Our Neighborhoods Economies (ONE)

One Providence Community/One Economic Development Strategy

By Tomás Alberto Avila

09/25/97
 Executive Summary
Just as our economic difficulties stem from more than the effects of single factors such as
defense down-sizing or selected high taxes, fixing our economic problems will require
more than developing a single program here, or passing single legislation there.

The New Economy is characterized by political institutions and cultures that are more
participatory and collaborative. In the new global economy, "an infrastructure for
collaboration" is a key component of success. As Harvard Business School Professor
Rosabeth Moss Kantor states in World Class, "politics involves battles over distribution:
who gets which slices of the pie. A community's social infrastructure, m contrast, offers
the prospect for expanding the pie. Yet, the social infrastructure (for collaboration) is
too often neglected, allowing the area to remain fragmented and balkanized1.

This social capital, the ability of people to work together for a common purpose in
groups and organizations, is a characteristic of successful regional economies around the
world, from Silicon Valley in California to the Emilia-Romanga region in Italy.9 These
places have begun to work collectively and to see their competition as coming not from
another part of the state, but from outside the state, region, and nation. In this
environment, the biggest threat becomes the lack of change itself. For example, Silicon
Valley, a region most would consider as being free from economic difficulties, was so
concerned about the effect of its "culture of blame" on economic development that it
made a commitment to work together to develop the "Silicon Valley, Joint Venture Way"
a partnership of business, government and community-based organizations to collectively
address and solve pressing issues that were holding back the communities' economic
future.

In fact, successful communities and states are those that are better at responding to
economic change -- at developing a shared understanding of changes, at crafting
innovative solutions, and most importantly, at coming together to place the collective
interest of the community above a narrow interest in maintaining the status quo.

Yet, Rhode Island's industrial, political and social legacy has made the development
of a more collaborative civic culture difficult. The Rhode Island historian William
McLoughlin argued that in the 1800s and early 1900s the legacy of industrialization and
patterns of immigration meant that economic and social divisions were magnified by
religious and political antipathies. He states: "by 1923, Rhode Island was a bitterly
divided state, socially, economically, and politically." In the 1950s, there was
"factionalism preventing the consistency and long range planning that might have helped
the state out of its economic decline."" In 1977, the Providence Journal wrote "if the
people of Rhode Island conclude that 'free for all' individualism must give way to more
cooperation, more balance and sharing, more planning in economic, political, and social
affairs, the state may be on the brink of a major shift in its patterns of thought and

1
Rosabeth Moss Kantor, World Class (New York, NY: Simon & Schuster, 1995). Francis Fukuyama, Trust (New
York, NY: The Free Press, 1995).
behavior. In that breakthrough may lie Rhode Island's real 'Hope."'122 In spite of the
recent progress, this legacy of division and mistrust remains a central barrier to Rhode
Island's economic rejuvenation.

These divisions occur at all levels. Business blames government. Government

distrusts business and all too often assumes the worst of intentions. Citizens distrust
political leaders and the political process. Aquidneck Islanders distrust Capital City
interests. But perhaps the largest division is between labor and business. Too many
workers see business as selfish, focused only on profit and exploitation of the
workingman and woman, and are quick to call up the conflict-ridden history of
exploitative mill owners as an illustration of business practices today. For their part, too
many business leaders blame unions for all economic and political ills. Yet, both clearly
have a stake in a healthy and prosperous Rhode Island economy that generates good jobs,
high profits, and a more healthy state fiscal condition. Yet, compared to some other
states, such as Pennsylvania and Michigan, that have also had a history of contentious
labor management relations, Rhode Island has not done enough to put this behind us and
begin an era of cooperation."

In general, we frame issues too often as win-lose, rather than win-win. Too often
valuable political and institutional energies are spent fighting over pieces of a shrinking
pie, instead of building a larger pie of more jobs, better wages, and higher profits. Such
divisiveness may have been acceptable years ago when there was little interstate
competition and when change was slow. Now, it gets in the way of the serious task of
building our economy.

Developing the sense that all Rhode Islanders -- rich and poor, white and minority,
labor and management, north and south, -- are in this together, is a critical first step in
the process of beginning to compete in the New Economy. Recent efforts suggest that
we have taken steps in the right direction. But we need to do more. We need to create a
culture in which people "come to the table" looking for a collaborative solution, not to
stake out an adversarial position." We need to cast off the culture of blame and
divisiveness and embrace a culture of responsibility and partnership. Building on the
shared vision of all sectors of the Rhode Island economy, we must begin the process of
healing the divisions of the old economy, and working together to build hope in the New
Economy.

