Updated: Mar 31, 2020

At the March MBTC membership meeting, the membership was asked to approve a $700 expenditure to reimburse Matt for attorney fees. It was explained that the costs were associated with an attempt to remove a board member, and legal advice that was sought when the board member's attorney threatened legal action against the board and town council. I want to clarify some of the misrepresentations without getting into too many details.

The accusations against the board member were very general, vague, and without any supporting details. The board member's attorney requested Matt to provide all of the details prior to the date when the board member was to be removed. Matt ignored the attorney's request. A short time before the board meeting was to happen, the attorney sent a second letter to Matt letting him know that if he went through with the board meeting without providing the information he requested so that the board member could develop a defense, that he would take action on behalf of the board member.

It was at this point that Matt, engaged in emails to the attorney making outlandish claims without any basis, but claiming that his position was based on advice from four attorneys. Matt went on to threaten the attorney if he showed up at the board meeting, turning him in to the California Bar Association. Based on my feedback, Matt did not request any board members to review the letters he sent to the attorney, even though he had access to two attorneys on the board. His emails were irresponsible and again without basis. At some point, Matt came to his senses and actually went to an attorney for advice. Based on his attorney's advice, Matt unilaterally sent a letter to the board member canceling any action against the board member. Had Matt taken one more day to have his emails reviewed by the board, there is no way that Matt would have sent the threatening emails. And thus, the $700 would have never been spent.

This is a Reader story going back to December 19, 2018

I initiated this story with the reporter to in effect document actions taken by Matt and other members of the MBTC board to stop any further investigation of business membership applications by The Control Group. Rob Brown used a distraction to accomplish this by claiming that I had turned him into the City for non-payment of his TOT taxes, which was completely false, but it accomplish his goal.

Matt Gardner, whose shop Cheap Rentals on Mission Boulevard ¾ of a mile north of the roller coaster rents bikes, surfboards, and other beach equipment, will be the new president of the Mission Beach Town Council starting on January 1. On November 14, he was elected to replace Gary Wonacott, who terms out on December 31. So anxious was Gardner to assume his duties as president of the Mission Beach Town Council, that on the organization website list of executive board members, he named himself president the day after he was elected. Off to the right, Wonacutt’s picture was included on the website, but bearing the moniker “past president.”

Gary Wonacutt: neighborhoods are for neighbors.

Even before his election, Gardner, whose email subscript is “You can’t buy happiness, so come to Mission Beach and rent it,” demanded that Wonacott stop advancing his personal views on behalf of the town council. In editorials he penned for Voice of San Diego and the San Diego Union-Tribuneduring last spring and summer respectively, Wonacott criticized the plan adopted by Mayor Faulconer to “carve out” Mission Beach from restrictions on short term vacancy rentals in the rest of San Diego. And using his platform as the Town Council president, Wonacott helped shape the argument that “neighborhoods are for neighbors, not vacation rentals.”

Matt Gardner: Come to Mission Beach and rent happiness.

In July 2018, the city council approved restrictions on short term rentals for all of San Diego, and the neighborhood advocates gained confidence. But the decision only fired up rental business management companies to make their own case more effectively. On October 22, facing a possible city-wide referendum, the city council voted to rescind the restrictions, although it will be able to enact new ones in a year as long as it doesn’t simply reenact the first ones.

In recent emails, Wonacott outlined for me a strategy he thought Mission Beach business owners had chosen to “change the narrative.” “In September,” he wrote, “an employee of The Control Group, with an address downtown, submitted 18 applications for business memberships at our website. The businesses were different LLCs, some with names associated with addresses in MB, and some not…. There were, however, no names associated with the LLCs, so our membership officer requested The Control Group employee to provide names for each of the LLCs. She did this. I searched The Control Group website and found that all of the names provided are employees of The Control Group.

“I then did a search of one of the LLCs, and found a Bizpedia website that associated it to an address in Pacific Beach. In fact, the website stated that there were 31 companies at the address in PB, many of which are the LLCs identified in the applications. Many of the LLCs were associated with properties in Mission Beach, but the connection is not clear. The Control Group does do web advertising, and it could be that the company was a client putting up online advertisements for short term rentals, but no evidence of that.

