San Francisco supervisors voted on Wednesday to advance a $22.2 million financing deal for a Mission District apartment building operated by the Mission Economic Development Agency (MEDA). The agreement would have the city purchase an existing $20.3 million loan from the Housing Accelerator Fund, making San Francisco the new lender for the 35‑unit property at 2059‑2065 Mission Street.
Local affordable‑housing effort
MEDA, a 53‑year‑old nonprofit that has built more than 1,300 affordable units, acquired the building in 2024 for $11.35 million. The property is part of the city’s Small Sites program, which helps nonprofits buy and rehabilitate buildings to keep rents affordable and prevent tenant displacement. The loan purchase would keep the project moving while the nonprofit works to resolve broader financial issues.
Financial oversight concerns addressed
Earlier this month, the city controller placed MEDA under the highest level of financial monitoring for nonprofit contractors, citing ten unresolved findings, including unsupported invoices and alleged employee self‑dealing. An independent audit also flagged unauthorized IT spending and weak internal controls.
MEDA spokesperson Juan Mesa called the organization a “victim of a crime,” and the agency’s public‑relations representative declined to confirm whether a police report had been filed. Despite the scrutiny, committee members said recent discussions with MEDA and the controller’s office gave them confidence that the loan is insulated from the nonprofit’s internal problems.
Supervisors’ rationale
Committee chair Supervisor Matt Dorsey explained that the brief delay allowed the board to gather more information and confirm that the city’s loan would be protected. “Last week, we did the right thing in trying to slow down and get more information,” he said.
Mayor’s Office of Housing and Community Development preservation manager Alea Gage told supervisors that the building’s projected income would exceed its first‑year debt payments by 37 percent, well above the 15 percent cushion required by the loan agreement. Gage also noted that Small Sites properties are held through separate legal entities, further shielding the city’s investment from MEDA’s organizational debts.
Long‑term affordability protections
The Mission Street property carries a 99‑year affordability restriction, limits on resale, and provisions allowing the city to acquire the building at a restricted value if necessary to preserve affordability. The housing department will monitor the property’s financial performance quarterly, as it does for 15 other MEDA sites.
Background on recent city actions
Last year, supervisors approved a $37.8 million refinancing package for 15 MEDA‑owned Small Sites properties containing 89 apartments. That package restructured existing debt and allocated roughly $6.2 million in new financing for repairs and reserves. The refinancing occurred six months before MEDA laid off 12 employees and reduced salaries amid signs of fiscal strain.
Calls for better communication
Supervisor Chyanne Chen asked how supervisors are notified when nonprofit contractors face serious financial problems. Sheila Gregorius of the Mayor’s Office of Housing and Community Development admitted that communication had not been consistent and pledged improvements.
MEDA Executive Director Luis Granados thanked the supervisors for their support and said the nonprofit has been working closely with the controller’s office since April to strengthen its financial procedures. Finance staff have received twice‑weekly coaching from private consulting firm BDO, and MEDA has paid off its operating line of credit.
Looking ahead
While the controller’s office has not publicly confirmed that all findings have been resolved, Supervisor Dorsey said the city feels comfortable moving forward with the financing agreement as oversight continues. “It sounds like we agree that we don’t want questions to hold up this project,” he said, emphasizing the importance of delivering affordable housing to Mission residents.
Original reporting: Mission Local — read the source article.
