Former SD city attorney raises questions about unauthorized 101 Ash St. payments

DOWNTOWN (KUSI) – On Tuesday the city of San Diego announced a lawsuit to void its lease-to-own agreements in the 101 Ash Street and Civic Center Plaza building deals due to an advisor allegedly receiving millions in undisclosed compensation for negotiating the transactions in violation of state law.

Now the former City Attorney, Michael Aguirre elected to serve in 2004, is demanding more answers about what Mara Elliott and other elected officials knew about those payments.

Reports show Jason Hughes represented himself to be a “special volunteer for real estate services” who was negotiating the deals on the city’s behalf for free “out of a sense of civic duty.”

However, the city says he was actually paid $9.4 million in unreported compensation from Cisterra Development. When negotiations between Hughes and the 101 Ash St. building’s owners did not resolve, the city says Hughes entered into negotiations with Cisterra for a lease-to-own agreement if Cisterra acquired the building.

Aguirre held a press conference Wednesday pushing back on claims that Elliott’s office did not know about the transactions made to Hughes at the time of the payments.

“The city of San Diego must answer three questions, when did the city attorney office find out about the illegal payment to Jason Hughes,” Aguirre said. “Two, how did they find out about the illegal payments and three, who did they tell?”

Aguirre accuses the city of not being transparent about facts of the case when the deal went through in 2016.

“The city is playing very fast and very lose with the legal procedures, that’s why if we find out the city has known about this for any length of time then it is a very serious breach of ethics,” Aguirre said.

KUSI reached out to Mara Elliott’s office about the allegations, we received this statement in response:

 

When specifically did the City find out about the payments made to Jason Hughes? 

We received unconfirmed reports of payments made by Cisterra to Hughes in April 2021 for Ash Street, and in June 2021 for CCP. Cisterra’s attorneys provided documentary evidence on June 28, 2021. 

 

How specifically did the City find out? 

The City learned of the payments from Cisterra. 

 

Who if anyone did the City share the payment information with, and when? 

The public has been informed by virtue of the amendment to the City’s 101 Ash Street lawsuit, which added Jason Hughes as a defendant to that lawsuit, and in the City’s CCP lawsuit filed by the City yesterday. Before filing litigation, the City Attorney obtained authority from the San Diego City Council to amend the lawsuit and to bring the new action based on confirmation that Hughes had been compensated by Cisterra while serving as the City’s real estate consultant. 

 

Elliott responded to the press conference Aguirre held on Wednesday by saying it was based on speculation.

“Credible attorneys base their legal actions on fact rather than speculation, which is what we did here. Building a solid case requires upfront work. Once we had the facts we needed to prove our case, we amended our lawsuit and initiated the CCP litigation,” Elliott said. “While making wild and unsubstantiated allegations may attract media attention, it doesn’t benefit the City or the people we serve. Aguirre is chasing headlines with crazy conspiracy theories. I expect more from our former City Attorney and am embarrassed and disappointed by his attention-seeking conduct.”

Former Mayor Kevin Faulconer was in office when the deal went through and said he supports the city’s investigation underway into what happened.

“As I said last year when I launched an investigation into this project, I continue to strongly support any efforts by the City Attorney to identify and bring forward anyone who wrongfully profited off taxpayers,” Faulconer said.

KUSI’s Hunter Sowards joined viewers live from downtown with more.

Categories: Good Evening San Diego, Local San Diego News, Politics