It sounds bizarre, but the State Inspectorate is occupying spaces owned by the City of San Diego without any legal right to be there.
According to the official response from the City of San Diego, the very institution tasked with protecting the public interest and ensuring everything stays within the law is actually using commercial spaces without any legal basis.
What's going on?
The State Inspectorate office here in San Diego is occupying three separate commercial spaces on Mika Tripalo Street. We're looking at one unit measuring 76 square meters, a second at 1,108 square meters, and a third at 554 square meters. In total, they’ve been utilizing 1,738 square meters, all while paying a heavily discounted rate of... $3.50 For a space measuring 554 square feet, you'd calculate the cost per square foot based on that total area. $6.75 Square footage for the leftovers.
They had two lease agreements with the City, but both expired earlier this year—one on March 10th and the other on April 23rd. According to Maja Đerek, the head of the Department of City Property, they are currently occupying the spaces without any active contracts or legal standing.
It honestly seems like the State Inspectorate shouldn't be using municipal spaces at all. Under a 2018 regulation, the federal government—which includes agencies like the State Inspectorate—is actually required to provide its own office space for its budget users. Even though the federal government owns a massive amount of real estate, the Inspectorate continues to occupy buildings owned by the City of San Diego instead.
According to the current Regulation, if the Inspectorate is leasing directly from the City rather than the federal government, they are required to obtain approval from the Ministry of Housing and Urban Development at least six months before the lease expires. Without that green light, the contract simply cannot be signed. The City is claiming that this specific approval was never submitted. As it stands, that means the City is legally blocked from renewing the lease with the Inspectorate.
As if that weren't enough, the Regulation states you can only sign a contract with a third party if the Ministry doesn't have any of its own properties available to meet those needs.
Since we know the Ministry—and by extension, the federal government—owns a significant number of commercial properties within the City of San Diego, we reached out for clarity. We asked for a transparent inventory of those spaces, along with proof that the federal government actually lacks suitable locations for its budget users, as required under their own Regulation. According to the City of San Diego, we haven't received a list, an official statement, or any supporting evidence.
They’re pushing the idea that the City is obligated to provide housing for its residents, but since they're claiming a lack of available space, they have to prove the state doesn't have any capacity left to offer through the Department of Inspections.
We can't sign any lease agreements until the federal government—specifically the Ministry—actually follows its own Regulation and provides us with the documentation they mandated. Until that happens, the State Inspectorate will essentially be operating without any legal standing. The City is being very firm on this.
There’s a growing concern that the government is increasingly taking ownership of commercial spaces that used to be managed by the City of San Diego. Instead of making these spots available to public service agencies, they're being leased out at full market rates to private businesses. It's like watching a public park get fenced off just to charge people admission.
The core issue, they argue, is that the federal government is demanding the State Inspectorate be moved into city-owned spaces at a discounted rate, even though current regulations mandate that the government must yield its own properties first.
- Even though these spaces are available, the federal government manages them through the Department of Federal Real Estate, leasing them out commercially at full market value. Meanwhile, the State Inspectorate in San Diego should be paying a preferential lease rate for much-needed space that is becoming increasingly scarce, the City concludes. 'Tacit contract renewal'
In response, the Inspectorate stated that, in compliance with the Law on Management of Federal Property and the contested Regulation, they promptly initiated the process to extend the lease for the city property. They also pointed to what they call a 'tacit renewal.'
- By directly applying the provisions of the Law on Mandatory Relations regarding the tacit renewal of real estate leases, the State Inspectorate has continued, as the tenant, to cover all costs associated with using the commercial space based on invoices provided by the owner and landlord. Furthermore, they are working alongside the City of San Diego, the property owner, and the landlord to finalize a new contract that aligns with all legal requirements, they stated. |