What do you do if you want to kick-start an economy in an area known for its crime, gang activity, meth traffic, high school drop-out rates, lack of job opportunity, and long-term disinvestment? Figuring that out was my assignment.
For 20 years, I worked in just such a neighborhood in San Diego for the family foundation launched by Joe and Vi Jacobs. An entrepreneur who founded the Jacobs Engineering Group, Joe wanted to roll up his own sleeves and use his resources to create the kind of economic opportunities he’d benefited from as a Lebanese immigrant. In 1992, when South Central Los Angeles erupted following the acquittal of the police officers who were videotaped beating Rodney King, Joe said if people in the community had owned some of the businesses in the areas where they were rioting, they would have expressed their anger in other ways.
For six years after the riots, we were active funders of nonprofits working in business development, entrepreneurship, and microlending. By 1998, this belief in the power of ownership led us to move the foundation’s offices into the disinvested Diamond Neighborhoods of southeastern San Diego in order to look closely at the interconnected web of challenges that limit economic opportunity and keep communities locked out of opportunity. We were a small foundation, granting less than $1 million a year, and none of our other local foundations were working in economic development. Not knowing where to start, we asked by going door-to-door, block-by-block.
Over the course of the next nine years we worked together side-by-side with residents to plan and build a commercial and cultural center they named Market Creek Plaza. That process culminated with a pioneering Community Development IPO. In order to help keep the work moving, we leveraged what we had: 1. vacant and abandoned property, which we believed we could turn into value; 2. our portfolio, not just the grantmaking budget, which we could use for loan guarantees and program-related investments; 3. our ability to ask other funders and investors to partner; and 4. access to lots of people with a pent-up desire to change their community. And then we stayed.
Throughout the journey, the work stayed centered around a deep commitment to resident ownership and the belief that long-term learning relationships provide the most fertile ground for change.
A Lesson from Goats
When I was given the assignment, I was just coming from teaching participatory planning methods to an NGO that would then train others throughout the Middle East and northern Africa. In the villages, I noticed a number of economic projects that had been built and then abandoned. When I asked why, I got the same answer in every village: “We never really wanted it. What we really wanted were goats.”
In considering what we would do in a historically disinvested community to not unintentionally disempower people, we decided to take a lesson from the story about the goats: We would start, and stay, with a commitment to asking people who lived there what change they wanted to see and how we could work together to achieve it.
It wasn’t necessarily easy. When we began asking people, they described a community development world where they had been reluctantly invited to a table that was already set, one that disregarded their living history, knowledge, and creativity. They described a world where decisions were made at arms length in order to be “objective,” which resulted in no one having to grapple with all the issues and things that go wrong on the ground day in and day out. They shared how already defined outcomes, narrow funder areas of interest, limited access to and use of resources, and data-driven analysis stifled the open, fluid, and often disruptive exchange of ideas that stimulates innovation. And, with great frustration, they recounted a long history of start and stop efforts, failed and abandoned initiatives, and grants and activities imposed or prescribed.
They experienced a world where services get provided, clients get counted, communities get studied, initiatives come and go, and transformational work rarely takes root. Money, competitiveness, histories, and distrust get in the way of change; the chasm between foundations, businesses, the public sector, and nonprofits overtakes it or pettiness, politics, and the abuse of power derail it.
The simple act of listening to the people in the neighborhood without an agenda and being guided by their wisdom challenged us to not repeat this history. They taught us that the first thing we would need to change was our foundation and how it operated. They also taught us that the people who live in the community need to be the ones to own its change for five reasons:
- They are the link between “community” and “development”;
- Their ownership of plans creates vision for and belief in a different reality;
- Their ownership of implementation builds skills and capacity;
- Their ownership of assets raises expectations for change, gives them responsibility for change, and builds assets they control that can be leveraged for future change; and
- Last, but not least, they represent staying power.
Linking Community and Development
By the time the Jacobs Foundation moved its offices to the southeastern San Diego community in the late 1990s, funders had begun to address the need for neighborhood transformation through comprehensive community initiatives (CCIs). We traveled the country to learn from them.
