A Wealthy Family's 100-Year-Old Company Is Blocking a Permanent … – Voice of San Diego

Voice of San Diego
Unveiling the Unseen
San Diego has rewarded family-owned H.G. Fenton Company handsomely over the past 117 years. Recently, Fenton had an opportunity to return the generosity.
Henry G. Fenton, the patriarch, began his working life as a poor, seven-year-old ranch hand in the San Pasqual Valley. He amassed a fortune by taking on large contracts for public improvements, related to streets, jetties and even the Tijuana Racetrack. Fenton bought many thousands of acres of land and, after his death, the company became a powerhouse in Southern California development. 
Now, in the midst of a dire homeless crisis, city leaders came to Fenton looking for a little help. They needed Fenton’s seal of approval to buy a motel to permanently house homeless people. Fenton not only declined. Company leaders threatened to fight the project with the full weight of their company, a lawyer for the San Diego Housing Commission said.
Here’s how the story goes: Mayor Todd Gloria and other city leaders have recently been trying to buy up extended-stay motels with money from a state program called Homekey. The motel rooms will be converted to permanent residences for homeless people.
They had their eyes on an Extended Stay America with 140 rooms on Mission Valley Road – right in the epicenter of Fenton-owned properties. 
The area is called Mission Valley Heights and it is part of the historic “backbone” of Fenton’s land empire, according to a 1987 Union-Tribune article. The land was once quarries and ranches, but Fenton developed it into commercial property. 
In the 1990’s, Fenton created a covenant for Mission Valley Heights – binding in the way the rules of a homeowner’s association might be – restricting future development. The covenant banned subsidized housing. 
The covenant, or agreement, can only be changed with Fenton’s approval and a vote by 51 percent of the property owners. Since Fenton still owns more than 51 percent of the properties, it is the sole decider on covenant matters. 
City leaders asked Fenton “on multiple occasions” if it might consider changing the covenant, according to Dave Rolland, a spokesman for the mayor. 
Walter Spath, a lawyer for the Housing Commission, said Fenton unequivocally declined.
“The response was, ‘Absolutely not and we’re gonna do whatever we can to stop it,’” said Spath. “They have deep pockets. And we have every reason to believe they were not bluffing.”
Company representatives declined to comment on this story. Henry Hunte II, a fourth-generation Fenton heir, did not return a voice message. 
The deadline to secure properties with Homekey money is weeks away. The city still has its eyes on two more properties. But, no matter how many they secure, Fenton’s denial will have cost the city beds in its ongoing struggle to alleviate the homeless crisis playing out on city’s streets.
A new and untested state law was designed specifically to stop companies like Fenton from using restrictive covenants to block subsidized housing projects.
Restrictive covenants, the law notes, have “historically been used to perpetuate discrimination.” The law allows property owners to overturn any covenant that prohibits subsidized housing.
It’s also, according to its text, incredibly easy to use.
Any property owner that wants a qualifying covenant gone need only file paperwork with the County Recorder that modifies the covenant. It must then be approved by a county lawyer.
But it’s not really that simple, according to Spath, the Housing Commission lawyer.
First off, Spath thinks the law is “constitutionally suspect.”
“As a legal matter, [the covenant] is considered a private contract,” Spath said. “The thing that jumped out to me is the contract clause of the Constitution. The government can’t interfere in a private contract.”
But aren’t contracts that don’t comply with the law not binding, I asked Spath.
Yes, that’s true, he said. Race-based provisions, for instance, have definitively been stricken down by courts. Spath wasn’t so sure the same would happen in this case.
“You just go provide a one-pager to the county and [the party] doesn’t even get a notice to appear,” Spath said. “It violates due process.”
Richard Bloom, a former assembly member and current Los Angeles Superior Court judge, wrote the law in 2021. Bloom did not respond to a request for comment.
Beyond constitutionality, Spath said there were logistical problems. Fenton planned to fight any move by the city to overturn the covenant and state deadlines to receive the money were just weeks away.
“Without cutting a deal with Fenton, we wouldn’t have been able to get legal certainty and meet the state deadlines,” Spath said.
Mary Jo Wiggins, a law professor at the University of San Diego who specializes in land use, said that, indeed, there would have been many complicating factors – from constitutionality to time table – had the city decided to challenge Fenton’s development rules.
Fenton spends substantial time lobbying the mayor’s office, public disclosures with the City Clerk’s office show. Fenton lobbyists also raised and contributed thousands of dollars to support Gloria’s mayoral campaign.
I asked Rolland, Mayor Gloria’s spokesman, if this might have influenced the city’s decision to fight or not fight Fenton.
Fenton “refused to use its voting power to change the covenant to allow a purchase. The city has no legal leverage to compel Fenton to change their mind within a limited time,” he wrote.
Ironically, the Extended Stay America on Mission Valley Road has been housing homeless people, through various funding programs, for more than a year. Yet, Fenton, as far as Spath knew, had made no move to enforce the covenant.
In a court battle, that fact would have tipped in the city’s favor.
