City sues broker over suspected conflict of interest in hotel acquisitions
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The lawsuit alleges real estate broker Kidder Mathews Inc. and agent Jim Neil did not disclose the alleged conflicts when they advised the San Diego Housing Commission to acquire two residences … Read More →
Issued: August 4, 2021 | Transcription
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A real estate broker hired by the San Diego Housing Commission to locate housing for the homeless during the COVID-19 pandemic was sued by the city on Tuesday for allegedly violating conflict of interest disclosure laws in the acquisition of two hotels in Mission Valley and Kearny Mesa .
The lawsuit alleges that real estate brokerage firm Kidder Mathews Inc. and agent Jim Neil failed to disclose the alleged conflicts when they advised the San Diego Housing Commission to acquire two Residence Inn hotels in connection with the city’s Operation Shelter to Home program to temporarily shelter homeless people amid the pandemic.
Neither Neil nor a representative for Kidder Mathews immediately responded to requests for comment on the lawsuit, which was cleared Tuesday morning by San Diego City Council.
The city alleges that Neil bought 40,000 shares of Chatham Lodging Trust, the former owner of the Mission Valley hotel, before negotiating a $ 67 million deal for the Housing Commission to buy the 192-unit property. The $ 349,000 per room cost for the Residence Inn Mission Valley was the highest cost per room of any hotel sold in the county last year, according to a San Diego Union-Tribune report released earlier this year on offers.
the San Diego City Attorney’s Office alleges that Neil’s shares may have risen to as high as $ 250,000 since the sale.
Kidder Mathews and Neil also allegedly breached their brokerage contract with the Housing Commission when Neil received commissions on the two transactions in excess of the $ 250,000 limit set in the agreement. He received $ 592,500 in the agreement with Kearny Mesa and $ 502,500 in the agreement with Mission Valley, according to the city attorney’s office.
In addition to damages, the city is seeking a judgment overturning the Mission Valley transaction, although it said the lawsuit would not return Mission Valley property to its former owner or disrupt homeless services in the city. one or the other of the properties.
“The facts in this case are appalling and city council is determined to shed light on how millions of public dollars have been spent,” said city attorney Mara W. Elliott. “Housing Commission brokers created a stock market boon on top of over $ 1 million in commissions as their client tried to protect hundreds of homeless people from a devastating pandemic.”
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