Kevin Faulconer and Katherine Stuart
With the mayoral election decided in favor of her husband, Republican city councilman Kevin Faulconer, Katherine Stuart was busy at work last week, pitching yet another multi-block closure and private street party to the special-event subcommittee of downtown's Gaslamp Quarter Association.
Stuart, who runs the couple's lucrative Restaurant Events business, has long flown largely under local media radar, ultimately surfacing in reports by U-T San Diego and KPBS during the mayoral campaign's final week after we reported here about her email interactions with city staffers over an unpaid five-figure street-closing tab from the city to one of her clients.
So-called negotiated revenue fees, levied on corporate events that hold block parties on city streets, have been intertwined with the lucrative consulting business of Katherine Stuart Faulconer, who has long been the go-to person for setting up corporate block parties in downtown's Gaslamp Quarter.
In his personal financial disclosure filed with the city, Faulconer said that the business was worth between $100,000 and $1,000,000 and had a gross income of over $100,000.
A Restaurant Events specialty is helping coordinate large corporate block parties held in conjunction with conventions. A testimonial of Janice Krieger, identified as an event producer for the Biotechnology Industry Association, is listed among others on the company's website.
"Well, BIO '08 is over and wrapped up, and I want to thank you for your tremendous assistance in making our Gaslamp Street Party a resounding success! Without a doubt, you know how to make this happen!"
Following a request made under the state public records act, the city released a list of street-closing fees it had collected from various convention sponsors, including "Qualcomm Q on the Fifth," June 2012, $21,000; "Cisco Block Party," April 2012, $6000; "Solidworks World 2012 Special Event," February 2012, $15,000; and "Qualcomm Q Fest Street Scene in the Gaslamp," June 2011, $12,000.
But some of the biggest events paid the city nothing at all, the list showed. Queried about the lack of payments by those groups, city spokeswoman Katie Keach explained in an email: "The discretionary fee is negotiable. Although event organizers have historically paid similar negotiated amounts, there are not set amounts...no formal written document or policy providing guidance on the negotiations exist[s]."
In December 22, 2009, according to the records, the city councilman's wife sent an email to city special-events staffer Cindy Benitez-Kodama, requesting that the office waive the city's fee for a May 2009 corporate block party sponsored by the American Thoracic Society.
"For some reason the invoice for ATS was never settled. Can you please let Ms. Damon-Sanchez know that the invoice 13705036 has been waived for the $9,000 plus interest?"
A week later, on December 29, with the bill still outstanding, Stuart again emailed Benitez-Kodama and her associate Kathy Damon-Sanchez, asking, "Are we good here?"
Replied Sanchez, "Still shows due and payable in the Collection Department. Balance today is: $10,039.07."
Responded Stuart: “Please let me know what the process is for fixing this ASAP. Thanks.”
On January 5, 2010, Stuart again emailed Benitez-Kodama: "Can you please give me an update on this. I am obviously very concerned about have [sic] something in collections."
On January 6, Benitez-Kodama responded: "I did request that the invoice be voided." Replied Stuart: "Great — Thanks."
According to Keach, the billing relief was granted because the doctors’ organization, a national enterprise with a membership of 15,000, is incorporated as a nonprofit venture and thus was determined by staffers to be exempt from city fees.
Keach added that the so-called negotiated fees, which she said were "discretionary," are no longer being collected at all, potentially costing city taxpayers millions of dollars in lost revenue.
"During the Filner administration, the decision was made to suspend the discretionary negotiation process for commercial events pending a citywide comprehensive review of all rate and fee structures.
"The city plans to conduct a comprehensive review of all rates and fees for review and approval by the City Council within the next year," wrote Keach.
"As part of this effort, the Special Events Department intends to evaluate and propose a fee and rate structure that addresses events hosted by commercial and non-profit entities."
Interviewed by phone before the election, Stuart said that other consultants, not her firm, had conducted the fee negotiations for her clients. She said she was aware the fees were no longer being levied but professed no knowledge of the city's plans for the future.
Those decisions will now be largely up to her husband, and city hall insiders are watching to see if GOP city attorney Jan Goldsmith, long a close friend and political ally of both Faulconer and the city's well-heeled hotel and restaurant lobbies, will offer an opinion on the legality of both the possible future fees and the process by which they are set.
Meanwhile, San Diego's future first lady put in a personal appearance in the Gaslamp last week on behalf of the 2014 BIO International Convention, set for June 23–26, to obtain the blessing of merchants and property owners there to once again close the streets for a BIO bash.
The closure is to include Fifth Avenue between J and L streets and K Street between Fourth and Sixth avenues on Wednesday, June 25, through 6 a.m. the next day.
"This [is] a private event for 3100 convention attendees," according to a memo from her firm that Stuart distributed prior to her presentation to the committee, which hastened to give its unanimous stamp of approval.
The Gaslamp group is heavily dependent on the city's goodwill for a variety of services, including a hefty complement of police protection.
According to KPBS, the Faulconer couple's income nearly doubled, from $142,500 in 2011 to about $245,900 in 2012, based on tax returns provided to the station by the candidate.