The argument would be, “You shouldn’t be able to enforce because you ignored the covenant as practical matter,” Spath said. “In court, that would have been an argument in our favor. But the problem is you’re still in court.”
Henry Fenton, the patriarch, considered himself a master of maximizing value – even when it came to people.
The ranch on which Fenton worked employed considerable Native American laborers, according to an account by Fenton himself. The ranch’s owner “certainly ruled them with an iron hand,” Fenton wrote.
Fenton wrote of one man named Morales, “a powerful full-blooded Indian weighing about two hundred ten pounds,” who’d been kind to Fenton as a boy. The ranch’s owner – who Fenton called “Uncle Bill” – kept Morales in debt “buying groceries for him and his wife,” Fenton wrote.
When Fenton went into business for himself, he occasionally hired out Morales. “I think I could get more work out of him than could Uncle Bill,” he wrote.
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Will Huntsberry is a senior investigative reporter at Voice of San Diego. He can be reached by email or phone at will@vosd.org or 619-693-6249.
Thank you Fenton family! No more giving up land for filthy, disgusting, useless drug addicts. Mental asylum or jail, no more gifts.
So all the seniors surviving on social security, priced out of their homes by greedy landlords, now living helpless on the streets through no fault of their own, to you are nothing but “filthy, disgusting, useless drug addicts”? May karma be your reward.
Show me one of these people. Where are all these seniors? I see 30 or so homeless people every day and none of them are seniors. You sound like you have never left your house.
I’m confused about the effectiveness of a law that requires a *property owner* to remove a now-illegal convenant.
It is effective in the sense that some politicians were able to claim credit. It is ineffective in the sense that it has no teeth because if it did, it would be illegal. That’s the reason property owners have to remove it, because they are the only ones who are able to. What is the difference between this bill and just asking the property owner? Nothing, nothing at all.
This is just a hit piece by city government to try to make an honest hard working company look bad. HG Fenton has done a lot of good for their residents, providing safe beautiful housing for people for decades. Allowing the homeless people there permanently would have harmed their residents, and the comfort and safety that they pay for. Why not put these homeless people next door to Myor Gloria?
The last four paragraphs refer to acts over 100 years ago that has nothing to do with the current situation, and is race-baiting.
As an ongoing contributor I’m disappointed VOSD. Do better.
So Fenton allows the homeless to stay in this extended stay hotel, but the author is upset the homeless cannot stay in all 140 rooms? Add in that this hotel is in the epicenter of Fenton-owned properties it sounds like Fenton is helping without devaluing their property.
Any reasonable person(and it sounds like this includes Fenton) would want to provide housing to someone who has fallen on hard times or is trying to get back on their feet. You cannot blame Fenton for not wanting the government to unilaterally place drug addicts, who don’t want help, from the street and into an area that would have such an impactful effect on Fenton’s property value.
Standing ovation for H.G.Fenton!!!
Hunstberry got it backwards, it is San Diego who has benefitted handsomely from H.G.Fenton. From paving the roads we drive to building a huge part of Mission Valley, Fenton has build more housing than the City of San Diego, the housing commission and SANDAG combined…and guess what, it’s occupied by people who work and pay rent! Preventing the City from wildly overpaying for a hotel and then turning into a slum is just icing in the cake. Here’s hoping Todd G. takes the money the city will save and buys the property next to Hunstberry and moves the hobos in there.
The city won’t save any money from this. The city will miss out on state funds for homeless housing that will go to another city.
Good! No more housing. I’ll support money for mental hospitals otherwise the state can keep it.
Thank you H G Fenton for attempting to stop the madness.
This is a hit piece. One sided slam on productive people.
Just rode my bike in a reserve next to my home in Rancho Sa Diego. Several homeless live in the park and rural open land area. The area is strewn with dozens of syringe’s and dozens of stolen Amazon packages along with obviously stolen personal items from people’s cars litter the 100 acre area. My neighbors and I are already helping the homeless as they pillage our homes and cars and play on our sympathies at every stoplight intersection. Fentons priorities are in the right place. Free housing for addicted criminals is available where they belong. In Jail with better rehabilitation services. Spend our taxes better. Don’t keep punishing the victims.
Imagine being so out of touch that you and your editors think this article was going to be well received. How small is the bubble the several of you are in? Calling yourselves the voice of San Diego and then getting torched on your own article is peak irony.
In order for a newspaper to be fair it has to interview both sides of a controversy. Plus, what are alternative locations? It seemed to be more a slam to a family company that has contributed so much to San Diego.
Way to go, Fenton family! San Diego, once a beautiful place to live, has become unrecognizable. These ‘improvements’ so desperately needed for our homeless population only profit local and private agencies. Lets not forget the elected public polititions who are pushing so hard for these changes. Is their concern for San Diego citizens or their own future in government?
In order for a newspaper to be fair it has to interview both sides of a controversy. Plus, what are alternative locations? It seemed to be more a slam to a family company that has contributed so much to San Diego.
