An unprecedented deal to use public funds to help with a mortgage for a nonprofit was approved Tuesday.
The future of the Lesbian, Gay, Bisexual and Transgender Community Center at 1800 Market St. is in jeopardy if it cannot refinance its mortgage with a bank, and the only way the bank will do it is if there’s a loan guarantee.
That’s where The City is stepping in. On Tuesday, the Board of Supervisors approved legislation in a 9-1 vote that creates a “mortgage payment reserve fund,” and puts in it $157,500 from The City’s operating-budget reserve. The fund could be “replenished” up to more than $1 million in subsequent years.
“This is not a bailout,” said Supervisor Bevan Dufty, who introduced the legislation. “I put myself on record in pledging to you that going forward we will not draw down these funds. These funds will be preserved in reserve.”
The refinanced loan would save $200,000 during the next five years, according to Dufty.
LGBT Center Executive Director Rebecca Rolfe has said the organization is looking to lease out space for commercial use, such as a restaurant, to generate more revenue going forward.
The LGBT Center was built eight years ago, and The City contributed $5.7 million to the development. The center offers such things as meals for the homeless, financial planning, art programs and job-search assistance.
Supervisor Sean Elsbernd voted against the legislation. Supervisor Michela Alioto-Pier was excused from the meeting. Elsbernd had said during a hearing last week that he was “not comfortable with the entire process” and did not think the board should be “putting The City on the hook.”
The board will take a second and final vote next week.
Mayor Gavin Newsom said Tuesday he was “cautious” about using the funds for the nonprofit.
“We are going to be cautious in terms of making a determination on whether this is appropriate at this time,” Newsom said.
Examiner Staff Writer Erin Sherbert contributed to this report.