Socialize With Us

A Builder with Nonprofits in Mind

Thursday, February 2, 2017

NCG's Nonprofit Displacement Project is happy to spread the news of a potential local investment in permanent homes for nonprofits. Read about the potential space in the article below by J.K. Dineen, a staff writer for the San Francisco Chronicle.

SF complex planned to permanently house social service nonprofits

San Francisco social service nonprofits, always vulnerable to displacement during real estate booms, would get permanent homes if a proposed $120 million development in the Mission District comes to be.

Common Ground Urban Development, led by real estate investor Chris Foley, has filed an application to build a 200,000-square-foot complex for nonprofits at 1850 Bryant St. The developer plans on dividing the new, five-story building into about 10 commercial condominiums and selling them to nonprofits that offer services including job training, housing placement, addiction counseling and adult education.

While construction wouldn’t start until June at the earliest, seven tenants have signed letters of intent to take 110,000 square feet, Foley said. None of the future tenants was willing to be identified because the leases have not been finalized. The building, which will also include some space for the arts and manufacturing, will include a 14,000-square-foot roof garden.

The project is being partly financed through federal New Markets Tax credits. Spaces in the building will sell for about 40 percent below market-rate values — about $575 a square foot, or $5.7 million for a 10,000-square-foot commercial condo.

“We’re basically offering affordable housing for social service nonprofits,” said Foley, a developer who co-founded the Polaris Pacific brokerage and owns the Market on Market food hall and grocery store.

Commercial rents in San Francisco are up 122 percent since 2010. A report issued in March by Northern California Grantmakers, an organization that connects and supports nonprofits, concluded that 82 percent of local nonprofits were concerned about the impact of the real estate market on their viability, and 68 percent said they had a lease expiring in the next five years. In addition, 38 percent have moved since 2010, and of those, 67 percent said cost was a factor.

“There is clearly a need for sustainable office space for nonprofits, but the key thing is that it has to be affordable over time,” said Steve Barton, who wrote the report. “It doesn’t do any good to have affordable space just for three or five years.”

The property is now home to Abbett Electric Corp., which plans to cease operations when the owner retires next year. That building will be torn down.

Owning space, rather than being subject to a fickle real estate market, makes a big difference, said Martha Ryan, executive director of the Homeless Prenatal Program. Ryan’s organization managed to buy a building a 2500 18th St. as it faced losing its home during the dot-com boom of 2000.

“We realized that if we were going to be in charge of our own destiny we needed to own our own place,” Ryan said. “I’ve had many, many nonprofits call and ask if I could help them figure out how to buy a building. I think nonprofits are in a very precarious situation right now.”

The announcement comes as the city is in the process of spending $6 million to help shore up nonprofits. In total, 76 organizations have received $4.5 million in financial awards and real estate services, according to Lex Leifheit, nonprofit business development manager at the Mayor’s Office of Economic and Workforce Development.

Foley saw the challenges nonprofits face when he advised the nonprofit United Playaz, which provides programs for youth at its South of Market clubhouse. The group eventually was able to raise $1.4 million to buy its building at 1038 Howard St.

Misha Olivas, director of programs at United Playaz, said owning the building allowed the organization to focus on its mission.

“We are taken a lot more seriously as property owners,” she said. “For kids that experience so much crisis and trauma at home or in the community, it’s important to know that we are not going anywhere. That we are going to be here for our young people.”

San Francisco Supervisor Hillary Ronen, who represents the Mission, said she is cautiously optimistic about the 1850 Bryant St. project, although she wants to make sure it’s as affordable as possible to cash-strapped organizations.

“The idea of creating a permanent home for nonprofits, so they have a secure footing in the Mission, is really exciting,” Ronen said. “I’m intrigued by the idea of joint ownership — kind of a condo building for social service groups.”