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Ask the Expert: Answering the Lingering EBDI, Anchor Webinar Questions
(avg: 3.75 of 5)
Anchor institutions occupy a unique and influential place in America’s inner cities. In 66 of the 100 largest inner cities, an anchor is the largest employer. Some 925 colleges and universities, or roughly one in eight, are based in the inner city. About 350 hospitals, or roughly one in 15 of the nation’s largest hospitals, call an inner city home.
So what can your city do to extract the most benefit out of your universities and hospitals? What sorts of partnerships can be developed to create shared value for your inner city?
Earlier this month, Andy Frank, Special Advisor to the President on Economic Development at Johns Hopkins University and former Deputy Mayor of Baltimore, joined ICIC to answer these questions. Specifically, he discussed the well-known, and sometimes controversial, East Baltimore Development, Inc. (EBDI) project. He outlined the background of the EBDI project, financing of the project, the relationship between Johns Hopkins and the City of Baltimore, and the results that have stemmed from the redevelopment of the 88-acre Middle East neighborhood. To download the entire presentation, click here.
While webinar participants were able to ask questions throughout the presentation, a few important questions went unanswered. Below are the questions, followed by Andy Frank’s responses:
1) How much private real estate and business investment has been attracted to date - both equity and totals?
To date, there are eight completed projects, representing a total private investment of approximately $214 million. Three apartment projects were funded with low income housing tax credits. Forest City, the developer, reports having about $18 million of true equity in the project. The largest project is the $100 million Rangos building, a 278,000 square foot biotech building.
2) Do I understand correctly that this mixed-used redevelopment cost $200 million? What is the anticipated payback years/ROI? How are you quantifying the return – especially the "social" return?
That is an excellent question. The public sector investment is approximately $200 million. Sources include an $80 million TIF, $21.2 million HUD 108 loan, $30 million city revenue bond funds, $9 million federal transportation earmark, $53 million in State capital funds, $12 million miscellaneous HUD funds. The two sources that must be repaid are the TIF and Section 108. Repayment of the TIF is the only source that depends on the success of the project. As buildings come on line, their incremental tax assessment is used to service the TIF. The Section 108 is paid from the city’s annual CDBG allocation. The other funds are essentially grants that do not require a traditional ROI calculation. The social returns are measured in terms of wealth creation, job training and placement, neighborhood satisfaction (measured in three independent surveys), business development, economic inclusion, and the right to return.
3) In terms of creating a mixed-income community: are you starting to see hospital employees residing in the area, or is that (as of now) only a hope for the future?
Not yet, but that is because we don’t have any product for middle income families. Recall that the catchment area for the new school is first the neighborhood and second the children of employees who work at Hopkins and other institutions. Last year, we had six Hopkins families apply to East Baltimore Community School. This year we had 22, almost a fourfold increase. We expect that number to increase when we open the new school in 2013, when we also will have housing product for non-income restricted families.
4) As a former Baltimore resident, I think this sounds great in many respects. Some of the problems we face here in Philadelphia, talking with anchor procurement folks, are that there are not enough local businesses producing what the anchors need. Is there a business development angle here?
The focus has been on job readiness and placement at the expense of a meaningful business development program. This should change with the creation of a Community Benefits Agreement that will generate revenues for local non-profits whose mission is to support minority business development.
5) How has the relationship between Johns Hopkins and the community evolved?
Books could be written about that subject. Like many large institutions, Johns Hopkins has had a complicated relationship with the community. I will just speak to the relationship as it relates to EBDI. Ten years ago, many in the community feared that the EBDI project was a subterfuge for a Hopkins land grab. This is understandable given the Hospital’s expansion into formerly residential neighborhoods over the years. The facts are that Hopkins owns no land within the EBDI footprint and never will.
The perceptions survey in 2009 revealed some surprising statistics, disputed by some:
- 59% said that the influence of Johns Hopkins on adults, families and children living in East Baltimore has gotten better in recent years.
- 88% responded that they trust Johns Hopkins as a partner to improve health status of the community.
- 85% said that Johns Hopkins has a positive influence on the health status of East Baltimore.
- 81% said that Johns Hopkins has a positive influence on jobs and employment.
- 81% agreed that Johns Hopkins was trustworthy or believable.
There's no evidence that there is any connection between EBDI and these results. However, we do know that the parents at the East Baltimore Community School want to change the school name to include Johns Hopkins.
A big thanks from ICIC to Andy for taking the time to answer these follow-up questions. To listen to the entire What Works webinar, “Leveraging Your City’s Anchors,” click here.
The next What Works webinar will be on 4/18 from 2:00 to 3:30 p.m. EST. This webinar will look at “How to Cultivate Your City’s Food Cluster.” The webinar will help economic development practitioners and city stakeholders better understand the complex taxonomy of the food cluster. Using a Boston (land-constrained) vs. Detroit (land-rich) case study, the presenters will highlight the significant opportunities for job creation within the emerging food cluster and how lessons can be applies to cities across the country.
Andy, thanks for following up with this—it’s just a shame more of the questions posed to you weren’t asked and answered during the Webinar or after.
I have some additional questions, for example. I’m curious about your statement, “The facts are that Hopkins owns no land within the EBDI footprint and never will.” How does this square with the large graduate student housing tower being constructed as part of the EBDI project (or at least advertised as such)? How is EBDI handling the fact that those graduate students are likely to be “low income” by definition, but are not at all the low-income population the project was supposed to work with and for? (At one point, Chris Shea, EBDI President, noted that it was impossible for EBDI to discriminate between low-income students and other residents of the area.) Is it possible that in the face of what Chris Shea dubbed “the failure of the Merck model,” the addition of the GSH tower—which was, to my knowledge, not a part of EBDI’s original Master Plan—represents, to “many in the community,” a partial realization of “fears that the EBDI project was a subterfuge for a Hopkins land grab”?
I have more questions, of course, but I’ll stick to these for now. Thanks in advance for your answers.
By Joshua Garoon on 03/19/2012
Seems as if Andy’s not answering any more questions here. Again, that’s a shame.
By Joshua Garoon on 04/02/2012
BY Guest Blogger on March 19th, 2012
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