Leo Hamel Not So Fine with National City: Jeweler Suing Town for $2 Million

“There’s never been a better time than now to turn your gold … into cash,” Leo Hamel says in one of the many TV commercials that’s made him a local household name.

But in National City, Leo Hamel Fine Jewelers says its cash is turning to ash.

Last week, Del Mar attorney Michael McColloch filed suit on the jeweler’s behalf against National City, whose moratorium against gold-buying businesses allegedly has led to losses for Hamel.

Besides asking San Diego Superior Court to end the moratorium, Hamel is suing for $2 million in lost revenues and $50,000 over the city fees and site work that he says have gone for naught.

The celebrity jeweler operates gold-buying shops in eight locations, including Rancho Bernardo and Oceanside.

“These establishments are certainly not pawnshops, secondhand stores, or fly-by-night gold buyers who set up temporarily in hotels,” said Halee Petzinger, Leo Hamel’s marketing director. 

“In the spring and early summer of 2011, we were about ready to open our ninth Leo Hamel Jewelry Buyers location in a shopping center in National City,” Petzinger said.

After starting a three-year lease and applying and paying for business licenses and permits, the city informed Hamel it was declaring a monthlong moratorium on gold-buying businesses, she told Patch via email.

“We waited the month, only to be informed that another moratorium was being imposed, this time a year long. That year went by and in July of this year, we were informed yet again that another yearlong moratorium will be in effect until July 2013,” she said.

For his part, National City Mayor Ron Morrison said Tuesday: “We were only made aware of the lawsuit at the end of business day yesterday.  It is our practice to not comment on pending litigation itself.”

But Morrison sent a copy of the staff report [attached] from a Sept. 18 City Council agenda that was approved and forwarded to the city Planning Commission, “where it was acted upon [Monday] night and is now coming back to the council to be enacted.”

“I hope this will be of help in understanding our desire to allow quality [businesses] to prosper and grow in our community,” Morrison said via email.

The pending law would end the gold-buying moratorium before its current expiration on July 31, 2013, but wouldn’t guarantee Hamel a presence in the South Bay city.

Among other restrictions—including ones limiting how close shops could be to each other—the proposed amendment to the city’s Land Use Code would limit the number of pawnshops within city limits to six and the number of secondhand dealers to two.

And National City already had six pawnshops and two secondhand dealers—The Check Cashing Place  on Plaza Boulevard and Cash for Gold/Gold Rush at Westfield Plaza Bonita.

Leo Hamel would apparently be out of luck for his planned shop in the Sweetwater Crossings Shopping Center.

National City reportedly imposed the moratorium out of police fear of stolen goods being pawned and of a recent clustering of new pawnshops. 

U-T San Diego quoted Morrison as saying he is optimistic that the moratorium could be lifted soon, because “we know there are some businesses out there waiting.”

Lawyer McColloch argued in his complaint, filed in Chula Vista Superior Court, that National City’s moratorium “contradicts state law and is void on that basis.”

Citing a section of the state Business and Professions Code, Hamel’s lawyer wrote in his complaint: “The Legislature’s intent in enacting the license and reporting requirements was to ‘curtail the dissemination of stolen property and to facilitate the recovery of stolen property by means of a uniform, statewide, state-administered program of regulation of persons whose principal business is the buying and selling of tangible personal property.’

“Thus, the state has already ‘occupied the field’ by governing gold-buying businesses and related criminal and legal issues, and the moratorium is in direct conflict with state law because it seeks to resolve the same criminal and legal issues in a more restrictive manner than the state imposes.”

At 9 a.m. Nov. 30, Superior Court Judge Kenneth Medel will consider a “motion to strike”—dismiss parts or all of the lawsuit—at the city’s request.