An autism nonprofit will pay Cupertino thousands of dollars after settling a monthslong dispute over the closure of a group home for children.
The Cupertino City Council unanimously approved a settlement between the city and nonprofit Pacific Autism Center for Education (PACE) last month after PACE stopped operating the group home at 7576 Kirwin Lane, roughly two years short of its 30-year agreement restricting the property to affordable housing uses during that time. PACE signed a $100,000 loan with the city under those terms and has to funnel $50,000 into the city’s below-market-rate housing fund for breaching the agreement, even after paying the loan back in 2015.
Executive Director Kurt Ohlfs said PACE decided to shut the home down — which served up to six low- and very-low-income autistic children — in 2023 after its operation costs soared, causing a roughly $250,000 deficit in one year largely due to short-staffing and the long-lasting effects of the pandemic. PACE rehomed two children still receiving services on Kirwin Lane and notified the city of its struggles, hoping to city would transfer the deed of trust back to PACE so it could sell the home. Ohlfs said his request was denied and the city’s response was “abrasive.”
“It’s just disappointing and frankly appalling that a city would treat a nonprofit in this fashion,” he told San José Spotlight. “We’ve served that city for 28 years of great service, been strong community partners in regards to providing for not just the home, but to the school districts and neighboring area.”
The loan agreement between the city and PACE goes back to 1995, when the city gave PACE a $100,000 community development block grant to help purchase the house with the deed restriction. The home added to the city’s affordable housing stock and would have added to its housing goals, recently given the state’s green light, if it stayed in operation. Ohlfs said he thinks that was a motivating factor in the city’s actions.
PACE sued Cupertino last October in an attempt to terminate the loan agreement after the city declined to transfer the deed, which City Attorney Christopher Jensen called frivolous. The lawsuit cost the city roughly $27,000 out of the city attorney office’s budget, Jensen said.
“I would be reluctant to recommend that Cupertino or any other jurisdiction work with them as a partner for the provision of affordable housing based on my experience with the organization — they gave the distinct impression of not knowing what they were doing,” he told San José Spotlight.
PACE paid roughly $20,000 in legal fees during the lawsuit, and Ohlfs said the nonprofit accepted the settlement as a business decision. He said PACE does not want to continue working in Cupertino after the settlement and will be pulling out of its other children’s group home in the city, as soon as it can.
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After the settlement, PACE is in the process of selling the home for roughly $3.1 million to a local family, Ohlfs said.
Vice Mayor J.R. Fruen said he wasn’t aware of the ongoing dispute until the lawsuit, which came as a surprise. He said the nonprofit didn’t voice its concerns to the city council, which he wished it had done to solve the problem sooner. He is open to discussion with PACE.
“These (services) are hard to come by to begin with, and affordable housing preservation is an incredibly important piece of the overall housing pie in the city,” he told San José Spotlight. “(It) is really important, especially to our overall notion of being a welcoming city that is supporting of everybody who is here.”
