By Alberto Garcia
Investigative Reporter
A lawsuit filed against the City of San Diego and the San Diego Padres to invalidate the 2022 sale of Tailgate Park to the Padres may succeed at the trial court level, throwing the controversial deal into uncertainty just 10 days before the Mayoral election.
Judge Katherine Bacal issued a tentative ruling on Thursday ahead of a scheduled hearing on Friday afternoon, finding that the City failed to perform an environmental review of the project as required under the California Environmental Quality Act, or CEQA, thereby voiding the entire approval.
“Further, because it violates CEQA, the project’s approval does not have any legal force and effect,” Judge Bacal ruled.
At the hearing, lawyers for the Padres attempted to introduce additional cases to argue against the ruling, leading Bacal to schedule another hearing on December 6th to allow her time to review the new evidence.
La Prensa San Diego broke a story in April 2022 that Mayor Todd Gloria was pushing to finalize the approval of the sale of the surface parking lot next to PETCO Park —known as Tailgate Park— to qualify for a lower requirement of on-site affordable housing units that existed before state law was changed to require a higher number of low-rent units.
The current proposal includes 1,800 apartment units, 50,000 sq. ft. of commercial spaces, and over 1,200 spaces in a car parking structure, and designates 270 apartments to be reserved for low-to-moderate income families at affordable rates, which is 15% of the total units.
But state law was changed while Todd Gloria was a State Assemblymember to require new developments to include at least 25% of the units designated affordable.
Then-Assemblyman Gloria voted for the new requirement three times; once in committee and twice on the Assembly floor, but later as Mayor, pushed the deal in an attempt to avoid the new requirement.
Critics of the deal argue that the location in East Village and across the street from the main Trolley station on Imperial Avenue is a perfect location to build more affordable units, not fewer.
Before the City Council approved the deal, local attorney Cory Briggs sent a letter to the City informing them of the potential state law violations.
The City Council approved the deal on April 19, 2022, with only Councilwoman Vivian Moreno voting against it, citing concerns that the project did not include enough affordable housing units.
The following month, Briggs filed the current lawsuit on behalf of the Project for Open Government, a group of citizens that has previously sued public projects for transparency, including recently fighting a City Council policy to limit public comments during Council meetings.
The lawsuit alleges two separate causes of action, including the lack of environmental review, as well as the failure to meet the new state requirement for the higher level of affordable housing units.
City Attorney Mara Elliott’s office has fought the lawsuit claiming the City was not required to complete an environmental review before the sale and approval of the project, and that the City met the state law requirement for affordable units.
The court's tentative ruling this week only dealt with the failure to comply with CEQA, and Judge Bacal left the decision on whether the City complied with the affordable housing requirement for a later hearing.
The parties will be back in court on December 6th.
TWO TAXPAYER LAWSUITS IN COURT
This was the second high-profile lawsuit related to City real estate deals heard in court in the last week.
Last week, a three-judge panel of the 4th District Court of Appeal heard arguments in a taxpayer lawsuit that could invalidate the City’s lease and eventual purchase of the 101 Ash Street building.
The lawsuit, filed by taxpayer John Gordon, claims the lease transaction approved by the City Council in 2016 was legal because it committed the City to debt payments that should have been approved by voters under the state constitutional limit on debt obligations.
Gordon’s case was dismissed by the trial judge in March 2023, finding that the “evidence does not demonstrate that defendant 101 Ash and the City entered into an agreement in violation of the constitutional debt limitation,” Superior Court Judge Joel Wohlfeil wrote in his decision.
Four years after the City acquired the building on a 20-year, lease-to-own agreement with landlord Cisterra Development, loose asbestos caused the evacuation of the 19-story tower in January 2020.
The City later sued Cisterra and its financiers to undo the transaction, but, in 2022, Mayor Todd Gloria rushed to settle the lawsuits through a purchase of the building for more than the original appraisal before the discovery of the asbestos.
Gloria and the City Council pushed the purchase even over the objections of City Attorney Mara Elliott who included a paragraph in the agreement stating that she advised the Council not to approve the deal.
Cisterra's lawyer argued in court last week that the City’s purchase of the building should have ended the review of the deal.
“We dealt with the duly elected representatives of San Diego and reached a settlement that voided the lease, terminated in its entirety,” said Michael Riney, an attorney for Cisterra’s 101 Ash LLC subsidiary.
Although Gordon's lawsuit would result in a windfall to the City, the City Attorney’s office has argued against Gordon in the case which, if successful, would invalidate the lease and subsequent purchase, resulting in the return of nearly $200 million the City spent on the 101 St building since 2016.
If the case succeeds, the building, which remains empty and unusable, would be returned to Cisterra and its financiers.
The Appellate Court decision on the case is not expected until the end of the year or early 2025.
