The Centre City Development Corp., a city-owned, nonprofit entity promoting downtown redevelopment, has only seven board members. Two have been charged with ethics violations in complaints to the Ethics Commission, along with a former member who resigned in May.
The corporation's president, Peter Hall, is not on the board but is in the hottest water. In a Superior Court filing, he is charged with intentional and negligent misrepresentation, unjust enrichment, and suppression of fact, greatly related to his position as the corporation's president.
He was co-owner of a building in the ballpark district, close to the ballpark itself -- a very obvious conflict of interest that the corporation's board tolerated far too long. Partly because of serious ethics questions raised before the ballpark vote, the corporation's board asked him to sell the property. His partnership sold it in mid-1998.
But the buyer, Donev Produce Company, says Hall's partnership promised it would do environmental remediation before the deal went through and then deceitfully shifted the responsibility to Donev -- thanks, in part, to Hall's inside knowledge of environmental cleanup and eminent domain plans related to the ballpark project.
The charges are made in a cross-complaint that Donev filed after it was sued last year by the Redevelopment Agency of the City of San Diego. That agency is run by city council. The council, in turn, names the board members of the corporation. So the redevelopment bodies are joined at the hip.
The redevelopment agency sued Donev, saying that to further the corporation's ballpark-area development project, it was going to purchase the property under eminent domain. And Donev would be charged for removal of hazardous substances.
Then Donev came back with the cross-complaint, charging Hall, his partnership, and others with under-the-table dealings -- allegations that Hall denies.
The cross-complaint charges Hall with "intentional misrepresentation, deceit, or concealment of a material fact." Donev says that Hall promised that his partnership would clean up environmental contamination. But Hall knew this was false because he wanted "to get out from ownership of the property quickly and to shift the burden of environmental contamination" costs to Donev. Through his corporation presidency, Hall knew the extent of the corporation's ballpark redevelopment project, knew that the eminent domain action was forthcoming, and knew that the redevelopment agency would shift the environmental onus to Donev, according to the cross-complaint.
Hall's partnership started the job but then never finished it, according to the complaint. If Donev had known what Hall was planning to do, it wouldn't have purchased the property, says the complaint.
But this imbroglio goes deeper. In August of 1999, civic activist Mel Shapiro filed a complaint with the Fair Political Practices Commission (FPPC), charging that Hall owned an interest in a ballpark-district building and had made numerous statements in favor of the redevelopment project. That violated state and local codes barring government officials from influencing a governmental decision about projects in which the official has a financial interest, said Shapiro.
Hall claimed that his statements in favor of the East Village project were made after the sale went into escrow in late 1997. But deals fall out of escrow all the time.
In mid-2001, Shapiro got a letter from the commission vindicating Hall on narrow grounds. At that time, it was not considered a conflict if the government official's real estate interests were at least 300 feet from the project. Hall's building was 303 feet "from the East Village development and the proposed San Diego ballpark," said the FPPC, being very specific about very nebulous parameters. The limit has since been raised to 500 feet. The commission also said there was no evidence that Hall influenced the corporation's decisions about the ballpark.
Helen Peak, general counsel to the corporation, says Hall had owned the property before he joined the corporation in 1995. He had disclosed the ownership and did not push the ballpark project, she claims. The board wanted him to get involved in the project and told him to sell the building. Hall "acted responsibly," says Peak.
But these alibis simply do not wash. It was an obvious conflict for the corporation's president to own a building in an area that had long been planned for redevelopment. "Even before talk of the ballpark, he should have sold it," says Shapiro.
Hall's group had made the purchase in 1980. "Prior to taking the [corporation] job, he should have disposed of it to avoid any potential problem and appearance of impropriety," says Bruce Henderson, former councilmember. "Owning property within the redevelopment area after going to work for [the corporation] is just asking for trouble. Hall shouldn't have been involved in that property in any way, because he knew it was subject to condemnation."
Henderson points out that Hall has boasted that it was he who got the Padres to go along with the East Village site. The Padres preferred another downtown location.
Earlier this year, Shapiro filed a complaint with the Ethics Commission, charging that two corporation boardmembers, Reese Jarrett and Robert Ito, had voted to give a piece of downtown land free to the Housing Commission. But both Jarrett and Ito are connected with firms that receive money from the Housing Commission. Therefore, both violated a city code banning officials from voting on a project that would benefit an entity with which they do business. On May 8, the Ethics Commission authorized an investigation, according to Shapiro. On May 9, Ito resigned.
"They should not have voted on that matter," agrees Peak. She wants the board to reschedule a vote with Jarrett abstaining. Ito's company intended to apply for funds from the corporation. Peak suggested he resign from the board, and he did so.
The other matter concerns attorney Victor A. Vilaplana, another boardmember. When the corporation voted to permit the Padres to shrink the planned park next to the ballpark, Vilaplana abstained, because he had two conflicts. He is lawyer for developer Doug Wilson, who was an avid supporter of the ballpark but opposed the downsizing of the proposed park. Vilaplana's law firm, Seltzer Caplan McMahon Vitek, represents a partnership in which an entity of Padres' majority owner John Moores is involved.