"what works: solutions for cities leveraging your citys anchors mary kay leonard, ceo and...
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"WHAT WORKS”: SOLUTIONS FOR CITIES Leveraging Your City’s Anchors
Mary Kay Leonard, CEO and PresidentMary Kay Leonard, CEO and PresidentNicki MacManus, Strategy Advisory Practice, ICICNicki MacManus, Strategy Advisory Practice, ICICAndrew Frank, Johns Hopkins University Andrew Frank, Johns Hopkins University
March 1, 2012March 1, 2012
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Copyright © 2011 ICIC 2
The nation is experiencing the effects of economic decline and cities in
The Opportunity31% of U.S.minority poverty
19% of U.S.poverty
8% of U.S.population
0.1% of U.S.land area
CONCENTRATED POVERTY mandates a comprehensive approach
Copyright © 2011 ICIC 3
The nation is experiencing the effects of economic decline and cities in
The OpportunityREST OF U.S.+5.9M JobsSince 1998
INNER CITIES-300,000 JobsSince 1998
Percentage of U.S. Employment
Universities and Hospitals are the number one employers in two thirds of inner cities nationwide
Copyright © 2011 ICIC 5
The nation is experiencing the effects of economic decline and cities in
The Opportunity
HOSPITALSUNIVERSITIES HOSPITALS
ANCHOR INSTITUTIONS are a MajorEconomic Force in Urban Economies
ARTS AND CULTURAL INSTITUTIONS
Copyright © 2011 ICIC 6
The nation is experiencing the effects of economic decline and cities in
The OpportunityANCHOR INSTITUTIONS, THE COMMUNITY,AND SHARED VALUE
Michael E. Porter, Bishop William Lawrence University Professor at Harvard Business School
Copyright © 2011 ICIC 7
The nation is experiencing the effects of economic decline and cities in
The OpportunityFROMCOMMUNITY ENGAGEMENT
TOCREATING SHARED VALUE
Motivated by “Moral obligation” to help community
Service learning and community support at core
Focus on community benefits and economic impact reporting
Opportunity to drive long-term competitiveness
Long-term investments that are integral to core strategy
Measure direct impact of activities on anchor and community
Copyright © 2011 ICIC 8
ANCHOR INSTITUTIONS AND THE COMMUNITY: Strategic Framework
Purchaser
Real Estate Developer
Employer
Workforce Developer
Core Service Provider
Community Developer
Cluster Anchor
Offer employmentopportunities to local
residents
Build local community
capacity
Address local workforce needs
Direct institutional purchasing toward local businesses
Stimulate growth of related businesses
and institutions
Tailor core products/ services to serve the
community
Use real estate development to anchor local economic growth
ICIC’S MISSION IS TO DRIVE ECONOMIC PROSPERITY IN AMERICA’S INNER CITIES THROUGH PRIVATE SECTOR INVESTMENT TO CREATE JOBS, INCOME, AND WEALTH FOR LOCAL RESIDENTS. WWW.ICIC.ORG
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East Baltimore Development, Inc.Presentation by Andrew Frank Special Advisor to the President on Economic
Development The Johns Hopkins University; former Deputy Mayor of Baltimore
Table of Contents
• Project Overview• Baseline Conditions• Governance Structure• Implementation• Sources and Uses • Accomplishments and Next Steps• New Framework Plan
Vicinity Map
Project Overview
• Started in 2001• Redevelopment of 88 acres in East Baltimore• Acquisition of 2,000 properties• Relocation of 750 households• Master Plan – 1.1 million sq. ft. of commercial
lab space, 2,000 housing units, 150,000 sq. ft. of retail space (grocery school), open space, new public school
What Made This a Priority?
