Grand Jury Scores ‘Monopoly’ Bidding in City’s Deal for Mission Beach Plunge

Reopening an old civic wound, the San Diego County Grand Jury issued a scathing report Tuesday, accusing San Diego officials of granting a sweetheart deal to the team of developers that tore down parts of the historic Mission Beach Plunge building to make way for shops and restaurants.

The 49-page grand jury report concluded that the developer, Belmont Park Associates, received “unusually favorable treatment” from the city because it enjoyed exclusive negotiating rights to build the project on city land while other interested builders were frozen out of the bidding.

The report concluded that city staff members bypassed municipal requirements for competitive bidding, and that members of the City Council who approved the exclusive negotiations with Belmont Park Associates in April, 1984, “must share in the responsibility for not protecting the interests of the citizens of San Diego from ‘monopoly’ bidding.”

The grand jury document also scores former Councilman Mike Gotch, whose beach district included the Plunge, for not telling his council colleagues before the April, 1984, vote that he had received a letter from another party interested in bidding.

The report, which is not legally binding, repeats many of the criticisms and charges that have been leveled by beach activists while plans to build around the Plunge worked their way through City Hall. Community sentiment against the proposal was so widespread and strong that beach residents were able to place a measure on the November, 1987, ballot aimed at rolling back the project.

But the council allowed the developer to begin the project before the November vote, thus rendering the ballot measure a moot point.

Mayor Maureen O’Connor, who had long opposed the project, said Tuesday that the grand jury report substantiates “what the community groups have been saying all along--that the proper procedure was not followed, that there was no competitive bidding, that once the initiative qualified we should not have issued the building permits until we knew the outcome of the vote.”

“But the real tragedy is that the damage has been done for 50 years to the community.”

Neither Gotch nor Graham MacHutchin, one of the developers of the project, could be reached for comment late Tuesday.

The grand jury report also was highly critical of the financial terms of the deal between Belmont Park Associates and the city. It said the developers were asked to pay only $50,000 for the right to exclusive negotiations over two years.

The report also said the city’s Property Department failed to obtain an independent appraisal of the Plunge so it could determine whether the deal with Belmont Park Associates was a good one for taxpayers. Instead, the Property Department simply accepted the developers’ estimate of the site’s value, the report said.

Grand jurors also said that a system of rent credits granted to the developers for putting in public improvements would eventually translate into a loss to taxpayers ranging from $14.5 million to $19 million over the 50-year lease.

Other observations by the panel:

- The city expended very little effort in trying to preserve the historic Plunge building by applying for historic rehabilitation loans or notifying the city’s Historic Site Board until after the 70,000-square-foot development was well into the permit process.

- Despite added parking spaces from the development, the shops and restaurants around the Plunge will worsen traffic congestion and the parking shortage at the busy corner of Mission Boulevard and Ventura Place.