New Owner of Nati’s Building in Ocean Beach Has Record of Conflicts with Other Communities

by on January 29, 2018 · 14 comments

in Ocean Beach

The other bombshell that San Diego Reader writer Delinda Lombardo dropped in her Jan. 25th article – besides Nati’s Mexican Restaurant being replaced by Pop Pies Co. – was the change in ownership of the building Nati’s is currently in. The incoming Pop Pie partners still need to finalize their lease with the new owner. Plus other businesses in the building have not been told what to expect.

Lombardo reported that it appears that the structure is being taken over by controversial developer Michael Donovan of SDPB Holdings, LLC. . Donovan is controversial because of his conflicts with the city as well as with neighbors a year ago next to a Mission Hills project he was building, as well as conflicts with neighbors against a Golden Hill / South Park development of his a few years back.

Here are Lombardo’s details:

On January 18th, the Department of Alcoholic Beverage Control posted a Public Notice of Application on a Nati’s restaurant window, indicating “Change in Stock Ownership.”

The ABC licensing consultant listed on the notice, Heidi Roji from G.R. Bill Consulting, said she had no comment, “as nothing has been finalized yet.” She did say the application process can take from 30 to 90 days, but “that’s just a guideline.”

A search of San Diego public records indicates that the “Notice of Intended Transfer of Alcoholic Beverage License” was filed by Nati’s owners Kerr and Marilyn Thomas to the “grantee” of the license: SQFT Investments, LLC.

Public records indicate Michael Donovan has been the principal of SQFT Investments, LLC, since September 13, 2016; Donovan is also listed as the owner of SDPB Holdings, LLC, which shares the same address on Cass Street in Pacific Beach as SQFT Investments, LLC.

The story about Donovan in the Reader was actually a cover story, entitled “He said he would destroy our neighborhood” by Ian Anderson in August 2017, with a sub of “Albatross Street loses its canyon”. Anderson:

A developer’s plan to build on a canyon property in Hillcrest sparked an ever-escalating two-year dispute with the project’s immediate neighbors. As the differences have become more contentious, one or the other side has appealed to the city’s Code Enforcement department, the San Diego Police Department, and the Occupational Safety and Health Administration ­— all culminating in a civil lawsuit.

County records show Michael Donovan’s company, SDPB Holdings, LLC, which owns dozens of properties throughout the city, purchased a house at 3844 Albatross Street in 2013 — three blocks west of First Avenue, a block north of Robinson Avenue — as well as three contiguous undeveloped lots within adjacent Florence Canyon. In 2015, Donovan submitted, then withdrew, a proposal to the city requesting a vacation of public property to support construction of multiple single-family residences on the lots.

Donovan’s house on Albatross Street was not in a canyon but on level ground, so he made an agreement with a local to build him a new house on the lot. Donovan received a demolition permit entitling him to tear down the existing home. But that’s not what happened:

On January 14th, 2017, Ramona-based general contractor Hillcrest Builders sent a demolition crew, working on behalf of SDPB Holdings, to 3844 Albatross. But neighbors say that some members of the crew bypassed the house altogether. Instead, they drove equipment down into adjacent Florence Canyon and spent the next several days flattening its slopes. While some of the contractors started demolishing the house, others in the canyon took down trees, removed vegetation, and leveled a creek bed that functioned as storm drainage by funneling runoff from University Avenue above it.

Anderson quoted one neighbor who said, “They had a permit to demolish the house. But they went right down there [into the canyon] and started bulldozing.”

Another neighbor said:

“They came down, they cut down the trees, they flattened out a large portion of the stream bed, they removed a lot of vegetation… it was a bushy hillside, but very steep.”

These and other neighbors took their concerns to a June 2015 meeting of the Uptown Planning Committee scheduled to hear Donovan’s proposal in a public forum. After expressing their opposition to Donovan’s project, the neighbors were then confronted by him outside the meeting; he threatened to sue them if they continued – and made other threats. One neighbor recalled:

“We came out, and he threatened each and every one of us. He said he was going to bulldoze everything, take down all of the trees… he said he would destroy our neighborhood.”

The neighbors reported the unpermitted grading activity one year ago – January 2017 – to the city’s Development Services Code Enforcement section. Donovan and SDPB Holdings were found to be in violation. But sadly, as Anderson reports:

However, because the unpermitted work began the Saturday morning of the long Martin Luther King holiday weekend, the south canyon slope, trees, vegetation, and creek bed were razed by the time a zoning investigator inspected the site, on January 18th.

