No decision from San Diego City Council on Ash Street litigation


Confidential three-trial discussions over the city’s lease-to-own deal for the 101 Ash St. skyscraper lasted more than 4 1/2 hours on Tuesday, but the San Diego City Council said it didn’t had taken no action regarding the litigation.

The closed meeting was the third time in as many months that council members have met privately to discuss cases generated by the lease recommended by former mayor Kevin Faulconer and approved by a previous council in 2016.

Last month, the board met privately for four hours to consider its legal strategy.

The council agenda said the city attorney’s office was seeking direction from the elected body. But when the public session closed late Tuesday afternoon, the council reported that no action had been taken.

Public documents released in recent weeks show Mayor Todd Gloria and City Attorney Mara Elliott have promoted a resolution to lawsuits filed since the city acquired the building more than five years ago.

The 20-year lease-to-own agreement has cost the city at least $60 million, even though the building is not safe to occupy.

The city signed an “as is” deal to acquire the building, which is contaminated with asbestos, has a faulty fire suppression system and aging heating and air systems, among other issues.

A consultant said it would take $115 million to repair the building, which was valued at $67 million before the council approved the deal.

In one instance, taxpayer John Gordon claimed the contract was illegal because it would have violated the state constitution by using public funds without direct benefit and putting the city in debt without a vote of the people.

Another lawsuit was filed by the city against an LLC created by Cisterra Development, a San Diego company that acted as landlord in the 2016 Ash Street deal, and its lender.

Cisterra, its lender and realtor Jason Hughes were also named in a second lawsuit filed by the city last year over the 2015 lease-to-own agreement for the Civic Center Plaza building.

The city’s lawsuits allege the defendants violated state anti-corruption laws by failing to disclose $9.4 million in payments to Hughes, who publicly identified himself as a pro bono adviser to Faulconer.

Cisterra, Hughes and the lenders all dispute the allegations.

According to public records, lobbyist Chris Wahl met with Elliott and senior Gloria aides in a bid to settle the Ash Street lawsuit out of court.

Wahl, who was hired by Cisterra, also raised tens of thousands of dollars for San Diego elected officials, including city council members who would need to approve any settlement.

All three cases are due for trial early next year.


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