The City agrees with a real estate broker

city ​​attorney Mara W Elliot announced today that it will bring to the City Council a settlement of the lawsuit filed against a real estate broker who secretly benefited from the San Diego Housing Commission’s purchase of a Mission Valley hotel.

San Diego ratepayers will be compensated under the terms of the proposed settlement, and the property will continue to be used to provide temporary housing for homeless people.

In negotiations with the city attorney’s office, realtor Kidder Mathews and agent Jim Neil agreed to pay $1 million in damages, $845,000 of which will go to the San Diego Housing Commission and $155,000 to the City of San Diego.

Neil received a $502,500 commission for his work on the Housing Commission’s 2020 purchase of the Residence Inn Hotel Circle in Mission Valley for $67 million. After identifying the Residence Inn as a suitable property for the Housing Commission, Neil purchased 40,000 shares of the company that owned the hotel. The value of its shares increased after the acquisition.

The city argues that Neil’s actions violated California anti-corruption laws that prohibit a government official from having a financial interest in any contract in which he participates. This same law is used by the City in its lawsuit against broker Jason Hughes regarding the 2016 acquisition of 101 Ash Street.

“The city will continue to be the target of corrupt business practices if those who profit from them are not held accountable,” the city attorney said. Mara W Elliot said. “This settlement sends the message that my office will not back down from doing the right thing.”

The settlement will be submitted for approval to the San Diego Housing Commission, the Housing Authority and the City Council in the coming months. Elliot sued on behalf of the three entities.

Under the proposed agreement, Neil will stipulate a permanent exclusion, which means that he will never be able to do business with the City or any entity affiliated with the City again. Kidder Mathews, the West Coast’s largest independent commercial real estate firm, agreed to a two-year ban.

Neil has further agreed to a bylaw with the state’s Fair Political Practices Commission which will be formally approved by the San Diego County Attorney’s Office.

Neil was brokering a second hotel deal at the same time – the purchase of the Residence Inn Kearny Mesa, for which he received a commission of $592,500. While Neil had no prohibited financial interests in this transaction, the commissions Neil negotiated with the sellers on both transactions exceeded the $250,000 limit set in his signed brokerage agreement with the Housing Commission.

The Housing Commission purchased the hotels to provide temporary accommodation for unhoused people and protect them from the peak of the Covid pandemic.

The lawsuit was brought by the city attorney on behalf of the city, the housing authority and the housing commission. It was argued by the city’s senior assistant prosecutor, Meghan Ashley Wharton.