Summary — what happened
A development impact fee (DIF) is the fee a developer pays to cover the public cost of growth its project creates — parks, fire stations, roads, libraries — collected by the city into community-specific accounts and legally required to be spent on infrastructure where the growth lands. Between 2014 and 2025, the City of San Diego waived, credited, or exempted an estimated $83–100M in DIF. Inferred: several of the largest beneficiaries are, in public records, proximate to the mayor's campaign and appointment network — a synthesis of public filings, not an asserted causal pattern and not a legal finding. In January 2023 the city agreed to pay $22.9M for a 23,045-square-foot East Village parcel — $9.1M in cash and $13.8M as a credit against future development impact fees, an instrument the city had not used before, handed to Bosa Development, which was already building a 617-unit luxury tower next door. GJ-Bosa-UT DB The block Bosa built on came from Zephyr Investors LLC, whose co-CEO Brad Termini is Gloria's largest individual campaign donor ($100,000+): Zephyr bought the block for $21.1M in 2014 and sold it to Bosa for $33M in December 2015. DB Bosa-buys-UT
Inferred: the other large beneficiaries share the same combination of features in the public record — a fee waiver or credit alongside a documented campaign, appointment, or family tie to the administration; this is a synthesis of separate filings, not an asserted recurring scheme and not a legal finding. The 101 Ash Street conversion — $24.5–32.7M in developer fees and DIF credits, a 60-year ground lease, and a 55-year seller's note at 4% with no payments for 15 years, awarded with no public RFP — went to Kelly Moden, the Gloria-appointed Planning Commission chair. OB-Ash DB The Complete Communities program waived DIF for residential units under 500 square feet ($17M+ documented via a public-records request); ADU DIF exemptions citywide totaled an estimated $26–31M, exploited at industrial scale by one builder (92+ units) before Council Member Kent Lee's pushback led to a rollback. NFABSD DB An estimated $1.5–4.5M in Complete Communities savings is tied to Hub & Spoke Communities, owned by the husband of Gloria's campaign manager (figure unconfirmed, requires a public-records request). DB
Separately, the 2024–2025 San Diego County Grand Jury report "Never Been Challenged" found the city holding $178.8M in collected DIF beyond the five-year state expenditure limit (never voluntarily refunded), $720,159.87 improperly transferred from 22 community lockbox accounts to fund Build Better SD, administrative fees charged at rates up to 18% (against a 5–8% guideline), $285.7M collected FY2021–FY2024 under Gloria, and annual reports filed late every year. GJ-Report DB The campaign-finance, permit, DIF-account, and corporate-ownership records that connect these facts sit in separate systems maintained by separate agencies; no public system links them.
Timeline
Zephyr buys the block. Zephyr Investors LLC acquires a full downtown San Diego city block for $21.1M.
Faulconer-era behested donations. Under Republican Mayor Kevin Faulconer (2014–2020), Bosa Development is named among companies "with business interests pending before the city" that made behested-payment donations solicited by the mayor.
Zephyr sells to Bosa for $33M. Zephyr sells the block to Bosa Development for $33M — a $12M profit ~18 months after the $21.1M acquisition. Co-CEO Brad Termini describes an "ongoing relationship with Bosa Development" and calls Nat Bosa "the ideal person to continue the project." (Termini — Gloria's largest individual campaign donor, $100,000+.)
"The Block" becomes "Diega.". The site, originally "The Block" (approved for a 41-story and a 21-story tower, 498 units), is rebranded "Diega" by Bosa and expanded to 617 luxury residences.
The $13.8M DIF credit. The city proposes paying $22.9M for a 23,045-square-foot East Village parcel (the future North Central Square Park) — $9.1M in cash plus $13.8M as a credit against future development impact fees, an instrument the city had not previously used to buy land. The credit means Bosa pays zero DIF on current and future downtown projects until the balance is exhausted. The land sits in the block bounded by 7th Avenue, 8th Avenue, Broadway, and C Street, adjacent to Bosa's Diega tower then under construction. A council committee voted to send the deal to the full City Council without recommending approval.
The 101 Ash deal. The City Council hands the long-troubled 101 Ash Street building to Kelly Moden (Planning Commission chair, Gloria-appointed; CEO of cREate Development / MRK Partners) in a deal carrying $24.5–32.7M in developer fees and DIF credits, a 60-year ground lease, and a seller's note for the $45.6M building value at 4% simple interest over 55 years with no payments for the first 15 years. No public RFP was issued. Moden seeks $32.2M in historic tax credits for a building not designated historic.