If the city had its way it would turn all hotels outside of downtown into homeless living spaces. Moving homeless into these places does not address the real issue that most of the homeless are addicts and criminals, this is not a housing problem. Yes, I said it! Housing First is a complete failure and the politicians and developers claiming it’s a housing issue is only to create an expensive high density city that will destroy our neighborhoods. Call the local police station about these converted hotels and they will tell you they are hubbs of crimes and high volume calls for service, taking officers away from the rest of the community.
My name is Dan Smiechowski. I am a candidate for San Diego Mayor. Yes. it is past time to end this nonsense and as I have advocated ad nauseum, San Diego needs more mental wards not this willy nilly pie in the sky, castles in the air BS.
Opinions used as facts relegate this to a poorly written article. That said, providing shelter for homeless in Mission Valley might simply move part of the problem from downtown to Mission Valley. The newly sheltered will not immediately have a new clean life. Their filth will follow and spread like vermin in East Village throughout Hotel Circle and Mission Valley.
I think there should be private property.
Do not know who owns it but it looks like along highway 52 there are remote areas where homeless housing could be built that would not affect other communities. i.e. mobile homes or tiny homes etc with bus transportation to SD. see
Good. House the homeless in the backyard of the author of this article.
It’s hard for me to understand what right destitute people have to choose the region of their subsidized housing. Seems to me, there is plenty of land East of San Diego metro and East of San Diego County where government housing would not greatly reduce property values. Blythe, El Centro, Slab City. etc… everything from the Foothills, West to the ocean is prime real-estate. Just build basic extended stay communities for people who are unable to work and evict everyone else who can work but choose not to.
Hire those who are willing and able to perform public works jobs to maintain these cities and their facilities. Have drug treatment and mental health care for those who need it. But for goodness sakes DON’T HAVE EXPECTATIONS TO PUT THESE PROJECTS IN AREAS WITH VALUABLE DEVELOPMENTS. Pay MTS to load them up and get then out of areas that people with means would value.
I think that all cities in the county should work together to build affordable housing units; tiny homes could work very well. At the same time, mental health needs to be addressed properly by the county. It’s really an all hands on deck (city, county, state, and federal governments) effort.
This may be cruel, but San Diego needs more mental wards with trained professionals in psychiatry to help these people. Dan Smiechowski is a candidate for San Diego Mayor.
From what I’ve witnessed, the county of San Diego needs to do a lot better in the area of mental health services. People who are obviously in need of urgent care are left on the streets, that’s very cruel because they could easily be victimized.
It’s also very unfair to business owners and residents who are affected by this tragic situation.
Just a two cents contribution- Mr Harris’ comments were noted and IMHO are on point. The Citys watchdogs have ignored this problem for “decades” and have been allowing the problem to climb out of control! They’ve allowed open drug dealing, mail theft, widespread public attacks all to climb to ridiculous proportions and their only answer is to try to get in on yet another state funded “gravy train to no where”! You should all be ashamed ! You are nothing more than a sad bunch of spineless carnival carnies who are making a living out if scamming the citizenry..Pathetic!
Motel have just a few rooms. Buy a storage facility they have different sizes for families or just singles most of them have fire sprinkles and bathroom would be easy to add. You want a stepping stone not something they’ll never want to move from.
Good for H.G. Fenton! I hope they win. Glad to see someone finally standing up to fight the City’s tyrannical land grabbers!
I encourage a different approach. We need a new, inexpensive policy to deal with the drug zombie homeless.
Offer them UNLIMITED FREE toxic drugs (along with food and a tent) if they stay within a confined area. Offer them help if they want to kick the habit.
Once they voluntarily enter the “camp,” they can’t leave unless they are dead or drug free.
The problem will “cure” itself.
Looks like this site is “Voice of leftism”. The real Voice of San Diego is in these well thought out citizen comments. Now if only all voters would follow through with this thinking we might actually start to fix this homeless problem.
This goes right back to Gloria. HG Fenton has been very clear from day 1 that they do not want to sell their ‘Stay American’ hotel. But instead of moving on to the next property, the Gloria Regime undoubtedly thought they could persuade or coax them into changing their minds. When dealing with real estate, an astute professional knows you always have more than one target for acquisition. This should be a no-brainer, move on from this property and go to the next on the list.
Everybody in the comments praising HG Fenton make me sick. You only care about your home equity and how this could affect you. You’re selfish, small-minded folk that have no idea what the homeless population actually goes through. Work in a shelter or with the homeless population for more than one day and you’ll see it’s the corporate landlords causing the homelessness crisis. You want to know why rent is so high? Because conglomerates own a majority of the units in San Diego and raise all their tenants rent at once creating ever increasing “market” rent.
Yeah whatever, nobody cares. You should move.
Personally, I get a hunch, or at least I have not seen data, that says that motels are a good housing model for homeless populations. Instead of wasting the money on something the city is not good at, like real estate purchases and building rehabs, the city and state could instead buy some of the new, energy efficient muilti-family “housing” that is being built by proactive developers. Shifting families and capable professionals into newer units could open up existing resources for unsheltered populations.
Elections are coming hahaha, electeds desperately trying to show results. But their staff clearly lack real estate business skills.
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