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Fearing a lawsuit from activist attorney Cory Briggs, San Diego’s downtown redevelopment agency is ready to sever its ties to a housing project in southeastern San Diego.
Late last year, Briggs and the nonprofit San Diegans for Open Government, alleged that Civic San Diego’s board chair, Phil Rath, had a conflict of interest because he previously worked as a lobbyist for Affirmed Housing, the developer tapped by Civic to complete the project.
Civic has decided the best way to handle the allegation is to wash its hands of the whole thing.
This is unfolding at a critical time for Civic. The quasi-public agency’s president resigned last month and it is expecting the results any day of an investigation into whistleblower claims of improper contracting. The mayor’s office is negotiating with a former board member to settle another lawsuit related to those allegations that could result in major structural changes to the agency.
The City Council in mid-November was set to finalize a deal with Affirmed to convert vacant land at the corner of Hilltop Drive and Euclid Avenue into low-income and market-rate housing with a park and commercial space. But Briggs sent the city a letter on the day of the vote saying it had found an old lobbying disclosure form that Rath had filed with San Diego County showing Affirmed as a client.
City Councilmembers delayed the vote so they could investigate for themselves. Council President Myrtle Cole offered to reconsider the development proposal on Jan. 9.
That day came and went with no update. Cole’s office said the city attorney and Civic’s legal counsel were still looking into the issue. The city attorney’s office confirmed that it was advising Civic, but hasn’t published a formal opinion.
Now, it appears Civic has decided how to proceed. The agency’s board is scheduled on Wednesday to consider rescinding all of its prior decisions on the project.
But that won’t kill the deal with Affirmed. In fact, it might not result in much change at all.
Civic issued the call for bids from developers on what to do with the city-owned land. It also evaluated the bids and eventually decided Affirmed had the strongest proposal. But the final say on entering into the development agreement is the City Council’s. Civic’s vote, even though it was the agency that effectively managed the entire process, offered only a recommendation to the city.
The Civic board is going to consider on Wednesday whether to cancel its prior recommendations.
That would mean the deal would still go to the City Council, just without a recommendation from Civic. The City Council could still approve the deal with Affirmed.
Or it could go another direction by either selecting one of the other proposals or re-starting the bidding process.
“Out of an abundance of caution because of the potential allegations that were raised by Mr. Briggs, our board is considering rescinding all prior actions as it relates to the project,” said Lisa Greeson, Civic’s assistant VP of human resources and compliance.
“The project itself is still a valid project,” said Kristine Zortman, Civic’s VP of real estate.
Rath is a high-profile lobbyist who worked as a consultant for Affirmed in 2013, years before Civic’s board selected the developer to build the project, but he never amended his disclosure filing to clarify that he no longer had a financial relationship with the company.
At the time, Rath insisted he had no reason to recuse himself from the board’s selection of Affirmed, and the former chair of the city’s ethics commission agreed.
Briggs, however, argued that there was no way to know whether Rath’s relationship with Affirmed had expired and that, even if it had, the disclosure form at least created the appearance of a conflict.
Theresa Quiroz, a former city planning commissioner and board member for SDOG, said the appearance would discourage other developers from bidding on city projects.
“My client was right,” Briggs said in an email. “At least this time the city listened before it got sued.”