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May 11, 2012 Steve Dubb, Research Director sgdubb@yahoo

The Big Picture: The Cleveland Evergreen Model and Community Wealth Building Good Jobs, Green Jobs: Detroit, Michigan. May 11, 2012 Steve Dubb, Research Director sgdubb@yahoo.com The Democracy Collaborative, University of Maryland www.community-wealth.org.

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May 11, 2012 Steve Dubb, Research Director sgdubb@yahoo

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  1. The Big Picture: The Cleveland Evergreen Model and Community Wealth BuildingGood Jobs, Green Jobs: Detroit, Michigan May 11, 2012 Steve Dubb, Research Director sgdubb@yahoo.com The Democracy Collaborative, University of Maryland www.community-wealth.org

  2. • Established in 2000 to advance a new understanding of democracy for the 21st century and to promote innovations in community development that enhance democratic life. • Conduct research, training, policy development, and community-focused work designed to promote an asset-based paradigm and increase support for the field. • Maintain community-wealth.org information portal. • Current flagship project: Evergreen Cooperative Initiative in Cleveland, Ohio, a comprehensive wealth building effort in six low-income neighborhoods. About the Democracy Collaborative

  3. What is Community Wealth Building? • promotes common ownership of productive assets • anchors capital and jobs locally • stops the leakage of dollars from communities • supports individual and family wealth building • generates revenues to finance public services • leverages anchor institutions for community benefit • contributes to local economic stability

  4. Continuum of Wealth-Building Strategies BROADENING OWNERSHIP OVER ASSETS AND CAPITAL www.Community-Wealth.org  The Democracy Collaborative

  5. Putting the Pieces Together • Help individuals build wealth and savings (using matched-savings programs, etc.) • Create community owned businesses that provide living wage jobs and anchor wealth in low-income communities • Link community businesses with anchor procurement needs Individual wealth building Community ownership Anchor Institutions An Integrated Community Wealth Approach Key Components

  6. The Emerging Community Wealth Economy

  7. EVERGREEN COOPERATIVE INITIATIVE Stabilize Neighborhoods Generate Wealth for Residents Create Jobs BUILDING COMMUNITY WEALTH TO TRANSFORM CLEVELAND AND CHANGE LIVES

  8. Understanding the Context Past efforts in Cleveland that had focused on big projects (e.g., sports stadiums, Rock and Roll Hall of Fame, etc.) had failed to reduce poverty. Cleveland used to be second to New York City in its number of U.S. Fortune 500 headquarter companies. By 2006, only two were left. (Today there is one). With capital flight, what remained were wealthy nonprofit “’anchor institutions.” Yet some of the poorest areas of Cleveland were immediately adjacent the “University Circle.” 8

  9. PROPERTY AT RISK 9

  10. Getting Started Begin a Conversation: Bring together about 50 “thought leaders” from diverse organizations — business, unions, co-ops, ESOPs, labor, religious, university, hospitals, community groups — along with city and county officials to have a conversation Develop a Strategic Plan: No quick way to do this — over 100 interviews of “decision makers” both at anchor institutions & in the community. And be prepared to listen to the results! Assemble a Team: Recruit leaders in business planning & employee ownership, community finance, workforce development, community land trusts, etc. 10

  11. Green Businesses Suggested by Anchor Institution Interviews Shuttle service to reduce driving Environmentally friendly industrial-scale laundry service Environmentally friendly energy & facility upgrade business Green friendly practices in food service (recycled cutlery,etc.) Business that will separate out non-hazardous medical wastes away for recycling Solar panel installation on rooftops Recycling service that meets privacy standards so that confidential paper can be recycled Deconstruction (reuse of materials for building construction) Locally grown organic produce that could be made available for sale in hospital & university cafeterias & restaurants Ecologically friendly landscaping business Tree farm Housekeeping service with non-toxic cleaning products 11

  12. EVERGREEN DESIGN CRITERIA For-profit Hire locally & located in community Matched to anchor needs Living wage + benefits Green Employee-owned (worker cooperatives) % of profits to help start new businesses in the community (social mission) 12

  13. Our Strategy • Focus anchor institution purchasing locally into neighborhoods • Create new community based business • GREEN • Link to expanding sectors of the economy (e.g., health, energy, food, waste & green technologies) • Ensure financing and sound management to move to scale

