Morning Report: City Stops Paying Rent on 101 Ash St.

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Morning Report: City Stops Paying Rent on 101 Ash St.

Mayor Kevin Faulconer talks to reporters at Golden Hall on Election Night. / Photo by Adriana Heldiz

The city has opted to stop making rent payments for 101 Ash St. less than four years into a 20-year lease-to-own deal widely considered one of the worst real estate debacles in city history.

VOSD’s Lisa Halverstadt reports that city officials late Tuesday notified seller Cisterra Development the city would not make the nearly $535,000 monthly rent payment that had come due, a decision that marks the latest chapter of a land-use nightmare that saw the city’s rush to evacuate workers from the building in January after a series of county asbestos violations.

The decision follows an August lawsuit alleging that the lease amounts to a waste of city funds and a violation of state debt limit requirements because the city has poured money into the building but has yet to reap the benefits of it. Late last month, former City Attorney Mike Aguirre and law partner Maria Severson issued a demand letter to the city calling for it to stop making rent payments.

In a statement, Mayor Kevin Faulconer wrote that his decision to stop making rent payments rested on the city’s current inability to “use the building for its intended purpose.”

Cisterra, which sold the building to the city, has continuously defended its deal with the city and said that rent payments flow to investors rather than the developer, a reality that could complicate any negotiations with the city. 

City officials are banking on the idea that their decision to stop paying rent will force Cisterra back to the table.

San Diego’s $5 Billion Water Independence Problem

It’s a lot like when the Star Wars franchise launched its fifth movie, “Attack of the Clones,” and we knew the moment the character Count Dooku entered the screen – that perhaps George Lucas had exhausted the storyline.

Such it seems with San Diego County Water Authority’s $1.8 million effort so far to study a duplicate pipeline to the Colorado River for the fifth time. VOSD’s MacKenzie Elmer reports in a new story on the agency’s latest push for an idea that has long been considered unthinkable.

It won’t bring more or better water to the region. It’d cost $5 billion to build and wouldn’t produce savings, consultants estimate, until 2063. The point is to become independent from the L.A.-based Metropolitan Water Authority, which controls the connection to Southern California’s most important water source.

So, will the pipe dream come to fruition?

The parallel pipe – called a conveyance – caused discord among the Water Authority’s board of directors in a recent meeting, which voted to stall a decision on the project until November.

Sweetwater Fires Superintendent

Sweetwater Union High School District Superintendent Karen Janney was officially fired by board members Monday following more than two months of paid leave. The district became embroiled in a financial scandal under Janney’s leadership requiring officials to cut tens of millions from its budget.

The irregular finances were first revealed in September 2018 when VOSD’s Will Huntberry found the district had suddenly come up more than $30 million short in its budget. His reporting showed that officials agreed to across-the-board raises they knew were unaffordable, which tanked the district’s finances.

The board voted 4-1 to terminate Janney’s contract effective in 90 days, reports Huntsberry. 

Correction: An earlier version of this story mischaracterized the terms of Janney’s termination. District spokesman Manny Rubio clarified after publication that she will not receive any payout, beyond what she earns while on paid leave.

Bry Makes Midway a Major Mayoral Matter

Last week, Mayor Kevin Faulconer announced the winning bid to redevelop the Sports Arena area. Now, Councilwoman Barbara Bry has come out against that selection, arguing the process lacked sufficient community input and the city would be better off waiting until after November, when voters will decide whether to raise the height limit in the Midway area.

“Rushed real estate deals are how we got into the 101 Ash Street debacle in the first place,” she said, referring to the still-unfolding scandal around the city’s acquisition of a downtown office high rise. “At a bare minimum, the city should wait to make any development decisions until after voters have weighed in on whether to waive the 30-foot height limit in the Midway District (which I oppose).”

But the Midway Community Planning group is itself strongly supportive of the city’s attempt to waive the height limit in its area, and has been working with the city during the competition to select who will redevelop the Sports Arena area.

Late Tuesday, the group issued a scathing response to Bry’s statement, saying it was “shocked and appalled” by and calling it a “blatant attack on the community.”

“The Midway Community Planning Group, the city-sanctioned community group, unanimously supported putting the 30-foot height limit issue on the ballot,” wrote the group’s chair, Cathy Kenton. “Yet, your position clearly states we’re not good enough or important enough for you and your District 1 constituency.”

  • Still, Tuesday was mostly a good day of news for the Bry campaign. The Union-Tribune and 10News released a new poll showing her with a 3-point lead over her opponent, Assemblyman Todd Gloria, putting the mayoral race within the poll’s margin of error while 29 percent of likely voters are undecided.

In Other News

The Morning Report was written by Lisa Halverstadt, Megan Wood, Andrew Keatts and MacKenzie Elmer and edited by Sara Libby.

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