Lewis.”

But the initiative would be on the same ballot as Mayor Gilmore and Councilman Chen in the upcoming election.  How many of those 6,339 registered voters who signed petitions would show up at the polls to vote for the initiative?  Would they bring a friend?  And how likely would those pro-initiative voters be to draw the line on the ballot for Ms. Gilmore or Dr. Chen in light of the positions they had taken?  It didn’t take a highly paid consultant – although both candidates had one – to worry about that prospect.

There was a way out:  rather than put the initiative on the ballot, Council could simply enact it as an ordinance.  If this were done, the ordinance would take effect 30 days after final passage.  The Friends would get everything the initiative petition sought to achieve. And then the rest of the dominoes would start falling until a settlement was in place.

It was a simple solution, although it would require the Mayor and Councilman Chen (as well as Councilwoman Ashcraft) to eat a little crow.  But staff came up with a way to make the dish more palatable.  At the same time they enacted the initiative as an ordinance, the Council members also could adopt a “companion measure” they could sell as a way to “protect the City” against a potential suit by Tim Lewis that City Attorney Janet Kern had conjured up for them to fret over.

The actual likelihood of a suit by Tim Lewis was truly fanciful, since the developer had no standing to sue the City for implementing a voter initiative re‑zoning the Crab Cove parcel before it even had taken title to the property.  Moreover, at the time, Tim Lewis was negotiating with the City over a far larger and more lucrative project than Crab Cove – the Del Monte warehouse – and it made absolutely no business sense for the developer to sue the City over one project at the risk of losing staff and Council support for another.

It took three Council meetings to settle on the language of the “companion measure,” which the politicians renamed the “fiscal responsibility ordinance.”  But Ms. Gilmore and Dr. Chen got their cover, and the Mayor felt sufficiently comfortable to cite in her 2014 campaign literature “advocating for more parks, open space and good local jobs” as one of her primary mayoral accomplishments.

Of course, Tim Lewis never sued.  In fact, a few months after the ordinance adopting the initiative was passed, it withdrew its development application for Crab Cove altogether. (Days later, having achieved its main objective, EBRPD’s suit against the City was dismissed).

That left only the condemnation suit standing in the way of the Park District cutting a deal with the feds.  For reasons unknown, and frankly unfathomable, to us, the feds pressed on with the litigation even after the City re‑zoned the Crab Cove parcel and Tim Lewis withdrew its development application.  Maybe they wanted to establish a precedent they could use to defend future takings designed to make government-owned “surplus” property more attractive to a private developer.

If so, the feds got what they wanted:  Judge Alsup did hold that the seizure of McKay Avenue had been done for a “public purpose.”  But then, as judges sometimes do, he turned the feds’ initial legal triumph into a potential bottom-line loss by agreeing with EBRPD and the State on the “just compensation” issue.  That ruling brought the feds to the settlement table and got us to where we are today.

“Victory has a thousand fathers, but defeat is an orphan,” John F. Kennedy has been quoted as saying.  These days, his words would need to be cleaned up for political correctness, but the thought behind them applies to the story of Crab Cove.  Richard Bangert, Irene Dieter, Maria Dominguez, Rayla Graber, Norman LaForce, Gretchen Lipow, Karin Lucas, Darcy Morrison, Brian Schumacher, Doug Siden, Eugenie Thomsen, Joe VanWinkle, and the lawyers at EBRPD and the State Parks Department – take a bow.

And be sure to give our regards to John Russo – wherever he might be.

Disclosure:  Jane Sullwold is a member of the Friends of Crown Beach and of the local chapter of the Sierra Club.  Having led the successful fight to save the Mif Albright golf course, she provided advice to both groups on issues relating to Crab Cove.

Sources:

Federal court orders:  DCt order denying motion for s.j.DCt opinion granting s.j.

