July 2 2013 04:28 PM

An honest examination also includes the developer and the City Council

Bob Filner
Photo by David Rolland

    San Diego Mayor Bob Filner started a press conference last Friday by reminding us that he's been in elected office since 1979. "I've had worse weeks," he said with his trademark grin. He acknowledged that some "controversies" oozed out of the Mayor's office last week, but he believes that in the grand scheme, none of them is that big a deal, at least to folks who live outside of the local journo-political bubble. 

    "People are really excited about some of the things that we're doing," Filner said.

    Our job is to analyze the news from as holistic a standpoint as possible. Our readers can decide for themselves who should be held accountable, and for how much of the controversy. Let's look at the biggest brouhaha—Filner's supposed shakedown of a local developer for $100,000 to fund two of the mayor's favorite community projects: 

    On May 16, Filner vetoed an April 30 decision by the City Council to waive its own policies governing private encroachment onto public property and give notorious real-estate developer Sunroad Enterprises two 9-foot easements within either side of a public park that the developer was required to create as part of a commercial-residential project in Kearny Mesa. His reason was that the council didn't follow proper procedure when it agreed to waive policy and grant the easement without the involvement of the city's development-services staff. Filner has since said that he also didn't think the city should give away easements on public property without getting anything in return.

    Interestingly, at the April 30 hearing on the matter, Councilmember Marti Emerald told Tom Story, Sunroad's vice president for development, that he should approach the Mayor's office and the city's Real Estate Assets Department "and see what kind of compensation we can get for this property. It is a public asset, and I think we have an obligation to make sure that we don't give it away."

    After Filner's veto, Story did just that. Filner says that Story contacted the Mayor's office and said that even though he believed he had enough council votes to override Filner's veto, Sunroad would like to donate money to some worthy city projects. That offer turned into $100,000 for CicloSDias, an Aug. 11 biking event, and a veterans plaza in Ocean Beach.

    Last week, 10 News and U-T San Diego obtained a voicemail message that Story left at the office of Councilmember Kevin Faulconer in which Story explained that he'd reached an agreement with the Mayor's office: "We have paid him the money that was requested and was told that the mayor would support the [veto] override." Thus, a scandal was brewing.

    At last Friday's press session, Filner produced a memo that he said he saw for the first time just the day before, on Thursday, June 27. The memo was from Story to Allen Jones, who was Filner's deputy chief of staff until two weeks ago. It referenced two attached checks totaling $100,000, payable to the city of San Diego, and it said that they were "payment" for the mayor directing his staff to record the easements. It was signed by Jones.

    Filner said that as soon as he read the memo, he gave Sunroad back the money. He said Jones signed the memo in violation of what the mayor believed to be the arrangement—a donation—and Vince Hall, his chief of staff, backed him up. This is an important distinction in light of an opinion that the City Attorney's office released on June 10, saying that a donation to the city might be legal, but a payment in direct exchange for an easement might not be.

    After the press session, both Voice of San Diego and the U-T interviewed Jones, who said Filner was on board from the get-go with a quid pro quo: favorable action on the park issue in exchange for money. Mind you, Jones told Voice's Scott Lewis that he doesn't find anything wrong with this and that he'd recommended that the money go to civic projects in Kearny Mesa so that there was a community nexus with the Sunroad development.

    So, either Filner or Jones isn't telling the truth. If it's Filner, that's bad; lying to the public is a serious no-no. 

    That aside, from a public-perception standpoint, a donation in this case is no different from a payment. Either way, it's a quid pro quo. That is, unless Filner told Story in no uncertain terms that he would not withdraw his veto, but if Story still wanted to give $100,000 of Sunroad's money—hey, thanks! But Filner gave the council his blessing to override the veto, and the money was sent. 

    Filner also admits to being under the impression that the money would help pay for two of his prized projects. So, while it wasn't going into his pocket, he was going to get personal political value: He could show voters that he was making good things happen.

    What Filner should have done was go to the council on the day of the veto-override vote, hand-in-hand with Story and say: "The council bungled this thing and gave away the people's property for nothing, and that's why I vetoed it. But Tom and I have been talking, and he agrees that Sunroad should pay for the easement; in fact, he's got a dollar figure in mind. If you like it, maybe you can vote again on a new deal."

    Now, that brings us to the City Council. On March 27, Councilmember Lorie Zapf, in whose district the project is located, brought to the council's Land Use and Housing Committee (LU&H), which Zapf chairs, a request from Story for the council to waive its rules on encroachment onto city property and to grant the easements in the park.

