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The Other Developer Donation

Everyone’s talking about Sunroad’s $100,000 donation to the city, but another big project was stalled by Mayor Bob Filner, only to proceed after a developer promised to pay up.

In a case with strong echoes of the controversial Sunroad deal that has ensnared Mayor Bob Filner’s office, another contested development held up by the city was allowed to move forward after the developers agreed to pay $150,000 for neighborhood improvements.

City Hall’s been buzzing over a $100,000 donation made by developer Sunroad Enterprises to the city of San Diego in exchange for formal approval of a development project in Kearny Mesa.

But earlier this year, developer Carmel Partners had already begun work on Centrepoint, a large project on El Cajon Boulevard, when Filner instructed city staff to stop conducting inspections on completed phases, thereby halting construction.

The developers sued, claiming Filner had halted their project in order to “curry favor” with local residents who had complained about the development. Before the lawsuit got to trial, Centrepoint settled with the city. A key part of that settlement: The developers agreed to pay $150,000 to enhance nearby Clay Park, once the building was complete. In exchange, the city agreed to allow the project to resume.

Centrepoint is different from the Sunroad controversy in some key ways. Notably, the request for a $150,000 contribution seems to have originated with the developers in response to a letter from a neighborhood group, rather than as a condition from the mayor’s office.

But there are notable similarities too. Both Sunroad and Centrepoint successfully disarmed Filner’s opposition by agreeing to give the city $100,000 or more above the impact fees they were already obligated to pay.

A Sudden Halt

The Centrepoint project, on El Cajon Boulevard and 63rd Street, will house 332 housing units, 10,000 square feet of commercial space and a parking garage with more than 1,000 spaces in four buildings near San Diego State University.

The city’s Development Services Department reviewed the project and found it was consistent with existing restrictions on the property. So, it awarded Centrepoint permits through a basic administrative process, which didn’t require more stringent approval from city officials.

Neighbors of the project complained, arguing Centrepoint is too dense and is actually intended as a pseudo-dormitory, rather than the luxury apartments it’s billed as. The project should have therefore required a different, more complex approval process, argued the Rolando Community Council.

The neighborhood group’s cause was taken up by City Councilwoman Marti Emerald’s office and, according to a lawsuit filed in May by the developers, the situation eventually attracted Filner’s attention.

Here’s the timeline of events, according to that lawsuit and other documents obtained by Voice of San Diego:

• On March 14, Emerald’s office sent Filner a memo demanding that construction of Centrepoint be stopped.

• On March 22, San Diego’s chief building officer sent the developers an email informing them an “administrative hold” had been placed on the project, and that resuming construction required securing an additional permit. To enforce this, the city stopped performing inspections of completed construction phases, which kept the builders from moving to the next phases of construction.

• Filner told Centerpoint he wouldn’t remove his hold on the project, and that the developers needed to work with the community to win support. The Rolando Community Council sent Filner and Emerald a letter reiterating its opposition, and informing them of needed improvements in the neighborhood that should be provided by any new project on the property.

• Centerpoint responded by sending Emerald a letter offering to pay $150,000 toward neighborhood projects. Emerald wrote back, thanking the group for its offer, but emphasizing the group still needed to change its plans.

• On May 7, Centerpoint filed a lawsuit in U.S. district court, claiming the city had illegally halted its project.

• On May 24, Emerald announced the legal settlement with the developers, after they agreed the project would rent units by the room, rather than by the bed, in addition to “several concessions for the surrounding communities.”

Turns out those concessions to the neighborhood included the $150,000 contribution Centrepoint offered to pay prior to filing its lawsuit.

The settlement establishes that Centrepoint will make the payment once the city issues a final “certificate of occupancy” for the finished project.

Another Sunroad?

There are some significant differences between the Centrepoint deal and the Sunroad controversy.

For one, the donated money will only be spent on improvements to a single park near the project site. The money will go toward Clay Park “in anticipation of the extra wear and tear imposed by the project,” according to the settlement. In Sunroad’s case, however, the projects funded by the developer donation aren’t connected to the area of the development.

That connection to the immediate area is potentially important legally, since the contribution essentially offsets the effects of the new project.

And, unlike with Sunroad, it doesn’t appear from the documents Voice of San Diego has obtained that Filner initiated or insisted on the contribution.

The offer to make the payment was sent by Centrepoint to Emerald’s office, which announced the eventual settlement.

Former Filner Deputy Chief of Staff Allen Jones confirmed Monday that Emerald’s office led those negotiations, though a May press release from the councilwoman announcing the settlement says the mayor’s office was also involved.

A spokeswoman for Emerald said in a brief statement Monday that the $150,000 was offered by Carmel Partners and was not initiated by Emerald.

“The mayor stopped the construction project six weeks ago at the urging of the neighborhoods and Councilmember Marti Emerald, who represents them,” the May release said. “The mayor, councilmember and developer have been negotiating since then to address community concerns.”

Filner’s office did not respond to a request for comment.

Despite the differences, there’s a key similarity to the Sunroad deal: The mayor used his power to direct city staff to halt construction of a controversial project. He then agreed to drop those objections once the negotiated settlement, including a contribution, was announced.

In the Sunroad case, the mayor vetoed a City Council decision to surrender some of the city’s property rights in a park neighboring the development. He then told Sunroad he’d instruct the Council to override his veto if Sunroad agreed to make the $100,000 donation.

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