Politics Report: What Did the Housing Commission Chief Know and When?
The Housing Commission scandal now turns to its CEO as a broker alleges commission staff knew and approved of controversial investment. Plus, History Man on the last California recall election.
In May, when we broke the news of a legal probe into alleged conflict-of-interest and disclosure violations by Jim Neil, a broker hired by the Housing Commission to help it purchase hotels to convert into homeless housing, it was Neil who was the key figure in the budding scandal.
Even then, however, there were significant questions about how much scrutiny and diligence Housing Commission leadership exercised ahead of its $67 million acquisition of a Mission Valley hotel that, we now know, Neil negotiated the agency to purchase after he bought 40,000 shares of stock in the real estate investment trust that owned the hotel (through a subsidiary).
Before we revealed an internal Housing Commission legal analysis that concluded Neil broke the law and recommended referring the matter to the district attorney, the Union-Tribune had already dissected the hotel’s purchase price, which an expert said was well above market rate. The agency’s defense of the transaction to the U-T didn’t really hold up. The appraisal it based the sale on explicitly estimated the property’s value as if the world-changing pandemic never happened, a choice that was not made in the appraisal for another hotel the agency bought at the same time.
And, importantly, two agency staffers said they learned of Neil’s investment before the rest of the agency, but they couldn’t remember whether they learned of it before the transaction. They didn’t act on the news in any way.
So, yeah, the Housing Commission already had a lot of questions to answer.