The Morning Report
Get the news and information you need to take on the day.
In August 2020, the city’s former real estate chief resigned her post as the city’s woes surrounding a downtown high-rise became a dumpster fire.
Cybele Thompson, who has been largely silent since leaving City Hall, testified under oath earlier this month that she remains proud of her work on the 101 Ash St. lease once projected to save the city millions — but that she’s convinced the city “cut corners” on renovations there.
Our Lisa Halverstadt obtained a draft transcript of Thompson’s deposition conducted by an attorney representing the city’s 101 Ash landlord and broke down a number of bombshells from the city’s former real estate director.
Among them:
- Thompson said former Mayor Kevin Faulconer directed city officials to pursue a more costly lease-to-own deal to acquire 101 Ash out of concerns about the optics of a deal with political supporter and lightning rod Doug Manchester, a claim the former mayor’s attorney denies.
- Thompson left City Hall with copies of hundreds of city documents out of concern she’d be scapegoated for her work on 101 Ash and Civic Center Plaza, the deal that preceded it.
Read more of Thompson’s revelations here.
About the City’s 101 Ash lawsuits … Thompson’s deposition was tied to the city lawsuits seeking to void the 101 Ash and Civic Center Plaza leases following the bombshell that the city landlord Cisterra Development paid the city’s “volunteer” real estate adviser $9.4 million for his work on the two deals.
The City Council got a closed-door update on those two lawsuits and a third brought by a taxpayer on Tuesday. That discussion seemed to run way over schedule. The City Council’s scheduled 2 p.m. meeting started more than 90 minutes late.
But insiders who had been speculating over whether the city was poised to proceed with a settlement with its landlord and lenders behind the deals will have to keep speculating. There were no public updates on Tuesday.
One More 101 Ash Revelation … The Union-Tribune broke the news Tuesday that Cisterra got an October 2016 appraisal valuing 101 Ash at $94 million — more than the earlier $67 million deposition it provided to the city months before the City Council vote. The larger estimate was based on the assumption that the city had pledged monthly rent payments for 20 years and was used to support a $92 million upfront loan the city’s landlord needed to make the deal happen.
Former City Attorney Mike Aguirre, who is challenging the city’s 101 Ash lease on behalf of taxpayer John Gordon, argued that the group representing lenders behind the deal sold the lease to investors based on a premise that runs afoul of the state Constitution. The state Constitution bars municipalities from taking on debt without a benefit in the year that debt was incurred. The city has occupied 101 Ash for just a few weeks since it got the keys to the building in January 2017. It stopped paying rent in September 2020.
Interestingly, Cisterra did share a broker’s opinion of value with the city before the Ash deal was approved valuing the property at $83.1 million to $85.7 million based on a 20-year lease with different rent assumptions. The separate $67 million review also ordered by Cisterra focused on the building value assuming the city would fully occupy 101 Ash with a different lease structure.
National City Councilwoman Calls It Quits
National City Councilwoman Mona Rios spent a dozen years representing the city where four generations of her family lived. But now it’s time to call it quits, she told Voice of San Diego’s MacKenzie Elmer.
Her departure from the City Council means she won’t be running for one of the newly-formed districts in National City, where council members ran at-large until this year.
But Rios also leaves a big vacancy as vice-chair of the San Diego County Water Authority Board of Directors, recently filled via an appointment process — or lack thereof — that left a bad taste in some director’s mouths. Rios is the second female vice-chair to leave mid-term in two years, leaving three White men at the helm of a body making the biggest, and costliest, decisions about water in the region.
Read more about Rios’ departure here.
San Diego Moving Ahead With Homekey App
The city and county are set to seek roughly $12 million in state homeless housing funds after key votes this week.
County supervisors on Tuesday voted to submit a joint city-county application for state Project Homekey funds to back a 40-unit supportive housing project in El Cerrito and to pledge $11 million in county money to support capital, services and operating costs for the facility.
City housing commissioners also unanimously supported the application at a special meeting Monday.
Future Housing Commission and City Council votes are expected later this year if the city and county are awarded state money.
The votes on the application came just days before the state’s May 2 deadline for the latest crush of Project Homekey funds meant to bolster statewide efforts to house homeless Californians. The application came together months after the region missed an initial deadline for roughly $61 million reserved for the San Diego region.
Affordable housing developers previously told Voice that the state initiative’s required quick construction turnaround and market changes since the program’s 2020 debut stymied potential projects. A Housing Commission executive said during Monday’s meeting that Mayor Todd Gloria’s office and city housing officials are now discussing those deadline challenges with the state in hopes of having more options in the program’s next funding round, which is expected to kick off this summer.
In Other News
- The Board of Supervisors unanimously approved a temporary shelter policy to handle asylum-seekers who arrive at the U.S.-Mexico border asking for humanitarian protection. (City News Service)
- The median rent for a one-bedroom unit in San Diego increased 32.8 percent since the start of the coronavirus pandemic, according to real estate company Zumper. (ABC 10)
- According to data released by the California Public Utilities Commission, more than a quarter of SDG&E customers are behind on their utility bills. (Union-Tribune)
This Morning Report was written by Lisa Halverstadt, MacKenzie Elmer and Megan Wood.