Tax and spend on salaries and council campaigns

City-council candidates Lorie Zapf and Chris Cate have a solid partner in the Downtown San Diego Partnership. The agency that manages the city's largest property-based improvement district and its CEO Kris Michell has gone to bat for candidates Zapf and Cate by sending emails to business owners and representatives throughout the city. In addition, the Downtown San Diego Partnership's political action committee, SD Jobs PAC, wrote a $10,000 check to Cate's and Zapf's independent expenditure committees.

The more councilmembers behind the partnership, the better. In recent months, new legal challenges have surfaced over the partnership's management of the downtown assessment district. The complaints allege the city has allowed the partnership to spend the nearly $5.2 million in annual assessments as it sees fit on items and initiatives that the complaint alleges violate state and local laws governing improvement districts. A few questionable expenditures include consultants, high administrative overhead, logo and website redesigns, and millions of dollars on several homeless initiatives. Last week, the board of directors agreed to hire yet another homeless-outreach worker.

The problem, say opponents, is the partnership relies too heavily on the downtown improvement district to pay for the agency's pet projects. A financial audit for 2012–2013 revealed that the agency received just under $6 million in revenues from two improvement districts (property and the business improvement district) as well as a transit-pass program with the Metropolitan Transit System. The partnership itself, however, only received $498,375 in membership fees and donations. At the same time, tax records show the partnership spent $2.6 million in salaries and employee compensation in 2011, meaning a large portion of assessments are being used to pay for overhead and not for specific benefits for residents and business owners.

As the lawsuit continues to make it through the courts, the downtown partnership, by way of its political action committee, is now trying to shape the city council to be more business-friendly. That's where its support of current District 6 councilmember Lorie Zapf (now running for the District 2 seat) and candidate Chris Cate come in to play. Since January of this year, the SD Jobs PAC has made over $70,000 in donations to independent expenditure committees in support of now-mayor Kevin Faulconer ($50,000) and Zapf ($10,000), and Cate ($10,000).

"With Mayor Faulconer’s big win in February, we have the momentum to win two very important city council seats in June; Lorie Zapf in District 2 and Chris Cate in District 6. A low turnout election gives us an advantage in voter turnout, and recent inside polling suggests Mayor Faulconer has a positive approval rating and the majority of the electorate agree that the city is moving in the right direction. Our candidates both have his endorsement which will help them capture the majority of support. Finally, with your help, both Lorie and Chris will have the highest name identification, giving both the best chance to win in June. While we are extremely optimistic about their races — the simple fact is — we cannot win this race without your financial support.

"If we don't do everything we can now, one or both of these races could push to November. That’s an additional $1 million dollar per candidate to fund. Labor will have even more time to raise the money — and outspend us. Do not wait!"

In the same email, the political action committee urges residents to attend upcoming fundraisers for Zapf and Cate. One of which, on May 21, is being hosted by Jerry Navarra, owner of Jerome's Furniture Stores. At the shindig, attendees will be wined and dined with "tacos, Jerry’s Margaritas & Other Refreshments!"

The emails from Kris Michell to business owners are prompting some to wonder if there is a conflict of interest having a CEO of an agency who contracts with the city to campaign for city councilmembers.

"Why do these people think it is okay to solicit donations for political campaigns to elect those who decide on their getting public funds?" Asks Mat Wahlstrom, of Roberts Electric Service in Hillcrest, a company that pays into the Hillcrest Business Improvement District.

"I never gave anyone our company info for political purposes or as a contributor to anything but charities, and certainly not to anyone with my last name as part of the name."