2007-14 Housing Element: 2012-03-12 PB – Attachment 3 (proposed list of rezoned sites)2012-06-11 PB – Exhibit 3b (proposed re-zoned sites)

October 2012 EBRPD-Russo corresondence: 2012-10-04 letter EBRPD to Russo (with attached email)2012-10-17 letter Russo to EBRPD

EBRPD mandamus action: EBRP vs City of Alameda Lawsuit-1

Russo reaction to EBRPD suit: 2012-11-24 SF Gate article – Russo comments2012-11-22 Alameda Sun with Russo op-ed

EBRPD & State DPR correspondence with City re easement: 2013-04-09 EBRPD Letter to City2013-05-22 state DPR to City re easement

State A.G. letter to U.S. D.O.J.: 2013-11-07 AG letter to DOJ

Ashcraft op-ed piece: 2013-08-01 Ashcraft letter

Chen op-ed piece: 2013-09-12 Chen article

Letter by DeHaan, Lucas & Matarrese: 2013-11-19 deHaan-Lucas-Mattarese letter to Council

Park/Rec Commission correspondence with Gilmore: LTR2Gilmore.pg1LTR2Gilmore.pg2CrabCoveLTRfromGilmoreCrabCoveLTRfromGilmore.pg1

Re-zoning initiative: Text of initiative2014-05-16 – Certificate of Sufficiency

“Companion measure” (aka “Fiscal responsibility ordinance”): 2014-07-01 staff report re companion measure2014-07-29 final version of companion ordinance

 

About Robert Sullwold

Partner, Sullwold & Hughes Specializes in investment litigation
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10 Responses to Crab Cove – the final chapter

  1. nyborn2013 says:

    Nicely written Bob. You covered all of the essential facts and your offered a historical view that really exposes what happened and why. The recent news about Crab Cove is wonderful. I recall the evening that Karin Lucas stood her ground at the Council Meeting where she was being challenged by City Manager John Russo. I walked away that evening impressed with her knowledge and her strength and once again realized that we have an amazing amount of quality people living in Alameda!

  2. Gretchen Lipow says:

    Thanks Robert for your fine description of the Crab Cove/Crown Beach campaign. This was a most impressive community activity. Shame on the city manager and those council members who went along with him. When the door opened the community walked in, in full force and within six weeks
    6,000 signatures were collected. The community truly rallied to save Crab Cove and the city
    grossly, once again, (think SunCal and the Mif Albright course) underestimated the power of the people. Open space and park land are truly valued in this rapidly expanding small urban city
    Rather than going to ballot city council wisely adopted the essence of the petition declaring
    Crab Cove open space.

  3. I wonder how often it has happened whereby the agency that has seized property through eminent domain has ended up giving the property back to its original owner. That is what will happen with McKay Avenue when the GSA gets their check from the park district for the future parkland. McKay Avenue goes back to the California Dept. of Parks and Recreation.

  4. Related news: Tomorrow (Wednesday the 28th) at the park district and city liaison committee meeting at city hall at 2 pm in conference room 360 (3rd floor), the park district, among other items, will highlight their grant application for funds to expand the public exhibit area in the Crab Cove Visitor Center. Part of the building used to be workshop space, which was relocated somewhere else.

