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Parties in Ash Street criminal probe negotiate over seized records

Prosecutors and lawyers for Cisterra Development and real estate broker Jason Hughes are working to resolve a dispute over whether materials seized during searches last fall are subject to attorney-client privilege.

The parties have agreed to a hearing before Superior Court Judge Kenneth So next month to assess their progress in determining which records and other communications can be turned over to investigators.

“On behalf of Jason Hughes and Hughes Marino, we are continuing to cooperate with the District Attorney’s Office to resolve any outstanding privilege issues,” said San Diego attorney Michael Attanasio, who represents Hughes.

“We will update the court on Sept. 7 as to whether we’ve resolved everything or require judicial review of certain privilege claims, but I’m optimistic the latter will not be necessary,” Attanasio said.

The Cisterra legal team did not respond to a request for comment Tuesday. Both Cisterra and Hughes have said they did nothing wrong and their leases with the city were good deals.

Last month, District Attorney Summer Stephen asked the judge to rule that the documents are not protected by attorney-client privilege. But lawyers for Cisterra and Hughes say much of the material is not subject to release.

A hearing that had been scheduled for Aug. 11 has been vacated while the parties continue to negotiate which records are protected.

The disputed material was seized last October, when the District Attorney’s Office executed multiple search warrants at Cisterra and Hughes Marino offices and at Hughes’ home in Rancho Santa Fe.

Agents investigating the city of San Diego’s 2016 lease of the former Sempra Energy headquarters at 101 Ash St. seized numerous records, computers and other material.

The 20-year lease-to-own deal proved problematic and expensive.

San Diego officials agreed to acquire the 19-story building “as-is” and did not perform an independent assessment of its condition. The property is unsafe to occupy due to asbestos and other issues.

The city agreed to pay $128 million over two decades for the building, which had been appraised at $67 million before former Mayor Kevin Faulconer recommended the lease.

Hughes made $9.4 million on that lease and a similar deal for the nearby Civic Center Plaza, after having previously acted as a volunteer real estate adviser to the mayor.

City Attorney Mara Elliott sued to void the two leases under the state’s anti-corruption laws. Mayor Todd Gloria and a majority of the City Council last month agreed to buy out the leases for $132 million in a partial settlement of the litigation months before trial.

The civil claims against Hughes were excluded from that agreement.

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