Explainer: Cleaning Up the Sunroad Mess

Explainer: Cleaning Up the Sunroad Mess

Photo by Sam Hodgson

A view of the south side of Centrum Park in Kearny Mesa, where a new development is under way.

It’s been almost two weeks since Mayor Bob Filner announced he had returned a $100,000 donation from Sunroad Centrum Partners after learning one of his top staffers secured the donation in exchange for the mayor’s agreement to drop his veto of a City Council-approved easement for the developer’s Kearny Mesa project.

Since then, two outlets have reported federal officials are looking into the arrangement, though no one has said on the record that an official investigation is under way.

But there are still a lot of questions floating around the city about the legality and propriety of Filner’s actions in the first place. Characterizations of the deal have been all over the map: It was either illegal, an example of the city finally conducting itself like a business or not a big deal. Or somewhere in between.

Here are answers to some lingering questions on how the deal unfolded, what the feds might be looking into and how this could all play out.

What Did the City Council Do?

On April 30, the City Council voted unanimously to give Sunroad the 9-foot easement it had requested on both sides of Centrum Park, built as part of the project before becoming city property.

Doing so required waiving Council policy 700-06, which was written in 1999 specifically to guide the Council on how to enforce its property rights when encroachments are discovered, or ones that could benefit the public and generate revenue for the city are proposed.

But granting the Sunroad easement didn’t include securing any new revenue for the city. The Council was opting to simply give away its right to build anything on 18 feet of its own public park.

That seemingly flies in the face of a specific guideline in policy 700-06 that says, “permission for encroachment on dedicated or designated parkland and open space that would benefit only a private party shall not be granted.”

The City Council has every right to waive its own guidelines, however. And it also could have determined the project benefited the public in some way, not just the private interests of Sunroad.

The council vote also went forward without a staff report from Park and Recreation, Development Services or the city’s real estate assets division on what the city was giving up.

Can the Donation Be Considered a Fee for Development?

As a general tenet of planning, public agencies can ask for a fee in exchange for approving a project. It’s called an exaction.

But the exaction needs to pass a two-pronged test outlined by the Supreme Court.

First, the exaction needs to have a nexus, or relationship, to the project itself. It also needs to be proportional to the impact the development will have.

“You can’t say, ‘There’s going to be air pollution, pay to throw us a parade,’” said Felix Tinkov, a land use attorney.

The Sunroad donation likely fails on the nexus test: The Kearny Mesa community sees nothing of the $100,000, but based on how the donation played out, that might not matter anyway.

As part of a normal development process, which includes staff reports on the effects of a project and a series of approvals at different levels of government, exactions are clearly defined along with everything else associated with the project.

In this case, the City Council approved millions in fees to be paid by Sunroad at the time it approved the original project.

“I don’t see the connection between the donation and fees to mitigate the project,” said Andrea Johnson, a professor at California Western School of Law. “I see the donations as something totally separate.”

If a new issue arises, however — such as a needed easement of city parkland — during the course of the development, the city could try to impose a new exaction, Tinkov said.

But that’s not what the City Council did. Instead, the Council determined that there was no need for a new fee or any other type of compensation, and approved the easement anyway.

Filner’s former deputy chief of staff, Allen Jones, explained why he stands by the $100,000 donation he proposed to Sunroad.

The city gave up property rights that have monetary value, and he made sure it received monetary compensation for doing so, he said.

So, Does That Mean It’s Extortion?

If federal authorities do in fact proceed with an investigation, they’d be looking to prosecute under the Hobbs Act, a federal statute meant to combat racketeering and public corruption, to determine if a public official used the weight of his office to collect money for performing his official duties.

The donation in question went to the city, not to Filner himself. But it was being diverted to specific pet projects that Filner could have used to raise his profile in the affected certain communities.

Johnson pointed out another reason why the Hobbs Act might not ensnare Filner: He didn’t have a formal vote on the project.

“He vetoed, but they overrode the veto, so it wasn’t as though his ‘vote’ was necessary or critical, which would cut against any claim of abuse of official authority, because the project could have gone forward by override without him doing anything,” she said.

“It sounds to me like he vetoed it because there was no input from city staff, and there should have been some input,” Johnson said. “He has the authority to veto and there’s no problem to doing that.”

A possible extortion case could also hinge on who initiated the donation request.

