San Francisco church sues nonprofit to halt proposed sale of affordable housing

SAN FRANCISCO (BCN) — A San Francisco church Tuesday filed suit against a nonprofit it founded to halt the proposed sale of a Western Addition building housing mostly Section 8 tenants and regain oversight.

The Third Baptist Church Tuesday filed a lawsuit and a temporary restraining order request in San Francisco Superior Court seeking to halt the proposed sale of the Frederick Douglas Haynes Gardens, a 104-unit building at 1049 Golden Gate Ave., by the nonprofit Third Baptist Gardens, Inc.

While Third Baptist Gardens Inc. was formed for the purpose of providing affordable housing, the church recently learned that Frederick Douglas Haynes Gardens was being advertised for sale with predicted market rate rents between $3,000 and $7,000 a month, the complaint filed Tuesday alleges. Currently, around 80 percent of tenants in the building receive

Section 8 housing assistance vouchers from the federal government.Tenants had not been told of the possible sale, church officials said.

Shortly after the lawsuit was filed Tuesday, attorneys for Third Baptist Gardens Inc. halted the sale to allow for talks between the two parties, and agreed not to renew efforts to sell without at least 20 days notice to the church, plaintiffs’ attorney Jonathan Holtzman said.

The lawsuit remains in effect, however, as the church works to reestablish oversight over the nonprofit, Holtzman said.

Third Baptist Gardens was formed by the Third Baptist Church in the 1960s to provide affordable housing and until recently provided regular updates to the church board, which included church members, according to the complaint.

However, in the past couple of years, the complaint alleges that Executive Director Rochelle Buford Williams began refusing to provide financial and operational information to the church and ousted a church member on the board without a properly conducted election.

He then persuaded two church board members in December 2014 to sign documents giving Third Baptist Gardens full authority over Frederick Douglas Haynes Gardens by arguing that federal housing authorities required the document. The members did so with the stipulation that the signatures required ratification by the full church board.

When the church board voted to reject the request for authority over the Gardens, the complaint alleges Williams submitted the document to federal authorities anyway. Church officials later learned that federal housing authorities had not required the signatures as Williams claimed, the complaint alleges.

The complaint alleges a breach of fiduciary duty and negligent and intentional misrepresentation and fraud.

Holtzman said the church now hopes to obtain the financial and operational reports it had been seeking, as well as a dialogue with the nonprofit leadership.

“I’m hoping that there will be a dialogue and that there’s an opportunity here to restore church oversight and an appropriate role for the church,” Holtzman said. “What this episode has made clear is that there is a huge need for oversight.”

The church, led by former San Francisco supervisor Amos Brown, has enlisted the support of Supervisor London Breed and former San Francisco City Attorney Louise Renne, whose firm Renne Sloan Holtzmann Sakai LLP filed the lawsuit, in its effort to stop the sale.

“Our clients are asking that TBG make a full and public accounting of the circumstances of this secret proposed sale,” attorney Renne said.

“Because there are two tragedies with this case: one of these 104 working families who are at risk, and the larger issue of protecting San Francisco’s affordable housing safety net.”

Breed said she was working with Mayor Ed Lee and the Mayor’s Office of Housing on the situation.

“I want to send a strong message that this type of behavior is not acceptable in my district nor anywhere in the city,” Breed said in a statement.

Attempts to reach attorneys for Third Baptist Gardens Inc. Tuesday afternoon were unsuccessful.

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