Sunset church embroiled in legal battle with infant day care center over shared space

An effort by a Sunset District church to assert control over an infant care center that it has housed for nearly four decades has resulted in a restraining order against members of the church’s leadership and an ongoing legal dispute.

For more than 35 years, the nonprofit Grace Infant Care Center has operated out of the lower floor of the Grace Lutheran Evangelical Church at the corner of 33rd Avenue and Ulloa Street. Though managed by its own board of directors, the center was created from a constitution adopted by church members.

In a complaint filed June 21 seeking a temporary restraining order, permanent injunction and damages, the center’s leadership alleges “usurious actions” on the part of the church that included seizing the center’s bank accounts, terminating its board and attempting to co-locate a preschool on the premises last month, allegedly placing the center in violation of its child care licensing.

The center’s staff fear that the power struggle could result in its shut down, to the detriment of the dozen or so families who currently rely on its services. The church, led since 2014 by Pastor Megan Rohrer, contends that the center’s refusal to file a joint tax return triggered the intervention.

“Our taxes have been filed jointly for 35 years. In January, the board chose a different method to file taxes,” said Rohrer, who is transgender with the chosen pronouns them/they. “We received information from the IRS that the way they are filing their taxes is not authorized, and we had to resolve the issue.”

In June, the church’s council voted to terminate the board and seize its accounts. The center’s leadership maintains these actions violated the church’s constitution, which requires the center to be financially independent.

In turn, the center froze its accounts to deny Rohrer access.

Parents were asked by Rohrer to begin making their infant care payments to the church, and were notified that the center could close for up to to 30 days for the transition.

The center also alleges that attempts by Rohrer to rent out a portion of the church’s space to the Wah Mei School to bolster the church’s rental income is in conflict with its infant care center licensing. The Sunset District preschool was recently awarded an expansion grant and has been searching for a new space to serve up to 60 low-income students.

Per the complaint, the child care center’s licensing dictates that the “facility space be designated to infant care and not for other purposes” and that a co-location would “force [the center] to close operations.”

Rohrer said that there is no intention to shut down the center, but acknowledged that its board of directors and the church’s leadership had reached an impasse.

“If this childcare center can only be run by a particular board, I don’t think that I can work through that,” said Rohrer.

The reportedly amicable relationship between the church and the center appeared to crumble last fall, when Rohrer “was trying to assert more control over the center, which caused a lot of us discomfort,” said Andrea Murphy, a parent at the center and the current chair of its board of directors.

At the center of the dispute lies the church’s constitution, which governs its operations and is also the foundation for the creation of the infant care center.

In court documents, the center’s leadership argues that it is a secular institution with no financial ties to the church, apart from a monthly rent payment for use of about 40 percent of its physical space. The church also holds the center’s child care license.

Murphy said that the center’s leadership was forced to take “drastic measures” by filing a restraining order after the church allegedly violated its own constitution by interfering with the center’s finances and firing its board.

The legal complaint alleges that the funds were used to pay for the salary of its pastor, which is alleged to be upwards of $90,000, and that the church’s congregation has “made a decision to close the church once the account falls to $200,000 which is anticipated to occur by the end of 2019.”

In response, lawyers argue on behalf of the church that those allegations are false and fueling a “smear campaign” in an effort by the center’s leadership to break away from the church.

“The church has ample authority under its constitution to take the funds of [the center], the organization it created,” reads the opposition statement, adding that “funds were taken to ensure the proper filing of the church’s taxes.”

“None of that money was used for church operations,” said Mark Watson, an attorney for the church, adding that the center was never “governed separately” because the church’s constitution “requires a majority of the members on the infant care center board” to also be members of the church’s council.

Though a judge advised both parties settle out of court at a hearing last month, tensions appear to have escalated.

Unarmed security guards were hired to watch over a service led by Rohrer on a recent Sunday. In a Facebook livestream of the service, Rohrer informed members that interruptions by staff and parents affiliated with the center were anticipated.

“We are under extreme caution,” Rohrer said at the time.

Likewise, the dispute has left parents worried about the future of the infant care center in a city where such institutions are in high demand but short in supply.

“There is such a shortage of infant cares in The City, it takes like six months to a year to find a new daycare. We applied to a dozen places and got into one,” said Gunnar Skulason, whose child is currently enrolled at the center. “My main concern is that if the church takes over, that [the center’s director] would leave, the staff and the parents would leave.”

Both parties are expected to appear in court on Wednesday.

lwaxmann@sfexaminer.com

Laura Waxmann
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Laura Waxmann

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