NAME Matthew Hervey

WHAT HE DOES Community Development Director and onsite manager of the City Heights Project

CHARITABLE ORGANIZATION Price Charities

AMOUNT CONTRIBUTED BY PRICE CHARITIES $110 million

FOUNDER AND BOARD CHAIRMAN Sol Price, 91, founder of the Price Club discount chains, which later merged with Costco

WHAT THEY DO Oversee the City Heights Redevelopment Project, which revitalized the formerly impoverished neighborhood with building development, job, education and numerous other community programs.

LEVERAGE Price Charities invested $110 million, which attracted an estimated $500 million in city and state funding. “The key is that the investment is all leveraged,” said Hervey.

HOW IT STARTED The project started when Sol Price read a 1994 newspaper article saying that City Heights was a disaster. He partnered with City Councilman William Jones and community groups to create a master plan for redeveloping the neighborhood that addressed 13 areas of need, including safety, housing, jobs, retail stores, health and education.

CREATING SAFETY “Price realized that if he could reduce the amount of risk that a developer was likely to take, developers were more likely to come in, ” said Hervey. “If the development could take foot, and he could fill it with nonprofit organizations serving the community, developers would begin to realize there was an island of security and safety, and they ’d be willing to look at the immediately adjacent land and consider developing on it. ”

Price Charities thus acquired 36 acres of land, which was used to build 116 town homes, a 400-car parking structure and a six-story office building, which now serves as the city center. Other developers built a retail village, with chain stores such as Albertsons, Denny ’s, Starbucks and Radio Shack.

RUN LIKE A BUSINESS When the group acquired a 90,000-square-foot piece of land, “we approached it like a for-profit developer. We had to pay market rates,” said Hervey. “And when we sold, we had to sell it at market rate, just like a for-profit developer. But all the profits came right back into the nonprofit corporation and is used to reinvest in City Heights.

“We get run like a business. We’re accountable like a business. But we’re a nonprofit organization,” said Hervey.

Another example the office building the group occupies and manages houses mostly nonprofit health, job and counseling groups serving the community. Yet it is managed like a business, comparing operating expenses, rents and occupancy rates to other commercial buildings. “We try to be as competitive as any other landlord,” said Hervey. The result: Building occupancy is nearly 90 percent.

INNOVATION The management constantly tries new ideas and discards unusable ones. In seeking ways to improve student performance, it has pioneered new programs, such as “Bridges,” which commits the same teacher to students from kindergarten through fifth grade, thus ensuring continuity. Another winner: “School in the Park,” where students go to Balboa Park museums to learn, thus improving comprehension. The result: Rosa Parks Elementary is now one of the top performing inner-city schools.

SUSTAINABILITY Hervey said that many nonprofits suffer once the donor base is gone. Managers then spend more time raising money than helping its constituents. That is why Price Charities is run like a business. “We need to be self-sustainable. That’s important for longevity. That allows us to put 100 percent of our time and effort into our mission of serving the community. ”

ROI “In a span of 12 years, you’ve seen the recovery of a neighborhood that had otherwise been abandoned by the city of San Diego. You ask everybody on the street who lives in City Heights, and they ’ll tell you it’s an improved quality of life,” said Hervey. As for Sol Price, “I think he gets the satisfaction of realizing that his investment of City Heights and his philosophy of philanthropy is successful. ”

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