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City Asks $9 Million From NTC Redevelopers

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Aired 4/19/09

San Diego City Attorney Mike Aguirre has accused one of San Diego's largest developers of artificially inflating costs to deny the city a share of their profits. He is asking Corky McMillin Companies to give $9 million to the city from the Naval Training Center redevelopment project. KPBS reporter Alison St John has more.

Developers frequently argue the city will earn millions from redevelopment projects in tax increment dollars, but in practice it turns out local government does not always get the promised payback.

Aguirre says his staff has uncovered a sweetheart deal between two Corky McMillin development companies, where one charged the other labor costs inflated by 250 percent. The inflated costs meant there wasn't enough profit at the end of the day to give the city's redevelopment agency anything.

Aguirre : McMillin is going to try and argue that it should be construed in a way that the city should get nothing and McMillin gets everything, but that's not the way it was presented to the council.

When the contract was entered seven years ago, negotiators calculated the city would earn more than $300 million in coming decades. Home sales on the property have been brisk, but so far, the city's earned nothing. Alison St John, KPBS News.

(Photo: City Attorney Michael Aguirre answers questions from the media outside Liberty Station on Monday, March 5.  Alison St John/KPBS ).

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