I just got word that Councilman Tony Young will ask that his council colleagues hold off on voting on a proposed zoning change for a plot of southeastern San Diego land that is currently the subject of a breach of contract and fraud suit against a city redevelopment group and a top redevelopment official.
Jimmie Slack, Young’s chief of staff, said the councilman wants a continuance to “ensure that all of the legal questions being asked are being addressed,” but he didn’t tie the request directly to the pending suit.
The Southeastern Economic Development Corp., the government agency tasked with revitalizing some of the city’s poorest neighborhoods, has recommended changing the zoning for Valencia Business Park from industrial to commercial. Because a land’s value is directly tied to what can be built on it, the move has the potential to give a lucrative boost to SEDC’s chosen developer, Pacific Development Partners LLC. PDP agreed to pay $1.5 million for the land based on industrial uses; commercial uses are generally considered more valuable.
When PDP bid on the land, SEDC was seeking the construction of industrial warehouses. PDP now has plans to build a Tesco grocery store, a fast-food restaurant and other retail development.
SEDC and its president, Carolyn Y. Smith, have been sued for breach of contract and fraud in connection with Valencia Business Park. The owners of an exotic bird store claim SEDC broke a legal settlement by failing to build them a promised warehouse. They also claim Smith committed fraud in withholding a side deal pertinent to the settlement from them and tricking them into releasing a claim they had on the land under the auspices that it would help the development move along quicker.
After the Petrarcas released the claim, the lawsuit states, they found out that SEDC didn’t intend to have the warehouse built and never asked its board to ratify the legal settlement.
Last week, a judge shot down an attempt by lawyers for SEDC and Smith to have a breach of contract and fraud suit against them thrown out of court. The attorneys had argued that Smith, as a government official, had immunity in the case from fraud charges and that the claims in the suit had already been addressed in previous lawsuits.
The rezoning is also tentatively scheduled to return to the community planning group level next week in wake of the lawsuit. A member of the Encanto Neighborhoods Community Planning Group, which approved the rezone 5-4 last year, has asked that the vote be reconsidered.
For the full background, read our special report from November and a follow-up on the rezoning earlier this month.