El Cajon
From Bwtm
It's been a quiet week in El Cajon, my home town.
http://en.wikipedia.org/wiki/El_Cajon
'Enough,' El Cajon says of deal with nonprofit
EL CAJON – A brown stucco office building sits on a busy street in the middle of the city. Inside are the quiet, cluttered headquarters of the Heartland Foundation, a nonprofit that seven years ago embarked on a novel plan.
The building at 1068 Broadway was supposed to be the hub of the foundation's Project Destination, an expansive job-training center that connects people to community colleges, internships and new careers.
Yet visitors won't find any mention of Project Destination on the building's directory. The brochures, when Heartland volunteers can find them, are outdated. There is no reception area for drop-ins.
Heartland bought the building with $1.3 million in federal money borrowed from El Cajon. Last month, the City Council voted to declare the loan in default and foreclose on the building after years of making loan payments that Heartland should have made but didn't.
As of October, the nonprofit paid less than $12,000 toward the loan while El Cajon has contributed nearly $1 million. The city has been paying down the debt with its limited share of Community Development Block Grants, money that could have been used to aid some of El Cajon's poorest residents.
Heartland now owes nearly $2.2 million for the loan, unpaid interest and late charges, said David Cooksy, the city's director of housing and redevelopment. The city plans to recoup the money by selling the Broadway building, but there's no telling when.
It's clear the nonprofit was overly optimistic when it applied for the loan in 1999. Less than two years old at the time, the foundation wooed the city with promises it couldn't fulfill, and the City Council was quick to believe them.
What the foundation claims to have delivered – help to 2,000 residents countywide – is difficult to verify.
“They looked good on paper, like a lot of other projects look good on paper, and sometimes it doesn't pan out,” said El Cajon Mayor Mark Lewis.
The mayor, quoted as a supporter in Project Destination's brochures, now says, “We don't even know if they're doing what they're supposed to be doing.”
'We bought into it'
The outstanding loan payments do not affect the city's budget. But the loan payments have taken away from the federal grant money that the city receives annually to revitalize neighborhoods, spark economic development or improve community facilities and services for low-and moderate-income residents. El Cajon receives about $1.2 million a year in Community Development Block Grant funds, Cooksy said.
“The council determined enough is enough,” Cooksy said. “We've done what we can. They've (Heartland) created a lot of jobs but the financial requirement to keep the program up and running is depleting money for other CDBG programs.”
Lewis, the only person still on the council who voted for the project in 1999, said Heartland's concept was so impressive that the majority of the council backed a nonprofit with virtually no track record and no proven fundraising ability.
“We bought into it at the time,” the mayor said.
Mark Hanson, Heartland's president and founder, said today's Project Destination may be different from the original vision. Still, he said, it has helped 2,000 people, about 20 percent of them from El Cajon.
He said Project Destination offers career and apprenticeship preparation, a community technology center, job training and placement. It has a second location in San Diego.
Hanson has filed monthly progress reports with the city listing those served. But El Cajon provides little oversight. The San Diego Union-Tribune reviewed the reports, obtained through a public records request, but the city redacted names and Social Security numbers for privacy reasons.
Heartland officials said they had the best intentions but were overwhelmed by the scope of renovations needed at the Broadway building. The nonprofit pinned its plans on a grant in excess of $300,000 that never came through. There was no Plan B for funding.
Yet Heartland's detailed proposals to the city seven years ago confidently claimed that Project Destination would reap more than $1 million in profits each year and plow the money back into the program.
“We did our best given the situation,” Hanson said.
Ideal on paper
When Heartland took its proposal to the city in 1999, city staff, which often makes recommendations on whether projects should move forward or need more work, didn't take a position on the loan application. “We didn't know a lot about this group, so we thought the council really needed to make this decision,” said Community Development Director Jim Griffin, whose department oversaw the distribution of CDBG money in 1999.
The council agreed to secure a $1.3 million loan on Heartland's behalf from the U.S. Department of Housing and Urban Development. The money would be used to buy and renovate the two-story office building and provide some start-up money for a wide-reaching vocational center that would partner with the Grossmont-Cuyamaca Community College District and local businesses.
In return, Heartland would handle all upgrades and rent offices to businesses supporting its mission. There would be enough money to make loan payments to the city and turn a profit, organizers promised.
The council approved the plan in a split vote. City leaders say Project Destination sounded ideal on paper, and Heartland offered up a slew of local business leaders who pledged to make the program a success.
Yet some who wrote letters of support had little to do with the program after the loan was received.
Buddy Wilkerson, Heartland's executive director at the time, said he gave up his position when it became clear there was no funding for the dental hygiene school and other programs he wanted.
“I think everybody had real good intentions,” Wilkerson said. “It would have worked” if the $300,000 grant had come through.
The college district backed Heartland's concept in the beginning. It offered computer classes at the Broadway building until 2002, said district spokeswoman Dana Quittner, but it was never affiliated with Project Destination.
Yet the building still has a sign for the Grossmont College Business
