Days after San Diego City Auditor Andy Hanau published a withering investigation into a popular tennis club that pays just $50 a month to lease more than a dozen acres of city property in Ocean Beach, Mayor Todd Gloria is cracking down on the tenant.
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In separate letters sent this past week to Youth Tennis San Diego, the nonprofit that runs the Barnes Tennis Center, Gloria administration officials demanded that the lessee correct a slew of violations and explain more than $1.2 million in spending.
“YTSD will be liable for the immediate repayment to the city of all ineligible cost amounts disbursed, plus accrued interest and any further costs related to the project if it does not comply with this request for information no later than Nov. 1, 2026,” one of the letters says.
The other spells out a litany of code violations the city says Youth Tennis San Diego committed under its 35-year lease for 12.5 acres along West Point Loma Boulevard that has charged the nonprofit a flat rate of $600 a year ever since it was signed in 1994.
City officials say the nonprofit has repeatedly violated its lease terms by ignoring the municipal code, failing to secure required permits and allowing third-party uses without informing the city.
The alleged violations extend beyond the unpermitted grading the club previously acknowledged it performed on property known as Parcel A, a parking area where decomposed granite was installed to address dust complaints from nearby residents.
“The conditions of the premise are also not in compliance with the existing (use permit), coastal development permit requirements, grading permits, erosion and sedimentation control, and permitted uses within the applicable zone,” the letter said.
“These conditions also are non-compliant with the lessee’s obligations under the lease.”
Jack McGrory, the former San Diego city manager who is now president of the Youth Tennis San Diego board of directors, said some of the letters’ claims are inaccurate but the center is committed to satisfying the city’s concerns.
“We are going to address all of this,” he said. “These are not significant issues. They are all resolvable.”
McGrory, who signed the lease on behalf of the public decades ago, said he tried repeatedly in recent months to work with the city to resolve a number of issues but officials refused to engage.
He also disputed the claim that the parking-lot upgrade violated the city code.
“We think it’s less than an acre and that doesn’t even require a permit,” McGrory said. “We don’t agree there’s a violation here at all.”
The former San Diego city manager said he already approached city leadership about opening discussions for a potential lease renewal. He said a new deal should include paying San Diego a share of the club’s revenue but also should last another 35 years or longer.
“We gave them two different term sheets,” he said. “I just couldn’t get a response from the city.”
Among city auditors’ other findings, noted that city officials repeatedly overlooked violations by Youth Tennis San Diego, declining to enforce any wrongdoing committed by the lessee.
But it wasn’t just the Barnes Tennis Center that was getting away with violations, according to the report. No violations by city tenants have been enforced, investigators said.
The report also said the Barnes Tennis Center collected more than $20 million in revenue over the past five years and paid its executive director a higher annual salary than the entire payroll at the Balboa Tennis Club in Balboa Park.
Auditors said the Youth Tennis San Diego lease should be renegotiated before it expires in 2029.
“Newly revised city policies provide mechanisms to recover a portion of the nonprofit’s gross revenues and evaluate whether the nonprofit’s public benefit is commensurate with the lease subsidy,” the report said.
The investigation also found that Youth Tennis San Diego’s failure to meet lease terms and other standards could undermine the city’s plan to recover most of $2.5 million in state grant money it provided upfront to the nonprofit.
In its Aug. 31 letter to the tennis club, the Parks and Recreation Department said the tennis club had submitted records detailing $2.3 million of the spending, and the city has been able to confirm less than half of those costs were eligible for reimbursement.
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“The remaining costs are either ineligible or remain under review,” the city wrote.
Specifically, some $743,000 in Youth Tennis San Diego spending remains under investigation, the Parks and recreation Department letter said.
The expenses are “under review due to irregularities, including duplicate work by multiple vendors, amounts exceeding vendor contracts, vendors whose contracts the city has not received, unknown grant task number and deviations from the grant agreement,” the city wrote.
“With proper supporting documentation, these invoices could be reviewed again for eligibility.”
The city also said almost $48,000 in billings were rejected because the work was performed outside the four-year timeframe spelled out in the grant, which began in 2022 and ended March 1, 2026.
Unrelated to those findings, the letter cited some $411,000 in spending that is under review due to missing permits, most of which appears related to installing a solar-power system.
“More information is needed from TYSD on the above issues before the city can make a final decision regarding the remaining costs,” the city said.
According to the auditor, the city so far has received just $260,000 of the $2.5 million in state grant funding it advanced to Youth Tennis San Diego. Discrepancies in the center’s records could jeopardize the city’s ability to recover the rest, the report said.
McGrory said the city’s questions about the tennis club’s use of the grant funds were news to him, but he pledged to work with San Diego to clear up any inconsistencies.
“The first we heard of any issue with the grant money was when we got this letter,” he said. “I don’t have any confidence in their numbers whatsoever.”
The day after the city questioned tennis club spending, the Economic Development Department sent a separate letter to the tenant outlining a series of alleged code violations and other transgressions.
The formal notice of violations, lease noncompliance and required corrective action was issued after two site inspections of the facility late last month.
Inspectors “determined that the unpermitted grading and construction activities altered drainage conditions and were undertaken without appropriate erosion, sediment and water pollution-control measures,” the city wrote.
Youth Tennis San Diego “must immediately cease all unauthorized construction, grading, clearing and vehicular parking within Parcel A and comply with the corrective actions identified in this letter,” the city added.
McGrory disputed those findings as well but said the center will work toward a solution that serves both sides.
“We’ll get to code again,” he said.
City officials also questioned the tennis club’s practice of not alerting its landlord to the various sub-tenants operating out of the West Point Loma Boulevard facility.
According to the lease, the tenant must receive city approval ahead of any subleases, provide copies of any such agreements and disclose rental payments or other revenue-sharing, the city said.
In particular, the city singled out a sauna and cold-plunge business called the Scandinavian Heat Club and a personal training facility called the Catalyst Performance Center that both rent space from Youth Tennis San Diego.
“Lessee must identify all third parties currently conducting business, providing services, occupying space or otherwise operating from the premises,” the city says in its letter dated Sept. 1.
The letter asks the tenant to submit a written correction plan within one week.
Online reports show that Youth Tennis San Diego chief executive Ryan Redondo formerly coached Catalyst Performance Center co-founder Alex Golding when Redondo worked as a head coach at the University of the Pacific.
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