Feb. 11 2015 12:48 AM

City-controlled nonprofit faces growing frustration from community groups

Andrew Phillips, chief operating officer (left) and Reese Jarrett, president of Civic San Diego
Photo by Joshua Emerson Smth

With plans to invest tens of millions of dollars in underserved neighborhoods, the city-funded land-use nonprofit Civic San Diego has faced one major question: What are the agency’s priorities? 

Using a number of funding sources, including federal tax credits and money from large banks, the quasi-governmental agency plans to strike deals with developers who wouldn’t otherwise build in low-income parts of the city. Just what those deals will look like and what exactly will be built has been the subject of much debate. 

In response to concerns, a coalition of neighborhood groups called the Community Budget Alliance has asked city leaders to adopt a so-called community-benefits policy that would spell out when developers would be responsible for requirements such as a living wage, affordable housing and local hiring. 

For more than a year now, Civic San Diego and a majority of its nine-person board of directors have consistently avoided attempts to create a policy with any such teeth. The issue came to a head last September when members of the City Council, led by Councilmember Marti Emerald, directed the nonprofit to draft a policy and report back in March. 

“I have heard the concerns community members have shared regarding possible future development by Civic San Diego in their neighborhoods,” Emerald said. “It’s understandable that they, as leaders in their neighborhoods, are doing their best to ensure that Civic San Diego understands what they define as a community benefit and that their ideas are incorporated in the planning process.” 

In response, Civic San Diego last month concluded a series of six public meetings dubbed the “community benefits consensus project,” which included talks by land-use professionals followed by question-and-answer sessions.

The reaction from advocates and many community groups has been unequivocal dissatisfaction. 

“We, as a coalition, were looking forward to working with Civic San Diego to develop a collaborative community-benefits policy that works for all of us, but after attending all of the consensus-project events, it was very clear that there was not going to be any space for discussion on an actual policy there,” said Samer Naji, Community Budget Alliance organizer with the Center on Policy Initiatives think tank. 

Outreach wasn’t geared toward average residents, said Josefina Garcia, a community organizer with tenants’-rights nonprofit Asociación de Liderazgo Comunitario. “It was supposed to be to get input from the community, but it’s hard to get input when you have a panel using language that regular residents wouldn’t understand.” 

City Heights Community Development Corporation Executive Director Ken Grimes said, “There really wasn’t any substantial discussion of a community-benefits policy that would specify the kinds of benefits that we’re looking for.”

Unless the City Council steps in, such a conversation may never take place. 

The community-benefits policy won’t outline or mandate any particular project requirements, Civic San Diego President Reese Jarrett told CityBeat. “It won’t get into that kind of specificity,” he said. “The policy will talk about the kinds of things that neighborhoods have indicated are important to their communities.” 

At the public meetings, Jarrett said, he heard a very different message. “They don’t want us to impose a community-benefits policy on their neighborhoods,” he said. “Obviously, we’re getting several messages, but that seems to be the overriding theme.” 

A longtime local developer, Jarrett was appointed last July by Mayor Kevin Faulconer to head Civic San Diego after former President Jeff Graham left to work for a private real-estate company. Under a proposal spearheaded by Graham and backed by Faulconer, Civic San Diego has planned to significantly expand its ability to not only fund but also plan and permit land-use deals with little city oversight. 

After the dissolution of statewide redevelopment in 2011, the Centre City Development Corporation (CCDC) was rebranded as Civic San Diego. The nonprofit continued to permit development Downtown but no longer had the benefit of doling out new redevelopment financing. 

In an effort to replace this lost funding, Civic San Diego successfully applied for about $58 million in federal new-market tax credits, which are required to be used in low-income communities. However, unlike redevelopment money, allocating these tax credits doesn’t require approval by the City Council. 

At the same time, Jarrett has continued to push Graham’s plan to expand Civic San Diego’s permitting and planning authority from Downtown to include large commercial swaths of City Heights and Encanto. Using tax credits and bank loans, Civic San Diego has started putting together a $100 million investment fund to finance development that it could then have the ability to permit and approve. 

What that development will look like, and how much open space, affordable housing or local labor it would include, will depend on the needs of the community, Jarrett said.

“The priorities in Encanto are going to be different from the priorities in City Heights,” he said. “Those are the kinds of things that we’re getting feedback on as we go out and talk to people about what are the needs of their neighborhoods—and then there’s the reality of the marketplace, what things can happen.” 

