Public records show Wear is a general partner of Pepperview Canyon Estates II limited partnership, which has owned one parcel at 65th and Varney since 1991 and acquired two more adjacent parcels in early 1999. Wear acknowledges he had owned the first parcel until last July, when it was transferred to Pepper View Canyon LLC (limited liability company). Wear says he never owned the other two parcels at 65th and Varney, which were also transferred from the partnership to the company last July.
Shapiro thinks the limited liability company has the same owners as the partnership. "You can't tell me they're not one and the same." Unlike limited partnerships, which identify general partners, limited liability companies aren't obligated to reveal owners.
Public records show Wear and Montgomery own three lots under their names and another two through the Ocean View Estates limited partnership.
Wear neglected to add the partnerships to his statements of economic interests, something Shapiro regards as a law violation. That omission is "no big deal," if property owned by the partnership appears on the statement, said Robert Simmons, a retired law professor of University of San Diego. "If the limited partnership owns other property in the city that's not disclosed, then it's a big deal." Wear said he didn't list the partnerships because he resigned as a general partner in 1994 and gave Montgomery control of the real estate.
For the past several years through 1999, Wear marked all of his Pepperview Canyon real estate as "sold (in escrow)." That notation, year after year, not only strikes Simmons as odd but also "duplicitous." To say a property is sold, in escrow, "tells me he no longer has ownership, that the seller hasn't been paid," Simmons said. "It sounds to me like a complete dodge to circumvent the required disclosure of property he owns."
Wear said he has nothing to hide and he's abiding by the law. He said he agreed to sell his half of the land to Montgomery in 1994, after they sold a home Montgomery had built at 621 South 65th. "Chris needs to complete the project before it goes out of escrow," Wear said. "I'm anticipating that will occur in a couple of years. It's moving slowly. Technically, I'm still the owner of record."
Neither Wear nor Montgomery provided a sales contract or escrow papers, but Montgomery did find Wear's resignation letter from the partnerships. Wear said their agreement is confidential and he has disclosed what's required. The two met in the late 1980s, they said, when Wear tried to sell some of his parcels via a classified newspaper advertisement. Unable to buy, Montgomery persuaded Wear to let him manage and develop the land.
San Diego County property records and lawsuits indicate Wear and Montgomery have struggled during the past decade to turn over their investment in Pepperview Canyon. For example, Neff Rentals in Escondido filed a mechanic's lien against the two partners last summer for failing to pay $4694 for two bulldozers. In 1996, private lenders sued Wear and Montgomery for nonpayment of $9989. The partners were also late in paying property taxes on five parcels, which is permitted. In 1995, they lost two lots in a foreclosure suit seeking $32,000.
The expense of installing sewer and water pipes under 66th Street initially stymied progress, said Montgomery, a real estate broker for Approved Mortgage Funding and Monterey Commercial Capital. Then a recession hit in the early 1990s. "I'm probably the only broke developer out there." Montgomery envisions two-story homes featuring large lots, red-tiled roofs, landscaping, three-car garages, 2000 square feet of living space, and four or five bedrooms. Each home would cost more than $200,000, he estimated. "This is a neat little project in an up-and-coming, working-class neighborhood."
That Wear voted to update regulations easing construction on hillsides and in canyons creates a conflict, Shapiro says. Voting to improve Martin Luther King Jr. Park, across the street from Pepperview Canyon, also is a conflict, Shapiro adds. Bristling at the hint of impropriety, Wear said there were times he abstained from voting on certain matters. "Just about everybody on city council owns real estate," Wear said. "To say they shouldn't vote on land-use issues is ridiculous."
In June, the District Attorney's office declined to act on Shapiro's complaint but referred the file to the California Fair Political Practices Commission.
Robert Fellmeth, a law professor at the University of San Diego, said elected officials may vote on general land-use issues and public-works improvements in neighborhoods where they own land, provided they don't benefit more than other property owners. "If a public official has an interest generally comparable to that of the citizens in that jurisdiction or general area, he or she may vote on it," Fellmeth said. "If, however, his or her interest is substantially disproportionate, such that the vote would markedly affect the value of his or her property vis-à-vis properties generally, then there can be a conflict problem."
Kathleen MacLeod, a member of Encanto Neighborhoods Planning Group, said she is amazed Pepperview Canyon is not in the city's hillside-review overlay zone, which would have required a public hearing and environmental review before any grading or construction. "It would take a mountain goat to go up and down some of the slopes," she said. "I just can't understand why the canyon is not protected." MacLeod was shocked to see the public right-of-way and three lots at 65th and Varney graded. "That part of the canyon was denuded. There's not one piece of chaparral."
Backed by Wear, new regulations replacing the hillside-review process on January 1 were lambasted by environmentalists. Ironically, the new rules would better protect Pepperview Canyon because they demand environmental reviews and public hearings for all steep hillsides, not just those within the former hillside-review overlay zone. Countering critics' outcry, some city planners say the new rules apply to more hillsides and require replacement of vegetation. Because Pepperview Canyon did not fall under the old rules last year when Montgomery started, his project escaped many safeguards targeting environmentally sensitive areas.