Broker Agrees To Pay $9.4M, Pleads Guilty To Conflict Of Interest Charges In Office Deal
A San Diego commercial real estate broker pleaded guilty to a misdemeanor conflict of interest charge for his role in advising the city in a purchase of two downtown office towers while taking money from the seller.
Jason Hughes, co-founder and CEO of Hughes Marino, on Thursday agreed to pay $9.4M to the city of San Diego and a $400 fine to the state, CoStar reported, after prosecutors argued that Hughes accepted the money from the seller of the two downtown office buildings — 101 Ash St. and Civic Center Plaza — while acting as a volunteer adviser on the city’s behalf.
“While Jason was prepared to put forth a vigorous defense at trial, he has concluded it is in his best interest to settle all claims against him in order to avoid the heavy cost and ongoing distraction of protracted litigation,” a Hughes spokesman wrote in an email to CoStar.
Hughes said that he informed the city, then-Mayor Kevin Faulconer and other city officials that although he would advise the city voluntarily, he would also be accepting payment from Cisterra Development, the owner of the buildings. City officials denied they were informed of the matter.
Hughes was given 10 business days to return the $9.4M he received from Cisterra in exchange for the dismissal of the city’s lawsuit against him and his company, Times of San Diego reported.
In 2016, the city bought the two buildings from Cisterra in a 20-year, $128M lease-to-own deal. In the years following the deal, the city paid $50M in renovations and legal costs, hoping to occupy the building in 2019, but asbestos was found to be floating in 101 Ash St., leading to the evacuation of city workers.
Before the city's deal, Sempra Energy's headquarters was stationed at 101 Ash St. for 50 years. It moved into a new office in 2015.
Hughes has lobbied for restricting the practice of dual representation in California with limited success, citing "abuse" he witnessed in connection to the common brokerage practice.