Chula Vista Mayor Embroiled in Rent Dispute

A Coronado real estate company owned by Chula Vista Mayor John McCann is locked in a court battle with the landlord of the company’s former headquarters, which alleges in a lawsuit that McCann’s company owes the landlord $650,000 in unpaid rent and fees. 

But McCann’s company says in a counter-suit that it is the landlord who should pay because years of neglect at the landlord’s office complex across the street from the historic Hotel Del Coronado caused mold, leaks and a sewage rupture that forced McCann’s company to break its lease and move out earlier this year. 

The landlord, Chicago real estate company Madison Desplaines LLC, sued McCann’s company in May, alleging that the company, Coronado Shores Co., abruptly moved out of its $13,283-per-month ground-floor office suite and changed the locks in February without paying several months’ worth of past-due rent and the remaining balance on a five-year lease. 

The suit says McCann’s company owes the landlord $650,000 in “rent and other charges due, together with accrued and accruing pre-judgment interest.” 

McCann countersued last month, alleging in a complaint twice as long as the original lawsuit that, in fact, it was the landlord who violated the lease by failing to maintain the building despite repeated complaints about leaks, mold and, late last year, a ruptured sewage pipe that “flooded [Coronado Shores Co.’s office] with urine and sewage, soaking the carpet and damaging cabinets [and] financial files.” 

McCann’s countersuit demands that Madison Desplaines pay at least $300,000 to compensate Coronado Shores Co. for damaged furniture and other property, lost business and money the company spent trying to keep its office habitable. 

McCann, through his lawyer, declined to comment on the lawsuit. 

Christina Denning, the lawyer representing Coronado Shores Co., said it was outrageous that Madison Desplaines was suing her client, given what she described as the landlord’s yearslong failure to maintain its building or respond to repeated requests for repairs. 

“Their employees couldn’t come to work,” Denning said of McCann’s company. “The smell was unbearable. [Myllissa McCann, who co-owns Coronado Shores Co. with John McCann and runs the company’s day-to-day operations,] terminated the lease on that basis, that it was uninhabitable. [Other tenants are] looking to find a space elsewhere because the place is a dump.” 

Cynthia Steltzer, a San Diego lawyer representing Madison Desplaines, did not return phone calls and an email seeking comment.  

A property manager at the building owned by Madison Desplaines declined to give her name or comment on the lawsuit or conditions at the building. 

Documents filed in conjunction with Madison Desplaines’ lawsuit show that in May 2022, McCann and his wife signed a five-year lease extension on a suite of offices at 1330 Orange Ave. in Coronado, a mixed-use, two-story office and restaurant complex steps away from the Hotel Del Coronado and the Coronado shoreline. 

At the time, a company called PREF Coronado Plaza LLC owned the building. The company had leased offices to Coronado Shores Co. since at least 2015, according to lease documents. 

McCann and his wife bought Coronado Shores Co. in 2017, taking over the high-end real estate and property management company from a previous family owner. The McCanns signed an initial lease extension at 1330 Orange Ave. after purchasing Coronado Shores Co. then a second extension in May 2022. 

The 2022 lease extension included a five-year rent schedule that started at $12,521 per month in 2023 and rose to $14,092 per month in 2027. 

A year after the McCanns signed the 2022 lease extension, Madison Desplaines bought 1330 Orange Ave. from PREF Coronado Plaza LLC. Property records show Madison Desplaines paid $40 million for the building, which Denning described as occupying a prime location that attracts daily pedestrian traffic from the Hotel Del Coronado. 

Denning said there were leaks and other maintenance issues in Coronado Shores Co.’s office before Madison Desplaines bought the building. But Denning said the building’s previous owner had responded to maintenance requests and the McCanns remained in the building because its location enabled them to work with nearby hotel guests who sought to rent longer-term accommodations in the city. 

“The foot traffic Coronado Shores Co. used to get was just prime,” Denning said. “That’s why they stuck it out for so long.” 

All of that changed when Madison Desplaines took over, Denning said. 

The McCanns’ lawsuit lists a series of maintenance problems in their office, including structural defects in the walls, leaks during rain, a clogged soda machine in a nearby office that sent water cascading onto the McCann’s floor, moldy carpets and the sewage rupture, which occurred five days before Christmas last year. 

The suit says Madison Desplaines failed to address any of those problems and did not respond to the ruptured sewage line for more than a month, forcing Coronado Shores Co. to vacate the office in February and rent a new headquarters space in another building a block away. 

“Coronado Shores Co. has suffered a business loss for sure because of the numerous events that weren’t properly handled,” Denning said. The company “is lucky they found a suitable place across the street.” 

Building records show that on Jan. 28, the city of Coronado issued Madison Desplaines a permit to “alter/repair/replace” one of the two suites Coronado Shores Co. had rented at 1330 Orange Ave. 

Four months later, the city issued another permit allowing Madison Desplaines to park a crane, lift or other equipment in the street alongside its building for construction work. 

Denning said the company was belatedly addressing issues it should have fixed years ago. 

“It’s shocking to me that [Madison Desplaines] is suing Coronado Shores Co. and not the other way around,” Denning said. “Myssie [McCann] has never had a problem paying rent. But she has had a problem with having a safe place to inhabit.” 

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