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What some have characterized as chaos at Civic San Diego presents a good time to consider whether the city-owned nonprofit is worth keeping.
Most of the discussion about Civic’s future has centered on how it administers new development downtown. Under pressure from a lawsuit filed by former Civic board member Murtaza Baxamusa, the city is considering whether some or all downtown planning decisions delegated to the nonprofit should be transferred to the City Council, so they can provide organized labor with leverage on major projects.
While this is an important question, it obscures the more far-reaching question of whether Civic can provide value beyond administering downtown.
Right now, there is no clear direction. Neither the city nor former president Reese Jarrett presented the corporation with any purpose beyond the high-profile downtown community plan administration, plus the winding down of the city’s redevelopment agency, which was dismantled by the state in 2012.
However, the nonprofit remains a significant city asset. Civic can perform important roles on behalf of San Diego that are difficult for City Hall to undertake.
The biggest share of Civic’s administrative budget comes from money intended to finish left-over redevelopment projects. It’s been six years since the end of the redevelopment agency, and the winding down is now more than 80 percent complete. There will continue to be contract monitoring, accounting and other obligations, and expenses for years, but the funding needed to provide those services is also winding down. Other Civic revenue sources include developer fees for administering the downtown community plan, SANDAG and state grants, and fees from tax credit deals. The city also contributes financial support.
With winding-down revenue declining and other revenue sources varying from year-to-year, the city must decide whether it should continue to subsidize Civic. The staff at Civic is exceptional. Among other things, they monitor an array of highly complex financial and legal obligations and have started to find replacement dollars for the redevelopment agency. The public works and planning sides of the nonprofit are highly professional.
Also, Civic has inherited a reputation for working effectively with the development industry. It is respected in the business world and is beginning to be appreciated in our neighborhoods. There may have been a leadership crisis, but the Civic staff continues to complete difficult projects.
With a little redirection, Civic can use these technical skills and other assets to leverage the efforts of community-based nonprofits, to help connect development opportunities with communities seeking new development and begin again to achieve the former redevelopment agency’s revitalization goals.
So, I propose that Civic San Diego be tasked with these new responsibilities:
- Continue to seek out new revenue sources: Civic launched a New Markets Tax Credit program that provides a valuable financing service and pays for itself. It is re-instituting a program that shut down during the 2008 financial collapse that incentivized lenders to invest in low-income communities. Other innovations worth exploring include Enhanced Infrastructure Financing Districts and Opportunity Zones, plus state affordable housing programs under current discussion.
- Seek out opportunities to collaborate with community-based nonprofits: Civic should partner with community-based nonprofits to compete jointly for grant funding. Local nonprofits provide community involvement and advocacy, but often do not have the staff resources to handle complex accounting and contract management. Also, they often can’t enter into grant contracts because they can’t advance project expenses and be repaid later. Civic could handle the accounting, contract compliance and construction management for those other nonprofits and be compensated through grant funds, and in some cases could front the reimbursable grant expenditures. This approach would bring new outside money to San Diego and strengthen neighborhood nonprofits.
- Under the City Council’s direction, undertake major community revitalization projects: The task would be to work with community residents and other stakeholders, prepare a plan, identify how to implement the plan, identify revenue sources, and, if approved by the City Council, implement the project, including construction. Some examples of revitalization projects with neighborhood support are Little Saigon in City Heights and student housing adjacent to the San Diego State University trolley stop.
These tasks are difficult for a municipal government to undertake, because they require risk that can be better mitigated through limited liability entities, but that would be improper for a prudently-managed city.
With these fundamental changes in direction, Civic can soon become a valuable asset for the whole city. It’s uncertain whether the corporation can ever become self-sufficient, although some aspects of its operation are moving in that direction. The question should really be whether Civic as a city-owned nonprofit can return significant benefits to our neighborhoods. And I believe it can.
Michael Jenkins is a Civic San Diego board member who served as treasurer between 2016-17 and a retired attorney who now specializes in land use and environmental mediation. See anything in there we should fact check? Tell us what to check out here.