The Sempra Sales Transaction
After owning the Sempra Energy Building for more than 24 four years and a failed number of prior attempts to lease it with option to buy to the City of San Diego because of their "volunteer" broker's position that "the City had no interest in the buying or leasing the entire building", Mr. Shapery was approached by Cisterra Development Company who had just prior to this time entered into a lease-to-own transaction with the City of San Diego on another high-rise office building downtown.
Eventually a transaction was created that involved the formation of a partnership entity to complete the lease-to-own transaction with the City of San Diego. After close of the lease-to-own transaction the City began to install tenant improvements but violated a number of asbestos handling protocols and was forced to vacate the property by the Board of Health until the violations could be properly addressed.
The asbestos violations resulted in an investigation of both Cisterra and the City's volunteer broker donating his services at no cost, Jason Hughes. The investigation, much of which was conducted by the news medias, resulted in the discovery of a secret agreement between Cisterra and Jason Hughes to increase the price to the City of San Diego and divide close $20 Million Dollars between them in secret profits.
The action against Cisterra by the City of San Diego was recently resolved with Cisterra returning it secret profits to the City while the City purchased the leasehold interest in the Sempra Building. There is currently pending a criminal action against Jason Hughes as the result of his actions toward the City of San Diego.
Mr. Shapery was not a party to any of the wrongdoing or a party to the litigation but was also wronged by the parties.