Late Friday, we obtained a memo that Metropolis Legal professional Mara Elliott despatched to the Metropolis Council updating it on negotiations for the sale of SDCCU Stadium to SDSU.
It wasn’t a promising replace.
Elliot’s memo was scathing, and although it stops in need of killing the deal, it says SDSU’s closing supply is dangerous for town and accuses the college’s staff of negotiating in unhealthy religion.
Jack McGrory, a member with the California State College board of trustees, responded in sort late Friday. He argued Elliott’s been attempting to kill the deal since negotiations began and mentioned it’s time the Metropolis Council cuts her out of the method and makes a closing resolution.
The Council is ready to contemplate the supply Might 19 — which suggests the docket must be set by Might 5 — so SDSU can take over the property in July.
However Elliott’s memo and McGrory’s remarks depart little doubt: The negotiations have been acrimonious from the beginning, they’re not getting any higher and SDSU is able to inform town “take it or depart it.”
A sharply worded memo: Elliott writes that SDSU instructed the Metropolis Council on Jan. 27 it could present inside two weeks its modifications to the buying and sale settlement – a 50-page doc with 450 pages of attachments that’s guiding the transaction. On Feb. 11, SDSU supplied its revisions, however didn’t contact any of the attachments.
“This has considerably slowed progress,” Elliott wrote.
She mentioned negotiating groups have continued to fulfill since then, however nonetheless have unresolved points that she’ll define on the Might 19 Council assembly.
Nonetheless, Elliott wrote that in a telephone name this week, SDSU President Adela de la Torre instructed her the college would offer its closing modifications to the transaction by Tuesday, and that they might represent a closing supply; any modifications town made could be rejected.
“She additionally acknowledged that she anticipated the deal to be finalized by Might 1 at the same time as I identified that town’s negotiating and authorized groups had not seen a considerable portion of SDSU’s proposed revisions,” Elliott wrote.
The subsequent day, Elliott writes she obtained the paperwork, with “1000’s of recent revisions.”
“It’s unlucky that SDSU orchestrated a ‘doc dump’ of tons of of pages of advanced contractual provisions upon the Metropolis on the final minute,” Elliott wrote.
Nevertheless it’s not simply the late discover she appears to resent. She thinks the modifications are substantial hurdles that town must right earlier than it will probably transfer ahead.
“Our preliminary assessment reveals that a lot of SDSU’s proposed revisions don’t mirror the agreed-upon consequence of negotiations, and subsequently don’t adequately defend town’s pursuits,” Elliott wrote.
The modifications embody points like present and future infrastructure enhancements for the mission and surrounding areas, Elliott wrote, and low-income housing necessities and allowing particulars for the mission.
Regardless of de la Torre’s insistence that SDSU’s newest supply mirror the ultimate deal, Elliott says town’s negotiating staff is compiling an inventory of remaining points the Council must kind out, and a brand new buying and sale settlement.
“This technique doesn’t serve town or SDSU nicely, and solely prolongs a negotiation we’d all prefer to conclude,” Elliott concludes.
‘We’re achieved with this recreation’: McGrory mentioned there have been no surprises between SDSU and town. The college was all the time clear that it could ship its closing model of the buying and sale settlement this week so it may go to Council in mid-Might. Then Elliott dropped her memo.
“I simply don’t assume that we’ll ever recover from her points,” he mentioned. “I like her, she’s a pleasant particular person, however there’s another motivation occurring right here.”
He cites the a number of lawsuits Elliott dropped at hold SDSU West off the poll. Whereas it held up its timeline, with unanimous approvals from the board of trustees — in January, for a improvement plan with environmental assessment, and March, for the stadium proposal and bonds to pay for it — she’s been “sluggish strolling this factor the entire time,” constructing out a purchase order and sale settlement that he says is much bigger than is typical for even large personal transactions, he mentioned.
The negotiations at the moment are completely dysfunctional, McGrory mentioned, with Elliott re-writing usually uncontroversial recitals of reality between drafts, and negotiating groups falling into prolonged debates about document retention schedules.
“It’s mind-boggling for the folks watching this,” he mentioned. “It’s time to finish this. Town can have a deal if it desires.”
He mentioned it’s already a terrific deal for town — and if it needed to get a brand new appraisal for the land within the present, post-coronavirus surroundings, town couldn’t dream of getting the deal once more. But the college is able to transfer ahead, with all the development jobs that include it.
