Rent disputes amid COVID-19 have some tenants at Liberty Station Arts District leaving or losing their leases
Longtime tenants in the popular Arts District at Liberty Station say they are being pushed out of their leases or being told they will not have their rental agreements renewed by the NTC Foundation, the nonprofit organization that manages the publicly owned property.
Some moved out after foundation officials locked common entrances to the art studios in response to the COVID-19 coronavirus pandemic. They were charged full rent anyway. Others were told they would not have their leases renewed once they expired.
“Half a dozen people packed up and left,” said Michelle Moore, a jewelry maker who recently vacated her studio after years of leasing space in the former military base. “Anyone who speaks up they are really retaliating against.”
The Arts District at Liberty Station is a collection of historic buildings that were part of the Naval Training Center that was shuttered in the 1990s. Tenants have complained for years that the foundation is more concerned with raising revenue than promoting the arts.
The disputes grew more serious in March, when the foundation closed the main entrances to many of the buildings in response to the pandemic. The gates stayed closed through late May, preventing tenants from accessing their leased spaces or conducting any business.
Lisa Johnson, NTC Foundation president and chief executive, said she could not discuss tenant-related matters due to a confidentiality policy.
“NTC Foundation’s business decisions are, as you might imagine, proprietary,” she said by email. “They are made in the best interests of Arts District Liberty Station as a whole, as well as the foundation itself.”
Johnson did not respond to questions about why tenants were charged rent for the two months they could not access their art studios.
Moore, who plans to relocate her 7 Stitches custom jewelry shop to an as-yet unknown location, is not the only artist leaving the district.
Judith Greer Essex leased about 1,200 square feet in the Arts District for nearly a dozen years.
The founder of the nonprofit Expressive Arts Institute vacated her studio this spring, even though she signed a three-year lease extension in January. Essex said she could not afford to pay rent on property she could no longer occupy.
“I’m kind of over the barrel as a small-business owner,” she said. “Once COVID hit, we were no longer generating income. Our business depends on meeting people face to face. They said they would postpone our rent, but that doesn’t really help.”
Essex broke the lease and set up the institute’s operations online from her South Park residence, though she hopes to find new rental space later this year.
Meanwhile, the NTC Foundation is seeking more than $100,000 from the Expressive Arts Institute — rent it would have collected over the next three years. The demand has flummoxed Essex, whose small nonprofit arts center has nowhere near that much cash.
Foundation assets exceed $44 million
In the early 1920s, not long after winning World War I, the U.S. government began construction of a new military base on the north shore of San Diego Bay. It was christened the Naval Training Center.
For more than seven decades, the training installation prepared thousands of sailors for war, steered billions of dollars into the regional economy and cemented San Diego’s reputation as a proud military town.
But the 360-acre Navy base just west of Lindbergh Field was targeted for closure in 1993 amid a national Department of Defense restructuring. The land and hundreds of historic buildings — many in disrepair — were turned over to the city of San Diego.
In 1999, city officials awarded rights to redevelop the property to The Corky McMillin Co., a longtime San Diego homebuilder that promised to transform the former military base into a huge residential, business and entertainment destination.
Two decades later, the dream has largely been fulfilled, and at limited cost to taxpayers.
Private homes in what is now called Liberty Station routinely sell for more than $1 million, and the community is home to some of the most popular brands in San Diego, including Stone Brewing Co., Corvette Diner and Rock Church.
The 80-acre Arts District was set aside as a cultural hub within the larger Liberty Station community, a place where artists of all stripes could congregate and create and visitors could shop, mingle, take classes and attend lectures or demonstrations.
Management of the Arts District, which remains publicly owned, was awarded to the NTC Foundation, a nonprofit created by a vote of the City Council. Its charitable mission was to renovate and preserve dozens of the historic buildings and to promote community arts.
But in recent years, tenants have questioned the foundation’s motives.
Ellen Shorey served in the Navy during the Vietnam War under the WAVES program — women accepted for volunteer emergency service. Now she produces acrylic mixed-media paintings in a 130-square-foot studio she leases at Liberty Station for $655 per month.
“I’ve been paying full rent and I haven’t skipped a payment,” Shorey said. “I asked several times for any help — half, anything — and it’s always no.”
The NTC Foundation’s financial records show revenue and assets increasing significantly in recent years.
In its 2016 federal tax filing, for example, the foundation reported $3 million in revenue and $40 million in total assets.
By 2018, the tax-exempt organization’s annual revenue had climbed to $4.1 million and total assets were listed at $44.3 million — increases of 37 percent and 11 percent, respectively — the California attorney general’s office reported.
‘Just pay it’
Michele Goodwin is another painter who ran a studio and gallery in the Arts District. She had just extended her lease by another year when the foundation closed the property in response to COVID-19.
Despite the closure, the landlord refused to offer any discount on rent, Goodwin said. When she couldn’t pay, the foundation billed her more than $9,000 — the full balance of the lease.
“They said due to COVID they were unable to rent the space, so I was liable to pay them for that whole year’s rent,” she said. “But the place rented immediately, and then for some reason they showed gratitude and charged me for three months.”
Goodwin, who now runs her studio out of her home in Point Loma, said she paid the foundation nearly $3,000 to break her lease — and it kept her nearly $800 security deposit.
“I had an attorney tell me to just pay it and run,” she said. “I didn’t want any dings on my credit.”
Ronald Slayen is a French marquetry artist who has been at odds with his landlord since soon after he signed his first lease in 2012.
Slayen, who has complained publicly that the NTC Foundation is too close to McMillin and refuses to allow tenants to attend board meetings or see financial records, said he was told last month that his lease would not be extended once it expires Sept. 30.
“It was supposed to be a separate unit from the for-profit McMillin empire, but it is, in fact, not,” he said.
Before running the foundation, Johnson was a McMillin executive. Another longtime McMillin executive, Joe Haeussler, is an officer of the nonprofit Liberty Station Community Association, which collects fees from Arts District tenants for maintenance and other costs.
Slayen also has raised questions about the foundation’s support for plans to convert the nearby North Chapel to a commercial events venue — a proposal that led to two Catholic congregations no longer being permitted to worship inside the Mediterranean-style church.
Slayen said he has no doubt he is being punished for speaking up against the foundation and criticizing plans to commercialize the church.
“The fact that they would go after me is so clear-cut retribution,” Slayen said. “If the cost of saving the North Chapel is losing my lease, then that is well worth it.”
The NTC Foundation has no role in managing the North Chapel. It was part of a master leasehold that McMillin sold in 2018. But the foundation CEO lent her name to a news release issued by the new landlord in December, when it announced the planned renovations.
“We have long wanted to see increased use of this building, and we’re pleased with this plan for adaptive reuse,” Johnson said.
Last year, the NTC Foundation was awarded a $9 million state grant to help restore a building just across Roosevelt Road from the North Chapel, where it expects to open a performing arts center.