Jacobs Center Uncertain How to End Itself as Promised

Years ago, a nonprofit bought 60 acres of land in southeastern San Diego and promised the community would one day take over all the new buildings and the nonprofit’s effort to bolster community leadership and economic success.

Now, more than two decades in, leaders of the Jacobs Center for Neighborhood Innovation can’t say exactly when the transfer to the community will happen or what it’ll look like – just that they’re committed to it.

The effort has hit a series of setbacks over the last decade. The dense housing, retail and business spaces that Jacobs envisioned around the trolley line came in slower than expected and community collaboration with the nonprofit has waned.

“The vision and possibility here are strong,” said CEO Reginald Jones, who took the helm four years ago. “What we are working through now is details for realization of the vision and possibility, and at what level.”

Stalled development progress recently forced the Jacobs Center to overhaul its approach. It’s no longer angling to develop land on its own. Instead, it’s looking to partner with developers and even sell some of the nearly 40 acres that remain undeveloped.

Other complications have also emerged. The status of a community-run foundation created with the hope it could carry on the Jacobs’ philanthropic mission is unclear. Jacobs now carries $33 million in debt on some of its properties. Efforts to prepare and engage with residents invested in Jacobs’ mission have lagged, along with the development and  waves of staffing cuts at the Jacobs Center.

All that’s left even some supporters like Ardelle Matthews, who invested in the Jacobs’ Market Creek Plaza years ago, questioning whether the vision the Jacobs family set out years ago will come to fruition.

“I am still hopeful but I do not see the promise,” Matthews said. “I don’t see that future coming up soon and to me, time is being wasted.”

Jones, and Andrew Hapke, a Jacobs family member who serves on the nonprofit’s board, said they’re committed to handing all of the assets over to the community. They plan to work with residents to lay out a definitive timeline and next steps in coming months. For now, they say the timeline for the Jacobs’ sunset rests heavily on when the Jacobs Center can push forward more development.

Jones has said he’s confident the nonprofit can finish construction projects on all its properties by 2021 now that Jacobs has a new master plan and the City Council’s approved a new community plan.

“Our goal is to get to complete community ownership and control of these assets,” Hapke said. “How we get there is one of our biggest challenges but also one of our biggest opportunities.”

Indeed, the transfer of ownership Hapke’s grandfather Joe Jacobs envisioned years ago was a new approach.

Jacobs wanted to spur economic development in a community that lacked a grocery store and other amenities, support residents’ own efforts to address community causes and eventually, to leave the community with the capacity to continue both missions. The community transfer part of the vision has yet to become a reality.

“It was strong commitment that was not intended to go on forever but it was intended to leave a set of sustaining structures that were brought up and controlled by community residents,” said Jennifer Vanica, who led what would become the Jacobs Center from 1995 to 2011.

There have been successes over the years. The Jacobs Center developed Market Creek Plaza, bringing in a grocery store and other new amenities into the community. They also built the Joe and Vi Jacobs Center and an amphitheater, supplying gathering spaces the community long lacked. Hundreds of community members have attended Jacobs Center meetings and events, and many got jobs at the Jacobs Center and other businesses that opened at the plaza. Nonprofits in southeastern San Diego also benefited from Jacobs’ philanthropic focus on the 10 Diamond neighborhoods clustered around Euclid Avenue and Market Street.

More recently, the community’s cheered a new Walgreens, a new affordable housing development and a beautified Chollas Creek thanks to Jacobs’ efforts.

Jones estimates the Jacobs’ investment in the community has totaled $300 million.

The Jacobs family, through its family foundation and major donations from Joe and Violet Jacobs, pledged to bankroll community-building and development efforts through 2020. They thought their investments would spur development. And that the work should continue after they stepped away.

In more recent years, the family said it’ll continue to support the Jacobs Center and related efforts until around 2030. Starting this year, the family has committed to contribute $1.5 million annually, down from at least $6 million that once came in each year from the foundation and Joe and Violet Jacobs.

Hapke said that move follows the longtime plans for the organization.