    From the agenda:
    CRAB COVE VISITOR CENTER GRANT APPLICATION
    October 28, 2015
    CURRENT STATUS
    The District has applied for $198,000 from the California Cultural and Historical Endowment’s
    Museum Grant Program for an expansion of the Crab Cove Visitor. If the Crab Cove project
    receives the grant, the District will provide $198,000 in matching funds from Measure WW
    Bond Funds specifically allocated to the Crown Beach area.
    The District’s ability to serve more students at the Crab Cove Visitor Center is limited by lack
    of indoor teaching space. Dozens of public school classes are turned back annually due to lack
    of space. Currently, the capacity of the exhibit area and the single classroom is 85 students/
    visitors. The single classroom only allows one group at a time to receive a naturalist program
    inside the facility, an integral part of each school group’s visit. The funds requested would allow
    the Park District to take the necessary first step in developing and renovating the facility
    infrastructure for a new public display and classroom space in a recently vacated office area of
    the Crab Cove Visitor Center. The new program area would provide visiting school groups
    with more in-depth and interactive instruction about sensitive ecosystems in San Francisco Bay.
    PROJECT SCOPE
    The project would renovate four vacant rooms into public exhibit and program space as well as
    program preparation space. The vacant rooms are adjacent to the existing public exhibit space,
    but are not currently in a condition acceptable for public access. Three restrooms would be
    brought into compliance with ADA standards. Work would include floor replacement, wall
    demolition for interior restroom ADA access, electrical changes, painting, basic cabinetry and
    plumbing alterations. The project would also include demolishing an interior wall between the
    public space and the security residence and replacing it with a fire barrier as required per
    building codes. For the most part, this is an interior renovation project with the exception of
    the ADA ramp to the exterior restrooms.
    NEXT STEPS
    Applicants will be notified of their award status for the museum grant by summer 2016. If
    awarded, the project would be completed in Spring/Summer 2017. Additional funding is needed
    for the exhibits and “wet lab” equipment. If the grant is not awarded, the timeline would likely
    be extended to allow time to secure another source of funds.

  5. Jenna says:

    Finally, the right and just outcome. Thank you Judge Alsup for being the voice of reason.

  6. John Russo says:

    One problem with your narrative, Bob: it is factually incorrect with respect to how the dispute between the City and the EBRPD initiated. You should check the documents. The City of Alameda’s letter to the EBRPD at the time they threatened the lawsuit against the City invited them to discuss the matter with us, and invited them to allow the City to reopen the issue PUBLICLY and with an opportunity for all sides to provide testimony at a public hearing. EBRPD chose not to accept the invitation for a public hearing on the matter and filed the lawsuit. You call it going “bonkers”; I call it justifiable outrage over what I could plainly see would result in a giant transfer of taxpayer money to high priced attorneys. And I was correct: hundreds of thousands, of not more than a million, dollars were wasted on a fight that should have always resulted in the deal between the EBRPD and the Feds that we are now seeing.

    And that is what happened. EBRPD could have had Crab Cove years ago had they offered the Feds the same amount of money they are paying now instead of insisting that it be provided to EBRPD on a free transfer and then, when not getting their way, resorting to political pressure in Washington to stop the nomination of the GSA Director to his post. This was a strategy which not only failed utterly, but poisoned relations between the GSA and EBRPD for years to come. I remind you that all of this happened before the City/EBRPD dispute began.

    I know you pride yourself in getting the facts right before writing your interpretation of events. It is quite a different matter that you have suggested. EBRPD, as they have done repeatedly over the past decade in cities throughout the Bay Area, chose the courtroom over the Council Chamber in order to get their way. Please review the original correspondence. Any fair minded person will see that the City was eager to cooperate with EBRPD but wanted a public process, not a back room, lawyer-brokered deal.

    My best to you and to Jane,

    John Russo

  7. Steve Gerstle says:

    Who at City Hall was responsible for listing the property as available for housing development?

  8. Richard Bangert says:

    Mr. Russo, in his comment above, says, “Any fair minded person will see that the City was eager to cooperate with EBRPD but wanted a public process, not a back room, lawyer-brokered deal.” There were numerous attempts by citizens to persuade city council members to bring the Housing Element back up for review so that the McKay Avenue parcel could be discussed in a public process. All attempts failed, until presented with a certified ballot measure to rezone the property.

    The face of the city is the city council, and they, the city, were adamantly opposed to a public process. If the council had chosen to revisit the Housing Element – in a public process – remove this small parcel, and rezone it as open space, the lawsuit would have ended. The property was rezoned via citizen initiative. Neither of the specters of doom echoed by park district opponents ever materialized: a lawsuit by the developer, or loss of state funding due to the Housing Element falling out of compliance.

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