Jones says he proposed the donation when Tom Story of Sunroad brought the problem to the mayor’s office. Filner said Story proposed the donation. And in a voicemail Story left for Councilman Kevin Faulconer, obtained by U-T San Diego, Story said he had “paid the money that was requested.”

“If Story had come in and said, ‘How ’bout we just give you the $100,000 and you rescind your veto?’ that wouldn’t be extortion,” Tinkov said. “That would’ve been the normal course of politics. Do a dance, get your veto.”

Does It Matter That Filner Gave the Money Back?

Filner said he returned the donation once he was made aware of a memo from Story to Jones that drew an explicit connection between the donation and the mayor’s willingness to drop his opposition to the easement.

“In consideration for this payment, the mayor will direct city staff to record the building restricted easements … such that construction inspections on the project … shall continue without interruption,” the memo reads.

Johnson said the prompt return of the funds could be relevant.

“If you were not aware at the time you received something that the intent of the person was a quid pro quo, then giving it back at the time you realize it is really the only option you have,” she said.

Jones said he requested the payment at the mayor’s direction, and that the mayor “is aware of and makes all decisions.”

Tinkov said the returned payment matters only to the extent that Filner can prove when he learned of the agreement.

“What saves him isn’t giving the money back, it’s that he didn’t know what was going on,” he said. “He needs to make Jones fall underneath an avalanche.”

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Andrew Keatts

Andrew Keatts

I'm Andrew Keatts, a reporter for Voice of San Diego. Please contact me if you'd like at andrew.keatts@voiceofsandiego.org or 619.325.0529.

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15 comments
Sharon Gehl
Sharon Gehl

Let’s put things in perspective. Every building project from a single family house to a mixed use project as big as Sunroad has to comply with complex and often contradictory city regulations. Because of the sheer number of regulations that exist, I guarantee you that something will be missed by both the builder and City plan check, and not become apparent until after construction has started. If the City didn’t notice that fire engines would need more room, why should Sunroad have to pay for the City’s mistake? But don’t blame the City either, all building projects are so complex that something will be missed. I guarantee it.

Sharon Gehl
Sharon Gehl subscribermember

Let’s put things in perspective. Every building project from a single family house to a mixed use project as big as Sunroad has to comply with complex and often contradictory city regulations. Because of the sheer number of regulations that exist, I guarantee you that something will be missed by both the builder and City plan check, and not become apparent until after construction has started. If the City didn’t notice that fire engines would need more room, why should Sunroad have to pay for the City’s mistake? But don’t blame the City either, all building projects are so complex that something will be missed. I guarantee it.

MFinnegan
MFinnegan

So on one hand absent mayoral action the developer would have gotten to shrink the public space promised in the planning stage at no cost because oops the developers didn't realize zoning would require additional land clearance. Developers like Sunroad have been saying oops at the expense of public space for far too long and I'm glad to see someone exacting a cost for those oops. Filner seems to have a fondness for old school big city mayor politics that may lead to problems but I think Mayor Filner's doing a better job than most of looking out for the citizens of San Diego's interests versus the developers.

Don Wood
Don Wood

Andy: How much in campaign contributions from Sunroad has Lorie Zaph received to date? How much did Sunroad contribute to Todd Gloria's reelection campaign where he ran unopposed? Don't you even suspect that those kinds of contributions bought their votes in this matter? Please follow the money and list contributions from Sunroad to each of the council members who voted on this project. Thanks.

Don Wood
Don Wood subscriber

Andy: How much in campaign contributions from Sunroad has Lorie Zaph received to date? How much did Sunroad contribute to Todd Gloria's reelection campaign where he ran unopposed? Don't you even suspect that those kinds of contributions bought their votes in this matter? Please follow the money and list contributions from Sunroad to each of the council members who voted on this project. Thanks.

Cory Briggs
Cory Briggs

“He vetoed, but they overrode the veto, so it wasn’t as though his ‘vote’ was necessary or critical, which would cut against any claim of abuse of official authority, because the project could have gone forward by override without him doing anything,” according to Professor Johnson, (Disclosure: She was my admin-law professor.) Andrew, it sounds as though you did not tell Prof. Johnson that Chief of Staff Vince Hall went to the City Council and explicitly asked it to override the Mayor's veto. The Mayor obviously has some pull with four members of the City Council when it comes to upholding his veto, as demonstrated by the cut to the City Attorney's budget. Had the Chief of Staff not asked for the override, then it'd be a different story. When asking experts to formulate an opinion, try to provide them with all the relevant facts.

