The Centre City Development Corp.’s board voted unanimously this morning to kill a proposed $409-million, 41-story downtown hotel and condominium project, citing the undisclosed potential conflict of interest of its former president, Nancy Graham.
Graham, who resigned July 24, received money from an affiliate of the project’s developer, The Related Cos., at the same time she participated in negotiations at CCDC.
The affiliate, The Related Group, struck a condo-development deal with Graham while she lived and worked in Florida. Profits from that deal — court records show Graham earned almost $3 million — continued coming to Graham while she was at CCDC. She did not report receiving the money in her annual economic disclosure forms, nor did she recuse herself from negotiations about the skyscraper proposed at 7th Avenue and Market Street downtown.
James Lough, an outside attorney hired by CCDC to investigate Graham’s participation in the 7th and Market deal recommended killing the project, saying in a report that Graham’s financial interests “tainted the transaction to the level that the transaction should not continue.”
State and local laws prohibit public officials from influencing decisions that can benefit themselves, their spouses or their business associates. The laws extend the prohibition for a year after receiving money from a source.
“There was a fundamental betrayal of trust,” said CCDC Chairman Fred Maas. “I’m not sure how we fix that no matter what we do.”
The project would have benefited from an $8.7 million city subsidy in exchange for including affordable housing and would have been built atop what today is a parking lot. But its future had been in doubt since we revealed that Graham had been paid while she was at CCDC, the city of San Diego’s downtown redevelopment authority.
We’ll have more on this later.