City officials review proposed policy to formalize leases of city-owned properties to nonprofits

City staff presented a proposed city policy intended to formalize how the city leases city-owned properties to nonprofit and for-profit tenants (agenda item 0.3), emphasizing current practices, new reporting requirements and a clearer process for identifying and offering vacant city properties.

Lisa Schecter of the Office of the CEO summarized the proposal and said the city currently has about “140 contracts” with nonprofit tenants, some of which have expired. The proposal would formalize many existing practices and add new elements: annual reports from nonprofit tenants to the council office, a typical five-year contract term for new leases with the possibility of adjustments tied to capital repairs, an explicit process for reviewing nonprofit requests case by case, and exceptions for certain departments (for example, parks and homelessness-related programs). Schecter told the council the new policy includes an asterisked notation indicating which provisions are new versus current practice.

Councilmembers pressed staff on implementation details. One councilmember asked how many nonprofits had participated in outreach; staff said “more than 50” nonprofit representatives attended public Q&A sessions and that the office walked attendees through the community-benefit analysis and the lease process. Councilmembers expressed concern about administrative burden on small nonprofits and whether the community-benefit analysis would create barriers for organizations operating on thin margins. An Office of the CEO representative said staff can provide step-by-step assistance and can simplify submissions for smaller organizations.

Council discussion also focused on how the city tracks vacant properties and coordinates across departments. Staff said there is a central inventory managed with the city’s real estate division (referred to in the transcript as GST) and that coordination occurs with departments to identify properties that may be available; nevertheless, staff and councilmembers noted the process has gaps and recommended a more proactive approach to identifying underused properties so the city can better match space to nonprofit needs. One councilmember urged that the council office act as a case manager when organizations need help complying with requirements for existing contracts.

No final council vote on the policy was recorded in the transcript excerpt; councilmembers indicated the item required additional review and follow-up. Staff said the recommended policy is intended to apply to new contracts while existing leases would be reviewed case by case.

Why it matters: The policy would standardize the city’s treatment of nonprofit tenants, clarify reporting and community-benefit expectations and change how vacant city property is marketed internally; it could affect dozens of community organizations and the city’s ability to allocate space for social services.

The council did not adopt the policy on Wednesday and asked staff to continue engagement with departments and nonprofit stakeholders.