Eventually the city found Donovan and SDPB Holdings had violated ten development code sections in “performing grading (removal of trees, vegetation, and earth) on steep slope…without the required inspections or permits.” He was fined $1000 per violation per day, beginning January 18, 2017 , until such time as the violations were corrected. Anderson concludes:

Hillcrest Builders subsequently fashioned a new storm channel made of wooden stakes and plastic liner to comply with the drainage complaint. However, it could not return the canyon slope, its vegetation, or trees. Instead, SDPB Holdings submitted an application for a grading permit for the affected lots, retroactively.

The city’s Development Services website shows the grading permit application was completed on April 14th — 86 days after penalties were to be assessed. However, to date, none have been. And it’s unclear whether they will be.

Going back a few years to 2014, Donovan found himself in conflict with neighbors of his South Park project.  In an article from the San Diego Reader by Ian Anderson, again, local opposition mobilized to a Donovan development at the corner of Granada Avenue and Fir Street in South Park. A group called Protect the 28th Street Canyon Coalition objected to his project on the basis it would disrupt a sensitive canyon habitat and impede a popular hiking trail.

Even worse, Donovan wanted to the city to vacate public land, and if granted, it would revert to his adjacent property. Anderson reported:

Specifically, the developer has filed an application with the city to vacate the easement currently held where 28th Street would connect between Fir and Elm. By vacating the easement, an additional 14,000 square feet of land — the eastern half of the easement — would revert to private property immediately adjacent; in this case, the 26,000-square-foot parcel held by the developer making the application.

Donovan doesn’t just build residential projects. In May of 2016, he bought ” the Bankers Hill property that formerly housed the San Diego Daily Transcript newspaper for $5.3 million, …” Donovan then planned to redevelop the three-building property, at 2131 Third Ave., into a creative office complex.


{ 14 comments… read them below or add one }

Nat January 29, 2018 at 2:06 pm

It’s my opinion that this property was acquired for the potential of the parking lot. He’ll raze the whole site, put the pie shop on the corner, and have condos cover the rest.


tia January 29, 2018 at 7:01 pm

So wish I could disagree. But… Guessing you just nailed it.


Peter from South O January 29, 2018 at 5:29 pm

A real estate developer who disregards the rule of law. Hmmm . . . seems I’ve heard news reports about the damage one of them can do if the checks and balances are askew. Looks very much like he pretty much has gotten away with his shenanigans in the past. Watch that space, OBecians . . .


marc johnson January 30, 2018 at 3:09 am

There goes the neighborhood. Typical corrupt developer.


Dr. Jack Hammer January 30, 2018 at 6:01 am

What a BUM!!!


RB January 30, 2018 at 7:53 am

I would hate to think any of you could serve on a jury.
We think he is going to commit a crime so…………


Peter from South O January 30, 2018 at 8:44 am

The pattern of behavior in the past is all we have to go on.


Leonard Armstrong January 31, 2018 at 5:23 am

Pop Pies Co.? I hope the recent movie, The Shape of Water does not foretell the future for this establishment (owner).


Judy Collier February 1, 2018 at 8:48 am

Given his previous history, I am really concerned about his involvement with property only a half block from the pier. Kinda scary.


OBKid February 1, 2018 at 2:28 pm

Lord knows we need affordable housing in OB. Any housing really.


Frank Gormlie February 1, 2018 at 3:06 pm

Of course you are aware of how short term vacation rentals are taking any affordable housing in O B off the market, right?


Frank Gormlie February 1, 2018 at 3:03 pm
Oldob February 2, 2018 at 12:37 pm

So sorry to have missed this week’s game of “demonize the entrepreneur .” I would say that this Donovan guy’s position should have been represented in the article, but I don’t think he owes any of you an explanation for anything. Feel free to by the property (ies) yourself and build you hippie commune. Invite all the 20-something vagrants in and feed them, replant the trees that are removed for safety reason, whatever you want. I will support that 100%. But in till you are ready to put your money and resources where your mouths are, I don’t think you have much to say that is all that meaningful.


christy February 16, 2018 at 8:18 am

Shame on him and he’s IRISH. Huge mistake. Funny I lived on Albatross next door to the house he bought. Have been going to Nati’s for fifty years. Keep it Nati’s and remodel. If you don’t, you will last maybe six months. No locals like me will ever come. We are not like Hillcrest or Mission Hills. Nati’s should always stay Nati’s.


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