Residence Inn by Marriott at Kearny Mesa was one of the hotels purchased to house homeless. Image via Google Maps

A real estate broker recently sued by the city for allegedly buying shares in the ownership of a Mission Valley hotel just before recommending the San Diego Housing Commission purchase the property said Wednesday the lawsuit misrepresents the facts behind the transaction.

The San Diego City Attorney’s Office last week accused Jim Neil and real estate firm Kidder Mathews of violating conflict-of-interest disclosure laws and collecting commissions to negotiate two hotel deals that exceeded limits set forth in the broker agreements.

Neil advised the housing commission to buy two Residence Inn hotels as part of the city’s plan to shelter homeless people amid the COVID-19 pandemic.

According to the lawsuit filed last week in San Diego Superior Court and a statement issued to numerous media outlets, 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 San Diego City Attorney’s Office alleges Neil’s stock may have increased by much as much as $250,000 since the sale.

According to a statement released Wednesday by Neil’s attorneys, Neil informed the Housing Commission that he intended to purchase the stock before the transaction.

“(Neil) was told there would be no issue with these actions by senior Housing Commission staff. The City Attorney’s Office and the Housing Commission were aware of this fact before issuing their press release,” according to the statement.

In response, the City Attorney’s Office issued a statement of its own, saying, “Mr. Neil’s claim that he revealed his unlawful conduct to Housing Commission staff is not a defense against California’s strict disclosure laws, which protect taxpayers from ethical breaches by public officials. The city is determined to recoup every public dollar that was illegally spent, and to learn more about these troublesome transactions through discovery and deposition.”

But Neil’s statement also denied that his stock purchases violated state law as claimed by the city attorney.

Neil’s attorneys allege the law referenced in the lawsuit does not apply to people who own less than 3% of the stock of a company, and his ownership stake is less than 0.1%. He also alleges he did not purchase stock in the actual previous owner of the hotel, which he said was a subsidiary to Chatham Lodging Trust.

In addition to the Mission Valley hotel, Neil also advised the city on the purchase of another Residence Inn in Kearny Mesa.

The lawsuit alleges the broker agreements with the Housing Commission were breached when Neil earned commissions on both deals that exceeded a $250,000 limit set forth in the agreements. He received $592,500 in the Kearny Mesa deal and $502,500 in the Mission Valley deal, according to the City Attorney’s Office.

Neil contends there were no such limits set forth in the Kearny Mesa agreement and that the Mission Valley agreement held that commissions could exceed $250,000 if the Housing Commission approved it. Neil also claims approval was received from both the Housing Commission and the City Council in late 2020.

“The City Attorney’s release contains a long series of accusations rife with omissions of critical facts to support their flawed narrative of Jim Neil’s work on behalf of the city of San Diego,” according to Neil’s attorneys.

“Over the course of his long career in San Diego, Mr. Neil has demonstrated an unwavering commitment to operating with the highest level of integrity and ethical standards,” according to the statement. “Mr. Neil intends to vigorously contest this civil suit and defend his excellent professional reputation.”

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