San Diego Mayoral Candidates' Personal Finances
Digging into the financial backgrounds of Alvarez and Faulconer
This story has been updated with information on Katherine Stuart Faulconer's 2012 salary.
Faulconer owns a more expensive home and has a bigger mortgage than Alvarez; Faulconer’s wife earns a lot more money than Alvarez's wife; and Faulconer’s pre-City Council salary was bigger than Alvarez's. Kevin Faulconer is 47, 14 years older than David Alvarez, so he's also had more time to make more money.
The next mayor will be in charge of the city’s $2.7 billion budget, and will make money-related decisions for the city constantly. Each candidate emphasizes his financial acumen, saying he’s the right fiscal leader for the city. And each candidate uses his own background and life story as campaign material. For all of these reasons, KPBS and inewsource dug into the two men's financial backgrounds.
Here's what we found.
Last Job Before City Council
Alvarez: Community liaison for state Senator Denise Moreno Ducheny. Alvarez says he earned about $50,000 a year, which agrees with the range of state salaries posted online.
Faulconer: Vice president for Porter Novelli, a big lobbying and public relations firm. Faulconer says he earned $121,776 a year, which agrees with other Porter Novelli salaries posted on glassdoor.com.
Alvarez: Xochitl Miramontes Alvarez is an assistant principal at Nativity Prep Academy, a private Catholic school. Alvarez says she earns about $55,000 a year. The academy’s most recently filed tax return shows Xochitl Alvarez was not one of the three highest paid employees, and that the highest paid, the academy’s principal, made $95,000 a year.
How We Did It
To find out how we did our reporting on Faulconer and Alvarez's properties, financial interest and more, see below.
Tax returns for the couple show their combined income was about $95,000 in 2012. Alvarez’s campaign spokesman Stephen Heverly says Xochitl Alvarez recently earned a promotion that was not reflected in the couple’s 2012 returns and that some of the couple's earnings go into a pre-tax retirement account. He said that's why their combined income of $75,000 and $55,000 does not match the income on their tax return. The tax return also lists about $12,000 in federal income tax withheld in 2012.
Faulconer: Katherine Stuart Faulconer owns the business Restaurant Events, which helps companies, conventions and other groups book restaurants for events mostly in the Gaslamp Quarter. Faulconer says she earned about $174,000 in 2012. Faulconer’s campaign did not respond to requests for his tax returns.
Faulconer’s 2012 Statement of Economic Interests, which public officials must file annually in order to help identify and prevent possible conflicts of interest, says Katherine Stuart Faulconer earned an income less than $100,000 in 2012.
In response to a question about the conflicting information, Faulconer’s campaign spokesman Matt Awbrey at first referred to the economic interest form’s disclosure that Restaurant Events’ revenue in 2012 was between $100,001 and $1 million and wrote in an email that "it looks like everything matches up."
He later clarified that candidates are only required to report their "community property interests," meaning half of their spouse's income. Stacey Fulhorst, the director of the San Diego Ethics Commission, confirmed the 50 percent reporting requirement is correct.
Several companies with restaurants downtown, including Cohn Restaurant Group and Dick's Last Resort, paid the business more than $10,000 in 2012. Porter Novelli, where Faulconer used to work, also has been a client, according to an online testimonial.
Restaurant Events, which Stuart formed in 1999 according to the Secretary of State, also lists locations in Toronto and Vancouver on its website. The Canada location's client lists have included large, powerful companies such as Pfizer, Bausch & Lomb, Roche, HSBC, ING, Sheraton and Marriott, according to the current website and archives.
Until recently, the locations had the exact same logo in different colors—green in San Diego and red in Canada. That changed after Annette Frymer bought the Canada business in the spring of 2013 and redesigned its website late last year. She said the Restaurant Events in Canada is no longer affiliated with Stuart’s business in San Diego.
Katherine Stuart Faulconer did not return a phone call seeking clarification about her business.
Katherine Stuart Faulconer also used to co-own Spa Tiki, a high-end day spa on Harbor Drive that is now closed. Faulconer's 2007 financial disclosure form says his wife sold her share of the business in 2007 for less than $10,000.
Public records show that in 2006, shortly after Faulconer was first elected to the City Council, he and his wife borrowed $200,000 against their home for Spa Tiki. In 2003, Katherine Stuart Faulconer's Spa Tiki business partner Jerry Dressel and his wife were listed as additional borrowers on another $250,000 loan. A real estate legal expert says adding a business partner’s name to a home loan is very uncommon, but the Faulconers might have done it to guarantee the loan or to ensure the Dressels would help pay it back.
