The Corky McMillin Cos. and City Attorney Michael Aguirre went head-to-head this week over the amount of money the city is due from the redevelopment of the former Naval Training Center.
The dispute, which has taken place largely in the public arena, follows on the heels of a San Diego Union-Tribune report detailing the contract, McMillin’s profits and the city’s losses.
McMillin was selected to build up the decommissioned naval base by the City Council in 1999. While the Point Loma property “” now home to condos, parks, schools, nonprofits and shopping “” has been profitable to date, the city has yet to receive any revenue from the deal.
A March 2 letter from Aguirre to McMillin Senior Vice President Walter Heiberg said an ongoing audit of the deal has revealed $9.6 million in exaggerated development fees, including labor costs inflated as much as 250 percent.
At a press conference Monday, March 5, Aguirre said the city would pursue mediation before a judge if McMillin was unwilling to correct the mark-ups.
“It is our intent to thoroughly examine every aspect of this transaction,” he said.
While the letter was available for some media as early as last Friday, McMillin officials said they did not receive it until late Monday.
In a written statement Tuesday, March 6, McMillin criticized Aguirre for making false accusations and asked for a public apology.
“McMillin has always been in full compliance with its contracts with the city and the [Redevelopment] Agency, and intends to remain in full compliance,” read the statement.
Not one to give up the last word, Aguirre responded publicly shortly thereafter, saying the outside auditor reconfirmed his original claim. He then reasserted his intention to pursue mediation if McMillin does not pay up.
Should mediation fail to produce an agreement, Aguirre said he will consider legal action.