However, this potential authority to dramatically engineer the future of neighborhoods with little supervision from elected officials has raised concerns. 

“Not understanding exactly what this entity is, or how to make sure there’s oversight, means people really want the City Council to take the lead in defining that, and developing a process that protects the taxpayer and the citizen,” said Kyra Greene, a policy analyst at the Center on Policy Initiatives. 

In designated areas, under the proposal, community plans—complex zoning documents that go through rigorous public vetting—could be altered to loosen requirements, such as on-site parking, building heights and density. Proponents have argued this would promote transit-oriented development and spur economic growth. 

However, what kind of public process would accompany any zoning changes remains vague. If the city grants this planning authority to Civic San Diego, under the proposal, residents would likely be allowed to comment. But it’s uncertain how or if residents could appeal decisions made by the Civic San Diego Board of Directors.

In California, there are three other community-development entities besides Civic San Diego that received new-market tax credits. In Los Angeles, San Francisco and Oakland, decision-making boards are composed of high-ranking government officials.

The Civic San Diego Board of Directors is different. With the mayor appointing eight of the nine members of the board and the City Council controlling one seat, the current board of directors is made up largely of land-use lawyers, real-estate professionals and registered lobbyists.

Despite challenges from a few directors, the overwhelming consensus of the board has been that adopting clear community-benefit requirements would prevent at least some development.

“Primarily [Civic San Diego] staff and a portion of the board of directors believe that any investment is better than no investment, and that’s debatable,” said former board director Susan Riggs, now deputy secretary for housing policy under Gov. Jerry Brown. “Certainly from the community’s perspective, that’s debatable.”

More than a year ago, while on the board, Riggs, then the executive director of the San Diego Housing Federation, initiated the push to adopt a community-benefits policy.

“If Civic wants to be relevant when it reaches out to other communities, it has to put on a different face,” she said. “It has be an advocate for the community and not for the development community.”

However, Riggs’ attempts to adopt a policy were repeatedly stonewalled by senior management and then-board chair Cynthia Morgan, a land-use attorney and registered lobbyist for law firm Higgs Fletcher and Mack. In October, Morgan unsuccessfully proposed a gag rule that would have prevented board directors from talking to members of the City Council.

Morgan didn’t respond to CityBeat’s request for comment. The only members of the current board who agreed to speak on the record for this story were Murtaza Baxamusa, director of planning and development for the San Diego Building Trades Family Housing Corporation, and Michael Jenkins, a land-use mediator, attorney and former professor at San Diego State University.

In an attempt to move a community-benefits policy forward, Jenkins said he also hit roadblocks under Graham’s leadership.

“The president at the time said, ‘If you have some thoughts on the matter, send me your thoughts.' And I prepared a draft, which I presented to him. But that never saw the light of day.”

Not only would Jenkins like to see a strong community-benefits policy; he also supports exploring City Council oversight of certain board decisions, including funding allocations.

“There’s different ways to structure it,” he said. “I could see every project going before the City Council for review. I mean, that’s the way it worked with redevelopment, and it didn’t seem to work too badly then.”

Civic San Diego would accommodate the City Council if it wanted oversight of funding allocations, Jarrett said.

“We’re very comfortable with the system that’s set up now,” he said. “As a policy decision, should it change then, we would facilitate what- ever changes would occur.”

The role and authority of Civic San Diego is still far from determined. Required negotiations with the Municipal Employees Association—the union that represents the city’s white-collar employees—have yet to kick off over whether Civic San Diego staff can take over permitting and planning responsibilities from city employees. In the end, Faulconer and the City Council will have the final say.

Officials with Civic San Diego are scheduled to appear before the council’s Public Safety and Livable Neighborhoods Committee at 2 p.m. Wednesday, March 18. While Jarrett said it’s not certain that a draft community-benefits policy will be completed by then, the meeting is shaping up to be contentious.

“Civic San Diego has assured me, and members of my committee, that dialogue between communities and the agency would happen, and that proactive measures would be taken to better understand the needs of our communities,” Emerald, who chairs the committee, said. “While reports of attendees feeling angry and ignored concern me greatly, I want to respect the process that Civic San Diego has initiated.”

Write to joshuas@sdcitybeat.com or follow him on twitter at @jemersmith.