In many place-based efforts at that time, the need for pre-defined service and policy outcomes and clearly-spelled-out work plans stood in the way of tilting any power toward residents. And yet it was clear that initiatives that shortcut resident participation up front frequently had to back up and even start over in an attempt to overcome dissonance, resistance, and the disconnect with neighborhood residents and partners.
Not only have we done great damage to people by making decisions without them that they should have been involved in, but we are losing the greatest tool we have at our disposal—the wisdom, experience, and creativity of people in their own neighborhoods.
To do this work, we had to move from seeing residents as clients and consumers of services to supporting them as citizens and central actors in community change. We had to go beyond asking residents to weigh in to asking them to dream, design, and implement. We had to figure out how to change from inside-out organizational decision-making to outside-in community decision-making. We had to evolve from being a foundation located in the community to being a neighbor—of the community.
In short, we had to move from resident engagement to resident ownership, understanding that residents need to participate as full partners in the work, guide the planning, share responsibility, and build an ownership interest in the assets developed.
There were three elements of ownership in our work:
- Ownership of the Planning: We ran a process grounded in people’s need to define their own future, one that is different, achievable, and has the power to move us to inspired action.
- Ownership of the Implementation: We worked together in teams that formed the platform for shared decision-making, rotating quickly from planning to action and linking residents to professionals and resource partners.
- Ownership of the Assets: Residents benefitted economically from all our work and we created inclusive structures to make that a reality.
Ownership of Planning
The restoration of the vitality of a community requires vision work. It requires asking people to dream big and collectively move toward a redefined future and that requires they own that different reality, take back their own power to shape the future, and not wait for someone else to solve the problems.
In a traditional development process, the planning goes on behind closed doors and is largely done with the developer, an architect, and an engineer. After plans are created, a community charrette takes place. Best case scenario, the role residents play is one of weighing in and providing feedback. Worst case scenario, their role becomes one of trying to put pressure on decision makers to change what they don’t like. Rarely, if ever, are they in situations where they are the decision makers and have to weigh competing elements themselves.
We placed a high value on inclusion and focused on residents, not just those affiliated with a group or organization, but all residents. We were careful not to just recruit organizational leaders, political leaders, or self-appointed leaders—although they were all invited into the process—but to draw in everyday residents, actively recruiting them through a door-to-door approach. We hired residents to form an outreach team, and with training, they conducted a series of surveys and living room meetings with their friends and neighbors, posing questions about what people liked and didn’t like about their community.
Following the “community listening” phase, an open call was made for residents to serve on resident teams focused on planning the various components of the project. The first to be initiated was the Art and Design Team and 125 people volunteered right away. As more and more teams were launched, residents came together quarterly in town hall meetings to keep the work connected.
Food, childcare, transportation, and translation were provided to respect and support resident participation. If people have to go home after work, get dinner for their children, arrange childcare, and then be away from their families, it becomes impossible to participate consistently in a planning process. But with the opportunity to come together, bring their families, share food, meet neighbors, and know their children were working in the adjoining room, people looked forward to participating. No long-term commitment was necessary, so people could opt in and out as their circumstances changed. The size of the working teams averaged about 35 and attendance at the town hall meetings grew to 500 people.
A team of professionals co-facilitated meetings alongside residents with an agenda that rotated from community listening, envisioning, and learning to implementing, evaluating, and refining the work. Through it, residents took ownership of identifying the key elements of the architectural character, developing the business and leasing strategy, creating the construction outreach process, and determining the place-making agenda. People dreamed, shared, discovered, and experienced the many rich and diverse cultures that would stamp the identity of Market Creek as a cultural village. In this way, these large teams could set their own success measures, define the barriers that would potentially stand in the way of success, and create an action agenda that would overcome those challenges and achieve their goals.
Ownership of Implementation
Capacity is best built through an iterative process in which teams listen, envision, learn, plan, and directly experience how work gets accomplished.
