To pay salaries and stay afloat, Civic San Diego relies on the revenues it receives from issuing permits and approving development projects in downtown San Diego. The nonprofit oversees the dissolution of San Diego’s former redevelopment agency and handles design and permitting functions for downtown, City Heights, and Southeast San Diego. The group requires that developers pay a fixed-fee for each development application in downtown. During this current fiscal year, Civic San Diego estimates revenues from applications to total $1.04 million.
The million-plus dollars that Civic San Diego receives to issue permits and process development applications amounts to 14 percent of its current $7.4 million annual budget and 21 percent of the $4.9 million that Civic San Diego pays to its 40 full-time employees.
If permitting and planning functions are essential in funding Civic San Diego’s day-to-day operations, then how is Civic San Diego not conflicted when considering development projects? And, how can residents be assured that their voices are heard regarding land-use decisions that affect their neighborhoods?
A San Diego Superior Court judge will answer those and other questions posed in a lawsuit filed by one of Civic San Diego’s own boardmembers, Murtaza Baxamusa. In December 2015, Baxamusa, along with the Building and Construction Trade Union, filed a complaint, questioning the legality of the City of San Diego outsourcing essential city services such as land-use authority and using public taxpayer funds to do so.
The lawsuit is the final obstacle to what could be a long-lasting agreement between the City of San Diego and Civic San Diego for permitting and planning services. The agreement is one of a kind. No other municipality in California has done what San Diego has in delegating land-use authority — which the California Constitution declares to be an essential city function — to an outside agency.
It was a long time in the works.
Former mayor Jerry Sanders and city-council members first opted to transfer basic planning and permitting functions to Civic San Diego in 2012, shortly after Civic San Diego was created from the ashes of the Centre City Development Corporation and Southeastern Community Development Corporation. Initially formed to oversee the dissolution of the city’s redevelopment agency, Civic San Diego’s range of services has increased during recent years.
The organization is responsible for approval and processing of ministerial and discretionary land-use decisions in portions of downtown and other communities. Civic San Diego administers the Downtown Parking District and heads up downtown’s economic development projects, which requires the agency to enter into partnerships with private and public entities to improve the standard of living for residents.
Controversy arises from the apparent conflict of a group partnering up with private-sector businesses and rubbing shoulders with developers while at the same time having the authority to perform an essential city service.
Quick and easy
Civic San Diego administrators, building-industry professionals, and elected officials say that transferring land-use authority to Civic San Diego affords residents and developers a quick and easy alternative to going to the city, where overburdened staff process permit applications from across the entire city.
The permitting and planning process is expedited, says Civic San Diego’s assistant vice president of planning, Brad Richter, despite the fact that Civic San Diego can require some applicants to present their project at five community meetings and to the downtown planning group. And while expediting permits is a lofty goal, the problem, says Baxamusa in his lawsuit, is that there is an inherent conflict of interest in that nothing prevents Civic San Diego’s president or the board of directors from approving projects, thus raising operating revenues for Civic San Diego.
Potential conflicts of interest are not eased given the fact that project opponents, and the occasional disgruntled developer, are not allowed to appeal Civic San Diego decisions to anyone but Civic San Diego’s own board of directors, some of whom work for private developers or high-priced consultants.
“It is clear from reading facts taken directly from Civic San Diego’s own meeting minutes that Civic San Diego staff — the unelected, private staff of a private company — are making judgment calls and using their own discretion to make decisions on the future of the City of San Diego,” says Baxamusa’s attorney Steven Coopersmith.
“We think that there are serious discrepancies throughout the entire record of the administration of the city’s delegation of its police power to this private company. We sincerely hope that the city changes its policies and joins with us to protect downtown San Diego from ‘speedy’ development at the cost of civic responsibility.”
The lawsuit wasn’t the only challenge to the city’s decision to bolster Civic San Diego’s planning presence in downtown.
The lack of oversight prompted state representative and former San Diego County labor leader Lorena Gonzalez to draft a bill last year that requested city-council oversight on planning decisions.
For her bill, Gonzalez first asked the State of California’s Office of Legislative Counsel to review the agreement between Civic San Diego and the city. “…[I]t is our opinion,” the office found, “that cities may not contract away their land use authority because the exercise of that authority is an exercise of their police power under article XI, section 7 of the California Constitution.”
Despite the opinion, and later passage by the state Assembly and senate, governor Jerry Brown vetoed the bill in October 2015, calling it a local issue not appropriate for the state to legislate. Gonzalez’s chief of staff, Evan McLaughlin, said the Assembly member is discussing whether to pursue new legislation.
For now, the fate of Civic San Diego’s planning future hinges on Baxamusa’s lawsuit.
Meanwhile, as the City of San Diego defends the lawsuit, city staffers are busy drafting a new contract with Civic San Diego, which requires council oversight over the nonprofit’s work plan and budget. It does not, however, allow citizens the right to appeal any of Civic San Diego’s planning decisions to the city council.
Civic San Diego’s Richter says the lack of council oversight with regard to planning and permitting is not a cause for alarm. Not only is it not illegal, it is not unusual.
“Legislative powers are those that create legislation, or, laws and codes, and only the city council has that power in the city. Permit approvals are considered a quasi-judicial action, in that, a decision is made pursuant to existing laws. Civic San Diego staff and board, just like city staff and the planning commission, can make decisions as outlined in the San Diego Municipal Code based on the codes and requirements that the city council passes. I’m not sure why people don’t understand that,” says Richter.