“You’d assume we’re a rapacious developer the way in which she’s treating us,” he mentioned. “We’ve had it, we’re achieved with it. Vote it up or down on Might 19. We’re achieved taking part in video games with town lawyer.”
He mentioned the college could be keen to speak by any main points with the Metropolis Council. However his aspect is fed up with haggling over particulars with Elliott, he mentioned.
“In the event that they don’t need it, promote it to a different developer they usually can have one other shopping center,” McGrory mentioned. “They’ve obtained a mandate, 55 % of voters need this to occur, however they’ve obtained a metropolis lawyer who doesn’t need this deal to work. If she desires to maintain taking part in phrase video games in a 600-page doc, we gained’t be on the desk any longer. It’s time for town to behave.”
Unhealthy timing: It’s by no means a great time for a significant actual property deal accepted by voters to go sideways. However proper now’s particularly unhealthy: With a roughly $300 million shortfall dealing with town on this 12 months and subsequent 12 months’s finances as a result of COVID-19 pandemic, Mayor Kevin Faulconer has proposed utilizing $21 million from the sale of the SDCCU property to assist prop up metropolis spending. His balanced finances additionally depends on offloading the price of working the stadium to SDSU as nicely.
Talking of which …
Spending the Feds’ Cash
San Diego’s Metropolis Council this week started debating a number of the hardest finances selections it’s ever confronted, as revenues have created no less than a $300 million shortfall between this and subsequent 12 months.
However of all the choices it must make, the way it will deal with the $250 million it obtained from the federal authorities is shaping as much as be the among the many most fascinating.
As a part of the CARES Act that gave checks to most People and began the Payroll Safety Program for small companies, the federal authorities additionally created a Coronavirus Reduction Fund for native governments. Based mostly on its inhabitants, San Diego collected $248 million – cash that’s already in a metropolis checking account.
However now town must parse the way it’s allowed to spend that cash.
Usually particular: There’s some clear rules from the federal government on how town can spend the cash.
It’s for prices associated to COVID-19, incurred between March and December, and it will probably’t go to something within the metropolis’s present finances.
The feds don’t need town to simply change the income it misplaced when folks stopped staying in resorts and interesting in commerce citywide.
Some bills clearly match. Something town spent shopping for private protecting gear for metropolis staffers, as an illustration, is probably going coated. If staff weren’t geared up to telecommute, and town spent cash to transition them, that’s virtually actually protected too.
However that also leaves lots of grey space.
Take a lifeguard. She was already included within the metropolis’s finances. She hasn’t been rescuing many swimmers the final two weeks, as deliberate, however has been implementing the county’s seashore closures.
Can town pay her wage with the $248 million?
The mayor’s workplace expects to supply extra readability when it unveils a revised finances proposal later this month.
However two Council members this week already declared that they’re desperate to see that cash spent.
“There’s sufficient latitude inside the laws itself, and the rules set forth not too long ago by the Treasury Division, to permit town to make use of each greenback of this funding,” Councilwoman Vivian Moreno mentioned. “It’s necessary to keep in mind that the principle response to the COVID pandemic regionally was the San Diego County public well being order that closed non-essential companies, parks and seashores. This order didn’t implement itself. Metropolis workers have enforced it … With out metropolis workers the county public well being order wouldn’t have been efficient.”
Councilwoman Monica Montgomery challenged the Council to vary up the way it usually allocates funding.
“All of us have acknowledged these are unprecedented instances, and we should convey that with the choices we make with the CARES Act funding. Now isn’t the time to do issues the way in which they’ve all the time been achieved, and now isn’t the time to take the trail of least resistance.”
Eye on the longer term: Combing by who obtained CARES Act cash and the way they spent it – particularly personal companies below the PPP, but additionally native governments by the Coronavirus Reduction Fund – goes to grow to be a cottage trade for journalists, authorities regulators and watchdog teams as we ultimately emerge from the COVID-19 pandemic.
San Diego is among the largest cities within the nation to obtain such funding. It gained’t sneak previous auditors’ consideration.
Nobody on the Council proposed something clearly prohibited, like back-filling town’s finances with the federal cash. However as town makes its selections, it’ll need to weigh how aggressively it desires to interpret the feds’ imprecise tips.