For each piece of the work involved in developing Market Creek Plaza, once the large planning teams set the framework, implementation teams were formed by posing two questions in the large community meetings: “Who needs to be involved?”—both specific people and types of people or skill-sets—and “Who wants to be involved?” These “working teams,” as we called them, were charged with guiding the implementation and the achievement of the goals set in the community planning process.
Work was scoped in 90-day increments and working teams were time-limited. This gave the work a clear beginning and a foreseeable end with a clearly defined victory. People knew they weren’t signing up for a traditional committee intended to go on forever, allowing them to easily come in and out of the process. Through the work, residents built their personal track records and resumes and strengthened their commitment to the greater good. They were responsible for reporting back in the larger community forums and were held accountable for achieving their team’s part of the larger plan.
This teamwork helped us manage decision-making, develop relationships, build trust, focus joint action, promote learning, and build networks. Teams tackled the work by breaking down the plans into small steps so success could be understood, acted on, and celebrated.
Here are some examples of how the teams broke through barriers to achieve community benefit results:
- The Construction Outreach Team had to address the lack of bonding among community contractors. It did this through the design of a wrap-around insurance program with our foundation serving as owner-builder. Through a best-bid process weighted toward community contractors, a mentorship program, and contracting workshops, this team surpassed its goals and achieved 69 percent participation by minority- and women-owned businesses, representing $7.8 million in additional capacity-building.
- The Business and Leasing Team was split between wanting living wage jobs with pension plans and wanting space for emerging entrepreneurs from the community. They solved this with a both/and strategy that provided space for national anchor tenants, new entrepreneurs, and manage-to-own franchise opportunities.
- The Employment Team had to address the right of the grocery union to give priority to its current members in the district when a new store opens. It did this by engaging the union leadership and grocery district management in problem solving. Ultimately, the grocery agreed to hire and train people in other stores, getting community residents into the union, and giving them priority to transfer back to the new store. This team surpassed the redevelopment benchmark of 30 percent community employment, achieving 91 percent of the opening day jobs.
This was a different kind of problem solving. While professionals provided access to information, background, and learning, it was often the people in the room who didn’t have professional training who found the breakthrough. While many of us were trying to figure out how to lobby the Army Corps of Engineers to allow us to put an amphitheater stage on the creek that ran through the site, someone asked “What can you put in a waterway?” and provided the stimulus for the stage to be permitted as a dock.
As each team completed its work, its members became part of an ongoing Working Teams Forum and could volunteer for future teams or just participate in the quarterly town hall meetings.
Ownership of Assets
When we speak of resident “buy-in,” we are exposing who drives and owns change. Typically, we are asking residents to buy in to our agenda rather than our buying into theirs. Through large-scale community listening and planning, followed by teams that guided implementation, we began to shift this dynamic.
But over time, we also learned that we needed to construct the platforms for residents to literally buy in, to co-invest alongside the other equity partners, to have skin in the game, and to economically benefit long-term from community development projects.
For Market Creek, the goal was to provide a platform for individual asset building, collective investment, community control of land, and the generation of ongoing resources to fund social equity goals. To achieve these goals, a resident Ownership Design Team created three structures:
- Diamond Community Investors (DCI), a class of members who would purchase and hold shares or “units” in Market Creek Partners, LLC. This would enable individuals in the community to own shares in and profit from the project they had designed and implemented;
- A community foundation public benefit corporation, called the Neighborhood Unity Foundation, which would own shares and return its profits to the community in the form of grants; and
- Diamond Management, Inc., a development entity with the mission of building other resident-owned projects based on this same process and structure. It was set up to be a fully-owned subsidiary of the Jacobs Center until it was profitable, had a pipeline of projects, and would train a team of community residents to run it, manage the Market Creek assets, and conduct ongoing development. Once sustainable, this company was planned to spin off as a independent community-owned enterprise.
To achieve the individual ownership component we created what became known as the “Community Development IPO.”
In January 2006, the stock permit was granted and the “Own a Piece of the Block” campaign kicked off. By October 31 that year, 415 investors had invested $500,000 and the offering closed. In addition to this capital, the Neighborhood Unity Foundation raised $500,000 from foundations, resulting in a total of $1 million in community equity—40 percent ownership of the Market Creek Partners, LLC.
