Jason Hughes never appeared in court last March, when he pleaded guilty to the only crime charged by prosecutors in the city of San Diego’s troubled lease-to-own deal for the 101 Ash St. office tower.
But when it came time last week to fight to save his real estate broker’s license, Hughes showed up to defend his actions in public.
He spent most of Wednesday in an istrative hearing speaking under oath and in public for the first time — part of his ongoing effort to keep the California Department of Real Estate from revoking his state broker’s license.
State regulators filed what’s called an accusation against Hughes after he entered his guilty plea. If their complaint is upheld by an istrative law judge, Hughes could lose his license.
Hughes has maintained for years that he did nothing wrong in his work with the city to help it acquire the former Sempra Energy headquarters on Ash Street and the nearby Civic Center Plaza.
Nonetheless, his name and photo have been removed from the “San Diego Team” page of the Hughes Marino website. His son, Tucker Hughes, is now listed as managing director.
In a hearing room Wednesday, Hughes and an expert witness hired by his lawyers testified that advice Hughes provided to city officials was unrelated to his work as a state-regulated broker.
The longtime real estate professional spoke extensively about how the years of criminal investigation into the Ash Street deal and civil lawsuits over it had damaged his reputation and traumatized his family.
Hughes’ voice cracked and he dabbed at his eyes with tissue as he described District Attorney’s Office investigators executing a search warrant at his downtown business and his Rancho Santa Fe home.
“They searched my granddaughter’s playhouse,” he said at the hearing. “This whole thing has just been very, very hard on the whole family.”
Hughes pleaded guilty in March to violating state conflict-of-interest laws by willfully representing both sides in the notorious 2017 real estate deal — a misdemeanor count that resulted in a $400 fine and one year of summary probation.
He also agreed to return the $9.4 million he had collected in fees for his work on the two downtown office towers.
Shortly after his conviction, the Department of Real Estate opened an investigation into potential license violations. The state is relying on Hughes’ plea as the basis of its case.
Despite his ission in criminal court, Hughes testified Wednesday that he pleaded guilty because civil and criminal prosecutors threatened to keep investigating him for years.
“I agreed to this given the circumstances,” Hughes said. “It was either take the deal or go through three more years of litigation.”
At least six San Diego city officials were aware that he planned to seek payment for his work, Hughes testified, although he acknowledged he did not disclose how much he eventually collected.
“Everybody knew I was going to get paid,” Hughes said. “I was explicit.”
Under cross-examination by state attorney Diane Lee, Hughes itted he had never informed city officials that he had a profit-sharing agreement with Cisterra Development, the landlord in both the Ash Street and Civic Center Plaza leases.
“They didn’t require it,” Hughes said of city officials. “They said I could do whatever I wanted.”
Before Hughes was sworn in to testify, one of his lawyers sought to dismiss the state’s accusation altogether.
Attorney Charles Harrison told istrative Law Judge Mary Agnes Matyszewski that a misdemeanor criminal conviction that is eligible to be legally expunged after one year is no reason to revoke a state broker’s license.
“At the end of the day, this is an accusation that should never have been brought,” Harrison argued.
Matyszewski rejected the motion.
Throughout the hearing, Lee sought to portray Hughes as less than forthcoming in his dealings with city officials.
She noted that Hughes’ business had long sought to work with San Diego, singling out a bid his company submitted for a job with the city dating back to 2008.
“I wasn’t involved in that — that was my partner Craig Irving,” Hughes said.
When Lee showed Hughes a news article from the time that quoted him, Hughes said: “I don’t recall.”
In other testimony, Hughes said he never acted as a representative for the city in its real estate transactions. He said he was a volunteer “helper” who did only what San Diego officials asked him to do.
Lee then showed Hughes a 2013 letter he wrote to a potential client that began: “As representative for the city of San Diego …”
Hughes called that “boilerplate language” that did not properly characterize his role.
The state attorney also raised questions about various records filed with the Secretary of State’s Office that reflect different people in the same leadership positions at Hughes Marino, which he testified he owns.
Some documents report Hughes as CEO; others listed his wife, Lee said. The company also reported new people among its officers and directors, she pointed out. Just last month, Hughes Marino filed an updated statement of information with the secretary of state noting that Hughes was no longer the chief executive, Lee said.
Hughes testified that he did not recall the recent change in leadership.
The Hughes legal team also presented an expert witness who testified that Hughes was not acting as a broker in the Ash Street transaction and as such should not be subject to discipline from state regulators.
That expert witness, Jay Hibert, also testified that the $9.4 million Hughes collected for his work on Ash Street and Civic Center Plaza leases was an “absolutely” customary fee level.
The city approved a lease-to-own deal for the former Sempra Energy headquarters in 2016, agreeing to pay $128 million for the building over 20 years.
But the 19-story property has been unsafe to occupy for all but a few weeks over the past seven years due to asbestos and other problems.
Last year, over the objection of the city attorney, the city agreed to buy out the lease for a total of $110 million and settled its civil claims against Hughes, Cisterra and lender CGA Capital.
The istrative law judge overseeing the Hughes regulatory proceeding is expected to issue a decision later this year.
