Hernandez gladly called the Tenderloin home for two decades. It was only when the pandemic hit, and fentanyl use surged, that she became appalled at the growing amounts of filth — needles, pipes, feces — her school-age daughters waded through by their door.
Even home was not an escape for Hernandez, who works as a janitor and wished to be identified by only her last name due to death threats from dealers. One evening in the spring of 2023, she stood at her stove, cooking garbanzos con pollo for the family. She looked down to see one daughter struggling to breathe.
The wafting scent of drug use from the sidewalk below had filled her lungs. Hernandez took her daughter to a local hospital. While she turned out fine, Hernandez shouted down the drug users outside her window, to no avail. They were there to stay.
The following year, the city contracted with Urban Alchemy to expand its unarmed ambassador patrols to Hernandez’s street.
Everything changed.
The drug users thinned out. The family’s neighborhood walks felt safe.
But that sense of relief was tenuous. Hernandez had heard that Urban Alchemy’s contract to patrol San Francisco’s most downtrodden streets would end in July. She fears her children will once again be scared to go outside.
“I’m afraid if Urban Alchemy leaves, the situation will collapse again,” she said.
Hernandez can rest easy — for the moment.
Mayor Daniel Lurie is renewing the organization’s contract, The Standard has learned. The timeline is still being worked out, sources said, and little is certain beyond one fact: Urban Alchemy will not abandon the Tenderloin and mid-Market in July.
But the organization’s long-term viability patrolling the streets remains very much in doubt. In recent months, city officials have increasingly scrutinized Urban Alchemy’s management, as the nonprofit has regularly gone over budget and asked the city for advances as it sheds staff, records show. The organization filed its second layoff notice just this month, threatening to lose an additional 50 staff, though a spokesperson said they’re looking to place them in other roles.
Meanwhile, the mayor’s office will soon restructure the city’s myriad ambassador programs, a source told The Standard. The multi-year plan would scale down Urban Alchemy patrols as the city ramps up other strategies, with the goal of making the nonprofit’s widely recognized ambassadors obsolete.
“Urban Alchemy is proud to continue our partnership with the city and Mayor Lurie to continue to bring more peace and safety to the Tenderloin and Mid-Market neighborhoods,” Urban Alchemy’s CEO, Lena Miller, said in a statement.
Charles Lutvak, the mayor’s spokesperson, declined to comment on the organization’s future. He confirmed that the contract would be extended past July, for an indefinite period.
“As we continue working across departments and nonprofit partners to keep our community safe and connect people to help right now, our administration is taking a hard look at how we can make the most of every tool available to make that work successful long-term,” Lutvak said.
Urban Alchemy isn’t just a neighborhood guardian; it boasts 10 San Francisco public agency contracts. Its staff serve as attendants at BART elevators and the San Francisco Public Library, walk kids to school, and provide security at homeless shelters.
However, it is best known for its unarmed ambassadors — called “practitioners” — who patrol the streets of the Tenderloin and mid-Market, offering aid to drug users and clearing them from sidewalks, where they can impede residents.
Like Hernandez, hundreds of city residents have lauded the practitioners for their efforts — but as Urban Alchemy’s finances struggled, it has pulled many of those workers from the streets. Emails between city staff managing Urban Alchemy’s contract and Mid-Market Foundation, a middleman for Urban Alchemy, reveal the depth of the cuts.
In November, Supervisor Connie Chan delayed the disbursement of $7.7 million to Urban Alchemy while demanding proof of the organization’s efficacy. Urban Alchemy filed a WARN Act notice that it would soon lay off more than 300 workers, which it ultimately did not fulfill.
To shore up its accounts, the Mid-Market Foundation sought a $2.5 million advance on its payments from the city and another $2 million after the Board of Supervisors delayed promised funding.
The foundation needed the money immediately, executive director Steve Gibson wrote in a Nov. 12 email to the city’s Office of Economic and Workforce Development and Department of Emergency Management, because “our vendor, Urban Alchemy, is trying to make payroll.”
Chris Corgas, a deputy director with the Office of Economic and Workforce Development, agreed. “I think, and Steve would need to confirm, that if those final amendments were advanced it could potentially get them through January and part of February,” he wrote in the thread.
Even so, the staff would need to be reduced, Urban Alchemy told the city. A review of the nonprofit’s reports show consistent budget overruns of at least $100,000 some months, reaching as high as $490,000 in November.
In a December report, Urban Alchemy wrote that it planned for “potential reductions due to amendment uncertainty and contract end date in June 2025.” In a January memo, the organization said it was prepared to eliminate “approximately 50 employees to balance budget without losing program coverage area.”
From September to January, Urban Alchemy staffers worked 44,000 to 50,000 hours a month. That costs the city roughly $2 million per month, reports submitted to the Department of Emergency Management show.
In February, those practitioner hours were down to 28,000.
Miller, Urban Alchemy’s CEO, said deployment, and therefore its spending, is dictated “by the city and its needs. We pride ourselves in being a nimble organization that can quickly adapt to any situation.”
Not everyone agrees.
Timothy Phillips has publicly alleged that he was wrongfully terminated when Urban Alchemy began firing practitioners for seemingly minor infractions in order to meet a budget deficit.
Phillips started as a practitioner with the group in 2023. Whereas eating lunch in your uniform vest once got you a verbal warning, this year, it might mean losing your job, he claims.
Phillips said he served seven years in federal prison for unarmed bank robberies in San Francisco and the East Bay to feed his addiction to powder cocaine. He later turned his life around and joined Urban Alchemy upon his release. He was fired after documenting a tense encounter with a former practitioner while he was on leave. His managers did not explain why he was terminated, Phillips said.
In one city report, Urban Alchemy told the city there is “assurance February will show more reduction” in its workforce. That’s the month Phillips was terminated.
Phillips lost his apartment and is living in a halfway house.
“Practitioners rely on Urban Alchemy for their lives,” he said.
The Standard walked the Tenderloin and mid-Market in late March, speaking to roughly 20 practitioners on the job. A handful said they were aware of firings for minor infractions. All had seen their teams reduced in size, often by half.
Jackie Thornhill, spokesperson for the Department of Emergency Management, confirmed that there was “accelerated attrition” due to the Board of Supervisors’ funding disruption, with layoffs for “other reasons that impacted overall staffing.”
One insider who spoke on condition of anonymity for fear of reprisal verified Phillips’ claims and said Urban Alchemy’s financial overruns are not unusual for a contracted organization dealing with budget uncertainty from the city.
“They were overstaffed. They were over budget. They [have] now tapered down to fit into the budget,” the source said. “It’s a little stricter management of their staff, yes that’s true.”
Miller said workers have been let go because they did not meet the “highest professional standards.”
“Like any workplace, accountability matters, and there are rules to follow. We are clear on what our standards are, and when issues arise, we address them quickly and directly,” the CEO said. “Decisions have consequences, and as a fast-growing, public-facing organization, we will keep improving our standards so we can deliver even more impact and success.”
In the Tenderloin, Hernandez has noticed the number of Urban Alchemy practitioners begin to drop. Through tears, she said her family needs Urban Alchemy’s presence to feel safe.
For now, her daughters freely take the bus to Ocean Beach, where they sit on the sand to play guitar and sing. Their latest obsession is a 1978 song by child musician Pedro Fernandez, “La de la mochila azul,” or “the girl with the blue backpack.”
“What’s wrong with you, little one, what’s wrong with you?” they sing in Spanish. “They tell me at school, and they ask me at home. And until now — I suddenly knew.”
This, Hernandez knows: Without Urban Alchemy, or an alternative to replace its practitioners, the Tenderloin may become unlivable again.