  14. Launched in 2009-2012 • Evergreen Cooperative Laundry (ECL) • Ohio Cooperative Solar (OCS) • Green City Growers Cooperative (GCGC) • Secondary Cooperatives • Evergreen Business Services (EBS) Planning & Development Three to Four Next Generation Businessesin Pipeline (launch 2 per year); goal in five years: 10 business, 500 employee-owners 14

  15. Customers: hospitals, nursing homes & hotels Ultimate goal: 10-12 Million Pounds Per Year ($4-5 million in annual sales) Employment Goal: 50 at full capacity, presently 21 Greenest Commercial Laundry in NEO Ohio 15

  16. Financing for Evergreen Cooperative Laundry Senior debt: First Merit (local commercial bank) 750,000 Shorebank 750,000 City of Cleveland 1,500,000 “Equity” (sub-debt through Evergreen Coop Development Fund) New Market Tax Credits (~26% of $5M allocation) 1,300,000 Cleveland Foundation (Evergreen Fund) 750,000 Working capital: City of Cleveland (EDA/Dept. of Commerce) 200,000 Common Wealth Revolving Loan Fund 250,000 Total 5,500,000 16

  17. 2010-11: Six installations ~ 500 kWh; more than 250 homes weatherized to date Employment at present: 22 Current sales: $800K (annual) long-term goals: 3MW solar capacity installed, $2.5M in sales a year, 75 worker-owners 110 kW – Engineered 89th/ Euclid Ave @ the Cleveland Clinic 17

  18. 40K SF DISTRIBUTION CENTER 3.25 ACRE GREENHOUSE • 1. $10 Million -BROWNFIELD & ECONOMIC DEVELOPEMENT AWARD (STATE BEDI) • $10 Million Award - $2 M in grant & $8 Million in Loan - Committed • 2. $18 Million New Market Tax Credits (NMTC) (Committed by PNC) • 3. Evergreen Cooperative Development Fund -$1 Million (Committed) Employment goal: 35-40 18

  19. Evergreen Cooperative Development Fund Revolving subordinate loan fund at Enterprise Cleveland Seed capital for coop start-ups Multiple investors To incorporate an LLC to attract more traditional investment capital Technical assistance and support 19

  20. Create new jobs for neighborhood residents in an employment desert (goal: 500 jobs in 5 years) Anchor capital so it doesn’t get up and leave; Redirect the purchasing stream of area institutions so that they bring needed resources into low-income communities Stabilize the low-income (area median income is $18,500) neighborhoods in East Cleveland neighborhoods ("Greater University Circle). Promote asset accumulation and build individual & community wealth ($65K/8 years) Have a favorable environmental impact Stop $$ from leaking out of NE Ohio Develop a replicable model for national impact GOALS

  21. EVERGREEN COOPERATIVE STRUCTURE ECC Board of Directors, 15 members, multi-stakeholder GUC Initiative Transit-Oriented Development Education Housing Engagement Evergreen Cooperative Corporation (ECC) Non Profit) Committees: Audit & Finance Governance Strategic Planning Investment Executive Cooperative Businesses Evergreen Cooperative Development Fund (LLC subsidiary of ECC) CDFI Evergreen Business Services (for Profit) Evergreen Real Estate Corp. (for Profit) (for Profit,) CDE (for Profit) Structured Fund (non -Profit) Human Resources TA Accounting IT

  22. Key Elements to Adapt to Other Cities Project champion: Provide seed capital, raise capital, hire consultants, and “lead the team” Business Development: Recruit democratic management, oversee business planning, and provide technical assistance Community loan fund incubator: Host loan fund Workforce development capacity: Screen, recruit and train workers (customized to business needs) Local political buy-in: City assistance to obtain approvals and state & federal funding Anchor backing: Commit to buy from community-owned business that meet quality standards

  23. General Lessons Identify and develop assets. Develop community approaches leading to regional impact. Use inclusive approach to decision making. Listening and follow-up are key. Build leadership. Work to develop vision even when the resources seem unavailable. Be prepared to adjust your vision to build a broader coalition. Know what you don’t know. Partnerships are key to getting things done.

  24. What Evergreen’s Worker-Owners Say “Because this is an employee-owned business, it’s all up to us if we want the company to grow and succeed. This is not just an eight-hour job – this is our business.” Keith Parkham “I never thought I could become an owner of a major corporation. Maybe through Evergreen things that I always thought would be out of reach for me might become possible. Owning your own job is a beautiful thing.” Medrick Addison

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