Faulconer’s wife pitches street closing for event in June

Gaslamp group gives stamp of approval for future first lady's business

Kevin Faulconer and Katherine Stuart
  • Kevin Faulconer and Katherine Stuart

With the mayoral election decided in favor of her husband, Republican city councilman Kevin Faulconer, Katherine Stuart was busy at work last week, pitching yet another multi-block closure and private street party to the special-event subcommittee of downtown's Gaslamp Quarter Association.

Stuart, who runs the couple's lucrative Restaurant Events business, has long flown largely under local media radar, ultimately surfacing in reports by U-T San Diego and KPBS during the mayoral campaign's final week after we reported here about her email interactions with city staffers over an unpaid five-figure street-closing tab from the city to one of her clients.

So-called negotiated revenue fees, levied on corporate events that hold block parties on city streets, have been intertwined with the lucrative consulting business of Katherine Stuart Faulconer, who has long been the go-to person for setting up corporate block parties in downtown's Gaslamp Quarter.

In his personal financial disclosure filed with the city, Faulconer said that the business was worth between $100,000 and $1,000,000 and had a gross income of over $100,000.

A Restaurant Events specialty is helping coordinate large corporate block parties held in conjunction with conventions. A testimonial of Janice Krieger, identified as an event producer for the Biotechnology Industry Association, is listed among others on the company's website.

"Well, BIO '08 is over and wrapped up, and I want to thank you for your tremendous assistance in making our Gaslamp Street Party a resounding success! Without a doubt, you know how to make this happen!"

Following a request made under the state public records act, the city released a list of street-closing fees it had collected from various convention sponsors, including "Qualcomm Q on the Fifth," June 2012, $21,000; "Cisco Block Party," April 2012, $6000; "Solidworks World 2012 Special Event," February 2012, $15,000; and "Qualcomm Q Fest Street Scene in the Gaslamp," June 2011, $12,000.

But some of the biggest events paid the city nothing at all, the list showed. Queried about the lack of payments by those groups, city spokeswoman Katie Keach explained in an email: "The discretionary fee is negotiable. Although event organizers have historically paid similar negotiated amounts, there are not set amounts...no formal written document or policy providing guidance on the negotiations exist[s]."

In December 22, 2009, according to the records, the city councilman's wife sent an email to city special-events staffer Cindy Benitez-Kodama, requesting that the office waive the city's fee for a May 2009 corporate block party sponsored by the American Thoracic Society.

"For some reason the invoice for ATS was never settled. Can you please let Ms. Damon-Sanchez know that the invoice 13705036 has been waived for the $9,000 plus interest?"

A week later, on December 29, with the bill still outstanding, Stuart again emailed Benitez-Kodama and her associate Kathy Damon-Sanchez, asking, "Are we good here?"

Replied Sanchez, "Still shows due and payable in the Collection Department. Balance today is: $10,039.07."

Responded Stuart: “Please let me know what the process is for fixing this ASAP. Thanks.”

On January 5, 2010, Stuart again emailed Benitez-Kodama: "Can you please give me an update on this. I am obviously very concerned about have [sic] something in collections."

On January 6, Benitez-Kodama responded: "I did request that the invoice be voided." Replied Stuart: "Great — Thanks."

According to Keach, the billing relief was granted because the doctors’ organization, a national enterprise with a membership of 15,000, is incorporated as a nonprofit venture and thus was determined by staffers to be exempt from city fees.

Keach added that the so-called negotiated fees, which she said were "discretionary," are no longer being collected at all, potentially costing city taxpayers millions of dollars in lost revenue.

"During the Filner administration, the decision was made to suspend the discretionary negotiation process for commercial events pending a citywide comprehensive review of all rate and fee structures.

"The city plans to conduct a comprehensive review of all rates and fees for review and approval by the City Council within the next year," wrote Keach.

"As part of this effort, the Special Events Department intends to evaluate and propose a fee and rate structure that addresses events hosted by commercial and non-profit entities."

