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Confidential discussions of three lawsuits over the city’s lease-to-own deal for the 101 Ash St. high-rise stretched for more than 4½ hours Tuesday, but the San Diego City Council said it took no action on the litigation.
The closed-session meeting was the third time in as many months that council members convened in private to debate the cases generated by the lease recommended by former Mayor Kevin Faulconer and approved by a prior council in 2016.
Last month, the council met privately for four hours to consider their legal strategy.
The council agenda stated that the City Attorney’s Office was seeking direction from the elected body. But at the close of the public session late Tuesday afternoon, the council reported no action was taken.
Public documents released in recent weeks show Mayor Todd Gloria and City Attorney Mara Elliott have been promoting a resolution of the lawsuits filed since the city acquired the building more than five years ago.
The 20-year lease-to-own arrangement has cost the city at least $60 million even though the building is unsafe to occupy.
The city signed an “as-is” agreement to acquire the building, which is contaminated with asbestos, has a faulty fire-suppression system, and aging heating and air systems, among other problems.
A consultant said it would take $115 million to repair the building, which was appraised at $67 million before the council approved the agreement.
In one case, taxpayer John Gordon claimed the contract was illegal because it allegedly violated the state constitution by using public funds without a direct benefit and by indebting the city without a vote of the people.
Another case was filed by the city against an LLC created by Cisterra Development, a San Diego company that acted as the landlord in the 2016 Ash Street deal, as well as its lender.
Cisterra, its lender and real estate broker Jason Hughes were also named in a second lawsuit the city filed last year related to the lease-purchase agreement for the Civic Center Plaza building in 2015.
The city’s lawsuits claim the defendants violated the state’s anti-corruption laws by failing to disclose $9.4 million in payments to Hughes, who held himself out publicly as a volunteer adviser to Faulconer.
Cisterra, Hughes and the lenders all dispute the allegations.
According to public filings, lobbyist Chris Wahl has been meeting with Elliott and senior aides to Gloria in an effort to settle the Ash Street lawsuits out of court.
Wahl, who was hired by Cisterra, also has raised tens of thousands of dollars for San Diego elected officials, including members of the City Council who would have to approve any settlement.
All three cases are scheduled for trial early next year.
Source: This post first appeared on sandiegouniontribune.com