The Grand Jury report. The 2024–2025 San Diego County Grand Jury (impaneled by a Superior Court judge, staffed by citizens) publishes "Never Been Challenged — City of San Diego Development Impact Fee Program Redux." Findings: the city holds $178.8M ($178,754,366) in DIF beyond the five-year state expenditure limit, which under Walker v. City of San Clemente and Hamilton v. City of Palo Alto must be spent on qualifying projects or refunded (the city has never voluntarily refunded DIF); $720,159.87 was improperly transferred from 22 community lockbox accounts to fund Build Better SD; administrative fees were charged at rates up to 18% (against a 5–8% guideline). The report issues nine findings and fourteen recommendations, including a mandatory independent audit at city expense.
Ocean Beach's exposure. The Ocean Beach community planning board's 14 capital-improvement requests face the potential loss of $20M in DIF funds under the Grand Jury's findings — roughly half of the neighborhood's big-ticket requests. Build Better SD permits DIF collected in one neighborhood to be redirected to "communities of concern"; Ocean Beach does not qualify.
The city's response. The City of San Diego files its formal response to the Grand Jury report. It does not commit to refunding the $178.8M and does not deny the figure; it states "Beginning with FY2023 report, City enhanced five-year findings reporting" and acknowledges it "failed to monitor total administrative fees due to lack of accounting mechanism."
101 Ash subsidies stack. The 101 Ash developer is awarded $63.8M in bonds and $82.2M in tax credits; with tax-exempt bonds and tax-credit equity included, the total public subsidy package exceeds $200M (reported at $203.2M). [101Ash-Subsidies]
The DIF revenue foregone (itemized)
Every line is a DIF waiver, credit, or exemption documented under the Gloria administration. Confidence levels are as recorded in the MathPolitics database.
| Line item | Amount | Confidence | Source |
|---|---|---|---|
| Bosa Development — DIF credit (North Central Square Park) | $13.8M | 0.85 (proven) | GJ-Bosa-UT DB |
| Moden / MRK Partners — 101 Ash developer fees + DIF | $24.5–32.7M | 0.78 (strong circumstantial) | OB-Ash DB |
| Complete Communities waivers (policy-level) | $17M+ | 0.80 (PRR-confirmed) | NFABSD DB |
| ADU DIF exemptions citywide | $26–31M | 0.75 (strong circumstantial) | DB |
| Hub & Spoke Communities | est. $1.5–4.5M | 0.65 (suggestive) | DB |
| Total | ~$83–100M | 0.78 composite |
Separately: $178.8M in collected DIF held beyond the legal limit and never refunded (0.93 confidence, Grand Jury finding). GJ-Report DB
The connected beneficiaries
The recurring fact across the largest waivers is proximity to Gloria's political and campaign network. Three legally distinct relationships — campaign donation, business partnership, and fee waiver — sit in three different filing systems.
- Bosa Development — $13.8M DIF credit. Builds the 617-unit Diega tower on a block sold to it by Zephyr/Termini, Gloria's largest individual donor.
Inferred connectionthe campaign donation, the $33M land sale, and the $13.8M fee credit run in one chain; the report does not claim Gloria directed the credit to benefit Termini, and the three transactions are not asserted to be causally linked — only that all three are public records and the connections between them were not. DB GJ-Bosa-UT Bosa-buys-UT - Moden / MRK Partners (101 Ash) — $24.5–32.7M. Buyer is Kelly Moden, the Gloria-appointed Planning Commission chair, who helps oversee development policy.
Inferredthe deal terms (no public RFP, below-market note, tax credits sought for a non-historic building) are characterized as unusually favorable; this is a characterization of the financials, not a legal finding. OB-Ash DB - Hub & Spoke Communities — est. $1.5–4.5M. Sole owner is Alexander Alemany, husband of Gloria's campaign manager Sarah Moga Alemany, who divested her partnership interest (a $10K–$100K interest) in September 2020, approximately three months before Gloria took office in December 2020. The DIF-savings figure is unconfirmed and requires a public-records request.