2
Ibid, p. 204.
Goals

Becoming promoters and participants of our community economic development.

Creation of investment group, capable of investing in the development of our

communities.

Empowering our community to envision ourselves becoming economically empowered

in order to be able to create wealth in our neighborhoods.

Teach community residents to overcome the social mentality and transform such
mentality to an economic development mentality.

To take control of our economic future, Rhode Island needs to put in place a competitive
business climate and a comprehensive and innovative economic development system.

Achieving these goals will require a concerted effort on the part of all Rhode Islanders:
business, government, workers, and citizens.

Economic Development Consultancy

Business Incubator Development
Venture Capital Funding Services
Real Estate Investment Partnership
Technological Economic Development (TED)

ONE economic strategy should be based on a comprehensive plan for community-

controlled revitalization crafted by community stakeholders. This plan should outline the
blueprint for a locally based economic development strategy based on the concept of an
Urban Village. Other initiatives around the country have demonstrated that community-
based planning and organizing can produce quality affordable housing and a network of
social services increasingly responsive to residents’ needs. The Board of Directors need
to develop a series of Urban Village Visioning sessions to convey the organization’s
intention in the neighborhood. One of these visioning sessions should be Community
Economic Power, which should identify the key leverage points to move from our vision
to the reality of a vibrant multicultural urban village.

ONE basic approach is to create an environment of opportunity that encourages and

supports sustainable business development and asset accumulation, and increases the
purchasing power of ONE neighborhood residents. We need to build on the community’s
many strengths, and rely on residents to set the direction. This community’s many assets,
include its unique ethnic composition (African American, Latino, Cape Verdean, and
white), a widespread interest in gardening and agriculture, the richness of its colonial
history as well as the current interest in its revitalization efforts, point the way to certain
assets-based approaches.

This bottom-up, integrated community approach often puts us at odds with the
conventional wisdom in community economic development.
A number of observers, most notably Melvin Oliver and Thomas Shapiro in Black
Wealth/White Wealth: A New Perspective on Racial Inequality and Michael Sherraden in
Assets and the Poor: A New American Welfare Policy explained that many previous
attempts to spur the economic revitalization of central cities have fallen short of
expectations because they do not address barriers to wealth creation or create asset
building mechanisms. They note that in order to truly escape poverty, the so-called
economically disadvantaged must not only raise their incomes, but acquire wealth
through asset accumulation as well. Conventional wisdom has fostered strategies for
urban revitalization that focus on job creation. ONE economic power strategy places the
emphasis on both jobs and the creation of wealth.

To date no organization has developed a coherent strategy for building both

community and individual assets. More importantly, local institutions have given
little guidance to communities on how to manage their existing and emerging
assets in a way that will stabilize their communities and encourage individual
wealth.
"Revitalize Communities Through Asset Building" by Ben Hecht.
The construction of affordable housing was a critically important strategic decision for
ONE Street. Some experts felt that initially focusing on housing instead of economic
development (job creation) would prove to be a mistake.

However, by starting its journey toward revitalization with the construction of quality
affordable housing, ONE Street was able to stabilize the neighborhood and promote
sustainable economic development by attracting families back to the area where 20% of
the land had been abandoned and allowed to deteriorate. Homeownership has also been
one of the most important means of building both community and individual assets. ONE
Neighbors, Inc., the community land trust, currently manages 30 acres of community-
owned land. Hundreds of families have become new homeowners as a result of the new
housing construction. Since 1989, more than $43 million has been invested in the
construction of nearly 300 units of new housing in the ONE Street area. Another $12
million has been invested in the rehabilitation of existing homes.

Total neighborhood investments since 1989 are estimated to be between $75-80 million.
This includes the construction of the ONE Town Common ($1.2 million), the
rehabilitation of the former furniture factory and home of ONE STREET and
YouthBuild Providence ($1.5 million), and capital improvements to the Vine Street
Community Center ($5.2 million).

While asset accumulation is crucial to long-term community viability and sustainability,

income derived from employment is what families need in order to purchase groceries
and pay the bills. A series of surveys conducted by the Harvard School of Business under
the direction of Michael Porter estimate that the purchasing power of the residents of
Greater Providence is more than $3 billion. Porter’s study also shows that overall;
Providence’s urban neighborhoods are currently experiencing a $1 billion trade deficit.
That is to say, $1 billion that residents spend on goods and services currently flows out of
their neighborhoods.
ONE residents are willing to take their time and build a sustainable economy whose
foundation is composed principally of local businesses owned and operated by residents
employing residents. They have opted to devote the bulk of their energy and resources to
generating homegrown economic power as opposed to attempting to import economic
development from beyond their boundaries.

