Want the news summarized?
Subscribe to The Morning Report.
Earlier this month, lenders behind the city’s Civic Center Plaza lease gave the city an ultimatum after it failed to make its July rent payment: Pay up or surrender possession of a building that houses hundreds of city employees within 10 days.
The city’s deadline quietly came and went on Saturday.
The city attorney’s office, which has office space in Civic Center Plaza, did not respond to a Friday request about what it planned to do.
A representative for the lenders declined to comment on their next steps last week other than to say they intend to “vigorously defend against the city’s baseless attempt to void” the leases while continuing to occupy Civic Center Plaza rent-free.
The city opted to stop paying rent earlier this month in the aftermath of revelations that a city real estate adviser who had been considered a volunteer was paid for his work on the Civic Center Plaza and 101 Ash St. leases, an outcome that attorneys for the city have deemed a significant conflict of interest violation that should result in the voiding of those two leases.
In a July 14 letter, an attorney representing the lenders wrote that they would “exercise all rights and remedies under the lease” and seek to evict the city from Civic Center Plaza if the city failed to fork over its $313,118 monthly rent by Saturday.
If the lender in the Civic Center Plaza deal moves forward with an eviction case against the city, the situation will likely play out in court.
In related news: The City Council land use committee voted Friday to forward building management agreements for the 101 Ash and Civic Center Plaza building leases to the full City Council for approval. Both leases require building management agreements.
Given the uncertainty surrounding both buildings, the proposed agreements with San Diego-based Meissner Jacquet Commercial Real Estate Services include clauses allowing no-fault cancelations by the city with 30 days’ notice.