Based on the increases in the grocery store lease, the business plan called for the community to have enough value in the project to buy out the other investment partners by 2018, leaving the entire asset controlled by the community through collective investment—an asset that could then be leveraged for future change.
Community transformation is deeply rooted in people’s will, motivation, and expectations for change. These are the people who stay, at the end of the day when the sun goes down, when the money runs out, and when the politician loses the election, making them the “staying power” for social change.
But residents cannot create or sustain change by themselves or they are merely left behind. What the community development world needs to put and keep in place are access to and the support of financial, professional, and political networks, pathways to engage each other and the regional community, and an infrastructure to support collective civic action, and catalytic, shared-ownership, shared-benefit projects that create economic impact.
As a pilot to test the staying power of a resident ownership approach to community development, what has Market Creek Plaza achieved that is being sustained and what lessons has it taught that can be applied in other communities?
First and foremost it exists—a community-designed, -built, and -owned commercial and cultural center, located at a public transit center that provides goods and services to residents. Near an intersection sometimes referred to as “the four corners of death,” a vibrant commercial center is now home to the first major grocery store to serve this community in more than 30 years.
Second, it is a profitable commercial-cultural center. Originally projected to hit $31 million in gross sales, in 2010 (the last year in which a full Social & Economic Impact Report was published) Market Creek Plaza generated $47.8 million in total economic activity, created a little over new 200 jobs, and attracted an additional $46.7 million to the surrounding community, lifting the number of neighborhood jobs from 7 to more than 500.
Third, it has developed two resident investment structures—the Diamond Community Investors and the Neighborhood Unity Foundation, which receive a 10 percent preferred return annually on their initial investment. By the end of 2012, $480,000 in profits had been distributed back to the community.
Fourth, it spawned the CD-IPO (community development initial public offering), which can be used as a model for both other Diamond Neighborhood projects and other communities nationally. Market Creek resident investors have already pooled their returns to create a Community Investment Fund for future ownership opportunities and by the end of 2012 had accumulated $92,000.
Fifth, over 150 residents participated as group leaders, trainers, and presenters, and using the expertise gained in planning Market Creek Plaza, 570 people worked to develop the urban design, connectivity, and cultural branding of an expanded 50-acre village plan.
Sixth, it has provided a community listening template, a participatory planning and decision-making process, and a resident working team structure, components of which are being used by other organizations and community groups, both in San Diego and nationally.
Seventh, it spawned other resident-led projects that have significantly affected public safety and dropped the recidivism rate of formerly incarcerated returning citizens from 70 percent to 10 percent through a interconnected set of resource networks.
Eighth, during the 10-year track-record of the $5.7 million neighborhood funders collaboration supporting the work, this project provided valuable experience for San Diego’s philanthropic community in working across areas of interest and blending different types of capital to accomplish community revitalization. For these 14 charitable organizations and individuals, their vision and approach to grantmaking were challenged and changed and their working knowledge of this set of neighborhoods was deepened.
Market Creek Plaza, by restoring hope and the belief that change was possible, became the catalyst for the development of a larger community vision for revitalization that includes putting over 50 acres of blight back into productive reuse, attracting over 2,000 jobs, 1,000 homes, seven interconnected cultural venues, and community amenities, such as open space, parks, childcare, and a river parkway.
When, how, and if that hope endures and that vision is fulfilled remains to be seen. For change to endure, all the parties to that change must also be willing to change, willing to endure great critics, barriers, and challenges, and willing to stay the course. Unrealistic timelines, short-term funding, the polarization of the political landscape, and fear of failure too often shut down the necessary risk-taking; impede steady, patient effort; and deplete the energy, creativity, and ambition of people to achieve change.
As we work on untangling the web of issues that plague our disinvested communities, we must create strategies that shift power and create ownership. When residents take ownership, they raise their expectations for change and take responsibility for change. This changes us all.
For me, this is the “utterly simple idea”—ownership. How could it have been otherwise?