Christian Spicer, the developer who seized on San Diego’s bonus ADU incentive, is facing two new lawsuits.
The proposed location of the Chalcifica project in Pacific Beach is for 2596 Chalcedony Street and 4846 Pacifica Drive. last year for pursuing giant ADU developments across San Diego that eventually led to a change in city policy, is being sued for many millions by his lenders and investors.
Spicer’s investors filed suit two weeks ago seeking more than $13 million in damages, alleging Spicer exaggerated how quickly he could get city approval for projects with many accessory dwelling units, or ADUs. That litigation followed a February lawsuit filed by one of Spicer’s lenders seeking nearly $5 million in damages based on claims Spicer failed to make loan payments or pay taxes on properties earmarked for ADU farms. The county treasurer-tax collector filed six notices of default totaling more than $98,000 for unpaid property taxes against Spicer last fall. But Spicer paid up in January, and those default notices were then cleared. Spicer — who is responsible for two massive proposed ADU projects that would each build more than 100 homes and several others with more than 20 — declined to comment Monday on the lawsuits. It’s not clear whether the city’s rollback last summer of its ADU incentive, which had been the most generous in the state, played a key role in Spicer falling out of favor with his lenders and investors. City Council members and other city officials said Spicer’s exploitation of the city’s ADU bonus program was their chief motivation for“I think everyone in this room seems to agree that a 20-, a 50-, a 150- or a 750-unit project is not what was ever intended,” Councilmember Kent Lee said last June before the council approved the rollback in a 5-4 vote. The update limited how many ADUs can be built on a single-family lot: four ADUs on lots smaller than 8,000 square feet, five on lots of 8,001 to 10,000 square feet and six on larger lots. City officials call ADUs, which are essentially backyard apartments, an efficient way to help solve the local housing crisis. But critics say they can damage neighborhood character and create noise and parking problems, especially when developers put many ADUs on a single lot., calling them a responsible and by-the-book response to San Diego’s shortage of affordable housing — “building within the city’s policies to help address the region’s housing crisis,” he said last year. His investors and development partners say in their 34-page lawsuit that he exaggerated many things, particularly project timelines that help determine estimated returns on investment. “Spicer repeatedly made representations that permits for each project could be obtained in three to four months, with six months as an extremely conservative estimate,” the lawsuit says. “Spicer agreed to commit to the timetables he laid out, which were based on his entities’ standardized project designs, ‘rinse and repeat’ permitting strategy, and the experience of his engineering firm.” But those promises were not kept, according to that suit, which was filed by a real estate investment firm called Vision Quest ADU that had been created specifically to exploit the city’s ADU incentive. “Spicer and his entities failed to meet the promised timelines,” the lawsuit says. “Certain projects failed to obtain basic but essential permitting, others went months without any meaningful work or updates, some had to be reduced or enlarged in scope and size, and each project began to stall out in progress.” The investors’ suit gives blow-by-blow details of how Spicer handled — and allegedly mishandled — each of 17 properties earmarked for large ADU projects. In addition to compensatory damages — $10 million in investor funds, $2 million for delays that lowered projected returns and $1 million Spicer allegedly withdrew from an account without authorization — the plaintiffs seek punitive damages based on allegations Spicer knowingly lied. “Spicer knew his representations were false when he made them, or at the very least made those representations recklessly and without regard for their truth,” that lawsuit says. “Spicer did so because he intended for plaintiffs to rely on his representations to either commit to a project agreement or to hide misconduct or project failures for which plaintiffs would seek redress.” It also alleges that the developer misleadingly emphasized positive aspects of the plans, but not negative ones. “Spicer would disclose positive developments and he would intentionally fail to disclose negative ones, making his disclosures deceptive,” the suit says. The suit seeks an injunction to prevent Spicer from moving forward with any of the projects. It also asks the court to determine who has ownership rights to the 17 properties in question. The February lawsuit, filed by lender HL3 Sierra, simply asserts that Spicer has not paid what he owes. He is accused of “failing to make required payments of principal and interest when due, failing to pay real property taxes, and failing to comply with other material terms and conditions of the loan documents,” the lawsuit says. That suit seeks more than $4.9 million for “outstanding principal, accrued interest, default interest, late charges, advances, and other fees and costs,” the suit says. Both lawsuits also seek attorneys’ fees from Spicer. Additional defendants in both cases include multiple development companies and limited liability corporations that Spicer has either formed or partnered with. ‘Character of our community is diminished.’ Borrego Springs group asks for short-term rental regulations‘We don’t have enough food’: Providers brace for thousands of San Diegans to lose SNAP benefits Its schools are falling apart, and voters won’t pass a bond. Could a little-used tactic help this district?A little-known Navy-Marine battle group from San Diego is making a beeline for the Middle EastSantee fire that prompted evacuations at shopping center charred 5 acres
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