In mid-November, city officials and nonprofit leaders held a press conference at 701 Alabama St. near 19th Street to announce the purchase of that property. It’s part of a two-story, L-shaped building that for decades was owned and operated by the Mission Language and Vocational School, where adult students can go to learn the skills they need to land jobs as, among other things, medical techs and caterers.
A few years back, the school was in financial crisis. It leased part of the building to a tenant who had the option – and eventually exercised that option – to split off and buy that part of the building. Now, the school, together with a group of other nonprofits and with backing from the city, has bought it back. And in the process of reversing the property deal through several years of tense court mediation, the school also underwent major changes to its leadership.
The Mission Language and Vocational School grew out of the Centro Social Obrero, founded in 1962.
“There was a lot of thought that went into how to help this Spanish-speaking immigrant community really get into the labor,” said Tracy Brown-Gallardo, now chair of the school’s board. “It started with [local] 261 and then it just expanded to other unions and expanded into different industries like the medical field, the hospitality industry, the administrative bilingual secretaries. And I think that all of that time, it was also a place where community came together to organize.”
The building, she says, became known as the Mission’s city hall. But it was also a social gathering space, where dances and other events were held.
When the Mission Language and Vocational School hit financial dire straits around seven years ago, it sought a tenant who would lease part of its building in order to bring in some money. Administrators found one, in a company called Huckleberry Friends, which works on clean energy technology, advanced manufacturing and promoting science education for youth. Huckleberry moved in, signing a lease that also gave them the option to split off and buy the portion of the building they were renting if they wanted.
“At the time that the deal was signed, MLVS was struggling, they were in financial crisis. So at the time, it was the best deal for MLVS to enter into that contract,” Brown-Gallardo said. “It was a time when programs were being cut. So a lot of the funding to MLVS had been cut. Foundations weren’t really giving as much as they used to in the past.”
A series of problems came to light, which I previously reported on for Mission Local. Because of the school’s financial difficulties, the tenant — Saul Griffith, who runs Huckleberry Friends — had actually agreed to co-sign a loan the school took out, secured by the building. Griffith and the school set up a joint account, and when the school stopped making loan payments into that account, the bank went to Griffith, because he was the co-signer. He agreed to foot the bill for one payment to stave off foreclosure, but ended up paying rent as well as hundreds of thousands of dollars toward his landlords’ loan.
More trouble developed: The school’s director, Rosario Anaya, died in 2015. And eventually, some of its other leaders expressed doubts about the deal. Griffith, whose lease included an option for him to split off and buy a portion of the building, had started the process of separating his portion. But the school wasn’t cooperating. In July of 2016, Griffith sued for the money he was owed and over the school’s delaying his ability to separate and buy part of the building.
In 2017, news came out about the dispute. And other community groups weren’t happy that part of the building could be sold – particularly given its historical significance. Neighborhood organizations and activists attended one of the school’s board meetings. They convinced the school to back out of the binding agreement to sell part of the property.
But in early 2018, the sale was made after all. A third of the Mission Language and Vocational School building was sold to Griffith for $3 million. Though instead of becoming two separate buildings, both entities were now “tenants in common,” sharing ownership of one property. Griffith, who had been trying to separate from the school, successfully requested to re-open the case in March of last year. One remedy he proposed was for the entire building to be sold and the proceeds to be divided between the parties. Court records indicate that the referee – a retired judge with the power to decide the case – was considering this possibility.
Until the legal dispute was settled, that is. Rather than seeing the building sold in its entirety, Mission Language and Vocational School formed a consortium with three other nonprofits and bought back Griffith’s interest in the building for $4.75 million, plus $700,000 in damages.
Griffith is deeply unhappy with the result. He said he lost at least half a million dollars on the settlement in legal fees and other costs, and estimates the loss is more like several million dollars if damage to his business is included. He also said he would have preferred to be able to continue to own and operate his business out of the property, which he had sunk millions of dollars into through upgrades. But he said he felt threatened, and didn’t want to continue what had already become a lengthy legal battle.
