San Diego news from inewsource Investigative journalism for the common good
by Brooke Williams and Brad Racino
A more up-to-date version of this story can be found by clicking here
Nearly two years ago, San Diego attorney Cory Briggs called on Mayor Bob Filner to resign for violating “principles of open, accountable, responsible government” in connection to a deal with a developer.
The next day, Briggs filed a lawsuit against the developer, Sunroad Enterprises, and the city, alleging a “pay-to-play scheme.” The city, the suit contended, was giving away public property in exchange for a $100,000 donation from Sunroad to Filner’s “pet projects.” The property included nine-foot wide strips of land on either side of a park. It was all part of a commercial-residential development in Kearny Mesa that Sunroad was building.
inewsource looked into how that lawsuit was resolved and found that the only one who has been paid so far is Briggs. But there appears to be some action since inewsource started asking questions.
Sunroad’s vice president of development, Andrea Contreras Rosati, told inewsource the company paid Briggs Law Corp. $135,000 to settle the case and put $10,000 into a San Diego park fund, as required by the settlement. Within ten days, Sunroad was also supposed to work with the city to appraise the easement, which would prohibit the city from building on two edges of the park. Sunroad was then to pay the city the appraised value 10 days after that. They signed the agreement on Aug. 21, 2014.
As of Wednesday, the easement had not been appraised. On Tuesday, inewsource asked for details of payments to the city from Sunroad since August to confirm the $10,000 donation, which was supposed to happen within three days of the settlement. The San Diego Treasurer’s Office found only three, but they were unrelated. The treasurer’s office is still trying to confirm its search didn’t miss any payments for city parks, according to city spokesman Tim Graham.
inewsource emailed Tom Story, a consultant for Sunroad, on April 11 with questions about the settlement terms. On April 14, inewsource reached Story by phone, who said he had forwarded the question on to Sunroad.
A day later, Contreras Rosati told inewsource in a phone interview that an appraiser had been hired “within the last week.”
“Cory and us, we just went back and forth for a while,” she said. “There wasn’t anything really in particular that caused the delay.”
The settlement spells out what Sunroad and Briggs were required to do if they couldn’t agree on an appraiser. Contreras Rosati said Sunroad took those steps.
She said “it shouldn’t take much longer” for the appraiser to come through, but “apparently he has quite a workload, too.”
Briggs did not respond to an emailed request for an interview Wednesday afternoon, but Contreras Rosati, who worked as a deputy city attorney until June 2014 when she took a job with Sunroad, said the company paid Briggs the $135,000.
The value of the easement in question was the first of two scandals leading up to Filner’s resignation, which was ultimately over charges of sexual harassment.
Briggs did not mention a “quid pro quo” in the resignation letter he faxed to Filner at 3:34 p.m. on July 9, although a CityBeat article, based on lengthy interviews with Briggs, Marco Gonzales and Donna Frye—three former Filner allies who sought his resignation—states multiple times Briggs’ letter asking Filner to step down was about the Sunroad arrangement. Briggs gave the city notice of the impending lawsuit against Sunroad with those allegations less than three hours later.
Sunroad’s messy history
What Briggs described as a pay-to-play scheme between Sunroad and Filner began when the City Council voted unanimously April 30, 2013 to waive a city land policy and give Sunroad a no-build easement along the edges of the north and south end of a park adjacent to the company’s development. An easement prohibiting the city from building on the land was delaying the Sunroad Centrum project in Kearny Mesa, a commercial and residential development that included a 2-acre park to be donated to the city.
The city’s real estate head at the time, James Barwick, told the City Council the easement would increase the value of Sunroad’s property because the company would be able to construct closer to the park and “build more units” as part of the project.
Barwick also told the council the “no build” easement would diminish the value of the land and pointed to “100 years down the road” when it might not be a park anymore. What if the city wanted to build a baseball field? He asked the council, saying “there should be some consideration or compensation to the city.”
Councilwoman Lorie Zapf led the motion to waive council policy, giving Sunroad the easement and saying it was “just a simple waiver.”
This wasn’t the first time Sunroad had been part of a scandal involving the city.
Years ago, the company notoriously had to remove the top of an office tower. The city had approved the height while the Federal Aviation Administration declared the building was dangerous for pilots flying into the airport in bad weather. A newspaper investigation at the time found the Development Services Department had at least two chances to limit the height before construction began.
As Story stood before the City Council in April 2013 in support of a waiver of council policy to get the no-build easement, City Councilwoman Marti Emerald recalled out loud the fiasco over the building and told Story, who was chief of staff to former mayor Dick Murphy, that she wanted to ensure this wasn’t a “manipulation of the system.”
Councilman David Alvarez asked if the City Attorney’s office had any concerns, and Shannon Thomas, deputy city attorney, said they didn’t have enough information to evaluate whether the easement had value or would be a “gift of public funds.”
In the end, Emerald joined her colleagues and voted in favor of the waiver but said “we have an obligation to make sure that we don’t give it away” and asked Story to “go back and negotiate with the mayor’s office, Real Estate Assets” to “see what kind of compensation we could get for this property.”
Story ended up working out a compensation package with the mayor’s office after Filner vetoed the council’s decision on May 16. At the time, Filner said he vetoed because was concerned about how the council waived city policies without consulting city staff.
Story reached an agreement with the mayor’s office to donate $100,000 to the city, which it allocated to a biking event and a veteran’s plaza in Ocean Beach. But a scandal ensued after Story left a voicemail for then-councilman and current Mayor Kevin Faulconer on June 7, saying the company had paid the money and was told Filner would support overriding his own veto.
A settlement
The lawsuit Briggs filed on behalf of San Diegans for Open Government* argued the city was entitled to the full dollar value of the land, and that the $100,000 had no “sufficient nexus with the loss of the park property and would not be used to fund any program or service that would benefit the Kearny Mesa community where the park is located.”
He also said the project violated the California Environmental Quality Act.
The August 2014 settlement did not include any environmental remedies. In all, Sunroad agreed to pay $10,000 to a city park acquisition fund with “with priority for parks located in Kearny Mesa and then Clairemont,” the value of the easement and $135,000 to Briggs Law Corp.
Contreras Rosati, vice president at Sunroad, said no one from the city was involved in the settlement, though some officials have asked for updates. “The city did not feel they needed to involve themselves further,” she said.
“I think I just saw an email recently where they wanted to know what was going on,” she said.
*Last week, San Diegans for Open Government filed a lawsuit against inewsource, its executive director, San Diego State University (where inewsource has its office), the San Diego State University Foundation and California State University. The lawsuit alleges conflict of interest violations concerning inewsource’s lease and non-disclosures on federal tax filings.
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