By a unanimous vote on June 21, the San Diego City Council delayed until July 13 the consideration of "extinguishing" $288 million in redevelopment loans owed to the City of San Diego. The unanimous vote also delayed a retroactive halt to assessing interest on Redevelopment Agency loans owed to the City (see item 203b).

Despite a projected city budget shortfall of tens of millions, city staffers were unable to explain how forgiving $288 million in redevelopment loans would erase city worker pension deficits, restore fire fighting capabilities, fill street potholes, add open hours to existing libraries, or keep the Chargers in town with a new stadium.

Instead, Scott Mercer of City Redevelopment offered that a HUD inspector general audit had found the City had failed to properly document the mega-millions in loans to the Redevelopment Agency. HUD also found that the City had failed to ensure that the loans originating from federal Community Development Block Grant funds would ever be repaid. City Redevelopment therefore recommended that the massive loan amount be "extinguished" and made to go away. A concurrent recommendation would stop the City from collecting interest on the Redevelopment Agency loans owed to the City as of June 2009.

The HUD inspector general's audit was mentioned in the ongoing Scott Kessler wrongful termination lawsuit against the City of San Diego. In his lawsuit, Kessler alleges that he was fired after he became suspicious of financing arrangements in business improvement district activities around Little Italy (see Don Bauder's Scam Diego series on the Kessler lawsuit and the FBI investigations of Little Italy BID).

The postponement of the loan "extinguishing" to July 13 is only days after a scheduled July 9 Superior Court hearing on a City motion for protective order covering Mayor Jerry Sanders in the Kessler lawsuit.

More lawsuit-related Scam Diego items:

What a Tangled Web We Weave

Did Sanders Order Detective Reprimanded?

City Trying to Block Deposition of Sanders


historymatters June 25, 2010 @ 1:56 a.m.

this is good stuff! Please keep informing us. Im very interested in this. I have been writing about how the Redevelopment Agencies are essentially robbing us at gunpoint, taking property tax $ and handing it to developers. But I think the worst part is the garbage these guys are building. Little Italy is the perfect example. It is such a joke and so sad considering what it could have been. Please help us get Sanders in jail!

My question is, what happens if Dumanis refuses to prosecute? Does the FBI stop there? She is obviously in on it too. Just look at her record.


a2zresource June 25, 2010 @ 11:15 a.m.

RE #1:

I'm learning by doing.

For instance, I now know that any links to supporting documents for City Council docket items are changed by city staffers within a day of blog publication or correction, giving the "page cannot be found" error messages that one will find on the Scott Mercer link above. I did correct it early yesterday, but it's been changed again.

So much for open government.

Also, I've seemed to have stumbled on something called the San Diego Tourism Marketing District ( from looking at City Council agendas. I bet most people didn't know there was a BID-like entity just for San Diego hotels with 70 or more rooms...


a2zresource June 25, 2010 @ 11:49 a.m.

NB: The latest correct link for "Scott Mercer of City Development":

Let's see how long it takes Sanders & Co. to kill this version off!

(Just in case any cryptographers are taking note, see how the directory path name keeps getting longer and longer...)


a2zresource June 26, 2010 @ 12:42 p.m.

Now at:

After this weekend (when I sincerely suspect the URL will be changed yet again), anyone who wants to see a copy can email me and I'll respond with a link...


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