Cleveland – community economic development success story

Applications are now open for communities in England to participate in the new partnership programme on community economic development. In my last post, I listed five exemplars from the UK. I have been pointed to many others pretty quickly, but also asked if I can tell the story of Cleveland from the USA. So here we go…

The Evergreen Initiative in Cleveland, USA was launched in 2007 and was inspired by the successful Mondragon Co-operative Corporation in Spain that has regenerated the Basque country’s entire economy over the past 50 years by devising an ingenious co-operative economic development approach funded by a local co-operative bank within a worker owned enterprise network. The local co-operative bank began life as a credit union for worker co-ops and it has operated with a focused mission to recycle and re-circulate low-cost capital within the local economy networks established by the worker owned firms in Basque cities.

In an adapted design for Cleveland, low-cost capital has been seeded by grant capital from the Cleveland Development Foundation and supported by different forms of tax credits as well as long-term, low-interest loans from the federal government.

Evergreen Co-operatives have so far set up three expanding worker co-operatives: Evergreen Co-operative Laundry Services that has been supported by procurement from anchor institution hospitals and universities; Evergreen Energy Solutions that has been set up both for installing, owning and maintaining solar power on anchor institutional buildings and for repairing and insulating older housing stock citywide; and Green City Growers a food growing co-operative to create jobs through the largest inner city farm in the USA and green house facilities (with 3.25 acres under glass) designed to harvest three million heads of lettuce a year and grow several hundred thousand pounds of fresh basil and other herbs – on a ten acre site in a low income neighbourhood right in the heart of the city.

The strategy of Evergreen Co-operatives links up three co-operative economic development tools. Firstly the worker co-operative model to create good jobs including equity development for worker owners and profit sharing, secondly a Community Development Finance Institution owned by the Evergreen co-op network to invest and recycle low-cost capital (as subordinated debt at a rate of 1% to create jobs) and thirdly a Community Land Trust to develop the space and sites for food growing and for developing affordable housing in the second phase of their plan. They have raised already £200 million of low-cost capital for Evergreen Co-operative Development Fund, their CDFI, and the annual procurement power of their anchor institutions is $3 billion.

Cleveland shows the power of community economic development to change the future for a city. As David Boyle says in his report for us with the New Weather Institute, Ultra-Micro Economics, “small plus small plus small plus small equals big”.

The approach has stimulated similar plans to copy the ‘Cleveland model’ in other US cities including Atlanta, Pittsburgh, Milwaukee and Washington DC. Here in the UK, there has been work in Preston, as I mentioned in my last post, and there is nascent interest among co-operative councils and with co-operative development agencies, such as Hackney Co-operative Enterprise in East London, which aims to put its own housing-related services out to locally-owned enterprises, rather than source these from outside its target neighbourhood.

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