One Strategy

Our Neighborhoods Economies (ONE) One Providence Community/One Economic Development Strategy By Tomás Alberto Avila 09/25/97

Executive Summary Just as our economic difficulties stem from more than the effects of single factors such as defense down-sizing or selected high taxes, fixing our economic problems will require more than developing a single program here, or passing single legislation there. The New Economy is characterized by political institutions and cultures that are more participatory and collaborative. In the new global economy, "an infrastructure for collaboration" is a key component of success. As Harvard Business School Professor Rosabeth Moss Kantor states in World Class, "politics involves battles over distribution: who gets which slices of the pie. A community's social infrastructure, m contrast, offers the prospect for expanding the pie. Yet, the social infrastructure (for collaboration) is too often neglected, allowing the area to remain fragmented and balkanized1. This social capital, the ability of people to work together for a common purpose in groups and organizations, is a characteristic of successful regional economies around the world, from Silicon Valley in California to the Emilia-Romanga region in Italy.9 These places have begun to work collectively and to see their competition as coming not from another part of the state, but from outside the state, region, and nation. In this environment, the biggest threat becomes the lack of change itself. For example, Silicon Valley, a region most would consider as being free from economic difficulties, was so concerned about the effect of its "culture of blame" on economic development that it made a commitment to work together to develop the "Silicon Valley, Joint Venture Way" a partnership of business, government and community-based organizations to collectively address and solve pressing issues that were holding back the communities' economic future. In fact, successful communities and states are those that are better at responding to economic change -- at developing a shared understanding of changes, at crafting innovative solutions, and most importantly, at coming together to place the collective interest of the community above a narrow interest in maintaining the status quo. Yet, Rhode Island's industrial, political and social legacy has made the development of a more collaborative civic culture difficult. The Rhode Island historian William McLoughlin argued that in the 1800s and early 1900s the legacy of industrialization and patterns of immigration meant that economic and social divisions were magnified by religious and political antipathies. He states: "by 1923, Rhode Island was a bitterly divided state, socially, economically, and politically." In the 1950s, there was "factionalism preventing the consistency and long range planning that might have helped the state out of its economic decline."" In 1977, the Providence Journal wrote "if the people of Rhode Island conclude that 'free for all' individualism must give way to more cooperation, more balance and sharing, more planning in economic, political, and social affairs, the state may be on the brink of a major shift in its patterns of thought and

1

Rosabeth Moss Kantor, World Class (New York, NY: Simon & Schuster, 1995). Francis Fukuyama, Trust (New York, NY: The Free Press, 1995).

behavior. In that breakthrough may lie Rhode Island's real 'Hope."'122 In spite of the recent progress, this legacy of division and mistrust remains a central barrier to Rhode Island's economic rejuvenation. These divisions occur at all levels. Business blames government. Government distrusts business and all too often assumes the worst of intentions. Citizens distrust political leaders and the political process. Aquidneck Islanders distrust Capital City interests. But perhaps the largest division is between labor and business. Too many workers see business as selfish, focused only on profit and exploitation of the workingman and woman, and are quick to call up the conflict-ridden history of exploitative mill owners as an illustration of business practices today. For their part, too many business leaders blame unions for all economic and political ills. Yet, both clearly have a stake in a healthy and prosperous Rhode Island economy that generates good jobs, high profits, and a more healthy state fiscal condition. Yet, compared to some other states, such as Pennsylvania and Michigan, that have also had a history of contentious labor management relations, Rhode Island has not done enough to put this behind us and begin an era of cooperation." In general, we frame issues too often as win-lose, rather than win-win. Too often valuable political and institutional energies are spent fighting over pieces of a shrinking pie, instead of building a larger pie of more jobs, better wages, and higher profits. Such divisiveness may have been acceptable years ago when there was little interstate competition and when change was slow. Now, it gets in the way of the serious task of building our economy. Developing the sense that all Rhode Islanders -- rich and poor, white and minority, labor and management, north and south, -- are in this together, is a critical first step in the process of beginning to compete in the New Economy. Recent efforts suggest that we have taken steps in the right direction. But we need to do more. We need to create a culture in which people "come to the table" looking for a collaborative solution, not to stake out an adversarial position." We need to cast off the culture of blame and divisiveness and embrace a culture of responsibility and partnership. Building on the shared vision of all sectors of the Rhode Island economy, we must begin the process of healing the divisions of the old economy, and working together to build hope in the New Economy.

