DCA Nonprofit Lease Subsidies

•   Last Updated: August 17, 2010

On June 1st, 2010, the Los Angeles City Council voted to move the proposed Nonprofit Lease Subsidy Council File into the Arts, Parks, Health and Aging Committee.  The issue remains in Committee, to be discussed in Fall 2010. 

Over 3,000 advocates had written to City Council urging them to give the proposal more careful consideration by moving it to Arts, Parks, Health & Aging. 

There was considerable discussion on the issue, with some Councilmembers lobbying to pass the motion as written.

Councilwoman Hahn noted, "I can’t vote for this yet. I don’t have enough information before me." Ultimately, the majority of Councilmembers agreed, with 12 of 15 voting to move the proposal back into committee. 

Councilman LaBonge made the motion, with Alarcon seconding.  LaBonge said, "I think it's important to listen to the nonprofits on this issue."

Councilman Alarcon spoke eloquently about the contributions of nonprofits within his district, both to the community and to the preservation of their buildings. "If the nonprofits charged us in real value what they are providing us, we would owe them money," the Councilman said.  

Representatives from many local organizations signed up to give public testimony at the meeting, including advocates from LA Conservation Corps, Central City Action Committee, ONE Generation, People Coordinated Services, McGroarty Arts Center, Hoover Intergenerational Center, West LA Family Resource Center, Barnsdall Art Park, Hollyhock House, Hollywood Arts Council, BACSAC, SPARC, El Centro del Pueblo and the Odyssey Theatre.  The Council was not able to get through all speaker cards, but those who spoke can be seen here on Arts for LA's Flickr Set. 

Arts for LA will provide additional information as we receive it.  To view all City Council files & information or receive up-to-the-minute updates on this issue, visit cityclerk.lacity.org and search for Council File 08-2762.

 

Background

A $1 per-year lease of city-owned buldings enables dozens of non-profits - many of them arts organizations - to serve the public.  The CAO has proposed the elimination of this long-held agreement, jeopardizing these organizations' ability to provide programs when our communities need them most.

We're calling on arts organizations, partners and community stakeholders to vigorously advocate to City Council for the proposal to have a full hearing in the Arts, Parks, Health & Aging Committee. 

The campaigns asked the City Council to consider the following:

1. The proposal needs a full hearing in Arts, Parks, Health & Aging to discuss the ramifications of removing the nonprofit lease subsidy program.

2. This hearing should include an economic impact statement.

 

Additional Information on NonProfit Subsidy Leases
A proposal by the CAO's office would eliminated the $1.00 per-year leases for nonprofit organizations working in the interest of the public. The propsal is currently in the Budget and Finance Committee.  Below is an excerpt from the CAO's recommendation expaining their rationale for the chance in policy.

Many non-profit organizations occupying city-owned facilities for virtually no payment to the City ($l/year). Not only is the City foregoing market rate rental income, the City, in some cases, is also paying for utilities, maintenance and security costs and is shouldering liability exposure that arises from use of such city-owned facilities. To minimize the City's existing structural budget gap, we recommend that Council adopt eligibility criteria and a subsidy policy, as proposed in Attachment I of this report. This policy will establish reasonable and appropriate financial responsibility for non-profit organizations in return for permission to occupy City-owned facilities. This policy will not only reduce the negative fiscal impact and liability exposure on the City, but will also provide consistency in determining eligibility and lease terms, while providing Councilmembers flexibility to subsidize up to 50 percent of the market rate rent. A portion of this policy also addresses the sale of property to non-profit organizations.

Full text: http://clkrep.lacity.org/onlinedocs/2008/08-2762_rpt_cao_4-16-10.pdf

This context does not address the important role these organizations play in reducing urban blight, sustaining jobs and stimulating economic activity.  It also does not address how GCS will meet the demand of serving these facilities.