Open letter to Harbor Bay neighbors

The Alameda Sun received a copy of this letter.

Dear Harbor Bay Neighbor: With the start of the New Year, we’ve been working hard on several fronts. And what we’ve found so far is bound to turn more than just a few heads! (Ron Cowan’s) Harbor Bay Isle Associates (HBIA) continues to state that “the club needs to move to stay in business” and this “is not debatable.” This position suggests that the Harbor Bay Club is losing money at its current location with its current amenities, and will go out of business if it is not moved to the business park and replaced with either houses or a hotel/conference center. Naturally, this led us to dig into the finances of Harbor Bay Club. We found that in 2008 HBIA, using a side company called Harbor Bay Club Associates LP, took a $6 million loan against Harbor Bay Club and then rolled that into a $7 million loan in July 2013. A loan of this magnitude typically requires the cash flow from the business to be at least 120 percent greater than the debt service and the loan amount to be no more than 65 percent of the value of the collateral (in this case the land). So, despite the payments on a $7 million loan, the club is generating a sizable income stream for HBIA. Cowan also has millions of dollars’ worth of equity in the business, which he would hardly walk away from by going out of business. No one with any financial sense would be so fiscally irresponsible as to default on as profitable a business as this, especially a multi-millionaire developer. This financial revelation changes everything. It reinforces that HBIA is not concerned with providing a quality facility (or they would have reinvested a chunk of that $6 million from 2008 into deferred maintenance at the existing club) and proves the club is financially stable with no threat of closure. So, why do they keep saying they will close? We believe HBIA simply refuses to accept the fact that Cowan is not “entitled” to build more homes in a completed planned unit development (PUD) where there isn’t any available property. So, they’ve resorted to a cheap scare tactic. We don’t buy it and neither should you. Harbor Bay Neighbors favors renovating (or rebuilding) the club at its existing location so it stays an amenity for the residents it is specifically designated to serve. And with $7 million in its pocket, HBIA should be able to figure out a staged renovation plan. (Think “TransBay Terminal” in San Francisco, which continues to serve 100,000 customers daily while they build a new transit hub. It can be done.) We need your help. With the threat of club closure discredited, moving the club and building houses or a hotel on the current property offers nothing to our community. It’s time to tell the city to reject HBIA’s application now, and focus city resources where they are needed, such as on the redevelopment of Alameda Point.

 

— Tim Coffey, Spokesman Harbor Bay Neighbors