Bronx Cooperative Development Initiative

Building Better Futures Through the

A project of

Winter 2013

COMMUNITY DISTRESSThe 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

ECONOMIC POTENTIALBCDI 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

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

STRUCTUREBCDI 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

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

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

BUSINESSDEVELOPMENT

FINANCE

GOVERNMENT

CDC’s

INITIAL STRATEGIC FOCUSA 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

PARTNERSBCDI 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

SUCCESS MODELSBCDI’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

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

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

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

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

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

Cultural/ Tourism Anchor Institution

University/ Educational Anchor Institution

Health/ Hospital Anchor Institution

HOW BCDI WORKS (1 of 3)

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

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

THANK YOU

BCDI 2013