Cory Briggs
Cory Briggs subscribermember

“He vetoed, but they overrode the veto, so it wasn’t as though his ‘vote’ was necessary or critical, which would cut against any claim of abuse of official authority, because the project could have gone forward by override without him doing anything,” according to Professor Johnson, (Disclosure: She was my admin-law professor.) Andrew, it sounds as though you did not tell Prof. Johnson that Chief of Staff Vince Hall went to the City Council and explicitly asked it to override the Mayor's veto. The Mayor obviously has some pull with four members of the City Council when it comes to upholding his veto, as demonstrated by the cut to the City Attorney's budget. Had the Chief of Staff not asked for the override, then it'd be a different story. When asking experts to formulate an opinion, try to provide them with all the relevant facts.

John Gordon
John Gordon

I know Andrew is new, but once again VOSD leaves out critical perspective: we've had trouble with Sunroad before, embarassingly, they had to take a whole story (not Tom Story, but he was involved) out of their Bridgepoint building. Why isnt senior staff at VOSD checking this? City Beat caught this.

John Gordon
John Gordon subscriber

I know Andrew is new, but once again VOSD leaves out critical perspective: we've had trouble with Sunroad before, embarassingly, they had to take a whole story (not Tom Story, but he was involved) out of their Bridgepoint building. Why isnt senior staff at VOSD checking this? City Beat caught this.

La Playa Heritage
La Playa Heritage

"Instead, the Council determined that there was no need for a new fee or any other type of compensation, and approved the easement anyway." Not correct. The City Council's backup documentation, Page 4, clearly states the City Council's approval to Waive City Council Policy 700-06 would have zero Fiscal Impact to public assets. See Page 4: Where Council Member Lori Zapf office wrote: "FISCAL CONSIDERATIONS: None." The original department is Job Nelson, Chief of Staff for District 6. http://dockets.sandiego.gov/sirepub/cache/2/m4h0rq55igm0nk55x5mcbj45/52272007082013073233647.PDF http://www.sandiego.gov/citycouncil/cd6/staff/nelson.shtml

La Playa Heritage
La Playa Heritage subscribermember

"Instead, the Council determined that there was no need for a new fee or any other type of compensation, and approved the easement anyway." Not correct. The City Council's backup documentation, Page 4, clearly states the City Council's approval to Waive City Council Policy 700-06 would have zero Fiscal Impact to public assets. See Page 4: Where Council Member Lori Zapf office wrote: "FISCAL CONSIDERATIONS: None." The original department is Job Nelson, Chief of Staff for District 6. http://dockets.sandiego.gov/sirepub/cache/2/m4h0rq55igm0nk55x5mcbj45/52272007082013073233647.PDF http://www.sandiego.gov/citycouncil/cd6/staff/nelson.shtml

Don Wood
Don Wood

Looks like Councilwoman Zaph convinced the council to give away the store. From now on, she'll be known as Sunroad's council rep. Wonder what kind of "donations" the city council members got from Sunroad for that vote?

Don Wood
Don Wood subscriber

Looks like Councilwoman Zaph convinced the council to give away the store. From now on, she'll be known as Sunroad's council rep. Wonder what kind of "donations" the city council members got from Sunroad for that vote?

Andrew Keatts
Andrew Keatts

Hey Cory, Professor Johnson was well informed on the situation. Her argument was that the decision to override the mayoral veto was an official decision of the 9 individual councilmembers, not of the mayor, with or without Hall's explicit request to override. We've certainly seen in the past that Filner can rally four votes to uphold his veto, and maybe that would have been the case here. But it also seems fair to acknowledge that Alvarez, Cole, Lightner and Emerald have agency as legislators, and not just presume they will always vote to uphold the mayor's veto because they've done so in the past.

Andrew Keatts
Andrew Keatts author

Hey Cory, Professor Johnson was well informed on the situation. Her argument was that the decision to override the mayoral veto was an official decision of the 9 individual councilmembers, not of the mayor, with or without Hall's explicit request to override. We've certainly seen in the past that Filner can rally four votes to uphold his veto, and maybe that would have been the case here. But it also seems fair to acknowledge that Alvarez, Cole, Lightner and Emerald have agency as legislators, and not just presume they will always vote to uphold the mayor's veto because they've done so in the past.