Faulconer’s campaign says he has repaid both loans and wouldn’t respond to questions about Spa Tiki or the Dressels’ involvement.
Other Sources of Income
Alvarez: Alvarez says he has no other sources of income, and his most recent economic disclosure form lists no investments.
Faulconer: He says he has retirement investments. His most recent financial disclosure shows he has less than $10,000 in stock invested in San Diego-based ImageWear Systems Inc., which has federal contracts and a partnership with SAIC.
Alvarez: He and his wife bought a 4-bedroom, 2.5-bathroom, 1,672 square foot home in Barrio Logan in 2008 for $270,500. The home was in foreclosure when they bought it and they took out a $265,173 mortgage to pay for it.
Public records indicate the Alvarezes have refinanced their home twice, but didn't increase their mortgage. Alvarez says he owes $240,000 on the home.
A comparison with comparable properties suggests the home is now worth about $300,000.
Faulconer: He and his wife bought a 3-bedroom, 2.5-bathroom, 2,651 square foot home in Point Loma in 1999 for $385,000. They took out a $345,466 mortgage to pay for it.
In the years since, Faulconer and his wife have recorded eight trust deeds with banks for the house, each indicating a refinance or new line of credit. Most recently, in March 2013, a document filed with the San Diego County Assessor shows he and his wife borrowed $546,250 in home equity.
Faulconer’s campaign says they owe $546,000 “on one mortgage after refinancing their home in 2013 to cover a remodel.”
Comparable properties suggest the home is now worth about $990,000.
Other Real Estate Owned
Alvarez: He says he owns no other property. Property searches for his full name do not turn up any additional properties in San Diego County.
Faulconer: He says he and his wife have a $25,000 investment in a small commercial property out of state. Property searches for his full name do not turn up any additional properties in San Diego County, and a background check does not turn up any other properties listed under his name.
Alvarez: He says he owes about $10,000. Alvarez graduated from San Diego State University in 2002.
Faulconer: He says he has no remaining loans. Faulconer graduated from San Diego State University in 1990.
Other Outstanding Debts
Alvarez: He says he has none.
Faulconer: He says he has none.
Cars and Other Transportation
Alvarez: 2009 Honda CRV and 2007 Toyota Prius. He says he does not owe money on either. Alvarez also says he owns a bike and commutes to work by car, bike, or trolley.
Faulconer: 2008 Jeep Commander Hemi and 2003 Mercedes E320. He says he still owes $17,830 on the Jeep, but the Mercedes is paid off. Faulconer also says he owns a bike and a boat. Faulconer commutes to work by car, rides his bike for exercise and is a member of the San Diego Yacht Club.
San Diego CityBeat reported an old roster from the yacht club lists Faulconer as the owner of a 19-foot powerboat named Everlasting Moon. A representative at San Diego County’s tax collector said there are no records of taxes paid on a boat in the county by Faulconer or his wife.
Faulconer’s campaign did not respond to questions about the type of boat he owns or whether he pays taxes on it in San Diego.
Alvarez: Janitor and fast food worker.
Faulconer: Deputy city manager in Oxnard and dean at Ventura College.
Alvarez: Daughter Izel, 4, is in preschool. Alvarez's wife is pregnant with their second child.
Faulconer: Jack, 12, and Lauren, 10, both attend public school.
Do the Kids Get an Allowance?
Faulconer: Both kids have chores around the house and yard. If they complete their tasks, they earn $10 each week, Faulconer says.
Favorite San Diego Restaurant
Alvarez: He says his family loves food, so their favorite is always changing. "Food trucks are always good because they’re everywhere and offer a lot of different options," he says. "Mariscos taco trucks are definitely up there as a favorite right now."
Faulconer: "It's hard to pick a favorite, but El Indio has always been at the top of my list," he says.
Alvarez: Cabo San Lucas
Faulconer: Visited his dad in Salinas for his 70th birthday.
Any Other Information Voters Should Have About Your Financial Situation?
Alvarez: "We save responsibly and live modestly."
Faulconer: "I've led by example by refusing to accept a pension and have consistently voted against pay increases for politicians. I'm proud to have brought real pension reform to San Diego and look forward to continuing to implement the will of the voters as mayor."