    Apartment construction is underway next to 
    Centrum Park.
    Photo by David Rolland

    Sunroad's project includes two apartment buildings that frame a two-acre public park. The city's Planning Commission permitted the project with just six feet of space between the buildings and the park, but during what's known as a "permit plan check review," the city's development-services staff informed Sunroad that the California Building Code would require 15 feet of space in this case, for fire-safety reasons. That's why Story was asking for the easement—an agreement that the city would never build any structures inside 9-foot sections of the park on both sides. City staff had told Sunroad that the easements wouldn't be allowed under Council Policy 700-06, "Encroachments on City Property." Hence, Story's request for waiver of the policy.

    Zapf and the committee relied solely on Story to give the kind of analysis that city staff would typically give. True to Filner's gripe, there was no city staffer there to provide information or answer questions. Zapf's spokesperson, Alex Bell, told CityBeat that while there was no proactive effort to invite city staff, the Mayor's office knew that Story's request was scheduled. Zapf aide Kelly Batten "was told by phone that Park & Rec staff would not do anything to grant the easement," Bell said.

    It was the last item on the agenda. No audience was present. Story was prepared to give a PowerPoint presentation, but Councilmember Sherri Lightner stopped him before he started, saying she'd be "delighted" to make a motion to approve Story's request. The ensuing committee vote was unanimous. The item took less than seven minutes, much of that time devoted to whether or not the committee needed to make any official findings in support of its decision and some comments from Story about why the council policy should be revisited.

    If you go to the city's website and retrieve the written materials for that item on the March 27 LU&H agenda, you find a 10-page document, which includes Story's requests and a copy of Council Policy 700-06. We assume that Story provided the copy of the policy because in it is an underlined phrase: "… would not be detrimental to the City's property interests…."

    Interestingly, that copy of the council policy was missing Page 4, which lays out the fees that private interests are supposed to pay when they want to encroach on city property. Though it's easy for committee members to find the full policy online, the incomplete version was included in the committee's binders.

    Encroachment fees were not brought up when the matter reached the full City Council on April 30. But compensation for the giveaway of public property was. Emerald's suggestion that Story negotiate compensation with the Mayor's office came on the heels of Real Estates Assets Director Jim Barwick telling the council that "this easement will diminish the value of the city's property." He added, "We just feel that there should be some consideration of compensation to the city for this loss of value."

    Councilmembers Zapf, Kevin Faulconer and Sherri Lightner were adamant that the city was losing no value because the park would at some point be "dedicated," meaning it would take a two-thirds majority of voters to turn the park into something else. (When Zapf explained the request to her colleagues, she read directly from Story's memo.) Barwick didn't relent, arguing that restricting what the city could do with parts of the park still meant a loss in value. In the end, the vote was unanimous in Sunroad's favor.

    Now, if Sunroad sounds familiar, it's because the developer was embroiled in controversy during Jerry Sanders' time as mayor. It's the company that built that 12-story office building near the Montgomery Field airport even though it and the city knew that federal aviation and state transportation officials said it was too tall. Amid a cozy relationship with Story and Sunroad's owners, the city did nothing to stop construction. Sunroad eventually was forced to lop off the top floor.

    Emerald brought up the too-tall-building flap on April 30. "I just want to understand the history of this," she said, "so that when I take a vote, I feel confident in knowing that this isn't a manipulation of the system, that we're not going to wind up with the same problems we had before."

    So, here we have Sunroad once again learning that it has violated some agency's rules and Story once again seeking permission after the fact. And that permission means more money for Sunroad. As Barwick told the council, by being allowed to build closer to the park, Sunroad can build more apartment units. Former Councilmember Donna Frye told us this week that she recalls Sunroad President Aaron Feldman sitting in her office years ago asking to be relieved of having to build a park at all because, with it, the project wasn't penciling out financially. Also, without the easements in the park, Sunroad would have had to use fireproof windows that don't open, reducing the value of the apartment units.

    Incidentally, doesn't it seem like Story was leaving quite the trail of breadcrumbs—the memo to Jones, the voicemails to Faulconer and other council members—leading the scandal to Filner's doorstep? We would bet that Story, a former high-level city official, would know that a direct payment for a favor would likely be improper. And, gosh, wasn't it quick and easy for certain reporters to get their ears on that voicemail through a Public Records Act request?

    City Attorney Jan Goldsmith, a bitter rival of Filner, said on Monday that he's investigating the quid pro quo. Investigations are good if they lead to the whole truth. If Filner did something illegal or improper, he should be held accountable. But when it comes time for citizens to judge this case, we hope they look at how Sunroad and the City Council put Filner in a position of needing to get something of value in exchange for the public's property.

    Write to editor@sdcitybeat.com.


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