2

Ibid, p. 204.

Goals Becoming promoters and participants of our community economic development. Creation of investment group, capable of investing in the development of our communities. Empowering our community to envision ourselves becoming economically empowered in order to be able to create wealth in our neighborhoods. Teach community residents to overcome the social mentality and transform such mentality to an economic development mentality. To take control of our economic future, Rhode Island needs to put in place a competitive business climate and a comprehensive and innovative economic development system. Achieving these goals will require a concerted effort on the part of all Rhode Islanders: business, government, workers, and citizens. Economic Development Consultancy Business Incubator Development Venture Capital Funding Services Real Estate Investment Partnership Technological Economic Development (TED) ONE economic strategy should be based on a comprehensive plan for communitycontrolled revitalization crafted by community stakeholders. This plan should outline the blueprint for a locally based economic development strategy based on the concept of an Urban Village. Other initiatives around the country have demonstrated that communitybased planning and organizing can produce quality affordable housing and a network of social services increasingly responsive to residents’ needs. The Board of Directors need to develop a series of Urban Village Visioning sessions to convey the organization’s intention in the neighborhood. One of these visioning sessions should be Community Economic Power, which should identify the key leverage points to move from our vision to the reality of a vibrant multicultural urban village. ONE basic approach is to create an environment of opportunity that encourages and supports sustainable business development and asset accumulation, and increases the purchasing power of ONE neighborhood residents. We need to build on the community’s many strengths, and rely on residents to set the direction. This community’s many assets, include its unique ethnic composition (African American, Latino, Cape Verdean, and white), a widespread interest in gardening and agriculture, the richness of its colonial history as well as the current interest in its revitalization efforts, point the way to certain assets-based approaches. This bottom-up, integrated community approach often puts us at odds with the conventional wisdom in community economic development.

A number of observers, most notably Melvin Oliver and Thomas Shapiro in Black Wealth/White Wealth: A New Perspective on Racial Inequality and Michael Sherraden in Assets and the Poor: A New American Welfare Policy explained that many previous attempts to spur the economic revitalization of central cities have fallen short of expectations because they do not address barriers to wealth creation or create asset building mechanisms. They note that in order to truly escape poverty, the so-called economically disadvantaged must not only raise their incomes, but acquire wealth through asset accumulation as well. Conventional wisdom has fostered strategies for urban revitalization that focus on job creation. ONE economic power strategy places the emphasis on both jobs and the creation of wealth. To date no organization has developed a coherent strategy for building both community and individual assets. More importantly, local institutions have given little guidance to communities on how to manage their existing and emerging assets in a way that will stabilize their communities and encourage individual wealth. "Revitalize Communities Through Asset Building" by Ben Hecht. The construction of affordable housing was a critically important strategic decision for ONE Street. Some experts felt that initially focusing on housing instead of economic development (job creation) would prove to be a mistake. However, by starting its journey toward revitalization with the construction of quality affordable housing, ONE Street was able to stabilize the neighborhood and promote sustainable economic development by attracting families back to the area where 20% of the land had been abandoned and allowed to deteriorate. Homeownership has also been one of the most important means of building both community and individual assets. ONE Neighbors, Inc., the community land trust, currently manages 30 acres of communityowned land. Hundreds of families have become new homeowners as a result of the new housing construction. Since 1989, more than $43 million has been invested in the construction of nearly 300 units of new housing in the ONE Street area. Another $12 million has been invested in the rehabilitation of existing homes. Total neighborhood investments since 1989 are estimated to be between $75-80 million. This includes the construction of the ONE Town Common ($1.2 million), the rehabilitation of the former furniture factory and home of ONE STREET and YouthBuild Providence ($1.5 million), and capital improvements to the Vine Street Community Center ($5.2 million). While asset accumulation is crucial to long-term community viability and sustainability, income derived from employment is what families need in order to purchase groceries and pay the bills. A series of surveys conducted by the Harvard School of Business under the direction of Michael Porter estimate that the purchasing power of the residents of Greater Providence is more than $3 billion. Porter’s study also shows that overall; Providence’s urban neighborhoods are currently experiencing a $1 billion trade deficit. That is to say, $1 billion that residents spend on goods and services currently flows out of their neighborhoods.

