Morning Report: The Governor Can Stay | Voice of San Diego

Morning Report

Morning Report: The Governor Can Stay

Also in the Morning Report: We got documents on 101 Ash. ‘Volunteer’ city advisor had formal agreement with landlord. And a San Diego hotel magnate goes incognito at a fraud trial.

A ballot box at the Mid-City Gym polling place in City Heights / Photo by Adriana Heldiz

The attempt to recall Gov. Gavin Newsom failed. It wasn’t close.

Almost 66 percent of California voters rejected the recall as of late Tuesday night, with networks and the Associated Press calling the race not long after results began pouring in. That number could come down as officials count more votes from Election Day, which are expected to be more conservative leaning. The Associated Press declared that Newsom’s victory cements his role as a major Democratic figure and preserves his prospects for higher office.

As a reward for his fine performance, Newsom gets to keep governing a state that is on fire; a state still struggling to manage a pandemic and the economic havoc it caused; a state that just Tuesday re-established itself as the one with the second highest poverty rate in the nation due to its soaring cost of living.

As if that wasn’t enough to manage, next year he gets to run a re-election campaign.

He’ll be pleased, though, that all his rivals fared so poorly.

As of 11 p.m. Tuesday, former San Diego Mayor Kevin Faulconer was in distant third place (9 percent) among those seeking to replace Newsom. Larry Elder, the conservative talk radio host, received more than four times as many votes as him statewide (45 percent), and the YouTube influencer Kevin Paffrath finished ahead of him too (11 percent).

San Diego wasn’t into K-Faulc either: Faulconer did better in his home county than he did statewide, but still received less than half as many votes as Elder in San Diego County. Businessman John Cox, who also lives in San Diego County, took just 4.7 percent of the vote statewide, good for fifth place.

Can’t bear it: Cox spent almost $10 million on his campaign.

Faulconer isn’t done: The former mayor said he’s considering running again next year.

“Tonight was round one,” he said. “There’s more to come.” That’s in the Union-Tribune’s piece about how Faulconer failed to convince people to vote for him.

It’s hard to picture what punches Faulconer may come up with that didn’t land in this round.

No one’ beat them all: Rob Pyers, research director for the California Target Book had this observation late Tuesday about how few people voted on the choice to replace Newsom at all: “There are currently 8.44 million votes on recall question one and 4.52 million votes on question two, which would suggest that ‘No one’ is currently outpolling Larry Elder by roughly 1.9 million votes.”

The Associated Press surveyed a few San Diego voters.

Joe Cusumano, a local barber who said he used to cut the hair of former San Diego Mayor Kevin Faulconer, voted yes on the recall. He said Faulconer was “a San Diego man, someone who is decent,” but ultimately chose conservative talk show host Larry Elder as his pick to replace Newsom. Two other San Diegans told the AP they voted against the recall, citing Newsom’s effort to curb the spread of the coronavirus and his work on homelessness and public education.

San Diego’s own: Secretary of State Shirley Weber made an appearance on CNN shortly after networks called the race, declaring the results a sign of faith in the state’s democracy.

“To those who continue to challenge the concept of fairness, to them I say, ‘where is the evidence?'” she said. “We have yet to get the evidence that there has been fraud or deception. We welcome all comments about our process. But false allegations are a waste of our time… I know what it’s like when you can’t vote. I know what it was like when my father couldn’t vote in Arkansas, for many years.”

Tweet of the Night: “A reason I’d be bad at politics is, if I were Newsom, I’d give my televised victory speech in a tight shot, then, as I’m wrapping up, the camera pulls back to reveal I’ve been seated at The French Laundry the entire time,” wrote Michael Tae Sweeney, from San Diego.

Documents Reveal Agreement Between Hughes, City Landlord

101 Ash St. / Photo by Adriana Heldiz

In July, an audit pointed out that the city had failed to ink a formal contract with its former volunteer real estate adviser, Jason Hughes, who, it was later revealed, actually received $9.4 million from one of the city’s landlords for his work. 

It turns out Hughes, downtown real estate maven Jason Hughes, did have formal agreements – with the city’s landlord.

VOSD’s Lisa Halverstadt obtained a 2014 non-disclosure agreement between Hughes’ company and Cisterra and a 2015 services and fee agreement, both of which were signed before the City Council approved a lease-to-own deal to acquire Civic Center Plaza. 

Hughes later received just over $5 million from Cisterra for his work on Civic Center Plaza following the fee contract stating he would receive 45 percent of the city landlord’s net profits on the deal – and to cover 45 percent of Cisterra’s deal costs should the transaction fall apart, Halverstadt reports.

Nearly two years later, Cisterra paid Hughes $4.4 million for his work on the 101 Ash St. deal.

Read her story here.

Hughes’ attorney argues the non-disclosure agreement followed direction from city officials concerned about the potential loss of Civic Center Plaza where the city has long housed hundreds of employees and that Hughes pursued the fee agreement after repeatedly letting city officials know he intended to get paid for work on what he said required more bandwidth than previous deals he’d worked on for the city.

City Attorney Mara Elliott’s office and outside legal experts, however, argue the two agreements provide more evidence of alleged conflicts of interest. Two experts told Halverstadt the fact that Hughes not only signed on to get paid but also took a financial risk that likely only increased his incentive to ensure the deal got done is significant. The city will likely emphasize those agreements in court cases arguing both leases should be voided due to the payments to Hughes.

How’d we get here again? It all started with 101 Ash St., which the city rushed to evacuate in early 2020 after a series of asbestos violations. In the aftermath of that debacle, how the city ended up with the building — and what went wrong — became a fixture in the mayor’s race. Then questions started to swirl around Hughes’ role. Halverstadt dug in deep earlier this year and found he was the mastermind behind the city’s Civic Center Plaza lease-to-own deal. Then, as the city prepared to take legal actions to try to void the two leases due to the alleged conflicts, Cisterra and Hughes revealed the city’s landlord had paid Hughes for his work on both deals.

Hanson: A San Diego Hotel Magnate’s Alter Ego

Photo by Sam Hodgson

San Diego hotelier Bill Evans made national news Tuesday. The owner of the Catamaran, Torrey Pines Lodge and Bahia Resort Hotel showed up at jury selection for the trial of Elizabeth Holmes, who is accused of fraud after her company Theranos raised billions and fell apart. 

Evans presented himself to reporters covering the trial as a kind of watchdog keeping an eye on them, making sure they covered it accurately. But he didn’t reveal his identity. When reporters asked him who he was, he brushed them off saying he fixed up old cars for a living and was just a concerned citizen.

But then, when the trial got underway, he showed up dressed differently and accompanying Holmes as part of her entourage. 

Read this hilarious NPR story about how the press covering the trial discovered that he was actually San Diego’s Bill Evans, hotel magnate, and father of Holmes’ partner, Billy Evans. 

Seriously, read it. Sometimes journalism is delightful.

In Other News

  • The San Diego City Council passed an ordinance Tuesday intended to crack down on ghost guns, making it illegal to buy and sell gun parts in the city that cannot be traced by law enforcement. (Union-Tribune)
  • The old Carmel Mountain Ranch Country Club golf course is going to be developed into housing. (10 News)
  • The Imperial Beach Pier is temporarily closed after part of the pier collapsed into the ocean. (NBC 7)

This Morning Report was written by Lisa Halverstadt, Andy Keatts and Scott Lewis, and edited by Megan Wood.

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