S
an Diego City Council members made a decisive move on Monday to revamp the city's approach to real estate deals, aiming to prevent costly missteps like the 101 Ash St. debacle that has left taxpayers with a hefty bill for an unoccupiable building. The unanimous approval of new policies is expected to safeguard the city from overpaying for properties or undercharging businesses and nonprofits for public space rentals.

    A key change requires the city to conduct independent appraisals before finalizing any acquisition, a step that was glaringly absent in the Ash Street lease-to-own deal. This move comes after the city's failure to secure an independent appraisal in 2017 when it spent $7 million on a failed indoor skydiving facility.

    The revised policies also mandate contractors and advisers who significantly influence real estate decisions to sign contracts with the city and disclose their financial interests if necessary. This change directly addresses concerns raised by Jason Hughes, a real estate broker who collected $9.4 million from the Ash Street lease and another deal for Civic Center Plaza. Hughes pleaded guilty to a conflict-of-interest charge in 2021 after it was revealed he had informed six city officials about his plans to seek payment.

    Council members also prioritized leases over selling city-owned properties, requiring an independent assessment of any property's condition before leasing or purchasing. This move comes after the Ash Street lease-to-own deal lacked such a report. Councilmember Marni von Wilpert noted that this oversight was a significant gap in the 101 Ash debacle.

    The revised policies also rename the city's "Portfolio Management Plan" to "Real Property Management Plan," requiring a review and update every other year, with findings presented to the City Council. The changes include almost two dozen amendments to three council policies, many of which were originally proposed in audits dating back over a decade.

    Leaders from major labor unions praised the policy updates, while business leaders expressed concerns about a rule requiring city approval for leaseholder refinancing efforts. However, city officials declined to revise this change, citing the need for case-by-case consideration.

    The city's real estate practices have been under scrutiny for years, with a 2021 audit raising questions about San Diego's handling of several properties. The revised policies aim to prevent future lapses and increase transparency in city dealings.