• New Leadership• Renewed Connection to the Business
Community • New Strategy: Build on Strength • Parallel Efforts: Biotech Park • Neighborhood Despair
Baseline Measures
Middle East Baltimore City Unemployment Rate 23.69 10.86Poverty Rate 43% 19%Percent of Households Receiving Public Assistance
29% 16%
Average Household Income
$28,464 $42,090
Vacancy Rate 70% 14%
Middle East Baltimore City % of Population Without H.S./GED Degree
40% 32.8%
MSPAP: Gr. 3 reading (% scoring satisfactory)
23.7% 14.1%
Teen Birth Rate (per 1,000 teens) 102 83
Infant Mortality Rate 17.1 11.7
Baseline Measures
Middle East Baltimore City Juvenile Arrest Record (per 1,000 age 10-17) 23.19 10.66
Violent Crime (per 1,000 residents) 51.8 26.19
Homicide Incidence Rate (2005-2009) 61 20
Lead Paint Violation Rate 25 11.8
Child Abuse and Neglect (per 1,000 children)
14.3% 4.5%
Baseline Measures
Key Initial Partners
• Baltimore City• East Baltimore Development, Inc. • Casey Foundation• The Johns Hopkins Institutions
Governance Structure
• East Baltimore Development, Inc.• Mayor and City Council• Land Development and Lease Agreement • Economic Inclusion Agreement• Master Developer: Forest City – New East Baltimore
Partnership• Master Development Agreement
Casey Foundation Inspired Development Principles
• Involves residents in consequential way• Offer intensive family advocacy• More equitable relocation compensation • Right of Return • Training and job readiness • Maximize local, minority and woman owned business
participation• Strict safety protocols for demolition
Public Private PartnershipUrban Renewal - Condemnation
• Required legislation to amend five urban renewal plans
• 2,000 residential and commercial properties• Approved before landmark “Kelo” Supreme Court
decision • City Council rejected previous relocation benefits• Supplemental relocation benefits• Gentrification fears
Public Private PartnershipEconomic Inclusion
• Central to the fundamental purpose of EBDI – physical and human capital
• M/WBE Participation • Right-to-Return• 37% of EBDI’s $181 million in contracts have gone to
MBEs• Minorities and women have worked 57.5% of the
man-hours generated by the project as of 12/31/10. • Third party monitor
• Acquisition - fair market value, as determined by two independent appraisers
• Relocation benefit package includes supplement to the fair-market price for current home to reestablish family in comparable home elsewhere.
• Supplemental benefit package includes:– closing costs and moving expenses– home appraisal and home inspection– $1,000 resettlement benefit– benefits provided by EBDI for real estate tax differentials over a 3-year
period
•
Public Private PartnershipRelocation Benefits
• Average home value increased from $30,000 to $156,000 in first phase
• 57 renters used relocation benefits to purchase homes
• Three post relocation surveys – larger majority report being better off
• Family Advocacy and Supportive Services
Public Private PartnershipSupplemental Relocation Benefits
• Family Advocate assigned to every household• Connects families to needed services• Job training, substance abuse, mental health
counseling, childcare, credit counseling, health care
• Of 206 homeowners relocated, only two foreclosures
Public Private PartnershipFamily Advocacy and Supportive Services
• Resulting from the Workforce Pipeline (1/2004 12/2012): 554
• Construction jobs: 813• Permanent jobs: 759• Total Job Placements: 2072• Total Job Placements East Baltimore: 755
Public Private PartnershipWorkforce Pipeline and Job Creation
Sources and Uses
Public Private PartnershipSection 108 Funds
• Federal program to borrow against future Community Development Block Grant (CDBG) allocation
• Approved for an earlier failed program.• Approved prior to “Kelo” decision
Public Private PartnershipTax Increment Financing
• What is Tax Increment Financing (TIF)?• $85 million EBDI TIF• TIF Repayment • Casey Foundation• Vertical Construction
– Government Buildings– Non-Profit Development– Residential Development
Public Private PartnershipFoundation Partners
• Johns Hopkins Institutions• Casey Foundation• Weinberg Foundation• Rouse Foundation• Goldseker Foundation• Abell Foundation• Atlantic Philanthropies
• 1,800 of 2,000 properties acquired
• 720 of 725 households relocated (to better housing in safer neighborhoods)
• 96% of residents of remained successfully housed; only foreclosures of 228 homeowners.
