SF Supervisors Approve $8.5M Zoo Bailout

San Francisco supervisors approved legislation on May 19 authorizing the city to lend the San Francisco Zoological Society up to $8.5 million to keep the San Francisco Zoo operating after officials warned of a mounting fiscal crisis. The vote cleared a loan agreement for the nonprofit that has managed the zoo since 1993 and a separate appropriation tied to the first tranche of funding. The package followed weeks of scrutiny over the zoo’s finances, management and facilities after a city audit and policy analysis laid out the cost of a potential collapse. City officials said the loan is structured as a bridge tied to operational milestones and repayment terms. ### Why did the city step in now? An April 7 policy analysis by the Board of Supervisors’ Budget and Legislative Analyst said San Francisco would still bear responsibility for the zoo’s land, buildings and animals if the Zoological Society could no longer operate it. The report said the city owns the zoo grounds, improvements and animals even though the nonprofit handles day-to-day operations. The same analysis examined scenarios in which the city would run the zoo itself or close it and relocate animals over three years. Mayor Daniel Lurie told ABC7 in April that the city “cannot afford to take over the zoo and spend tens of millions of dollars to shut it down or keep it afloat,” framing the loan as the cheaper option. ### What exactly did supervisors approve? File 260393 authorized the Recreation and Park Department to enter into a loan agreement of up to $8.5 million with the San Francisco Zoological Society. The resolution says the debt is to be repaid over 10 years through deductions from the nonprofit’s management fee and allows the city to terminate the lease and management agreement if repayment or other conditions are not met. A separate measure, File 260360, de-appropriated $2.5 million from open-space acquisition funding and appropriated that amount to Recreation and Park for the loan in fiscal 2025-26. Budget and Finance Committee minutes show both measures were heard on May 6, when Supervisor Myrna Melgar, Recreation and Park officials, zoo chief executive Cassandra Costello and the Budget and Legislative Analyst’s Office presented the proposal. ### Why is most of the money being held back? SFist, citing the committee discussion and city terms, reported that the nonprofit will receive $2.5 million first and must satisfy a list of milestones before the remaining roughly $6 million is released. Melgar said at the committee meeting there was “a long list of milestones” for the department and the zoo to meet. ABC7 reported in April that the proposed support included a base amount plus additional funding tied to performance milestones. Costello, who took over in February, said the zoo had identified its problems, developed a turnaround plan and was working with city partners to secure support. ### What did the audit find? A May 1 performance and management audit by the Budget and Legislative Analyst found the zoo and its nonprofit operator spent about $12 million on construction and improvement projects from 2019 to 2025 without required city approval. The audit also documented broader concerns about financial controls, oversight and management practices. KRON reported on May 2 that the audit said the zoo violated city rules with that spending. SFist separately reported that the audit described ongoing deficits and weak financial oversight while noting that new leadership had begun making changes. ### Who is running the zoo now? Cassandra Costello was appointed chief executive in February after Tanya Peterson stepped down, according to ABC7. Lurie told the station that the city first needed “a change in leadership” and said Costello had “really shored up the management there.” Melgar told ABC7 the bridge loan would give the zoo “the runway it needs” to carry out a turnaround plan. Committee minutes from May 6 show Costello appeared alongside city officials as the funding package moved through the board process. ### What happens next? The May 19 board action authorized the loan and set the terms for repayment, milestones and possible enforcement if the Zoological Society falls short. The first $2.5 million is tied to the fiscal 2025-26 appropriation, while the remaining funds depend on the zoo meeting the conditions laid out in the agreement. The next test will be whether Costello and the Zoological Society satisfy those milestones to unlock the balance of the loan. Under the resolution, the city can withhold later funding and terminate the lease and management agreement if the nonprofit does not repay the loan on time or fails to meet the agreement’s conditions.