Congressional candidate Adam Gray is facing scrutiny for investing in an apartment project on the former Castle Air Force Base shortly before the state awarded $50 million to transform the site.
According to an LA Times report, Gray did not disclose the investment in 2022 after he lost the race for Congressional District 13 against Rep. John Duarte (D–Modesto).
The backstory: In 2018, Google had been using the Castle Air Force Base to test its self-driving vehicles. Gray, who was in the Assembly at the time, had urged the state to give Merced County $6.5 million to expand the base’s self-driving testing program.
- Gray partnered with David Marvulli in 2021 to form Gemenii LLC, where he is a minority owner.
- Merced County declared three parcels of land at the former base as surplus in 2021.
- One year later, Gemenii LLC purchased four apartment buildings – which were former barracks – on 5.3 acres of land for $600,000.
Driving the news: Gray left office in December 2022, and in July 2023 California officials awarded nearly $50 million to Merced County to develop 70 acres of land at the former base – now called Castle Commerce Center – for a new inland port to connect to the ports of Long Beach and Los Angeles.
- Gemenii has spent millions of dollars renovating the apartments over the past two years, the company told the Times.
- With such costly renovations, Gray’s representatives told the Times that he has not made any money off of his investments in the apartments, which are designed to be affordable housing.
The big picture: Gray disclosed the investment to state ethics officials in his 2022 Form 700. But he did not disclose the investment in his federal financial disclosure after he ran for Congress in 2022.
- A new filing that was made public in August shows that Gray reported receiving between $100,000 and $1 million from Gemenii in 2023, along with $50,000 to $100,000 for the first half of this year.
- Gray’s campaign told the Times that those numbers represent Gemenii’s total revenue and were listed “out of an abundance of caution.”
- His campaign said Gray has not made a profit from Gemenii last year or this year.
State of play: The 5.3 acres of land that Gemenii purchased in 2022 are now worth over $2.5 million, according to tax records reviewed by the Times.
- Gemenii had taken out an $885,000, 30-year mortgage in 2022 and a $3 million, 15-year mortgage in June for building renovations.
- The Castle Commerce Center now has a full self-driving testing program and hosts Waymo, Google’s self-driving vehicle company.
- While the underlying land value of Gemenii’s property has increased by $9,300, the company told the Times that any developments at the Castle Commerce Center have had no impact on the property’s value.
What they’re saying: Former California Fair Political Practices Commission Chairman Dan Schnur told the Times that it seemed “suspicious” that Gray invested in the apartment complex around the time when the state was awarding millions of taxpayer dollars to the Castle Commerce Center.
- “Everyone deserves the benefit of the doubt, but the best way to receive the benefit of the doubt is to earn it,” Schnur told the Times. “A public servant ought to be aware of how these things might be perceived.”
- National Republican Congressional Committee spokesperson Ben Petersen called Gray’s investment corrupt.
- “Adam Gray’s corrupt real estate deal, mixing taxpayer money with personal profit while hiding it from voters, merits an immediate investigation,” Petersen said. “Gray’s self-serving scheme reveals his true colors as a Sacramento politician who lines his own pockets at the expense of Valley families’ trust and hard-earned dollars.”
- Gray’s campaign manager Ben Rodriguez told the Times that the allegations are false.
