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Mayor Faulconer Staff Wrote False Letters for 101 Ash Contractors to Cover Problems


By Arturo Castañares
Editor-at-Large

Emails and documents confirm that Mayor Kevin Faulconer’s administration worked to cover up the fact that the 101 Ash Street building was an unsafe fire hazard before they forced nearly 1,000 employees to move into the building in December 2019.

Emails and communications between San Diego City officials and contractors working on the building in 2019 reveal that several high-ranking City staffers were aware that the fire-life-safety systems, including fire suppression and electrical control systems, were non-functional and posed a risk to employees and public visitors in the 19-story high-rise near City Hall.

After being informed by contractors that the building was not ready for use, two high-ranking City officials sent pre-written letters to two different contractors and asked the contractors to put the letters on their own company letterheads and send them back to the City saying the building was safe to occupy -contrary to the known condition of office tower.

The first letter was sent by James Nagelvoort, Director of the City’s Public Works Department, to David Davey, President of West Coast General Contractors, the City’s lead contractor working on renovations of the building; the other letter was delivered by Cybele Thompson, Director of the City’s Real Estate Assets Department, to John Frager, Executive Managing Director of CBRE Group, the building management company that controlled the building under a City contract.

A December 6, 2019, email from West Coast General Contractors put the City on notice that “all existing fire, life, safety infrastructure must be completed before a life, fire, safety final sign-offs will be granted and allow for building occupancy” and that “no fire alarm for any floor can be completed until the entire infrastructure is repaired, replaced, and/or operations.”

The email from the contractor also stated that “the City is under significant political pressure to meet what are non-contract imposed milestones” because City staff were being pushed by the Mayor’s office to move employees in before then end of the year as Faulconer had promised the public would happen.

At the time of Davey’s email, the building automation system (BAS) was not functional and could not control major components of the fire-life-safety systems. One of those components, the vent dampers which are supposed to close on floors near a fire to stop air from feeding the flames, were bolted open and could not close at all, leaving a major part of the fire system inoperable.

Davey’s email was sent to Assistant Chief Operating Officer (COO) Ron Villa, Deputy COO Johnnie Perkins, Director of Public Works James Nagelvoort, Director of Real Estate Assets Cybele Thompson, and other top City staffers.

EXHIBIT A

But just five days later, Davey received an email from Nagelvoort containing the text of a letter addressed to Nagelvoort himself and signed with Davey’s name, explaining that “West Coast General Contractors recognizes that the City has taken all the necessary precautions to ensure that 101 Ash Street is safe for City employees and the public to occupy”, and mentioned asbestos testing, but failed to mention the fire-life-safety issues included in Davey’s email to the City.

Davey later sent the letter back to the City as requested by Nagelvoort.

That letter from West Coast was later used by the City to respond to questions from the San Diego Union-Tribune with respect to the status of the building, as well as held up by Deputy COO Johnny Perkins during a January 2020 City Council meeting as a way of proving the building was safe to occupy. Perkins was included in the emails between Davey and Nagelvoort, including the email where Nagelvoort sent the pre-written letter to Davey, so Perkins would have known that the letter was written and directed by the City, not the contractor.

EXHIBIT B

A second letter was handed to CBRE’s Frager by Thompson on December 12, 2019, but was not emailed. That letter, addressed to Thompson, contained nearly the same language as Nagelvoort’s letter and also mentioned asbestos testing, but not any of the fire-life-safety issues. The letter included that “CBRE recognizes that the City has taken all precautions to ensure that the 101 Ash Street is safe for employees and the public to occupy“, using language nearly identical to that used in the Nagelvoort letter to the other contractor.

But in this case, CBRE modified the letter before sending it back to the City and addressed it instead to Nagelvoort, not Thompson. Although Frager somewhat watered-down the language, he still included that “CBRE recognizes that the City has taken appropriate precautions to ensure that 101 Ash Street is safe for employees and the public to occupy,” again using the same language provided by City staff to both contractors.

CBRE staff and engineers had concluded that the building was unsafe and that the City should postpone moving employees into the building until critical systems were repaired or upgraded to bring the building into code compliance.

