By Alberto Garcia
Investigative Reporter

The City of San Diego’s former unpaid real estate advisor filed an appeal today to challenge the California Department of Real Estate’s decision to revoke his license after he was forced to return $9.44 million in profits he made from two controversial City building lease deals.

Jason Hughes, Co-CEO of real estate firm Hughes Marino, pleaded guilty to a conflict of interest charge in March 2023 after he helped the City negotiate two 20-year, lease-to-own deals with landlord Cisterra Development in 2014 and 2016 and received undisclosed payments from Cisterra.

The second deal involved the 101 Ash Street building which the City leased but then later purchased as part of a global settlement of lawsuits between the City, Cisterra, and the landlord’s funders.

The City of San Diego vacated the 101 Ash building in January 2020 over exposed asbestos material and has now spent an estimated $200 million on the 19-story tower some real estate experts argue may be worthless given the cleanup costs and market value of a fraction of what the City has invested.

La Prensa San Diego was the first media outlet to claim Hughes had been paid fees by Cisterra which had not been disclosed either in the transactions or in public statements. Hughes refused to confirm or deny the payments until he disclosed them the following year as part of the City’s lawsuit to invalidate the deals over his undisclosed conflicts of interest.

Hughes eventually pleaded guilty to a single misdemeanor count of violating the state’s conflict of interest laws. Hughes argued that he had notified then-Mayor Kevin Faulconer’s office that he would seek compensation on the deals, but Hughes never officially disclosed to the City that he had negotiated payments from the City’s landlord or that he had received the payment after the deals closed.

Earlier this year, Hughes petitioned the court to expunge his conviction after completing one year of probation. Hughes also paid a $400 fine for the $9.4M in undisclosed payments and returned the full amount to the City after his conviction.

On March 28th, the DRE decided to revoke Hughes’ real estate license effective April 17th, but Hughes filed to extend the action until May 17 to give him time to file the appeal.

Hughes filed the appeal on May 13th.

The DRE’s revocation will take effect at noon on Friday, May 17th unless it is overturned by the Court.