ONE residents are willing to take their time and build a sustainable economy whose foundation is composed principally of local businesses owned and operated by residents employing residents. They have opted to devote the bulk of their energy and resources to generating homegrown economic power as opposed to attempting to import economic development from beyond their boundaries. Following the identification of Community Economic Power as a key leverage point, we designed a community thinking process to do contingency planning around economic development. In these "What If…?" sessions, we tested various strategies against possible scenarios in order to identify "resilient elements" that helped approaches and projects survive many possibilities. These elements were summarized as: • build on community diversity • local/community ownership and control • circulate dollars locally • community cooperation • more good jobs / livable wage • community education • personal development • political clout • organizational infrastructure • harnessing outside resources • diverse economic activities • sustainability These resilient elements are now being crafted into a community assessment tool so that residents can examine and design projects that have the best chances of survival and the greatest community benefit. We have started to look at our own ideas, as well as other proposals, with this lens. The ultimate goal of ONE sustainable economic development strategy is to create a healthy, safe and secure neighborhood and to create real wealth within the community. Real wealth is created through the development and nurturing of individual and community assets. Economic development is thus seen as a means to an end, not the end itself. The ONE Street strategy for sustainable development is resident-directed and will build upon the community's inherent and acquired strengths and assets which include: its strategic location with respect to Providence and major transportation routes, available labor force, vacant land, eminent domain authority, a comprehensive revitalization plan, location within Enhanced Enterprise Community (EEC), strong community partners including CDCs, philanthropies, City of Providence, designation as a brownfields site, historic landmarks and sites, cultural diversity, and a business base of 250 businesses. Some of these assets were viewed as liabilities not too long ago. For example, the diverse cultures that have come to live and co-exist here are still seen by some as being the source of racial tension. We view our identity as the foundation of an exciting cultural mosaic upon which we can draw strength and from which we have been able to create a

shared vision through organizing to successfully undertake an ambitious development agenda that former nay-sayers had claimed to be impossible. Develop Community Standards to Guide the Development of the Urban Village ONE strategy for job creation will include the development of new locally-owned businesses as well as attracting some businesses from the outside. We will continue to work on sustainable development criteria for the ONE Urban Village. Criteria (developed by the community during the Urban Village Visioning Process) such as building on community diversity, local community ownership and control, local circulation of dollars, more jobs, community education, personal development, political clout, and diverse economic activities need to be translated into community standards. These standards will be used by the community to determine the "fitness" of various development proposals to the urban village. Promote Historic ONE Tourism is one of Providence's largest industries. People from all over the world flock to Providence to partake in its historic landmarks and sites. ONE also has a rich history and many historic landmarks, but to date these are for the most part unknown. It is certainly not included in any of the historic tours that originate from downtown Providence. We are currently designing a Historic ONE project, that will explore, document and market the neighborhood's rich history, from colonial times to its recent history of neighborhood struggle and revitalization. Neighborhood youth will be hired to do the research, locate artifacts, create exhibits and other materials, and conduct community tours and workshops. This will not only help build community knowledge and pride and create challenging opportunities for young people; it will also counter the negative stereotypes of the community, which discourages investment and visitors. By "putting ONE on the Map", we hope to get on Providence's map of historic landmarks, and tap the city's booming tourist industry which draws visitors and dollars from around the world.

First World Multicultural Festival The ONE Street proposes to build upon the success of its annual "Multicultural Fair" that it has planned, organized and run for the past eight years to create a First World Multicultural Festival. This plan proposes to integrate the festival into ONE overall comprehensive revitalization strategy. We specifically view the First World Multicultural Festival serving as a "window" that will provide residents, city officials, potential investors and others with a "sneak preview" of what the cultural component of our proposed Urban Village will look like as well as a hint of its economic potential. The First World Festival represents an important component of ONE economic revitalization strategy. It will play an integral role in establishing the ONE area as a special place with its own unique and history and peoples. Festival activities will take place in several strategic locations throughout the neighborhood that together will serve to emphasize ONE’s •

