California Coastal Commissioner Patrick Kruer, a builder and investor in La Jolla, decided to abstain from voting on a plan to overhaul San Diego’s waterfront after inewsource asked about his brother’s financial involvement in the project.
Kruer, who championed the plan when it came before the commission in February, will recuse himself on the issue at an April 14 meeting, even though he has no legal obligation to do so, according Hope Schmeltzer, the commission’s chief counsel.
“Commissioner Kruer has always been exceedingly meticulous about avoiding any appearance of conflict, and so he chose to recuse himself from this matter,” Schmeltzer said.
Kruer has not publicly disclosed that his brother’s firm, J.T. Kruer & Co., is in charge of planning construction and estimating costs for this phase of the development. So far the firm has been paid $78,150, which is split between the Unified Port of San Diego and the city’s redevelopment agency. The contract is worth $92,250; work is ongoing.
State law requires commissioners to recuse themselves from any vote that could affect the financial interest of an immediate family member. According to the law, an immediate family member includes a spouse and dependent children — not siblings or parents.
Kruer did not return several phone calls and an e-mail from inewsource last week.
Peter Douglas, executive director of Coastal Commission said Kruer does not have a financial stake in his brother’s business. He called Kruer after inewsource inquired about the relationship last week. He said Kruer told him he didn’t know his brother was part of the project’s design team.
The project includes improvements to the intersection of Harbor Drive and Broadway Avenue.
“He didn’t know anything about it—he doesn’t follow what his brother does,” Douglas said. “He was quite upset that anyone would impugn his integrity.”
In an interview, Jonathan Kruer said he told his brother he was working on the project, but that was the extent of their conversation.
“We’ve got better things to talk about when we get together,” he said.
J.T. Kruer & Co. is one of a number of subcontractors to Project Design Consultants, a San Diego firm and Centre City Development Corporation (CCDC) and the Port hired to work on the waterfront project.
J.T. Kruer’s headquarters is on Vista Sorrento Parkway in Sorrento Valley. Jonathon Kruer said he leases the property from his brother’s real estate investment company, Monarch Group, which is based in La Jolla.
Patrick Kruer’s most recent financial disclosure lists a long portfolio of stocks and real estate investments. He does not report any connection to his brother’s firm.
Government ethicists see a moral and ethical conflict.
“Should he recuse himself? Yes,” Robert Stern, a government ethicist who is president of the Center for Governmental Studies, said, when interviewed by inewsource last week. Stern, who co-authored state ethics laws, said, “The bottom line is it looks bad, and you want to have confidence in these decisions.”
Judy Nadler, a government ethicist at Santa Clara University, said it is especially troubling that Kruer advocated for the project at the February meeting, when he made the motion to approve the plan. “Everybody should jump up and down” to support it, Kruer said. The commission wound up delaying action because its staff and coastline activists wanted to see more public park land.
“You might not talk business (with your brother) —and you might not even talk to one another—but the public perception is that this looks like an insider deal,” she said.
Douglas said he has worked with Kruer for a decade, and during that time the commissioner has recused himself if there was any concern about a conflict of interest.
“He is very particular and very attentive to avoid any conflicts,” Douglas said.
The Port plans to build a plaza with landscaping near the Broadway Pier.
Kruer has a reputation as a political moderate. State Assembly Speaker Antonio Villaraigosa appointed him to the Coastal Commission in 1999, and he was chairman from 2006 to 2008. At the time, some of his peers and coastal activists told the news media they thought he was fair and good at balancing protection of the coastline with development.
The project up for a vote Wednesday is the first phase of a $228 million transformation of bay front land between Lindberg Field and Seaport Village. Called a plan to beautify San Diego’s “front porch,” the project has been in the works for more than a decade and has been very controversial.
In early stages, the Port, the city of San Diego and CCDC planned to create a large park at the foot of Broadway Avenue at Harbor Drive that would give way to a public pier and link San Diego’s bustling downtown with its bay front.
Now, more than a decade later, the plan calls for a concrete plaza and esplanade instead of a park.
The plan changed as the Port, CCDC and the Coastal Commission approved a cruise ship terminal on the 1,000-foot Broadway Pier and private developments on adjacent land. J.T. Kruer also worked on the cruise ship project, but his brother was not present when the commission voted on it.
Project Design Consultants is the lead contractor on this phase of the waterfront overhaul, a public project which is estimated to cost $28.6 million. Project Design also works for nearly every private company developing nearby land.
Cruise terminals are considered terrorist threats, so the pier will be gated with concrete bollards and closed to the public much of the time. According to federal regulations, the public won’t be allowed within 100 yards when cruise ships are docked.
Going into the Feb. 11 meeting, it seemed the Port faced an uphill battle to get the coastal protection agency’s blessing.
Staff had asked commissioners to reject the plan, pointing to the lack of open, public space.
Coastal planner Diana Lilly overlaid a sketch of the initial plan, which was filled with green open space, on the current plan, which was mostly grey.
“The proposed project is quite different,” she said before the crowd, which was buzzing with activists and politicians. Mayor Jerry Sanders was there to support the project.
Kruer was the first commissioner to speak.
“The truth is, the architects and the people who did this improvement project,” he said, pausing, this “is a very a nice plan, is a very world class plan…We should not miss this opportunity.”
Kruer motioned to approve the project, but in the end, the commissioners agreed to allow the Port to return with a plan that included more public, open space.
Coastal commission staff has been working with the Port to include a park somewhere else in the north embarcadero area. Staff said they would recommend approval with a few conditions. For instance, the park must be at least 2.5 acres, include a waterfront element and be constructed in as soon as three years.
On Monday, Lilly said the Port hadn’t accepted all the conditions and took issue with a few of them, such as the timeline to build the park. She said they were working on a compromise.
A version of this story was published in partnership with the San Diego Union-Tribune.
UPDATE
The Coastal Commission rejected the Unified Port of San Diego’s plan to overhaul the downtown bayfront on April 14, citing the lack of open, public space. The commission deadlocked with a 5-5 vote after Commissioner Patrick Kruer abstained from the discussion and vote. Kruer said he would recuse himself last week, after inewsource asked about his brother’s ties to the Port and this project. Kruer’s brother, Jonathan, owns J.T. Kruer & Co., a construction firm that has a contract to help design this phase of the $228 million bayfront development. J.T. Kruer & Co. leases its Sorrento Valley headquarters from Patrick Kruer’s La Jolla real estate firm, the Monarch Group.