City of San Diego reaches settlement with broker sued over hotel transactions

SAN DIEGO (CNS) – A proposed settlement was announced Thursday between the city of San Diego and a real estate broker the city accused of buying shares in the ownership of a Mission Valley hotel just before recommending the San Diego Housing Commission purchase the property.

The San Diego City Attorney’s Office sued Jim Neil and real estate firm Kidder Mathews last year, alleging conflict-of-interest disclosure laws were violated for their roles in the Housing Commission’s purchase of two Residence Inn hotels as part of the city’s plan to shelter homeless people amid the COVID-19 pandemic.

According to the city’s lawsuit, Neil bought 40,000 shares of stock in Chatham Lodging Trust, the former corporate owner of the Residence Inn in Mission Valley, before negotiating a $67 million deal for the Housing Commission to purchase the 192-unit property.

The other hotel at issue is in Kearny Mesa, and the City Attorney’s Office alleges Neil earned commissions on both hotel deals that exceeded the $250,000 limit set forth in the agreement.

In a statement, Neil’s legal team said his agreement to the settlement was not an admission of wrongdoing, but rather a means to “move forward without further years of costly litigation.”

Neil’s attorneys say he informed the Housing Commission that he intended to buy the stocks before the transaction took place and was told by Housing Commission senior staff that it would not be an issue.

His attorneys also say that contrary to the City Attorney’s claims, the contract between the city and Kidder Mathews laid out that his commissions could exceed $250,000 if approved by the Housing Commission, which his team says the commission voted to approve for both the Mission Valley and Kearny Mesa transactions.

Per the settlement agreement, which still must be approved by the Housing Commission, Housing Authority and City Council, Neil and Kidder Mathews will pay $1 million in damages, $845,000 of which will go to the San Diego Housing Commission and $155,000 to the city.

Neil will also stipulate to a permanent disbarment from conducting business with the city or city-affiliated entities, while Kidder Mathews has agreed to a two-year disbarment.

“The city will continue to be a target for corrupt business practices if those who take advantage of it are not held accountable,” San Diego City Attorney Mara W. Elliott said in a statement.

Neil’s attorneys called the city’s litigation “unwarranted” and said, “Mr. Neil maintains that his and the efforts by the Housing Commission staff in these transactions were in good faith and well intentioned.”

Regarding his disbarment from future business with the city, Neil’s legal team said, “As part of the settlement agreement, Mr. Neil affirmed he would never do business with the city again. He has no desire to.”

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