Photo by Jacob Aere
A real estate broker recently sued by the city for allegedly buying shares in the property of a Mission Valley hotel just before recommending the San Diego Housing Commission to buy the property said on Wednesday the lawsuit distorted the facts behind the transaction.
The San Diego City Attorney’s Office last week accused Jim Neil and real estate firm Kidder Mathews of breaking conflict of interest disclosure laws and collecting commissions for negotiating two hotel deals that exceeded the limits set in brokerage agreements.
Neil advised the Housing Commission to buy two Residence Inn hotels as part of the city’s plan to shelter the homeless amid the COVID-19 pandemic.
According to the lawsuit filed last week in San Diego Superior Court and a statement to numerous media outlets, Neil bought 40,000 shares of Chatham Lodging Trust, the former owner of the Residence Inn hotel in Mission Valley, before negotiate a $ 67 million deal. for the Housing Commission to purchase the property of 192 units.
the San Diego City Attorney’s Office alleges that Neil’s shares may have risen to as much as $ 250,000 since the sale.
According to a statement released by Neil’s attorneys on Wednesday, Neil informed the Housing Commission that he intended to purchase the stock prior to the transaction.
“(Neil) was informed that there would be no problem with these actions on the part of the senior staff of the Housing Commission. The city attorney’s office and the Housing Commission were aware of this fact before. to publish their press release, “the statement said.
In response, the city attorney’s office issued its own statement, stating: “Mr. Neil’s claim that he disclosed his unlawful conduct to Housing Commission staff is not a defense against the laws. strict California disclosure policies, which protect taxpayers from unethical breaches on the part of officials. The city is determined to recoup every public dollar illegally spent and to learn more about these troublesome transactions through discovery and deposit. “
But Neil’s statement also denied that his stock purchases violated state law, as the city attorney claimed.
Neil’s lawyers allege that the law referenced in the lawsuit does not apply to people who own less than 3% of a company’s shares and that its stake is less than 0.1%. He also alleges that he did not purchase shares from the current former owner of the hotel, who he said was a subsidiary of Chatham Lodging Trust.
In addition to the Mission Valley Hotel, Neil also advised the city on the purchase of another Residence Inn in Kearny Mesa.
The lawsuit alleges that brokerage agreements with the Housing Commission were violated when Neil earned commissions on the two transactions that exceeded the $ 250,000 limit set in the agreements. He received $ 592,500 in the agreement with Kearny Mesa and $ 502,500 in the agreement with Mission Valley, according to the city attorney’s office.
Neil argues that there were no such limits set out in the Kearny Mesa agreement and that the Mission Valley agreement provided that commissions could exceed $ 250,000 if the Housing Commission approved it. Neil also claims approval was received from the Housing Commission and City Council at the end of 2020.
“The City Attorney’s Release contains a long line of accusations riddled with critical fact omissions to support their flawed account of Jim Neil’s work on behalf of the City of San Diego,” according to Neil’s attorneys.
âDuring his long career in San Diego, Mr. Neil has demonstrated an unwavering commitment to operating with the highest level of integrity and ethical standards,â the statement said. “Mr. Neil intends to vigorously challenge this civil lawsuit and defend his excellent professional reputation.”
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