Comic-Con buys San Diego sites
Nonprofit quietly acquires three Barrio Logan buildings for $6.3 million.
SAN DIEGO — San Diego Comic Convention, the cash-rich nonprofit that presents the pop culture extravaganza Comic-Con International every summer, bought three buildings in Barrio Logan for $6.3 million last year.
The acquisition was made in the name of a limited liability company that the nonprofit said it owns.
“It is part of a potential future business operation that is not appropriate for disclosure at this time,” Comic-Con said in a statement. “Also, there are tenants currently occupying the building and we prefer they not be bothered.”
The multimillion-dollar transaction was referenced in the tax-exempt organization’s most recent audit, which is required to be made public under California law.
Public records show a company called Barriohaus bought two office buildings and a warehouse at and near the intersection of National Avenue and South 16th Street on April 1, 2015, for $6.3 million.
The nonprofit said Barriohaus is wholly owned by San Diego Comic Convention, although there is no mention of the limited liability company on its federal tax filings or in the independent audits.
“The acquisition of the property was approved by the board,” the Comic-Con statement said. “The board also approved formation of Barriohaus LLC to own the property.”
Federal regulators require tax-exempt organizations to disclose when they have interests in related businesses, either with other nonprofits, such as a foundation, or with forprofit companies.
The U.S. Internal Revenue Service definition of a related organization includes “organizations that stand in a parent/subsidiary relationship.” The agency specifically asks charities if they have such relationships.
“Was the organization related to any tax-exempt or taxable entity?” IRS Form 990 asks. “If ‘Yes,’ complete Schedule R, Part II, III, or IV, and Part V, line 1.”
The most recent San Diego Comic Convention filing, which covers the year that ended Aug. 31, 2015, answered no to that question and did not complete or attach Schedule R to its 36page tax return.
Comic-Con officials said they responded to the question appropriately.
“For tax purposes, a single member limited liability company owned by the filer is not considered a related entity,” the nonprofit statement said.
The nonprofit declined to provide any documentation showing that it owns Barriohaus. Instead, a statement noted that the tax return and audit both refer to the purchase. The references in those documents make no mention of Barriohaus.
According to the California secretary of state’s office, Barriohaus was established March 20, 2015, 12 days before it took title to the Barrio Logan buildings.
State records list the business address for Barriohaus as 225 Broadway, Suite 1800, the same downtown office occupied by Comic-Con. The registered agent is San Diego Comic Convention President John Rogers.
The only company member listed on public records available from the secretary of state’s office is Rory O’Neill, whom the nonprofit identified as an employee of its law firm.
“Rory O’Neill was the organizer of Barriohaus LLC,” the Comic-Con statement said. “She is a corporate paralegal at Pillsbury Winthrop Shaw Pittman LLP, which is outside legal counsel to SDCC.”
The office and warehouse space purchased by Barriohaus includes more than 32,000 square feet, much of it refurbished in recent years by the late architect Graham Downes.
Both office buildings, one in the 900 block of South 16th Street and the other in the 1600 block of National Avenue, are about 15,000 square feet. The warehouse at 1622 National Ave. is 3,000 square feet.
Tenants include the Sushi on a Roll catering company and the Invisible Children charity.
With fewer than 50 employees, it is not clear what San Diego Comic Convention would do with tens of thousands of square feet of office space.
The nonprofit does rely on more than 3,000 volunteers to present the annual comic book and entertainment showcase.
The investment in Barrio Logan may be significant beyond the money spent.
Comic-Con International attracts more than 130,000 visitors to San Diego every year, and pumps tens of millions of dollars into the local economy.
In recent years, nonprofit officials have cited the economic effect and won concessions from city officials in exchange for a commitment to remain at the harborside convention center.
With millions of dollars in real estate holdings on the edge of downtown San Diego, Comic-Con may be less likely to relocate to other interested convention cities, such as Anaheim or Los Angeles.