City Attorney Mike Aguirre sent a letter today to Centre City Development Corp. Chairman Fred Maas calling for the agency to set aside the skyscraper project at 7th Avenue and Market Street.

The project has come under scrutiny because of former CCDC President Nancy Graham’s previous business relationship in Florida with an affiliate of the developer, Related of California.

In the letter, Aguirre alleges that Graham had a financial interest in the Related affiliate, the Florida-based Related Group, at the time CCDC entered into a contract here with Related of California.

“We have garnered enough information to conclude that at the time the contract between CCDC and Related was entered into, Ms. Graham had an interest in Related,” he wrote. But he offers no substantiation of that claim and declined comment when asked about it this afternoon.

“I can’t say anything about that,” Aguirre said. “We’re not at liberty to discuss that.”

In his letter, Aguirre alleges that Graham violated Government Code Section 1090, which prohibits public officials from participating in contracts in which they have a financial interest. A 1090 violation occurs when a public has an active interest in a contract.

Graham has drawn attention for participating in meetings about the project at 7th and Market, despite saying she had recused herself. She resigned July 24 after having subsequently acknowledged being involved in what she described as “minor things” related to the project.

As we reported today, the question of any conflict for Graham boils down to timing. She has said she sold her interest in N-K Ventures, a development business, to her former husband in early 2006. The two stood to reap ongoing profits from participating with The Related Group in a condominium project in Florida, where Graham lived before starting the CCDC job in December 2005.

Related of California was chosen by CCDC on the 7th and Market project in March 2007. The project would benefit from an $8.7 million city subsidy in exchange for including affordable housing units.

If before selling out to her husband she received money from The Related Group, the Florida affiliate, she would have been prohibited for making any governmental decisions about the business or its related entities for one year. That’s a different prohibition than is covered by the law Aguirre referenced.

Aguirre set an Aug. 15 deadline for CCDC to set aside the deal. If the agency does not, Aguirre wrote that “the City Attorney’s Office will seek judicial intervention to set aside this contract.”

Update: The original version of this post incorrectly said Related signed an exclusive negotiation agreement in March 2007. CCDC chose Related as the preferred developer on that date.


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