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Former City Attorney Mike Aguirre urges city council to vote against 101 Ash Street settlement

The settlement calls for the city of San Diego to buy 101 Ash for $86 million. The building has sat vacant for the exception of two weeks since 2017.

SAN DIEGO — The San Diego taxpayer who is suing to void the contract of the controversial 101 Ash Street is demanding Mayor Todd Gloria and the city council reject a proposal to buy the asbestos-laden building for $86 million.

In a July 14 press conference in front of the 101 Ash Street building, former city attorney Mike Aguirre and his legal partner Maria Severson railed against Mayor Gloria's push to settle two city lawsuits that look to void the contract that the city entered into in 2016 to buy the building. 

The attorneys say they plan to file a restraining order against the City if the council approves the settlement at a July 26 hearing.

Aguirre, Severson, and their client John Gordon, took shots at Mayor Gloria for his support of the settlement, one that the City Attorney has publicly opposed.

Aguirre blasted the Mayor for intentionally misleading the public on the benefits of settling the lawsuits. Aguirre says that while Gloria may have been deceived when he made the motion to lease the building in 2016, the Mayor is informed enough now to know the proposed settlement is bad for the city and bad for taxpayers. 

"My interest is the taxpayers and my interest is good financial management in San Diego," said Gordon who sued two years ago to void the 101 Ash lease agreement. Gordon and his attorneys say the contract violates the state constitution due to the fact that the public is not benefiting from the 101 Ash lease.

"This is not a settlement, this is a surrender," said Gordon.  

Under the proposed settlement agreement, the city would pay $132 million dollars to Cisterra and the lender to purchase 101 Ash Street for $86 million, and Civic Center Plaza for an additional $46 million.

The city entered into nearly identical agreements with Cisterra Partners for the two buildings. Yet while city employees, including the City Attorney, currently occupies Civic Center Plaza, the building located at 101 Ash has sat empty and in need of an estimated $115 million dollars in renovation to remediate the building due to asbestos contamination.

In exchange, the seller for each of the buildings, Cisterra Development, has agreed to return the $7.5 million profit it made by leasing 101 Ash Street to the city.

As part of the settlement, the city will reimburse the lender for the nearly 18 months in back rent that the city stopped paying since the lawsuits were filed in October 2020. Those monthly payments cost the city $535,000 a month.

The $132 million settlement underscores the actual cost to taxpayers, as reported by the San Diego Union-TribuneRising interest rates and costs to bond the purchases could cost as much as $207 million. In addition, the Mayor's Office proposes reaching into the city's Capital Improvement Fund which pays for road repairs and other infrastructure projects to pay for buildings.

"The statements made in the Mayor's press release, he clearly has to know are not true because he just had his deposition taken and were given the information," said Aguirre.

Mayor Gloria's Office disagrees.

“What Mr. Aguirre is proposing will result in the continued waste of millions in taxpayer dollars on attorneys and attorney’s fees to litigate this matter for next five to eight years," stated Gloria's Deputy Chief of Staff, Nick Serrano. "Even if the City did litigate to the bitter end -- as Mr. Aguirre is suggesting -- and was successful in Court, we would still be required to complete the repairs to the botched remodel of101 Ash Street made by the prior administration, then hand the keys back to Cisterra to profit from. This would mean the City has nothing to show for years of suffering from this failed acquisition. Our proposed settlement agreement gives the City certainty, secures the City’s ownership of the buildings and the land, stops the bleeding and waste of taxpayer dollars, and gives us an opportunity to redevelop the Civic Core Downtown. That is why this is truly in the taxpayer’s best interest.”

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