“There are a couple of examples of properties with the same ownership that are now represented by different LLCs. That is cumulative voting. In addition, the LLCs may be proxies….” That would be the case if the LLC documents, which can be seen on the California Secretary of State’s website,do not include the names provided to the Town Council. One of the owners is mentioned three times, so as a property owner, this owner could only vote once. Otherwise it would be cumulative voting.

“Only seven names are mentioned on all of these documents. And of the seven, only two are mentioned on the list of LLCs sent by The Control Group’s representative. This would suggest that only two of the 18 properties listed would have” the voting rights that members enjoy, for instance, in the election of executive board members.

According to the Mission Beach Town Council’s bylaws, Wonacott explains, cumulative and proxy voting are not permitted.

When Wonacott contacted The Control Group representative, who is associated with one of the LLCs, and suggested that cumulative or proxy members would not have voting rights, she threatened legal action. The Town Council did accept the $30 for each business membership she applied for. “It may be that this is all legal, but does not look that way,” wrote Wonacott. “And even if the LLCs violate our bylaws, I don’t know the legal implications for a town council organization. We still have more questions than answers.” So Wonacott asked his board to stand a committee to review the Town Council’s bylaws. “This is likely to take quite a while,” he said.

On November 8, soon to be president-elect Matt Gardner gave his take. Wonacutt’s contacting The Control Group about the memberships applied for, he wrote to board members in an email, “is a clear abuse of trusted information.... Somebody that is joining membership or wanting to volunteer to be on the board should not have to be scared to join because their views are different than Gary’s or anyone’s. This is not just ethically wrong but potentially illegal as this is clearly harassment. This could jeopardize the entire MBTC with legal trouble. But plain and simple it is wrong. These people never troubled Gary in any way and this is totally motivated by differences of opinion on short term rentals during an election time of our Mission Beach Town Council.”

Board member Sarah Mattinson added, “This is not what the town council should do or can do with its membership list. The emails, phone calls, trips to Control Group’s office, snail mail is harassing and completely wrong.”

Meanwhile, town council board members piled additional charges onto Wonacutt. “I just hung up the phone with Rob Brown,” wrote Kimberly Wise, “who called me from downtown where he is being asked to prove that he was not renting his property (and failing to pay transient occupancy taxes prior to March 2018) on his property…. He said that Gary ... informed the city that a violation was occurring after he submitted his application to the Mission Beach Town Council. He had to take the morning off work to deal with this. Is this true?”

(Brown would later be elected secretary and Wise an area representative in the election of the new executive board.)

“I also talked with Rob,” wrote Gardner, “and he confirmed that Gary did turn him in to code compliance even though he has done nothing wrong. Now he has to commit time, money and resources to rectifying this issue. Gary might have tried to turn in other people as well. We must denounce this behavior and stop it immediately by any reasonable means necessary.”

So, Wonacutt checked with the city’s code compliance department. “While the name of a person who files a complaint is confidential,” he emailed in response, “the fact that a complaint is filed or not is public information. So, I would ask someone, preferably a more neutral party, to call and ask if there is actually a complaint.”

Wonacutt tells me that past board president Scott Morrison suggested that the city might have only been doing an audit and that Rob Brown was randomly chosen.

Reflecting on where the board stands as he prepares to let the presidency go on January 1, Wonacott says the neighborhood's group is still in the majority, but “the pro rental business group is very vocal.

I emailed several members of the Town Council’s present and previous leadership, including Matt Gardner and Scott Morrison. I wanted to ask not only about the code compliance controversy but the issues of cumulative and proxy voting as well. Did any of the new LLCs submitted by The Control Group, for instance, get a vote in the November 14 election?

Gary Wonacutt alerted the board members that they’d be hearing from me. Although I had seen Gardner’s address and used that, my email bounced back. The only person to reply was Scott Morrison. “I’m not interested,” he wrote.

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