In both cases, high-ranking City officials provided the letters to the contractors requesting that they declare that the City had made sure the building was safe for employees and the public to occupy even after various City officials were put on notice that the building was, in fact, unsafe.

High-ranking former City officials familiar with the two letters confirm that they originated from Mayor Faulconer’s office and that the two officials were directed to request the pre-written letters from the contractors to provide the City with a cover story that the buildings were safe when fire-life-safety systems were clearly not functional and posed a danger to employees.

Villa, Perkins, and Thompson have since left working for the City. Nagelvoort did not respond to requests for comments. Perkins is now the City Administrator for the City of Spokane, Washington.

THE BUILDING

The City had acquired the 101 Ash Street building in January 2017 through a 20-year lease-to-own agreement with Cisterra Development, a local real estate company that had signed a nearly-identical lease two years earlier to acquire the CCP building. In both cases, Cisterra brokered the deals between existing owners and the City, and provided the financing mechanism to leverage the City leases to acquire and lease the buildings to the City.

The difference between the two deals was that the City had already occupied the first building, known as the Civic Center Plaza building, for several years and multiple City departments were housed in the brown office tower, including the City Attorney’s Office.

In comparison, the City had no direct knowledge of the condition of the 101 Ash St. building which had already sat vacant for nearly a year after Sempra Energy and San Diego Gas & Electric had left the building because the companies found it to be functionally obsolete.

Much has already been reported about the City’s lack of due diligence and reliance on inspection and condition reports from the sellers without the City conducting its own physical inspections of the building, including testing its electrical and mechanical systems and confirming the condition of known asbestos material throughout the tower.

But at the time the City Council and Mayor were negotiating for the purchase of the building, the sellers and City staff described the building as a “Class-A” building that only needed a “$10,000 power wash” to make it usable for over 1,000 City employees. Both of those claims turned out to be wrong.

The City moved staff into the building in mid-December 2019 but the building was evacuated in mid-January 2020 after the San Diego County Air Pollution Control District repeatedly found traces of asbestos material throughout the building. The building was deemed to be a hazard to the public. Encapsulated asbestos material was disturbed during the renovation work and was the stated reason for the City having to move out of the building.

CURRENT STATUS

The 101 Ash Street building remains empty but is now at the center of numerous lawsuits from various sides.

The City has sued to invalidate the lease for both 101 Ash and the CCP building after it was confirmed that Jason Hughes, the City’s pro bono broker on both deals, received over $9.41 million in previously undisclosed fees from Cisterra on the deals in violation of state and local conflict-of-interest laws.

The financiers of the two deals are also suing the City to enforce the leases and to resume lease payments halted by the City. The City stopped making lease payments on 101 Ash nearly one year ago, and more recently stopped making payments on CCP after the City sued to invalidate the lease over Hughes’ payments.

Several employees and former contractors have filed lawsuits over their exposure to asbestos during the construction work and for whistleblower retaliation after they alerted officials to the problems with the building.

Additionally, Dorian Hargrove, a reporter with NBC 7/39 News who was one of the first journalists to dig into the growing financial scandal, filed a federal lawsuit against City Attorney Mara Elliott and the City over allegations he falsified a report related to the 101 Ash deal. A report quoted by Hargrove contained a footnote that described shortcomings in an independent investigation that Elliott. Elliott claims the reported footnote was fabricated. Hargrove is suing for violations of his civil rights, defamation, and damages he incurred after NBC retracted the story and sidelined him from reporting on City politics.

Kevin Faulconer is now a candidate in the recall election seeking to replace California Governor Gavin Newsom. Faulconer’s Chief of Staff at the time the CCP and 101 Ash deals were signed, Stephen Puetz, is currently Faulconer’s campaign manager. Puetz was replaced as Chief of Staff in July 2017 by Aimee Faucett who served until Faulconer left office last December. Faucett is now a consultant on Faulconer’s recall campaign.

Last week, news reports detailed that Faulconer’s campaign funds paid $58,000 to a company owned by Faucett during the same period that another of Faucett’s companies paid Faulconer between $10,000 and $100,000 for his consulting services. Although Faulconer cannot use his campaign funds for personal expenses, the money paid to him by Faucett would not be restricted.

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