Is Alameda Heading Towards Municipal Bankruptcy?

On January 9, the Los Angeles Times covered a breach-of-contract appellate court decision in Mammoth Lakes, California that appears remarkably similar to the Alameda Point lawsuit. In the Mammoth Lakes contract, the developer agreed to make improvements to the airport in exchange for rights to develop a $400 million hotel next to the airport in addition to an option to buy the land. After the developer made the improvements to the airport, the city reneged on the hotel deal because the hotel placement would obstruct the airport’s ability to accommodate Boeing 757 passenger jets.

The small ski-town of only 7,500 residents lost its legal battle with a three-judge panel’s unanimous decision in favor of the developer. What’s more, the 66-page ruling scolded the town for backing out of the deal.

The consequences of this decision are ominous for the town of Mammoth Lakes, which may declare bankruptcy, and bring up potential consequences for the City of Alameda in the Suncal Alameda Point lawsuit. Legal costs are sky-high, and to pay for the lawsuit and a potentially negative court ruling, the city may have to take dire measures which will have a negative economic impact on the city.

So, how can we avoid this in Alameda? What can our councilmembers do to avoid a potential bankruptcy? At this point, Alameda is most likely paying thousands in legal fees that might be avoidable.

Read the Mammoth Lakes story here.
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