• Average Phase II homeowner relocation benefit: $175,000
• 58 renters became homeowners
• $67.2 million (37% of all contracts) to M/WBE
• 2,700 residents placed into jobs
Selected Accomplishments
Progress Ahead
Rangos Building Retail
• Teavolve• Milk and Honey• Atwaters• Cuban Revolution• 7-11
House for a Houseand Home Repair Program
• 20 “House for House”
• 20 “Home Repair Program”
House for a Houseand Home Repair Program
Graduate Student Housing
• 321 units• 573 beds• $60 million• Open August
2012
1,500 space Parking Garage
Maryland Public Health Lab
• 130,000 sq. ft.• $160 million• 350 jobs• 2011 second quarter
ground breaking
2011 SUMMARY RECOMMENDATIONS
FOREST CITY NEW EAST BALTIMORE PARTNERSHIP
21 August 2011
SUMMARY DISCUSSION DRAFT 21 AUGUST 2011
RetailR&D Proposed
HotelSchoolParking GarageNew ResidentialRehab Residential
R&D Built
Completed Residential
2006 PLAN 2011 FC-NEBPRECOMMENDATIONS
Demand:• Market research identified
wellness most desirable theme• Marketability of Beacon Park
as a cutting-edge, model wellness community
Need:• Urban/Suburban health
disparity• Preventative medicine can
lower healthcare costs
Opportunity:• Proximity to JHMI is a unique
opportunity to partner in pioneering wellness research
• Current political attention means opportunity for logistical and financial support
• Successes could be replicated throughout Baltimore, and even nationally
The Arguments for Wellness
DRAFT FOR DISCUSSION 7-28-2011
BIG MOVESGateway
43
Park Looking South to Gateway Block 44
Ashland Street at Wolfe Street Looking West 45
46
BIG MOVESResidential
47
1st Phase Eager Street Buildings Expected to Stimulate Demand
TOTAL UNIT TYPE COUNT
Apt / Loft Rental: 236
SF Townhouse For Sale: 28
Stacked Duplex For Sale: 34
SF Townhouse For Rent: 7
SF Rehab Townhouse For Sale: 40
Total Residential Units: 345
UNIT TYPE BREAKDOWN1 Bedroom Apt / Loft Rental:
- Eager Street: 1552 Bedroom Apt / Loft Rental:
- Eager Street: 81
SF Townhouse For Sale: - Eager Street:
10- UME / Mews:
18Stacked Duplex For Sale:
- Eager Street: 34
SF Townhouse Rental: - UME / Mews:
7SF Rehab Townhouse For Sale:
- UME / Mews: 15
- McDonough: 25
EAGER STREET RESIDENTIAL PROGRAM
Apartments / Lofts (236)
Stacked Duplex (34)
SF Townhouse (28)
SF Townhouse Rental (7)
SF Townhouse Rehab (40)
BIG MOVESRetail
49
50
0 100’ 300’ 500’
RETAIL SPACE PLAN
Completed, Under Dev., and Next Phase Dev.
USE #SQUARE
FEET% OF
TOTALRestaurants 4 25,724 21%Cafes 5 11,863 10%Grocery 1 12,000 10%Retail Anchor 0 0 0%Apparel/Specialty 0 0 0%Service Retail 0 28,891 24%Fitness/Wellness 1 44,000 36%Total 16 122,478 100%
50SUMMARY DISCUSSION DRAFT 21 AUGUST
2011
Retail success depends on drawing shoppers from larger trade area beyond the 88 acres.
BIG MOVESOffice/Lab Buildings
51
PHASE 2 GARAGE
PHASE 3 GARAGE
PH 4
PH 3 PH 4
PH 4
PH 4
PH 4
PH 2
PH 3
PH 3
PH 4
PH 3
PH 1
PH 1
CompletedR&D:
Under DevelopmentR&D:Retail: 11,000 sf.Parking Garage (spaces):
Next Phase DevelopmentR&D:Commercial: - Hotel - Retail
Future PipelineR&D:Parking Garage (spaces):
TOTAL (GSF):
TOTAL (SPACES):
280,000 sf.
235,000 sf.
1,400
435,000 sf.
160,000 sf.80,000 sf.
815,000 sf.
1,000
1,955,000
2,400
COMMERCIAL
BIG MOVESSchool
53
Lessons Learned
• Community Support• Impact of Recession• Mixed-Income Community• Retail• Raised Expectations• JHU Leadership• JHU as an Anchor Elsewhere
ICIC’S MISSION IS TO DRIVE ECONOMIC PROSPERITY IN AMERICA’S INNER CITIES THROUGH PRIVATE SECTOR INVESTMENT TO CREATE JOBS, INCOME, AND WEALTH FOR LOCAL RESIDENTS. WWW.ICIC.ORG
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