Following the identification of Community Economic Power as a key leverage point, we

designed a community thinking process to do contingency planning around economic
development. In these "What If…?" sessions, we tested various strategies against
possible scenarios in order to identify "resilient elements" that helped approaches and
projects survive many possibilities. These elements were summarized as:
• build on community diversity
• local/community ownership and control
• circulate dollars locally
• community cooperation
• more good jobs / livable wage
• community education
• personal development
• political clout
• organizational infrastructure
• harnessing outside resources
• diverse economic activities
• sustainability
These resilient elements are now being crafted into a community assessment tool so that
residents can examine and design projects that have the best chances of survival and the
greatest community benefit. We have started to look at our own ideas, as well as other
proposals, with this lens.

The ultimate goal of ONE sustainable economic development strategy is to create a

healthy, safe and secure neighborhood and to create real wealth within the community.
Real wealth is created through the development and nurturing of individual and
community assets. Economic development is thus seen as a means to an end, not the end
itself.

The ONE Street strategy for sustainable development is resident-directed and will build
upon the community's inherent and acquired strengths and assets which include: its
strategic location with respect to Providence and major transportation routes, available
labor force, vacant land, eminent domain authority, a comprehensive revitalization plan,
location within Enhanced Enterprise Community (EEC), strong community partners
including CDCs, philanthropies, City of Providence, designation as a brownfields site,
historic landmarks and sites, cultural diversity, and a business base of 250 businesses.

Some of these assets were viewed as liabilities not too long ago. For example, the diverse
cultures that have come to live and co-exist here are still seen by some as being the
source of racial tension. We view our identity as the foundation of an exciting cultural
mosaic upon which we can draw strength and from which we have been able to create a
shared vision through organizing to successfully undertake an ambitious development
agenda that former nay-sayers had claimed to be impossible.

Develop Community Standards to Guide the Development of the Urban Village

ONE strategy for job creation will include the development of new locally-owned
businesses as well as attracting some businesses from the outside. We will continue to
work on sustainable development criteria for the ONE Urban Village. Criteria
(developed by the community during the Urban Village Visioning Process) such as
building on community diversity, local community ownership and control, local
circulation of dollars, more jobs, community education, personal development, political
clout, and diverse economic activities need to be translated into community standards.
These standards will be used by the community to determine the "fitness" of various
development proposals to the urban village.

Promote Historic ONE

Tourism is one of Providence's largest industries. People from all over the world
flock to Providence to partake in its historic landmarks and sites. ONE also has a rich
history and many historic landmarks, but to date these are for the most part unknown.
It is certainly not included in any of the historic tours that originate from downtown
Providence.
We are currently designing a Historic ONE project, that will explore, document and
market the neighborhood's rich history, from colonial times to its recent history of
neighborhood struggle and revitalization. Neighborhood youth will be hired to do the
research, locate artifacts, create exhibits and other materials, and conduct community
tours and workshops. This will not only help build community knowledge and pride
and create challenging opportunities for young people; it will also counter the
negative stereotypes of the community, which discourages investment and visitors.
By "putting ONE on the Map", we hope to get on Providence's map of historic
landmarks, and tap the city's booming tourist industry which draws visitors and
dollars from around the world.
First World Multicultural Festival

The ONE Street proposes to build upon the success of its annual "Multicultural Fair"
that it has planned, organized and run for the past eight years to create a First World
Multicultural Festival. This plan proposes to integrate the festival into ONE overall
comprehensive revitalization strategy. We specifically view the First World
Multicultural Festival serving as a "window" that will provide residents, city officials,
potential investors and others with a "sneak preview" of what the cultural component
of our proposed Urban Village will look like as well as a hint of its economic
potential.
The First World Festival represents an important component of ONE economic
revitalization strategy. It will play an integral role in establishing the ONE area as a
special place with its own unique and history and peoples. Festival activities will take
place in several strategic locations throughout the neighborhood that together will
serve to emphasize ONE’s
• History
• Cultural Heritage
• Artists and Artisans
• Unique Shops and Merchants
The First World Multicultural Festival will highlight the histories of the African
American, Latino, Cape Verdean and European residents and the history of
Providence as well. The various cultures will be colorfully represented with foods,
clothes, crafts and music. Local entrepreneurs and would-be entrepreneurs (including
youth) will be encouraged to take advantage of the crowds the festival will attract to
set up stalls and tables and sell their wares along ONE Street. We envision the
festival eventually evolving into a major fundraising event for the community and
ONE.

