The real estate and hospitality guru who sparked Mayor Todd Gloria’s plan to turn a Middletown warehouse into a massive homeless shelter wants to talk to city councilmembers about revised deal points.
A lobbyist representing Douglas Hamm, who owns the warehouse at Kettner Boulevard and Vine Street, emailed City Council offices Tuesday to request meetings to discuss updated lease terms following backlash over an initial proposal that City Hall and real estate insiders deemed too favorable to Hamm. The City Council is expected to have a second closed-door discussion about the proposed deal on Monday.
Hamm and Gloria’s team have recently revived talks in hopes of proceeding with a plan to open a 1,000-bed homeless shelter at the property near the airport. Gloria has said the vacant warehouse could become the city’s largest-ever permanent homeless shelter.
Now Hamm’s team is telling the City Council that they have progress to report.
“We have appreciated the opportunity to continue negotiations with the Mayor’s Office over recent days to reflect feedback provided by both the public and City Council,” Stefanie Benvenuto of Pacific Public Affairs wrote in an email obtained by Voice of San Diego.
Benvenuto wrote that Hamm has agreed to a lower per square foot rental rate, a reduced lease term, “a significant investment” in property improvements and an increased time period where the city will have access to the property before it begins paying rent.
Gloria spokesperson Rachel Laing would not say whether the mayor or his team have signed off on the updated terms Hamm plans to present to councilmembers. Laing said she could only say that officials plan “to report on progress on negotiations to the City Council on Monday in closed session.”
After initial deal terms went public last month, real estate pros criticized $2.45 a square foot lease payments for the warehouse they argued were far above market rates and the city’s initial agreement to repay Hamm for up to $18 million in upfront property upgrades. Others found the 35-year lease term, which far exceeds typical city leases, excessive. The city’s independent budget analyst also questioned whether the rents were “consistent with market,” prompting Gloria’s office to postpone a planned April 18 City Council committee hearing on the lease proposal.
Despite the blowback, Hamm told Voice last week that he thinks the initial deal was fair due to other interest he’s gotten in the property. He said he’s aiming to reach a deal with the city that also makes business sense for him. At the time, Hamm said he had already committed to beautifying the property with details such as street-level landscaping to ensure the warehouse doesn’t look like a typical shelter.
Benvenuto’s email didn’t detail the specific updated terms Hamm has agreed on – or whether city officials were on board – but she wrote that they would be “happy to provide more detail in our meeting.”
Hamm recently hired lobbyists James Lawson and Benvenuto, former chair of the city’s Housing Commission, to help him navigate City Hall and the drama that almost instantly engulfed his proposed city lease.
Margie Newman Tsay of Intesa Communications Group, who Hamm also recently hired to assist with the press, declined to elaborate on updated deal terms. She said the real estate investor is eager to first share details with councilmembers, ideally as soon as possible.
“Out of respect for Council, out of the respect for the Mayor’s Office, we want the elected officials, the policymakers to have time to receive these points of the deal and to have time to digest what they’ve heard before we share those things with the media,” Newman Tsay said.
Hamm’s meeting requests came the day after a City Council budget hearing where multiple city councilmembers questioned whether the city should fund the Kettner and Vine shelter when it’s being forced to make other cuts.
Councilmembers Kent Lee and Vivian Moreno separately suggested it might not be fiscally responsible to move forward with the new shelter at a time when the city is facing proposed cuts to services.
“Even if this was a perfect real estate deal – and I’m confident that it is far from perfect – it still would be irresponsible to move forward with it in this year,” Moreno said.
Newman Tsay said Hamm remains proud of the vision for the shelter project and hopeful it will move forward. She said city officials also seem optimistic.
“(Hamm) and the city are feeling very good about the positive momentum, about the progress they’ve made and what they’re going to share with the City Council,” Newman Tsay said.
Of course he’s trying to save this sweetheart deal. The other options must not be that possible I’d say by this report. The city budget is a mess and this deal should not go forward. Further study is necessary to the toxic safety to begin with. Taxpayers should know all details before the council makes a decision.
Great article that demonstrates Lobbyist and political types and MR Hamm all have close access to City Council members while City residents are ignored and kept in the dark on the financial negotiations. Looks like ASH Street 2.0 is on the way! Where is the Sunshine City Council?
I agree. When I read, “Out of respect for Council, out of the respect for the Mayor’s Office, we want the elected officials, the policymakers to have time to receive these points of the deal and to have time to digest what they’ve heard before we share those things with the media,” I actually heard, “We want to be sure that we’ve already convinced the Mayor and City Council to vote for this behind closed doors, before the public–particularly anyone with commercial real estate experience outside of the City’s halls (who have a terrible track record)–can weigh-in on all the things the City’s leaders haven’t considered.”
While I wish this were a viable solution to the City’s unhoused problem, if someone is hiring an entourage of lobbyists and spokespeople to convince everyone at the City how great the idea is when they claim to have other interested parties, then A) they’re sure that they can make a huge profit from the deal with the City, and B) the deal probably isn’t great for the City’s taxpayers.
Follow the money. Dig deep into every person involved with the SELLER!
So you said he was trying to do us all a favor by leasing us this toxic polluted property at way above market rates because he could get more elsewhere for it. Now he’s hiring lobbyists and begging the city council to accept bribes to get it done? Weird.
1000% Toad is getting offered (and probably accepting) kickbacks or “campaign contributions” from this.
“Hamm told Voice last week that he thinks the initial deal was fair” isn’t that what Cisterra said about 101 Ash?
Mayor wants to pay inflated above-market lease rates but there’s such little money for infrastructure that we’re supposed to vote yes on a sales tax increase this fall. How insane is he.
The only names missing from this story are Jason Hughes, Jack McGrory, Brad Termini and Doug Manchester.