Direct Relief Seals Airport Deal

As logistical challenges go, Thomas Tighe’s is a doozy. In response to the deadly eruption of Ebola now ravaging Liberia and Sierra Leone — leaving nearly 900 dead and another 1,600 infected — the executive director of Direct Relief needs to get his hands on 100 tons of surgical gloves and respirator masks in a hurry to ship to doctors in Africa. That takes up a lot of space, and Tighe says Direct Relief’s current quarters — in the former lemon-packing plant by the railroad tracks along Goleta’s La Patera Lane — isn’t nearly big enough. Among other things, he said, it lacks the “surge capacity” to handle such big loads in moments of life-and-death crisis.

To that end, Direct Relief and Santa Barbara city administrators have been negotiating the details of a major real estate deal over the past two years that the City Council unanimously embraced this Tuesday. In broad outline, the City of Santa Barbara agreed to sell up to eight acres of “airport” land located on the north side of Hollister Avenue across from the city’s municipal airport for about $8 million. This will enable Direct Relief to build a new warehouse and administrative office space with about twice the capacity of its current location.

Beyond size, Tighe said, there are ever-escalating security requirements that state regulators impose on any agency that ships prescription drugs. “There are 500 distribution centers in this country. One is a nonprofit,” Tighe told the council. “It’s us.” Since 2009, Direct Relief has been licensed to ship prescription pharmaceuticals to all 50 states and more than 70 nations from a temperature-controlled, metal-encased warehouse roughly 28,00 square feet in size. Direct Relief claims to distribute $500 million worth of prescription drugs to 200 community clinics throughout the United States — free of charge — serving low-income residents.

The city’s staff report described the proposed deal several times as “unprecedented,” a fact seized upon by Councilmembers Gregg Hart and Bendy White in expressing their reservations about selling off any public land. The City of Santa Barbara owns 88 acres of Goleta Valley property that it acquired as part of the broader airport package shortly after the end of World War II. For the past 20 years, city administrators have pursued countless development schemes without any success. The most recent involved a deal to locate the Deckers headquarters there, but the proposal — like many before it — would fall apart at the proverbial last minute. Before that, there were four passes at locating a Target store there, building a hotel, and creating a couple of business parks.

In recent years, City Hall has settled on using the property to create an incubator space for light industrial start-up companies, the fertile brainchildren of UCSB’s ever-accelerating research and development machine. But for City Hall, the development costs of building such structures proved prohibitive. Airport officials estimated it would take 40 years for such structures to pay for themselves in rent. By selling the land to Direct Relief — which started in Santa Barbara in 1948 — airport officials estimate they’d generate between $6-$8.5 million in cash, and that would go a long way in covering the costs of construction.

Direct Relief’s stellar reputation as a highly cost-efficient nonprofit on a humanitarian mission didn’t hurt its chances this week. Nor did the whiff of a threat that it might have to pick up stakes and move out of the area if the deal were not approved. Councilmember Hart noted both of these when he reconciled himself to the “unprecedented” notion of selling public land. White said of all the councilmembers, he had the most serious reservations about the deal, describing the “skidmarks” under his feet as the deepest.

But in ultimately blessing the deal, White described Direct Relief as his “favorite international nonprofit” and urged the organization to proceed with as light a touch on the land as possible. Mayor Helene Schneider enthusiastically noted the entrepreneurial spark the creation could generate, and Councilmember Dale Francisco said it was in the city’s self interest to keep an organization so accomplished in Santa Barbara’s own backyard.

Tighe noted it will take about two months for the ink to officially dry on the council’s vote. At that point, he said, the hard work of fundraising would have to begin in earnest. In addition to the cost of the land, he estimated the buildings would cost another $20 million. While that would be daunting, he noted Direct Relief has an endowment of $34 million and raised $19 million in cash donations last year.