InferredHub & Spoke builds units sized exactly for the Complete Communities waiver; the report notes the policy was championed by the administration the campaign manager helped elect, and that the divestiture was not required by any rule. Not a legal finding. DB - SDRE Homebuilders — ADU exemptions. Led by Christian Spicer; built 92+ ADU units capturing fee waivers at volume under the ADU bonus program before Council Member Kent Lee's pushback led to a rollback. DB
The bipartisan pattern
Bosa Development's giving tracks whoever controls the permits, not party.
| Mayor | Party | Tenure | Bosa relationship | City business |
|---|---|---|---|---|
| Kevin Faulconer | Republican | 2014–2020 | Donated at the mayor's behest (behested payments) | Pending before the city |
| Todd Gloria | Democrat | 2020–present | Partner Zephyr/Termini gave $100K+ to Gloria; Bosa received the $13.8M DIF credit | Pending before the city |
Inferred: the report frames this as a developer adapting to the party in power, not as evidence of a quid pro quo under either administration; no legal finding. Faulconer-UT GJ-Bosa-UT DB
Key players (callback index)
- Todd Gloria — Mayor of San Diego (2020–present). His administration waived/credited an estimated $83–100M in DIF GJ-Bosa-UT OB-Ash NFABSD DB; the Grand Jury found systemic DIF mismanagement under his tenure ($285.7M collected, $178.8M held beyond the legal limit, reports late every year). GJ-Report DB
- Brad Termini — Co-CEO of Zephyr Investors LLC; Gloria's largest individual campaign donor ($100,000+). Sold the $33M block to Bosa and cited an "ongoing relationship" with it. Bosa-buys-UT DB
- Nat Bosa — President of Bosa Development; Vancouver-based luxury condo builder; recipient of the $13.8M DIF credit. GJ-Bosa-UT DB
- Kelly Moden — Planning Commission chair (Gloria-appointed); 101 Ash buyer via cREate / MRK Partners ($24.5–32.7M in fees/credits, no public RFP). OB-Ash OB-Ash-Council DB
- Sarah Moga Alemany — Gloria's campaign manager; former Hub & Spoke Communities partner; divested ~3 months before Gloria took office. DB
- Alexander Alemany — Moga Alemany's husband; sole owner of Hub & Spoke Communities after divestiture.
- Christian Spicer — SDRE Homebuilders founder; built 92+ ADU units under the DIF exemption at scale. DB
- Kent Lee — Council member who called out the SDRE ADU exploitation before the program rollback.
- Kevin Faulconer — Former Republican mayor (2014–2020); Bosa donated at his behest while having business pending, establishing the bipartisan pattern. Faulconer-UT DB
Caveats
- The fee waivers, credits, and exemptions described here are not alleged to be illegal. The Grand Jury characterizes the holding of $178.8M in collected DIF beyond the five-year limit as a violation of state law (per Walker and Hamilton); that is a Grand Jury finding, not a court judgment, and the city's response neither confirms nor commits to a refund.
- "Patronage" and "connected beneficiaries" describe the proximity of recipients to Gloria's network as documented in public records. The report does not claim Gloria directed any waiver to benefit a donor, and does not assert the donation/land-sale/fee-credit chain is causally linked.
- The $83–100M total is a compiled range across five developers at confidence levels from 0.65 to 0.85; it aggregates proven, strong-circumstantial, and suggestive components. The 101 Ash, ADU, and Hub & Spoke figures are estimates.
- Per-developer DIF waiver and credit amounts are not published by the city broken out by recipient. The Hub & Spoke savings figure (0.65 confidence) is unconfirmed and requires a California Public Records Act request.
- Bosa Development's direct campaign contributions to Gloria could not be confirmed via the Cal-Access electronic filing system; the documented campaign link runs through Zephyr/Termini.
- The Moden deal terms are characterized as favorable based on analyst review (Lisa Mortensen, via OB Rag); no conflict-of-interest finding has been issued on the appointment or the deal.
