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San Diego inches closer to settlement in 101 Ash Street controversy

Mayor Todd Gloria is asking city council to approve paying $132 million for Ash Street and Civic Center Plaza as a way to end costly litigation

SAN DIEGO — The City of San Diego is now one step closer to buying the now-vacant building at 101 Ash Street which has been at the center of legal disputes and is in need of tens of millions of dollars in asbestos remediation before it can be occupied.

During a June 20 news conference, Mayor Todd Gloria and two councilmembers outlined a settlement agreement that has the city purchasing 101 Ash Street for $86 million as well as Civic Center Plaza for an additional $46 million. 

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.

In regards to Ash Street, 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 are just under $565,000 a month. 

In addition, the city will continue to pay to remediate asbestos and safety issues inside 101 Ash Street, which according to a report from Kitchell Corporation, could cost anywhere from $20 million to $115 million.

City council agreed to lease 101 Ash Street from Cisterra Development in October 2016. In the nearly six years it has possessed the building, it has only been occupied for just over two weeks due to asbestos and other issues with the building.

And while the settlement is a costly step, it is one that is needed to move forward said, Mayor Gloria.

“Because there was no possibility of an ideal outcome from this civic debacle, our aim was to reach a lawful, fair settlement that limits the City’s liability and is in the best interests of taxpayers, which is what this proposed settlement is,” said  Gloria. “Nothing in the proposed settlement absolves anyone of any criminal wrongdoing. Law enforcement can – and should – continue investigations into anyone who may hold criminal liability as part of this transaction and its aftermath. What this settlement does is put the needs of the City and its residents first.” 

According to the city, the settlement will save taxpayers $15 million to end the leases and buy the buildings outright.

A final city council vote is needed to approve the settlement. That vote is now scheduled for June 27.

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