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Thursday, April 07, 2005 | This is part four in a five-part series. Read part one, part two, part three, and part five.
(April 20, 2005. Clarification: In reporting this story, we failed to check the outcome of the Ethics Commission investigation regarding Reese Jarrett and Robert Ito. We later learned that both were exonerated by the Ethics Commission in September. We apologize for not securing that information before the article’s publication and for not contacting them prior to the publication of the story.)
After the Horton Plaza project was initiated in 1974 by the City Council, which also sits as the San Diego Redevelopment Agency, then-Mayor Pete Wilson recommended the formation of the Centre City Development Corp. to oversee the redevelopment of downtown. The California Community Redevelopment Act of 1962 provided cities the ability to appoint such an agency, and Wilson and his council set out to find the “sharp minds and sharp pencils” that he said would be needed to transform San Diego’s blighted downtown.
Established as a nonprofit, public corporation, CCDC’s Articles of Incorporation were filed with the California Secretary of State on March 31, 1975. The charter instructed CCDC to implement the Redevelopment Agency’s policies in the downtown redevelopment areas, negotiate with owners of properties targeted by the agency for redevelopment, recommend priorities and plans for the downtown project areas, and lead efforts to promote redevelopment to the public.
Boards past and present have traditionally been comprised of individuals hailing from backgrounds in relevant industries like law, real estate, construction, finance, architecture and retail – a diverse offering but all relevant to the task at hand, Wilson said.
“We were looking for experts in real estate markets and finance and developers who knew how to accomplish this challenging task,” Wilson said in a recent interview. “We selected our board based on that and by finding people who had a clear desire to make a contribution to the city.”
However, critics have accused the board of sometimes taking action on projects where a sitting director has an involvement professionally. The ties between several board members’ dealings and the votes they make as CCDC directors have prompted San Diego resident Mel Shapiro to file complaints with the city’s Ethics Commission.
In 2003, he said he filed a complaint against then-directors Robert Ito and Reese Jarrett over a CCDC vote to grant the San Diego Housing Commission space at 12th Avenue and C Street – where the commission’s headquarters will be beginning November 2006 – while the Housing Commission, Shapiro said, was subsidizing a project that involved firms connected to both Ito and Jarrett.
Both Ito and Jarrett resigned fairly soon after an investigation was launched in the summer of 2003, Shapiro said. CCDC spokesman Derek Danziger said the apparent conflict of interest did cause the two to step down.
Last December, the Ethics Commission fined CCDC Chairman Hal Sadler $6,000 for voting on several tax-allocation bonds that listed the planned downtown library as a recipient and for his votes on CCDC budgets that included line-item funding for the library, according to the stipulation issued to Sadler. Sadler serves as the chairman for Tucker Sadler Architects, one of the firms being used to design the new main library.
In the cases of Ito, Jarrett and Sadler, the Board voted again without the members in question present. The results were the same the second time around.
Helen Peak Holmes, who has served as CCDC’s general counsel since 2001, said that the corporation’s staff is constantly on the lookout for material or financial conflicts of interest, and that they are normally caught before such an item goes before the board.
“The board members are usually on top of that,” she said.
When an action that has potential for a conflict of interest appears before the board, directors who have ties to that item will recuse themselves, Holmes said, leaving the board room before it’s discussed and voted on.
Since 2001, CCDC directors recused themselves from 21 percent of the votes taken on issues regarding redevelopment projects, board meeting minutes show.
But not voting on an issue doesn’t mean the director with an apparent tie to a proposed project doesn’t have access to CCDC’s staff or casual sway with the other members who will vote on the item, Councilwoman Donna Frye said.
“I think they are a little too close to the action,” she said. “A lot of times people that have actual interests in these projects are appointed – more so than your average citizen.”
Frye said she doesn’t remember seeing a member of a labor union on the board, a voice she said would champion affordable housing over high-rise luxury developments.
“There doesn’t seem to be enough balance,” she said.
Please contact Evan McLaughlin directly at