San Diego City Attorney Mara Elliott is taking legal action hoping to recoup $44 million dollars from the sellers of 101 Ash Street and Civic Center Plaza by voiding the lease-to-own agreements on the properties.
The vacated 19-story building has cardboard on its windows and a plastic-wrapped lobby, possible because of asbestos dangers. That’s what you see when you look through the lobby of 101 Ash Street, the high-rise purchased under former Mayor Kevin Faulconer's administration for $92 million.
City Attorney Mara Elliot has now filed a lawsuit to void two building deals so the city can get reimbursed for rent paid, $24 million for 101 Ash Street and $20 million for Civic Center Plaza.
Elliot claims Jason Hughes, owner of commercial real estate firm Hughes Marino, worked as a volunteer consultant for the city and violated the 1090 anti-corruption law when he got paid nearly $10 million dollars in unreported money from the seller on the Ash Street and Civic Center deals.
"One of the interesting issues is whether, assuming Mr. Hughes satisfies the definition of a public official, whose responsibility was it to make sure that he filed the required form, and if it was the city's responsibility, does that have any consequences to the city's ability to recoup some or all the money it has paid in connection with this transaction," explained legal expert Dan Eaton.
Hughes' attorney, Michael Attanasio, sent NBC 7 a copy of an email and letter to Cybele Thompson, the City's Director of Real Estate Assets at the time. The letter notified city leaders that Hughes expected to get paid for his services.
In a statement attorney Attanasio wrote in part:
"While continuing to waive customary leasing fees, Jason transparently disclosed to the city and several of its highest-ranking elected and appointed officials his intent to seek compensation from the private sector for his role in these transactions. Although Jason was under no legal obligation to make such disclosures in light of his unofficial role, he did so to ensure that his intentions were transparent and known to senior city officials. "
Attanasio said his client was never told to fill out a form disclosing economic interest that public officials are supposed to file.
Contacted by phone, Cybele Thompson lamented the careers lost and reputations tarnished, including her own, because of the Ash Street deal.
“The fact that he was taking taxpayer dollars at the same time we were negotiating these deals and thought he was working in our best interest is beyond staggering," Thompson said.
Former Mayor Kevin Faulconer issued a statement saying, “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.”