“The goal is to spend down (the foundation’s coffers) so eventually we’ll have zero dollars,” Hapke said.

This means there’s a key decision coming, though: The community and perhaps other philanthropists will be the ones deciding whether the nonprofit Jacobs Center exists once the family stops making annual donations. The Jacobs Center building will remain. The nonprofit may not.

Last year, the nonprofit changed from a private foundation that largely writes checks to community causes, to a public charity that can draw more outside dollars. That move sets the stage for the community to take the reins if it chooses.

Then there’s the literal community ownership angle.

A formal community public offering a decade ago paved the way for more than 400 residents, including Matthews and her husband, to take on a 20 percent stake in Market Creek Plaza.

The Jacobs Center now owns 60 percent of shares. Next year, the residents group, known as the Diamond Community Investors, could vote on whether it’d like to buy out the Jacobs’ shares. This would be a key step in the community transfer process.

Not enough resident investors have attended recent meetings, however, to allow for a vote or even for simpler advisory council board decisions. Many southeastern San Diego residents stopped going to investor gatherings years ago.

Joseph Kelly, treasurer of the investors’ advisory council, said the group needs to better educate resident investors, gauge their interest and learn more about the viability of an increased investment in Market Creek Plaza before it takes a vote.

One of the issues members will be weighing carefully is the remaining construction debts for Market Creek Plaza. Jones said $11 million in debt remains on that facility alone. The nonprofit has another $20 million in debt on other properties not considered part of the investment partnership.

There’s also another potential complicating factor to the potential 2018 vote and the eventual sunset scenario.

The nonprofit Neighborhood Unity Foundation, a group initially built to carry on the community grant-making that’s been a hallmark of Jacobs’ work, holds a 20 percent share in Market Creek Plaza, and its status is hazy. It formally separated from the Jacobs Center years ago, though its plaza investment was meant to provide a revenue stream for grant-making.

Several community leaders, including Jones, say they’re not certain of the status of the Neighborhood Unity Foundation and haven’t seen the group’s executive director in months or even years. Despite past donations to community nonprofits and initiatives, the foundation doesn’t appear to have handed out any recent grants. The plaza hasn’t turned a profit in at least five years, which means a major source of grant-making dollars has for now dried up.

The foundation’s website has been taken down and the group hasn’t made mandated annual reports to the state’s charity registry the past couple years.

Neighborhood Unity Foundation board members reached by Voice of San Diego would not comment, other than to say their nonprofit still exists. The executive director did not return repeated calls.

Narri Cooper, who’s been involved with the advisory council for years, said a Neighborhood Unity Foundation representative has attended recent investor meetings but neither she nor Kelly could speak to the status of the organization.

Cooper remains hopeful that the foundation can resume its grant-making once Market Creek Plaza is more profitable and won’t affect investors’ potential effort to buy Jacobs shares.

Cooper said she wrestled with the likelihood of development and community ownership amid years of turnover among key staff tasked with carrying out Jacobs’ mission. More recently, she said she’s gotten more excited as the Walgreens and an affordable housing development have gone up.

“We need the momentum to continue,” Cooper said.

Other longtime investors, most of whom are less involved with Jacobs today, are more pessimistic.

Henry Merritt, who was once passionate about the community owning Jacobs’ mission, was one of a handful of investors who years ago pushed the Jacobs Center to do more to prepare residents for an increased ownership role. He walked away from the experience feeling rebuffed.

He remains convinced the nonprofit’s still not taking adequate steps to prepare the community to carry forward the Jacobs’ mission – and that the family’s not really committed to the concept.

Merritt and multiple current and former investors are particularly suspicious of the fact that only Jacobs family members sit on the nonprofit’s board. (Jones and Hapke say they’re working to change that soon.)

“They’ve really dropped the ball in terms of their mission,” Merritt said.

Jones and Hapke said they remain dedicated to the development and ownership visions.

“I think it’s really important this project is a success,” Hapke said.

They just don’t yet know what success looks like.