The Morning Report
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The city is set to spend $132 million to buy out its 101 Ash St. and Civic Center Plaza leases following the City Council’s Tuesday approval of a controversial settlement with its landlord and lenders behind both deals.
The City Council voted 6-3 to approve the deal pushed by Mayor Todd Gloria and other city leaders who argue it will help the city move forward from the years-long debacle surrounding 101 Ash. City Council members Monica Montgomery Steppe, Vivian Moreno and Marni von Wilpert opposed the arrangement. City Attorney Mara Elliott also spoke out against the deal Tuesday.
The settlement – which we previously detailed here – means the city will resolve its lawsuits against its landlord and lenders but continue to pursue legal claims against former city real estate adviser Jason Hughes and contractors who worked in the 101 Ash building. It will also still face claims from dozens of workers who once worked in the building. The city evacuated 101 Ash in early 2020 after only a few weeks of occupancy following a series of asbestos violations.
The settlement vote came a few hours after Superior Court Judge Joel Wohlfeil rejected former city attorneys’ request for a temporary restraining order to keep the city from buying out the 101 Ash lease. Lawyers Maria Severson and Mike Aguirre are now set to return to court Aug. 26 to argue for an injunction until the court rules on the merits of their taxpayer lawsuit alleging that the Ash lease – and the plan to pay it out – violate the state’s constitutional debt limit.
The city’s settlement deal incentivizes the city to buy out the Ash lease before Aug. 26. To comply, the city must try to buy out the two leases by Sept. 1. Beginning on Aug. 9, the city will be hit with $7,000 a day in late fees for 101 Ash, and more than $4,300 a day for Civic Center Plaza.