Morning Report: The Mystery Behind Hughes $9M Payday

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Morning Report: The Mystery Behind Hughes $9M Payday

The 101 Ash St. building / Photo by Adriana Heldiz

Payments made to downtown real estate broker Jason Hughes for his work on the city’s Civic Center Plaza and 101 Ash St. deals have brought a new spotlight onto San Diego’s commercial real estate industry.

Years ago, Hughes agreed to help the city with its real estate deals without seeking commissions that real estate pros usually get for negotiating office leases. Then came the recent bombshell disclosure that Cisterra Development, the city’s landlord in the deals, paid Hughes just over $5 million for his work on Civic Center Plaza and another $4.4 million for the 101 Ash lease.

Lisa Halverstadt reports in a new story that others in the industry say the payments to Hughes seem to exceed typical fee schedules for brokers and raise questions, including a former city real estate official who worked with Hughes on one of the deals.

Using fee structures provided by multiple sources, Halverstadt found that had he been acting as a normal tenant representative in a typical lease deal, Hughes would likely have received far less.

The developer and Hughes’ attorney argue the payments he received were reasonable in light of the solutions he delivered on two complex real-estate deals. His attorney said Hughes’ work went far beyond that of a typical broker – and that the payouts he received were “customary as measured by industry standards for structured transactions in which the adviser accepts risk and develops an ‘investment banking solution’ for the parties.” 

Need a refresher on 101 Ash? Catch up on all of our reporting here.

City Attorney Hands Measure B Implementation Off

Last week, advocates and experts questioned why the city attorney was writing the ordinance to implement Measure B, the voter initiative passed in November establishing a strengthened police oversight board. Part of the impetus for the measure was to distance the city attorney’s office, which represents police officers accused of misconduct, from the oversight group.

Now, the city attorney’s office is handing the job over to an outside attorney, City Attorney Mara Elliott announced in a memo to Councilwoman Monica Montgomery, chair of the Council’s Public Safety & Livable Neighborhoods committee, and a proponent of Measure B. Montgomery said in a statement that she supports the move.

Andrea St. Julian, the author of Measure B, applauded the move to bring in an outside party, but said it still matters who is tapped to write the ordinance.

“Whomever is chosen to write the ordinance has to be someone grounded in civil rights and public interest law,” she said.

Newly Merged Park Group Gets New Name

The newly merged Balboa Park Conservancy and Friends of Balboa Park now have a new name: Forever Balboa Park.

The combined boards of what had been the park’s two largest philanthropic groups voted Thursday afternoon to rename themselves two weeks after officially joining forces. The two groups began exploring the merger last year after years of calls from park stakeholders for a clear leader that could guide how to attack the park’s many needs, including its crumbling facilities.

Now, a decade after the conservancy was founded to fulfill that leadership role, board co-chair Connie Matsui told Voice of San Diego that Forever Balboa Park has begun talks with the city about a more formal partnership.

“We are in preliminary discussions with the city about what our formal relationship could and will look like,” Matsui wrote in a statement. “The goal is to formalize a public-private partnership that best serves Balboa Park, and we look forward to getting that in place soon.”

The city and the conservancy in recent years partnered on a handful of permits to execute park projects and programs. The Friends of Balboa Park also teamed with the city on a number of projects. 

Mayor Todd Gloria said after the merger was announced last year that he supported the previously etched out Conservancy model – and that he thought a merger would make achieving that vision more feasible.

Whether Forever Balboa Park is deemed qualified to take on more overarching park responsibilities will likely rest on factors including its future executive.

The group announced Thursday that it has hired a national search firm to find its leader and said it expects to hire an executive in early 2022 after establishing strategic priorities for the new organization.

In Other News

  • San Diego firefighters are 95 percent male and 67 percent white, despite efforts to recruit more women and minorities. (Union-Tribune) 
  • A former employee of the San Diego Museum of Art has filed a sexual harassment lawsuit against the museum alleging that officials there fostered a workplace culture that singled out women for harassment and discrimination. (Union-Tribune)
  • Doug Applegate, a Democrat and two-time congressional candidate in the coastal 49th District, has filed paperwork indicating he’ll run against Supervisor Jim Desmond in the county’s inland northern district. (San Diego Reader)
  • The philanthropist Malin Burnham is launching a new think tank aimed at implementing solutions related to the results of its research projects – a “think-and-do-tank” as they say – called the Burnham Center for Community Advancement in San Diego. The group has hired a CEO, but won’t have an issue area it focuses on, at least initially. (Union-Tribune)
  • Its time as a shelter for migrant children over, the San Diego Convention Center is now preparing to again host events, with its first one scheduled for the first week of August. (NBC 7 San Diego)

The Morning Report was written by Megan Wood and Andrew Keatts.

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