Reference key
- GJ-Bosa-UT San Diego Union-Tribune, "San Diego proposing to pay $23M in cash and DIF credits for Bosa downtown park," 2023-01-26 (evidence E-546). https://www.sandiegouniontribune.com/business/story/2023-01-26/san-diego-proposing-to-pay-23m-in-cash-and-credits-for-this-future-downtown-park/
- Bosa-buys-UT San Diego Union-Tribune, "Bosa buys 2 more condo sites downtown" ($33M Zephyr block purchase), 2015-12-10 (evidence E-554). https://www.sandiegouniontribune.com/2015/12/10/bosa-buys-2-more-condo-sites-downtown/
- Diega Bosa Development, Diega project page (617-unit luxury high-rise on the former Zephyr "The Block" site) (evidence E-557). https://bosadevelopment.com/project/diega-2/
- GJ-Report San Diego County Grand Jury, "Never Been Challenged — City of San Diego Development Impact Fee Program Redux," 2024–2025 (evidence E-549). https://www.sandiegocounty.gov/content/dam/sdc/grandjury/reports/2024-2025/d-i-f/City%20D.I.F-%20Final%20Approved%20Version.pdf
- GJ-UT San Diego Union-Tribune, "Watchdog panel says San Diego chronically breaks the law on developer impact fees," 2025-07-31 (evidence E-552). https://www.sandiegouniontribune.com/2025/07/31/the-last-of-the-red-flags-watchdog-panel-says-san-diego-chronically-breaks-the-law-on-developer-impact-fees/
- City-Response City of San Diego, "Proposed Response to Grand Jury DIF Report — Never Been Challenged," 2025-10 (evidence E-550). https://www.sandiego.gov/sites/default/files/2025-10/23-33-proposed-response-to-grand-jury-report-never-been-challenged-city-of-san-diego-development-impact-fee-program-redux.pdf
- OB-Ash OB Rag, "More Red Flags on 101 Ash Street" (developer fee, waived impact fees, deal structure), 2025-07-17 (evidence E-527). https://obrag.org/2025/07/more-red-flags-on-101-ash-street/
- OB-Ash-Council OB Rag, "Council Hands Over Ash Street Tower to Kelly Moden, Chair of the Planning Commission" (60-year ground lease, no public RFP), 2025-07-29 (evidence E-1035). https://obrag.org/2025/07/city-council-hands-over-ash-street-tower-to-development-team-of-kelly-moden-chair-of-the-planning-commission-no-conflict-of-interest-there-oh-no/comment-page-1/
- 101Ash-Subsidies San Diego Union-Tribune, "101 Ash St. developer awarded federal subsidies for low-income housing project" ($63.8M bonds, $82.2M tax credits; total subsidy $203.2M), 2025-12-19 (evidence E-1057). https://www.sandiegouniontribune.com/2025/12/19/101-ash-st-developer-awarded-federal-subsidies-for-low-income-housing-project/
- NFABSD Neighbors for a Better San Diego, Complete Communities ($17M in DIF waivers documented; interactive CCHS project map) (evidence E-1075). https://www.neighborsforabettersandiego.org/complete-communities
- OB-Ocean-Beach OB Rag, "Grand Jury Report Casts Doubt on $20 Million in Ocean Beach Development Fees," 2025-08-15 (evidence E-551). https://obrag.org/2025/08/grand-jury-report-casts-doubt-on-20-million-in-ocean-beach-development-fees/comment-page-1/
- Faulconer-UT San Diego Union-Tribune, "Faulconer raised $500K for charity that supports/promotes Mayor's Office" (Bosa among donors), 2017-02-24 (evidence E-555). https://www.sandiegouniontribune.com/2017/02/24/faulconer-raised-500000-for-charity-that-supports-promotes-mayors-office/
- DB MathPolitics database connection/evidence IDs as cited in the full report: connections C-2883 (Bosa $13.8M DIF credit), C-2884 (Bosa–Zephyr builder relationship), C-2885 (Zephyr–Bosa $33M sale), C-2886 (Gloria–Hub & Spoke policy benefit, 0.65 confidence), C-2887 (Bosa–Faulconer behested), C-2888 (Gloria DIF mismanagement, $178,754,366, 0.93 confidence), C-2889 (Nat Bosa ownership), C-2890 (Gloria–SDRE ADU exemptions); evidence E-527, E-546, E-549, E-550, E-551, E-552, E-554, E-555, E-557, E-1035, E-1057, E-1075. → view in evidence search
Report #13 · The Giveaway (Part 1) · condensed AI fact sheet. Chronological; every claim cited; inferences flagged. Source: full report reports/series-4-the-giveaway/01-the-fee-that-disappeared.md.
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