Redevelopment: Ex-U.S. Attorney Aids Team in Grand Jury Investigation
Construction at the Padres ballpark came to a halt last week but legal activity involving the project and a related federal probe kept the legal staffs for both the city and ballclub busy.
The Padres, the master developers for the $450 million ballpark, ordered the work stoppage at the East Village site Oct. 2 after the ballclub and the city were unable to negotiate an alternative financing plan until the city issues up to $299 million in tax-free bonds.
City officials said last month the bond issuance is out of the question until a federal grand jury investigation involving San Diego City Councilwoman Valerie Stallings and Padres majority owner John Moores is completed.
The two longtime friends are at the center of a federal probe into Stallings’ purchase in March 1999 of IPO stock in Neon Systems Inc., a Texas software company chaired by Moores, and her subsequent sale of the stock at its peak price less than a month later.
Stallings, who cast a key ballpark vote on the date she sold the stock, reported she made a pre-tax profit of $14,000 in her financial disclosure documents filed earlier this year.
Although federal prosecutors are not acknowledging an investigation or the existence of a grand jury, the Padres have retained two former federal prosecutors, Charles La Bella and Jerry Coughlan. Both have experience in prosecuting and defending high-profile clients.
Grand Jury Probe
La Bella, the former acting U.S. attorney in San Diego, said he has been retained by Padres in-house counsel, Bob Vizas, to assist him in presenting documents before a 23-person grand jury, which La Bella said has been meeting for several months.
“I’ve been retained by the Padres, not John Moores, and I’m representing them in connection with the grand jury investigation,” said La Bella, who left the U.S. attorney’s office last year to take a job as senior managing director for DSFX, a New York-based investigative consulting company. He was hired last week by the local office of McKenna & Cuneo, which is headquartered in Washington, D.C.
La Bella said he has been working on behalf of the Padres since August. He couldn’t say when the investigation would conclude, but noted the process doesn’t necessarily always result in the grand jury handing down indictments.
Coughlan also said he was retained by the Padres but didn’t provide any details about his services. Coughlan has been a partner in the San Diego firm of Coughlan Semmer & Lipman for 13 years following 11 years as an assistant U.S. attorney.
Both attorneys worked on opposing sides in a judicial bribery trial that resulted in convictions of two San Diego Superior Court judges and a local attorney, and a plea bargain of another judge.
La Bella was the lead prosecutor, while Coughlan represented former judge James Malkus, one of the convicted judges in the gifts-for-favorable-verdicts court case.
While stymied in their plan to obtain bond financing, city officials lauded a Sept. 29 court verdict in a property condemnation jury trial involving a key ballpark parcel. The jury awarded the property owner a total of $11,063,850 for the block on Imperial Avenue, between Eighth and Ninth avenues. Ed Plant, who owned and operated San Diego Refrigeration Services on the site, was asking for $19 million.
David Allsbrook, manager of contracts and acquisitions for the Centre City Development Corp., the city’s Downtown redevelopment agency, said the jury’s verdict was only about $64,000 more than the city’s final offer. The jury’s award included $2 million for the loss of business goodwill. Plant has relocated some of the business to National City and another site in San Diego.
Considering what Plant was asking for the property, the verdict was a victory for the city’s interests, Allsbrook said. It was also the largest amount the city has paid for any parcel in the ballpark district, he said.
Allsbrook couldn’t give the total CCDC has spent on land acquisition for the ballpark, but the latest amount awarded puts it close to its $100 million budgeted for that purpose. A document provided by the Padres last month said the amount spent by CCDC on ballpark land acquisition was $67.1 million, bringing the updated total to at least $78 million.
Including $50.2 million spent by the Padres and its development company, JMI Realty, the total expended for ballpark related land purchases so far is more than $128 million.
According to the Padres, the city and the Padres have each spent about $90 million on the ballpark and its surrounding commercial redevelopment projects. In addition to land, the costs cover design and construction, infrastructure and private development “soft costs.”
The city’s ballpark costs are capped at $225 million, with the Padres responsible for any construction cost overruns above $267.5 million. That was the amount designated in a memorandum of understanding negotiated between the parties, and approved by nearly 60 percent of city voters in November 1998.
All the land needed for the ballpark has been in the city’s hands since early this year, following the city’s use of its condemnation powers. However, the price paid on select parcels where an offer isn’t accepted by the property owner triggers a legal process that may end in a trial.
Allsbrook said there are 11 such cases pending trial in the courts, and he anticipates a settlement in all the cases by next summer.