Wednesday, July 27, 2011

Seven Ways Anchor Institutions Can Support Commercial Revitalization, Courtesy of ICIC

Wesleyan University was a major investor at the Inn at Middletown,
which involved the rehab of an old armory building right on Main St.
Local communities often struggle to find resources to advance their commercial revitalization efforts. Engaging property and business owners is obviously a first step, but it can sometimes be easy to overlook other stakeholders in a community. Universities are often seen as partners in this effort, as we have written about on this blog a number of times before [click here for previous posts], but increasingly, health care and cultural institutions are also playing a role in community building. Yet by and large they remain an untapped resource for revitalization.

Anchors are a good example of “sticky capital”, their looming physical presence and investment in built facilities means they are literally anchored in the community. They may be so focused on their primary mission, that they may not even realize the benefits that accrue to them from improvements to the surrounding neighborhood. In some communities, rather than engage in community efforts, they have done just the opposite. They have instead built fences around their properties, concentrated retail and services on-site, effectively isolating themselves. In communities with high crime rates and public safety challenges, this can be seen as the easy way out. I recall a tour of the Ivy City neighborhood in northeast D.C when I worked for LISC. Ivy City is a community with its fair share of public safety challenges. Looming large over the neighborhood was Galludet Univesity, with its tall fences and closed campus. The distinct 'them vs. us' attitude was mentioned again and again by community residents who were frustrated by the lack of meaningful engagement from the university.

Last week, I had the opportunity to hear Mary Leonard, President and CEO of the Initiative for a Competitive Inner City, speak at the City of New York’s Annual Business Improvement District (BID) Conference. ICIC, founded in 1994 by Harvard Business School Professor Michael Porter, has been analyzing the impact of anchor institutions on urban economic development. They have come up with a framework for the role of anchors in community revitalization. While the most obvious contribution that an anchor can make is money, Mary Kay laid out a framework for the role of anchors that goes much further and suggests seven ways in which anchors can participate in community building. With full credit to ICIC, and peppered with my own examples culled from my own experience, I offer this framework to readers interested in a comprehensive set of options for the ways in which local anchor institutions can have a more significant impact on their commercial revitalization efforts. [For a more detailed look at the ICIC framework click here]
  1. Core Products or Services – This refers to the contribution that an anchor makes based on their area of expertise. If the anchor is a university, students might be tapped to do research or service. If the anchor is a health organization, they might provide free health screening to area residents. If the anchor is a cultural institution, they can contribute enhanced programming that draws visitors to the district. Vassar College, for instance, runs a field work program that provides students with academic credit and a stipend to intern with local community organizations and government agencies. 
  2. Real Estate Developer – Anchor institutions can use their real estate investments to either turn their back on the local community or to build linkages to the district. Pratt University, in Brooklyn, NY recently unveiled a 120,000-square-foot, $54 million six-story building that houses administrative offices, galleries and classrooms right on Myrtle Avenue – a district that has benefitted significantly from Pratt’s active engagement. [For more on the Myrtle Avenue story, click here]. Another good example is Wesleyan University in Middletown, CT. Wesleyan was a lead participant and investor in the building of the Inn at Middletown. The hotel, located in a restored armory on Main Street, was once a blight on the district. Today the building and its guests are a stabilizing force that helps drive retail sales in the district.
  3. Purchaser – The purchasing power of anchors can be directed to local businesses and suppliers. Communities can work closely with the anchor to identify local businesses, set up local purchasing goals, and offer incentives to help them to meet these goals.
  4. Employer – I was shocked when Mary Kay mentioned that 2/3 of hospital and 1/3 of university employees only need associate degrees. There are clearly untapped opportunities, particular in lower income communities, to establish connections to residents through screening, training and referral. These jobs help stabilize a neighborhood by building wealth among local residents, building buying power for local businesses in the process.
  5. Workforce Developer – Anchors can work closely with other community stakeholders, particularly universities, in identifying gaps and training local residents for jobs in the future.
  6. Cluster Anchor – Anchors can collaborate with other organizations to incubate new businesses that simultaneously provide needed services and also fill local retail space. Hospitals are an excellent example of this trend. You often see complimentary retail and services in the vicinity of a hospital – and a hospital can help build demand for these services by encouraging patients and staff to patronize these local businesses.
  7. Community Infrastructure Builder – There are many ways in which an anchor can help build local infrastructure. For example, ICIC notes that Yale University provides a subsidy for faculty and staff to buy homes in New Haven. While a student at Wesleyan University, In Middletown, Connecticut, I worked closely with the City planning office to apply for a competitive Connecticut Main Street program grant for technical assistance from the National Main Street Center. Our successful application counted on the support of seven organizations that contributed $10,000/year for three years to fund a Main Street program, one of which was the University. This effort eventually led to the formation of a Business Improvement District.
I could hang dozens of wonderful examples onto this framework, and I'm sure our readers could too. It is an excellent starting point that pushes us to think more creatively about how to engage anchor institutions beyond asking for a blank check. These options inevitably result in deeper, more lasting relationships that simultaneously benefit the district and the anchor over time.

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