Jason Hughes, broker in 101 Ash St. deal, wins bid to stop his license from being revoked

A Superior Court judge has blocked the California Department of Real Estate from revoking the license of the broker who advised San Diego city officials to lease a downtown high-rise, then pocketed millions from the deal.

Real estate adviser Jason Hughes won a stay of that planned penalty at a hearing Thursday, after state regulators upheld an earlier decision that he had acted improperly when he recommended the city lease the former Sempra Energy headquarters at 101 Ash St.

Judge Carolyn M. Caietti said Hughes had successfully completed probation, paid back millions of dollars to the city and stayed out of trouble since he pleaded guilty to a misdemeanor conflict of interest charge last year. The charge was dismissed earlier this month.

“This is an exigent circumstance,” she said. “I think it’s important to maintain the status quo at this point. I don’t believe that the public interest will suffer by continuing the stay (of) the license being taken.”

Hughes sued the state Department of Real Estate and its commissioner earlier this week, after regulators said his license would be revoked effective at noon Friday.

The decision means Hughes will be permitted to keep his license while his appeal to the Superior Court moves forward.

Deputy Attorney General Andrea Schoor-West urged the judge to uphold the license revocation, saying Hughes continues to minimize his role in what has become one of the biggest political scandals in San Diego history.

“A stay is absolutely against the public interest,” Schoor-West argued in court. “To this day he failed to accept responsibility for his actions.”

Even the request to block the revocation downplayed Hughes’ role in the Ash Street lease, she added.

“His ex parte application is replete with attempts to impeach his conviction,” the state attorney said. “His continued claims that he did nothing wrong and was scapegoated are exactly what led the commissioner to conclude that he was not rehabilitated.”

Attorneys for Hughes said in a statement that the revocation would not affect business operations at Hughes Marino, the real estate consultancy Hughes co-founded more than a decade ago.

“Mr. Hughes continues to act in a senior leadership role overseeing the firm’s 11 offices across the country as it continues to expand with the opening of four new offices,” they wrote. “The Hughes Marino real estate license is not in Mr. Hughes’ name.”

According to his lawyers, Hughes is seeking to preserve his license in the interest of justice.

“The appeal is based on principle and fairness and Mr. Hughes’ belief that this is an unprecedented and grossly unfair decision against him,” the statement said.

State regulators sought to revoke Hughes’ broker’s license after he admitted collecting $9.4 million in fees while advising former Mayor Kevin Faulconer to agree to long-term leases for the Ash Street property and another nearby high-rise.

Hughes, the high-profile Hughes Marino founder, paid a $400 fine and served one year of summary probation after pleading guilty in March 2023. He also repaid the city the money he received from the two deals.

Months later, the Department of Real Estate filed an accusation against him, saying he violated state regulations by representing the city and the building’s landlord in the same transaction.

He challenged the decision and testified for the first time publicly in August, telling an administrative law judge that he had done nothing wrong. He testified that he told six San Diego officials that he expected to be paid for his work on the Ash Street and Civic Center Plaza leases.

“They searched my granddaughter’s playhouse,” Hughes said in a cracking voice as he dabbed his eyes with tissue during his testimony. “This whole thing has just been very, very hard on the whole family.”

The judge conducting the regulatory proceeding ruled late last year that Hughes should not lose his license but should instead pay $4,000 in costs .

But the department chief overruled that decision and imposed a license revocation that would become effective on Friday. That’s the order Hughes sought to delay by seeking a ruling from the Superior Court.

Hughes was one of several key figures in the Ash Street scandal, helping the city negotiate 20-year lease-to-own deals for 101 Ash St. and the Civic Center Plaza in 2016 and 2015, respectively.

The Civic Center Plaza has served as city offices for decades, but the former Sempra building required extensive renovations. The deal Hughes helped negotiate was “as-is,” and the property proved to be uninhabitable due to asbestos, mechanical and other issues.

Years later, amid a flurry of litigation filed over the unusable property that was still costing the city $18,000 a day, Hughes acknowledged he had been paid $4.4 million for his help on the Ash Street lease and just over $5 million for his Civic Center Plaza work.

The Hughes legal team insisted the broker acted properly.

“As Mr. Hughes has adamantly maintained all along, he did nothing wrong and acted transparently and in good faith to support the City of San Diego during a time of significant uncertainty and urgent need,” his lawyers said.

Hughes was the only person charged after a two-year criminal investigation by District Attorney Summer Stephen.

The county prosecutor said last year that her case had been undermined by Mayor Todd Gloria’s decision — with the approval of a majority of the City Council — to buy out the lease for 100 cents on the dollar.

The 101 Ash St. office tower remains vacant to this day, despite public spending of more than $200 million. A plan to remake the building into hundreds of affordable housing units fell apart earlier this year.

Hughes could win a reversal of his license revocation altogether should his pending appeal succeed. The matter was scheduled for a status conference Aug. 16.