Thus, says Russell, he's been selling off his units to Nick Inzunza, offering him extremely favorable terms in the bargain. Since 1995, records show, Russell has deeded eight separate parcels of real estate scattered around Barrio Logan and environs to Inzunza, purchased by the National City mayor for a total of about $2 million. In each case, Russell, not a bank or other lender, financed the transactions. In the biggest purchase, an apartment building at 234 Francis Street South, valued at $1,050,000, records show Inzunza made a down payment of just $50,000, and Russell took back the balance in a million-dollar note. The down payment is much lower than a bank would require, say those familiar with local real-estate financing.
A property on Newton Street sold for $160,000, with a down payment of $5000, about 3 percent of the total value. Units on Ocean View sold for $150,000, with a down payment of $5000, less than 4 percent. A property on Dewey Street sold for $150,000, also with $5000 down. A house on Quail Street sold for $127,500, with $5000 down. Another set of units on 17th Street sold for $250,000, with $5000 down, or 2 percent of the total value.
The National City mayor recently told a writer for San Diego Metropolitan that Russell had given him his start in Barrio Logan real estate. Nine years ago, at the age of 23, "I'd saved up enough money to buy my first property from a gentleman by the name of Richard Russell, who from that moment on served as a mentor to me," Inzunza was quoted as saying. "He was selling me properties considered undesirable. He sold me maybe 20 percent of his portfolio. This guy had a lot of property, lived on Mt. Soledad.
"He taught me about economics, urbanism, about inflation, the cost of housing, and how, if I were to work hard and invest in real estate in the inner city, someday it would pay off. Most folks were putting their money into IPOs, but I put my money where my mouth was and invested it back in the community. Through a seven-year period of acquiring property, I was able to make acquisitions totaling $3.2 million."
In a telephone interview last week, Inzunza described how he first met Russell. "He's such a great guy. I think he had an ad in the paper, and I was kind of very young and gullible. He had an ad in the paper wanting to sell some property and was willing to carry the note. It was a vacant structure, considered to be undesirable. It was a pretty good interest rate at the time, considering the inner city and where it was economically in those days."
According to Inzunza, in those days it was hard for inner-city landlords such as Russell to unload their units at virtually any price. "There were no buyers. Nobody wanted to buy 'em. He was offering nothing down to some folks. There was vacant housing all over the inner city. There was no conventional financing."
But Inzunza had more than his mentoring relationship with Russell going for him. A scion of one of the South Bay's most politically influential families, both he and his brother have long worked for some of the barrio's most influential politicians. His father, Ralph Inzunza Sr., was on the city council of National City for many years and is widely regarded as one of the godfathers of South Bay politics.
Nick's brother, Ralph Inzunza Jr., now 33, began his political career in 1991 as chief of staff to then-city councilman Juan Vargas and served six years there before moving over to Sempra Energy, otherwise known as San Diego Gas & Electric, as a public relations man and lobbyist. In November 2000, Vargas was elected to the state assembly from the 79th District, which includes Barrio Logan. For more than a year before that, Ralph Inzunza Jr. had quietly been raising a stash of campaign money to run for his former boss's council seat.
He easily bested a large field of less-connected opponents and was elected to fill the vacant city-council seat in a 2001 special election. Campaign filings for Vargas -- widely expected to eventually make a bid for Congress in the district now represented by Democrat Bob Filner -- and the Inzunza brothers show that they share many of the same contributors. Many political observers note that Vargas and the Inzunza brothers often wage a well-coordinated effort to deliver government perks and influence to their favored constituents. Six of the eight properties Russell sold to Nick Inzunza are within his brother's eighth city council district, which overlaps Vargas's assembly district.
"I'm very proud of him," Vargas told a Union-Tribune reporter the night Ralph Jr. was elected to the city council. "We really are a team, and we're going to operate as a team. He's already asking for things from the state for the district, and I'm going to help him."
Ralph Jr. has repeatedly spearheaded efforts to funnel more government redevelopment money into Logan Heights and surrounding neighborhoods. In April of last year, he and fellow councilmember Toni Atkins held a news conference to tout a proposal to use downtown property-tax money to float $60 million in housing-subsidy bonds, proceeds to be used in neighborhoods including Barrio Logan. In June 2001, he waged an unsuccessful effort to block a $615,000 redevelopment-agency loan to St. Vincent de Paul Village for construction of a 90-unit low-income apartment building on the border of Logan Heights. Twenty-five of the units were reserved for the mentally ill, drawing strong opposition from Barrio Logan residents and property owners.
Shortly before he bought his first units from Russell, Nick Inzunza cut his teeth in politics as a 23-year-old aide to then state assemblywoman Denise Ducheny, today a state senator whose district includes Barrio Logan. From 1997 to 1998, he worked as a "legislative assistant" to San Diego County Supervisor Greg Cox, whose district includes Barrio Logan.
In 1999, he served as executive director of Neighborhood Opportunities Corporation, a nonprofit affiliate of Neighborhood National Bank. The corporation was supposed to "provide financial literacy and first-time homebuyer education to individuals in the community," according to a note on the bank's website. Inzunza earned $5417 a month, according to a tax return filed in November 2000 by the nonprofit. He's also reportedly been a political consultant and once worked for a labor union.