Kris Michell, president of the Downtown San Diego Partnership, hired Marco Li Mandri to be a “key advisor” for $10,000 per month.

In 2009, a few downtown residents discovered that they, along with over 2600 other downtown property owners, had been overcharged by the property and business improvement district in which they lived. The assessment district, also known as the Clean and Safe Program, provides enhanced city services such as sidewalk cleaning, tree trimming, and security patrols for 5300 parcels in East Village, Gaslamp, Core Columbia, and the Cortez and Marina districts.

Some residents had overpaid only $32, while others had unknowingly shelled out $1500 extra. In all, the error was estimated to total more than $269,000.

More than two and a half years later, the residents have not received refund checks, despite repeated promises from the City.

As residents continue to wait, the Downtown San Diego Partnership, the business advocacy group that administers the improvement district, has been writing other checks.

Starting in May 2011, the district began paying Marco Li Mandri $10,000 per month to serve as “key advisor” for district operations. The job entailed reviewing contracts, presenting strategies on how to raise more funds, and renewing the “special benefit district for the maximum term available, if not in perpetuity,” according to the contract.

Li Mandri’s paycheck is in addition to the $1.6 million that the district budgeted for salaries and wages in fiscal year 2012.

The discovery that the district was paying a $10,000 monthly consultant fee, combined with its refusal to refund the overassessments, has left many residents upset and frustrated.

“I am an owner in the Cortez District and as such try to keep abreast of the monies spent and services rendered in this area Clean and Safe,” wrote one Cortez Hill resident who wished to remain anonymous. 

“I was appalled to discover Mr. Li Mandri has been hired as a consultant by this group and he is receiving $10,000 per month. It does make one wonder in what direction this organization is headed. It seems to be growing in leaps and bounds, not in the field forces but in the management group. I’d venture to say this is yet another example of non-transparency.”

Li Mandri, whose office is on West Ivy at Columbia Street, specializes in assessment districts. His for-profit company, New City America, has formed 61 districts across the country.

His business practices, however, have come under fire in recent years. Between 2005 and 2007, a joint investigation by the FBI and San Diego Police Department looked into conflict-of-interest allegations involving a business improvement district in North Bay that Li Mandri set up for the City of San Diego and ran for a time as executive director; later, the district awarded Li Mandri’s company contracts. (The investigators submitted their report to the district attorney, requesting that Li Mandri and others be charged with violations enumerated in the report, but the district attorney took no action.)

The investigation was at the center of a 2009 wrongful termination suit filed by Scott Kessler, a former deputy director of the City’s Economic Development Division. Before the City settled the lawsuit in November for $200,000, the relationship between Li Mandri and powerful forces in Mayor Sanders’s office had been exposed, including the relationship between Li Mandri and Sanders’s chief of staff in 2008, Kris Michell.

Kessler’s lawsuit states that Michell was unhappy that Kessler was working with investigators. Kessler’s supervisor “Assistant Deputy Chief Murray informed [Kessler] that his cooperation…into the investigation of Li Mandri, combined with his cooperation with the Ethics Commission, angered Chief of Staff Michell,” says the lawsuit.

The connection between Li Mandri and Michell doesn’t end there. In February 2011, two months before Li Mandri started work for the downtown district, Michell took over as president of the Downtown San Diego Partnership.

Even more interesting was the process of approving Li Mandri’s contract.

At its March 29 board meeting, the directors of the Downtown San Diego Partnership recommended going forward on “contract agreements” with Li Mandri, and on April 26 the board approved the contract. However, the improvement district’s advisory board was not informed of the contract until their monthly meeting on May 10.

The minutes from that meeting read: “According to Kris Michell, due to the need for Mr. Li Mandri’s input and the short timeline to complete the [request for proposal] process, the consultant contract for Marco Li Mandri went out of sequence and was taken to and approved by the [Downtown Partnership] Board first.”

Li Mandri’s contract with the Downtown Partnership was a sole-source contract, meaning no other consultants were asked to submit bids. The one-year contract was signed on June 17, 2011, and commenced on July 1.

In May, Li Mandri submitted his first bill for $10,000. During that month, Li Mandri completed 12 tasks, including a conference call with staff, “prep and attend” the May 10 advisory committee meeting, general administrative work, and attending a Downtown San Diego Partnership meeting with staff.

In October, Li Mandri completed nine tasks for his $10,000 monthly fee. His tasks that month included putting together an outline for a PowerPoint presentation to the advisory committee; attending the advisory committee meeting; meeting with staff on “2005 Management District Plan, its services, adherence to the plan and using Chinatown LA as an example of a plan that provides greater detail,” and touring homeless encampments.

Ryan Loofbourrow, executive director of Clean and Safe since August, says Li Mandri has been an asset to the team.

“During the month of May 2011, [Li Mandri] was hired to assist the Clean and Safe Program with managing the annual contractor request for proposal process,” says Loofbourrow. “During that time, he helped negotiate contracts for such services as pressure washing, safety patrols, and landscaping. As a result, Clean and Safe saved more than $200,000.”

Loofbourrow says Li Mandri will evaluate the current practices and develop new strategies for administering services, including developing a district map of all properties, street furniture, trees, trash receptacles, newspaper stands, and lighting, and offering a strategy for managing the “downtown urban forest.”

By having Li Mandri execute those tasks, Loofbourrow says he is free to focus his energy on homelessness in downtown and to oversee other district contracts.

Neither Kris Michell nor Marco Li Mandri responded to requests for comment.