Former Encinitas official’s votes on Piraeus Point likely a conflict, experts say

NOTE: Since publication, an FPPC complaint has been lodged against Blackwell over the potential violations outlined within this story.

ENCINITAS — A former Encinitas City Council member may have violated state conflict-of-interest laws by voting to approve a project from a real estate developer in which she held investments, according to campaign finance experts.

Allison Blackwell, who served on the council as the District 1 representative from January 2023 until the end of last year, cast multiple votes in favor of the Piraeus Point development during her time in office. 

Since Blackwell had a living trust set up with a significant investment holding in Lennar Corporation — the real estate developer behind the Piraeus Point — these votes appear to have violated conflict of interest rules set by the California Fair Political Practices Commission (FPPC), according to multiple former FPPC regulators interviewed by The Coast News. 

“In general, if you, an official, are invested in a business, and that investment is worth over $2,000, and then you are asked to vote on an issue that would likely have a material financial effect on that business, you’re not allowed to participate in that vote,” said Tracey Frazier, an election attorney who worked for the FPPC’s enforcement division for more than five years.

Blackwell filed a Form 700 with the FPPC in February 2023 disclosing various financial interests, including a living trust containing various equity holdings. One of the interests listed was a $10,001-100,000 fair market value investment in Lennar Corporation (also called Lennar Homes). 

More specific details about the investment, including the exact dollar amount of Blackwell’s shares in Lennar and the particular nature of the equity agreement, were unavailable.

Regardless of those specifics, the value of Blackwell’s stock holdings in the development company exceeds the FPPC’s $2,000 threshold and thus should have precluded her from voting on any of Lennar’s housing projects, according to a former FPPC attorney who asked not to be named directly. 

“If [Blackwell] had a direct investment in this company and they come before the council with a decision to be made affecting them in a major way, she shouldn’t participate in that vote, period — no matter whether it’s a mutual fund, living trust, or any interest that exceeds that $2,000 threshold,” the former regulator told The Coast News.

Frazier agreed, explaining that while it’s entirely possible that Blackwell had no nefarious intent when she voted on the Piraeus Point project, it was still incumbent on all council candidates to recuse themselves from decisions directly impacting their personal investments. 

“It really is incumbent upon elected officials to be aware of the rules to avoid losing public trust…I would certainly have advised my own clients to recuse themselves in situations like this out of an abundance of caution if nothing else,” she said. 

The FPPC’s conflict of interest regulations list five types of “disqualifying financial interests” that require an elected official to recuse themselves from a vote: business entity, real property, income, gifts, and personal finances. 

Under the business entity category, the code says that a public official must disqualify themselves from votes concerning any business entity “In which the official has an investment of $2,000 or more; or in which the official is a director, officer, partner, trustee, employee, or manager.” 

Blackwell’s failure to recuse herself from voting on the Piraeus Point development is likely to at least warrant an investigation from the FPPC, according to Ann Ravel, a former chair for both the FPPC and the Federal Election Commission. 

“What’s going on with this situation is really among the most serious of the cases dealt with by the FPPC,” Ravel said, adding that it does not usually matter the nature of the equity holding that created the conflict as long as it exceeds the $2,000 threshold. 

“There could be some unique circumstances that make these [votes] not a conflict for her, but for the most part, it’s pretty clear that it would be [a conflict]… I’m not sure there’s a way for her to get around this one if her own interests are involved in this way,” Ravel continued. 

In addition to being required to file forms disclosing their financial interests, all Encinitas City Council members undergo ethics training sessions and are briefed on rules related to conflicts of interest, including FPPC guidelines, a city spokesperson told The Coast News in an emailed statement. 

City Attorney Tarquin Preziosi was unavailable when asked whether Blackwell was advised that her disclosed financial interest in Lennar Corporation would preclude her from voting on development projects brought before the council. 

Mayor Bruce Ehlers said council members attend informational sessions by city staff every two years, covering personal investments, mutual funds, trusts, etc. While declining to comment directly on whether Blackwell’s votes had violated campaign finance laws, Ehlers expressed consternation about how the situation could affect public trust in the council’s leadership on the issue of housing development. 

“Ignorance of the law is certainly no excuse in a situation like this,” Ehlers said. 

Piraeus Point, consisting of nearly 150 townhomes at Piraeus Street and Plato Place in Leucadia, originally came before the City Council for a vote in August 2023. A large contingent of community members opposed the development, claiming it would have negative externalities, including pollution, wildlife habitat erosion and traffic congestion.

However, a majority of council members, including Blackwell, voted to approve the project. The same council voted again to approve a revised version of the project in December 2024 and simultaneously voted to approve a 0.96-acre easement to Lennar Homes for $1.8 million, allowing the developer to construct a biofiltration basin and access infrastructure.

Blackwell cast the deciding vote in the council’s 3-1 approval of Piraeus Point in August 2023 (with then-Councilmember Kellie Hinze absent), but it’s unclear whether this impacts the nature of the potential violation. Blackwell’s subsequent vote in December 2024 would not have changed the outcome with the council voting 4-0 (with Ehlers absent).

During these meetings, Blackwell and then-Mayor Tony Kranz acknowledged residents’ concerns. However, both expressed the view that approving the Piraeus Point development would help the city with its affordable housing shortage while protecting Encinitas from the threat of state litigation. 

Furthermore, project defenders have argued that the $1.8 million easement payment into the city’s general fund will help with valuable local improvements. 

Since Blackwell’s vote did not swing the decision in either case, there is likely no possibility of challenging Piraeus Point’s approval in court. 

However, according to Ravel, the agency could fine Blackwell as an individual if an investigation determined that a violation occurred. 

There is no evidence that the FPPC is currently investigating Blackwell. The FPPC did not respond to confirm or deny any existing active investigation.

The Coast News contacted Blackwell several times for further clarification, but the former council member did not respond to requests for comment on this story. 

Since California’s Housing Accountability Act and other regulations require cities to approve certain thresholds of affordable housing units annually, Encinitas officials have expressed that there is little they can do to deny controversial projects like Piraeus Point, as doing so could result in a lawsuit or Builder’s Remedy.

The Piraeus Point development will comprise 134 residential homes, 14 of which are reserved for “very low” income households. All units are for sale rather than rent.

Blackwell, a longtime Leucadia resident, was originally appointed to the council in January 2023 to fill the vacancy created when Tony Kranz, previously serving as the District 1 representative, was elected mayor. 

Blackwell was previously the chief human resources officer for Cue Health and had been in active leadership on several city committees, including the Encinitas Community Garden, the Encinitas Homeless Action Plan Community Group, and the city’s Equity Committee.

Lennar, a publicly traded developer worth $27.87 billion in equity as of 2024, is America’s second-largest home construction company.