Worker Ownership, Green Jobs, and Partnerships with Institutions: A Prescription for America’s Inner Cities? An Overview and Analysis of the Evergreen Cooperatives in Cleveland, Ohio Kelly Graham Research Goals: To determine the tangible and intangible elements of a new model of community economic development and the potential for it to be replicated in other cities. Environmental Health and Equity: Global Strategies and Innovation April 30, 2011 McGill University

Project Methodology Qualitative case study Data sources: 39 semi-structured open-ended interviews with multiple stakeholders The Evergreen leadership team at the Cleveland Foundation Workers in the companies Institutional leaders from the anchors and the city Associated people working in the community Direct observation of meetings, workplace visits Program documentation Analytical Framework: Strategy rests on sound evidence-base Replication requires consideration of local conditions

The Evergreen Strategy Targeting Anchor Institution Purchasing Non-profit institutions that are rooted in their communities, “Eds and Meds” 3 major University Circle institutions spend combined $3 billion on services and procurement Worker Ownership Profits distributed among employee owners, circulate in the community Businesses rooted in communities, owners unlikely to send their jobs away Builds on highly successful Mondragon Cooperatives in the Basque Region of Spain Green Jobs New economic niche and increasing demand for green products Sustainability requires new technologies and practices Government support Triple bottom line of people, planet, profits

Greater University Circle University Circle, 1-mile radius, contains major institutions including: Case Western Reserve University, University Hospitals, Cleveland Clinic GUC: 6 target neighborhoods have average income of $18,500 Greater University Circle Initiative (est. 2005) focuses on: Education Housing Safety Economic inclusion (Evergreen Initiative) Greater University Circle Target Area: Boundaries and Neighborhoods Source: Cleveland Foundation

Contrasts: University Circle and Surrounding Neighborhoods University Circle: Cleveland Museum of Art Vacant lots in Hough neighborhood

Context High poverty, unemployment, and segregation Loss of manufacturing as economic base Job & population loss Exacerbated by foreclosure crisis and recession Map: Colored areas indicate the location of vacant land, poor and unsound building conditions, water shut offs, tax delinquencies and foreclosures Source: Cleveland Foundation

Businesses Evergreen Cooperative Laundry (est. Oct 2009) Industrial laundry: hospital, hotel, nursing home linens Energy & water efficient, fewer and safer chemicals Ohio Cooperative Solar (est. Oct 2009) Solar panel installation and operation, power-purchase agreements Weatherization of homes Neighborhood Voice (est. September 2010) Print and online community news source Run by high school and college student Green City Growers (spring 2011) Hydroponic greenhouse growing lettuce and herbs Wind turbine on site, sustainable technologies to reduce water, fertilizer, heat, and electricity requirements Evergreen Business Services (serves all the cooperatives)

Evergreen Cooperative Development Fund (non-profit holding Company/ Intermediary) CDFI Evergreen Cooperative Corporation (ECC) (for Profit) Cooperative Businesses Committees: Audit & Finance Governance Strategic Planning Investment Executive Evergreen Land Trust (Non-Profit ) Evergreen Business Services (for Profit) GUC Initiative Transit-Oriented Development Education Housing Engagement ECC Board of Directors AccountingIT TA CDE (for Profit) Structured Fund (non -Profit) Human Resources EVERGREEN COOPERATIVE STRUCTURE ECC is a for-profit owned and controlled by its members - members will include: cooperative businesses, critical stakeholders and strategic partners DRAFT ECDF Board of Directors (for Profit)

Building a Culture of Ownership “What they said about the way I run the tunnel, that was one of the things at the start I was like ok if I start this tunnel 45 minutes earlier than before and I multiply by 21 each pocket, I can cut the time sorting and the time on the floor practically in half. It was an experiment and it work out marvelous and something that we actually use today” (ECL employee #1, 8 June 2010). “I feel with this company, the difference in this company, versus other companies I worked for, its like I worked for them, its like I belong to this company” (OCS employee #2, 1 July 2010) “Think about that brand new, think about your very first car when you were 16 years old. And you washed it every day and you wanted it to be the best car on the block. And I tell them to think about it like that, think about this is your first business, and you would like for it to be the best business. But the only way we can make it the best business is to work hard and to keep our clients happy.” (ECL manager #1, 22 June 2010). “It’s a culture of ownership, it’s a culture of not just ‘Me Inc’ but it’s one of me, fellow worker, and company all wrapped into one. In other words, it has to be a profitable enterprise, so we all have to work together to make that happen” (Evergreen startup CEO #1, 8 June 2010).

Outcomes In its first year, the Evergreen Initiative has created 4 businesses and 48 new jobs Recipient of Living Cities Integration Initiative Award ($15 Million) Interest in replication in Atlanta, Pittsburgh, Youngstown Environmental impact inherent in business design, will grow as the businesses grow Deepening commitment from institutional stakeholders and city Intangible: New sense of hope in the community, sense of connection between institutions and communities

Challenges Challenges for the Initiative Confronting skepticism and lack of knowledge about cooperative model Defining and institutionalizing structure, mechanisms Capacity restraints Business Development Financing Finding talented management Land acquisition for GCG Lack of support for print media for NV Business Operations Obtaining contracts Cultivating sense of ownership Future challenges Proving the model and moving to a meaningful scale Shorten business development time frame Building management talent within the employee owners General challenges of startups Competition from other firms that lack social mission

Essentials Elements (1) Context of Cleveland Persistent economic decline plus 2007/2008 crisis Need for new approaches and sense of urgency Wider trend towards sustainability Demand for ways to reduce environmental footprint Local, state, and federal initiatives for efficiency, renewable energy, and sustainability Geography of Greater University Circle (GUC) Focal point for initiative – “building on strength” Role of Cleveland Foundation Funder, convenor, and power broker Commitment to strategic initiatives, not afraid to take risks

Essentials Elements (2) Role of the City of Cleveland Alignment with the Mayor’s priorities Helped secure funding and land assembly Leadership Talented and deeply committed Evergreen Leadership team New leadership at institutions, recognition of their role in community “Community of change”: Philanthropy, Institutions and the City Partnerships and collaboration GUC meetings established track record, built trust among stakeholders ‘Win-win’ alignment between institutions and the initiative Institutions propose business ideas Partnership is institutionalized in “Class C” stakeholder shares

Recommendations for Replication Recognizing that the Evergreen Initiative is still in its infancy and not yet a “proven” model: Theoretically, the model of worker ownership, anchor purchasing, and green jobs is widely applicable The basics: anchor institutions, a target community, leadership, and funding Equally important: context, relationships, shared vision Find: An organization to fulfill Cleveland Foundation role, talented and motivated leadership, alignment with institutional leaders Cultivate: relationships among stakeholders (philanthropy, institutions, community groups, government), ownership culture Adapt: to local historical, cultural and political contexts, policies