Interviewed by phone before the election, Stuart said that other consultants, not her firm, had conducted the fee negotiations for her clients. She said she was aware the fees were no longer being levied but professed no knowledge of the city's plans for the future.

Those decisions will now be largely up to her husband, and city hall insiders are watching to see if GOP city attorney Jan Goldsmith, long a close friend and political ally of both Faulconer and the city's well-heeled hotel and restaurant lobbies, will offer an opinion on the legality of both the possible future fees and the process by which they are set.

Meanwhile, San Diego's future first lady put in a personal appearance in the Gaslamp last week on behalf of the 2014 BIO International Convention, set for June 23–26, to obtain the blessing of merchants and property owners there to once again close the streets for a BIO bash.

The closure is to include Fifth Avenue between J and L streets and K Street between Fourth and Sixth avenues on Wednesday, June 25, through 6 a.m. the next day.

"This [is] a private event for 3100 convention attendees," according to a memo from her firm that Stuart distributed prior to her presentation to the committee, which hastened to give its unanimous stamp of approval.

The Gaslamp group is heavily dependent on the city's goodwill for a variety of services, including a hefty complement of police protection.

According to KPBS, the Faulconer couple's income nearly doubled, from $142,500 in 2011 to about $245,900 in 2012, based on tax returns provided to the station by the candidate.

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You show about $54,000 in fees charged from June 2011 to June 2012, yet write that the fees "are no longer being collected at all, potentially costing city taxpayers millions of dollars in lost revenue." ????

Okay since "millions" implies more than one million, let's assume it's $2 million you're talking about. At $54,000 a year, that's 37 years before the city loses "millions" from not charging this fee. And that doesn't doesn't take into account the income from the sales taxes charged on the food and services paid by the party hosts, nor the extra paid hours for San Diego workers employed at these events.

Or was something left out of the story, perhaps hundreds of thousands of dollars in fees having been collected each year? Or, is the fact that one event organizer happens to be married to a Republican reason enough to concoct to a hypothetical account of millions of dollars lost to apparent favoritism?

No, it is about accountabliity Mr. Hudson. One group/person should not get exempt status over other, I've had a lot of push back from city hall to provide overnight parking to Vets in industrial/comm. area streets, but residential/comm. are okay. With the idea that they suggest they get funds, but truth being told they are not getting funds, and seem to be paying taxpayer dollars to provide services to benefit/profit business over taxpayer/constituent concerns! This is shameful! City is supposed to provide street safety & services, lighting on streets/parks etc, water & sewer, pollution controls, and public safety, BECAUSE THEY ARE THE ONLY ONEs GIVEN THAT DUTY BY VOTERS! My SafeZone(s) for homeless Vets sleeping in cars is getting so much push back it is unbelievable. Closing streets from 8pm - 5am should not be that difficult! It is happening now in many many communities, I'm just trying to make it legal, safe, and secure, while hoping to provide a lot of connectivity via volunteers for needed services and available benefits. Opps, they don't count, they are not profit making businesses!! They are not asking for lots for free benefit services, or city service, just constituents, citizens, neighbors needing help!! [email protected] ~human [email protected] non-profit

Special free deals for those with close connections to the City Council has crooked written all over it. Whether millions or thousands it's felony. Bob Hudson's defense of Faulconer, "They only swindle thousands.", would be the lamest defense ever, if it really was a defense.

@ Paul O'Sullivan: What are you talking about? "First Lady" is often used for a mayor's wife. None other than the New York Times used it last week. "For New York City’s First Lady, a Chief of Staff but Still No Defined Role." Clearly, Bob Filner's use of the term (or his fiance's use of the term) was inappropriate, but in this case it's perfectly normal. I would think a "public relations executive" would know when to mince words and when not. At least if you want to get mad about something, try to pick something that matters. It's commonly used. And hardly the point of the story.

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