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Bronx Cooperative Development Initiative Building Better Futures Through the A project of Winter 2013.

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Presentation on theme: "Bronx Cooperative Development Initiative Building Better Futures Through the A project of Winter 2013."— Presentation transcript:

1 Bronx Cooperative Development Initiative Building Better Futures Through the A project of Winter 2013

2 COMMUNITY DISTRESS The Bronx is owner of dire statistics: Highest rate of Asthma in NY Highest levels of Obesity in NY The poorest urban county in the United States Highest rate of Mortality and Morbidity in NY

3 ECONOMIC POTENTIAL BCDI is designed to leverage the Bronx’s significant financial assets and economic activity: High concentration of Bronx-based anchor institutions: 9 Hospitals, 5 Universities, 4 Cultural Institutions, 3 Governmental Institutions, over 400 Public Schools and 90 Public Housing Developments Bronx anchor institutions collectively spend over 4 billion dollars annually on procurement of goods and services—however less than 10 percent of procurement is spent locally Home to Fordham Road, the third largest commercial corridor in NYC Home to the Hunts Point Terminal Market, the largest food distribution center in the world with 6 billion dollars in annual revenue

4 ABOUT BCDI The Bronx Cooperative Development Initiative (BCDI) is an innovative model for urban economic development —the only model of its kind in the NY region Launched in 2011 following a year-long community engagement process led by Bronx-based institutions, grassroots organizations and civic leaders BCDI is working to create a network of employee-owned, sustainable businesses in the poorest urban county in the United States, where over 30 percent of the population lives below the poverty line

5 STRUCTURE BCDI is a community-led initiative whose members include Bronx residents and civic leaders representing community-based organizations and labor unions with strong ties to the Bronx : The Northwest Bronx Community and Clergy Coalition, THE POINT CDC, Mothers on the Move, Green Worker Cooperatives, the Consortium for Worker Education, Northern Manhattan Coalition for Immigrant Rights, 1199 SEIU United Healthcare Workers East BCDI operates with technical support from the MIT Community Innovator’s Lab (CoLab) and CommonWise : MIT CoLab : part of the MIT Department of Urban Studies and Planning, one of the leading academic centers in the world for urban planning and development CommonWise: a nonprofit consulting firm, led by Jeffrey Hollender (co-founder of Seventh Generation, green household products company), a network of pioneering entrepreneurs, advisors and innovators focused on sustainable business development

6 STRATEGIC OVERVIEW BCDI is designed to build capacity within the Bronx for development that puts communities on a self-determined path to economic stability and ensures financial benefits are broadly shared Uses strategies and ownership models to establish better coordination between community assets (residents, businesses, institutions) and create the infrastructure to support new forms of targeted reinvestment Stimulates economic development defined by community engagement and participation

7 Community Enterprise Network A network of anchors, community based organizations, community development corporations, and other support infrastructure with the capacity to plan and execute a borough-wide economic development platform for the Bronx. STRATEGIC OVERVIEW cont’d ANCHORS CBO’s BUSINESS DEVELOPMENT FINANCE GOVERNMENT CDC’s

8 INITIAL STRATEGIC FOCUS A key focus of BCDI’s initial strategy involves import substitution: Imports procured by Bronx residents and anchor institutions (hospitals, universities, major cultural centers) are replaced by goods and services produced locally Purchases from businesses outside the Bronx are redirected to new or existing Bronx-based employee-owned businesses —built to meet the needs of anchor institutions and support their neighborhood revitalization and environmental goals For-profit, employee-owned businesses are based locally and hire locally, strengthening the internal Bronx market and increasing the financial assets of workers BCDI companies promote green industry to the fullest extent

9 PARTNERS BCDI Anchor Institution Partners Montefiore Medical Center, Fordham University, The Bronx Zoo, the Botanical Gardens (the four largest employers in the borough), Hostos Community College, Bronx Community College and Riverdale Country School BCDI Philanthropic Partners The Rockefeller Foundation, Morgan Stanley Foundation, Kendeda Fund BCDI Corporate Partner Mondragon Cooperative Corporation

10 SUCCESS MODELS BCDI’s system is informed by extensive academic research and practitioner reports from highly successful anchor institution development strategies and worker-owned enterprises, including The Evergreen Cooperative Initiative in Cleveland, Ohio, and the Mondragon Cooperative Corporation in Spain— both advisory partners to BCDI

11 SUCCESS MODELS: Evergreen Cooperative Initiative (BCDI Advisory Partner) December 2006: conceptualized during a community wealth building roundtable organized by The Democracy Collaborative (University of Maryland) and the Ohio Employee Ownership Center (Kent State University) Early 2008: received $3 million grant to form the “Evergreen Cooperative Initiative” October 2009: launched first two businesses— Evergreen Cooperative Laundry (ECL) and Ohio Solar Cooperative (OCS) — worker-owned, for profit, green companies employing 50 (ECL) and 75 (OCS) local residents Summer 2011: launched Green City Growers (GCG), a year-round hydroponic food production greenhouse, producing millions of pounds of fresh produce per year After 8 years, a typical worker-owner will possess an equity stake in their company of about $65,000 Initial complex of 10 companies will produce 500 jobs over the next 3-5 years Additional 12 anchor-related businesses currently in production

