Newport mayor says he wants to sell his boat factory site, not grow marijuana on it

Despite having local and state approvals to cultivate or distribute medical marijuana on the site of his boat factory in San Bernardino County, Newport Beach Mayor Marshall “Duffy” Duffield says he isn’t a pot farmer. Rather, he says, he sought the entitlements to make the property more attractive to buyers so he can move his factory to Utah.

Duffield said in a statement emailed to the Daily Pilot on Sunday that he split his 4.7-acre property in Adelanto into thirds and sought a cannabis distribution permit from the California Bureau of Cannabis Control to take advantage of increased property values that followed Adelanto’s passage of a medicinal cultivation ordinance in 2015 and creation of a “cultivation zone” in 2016 that later expanded to include the factory site.

“As a property owner, I am trying to maximize the value to sell the land, not grow pot,” Duffield said. “I am actively manufacturing electric boats at the plant and there is no room to be growing pot.”

The statement confirmed that he tapped the services of Newport Beach City Council colleague Scott Peotter, who works as an architectural and development consultant, to do the legwork on parceling the property. That arrangement is outlined in records obtained from the California secretary of state’s office and the city of Adelanto.

Peotter made at least $10,000 from DC Developments, a Duffield-associated company, according to Peotter’s state-required economic interest forms.

Duffield’s statement Sunday did not address any possible conflicts of interest in paying his fellow councilman to do the work, and neither Duffield nor Peotter immediately responded to requests for follow-up comments.

The legality of such a business relationship is unclear. The city charter is silent on intracouncil financial conflicts of interest, and state conflict-of-interest laws don’t address one council member employing another.

Speculation that Duffield and Peotter quietly had a business relationship surfaced in August, though neither directly answered questions about it at the time. At an August council candidates forum, Duffield — who is seeking reelection — would not answer a question from his District 3 challenger, Tim Stoaks, about whether he has ever employed Peotter while they have served on the council. After the forum, Peotter said he doesn’t respond to rumors.

In September, local activist Susan Skinner filed a complaint with the California Fair Political Practices Commission seeking an investigation into the possibility of a Duffield-Peotter employment arrangement, arguing that it would be a conflict of interest.

Duffield regularly recuses himself from City Council votes on Newport Harbor matters because of potential business conflicts related to his Duffy Electric Boat Co., which has a harborfront office on West Coast Highway. Peotter does not recuse himself from those votes.

Skinner argued in her complaint that if Duffield is a source of income for Peotter, Duffield’s conflicts of interest are also Peotter’s.

City Atty. Aaron Harp has had no public comment about the situation since receiving the records about the councilmen’s business relationship from the Daily Pilot on Thursday.

Duffield’s statement said he has been working for three years to move the Duffy factory from Adelanto — about 40 miles north of San Bernardino — to Ogden, Utah, where he said he is in line for free land and forgivable loans.

Adelanto’s cultivation rules were prescient a year before Californians voted to legalize recreational marijuana. Land values in the marijuana zones increased nearly 1,300% in the year and a half after the city passed the initial cultivation ordinance, the Victorville Daily Press reported last spring.

But Duffield said he has been stymied in his attempts to sell his land, which fell out of escrow three times because of buyers’ lack of funds. Meanwhile, he said, most of his neighbors have sold their land, and as more cities begin allowing marijuana growing, the sale prices are dropping.

Peotter — representing architectural and development consultant Aslan Cos., of which he is chief executive — appeared before the Adelanto Planning Commission in September 2017 on behalf of DC Developments, a company that runs properties including the Duffy boat factory on Muskrat Avenue. Duffield is listed as a “manager/member” of DC Developments, according to the secretary of state’s office.

According to a city staff report for the Planning Commission meeting, Peotter asked for permission to subdivide the parcel into three lots and added that Duffield planned to apply for a state permit to cultivate cannabis on the site. The city’s permission for the subdivision and a state license for distribution of medicinal marijuana were granted late last year. The Bureau of Cannabis Control issued the distribution license to Muskrat Consultants LLC, of which Duffield also is a “manager/member,” according to secretary of state records.

Two years earlier, in November 2015, Duffield and Peotter were part of a unanimous Newport council vote to ban medical marijuana cultivation, processing and delivery in Newport Beach.

hillary.davis@latimes.com

Twitter: @Daily_PilotHD