Broker accused in San Diego city lawsuit over pricey hotel purchases defends his actions – California News Times

For the first time, a real estate broker, who was accused of not disclosing his role in buying two hotels in the market and his financial interests in one real estate, commented on the dispute last week. ..

Jim Neil refused to discuss the handling of the two residence-in-hotels that the city recommended to buy for months.

His statement on Wednesday said the press release associated with the proceedings filed by city lawyer Mara Elliott was full of errors and misunderstandings, omitting important facts in support of the flawed story. ..

Neil also told the city’s housing authorities that he had bought shares in a company that owns one of the real estate properties before the deal closed last year. He did not provide evidence and did not explain why he waited more than three months to state his position.

“Mr. Neil notified the Housing Commission of his intention to buy shares prior to the transaction and was told that these actions by senior Housing Commission officials were okay,” he said.

“The city’s law firm and housing commission knew this fact before issuing the press release,” he added.

This claim was one of several points made in an announcement from Paragon Communications of West Sacramento, Neil’s public relations firm.

The statement states that Neil holds a legal defense team but did not identify a law firm. The PR company did not answer the follow-up question.

Neil also refused a claim from the city prosecutor’s office that the brokerage fees he had collected exceeded the contract amount. This statement does not correspond to the city’s claim that the city overpaid its assets.

Neil and Kidder Mathews Inc said last week that the City Prosecutor’s Office violated the state’s conflict of interest law by purchasing two hotels in November to protect homeless people from COVID-19. Announced that he had sued.

A spokeswoman for city lawyer Mara Elliott issued a statement in response to Neil’s allegations, but the response did not mention whether housing commission officials were informed or approved of Neil’s investment.

A statement by spokeswoman Leslie Wolf Brandscom suggested that there was no legal difference.

“Mr. Neil’s allegation of revealing his illegal activity to housing commission staff is not a defense against California’s strict disclosure laws that protect taxpayers from ethical violations by civil servants,” she emailed. Said in.

“The city is determined to collect all illegally used public funds and learn more about these nasty transactions through discovery and deposits,” Brandscom added.

Scott Marshall, a spokesman for the San Diego Housing Commission, declined to comment on Neil’s allegations on Wednesday. The commission also did not respond to the City Prosecutor’s Office last week’s proceedings.

Another spokeswoman for Elliott said last week that a city lawyer did not approve the purchase of the hotel. Instead, these transactions were approved by a law firm outside the Commission, spokeswoman Hillary Nemchik said at the time.

The San Diego Union-Tribune reported in February that two properties had been purchased by the city under an assessment prepared prior to the pandemic. As a result, the global blockade has reduced the market rate of hotels across the country.

The San Diego Housing Commission has agreed to pay more than $ 106 million to two hotels, a 192 residence inn in Mission Valley and a 144-room residence inn in Kearney Mesa.

The Mission Valley property at Hotel Circle was purchased for $ 67 million, or $ 349,000 per room. This shows that the cost per key is much higher than any other hotel property traded in San Diego County last year.

The city’s housing authorities have agreed to pay the Kearny Mesa Hotel $ 39.5 million (about $ 275,000 per room). This is the fifth highest cost per room for a hotel sold in San Diego County last year.

A real estate expert specializing in the hospitality industry said the pandemic blockade reduced the value of hotel real estate by as much as 40%.

The other four residence inns sold in California since 2019 had an average cost of $ 227,000 per room before the lockdown in March 2020. City housing officials said the two properties in San Diego were in good condition and the selling prices were reasonable.

Elliott said in a complaint filed with the San Diego High Court last week that the value of both assets had swelled and one was sold at an unnecessarily high price in an attempt to raise broker fees.

The proceedings also accused Neil and Kidder Matthews of collecting higher broker fees than required by the contract. He said the fee would be limited to $ 250,000, but said the city paid the broker $ 502,500 and the broker also received nearly $ 600,000 from the seller.

The Housing Commission defended broker fees in February, saying real estate professionals did a good job and the Commission felt the payment was justified.

Marshall did not comment on the city’s lawyer’s allegation that the charges were too high, but Neil’s spokeswoman said the city claimed to charge a fee for the hotel circle’s assets.

“It was the city that suggested that the city pay Mr. Neil’s fee for purchasing the Hotel Circle to benefit the city,” the statement said. “Mr. Neil followed the instructions of a city lawyer about who pays the fee and how it is paid.

“The city has a clear document on this, but chose to ignore it,” the statement read.

Voice of San Diego, an online news organization, first reported in May that Neil had purchased 40,000 shares of a real estate investment trust that owns the Residence Inn on Hotel Circle.

Neil’s investment would have disqualified him from participating in the city’s deal, a housing commission lawyer said in a memo to the commissioners and the city council, but the deal went on.

A broker spokeswoman said Wednesday that there were no violations of the state’s conflict of interest rules.

“Mr. Neil did not own the company that directly owns the assets of the Hotel Circle,” said a broker spokeswoman. “The company was a subsidiary (of the trust).”

The statement also stated that Neil’s ownership was less than 0.1%, an exception to the section of the State Code that addresses conflicts of interest.

The Conflict of Interest allegations filed by the City Prosecutor’s Office in the Residence Inn transaction are similar to those included in another proceeding Elliott filed this summer in an ongoing lawsuit over a vacant office tower in 101 Ash St. I have.

The city argues that the skyscraper and nearby Civic Center Plaza rent should be revoked as real estate broker Jason Hughes raised $ 9.4 million in private fees to support these transactions. did.

Hughes also claimed through his lawyer that then Mayor Kevin Faulconer and his aides were unaware of the commission, but city officials expected him to be paid for the job of the transaction. He said he was told.

Neil’s statement on Wednesday advertised his decade of service to the city of San Diego as a contract broker and promised to fight fiercely against the city’s proceedings.

“During his long career in San Diego, Mr. Neil has demonstrated his unwavering commitment to working within the highest levels of integrity and ethical standards,” he read.

Broker accused in San Diego city lawsuit over pricey hotel purchases defends his actions Source link Broker accused in San Diego city lawsuit over pricey hotel purchases defends his actions