San Diego wanted use permit before buying skydiving building, proceeded with purchase anyway

Months before the city of San Diego purchased a failed indoor skydiving center in East Village for $7 million in cash, city officials determined that they needed to secure a use permit before completing the sale.

But the approval process would have taken months and the seller was in a hurry. So officials changed their mind and bought the property without a permit to operate the place as a homeless-services center, according to emails obtained by The San Diego Union-Tribune.

The city also relied on the seller’s agent to determine how much the building was worth, the emails show.

“Do you have any appraisal you can provide as that will likely be the largest hurdle time-wise,” Cybele Thompson, the city’s real estate assets director, wrote to the agent Nov. 27. “Can you please clarify the price you are asking and what time constraints you are dealing with? Thanks so much!”

“This looks great,” Thompson’s assistant replied. “Please proceed with the work right away.”

By the middle of January, city officials decided to outsource the permitting process and use federal community-development grants to pay for the work and the real estate. Critics began complaining that the city could rent an office for much less and use the balance of the funds for direct services.

At the same time, Rodrigue alerted city officials that his client was running out of patience and would walk away if a deal was not reached soon.

The owner “has been receiving BOV’s (broker’s opinions of value) from between $10-$15 M and is willing to wait for the additional cash,” Thompson’s aide told the city real estate assets chief in a Jan. 11 email.

Rodrigue “believes the only way she would reconsider delaying the close until a (use permit) is issued is if we increase the sale price,” the aide added. “Her interest in selling to the city for a good cause has changed. She’s now basing her decisions on price and timing.”

Thompson replied a short time later. “Thanks for the heads up — I will advise (chief operating officer) Kris Michell.”

Within days, the real estate assets team and others presented the arrangement to the City Council, which quickly approved the purchase.

jeff.mcdonald@sduniontribune.com (619) 293-1708 @sdutMcDonald

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