“My wife and I simply could not afford to continue fighting this fight so we relinquished and sold the property at a significant loss,” Griffith wrote in an email.
For Mission Language and Vocational School, the sale still required significant fundraising and organizing. State Assemblymember David Chiu was brought in as a mediator. Community members who had opposed the sale were invited to join the school’s board of directors.
Brown-Gallardo is one of the new board members. As the dispute over the building unfolded, she found herself remedying problems previous school leaders had left behind — like when she discovered the school’s 501(c)3 nonprofit status had lapsed.
“I thought, oh my god. This means that technically, if we don’t renew this, we will be out of business,” she said.
Worse, the school had a history of sometimes not making payroll – and Brown feared it could happen again on her watch. At times, that meant coming up with solutions like bringing in catering business.
“So it has definitely kept me up,” she said. “I thought I would be a failure to my community. There was definitely times where I was not sure I was going to make payroll. And as the board president, it’s almost like, I can’t not pay my staff. I think once I assumed the role of the board presidency, within three to four months, there was never a time that we did not make payroll. So that was a huge celebration.”
The legal dispute carried on. District 9 Supervisor Hillary Ronen remembers feeling like things would not work out for the school.
“There was a dark point in this whole process where it looked like everything was going to fall apart. And I was saying to myself, we cannot lose this historic building for the Latino community in the Mission District, but I have no idea how we’re going to get out of this or how we’re going to save it. And it was really scary,” Ronen said. “I didn’t see a path forward.”
In order to make an offer to buy back the disputed part of the building, the school also needed to raise money. So it formed a consortium with three other neighborhood organizations: Jamestown Community Center, the Mission Economic Development Agency and Mission Neighborhood Centers, Inc.
Jamestown, a youth development organization, was facing displacement from its 26th Street location. Its executive director, Myrna Melgar, said she and Brown-Gallardo met with the mayor, who suggested moving in to the Mission Language and Vocational School space.
“The mayor said to me meeting that: ‘What are you doing? You know, you should just move into that building, and then I’ll give you the money, and we can save it.’” Melgar said. “So we moved in here, Jamestown moved to this building, despite knowing that we could be evicted if the lawsuit went through. And we did that, you know, out of solidarity, and because, you know, we really thought we could do it with the mayor’s commitment.”
And the city did pitch in money. An initiative of the mayor’s office called the Nonprofit Sustainability Initiative granted the consortium one million dollars.
“Almost immediately after the mayor was in office, the consortium and Mission Language Vocational School came together and asked to have a sit-down with her to find out how she could support their interests,” said Joaquin Torres, director of the Office of Economic and Workforce Development. The million-dollar grant, he said, enabled the school to close a deal to buy the building.
“There’s nothing like having a place in your community to call home,” Mayor London Breed said at the press conference announcing the buyback. “This place represents so much not only to this community but to this city. And so, it wasn’t even a question as to whether or not we needed to make sure that we provided the necessary money to help secure this facility.”
It’s a particularly sore point for Griffith, who sold back his share of the building, and who says he lost money on the deal.
“It seems like an enormous insult that my tax dollars bought my own building away from me,” he said.
Brown-Gallardo, from the school’s board, says the school will be paying off the building and the $700,000 awarded to Griffith in damages for a long time.
“That was steep for us. It will hurt us for years to come. We will be fundraising for many years,” she said. “I was put here by community to advocate for what was best for community, and I knew that I could not take any risk at losing the building. And so ultimately, that’s why we agreed to settle with such high damages.”
In the end, she described the outcome as a win for the community, which will keep the school and its space and programs.
“To be part of this community, you have to kind of make some sacrifices. And I think we all made sacrifices for this to happen,” Brown-Gallardo said. “I’m just so thrilled at the outcome — we will be able because of this to serve the Mission for many more decades to come.”
