Rob Gitin has spent the past 18 years counseling homeless youths in San Francisco through the nonprofit he co-founded.
But when the building where he leased space for the nonprofit on Valencia Street in the Mission District was sold two years ago, that work was put in jeopardy.
Gitin and his nonprofit, At the Crossroads, faced the stark reality that hundreds of nonprofit organizations in San Francisco and the Bay Area have confronted for the past five years — displacement in a hot real estate market.
Gitin’s real estate worries, however, have seemingly come to an end with a rare opportunity to sublease thousands of square feet from The City for $1 a year in rent, an agreement that will go before a Board of Supervisors committee for approval today. The proposed sublease is for five years with a five year option.
The chance arose following an outcry from nonprofit leaders in 2013 that without a helping hand from The City many of San Francisco’s longstanding organizations will move away or simply vanish. A year later, The City created a nonprofit displacement program and put $4.5 million into a fund to assist nonprofits with contract negotiations, relocation fees and real estate searches.
Also part of that effort was a recommendation that The City itself should explore subleasing to nonprofits.
Last year, The City did just that when asking nonprofits to bid on 4,124 square feet on the third and fourth floors of 167 Jessie St., also known as the Jessie Hotel, in the South of Market neighborhood. Gitin was one of 24 other groups to express interest and two to apply. Gitin won.
“[This is] literally the single most important thing to happen to our organization since we got our startup funding,” Gitin said Friday. “I say that because I have no idea what would have happened. We are not an organization that can move to Oakland or move to wherever. We have to be where our clients are. We didn’t know what we were going to do.”
The Board of Supervisors Land Use and Economic Development Committee will vote today to approve the agreement, which was introduced by Mayor Ed Lee and Supervisor Jane Kim, whose district includes SoMa.
The space came about through a series of circumstances dating back to a former redevelopment agency’s 1990s land sale to developer Third and Mission Associates LLC. That company built the Paramount at 680 Mission St., with one condition — that nonprofit space was provided and the adjacent 1912-era Jessie Hotel was preserved.
Some 15,000 square feet went to the California Historical Society, which subsequently reduced its square footage by 10,000 square feet, leading to an agreement with the developer to provide additional space for another nonprofit in the Jessie Hotel.
Admittedly, the space needs a lot of work. To that end, The City says Gitin can apply for a grant of up to $946,000, and the nonprofit is expected to privately raise about $1.5 million.
“At the Crossroads is a vital resource for our homeless community. This new space allows this important organization to continue providing unparalleled services to our youth who are vulnerable and at risk,” said Todd Rufo, director of the Office of Economic and Workforce Development, in an email.
A New York native, Gitin, 42, began working with homeless youths after taking a course at Stanford University related to poverty. He began to intern at a drop-in homeless center in San Jose, where he became most interested in the youths who were kicked out or who had heard about the service but waited years before taking advantage of it.
To address this segment of the homeless, Gitin, then 22, applied for a grant with co-founder Taj Mustapha, who has since moved on from the organization. The two initially began the work out of Gitin’s North Beach apartment and Mustapha’s lower Polk Street home.
“My refrigerator always smelled like peanut butter and jelly sandwiches and we had a ridiculous amount of condoms that we weren’t personally using underneath our beds,” Gitin said.
But in 1998, they moved into a small space in 333 Valencia St. and the nonprofit has since grown to a staff of 14 occupying 2,300 square feet and paying $3,400 a month in rent. The new owner wouldn’t renew their lease, which expired in June, though Gitin said he was able to negotiate a three-month extension.
Four nights a week, the group’s outreach counselors walk the streets and reach out to homeless youths and young adults. Annually, they contact about 1,100, but maintain longer term counseling relationships with some 400.
“A lot of the time it takes years and years of slowly building trust on the streets before kids really start to talk to us, but sometimes kids start talking with us right off the bat,” Gitin said. The youths often come from poverty and have suffered some form of abuse.
Gitin said there has been an increase black homeless youths over the years, which he suspects has to do with The City’s decreasing black population.
“Whereas in the past they might have had a large community that would have created options for them other than the streets, now that community is living in Antioch or they have moved out of [the] state,” he said. “This is our theory. I have no idea if we are right.”
He estimated about 65 percent of their clients are black and 15 percent Latino. “These are the kids who are the next generation of chronically homeless adults,” Gitin said.
At The Crossroads is just one of dozens of nonprofits struggling to stay afloat in the hot real estate market. Some 93 nonprofits have applied to The City’s nonprofit displacement program, which is overseen by Northern California Community Loan Fund.
About $2.1 million in financial assistance grants have since been awarded to 35 nonprofits, including 12 arts nonprofits and 23 social service nonprofits, as of March. Another 50 nonprofits have received some type of technical assistance. Forty nonprofits served obtained leases of three years or more.
Among those assisted was the Roxie Theater. The City provided the Roxie with $50,000 for tenant improvements while also providing assistance to negotiate a three-year lease extension, avoiding the doubling of rent the landlord initially sought.
Tandem, Partners in Early Learning, which promotes early childhood literacy, was forced from its 1,800-square-foot SoMa office space after 10 years due to rent hikes but The City provided $50,000 to help the nonprofit relocate to a 6,000-square-foot site in the Bayview-Hunters Point, under a seven year lease.
The need of nonprofits is expected to continue. A report released in March found 82 percent of nonprofits are “concerned about the negative impact of the real estate market on their long-term financial sustainability” and 68 percent “think they will have to make a decision about moving in the next five years.” The survey was conducted by Harder+Company on behalf of Northern California Grantmakers and the San Francisco Foundation. Nearly 500 Bay Area nonprofits responded.
The same report referred to reports by real estate firm CBRE that found San Francisco office space rents are 122 percent higher than five years ago and that “several years of fast growing, tech-dominated demand overwhelmed supply pipelines and resulted in all Bay Area markets becoming among the tightest in the nation.”
But as nonprofits’ real estate woes continue, so will The City’s assistance. The mayor added $6 million more to the nonprofit assistance program during the next two years as part of his budget, which the board approved last week.
“Nonprofit organizations are the backbone of our city,” the mayor said in a statement earlier this year. “Our residents, particularly our most vulnerable, depend on San Francisco nonprofits for services, compassion and inspiration.”