How We Did It
We spent more than two months conducting a thorough financial background of Alvarez and Faulconer. We relied mostly on public records available online or at government offices.
Here are the places we looked:
To determine if either candidate owned property in San Diego County, we started with the Assessor/Recorder’s Grantor-Grantee index. This website enables the public to search for property records by name and retrieve document numbers.
Unfortunately, it doesn’t include information on the location of properties, mortgage amounts, or any other details. For all of that, we had to spend many hours in the San Diego County Assessor’s Office at 1600 Pacific Highway in San Diego.
For Kevin Faulconer and Katherine Stuart, the Grantor-Grantee search produced dozens of documents. There was only a single deed showing the couple had purchased a property in San Diego County--their home in Point Loma. But there were eight other trust deeds with different banks, which seemed like a lot for just one home.
Trust deeds refer to loans on property--whether it’s a first, second or third mortgage, a line of credit or a refinance. There were also reconveyances, which usually mean a loan was paid off by the homeowners or another bank purchased it as part of a refinance. Lastly, there were records showing the couple had transferred the property between themselves and Faulconer’s trusts.
We put the document number of each trust deed and reconveyance into a spreadsheet. Then we stood at computers in the assessor’s office to read the documents and record details such as amounts of loans, whether they were paid off and when, and who the borrowers were. We also researched and noted cases in which one bank had purchased another.
While the documents contain numerous pages of standard legal language, reading them carefully paid off. Buried in two were references to the loan for Katherine Stuart’s former business, Spa Tiki, and her former business partner being listed as a borrower on a home equity loan.
After we waded through all of these documents, we compared the trust deeds with the reconveyances to come up with our conclusion that Faulconer likely still owes about $546,000 on his mortgage. We confirmed this conclusion with a real estate lawyer.
Our search online for David Alvarez and Xochitl Miramontes produced fewer results. There was one deed, showing the couple had purchased their home in Barrio Logan, and two trust deeds. Because each new trust deed was for a very similar amount to the original mortgage, it seemed likely these additional borrowed amounts were refinances, not new lines of credit. We confirmed this conclusion with a real estate lawyer.
With each home’s parcel number, which is listed on their trust deeds, we also found property details using SANDAG’s interactive maps.
Income from Corporations or Nonprofits:
To see if the candidates or their spouses were currently listed on the boards of directors or as highest paid employees of nonprofit organizations, we used a new tool at CitizenAudit.org, which enables the public to search the most recent annual reports filed with the Internal Revenue Service. There were no matches.
To find possible connections to publicly traded companies, such as positions on boards of directors, we used the Security and Exchange Commission’s full text search. It contains records filed during the past four years. We did not find any reference to either candidate or their wives, though the search for Alvarez was more tricky since his name is so common. The California Secretary of State also offers a similar records search online, and it also provided no matches.
Since both candidates are currently on the City Council, they must file financial disclosure forms known as Form 700s. We reviewed these forms, which are available online at the California Fair Political Practices Commission.
Faulconer’s 2012 disclosure form showed he had up to $10,000 in stock invested in San Diego-based ImageWear Systems Inc., which has federal contracts and a partnership with a local defense contractor. Faulconer also reported his wife’s business, Restaurant Events Inc., an event planning company in downtown San Diego, brought in between $100,001 and $1 million in 2012.
The most recent disclosure for Alvarez showed his wife earned between $10,000 and $100,000 working for Nativity Prep Academy in 2011. She is not listed as one of the highest paid employees on the nonprofit group’s tax filings, which we searched using the website GuideStar.com.
We searched for both candidates and their spouses in San Diego County Superior Court Records, which are available online.
The search for David Alvarez was trickier. His name is very common, so searches for just the name "David Alvarez" turned up a huge number of hits. When we narrowed the search to David A Alvarez, we got some hits like court rulings for child support and county tax liens.
To check on whether those rulings were for the mayoral candidate Alvarez, we again used the San Diego County Assessor's Office. There, we saw the child support judgment was for a David A Alvarez who was born in 1963. Since we know the mayoral candidate Alvarez is 33 years old, we ruled this one out.
The tax liens for a David A Alvarez didn't list a birthdate, but they extended back until 1990, all for the same David A Alvarez. Since the mayoral candidate was 10 years old in 1990, it seemed unlikely that these tax liens were for him.
We also sent questionnaires to Faulconer and Alvarez asking them for the information printed here. We verified the information that was publicly available.