2.5 Enhance Business Development Opportunities with Commercial Real Estate

Development

Discussions within ONE sustainable development committee will focus on a strategy for
expanding our revitalization efforts beyond housing development activities within the
Southside. Since it is questionable whether the City of Providence would consider
extending the community’s eminent domain authority to abandoned buildings or to
parcels outside the original designated area, we must look for and discover alternative
means for gaining community control of land for the purpose of undertaking
comprehensive planning and development.

Redeveloping Brownfields
Brownfields are a possible option in this regard. The US Environmental Protection
Agency defines brownfields as abandoned, idled, or under-used industrial and
commercial facilities where expansion or redevelopment is complicated by real or
perceived environmental contamination. Brownfield programs offer various tax
breaks and reduction in legal liabilities on contaminated sites as a way of
rechanneling economic growth from farm and forestlands to reclamation of blighted
urban sites in communities in search of economic development opportunities.
The ONE neighborhood is a designated Brownfields site. Consequently, we are
targeted for receiving funds to help transform contaminated parcels of land into sites
for appropriate commercial development, i.e. development that is consistent with the
residents' urban village vision. Legislation pending before the Massachusetts Senate
would make $60 million available to targeted communities for brownfields
development.
Workshops and planning sessions around brownfields redevelopment are exploring
the possibility of making contaminated sites/facilities more productive. Brownfields
planning has led to the identification of sites for possible redevelopment, the
neighborhood's vision of what could be developed, and the identification of some of
the resources available. This year we will need to: identify specific sites for site
control, environmental assessment and clean up, and site marketing/redevelopment.
We are also exploring the role brownfields redevelopment can play in our urban
agricultural strategy.

Strategy Three: Increase The Purchasing Power Of ONE Resident

The poor have long faced barriers to accumulating wealth and assets. Financial planning,
economic literacy services and refundable tax credit programs primarily benefit
moderate- to high-income individuals and families who have been able to take advantage
of such programs to save toward homeownership, education and retirement. These
programs have included savings programs such as Individual Retirement Accounts and
401(k) s.

In the ONE Street neighborhood there is a need for programs that inform residents of
their economic power options, teach economic literacy and financial planning to low- to
moderate-income individuals and for mechanisms which make investing in the future
feasible and aspirations for education, homeownership, or starting or investing in a
business a reality. ONE work with residents has clearly indicated that savings is one of
the largest obstacles to economic mobility and to obtaining quality housing.

Strategy three involves extensive outreach to and counseling of low- and moderate-
income residents in the ONE neighborhood. The project will build on ONE community
development, community organizing, and homeownership work to ensure that ONE
Street residents are informed of and have access to the tools to realize their economic
power.

Implementation
One’s Sustainable Economic Development Strategy is a comprehensive approach to
create an environment of opportunity that encourages and supports sustainable business
development and increases the purchasing power of One’s neighborhood residents.
Although we recognize that this plan and the initiatives to support the strategies
described above are ambitious, they strategically build on the area's strengths and
resources and ONE's capacity to undertake the needed organizing and leveraging of
resources to address the needs we have identified through our work in the community.

While the bulk of the initial planning and ongoing organizing work associated with this
effort will be coordinated and carried out by ONE staff, the successful implementation of
our Strategy for Sustainable Economic Development will require the assistance of many
others. For example, our community partners -- particularly our local community
development corporations -- will have key roles to play.

We will also continue our work with various levels of government, university-based, and
community environmental agencies/organizations to package technical assistance and
resources for both existing businesses and to possibly redevelop brownfields for
productive use. Wherever possible, graduate students from local business schools and
policy and planning programs will assist us with market studies, business planning, and
related research. However, we expect that specialists may be required on a contract basis
to support implementation of a number of the objectives described in the above plan (for
example, to develop ownership structures should we identify worker-owned business
opportunities).

In addition, the Resident Development Institute (RDI) that is being developed as the
cornerstone of ONE's participation in the Annie E. Casey Rebuilding Communities
Initiative (RCI) will be the primary vehicle for encouraging resident participation.
Currently two RCI staff members and organizing staff are focusing their work on our
strategy to help develop resident economic power.