Former SD Town lawyer raises questions about unauthorized payments at 101 Ash St. –

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DOWNTOWN (KUSI) – On Tuesday, the City of San Diego announced a lawsuit to rescind its capital leases in the construction contracts for 101 Ash Street and Civic Center Plaza due to an advisor reportedly received millions of dollars in undisclosed compensation for negotiating the transactions in violation of state law.

Now, former city attorney Michael Aguirre, elected in 2004, is asking for more answers on what Mara Elliott and other elected officials knew about these payments.

Reports show Jason Hughes portrayed himself as a “special real estate services volunteer” who negotiated the deals on behalf of the city for free “out of a sense of civic duty.”

However, the city says it was actually paid $ 9.4 million in undeclared compensation from Cisterra Development. When negotiations between Hughes and the owners of the 101 Ash Street building were unsuccessful, the city says Hughes has entered into negotiations with Cisterra for a capital lease if Cisterra acquires the building.

Aguirre held a press conference on Wednesday rebuffing claims that Elliott’s office was unaware of transactions with Hughes at the time of payments.

“The City of San Diego must answer three questions, when did the city attorney’s office discover Jason Hughes’ illegal payment,” Aguirre said. “Two, how did they find out about the illegal payments and three, who did they tell? “

Aguirre accuses the city of not being transparent about the facts of the case when the agreement was reached in 2016.

“The city plays very fast and loses a lot with legal procedures, which is why if we find out that the city has known about this for some time, it is a very serious breach of ethics,” Aguirre said.

KUSI contacted Mara Elliott’s office regarding the allegations, we received this statement in response:

When exactly did the City learn of the payments made to Jason Hughes?

We have received unconfirmed reports of payments made by Cisterra to Hughes in April 2021 for Ash Street and in June 2021 for CCP. Cisterra’s lawyers provided documentary evidence on June 28, 2021.

How did the City actually find out about it?

The City learned of Cisterra’s payments.

Who if someone has the City shared payment information with, and when?

The public has been notified under the city’s 101 Ash Street trial amendment, which added Jason Hughes as a defendant to that lawsuit, and the city’s CCP lawsuit filed by the city yesterday. Before filing a lawsuit, the city attorney obtained permission from the San Diego City Council to vary the lawsuit and bring a new action based on the confirmation that Hughes had been compensated by Cisterra while he was the city’s real estate consultant.

Elliott responded to the press conference Aguirre held on Wednesday saying it was based on speculation.

“Credible lawyers base their lawsuits on fact rather than speculation, which we have done here. Building a strong case requires initial work. Once we had the facts we needed to prove our case, we changed our lawsuit and started the CCP litigation, ”Elliott said. “While making wild and unsubstantiated allegations may attract media attention, it does not benefit the City or the people we serve. Aguirre runs after the headlines with crazy conspiracy theories. I expect more from our former city attorney, and I am embarrassed and disappointed with his attention-seeking conduct. “

Former mayor Kevin Faulconer was in office when the deal was made and said he supported the city’s ongoing investigation into what had happened.

“As I said last year when I launched an investigation into this project, I continue to strongly support all efforts of the city attorney to identify and denounce anyone who has unfairly benefited taxpayers,” Faulconer said. .

KUSI’s Hunter Sowards joined live downtown viewers with more.


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