The city had allowed Sunroad Enterprises to build an office tower so tall that it violated Montgomery Field airspace, and the suggestions were meant to ensure something similar would not happen again.

A year later, Mayor Jerry Sanders has adopted basic improvements to the city's permitting system, but has opted against the top recommendation: to merge the Development Services Department, which issues permits, with the Planning Department, which recommends long-term zoning plans.

Sanders declined to be interviewed, but his staff issued a report outlining steps taken to resolve permitting issues. And Chief Operating Officer Jay Goldstone defended the decision not to merge the departments.

“We often get recommendations from auditors and consultants; some make sense and some don't,” Goldstone said. “Our feeling is that keeping them separate works better.”

Critics say the process continues to favor builders, and that the Development Services Department suffers from a lack of communication and makes too many mistakes.

“The city tends to allow development to the limitations of the code and beyond,” said attorney Craig Sherman, who filed two lawsuits in recent months over what he considers flawed permits.

This time last year, Sanders was facing harsh questions over the Sunroad office tower. The mayor had waited months to halt work on the project while Sunroad owner Aaron Feldman repeatedly ignored warnings from state and federal regulators that the high-rise was illegal and unsafe.

Because Feldman was an influential campaign contributor, Sanders ordered an internal investigation.

Jo Anne SawyerKnoll, deputy chief for ethics, was put in charge of the probe and issued a report that identified plenty of mistakes but held no one person accountable. SawyerKnoll could not be reached for comment last week.

The report's first recommendation was to combine Development Services and Planning. The offices had been divided in 1994 by then-City Manager Jack McGrory to expedite building applications in the wake of the early '90s economic slump.

Development Services issues permits, enforces zoning and orders environmental reviews if necessary. Planning is in charge of setting long-range land-use policy.

SawyerKnoll's report said that's a bad idea.

“Separating vision from implementation in land use is a dangerous thing that leads to just the type of misunderstanding and miscommunication found in the Sunroad incident,” she wrote.

Paul Tryon of the Building Industry Association said separating planning and permitting 14 years ago gave the city much-needed flexibility. Builders would not welcome a return to the old system, he said. “We would hate to see development projects get bogged down.”

The separation allows for more permits, but Steve Erie, a University of California San Diego urban planner and political scientist, said “the problem is we threw out the baby with the bath water in terms of public oversight and accountability.”

Michael Stepner, an architect who spent years planning San Diego's growth before leaving City Hall in 1997, said the existing system isn't the problem.

“What was lacking was the coordination between the two offices,” he said. “Somewhere up on top was supposed to be someone responsible for making sure all these departments worked together, and that just didn't happen.”

The Sunroad report's other recommendations included moving the airports division to the Public Works Department; issuing more notification when buildings are proposed near airports; and forming a team to study zoning near airports and work closer with the Regional Airport Authority.

SawyerKnoll said the troubled relationship between Development Services and the City Attorney's Office should be “corrected.” A lack of trust between the offices exacerbated the failure to stop Sunroad construction earlier.

Lastly, she suggested more staff training on prohibited contact with former employees, a response to Sunroad executive Tom Story's continuing exchanges with city officials within months of his retirement as then-Mayor Dick Murphy's chief of staff.

Goldstone said employees have received new training and a committee now meets every month to review important projects. “There have been problems, but we're continually trying to clean things up,” he said.

Improving communication between Development Services and the City Attorney's Office is “in progress,” the mayor's staff said. City Attorney Michael Aguirre said: “We're getting closer. The key is to keep the politics out of it.”

In the year since the report was issued, the county grand jury issued a separate report criticizing Development Services for being “caught in the middle of a multiple-ring circus,” due to an illegible land-use code and perennial staffing and training challenges.

Too often, the jury said, the office appears to waive rules requiring costly environmental reviews, and employees cannot answer elected officials' questions about projects.

Also, San Diego has been sued three times in recent months over decisions by Development Services – the Kensington Terrace mixed-use development, the Blackwater Worldwide training center in Otay Mesa and a parking lot at Mesa College.

The Kensington developers, who include a Sunroad executive, downsized their project rather than fight; Blackwater took its case to federal court and won, though the city has appealed; the Mesa College case is pending.

Sherman, the lawyer who handled the suits over the Kensington and Mesa College permits, said permitters tend to make decisions that save developers time and money.

“It is done for expediency,” he said. “I don't know if those decisions are driven by developers or by the city.”

Jeff McDonald: (619) 542-4585; jeff.mcdonald@uniontrib.com