City of Cleveland

EVERGREEN COOPERATIVES

IEDC Annual Conference

October 8, 2013

Project Partnership

The City of Cleveland was approached by the Cleveland Foundation to participate in the Foundation’s Greater University Circle InitiativeThe Foundation established the Evergreen Cooperative Development FundThe Fund will support start-up companies that provide local services to the City’s institutions (hospitals, governments, universities).Fund start-ups will be cooperatives and target low-income residents to become employee-ownersThe City will use Empowerment Zone, HUD 108, and other funds to assist in the financing of these important job- and wealth- creation projects.

Anchor Institutions

• Anchor institutions are large economic drivers that remain constant in our community.

• Businesses seek to co-locate with these institutions

• Cleveland Anchor Institutions:– Cleveland State University – University Hospitals – Cleveland Clinic– NASA– Cuyahoga Community College– St. Vincent’s Hospital– Metro Hospitals

Leveraging Anchors

• Cleveland’s anchors make billions of dollars in purchases of goods and services

• Can we provide those goods and services locally?

• Can we locate these providers in surrounding, challenged neighborhoods?

• Can we do so in a way that provides jobs and grows wealth in our community?

Evergreen Initiative

• Create a system of cooperative, employee-owned businesses

• Target to market needs

• Get “Experts” to Manage the Start-Up

• Leverage the purchasing of institutions

• Locate in & employ neighborhood residents

• Create wealth for the community

Evergreen Cooperative Laundry

- Provide laundry services to Cleveland’s hospitals and nursing care facilities.

- Universities, Hospitals, and Nursing Facilities privatize laundry services

- Laundry contracts were coming available in the upcoming years

- Providing neighborhood service would reduce fuel and transport fees

Community Benefits

Provide training in:• Job-specific Skills• Life Skills• Management Skills

Provide employment opportunities for neighborhood residentsProvide opportunity for wealth creation in the community

Project Funding $1.5 Million in City of Cleveland Empowerment Zone/HUD 108 Funds $750,000 Loan from ShoreBank $1,326,500 from the Evergreen Cooperative Development Fund $1,373,500 in New Markets Tax Credits Investments $200,000 in City of Cleveland EDA Title IX Working Capital Loan $250,000 in Commonwealth Fund loan $183,500 in Enterprise Grant

Project Funding

Project Results

LEED- Certified Building 10 Million lb Capacity Opened for business: October 2009

Employment Results

TOTAL EMPLOYMENT: 22CLEVELAND RESIDENTS: 19(86%)MINORITIES: 19 (86%)CRIMINAL CONVICTIONS: 18 (81%)FORMERLY INCARCERATED: 14 (64%)

Opportunities

Employees have moved into supervisory roles Employees have selected leaders who are training for roles on the Evergreen Board. Employees have earned equity in Evergreen

Green City Growers

- City owned most parcels on a 10-acre site ideal for a greenhouse.

- Greenhouse could produce leafy greens that would be marketed to institutions and groceries

- Institutions to leverage their suppliers to locally source produce

- Market for leafy greens was ideal for local production.

Project FundingTotal Sources $16,476,896Cleveland HUD 108 Loan $ 8,000,000NMTC Investor Equity (PNC) $ 4,761,900Cleveland BEDI Grant $ 2,000,000Evergreen Development Fund $ 1,400,000Project Grants $ 415,000Cleveland EDA Equipment Loan $ 250,000City of Cleveland NDP Grant $ 40,000

Project Results

150,000 sq. ft. Greenhouse Largest food production greenhouse in an urban area in US Produces 3,000,000 heads of lettuce annually 1% of product donated to Cleveland Food Bank

Employment Results

TOTAL EMPLOYMENT: 24CLEVELAND RESIDENTS: 20(83%)MINORITIES: 19 (79%)CRIMINAL CONVICTIONS: 4 (16%)

Conclusions

Reproducable ModelPeople-Planet-Profit ROICommunity-based Investment

• Employees Earn Equity valued at $60,000 in 10 years

• Re-invest Equity in Community

City of Cleveland Department of Economic Development

David EbersoleBrownfield Program Manager(216) 664-2204debersole@city.cleveland.oh.us