SAN JOSE -- Five and a half years after San Jose took control of its Mexican Heritage Plaza from a struggling nonprofit, the City Council on Tuesday appointed the cultural arts school that has provided programs there to run it permanently.
The 8-1 vote appointing the School of Arts and Culture ensures the plaza, a $31 million city redevelopment project that opened 14 years ago on Alum Rock Avenue in San Jose's heavily Latino East Side, will continue providing cultural programs at the site as intended.
Mayor Chuck Reed and Councilman Xavier Campos said in a joint memorandum urging support that the School of Arts and Culture's "community programming and facility management efforts have created an atmosphere supporting the vision and spirit for which the facility was originally designed."
"It took a long time to get it right," Campos said before the vote. "Hats off to everyone who had the courage to take this on."
But the vote also means San Jose will have to continue subsidizing the plaza to the tune of nearly $500,000 a year indefinitely. The city in March 2008 assumed control of the plaza from the financially struggling original operator Mexican Heritage Corp., which argued that San Jose's $414,000 annual subsidy at the time was unrealistic and needed to more than double to $1.3 million.
The deal with the School of Arts and Culture commits San Jose to providing $450,000 in annual plaza support through June 2020 and $425,000 a year for an additional 10 years with two, 10-year renewal options.
Critics argued that that's too much for a city struggling to fill its police ranks.
"The $425,000 annual subsidy could better serve the local community near the plaza with three or four additional police officers whose services could help reduce crime rates in that area," Almaden Valley resident Jerry Mungai said in an email to council members suggesting the city sell the plaza "to those who wish to promote Mexican culture."
Councilman Pierluigi Oliverio cast the lone no vote, arguing the city should use the plaza for a charter school that could cover its cost and eliminate the city subsidy. Vice Mayor Madison Nguyen and Councilman Pete Constant were absent.
The six-acre site with 55,000 square feet of class and meeting space features a 500-seat theater, pavilion, gallery, classrooms and an outdoor square and gardens built in the architectural style of a traditional Mexican plaza.
Following the city takeover in 2008, San Jose created a community committee to develop a self-sustaining business model and a process for finding a permanent nonprofit operator capable of implementing it. After two years of meetings, the committee recommended that a school of arts and culture run the plaza and developed a business plan, which the council approved in 2011 calling for after-school and summer classes focused on children and families as well as gallery exhibitions, performances and private and community events.
When city officials found no takers for the idea in nonprofit-land, they asked 1stACT Silicon Valley to create one, while providing an operation and maintenance subsidy of $550,000 to $600,000. The School of Arts and Culture established through that process, which later became an independent nonprofit, remained the only group interested in the city's cultural programming model at the plaza.
The deal calls for the School of Arts and Culture to match the city subsidy or have it reduced. City officials said the organization appears financially healthy. According to its most recent audited financial statement, they said, the school in the past fiscal year had a budget of $1.9 million, revenue of about $2.1 million and net income of about $220,000. Its current budget is $2.2 million, and the school has diversified funding sources including rental and class revenue, grants from the Knight, Shortino, Packard, Adobe, Applied Materials and Hewlett foundations and individual donations.
Yearly city subsidies for the plaza in the past have ranged from $414,000 to $826,000. Tamara Alvarado, the School of Arts and Culture's executive director, said the city deal makes it easier for the group to secure funding from donors.
Contact John Woolfolk at 408-975-9346. Follow him on Twitter at Twitter.com/johnwoolfolk1.
San Jose named the School of Art and Culture to run its Mexican Heritage Plaza. A brief history: