Civic Center Plaza Lenders File To Evict The City After Rent Non-Payment

Speaker 1: 00:00 The San Diego city attorney calls a gamesmanship, the building's lenders say they want their rent paid and they filed suit to evict city offices. And more than 800 employees from the civic center Plaza building the dispute is part of an ongoing effort by the city to get out of an expensive and allegedly unlawful real estate deal, which includes the abandoned 1 0 1 Ash street building. Now that the legal battle includes civic center Plaza. One of the iconic public spaces in downtown San Diego, the complicated real estate dispute may be exhibiting real world consequences beyond the tens of millions of taxpayer dollars already sunk into the building deal. Johnny Mia's voice of San Diego reporter Lisa Halverstadt. Lisa. Welcome. Speaker 2: 00:48 Thank you so much for hearing me. Why Speaker 1: 00:50 Isn't the city paying its rent on civic center Plaza? Speaker 2: 00:54 The city attorney decided late last month that the city should try to back away from both its 1 0 1 Ash and civic center Plaza leases, and thus should not be paying rent anymore. Speaker 1: 01:09 And how has the Plaza been drawn into the Ash street concrete? Speaker 2: 01:13 So late last month, there was a big revelation that the city's landlord at civic center Plaza Astera development, who also did the one-to-one Ash deal with the city paid the city's real estate consultant, who was the volunteer, Jason Hughes, just over $5 million for his work on civic center Plaza and $4.4 million for his work on one-on-one Ash. Now that is significant because of a government code section known as 10 90, which essentially says that people who are acting in an official capacity, which can include people who are consultants or contractors should not financially benefit from deals that they broker in those official roles. And so the city attorney said that both of these deals should be voided. And the city's chief operating officer sent a notice to the city's landlord early this month saying there would not be any more rent payments coming for civic center Plaza. Speaker 1: 02:13 Give us an idea if you would about the city departments that could potentially be involved in this eviction effort. Well, Speaker 2: 02:20 So there are about 850 city employees that report to this building probably has been some of a decrease because of the pandemic. We know so many folks are working from home, but there are more than a dozen city departments that have this building as their headquarters, city treasurer's office, the city's it department, the city attorney's office. I have occupies multiple floors of this building. Um, even the cities city TV that some of us watch to monitor city council meetings is in this building. So they're really a lot of questions about what will happen next for these employees and these departments. Speaker 1: 02:59 But, uh, there is a charter school there that's not affected by this eviction threat. Speaker 2: 03:05 Yes, king Chavez, uh, community high school, which is, uh, as you said, a charter school basically has been sort of set aside here. The lender has said that it's not going to try to kick the school out. They're essentially a subtenant, so they pay rent to the city, but they, you know, again, the lender has said, they're not going to be trying to put the high school. Speaker 1: 03:26 Now, as you said, a city attorney, Mara Elliot's office is calling the lawsuit gamesmanship because of this lawsuit that the city has filed in an effort to avoid both the civic center and Ash street, real estate deals. But my question is, does the lender actually have the right to evict the city for non-payment of rent? Speaker 2: 03:46 Well, that will certainly be for a court to decide. And it will be interesting to see how this plays out, because right now these are two separate legal actions. You have the unlawful detainer case, essentially an eviction action. And then you also have these other legal actions seeking to essentially quash, both leases. Um, the city will have once it's actually served in the unlawful detainer case five days to respond, um, one legal expert. I talked to suggested that the city may want to, or try to, uh, put together these multiple cases because they could then sort of link the issues and actually buy themselves more time because eviction cases typically move pretty quickly pre COVID. They typically moved in about 45 to 60 days, um, which may seem like for most of us a longer period of time. But when we're talking about, you know, hundreds of city employees and lots of city departments, 45 to 60 days would be real panic mode for the city, Speaker 1: 04:48 Former mayor. Now recall candidate Kevin Faulkner tied up in all of this. Speaker 2: 04:53 Well, that's a great question, Maureen, because I also have a lot of questions about what former mayor Kevin Faulkner new Hugh's attorney, um, is making the case that the former mayor actually signed off, um, on Hugh's ability to be paid for his work on these more complex deals. Um, and also, you know, produced a letter, uh, that he says was signed by the city's former real estate director at the mayor's direction saying in fact, the Hughes could be paid. The attorney also produced text messages between the mayor's former chief of staff, um, and Hughes talking about this letter. Um, and I was able to look back at some calendars that I had obtained after public records request, um, showing that there was in fact, a meeting between the mayor and Jason Hughes on the day that that letter was signed, but the, the mayor has really not directly addressed this issue. Speaker 2: 05:50 He's implied in some statements that he did not know that he used was being paid and that the payments were not. And certainly former Faulkner administration officials have really pushed back pretty hard. The former city real estate director said that she doesn't recall signing such a letter and the mayor's former chief of staff has pushed back and criticized use and said that, that the idea that they knew that he was being paid was wrong. Um, but there are still a lot of questions that I have for former mayor Faulkner, um, about what he knew. And, uh, I think would benefit from some direct answers from him. Speaker 1: 06:28 Now, city attorney Mara Elliot's office says this city will make every effort to, and here's a quote, ensure public services go uninterrupted throughout court proceedings. But what is the potential for disruption of public services during this legal process? Speaker 2: 06:46 No, Maureen, it's really hard to say. Um, certainly the experts I spoke to who work on these sorts of eviction cases say that there will be lots of opportunities for the city to try to drag this out. And what would imagine, certainly when we're talking about the headquarters of so many city departments and so many, um, employees that the city will make every effort to try to keep those employees in that building. Um, but the city ultimately did make the call to not pay rent here. And traditionally that is something that could create the possibility of an eviction. Um, obviously in this case, the city attorney, as you pointed out is saying there's a lot more going on here that led the city attorney to stop paying rent. Um, but I guess we'll just have to see what comes next. And this one I'll certainly be closely following it. Speaker 1: 07:35 I know that you will. I've been speaking with voice of San Diego reporter, Lisa Halverstadt. You can read her story on the civic center Plaza lawsuit@voiceofsandiego.org. Lisa, thank you. Thank you for having me. Speaker 3: 07:58 [inaudible].