SF housing nonprofit MEDA could lose city funding after alleged employee self-dealing
Money Moves San Francisco, CA localA controller's watch-list rating and an audit alleging unauthorized purchases haven't stopped a $22.2 million loan from advancing to the full Board
Overview
San Francisco's Controller's Office has given the Mission Economic Development Agency its most serious risk rating for city contractors, citing alleged self-dealing and unauthorized purchases among ten findings. The Tier 3 rating can cost MEDA city funding if the problems are not fixed, though the Controller says it can be lowered after corrective steps.
On Oct. 28, the Board of Supervisors' Budget and Finance Committee voted 3-0 to advance a $22.2 million loan for a 35-apartment building at 2059-2065 Mission Street, sending it to the full Board. The committee had delayed the vote a week earlier amid scrutiny that includes an independent audit alleging a former employee made unauthorized purchases and inadequate oversight. MEDA, which laid off 12 employees in April, says it was the victim of a crime and has worked with the Controller's Office since April.
Why it matters
MEDA manages over 1,000 affordable homes in San Francisco, and a funding freeze would slow its building purchases and repairs.
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Timeline
April 2026 October 2026
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Budget committee advances $22.2 million MEDA loan
Latest GovernmentThe Board of Supervisors' Budget and Finance Committee voted 3-0 to recommend the city buy and restate a loan of up to $22,157,500 for 2059-2065 Mission Street. The item moved to the full Board; no new loan conditions were reported.
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Audit alleges unauthorized purchases at MEDA
OversightAn independent audit reported by Mission Local alleges a former employee made unauthorized purchases and that MEDA's oversight was inadequate. The findings added to scrutiny that had already led supervisors to delay a vote on the nonprofit's $22.2 million loan.
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Supervisors continue $22.2 million MEDA loan
GovernmentThe Board of Supervisors' Budget and Finance Committee continued a loan purchase agreement of up to $22,157,500 for 2059-2065 Mission Street to the call of the chair, leaving no return date. Members asked to see added reporting on MEDA's finances before the city commits the money.
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Controller's Office notifies MEDA of top risk rating
OversightThe Controller's Office sent MEDA written notice of its most serious risk rating for city contractors, citing alleged unauthorized employee expenses and self-dealing among ten financial concerns. SFist reported the designation on Oct. 22.
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MEDA lays off 12 staff and cuts pay
FinancialMEDA laid off 12 employees and imposed pay cuts, including a 43 percent cut for executive director Luis Granados, as part of a 21 percent expense-reduction plan. The nonprofit blamed expansion costs, slower philanthropic revenue and delayed city reimbursements.
Scenarios
City cuts MEDA's funding
Discussed by: SFist reporting on the Controller's risk designation
MEDA does not resolve the Controller's concerns, the designation stays, and the city reduces or ends its funding.
MEDA keeps funding after corrective steps
Discussed by: SFist: the designation can be lowered or removed after corrective measures
MEDA addresses the flagged concerns and the Controller lowers or removes the designation, which SFist says is possible. City funding continues, possibly under stricter oversight.
Supervisors approve the $22 million loan
Discussed by: SFist: vote delayed by Supervisors Matt Dorsey and Danny Sauter
The delayed vote goes ahead and the city lends MEDA up to $22 million to buy the 39-unit building.
Loan stalls without a committee vote
Discussed by: SF Daily Brief, reporting the item was continued to the call of the chair
The Budget and Finance Committee left the $22.2 million loan with no return date. City staff told members the rehabilitation and leasing schedule was already tight, so the delay carries a cost even if the loan is never formally rejected.
Full Board approves the $22 million MEDA loan
Discussed by: Budget and Finance Committee's 3-0 recommendation; Mission Local and SF Patriot reporting
The full Board accepts the committee's recommendation and the city buys and restates the loan for 2059-2065 Mission Street, preserving 35 affordable apartments and four commercial spaces.