Nonprofits will have an easier time renting in San Jose under revised policy

It might soon become even easier for nonprofits to find spaces to operate in the city—welcome news for community organizations with limited resources.

San Jose amended its policy on nonprofits using city-owned land with a unanimous vote Tuesday. The policy will set clearer guidelines for assisting nonprofits and other public organizations, like schools, in renting city-owned buildings at a lower price. Currently, qualified organizations can lease property from the city for as little as $1 per month with certain city-mandated restrictions.

“We’ve heard from some of our community groups that they desire that longer term,” said Kevin Ice, the senior manager of real estate in the city’s economic development department. “They can use that stability to secure grant funding.”

The policy, first adopted in 1970, was last amended in 2006.

All tenants under the program are renting month-to-month, which makes it difficult for some organizations to obtain grant funding, according to city officials. That means some of the tenants, such as the African American Community Service Agency (AACSA), founded in 1978, have been renting month-to-month for more than 40 years. Before Tuesday’s amendment, tenants were required to provide detailed financial and operational reports to the city, burdening small nonprofits without dedicated financial departments.

“It will allow us to help our community groups better go after dollars like that,” Ice said.

Tuesday’s changes will make it easier for tenants to stay long-term in their rented spaces, as their agreements will be changed from month-to-month to longer-term agreements. Organizations will still be responsible for all repairs to the rented building.

Tenants under the current policy include AACSA, the Alviso Post Office, San Jose Conservation Corps, Yu-Ai Kai Japanese American Community Senior Service and Empire Gardens Elementary, part of the San Jose Unified School District.

Councilmember Dev Davis pointed out that the $1 per month policy was not being applied to some of the nonprofits, such as AACSA, which pays near $100 a month.

The discrepancy, according to officials on Tuesday, was because the city allowed AACSA to have subtenants to help pay for the organization’s programs.

“Kevin (Ice) and I are already chatting about when an extension happens that we can certainly modify that to a lower amount,” Nanci Klein, director of the city’s Office of Economic Development.

The policy will not apply to community centers, city-owned parks or properties with “preexisting commitments,” such as lands that are used by the county or state. The city can end the tenant’s stay at any time should the tenant fail to keep up with agreements or maintenance. Instead of asking for detailed financial and service documents like in years past, the city will only look to see if the nonprofit tenants are continuing to provide an “adequate public service” to the city.

The changes are set to take effect immediately, according to city officials.

Contact Lloyd Alaban at [email protected] or follow @lloydalaban on Twitter.