101 Ash St. / Photo by Adriana Heldiz

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It’s now been five years since the city acquired 101 Ash St., a downtown high rise that has spawned multiple scandals and cost the city more than $60 million despite sitting empty for much of that time.

And yet the situation took an even more dramatic turn in 2021.

In our latest year-end review, Lisa Halverstadt breaks down both the backstory on the acquisition and the bombshell that ultimately set off a criminal investigation and city efforts to void its 101 Ash lease altogether: the city’s landlord at 101 Ash St. and Civic Center Plaza paid the city’s purportedly volunteer real estate real estate adviser $9.4 million for his work on the two deals.

Now, Halverstadt explains, criminal investigators are digging in and attorneys for the city are arguing in legal filings that the payments to Hughes’ company amount to conflicts of interest that infected both deals. The city is now making a big bet that this year’s revelations will help it recoup tens of millions of dollars in rent payments on both buildings.

Yet representatives for Hughes and city landlord Cisterra Development argue their clients will ultimately be cleared — and that the city’s legal strategy faces major pitfalls.

Exhibit A, according to Hughes’ attorney: He says former Mayor Kevin Faulconer and top officials signed off on Hughes’ proposal to be paid for his work on complex city lease deals — and he’s pointed to text messages and letters he says prove his point. (Faulconer and former officials have insisted they didn’t know Hughes got paid.) 

Cisterra has said it relied on assurances from Hughes that he had gotten the go ahead from the city to be paid.

One thing’s for sure about where this saga is headed in 2022: The drama won’t end any time soon.

Click here to read more. 

Property Owners Paying Thousands to a Maintenance District Want to Call It Quits 

Property owners in Logan Heights and other surrounding communities have paid an annual assessment for nearly 20 years to fund cleaning services in their community. But now, some want to stop. 

inewsource reported that some property owners want to disband the area’s maintenance assessment district because of conflicts in the community and a recent change in who runs the district — now the city of San Diego. 

The Central Commercial Maintenance Assessment District encompasses some 400 parcels of property in the neighborhoods of Logan Heights, Sherman Heights, Grant Hill and Stockton. The money paid into the district is used to pay for cleaning services outside of the baseline services the city provides. Think graffiti removal, regular sidewalk sweeping, trash collection and tree trimming. 

It’s important to note that some of the individuals who want to get rid of the district all together — because they claim there is poor service — are the same board members who formerly managed the district as the nonprofit Central Commercial District Revitalization Corporation. The corporation’s contract with the city to run the MAD was not renewed in July following complaints from other property owners that there was poor service

The city’s Economic Development Department in June, sent a letter to the nonprofit detailing issues with how it was managing the district. Issues ranged from failure to respond to property owners complaints to not having its financial documents available on its website. 

The nonprofit’s board members told inewsource that they felt wronged by the city’s decision. 

“We were there for 20 years. We kept the neighborhood clean. You look at it now and it’s not clean. There’s trash all over the place. There’s weeds. It’s just sad,” board member Connie Zuniga told inewsource. 

Residents and property owners who began complaining to the city about poor service nearly a year before the nonprofit lost its contract would likely disagree. Property owners told the Union-Tribune in May that their concerns about poor service were ignored by the nonprofit and often complaints were met with hostile responses from those on the board. 

At least three property owners told the U-T that “a board member said people in the community were ‘dirty’ and suggested that a property owner complaining about the cleaning services had moved to the wrong neighborhood.” 

In Other News

This Morning Report was written by Lisa Halvertadt, Andrea Lopez-Villafaña, Will Huntsberry and Jesse Marx. It was edited by Megan Wood.

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