101 Ash St. / File photo by Adriana Heldiz

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Under Mayor Todd Gloria’s proposal regarding 101 Ash, the City of San Diego will incur hundreds of millions of dollars of debt that will take up to 30 years to pay off.  The proposal is uncertain because the city will take city cash from unspecified street and sidewalk repair, library, beach erosion and public improvement projects to pay over $86 million to fund the mayor’s proposal. The proposal is uncertain because the city has no plan for the Ash Street building — the city is unable to “represent that it has the intention of occupying the building for office space for City employees.” And, there will be a tremendous additional expense — $140 to $270 million — to cover this cancelled capital project costs due to this proposal.

The mayor relies on his PowerPoint report from a real estate consultant —Kosmont Companies to conclude the settlement is the best outcome. This company did not even include my 2020 legal action, John A. Gordon v. 101 Ash Street, LLC et al, Gordon Taxpayer suit seeking to declare the underlying Ash Street debt void because it was incurred in violation of the State Constitution’s municipal liability limit provision. The city incurred a $91,893,022 liability in 2017 to buy the Ash Street building, but the payments were to be made over 20 years.  Under the State Constitution, such financing had to be approved by voters. It was not.

The 101 Ash lease was constructed as a financing contract to purchase the building. In commercial terms, it was a “Credit Tenant Lease” where the payments by the tenant would finance the purchase of the building. The payment of the lease was mandatory without exception, thus described by the lender’s legal team as a “Hell or High Water” obligation, meaning the city must pay without exception or escape. This, on its face, is unconstitutional.

The mayor’s proposal represents that Cisterra will pay back its profits. This is untrue.  On Jan. 5, 2017, over $10 million was transferred to Cisterra Chairperson Steve Black and his Sierra Summit Partners, LLC. Cisterra is not returning the entire $10 million. Cisterra is withholding the $4.4 million it paid off to the City’s Ash Street advisor.

The mayor claims the settlement will allow the city to develop its inner core. But there is no plan. The mayor has had over 18 months to develop a city workforce or funding plan for 101 Ash, but none has been made. The mayor represents he will be back with a plan in one year. Taxpayers need to know the plan before, not after, the legal cases are dismissed.    

There has been a lack of transparency.  Mayor Gloria has negotiated this settlement with Cisterra’s lobbyist in secret. Cisterra has even refused to turn over law enforcement critical records about the Ash Street deal.  

The mayor blames his predecessor for the Ash Street disaster.  But it was the City Council, based on motions Gloria made at Committee and at Council, that approved the Ash Street debt in 2016. 

On June 29, 2021, Mayor Gloria admitted he was deceived.  He promised to void the illegal Ash Street debt.  Instead of following through, he has reneged on his promise.  Then deceived, now a deceiver.

Even the City Attorney opposes the deal and highlights the significant disadvantages to the city’s legal and financial interests.

The resolution of Ash Street should be based on facts and law, not spin, no matter how many consultants the mayor hired to advocate for him, no matter how many respected community members who write commentaries based upon made-to-order scripts.  This is the time to get to the bottom of the Ash Street scandal and to negotiate a resolution that is fair to taxpayers. 

There is currently a hearing set for July 26, 2022, to request the Honorable Joel Wohlfeil issue a Temporary Restraining Order prohibiting the City from making any further payments to Cisterra or CGA related to the 101 Ash Street building. The City should not take any action that calls for the transfer of city funds until after the case is resolved on the merits.

John A. Gordon

John A. Gordon is a longtime resident of San Diego who has been active in City of San Diego matters. He is a Master Analyst of Financial Forensics and...

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1 Comment

  1. On June 29, 2021, Mayor Gloria admitted he was deceived. He promised to void the illegal Ash Street debt. Instead of following through, he has reneged on his promise. Then deceived, now a deceiver.

    OR Why is Satan laughing?
    When a thief steals from a thief the devil laughs.

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