San Diego audit defeats real estate transactions under Faulconer

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SACRAMENTO, Calif. (AP) – When Kevin Faulconer was mayor of San Diego, his administration failed to follow best practices and demonstrate due diligence when spending hundreds of millions of dollars on real estate purchases, revealed a municipal audit.

the Audit published Thursday, reported by the San Diego Union-Tribune, explores four real estate deals totaling $ 230 million that the city closed under Faulconer’s direction. Auditors wrote that “a serious lack of policies and oversight has caused the City to miss or skip key steps in the procurement process” and the Faulconer administration has omitted or misrepresented key information.

Faulconer, a Republican, held the seat from 2014-2020 and is now running for governor in Democratic Gov. Gavin Newsom’s upcoming recall election. He cites his record in San Diego, the nation’s eighth largest city, as proof that he’s ready to lead the state of 40 million people and its massive economy. Two of his Republican rivals called the audit a political problem for Faulconer.

Much of the audit focuses on a building, known as 101 Ash Street, which the city purchased with the intention of using it as consolidated office space for city employees. But the city only used the property a few weeks after the asbestos was discovered, the Union-Tribune reported.

The audit accuses the administration of Faulconer for not having fully informed the city council and the public of the property. City staff told council the building would only need $ 10,000 in repairs, but city contractors later estimated the building needed $ 115 million in repairs and upgrades, according to the audit.

Faulconer’s administration also relied on a real estate expert, Jason Hughes, who was not under contract with the city and raised $ 9.4 million from the seller of two properties, including Ash Street, after he advised the mayor, reported the Union-Tribune. The auditor criticized the Faulconer administration for working with Hughes without signing a municipal contract that would have exposed his economic interests.

John Burke, spokesperson for Faulconer’s campaign, called the deal’s execution “flawed” in a Friday statement about the audit, but blamed Hughes for “playing both sides. of the transaction “. He said Faulconer halted payments on the property.

Faulconer “continues to fully support the city’s sustained efforts to hold accountable anyone who wrongly benefits taxpayers,” said Burke.

Hughes was clear on his intentions to get paid, his lawyer told the Union Tribune.

The administration of Democrat Todd Gloria, the city’s current mayor, accepted some of the auditor’s recommendations to improve oversight of real estate transactions but rejected others, the newspaper reported.

The audit found issues with three other city real estate transactions, including an indoor skydiving facility that was once owned by one of Faulconer’s political supporters that the mayor recommended the city buy.

Businessman John Cox, another Republican participating in the recall, said the information in the audit should be characterized as corruption by the Faulconer administration. Cox made his comments on Friday while protesting a possible approval vote in the race by the California Republican Party and arguing that Faulconer is not the party’s best choice to take on Newsom.

“Sir. Faulconer’s handling of real estate and other issues as mayor of San Diego would absolutely yield a treasure trove of negative publicity for the campaign,” he said.

Likewise, former Congressman Doug Ose said, “Democrats are going to tie this building around his neck and set it on fire.”


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