Urban Corps Employees Worked on Executives' Homes, Former CEO Claims

The Controversial Practices at Urban Corps of San Diego County

Urban Corps of San Diego County, a nonprofit organization established in 1989, has been the center of recent controversy following revelations about the practices of its former chief executive, Kyle Kennedy. According to Kennedy, it was common for employees of the organization to perform work on the personal homes and properties of senior leaders. This practice, which he claims was part of a job-training program, raised significant concerns among board members and the public.

Employee Work on Senior Leaders' Properties

Kennedy, who left the organization earlier this month, shared his perspective in an exclusive interview. He stated that the arrangement allowed employees to gain valuable experience and provided them with employment opportunities when other contracts were scarce. “All the workers are compensated,” he emphasized. “They are in a job-training program. They get paid to do whatever they do. Sometimes when there’s no work, they would do odd jobs at our houses.”

This practice reportedly continued for years before Kennedy became CEO in 2019. However, he noted that the board was unaware of the situation. “Everybody at Urban Corps was aware of it, except the board,” he said.

The Renovation Scandal

The controversy came to light when The San Diego Union-Tribune reported that Kennedy had up to 26 workers renovate a three-bedroom home he purchased from a subordinate in 2023. The renovation included both interior and exterior work, costing over $100,000. An independent nonprofit lawyer interviewed by the newspaper suggested that the arrangement appeared improper.

Two board members resigned in protest after a decision by Chair Tracey Williams and a majority of other directors to allow Kennedy to remain as CEO despite allegations of misusing nonprofit resources and failing to inform the board. Following an internal investigation, Urban Corps placed Kennedy on a three-month performance improvement plan but allowed him to keep his $209,000-a-year position.

Board Resignations and New Leadership

Board members Mario Sierra and Linda Caballero-Sotelo resigned, stating they could not support keeping Kennedy as CEO. Sierra expressed his loss of confidence in Kennedy, citing a history of questionable decisions and poor judgment. “I cannot be part of an organization in which I have lost all confidence and trust in the CEO,” he wrote in his resignation letter.

In response to the scandal, Urban Corps announced that Kennedy would leave the organization, effective immediately, based on a board decision made earlier in June. The board then named longtime Urban Corps official Anne Bernstein as acting CEO.

Bernstein's Involvement

Bernstein acknowledged using nonprofit staff to paint her home but denied having asked anyone to conceal information from the board. She stated that she hired a crew for a small job in 2011 or 2012, with full permission from the CEO at the time. “I paid fully for these services out of pocket,” she said.

Chair Tracey Williams expressed her complete faith in Bernstein, highlighting her dedication and transparency. “Anne has always been, and continues to be, very upfront and transparent with myself and the board,” Williams said.

Communication Issues and Board Responsibilities

Kennedy cited family reasons and outside business obligations as the primary factors behind his departure. He claimed the decision was made before the Union-Tribune published its first report in mid-June. However, he also admitted to minimal communication with the board, meeting only five times a year.

Nonprofit officials disputed Kennedy’s characterization of the relationship between the board and himself, emphasizing that it is the CEO’s responsibility to report regularly to the board. “Not only do we strenuously disagree with this assertion, but it is the obligation of the CEO to report regularly to the board, not the other way around,” Urban Corps stated.

The Investigation and Aftermath

The Union-Tribune learned about the renovation at Kennedy’s investment property through resignation letters submitted by board members. Sam Duran, the founder of Urban Corps, discovered the work while driving down Epsilon Street and alerted the board, pushing for Kennedy’s removal.

Last summer, the board hired an outside firm to investigate the matter. The review found that Kennedy acted independently of the accounting department, resulting in actions that could not be corroborated. The report also noted that Kennedy was not fully cooperative during the investigation.

Final Thoughts

Despite the controversy, Kennedy defended the arrangement, stating that it benefited employees by providing training opportunities. He also mentioned that he could have completed the renovation more quickly by hiring an outside contractor. “I’m allowing them a training opportunity,” he said. “We need partners with properties to work on so we can do teachings about how to do the work. I paid for all the work that was done.”

Public property records show that the house was worth up to $600,000 at the time Kennedy purchased it for $450,000. He claimed the property was in terrible condition and needed to be completely rebuilt. However, the organization’s investigative findings remain confidential, and no further details have been released.