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Loss of redevelopment funds could mean curtains for San Jose theater company

By Stephanie Soderborg | 31 Jan 2012

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The San Jose Stage Company, located in downtown San Jose, may not be able to stay in its current location. With the end of redevelopment agencies in California, funds that used to subsidize community projects like this are now being redirected to schools. (Photo: Stephanie Soderborg/ Peninsula Press)

As any good theater company knows, the show must go on. The question facing the San Jose Stage Company is: How? The theater is losing its government funding and support.

With the closure of redevelopment agencies across California, numerous nonprofits and community groups are scrambling to figure out how, or if, they will be able to survive. The San Jose Stage Company, a nonprofit community theater and arts group that rents highly subsidized downtown property from the San Jose Redevelopment Agency, is one such entity.

Last month, the California Supreme Court upheld the state’s decision to abolish its 400-plus redevelopment agencies. Gov. Jerry Brown hailed the move as “a key component of the state budget and guarantees more than a billion dollars of ongoing funding for schools and public safety,” in a press release issued the same day as the ruling.

The state plans to divert $1.7 billion from the redevelopment agencies into education and local government services. This leaves many projects, such as affordable housing and community investments, struggling to find a way to continue after funding ends as early as February.

The San Jose Stage Company has one advantage. The president of its board of directors, Jerry Strangis, is a registered lobbyist who has taken on the theater company as a pro-bono client.

The legislation requires San Jose to appoint a successor agency to deal with the obligations and agreements of the redevelopment agency after it closes. Strangis intends to lobby its board, with the goal of achieving one of two outcomes: convince the agency to either continue the theater’s lease or sell the property to the theater. The company hired a contractor to determine whether  purchasing the site is within its budget or fundraising capabilities.

Strangis hopes the city “realizes we are a not-for-profit doing a service and has no intentions of putting us out of business,” he said in an interview.

The likelihood of the successor agency continuing to support the company is slim, according to Dave Cortese, president of the Santa Clara County Board of Supervisors.

“There probably won’t be a successor agency that continues to do what the redevelopment agency did before, except for affordable housing,” he asserted. “I wouldn’t expect there to be hope for the non-profits getting any money from the successor agencies, especially in San Jose.”

Even city council members who support the Stage Company are unsure of how successful Strangis will be in securing its future at the same location.

Donald Rocha, a San Jose City Council member and former officer at the San Jose Redevelopment Agency, described the theater as “a great incubator for local actors that breeds a great arts community.” However, Rocha is not so confident about the company’s enduring prospects at its current location. “In the long-term, the successor agency will eventually see its way out of any current redevelopment-agency leases,” he explained. “I think that is part of their mandate.”

Strangis knows the chance of continuing the company’s lease under the successor agency is slim. That is why he says he will also lobby for the successor agency to sell the property to the San Jose Stage Company. This would require the new entity to agree with the company’s property appraisal.

In a worst-case scenario, “we are out in the street because the new entity decides they want as much money as possible to sell for development,” Strangis said.

While the community may mourn the loss of the local theater company if Strangis is unsuccessful, others view the reallocation of funds towards schools as a critical step in the right direction.

“We have been disinvesting in our children for far too long,” said Joseph Di Salvo, president of the Santa Clara County Board of Education. “For our eventual strength as a state, we must reinvest in our children to the maximum possible amount that our state will allow.”

Di Salvo does not celebrate the potential end of community assets like the San Jose Stage Company. But he does note that since schools are supposed to receive the former redevelopment agency funds,  some may spend more money on the arts, which are “vitally important,” Di Salvo noted.

Part of the reason the San Jose Stage Company’s future is so uncertain is that the city has not appointed the board for the successor agency. So it remains unknown how it will interpret the responsibility to “wind down the affairs of he dissolved redevelopment agencies,” as stated in the legislation that ended redevelopment agencies.

“We are just trying to figure out the fallout of the law suit and what it really means,” Strangis said. “Our biggest problem right now is the unknown. The new entity has to meet and assess what to do in the parameters of the legislation.”

The San Jose Stage Company has been at its current location for two decades, since it collaborated with the San Jose Redevelopment Agency to create a permanent space for the company’s off-Broadway theater. In return for a highly subsidized rent, the company set aside approximately 90 days a year for community use of the space. Over the years, those community activities have included use by local high school theater groups, poetry readings, drama classes, and similar events, all provided with technical assistance by the company.

The state charted the first redevelopment agencies in 1945, with the charge of improving blighted neighborhoods and business districts, turning them into community assets. The San Jose Stage Company is one example of how those funds were used.

For many locals, the theater has served its purpose by improving the neighborhood. “San Jose Stage brings high-quality performances to a city that sorely needs greater depth in professional artistic production,” wrote city councilman Sam Liccardo, who represents the downtown district where the company is located, in an email. “We have a substantial demand for performing arts in this Valley, and the loss of SJ Stage would leave a substantial hole in our artistic fabric.”

So Strangis is drawing on his extensive network of peers and acquaintances in government to ensure that the theater does not disappear from downtown San Jose. He grew up in San Jose, played sports for San Jose State University and has worked as a real estate agent in the city since 1975. As an established local, Strangis says he is well connected.

Now, Strangis is throwing this expertise into saving the theater group he has chaired for 28 years.

“Fortunately, government never moves fast, he said, “and no one wants to kick a nonprofit community arts theater out in the cold.”

However, no matter how admirable the nonprofit, it is still at risk. “This is simply about the state running out of money,” council member Liccardo wrote. With a huge budget deficit, something has to go, and Gov. Brown decided it would not be public education.

“While the Governor recognizes the benefits that redevelopment has had on some communities,” explains Samuel Chiu, a spokesperson for the governor, “he has repeatedly emphasized that in this fiscal climate, providing funding for local schools and local public safety is a higher priority.”

Great community assets may have to close down.  It is a difficult dilemma deciding what has to give, and unless Strangis lobbies successfully, the San Jose Stage Company may be on the losing end.

As Liccardo put it, nobody would wish this, even “on their least-favorite city.”

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