12 SUCCESS MODELS: Mondragon Cooperative Corporation (BCDI Advisory Partner) The Mondragon Corporation, based in the Basque region of Spain, is the seventh largest Spanish business group, employing more than 85,000 people Founded in 1956 by graduates of a local technical college; first product was paraffin heaters Mondragon federation of worker cooperatives: 120 companies in four areas of activity: finance, industry, retail and knowledge Cooperative businesses include: bank, insurance company, consumer goods manufacturers (refrigerators, washing machines, ovens, etc.), automotive and construction equipment manufacturers, systems/ logistics engineering companies, retail manufacturers, technology training programs, R&D and innovation centers 2011 revenues: $20 billion

13 BENEFITS (1 of 2) Builds capacity within the Bronx for community-driven economic development Creates new, living wage, green jobs anchored locally and develops new business leaders for stronger, more vibrant neighborhoods Anchor institutions realize a closer, customized and enhanced service Employee-ownership gives workers equity in their firms and creates genuine opportunity for low and moderate-income individuals to build wealth

14 BENEFITS (2 of 2) Strengthens municipal tax base and prevents financial resources from “leaking out” of the Bronx Sustainable, innovative, green companies have a competitive advantage New instrument for significant external financial investment into the Bronx, including opportunities for new business expansion or relocation

15 HOW BCDI WORKS (1 of 3) BCDI will analyze procurement data to assess goods and services purchased by anchor institutions that could be produced locally BCDI will develop strategies and raise capital for business development linked to anchor institution supply chain opportunities New guaranteed local manufacturing and purchasing flows will capture larger portions of the wealth generated locally and keep more dollars circulating within the local community Employee-ownership model will maximize wealth accumulation for workers

16 Cultural/ Tourism Anchor Institution University/ Educational Anchor Institution Health/ Hospital Anchor Institution HOW BCDI WORKS (1 of 3)

17 HOW BCDI WORKS (2 of 3) A collaborative community planning process designed by the MIT CoLab in partnership with local organizations will establish an agenda and strategic capacity for economic development that responds to local needs and aspirations A training, development and education program created through a partnership between the Mondragon Corporation and community-based organizations will enhance business skills and capacity among the local workforce

18 HOW BCDI WORKS (3 of 3) During the capital formation stage, business experts will raise start-up capital and direct it towards a BCDI Enterprise Fund, the mechanism through which local entrepreneurs will have access to capital Through the creation of a BCDI Community Enterprise Network, BCDI will ensure that sufficient and appropriate technical advisory support is provided to promote business development and growth; the network will include CBOs, anchor institutions, employee-owned enterprises, financial and business service providers, workforce development and R&D

19 JOB GROWTH The following table shows projections for measurable results in jobs created over BCDI’s initial five-year period through the multiplier effect: Note 1 : Based on practitioner reports, BCDI assumes that on average each business creates 20 new jobs in Year 1 and that each business generates new jobs at an average of 5% a year. Note 2 : On average in all sectors of the economy, one additional job is created as an indirect effect of every 2 jobs that are directly created, according to The Job Impact of the American Recovery & Reinvestment Act by Christina Romer, Chair, Council on Economic Advisors, and Jared Bernstein, Office of the Vice President. Note 3 : New jobs indirectly increase household consumption; with increased household consumption, new jobs are created. The impact of this varies greatly by industry. The University of California, Berkeley, estimates that for every additional 3 jobs created by the alternative energy industry, an average of 1 additional job is created as an indirect effect.

20 WEALTH CREATION The following table shows projections for measurable results in wealth creation over BCDI’s initial five-year period: Note: Preliminary estimates only; more detailed projections will be made after the development phase of the project has been completed.

21 MOVING FORWARD (1 of 2) In 2013, BCDI will complete the following strategic objectives: Purchasing Analysis : assessment of goods and services purchased by anchor institutions that could be produced locally Business Feasibility Study : analysis of start-up capital required to launch new businesses, including feasibility/ risk assessments, estimates for ratio of capital invested to jobs created Business Plans : detailed operational plans for five (5) selected businesses, including competitor analysis, branding/ positioning, growth and organizational strategies Anchor Institution Commitments : formalized agreements from a subset of BCDI’s anchor partners to engage in local procurement in connection with launch of first BCDI businesses (2014) Bronx Leadership Development: programming, organizing and educational outreach to build local expertise and leadership potential for community-led development initiatives

22 MOVING FORWARD (2 of 2) In 2013, BCDI will complete the following strategic objectives: Workforce and Business Leadership Development Program : launch of integrated business management and governance program, focused on employee-ownership, entrepreneurship and innovation Incorporation : registration as independent 501(c)3 not-for-profit organization Secure Investors : launch capital raising campaign targeting social venture capital funds, foundation PRI’s, CDFIs, and social impact investors Identify Entrepreneurial Talent : begin recruitment of entrepreneurial talent whose skill-sets align with identified new BCDI businesses to launch in 2014/ 2015

23 SUMMARY Innovative, community-driven economic development model; builds capacity for development that brings greater neighborhood and borough-wide benefit Initial strategy captures wealth generated locally by leveraging purchasing and investment power of anchor institutions Creates for-profit, employee-owned, green businesses based locally, hiring locally Cooperative business model increases asset ownership, maximizes wealth accumulation for workers Significant support from community-based organizations and Bronx anchor institutions, including the four largest employers in the borough; substantial economic potential Anchor institutions realize customized, enhanced service and competitive advantages; achieve community reinvestment and environmental goals High-level development team in place comprised of business innovators, experienced specialists and leading academic institution; advisory partners to share best practices and help guide successful implementation


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