While there are affordable housing programs for people, there are very few programs that build permanent affordable commercial space for nonprofit social service providers.
Common Ground Urban Development has partnered with teams that want to change this dynamic by making socially responsible real estate development decisions from the very beginning.
Douglas Ross Construction | Palisade Builders
Douglas Ross has been in the construction and real estate development business for over 40 years. Doug has completed over 20,000 housing units in the SF Bay Area with several billion dollars of completed projects include commercial office buildings, historic renovations, hotels, mixed use projects and apartments. Clients include Equity Residential, Rain Tree Partners, Blackrock, Mid-Peninsula Housing Coalition, Build Inc., Prometheus, Irvine Company, Stanford University and Wilson Meany. Doug also has developed over $400 million of development projects in the Palo Alto, San Francisco, Palo Alto and Santa Cruz areas alone. As founder and principal of Palisade Builders, Doug’s team built a suspension bridge in Honduras for Bridges to Prosperity.
Chris foley | Polaris Pacific
Chris Foley is a long-term real estate investor, developer and principal partner at Polaris Pacific, the largest sales and marketing company selling new construction high-density urban housing on the West Coast. At Polaris Pacific, Chris specializes in entitlement, financial analysis and land acquisition. As well he led the effort to raise funds for United Playaz to buy their building at 6th and Mission, is involved with Swords to Plowshares, and helped Homeless Prenatal Program acquire their property. He also is the Founder of The Market a 22,000 foot food hall that was employer of the year for Goodwill in 2015 and hired over 80% of the team their through groups like Goodwill, Episcopalian Services, Mission Hiring Hall and others. When they opened they had multiple homeless people who started work there and now have a home. Chris and Doug are also working together on rehabilitating a church at 1401 Howard that was vacant since 1989
Community development finance partnerships
1850 Bryant Street Best PRACTICES At Work: RESEARCH
The report outlined immediate, mid-term and long-term solutions. Although the immediate and mid-term recommendations have been fulfilled, the long term solution for permanent space through nonprofit ownership has yet to be realized. The report determined the highest priority as working with developers to build multi-tenant centers owned by nonprofits:
· The possibility of identifying significant spaces for multi-tenant co-location should be examined, especially in neighborhoods with high concentrations of San Francisco residents who currently access services.
· The specific details of the rental status should be reviewed with the underlying goal of determining possible co-location and the ability of the City to provide strategic support for permanently affordable space.
· Given that over half of the nonprofit organizations surveyed indicated an interest in sharing space, buildings that could provide this opportunity should be specifically investigated.
· Maximizing the long-term sustainability of nonprofits may require strategic acquisition of larger spaces by a nonprofit with the capacity to maintain such a space and manage the real estate financing required.
1850 Bryant’s underlying zoning allows for social service agencies to operate at this property. The building is being structured as commercial condos which will allow each nonprofit to participate in the equity of their space tailored to their financing capacity. This structure allows for direct ownership and helps protect the nonprofits.
The report cites the Community Arts Stabilization Trust (CAST) as a best practice, with which the 1850 Bryant project team has significant experience.
· The City can also examine the CAST model to determine the utility of creating an entity specifically to deal with the real estate acquisition so that the nonprofits focus on providing services instead of having to learn how to deal with a potentially complicated real estate transaction.
The 1850 Bryant project is structured similarly with the development team providing the predevelopment resources necessary for project completion. Currently, the project team has been assembled, site control is in place, and entitlements are underway which will give the nonprofits the time needed to purchase their condo that complements their management structure.
In addition, over the next two years, the City of San Francisco is investing $6 million in the programs outlined below to strengthen and stabilize the nonprofit real estate sector in San Francisco.
The study received surveys back from nearly 500 nonprofits in the Bay Area. There was an overwhelming concern about space needs for nonprofits, specifically those who serve low-income communities. See below.
The vast majority of respondents have serious concerns about how the real estate market will affect their futures.
Most respondents (82%) are concerned about the negative impact of the real estate market on their long-term financial sustainability. Affordability appears to be affecting nonprofits similarly across areas of focus, size, and geography.
But nonprofits serving communities of color and low-income communities show an especially high level of concern for the future.
A majority of respondents (68%) think they will have to make a decision about moving in the next five years.
Most of those organizations (76%) cite affordability as a reason for such a move. More than half (57%) think that a move would lead to a decrease in the quality of their space. Roughly half (48%) think a move would lead to a decrease in revenue. A third (33%) of them think they would have to move to another city.
More than a third of respondents (38%) have already moved at least once in the last five years.
Of these, two-thirds (67%) say cost was a factor in their reason for moving. A notable proportion reported decreases in the quality of their space (30%) and a negative effect on their mission (20%).
Respondents identified ownership of their spaces and working in spaces designated for nonprofits as crucial options for weathering a challenging real estate market.
The report concluded that the “respondents have identified ownership of their spaces and working in spaces specially dedicated to nonprofits as crucial to weathering the challenges of the Bay Area real estate market.”