SDSU $575-an-hour lobbying deal revealed

When last we checked in on closed-door negotiations between the city of San Diego, led by Republican Mayor Kevin Faulconer, and the California State University system regarding the city-owned real estate once known as Qualcomm Stadium, university officials were playing hardball.

"Agreements entered between CSU and outside legal firms are protected by the attorney-client privilege and attorney work product doctrine and will not be disclosed," wrote university counsel Sasha K. Danna in a February 25 email in response to a request under the California Public Records Act for the contract between the university system and the white-shoe law and lobbying outfit of Sheppard Mullin.

The university's refusal to make the document public came despite a January 15 lobbyist filing by Sheppard Mullin with the city of San Diego which revealed that the firm has been retained by CSU to lobby for "approval of agreement for the acquisition of the stadium site in Mission Valley from the city of San Diego."

In response to a follow-up, which noted that state law contains no exemptions for the release of lobbying contracts entered into by public agencies, Assistant Vice Chancellor & Chief Counsel – External Affairs Carrie Reith asserted that Sheppard Mullin's San Diego disclosure does not mean the firm is actually lobbying for the university system, but instead "merely satisfies a local municipal disclosure requirement."

"Sheppard Mullin will be representing CSU in negotiations with the City. This will necessarily require Sheppard Mullin to meet with the City Attorney’s office and other city officials on the City’s negotiating team."

Pressed regarding the university's rationale for withholding the retainer records, Reith finally agreed March 29 to release a heavily redacted version of a December 20, 2018 letter from CSU to Sheppard Mullin partner Domenic Drago titled "Re: SDSU Purchase and Development of Mission Valley site."

"Dear Domenic," begins the letter from University Counsel Catherine Valerie Barrad. "You are being engaged to provide the California State University — through its Office of General Counsel and San Diego State University — legal services and advice in connection with the CSU's purchase and development of the Mission Valley site, consisting of approximately 90 acres of land located near the SDSU campus."

The remainder of the two-page document, apparently containing details of Drago's assignment and to whom the agreement was copied, has been blacked out, except for a partial sentence revealing that "all attorneys and other timekeepers will charge the lower of their rate or $575 per hour."

The university also furnished what it said was Sheppard Mullin's initial invoice, dated February 25, for unitemized professional services through January 17 totaling $50,312.50.

Drago is a veteran lawyer and lobbyist with a history of contact with elected public officials to influence development decisions in San Diego county, including Del Mar, records show. His campaign contributions, per city records, include $250 made in June 2017 to the reelection cause of Republican city councilman Chris Cate.

During his two-term city council career, Cate - who as a member of the city council will ultimately vote on whether to approve the final terms of CSU's agreement for its so-called SDSU West plan - has received a total of $8950 from employees of Sheppard Mullin.

In a June 16, 2018 letter to Del Mar Mayor Dwight Worden and city council members, Drago bashed a ballot proposal to place limits on development in the city as "an initiative being put forth by a completely self-interested resident." He added that a proposed city action to downzone a client's real estate "poses the most damaging threat to this valuable property in the entire 90-year history of ownership."

A key point in the ongoing backroom negotiations between the California University System and the city of San Diego involves whether a deal with San Diego State University will adequately protectthe San Diego River by setting aside a 34-acre park, or instead maximize build-out of SDSU's allied commercial development of the land.

Adding to the behind-the-scenes sense intrigue is that Sheppard Mullin's website lists JMI Realty, belonging to mega-developer John Moores of Rancho Santa Fe, as one of Drago's clients.

JMI first promoted its high-intensity version of redeveloping the city-owned Qualcomm Stadium property three years ago in March 2016 at a company-sponsored dog-and-pony show on the SDSU campus.

"The JMI team (represented by President John Kratzer and Steve Peace), working in concert with Steve Black of Cisterra Development, another prominent San Diego developer (and SDSU alumni), will unveil their proposal to develop the Qualcomm Stadium site into a civic gem that all SDSU alumni and San Diego County residents will claim proudly," said the invitation.