History

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Cultural Heritage

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Artists and Artisans

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Unique Shops and Merchants

The First World Multicultural Festival will highlight the histories of the African American, Latino, Cape Verdean and European residents and the history of Providence as well. The various cultures will be colorfully represented with foods, clothes, crafts and music. Local entrepreneurs and would-be entrepreneurs (including youth) will be encouraged to take advantage of the crowds the festival will attract to set up stalls and tables and sell their wares along ONE Street. We envision the festival eventually evolving into a major fundraising event for the community and ONE. 2.5 Enhance Business Development Opportunities with Commercial Real Estate Development Discussions within ONE sustainable development committee will focus on a strategy for expanding our revitalization efforts beyond housing development activities within the Southside. Since it is questionable whether the City of Providence would consider extending the community’s eminent domain authority to abandoned buildings or to parcels outside the original designated area, we must look for and discover alternative means for gaining community control of land for the purpose of undertaking comprehensive planning and development.

Redeveloping Brownfields

Brownfields are a possible option in this regard. The US Environmental Protection Agency defines brownfields as abandoned, idled, or under-used industrial and commercial facilities where expansion or redevelopment is complicated by real or perceived environmental contamination. Brownfield programs offer various tax breaks and reduction in legal liabilities on contaminated sites as a way of rechanneling economic growth from farm and forestlands to reclamation of blighted urban sites in communities in search of economic development opportunities. The ONE neighborhood is a designated Brownfields site. Consequently, we are targeted for receiving funds to help transform contaminated parcels of land into sites for appropriate commercial development, i.e. development that is consistent with the residents' urban village vision. Legislation pending before the Massachusetts Senate would make $60 million available to targeted communities for brownfields development. Workshops and planning sessions around brownfields redevelopment are exploring the possibility of making contaminated sites/facilities more productive. Brownfields planning has led to the identification of sites for possible redevelopment, the neighborhood's vision of what could be developed, and the identification of some of the resources available. This year we will need to: identify specific sites for site control, environmental assessment and clean up, and site marketing/redevelopment. We are also exploring the role brownfields redevelopment can play in our urban agricultural strategy. Strategy Three: Increase The Purchasing Power Of ONE Resident The poor have long faced barriers to accumulating wealth and assets. Financial planning, economic literacy services and refundable tax credit programs primarily benefit moderate- to high-income individuals and families who have been able to take advantage of such programs to save toward homeownership, education and retirement. These programs have included savings programs such as Individual Retirement Accounts and 401(k) s. In the ONE Street neighborhood there is a need for programs that inform residents of their economic power options, teach economic literacy and financial planning to low- to moderate-income individuals and for mechanisms which make investing in the future feasible and aspirations for education, homeownership, or starting or investing in a business a reality. ONE work with residents has clearly indicated that savings is one of the largest obstacles to economic mobility and to obtaining quality housing. Strategy three involves extensive outreach to and counseling of low- and moderateincome residents in the ONE neighborhood. The project will build on ONE community development, community organizing, and homeownership work to ensure that ONE Street residents are informed of and have access to the tools to realize their economic power. Implementation

One’s Sustainable Economic Development Strategy is a comprehensive approach to create an environment of opportunity that encourages and supports sustainable business development and increases the purchasing power of One’s neighborhood residents. Although we recognize that this plan and the initiatives to support the strategies described above are ambitious, they strategically build on the area's strengths and resources and ONE's capacity to undertake the needed organizing and leveraging of resources to address the needs we have identified through our work in the community. While the bulk of the initial planning and ongoing organizing work associated with this effort will be coordinated and carried out by ONE staff, the successful implementation of our Strategy for Sustainable Economic Development will require the assistance of many others. For example, our community partners -- particularly our local community development corporations -- will have key roles to play. We will also continue our work with various levels of government, university-based, and community environmental agencies/organizations to package technical assistance and resources for both existing businesses and to possibly redevelop brownfields for productive use. Wherever possible, graduate students from local business schools and policy and planning programs will assist us with market studies, business planning, and related research. However, we expect that specialists may be required on a contract basis to support implementation of a number of the objectives described in the above plan (for example, to develop ownership structures should we identify worker-owned business opportunities). In addition, the Resident Development Institute (RDI) that is being developed as the cornerstone of ONE's participation in the Annie E. Casey Rebuilding Communities Initiative (RCI) will be the primary vehicle for encouraging resident participation. Currently two RCI staff members and organizing staff are focusing their work on our strategy to help develop resident economic power.