It’s not often that a street intersection becomes as notorious as the corner of Fayette and Monroe in West Baltimore. During the ’80s and ’90s, the corner was ground zero for the city’s open-air drug market. Both a manifestation and symptom of Baltimore’s rising poverty, the corner became an inspiration for the television series The Wire.
The corner became an inspiration for the television series The Wire.
A few blocks away from Fayette and Monroe is Bon Secours Hospital, built in 1919 by a group of Parisian nuns on a social mission. George Kleb was just a few years into his role as executive director of the affiliated Bon Secours Foundation when a problem was brought to his attention: The foundation had just invested $30 million in a hospital that both patients and doctors were scared to enter.
“Say you’re going to interview for a job at Bon Secours and you’re waiting at that corner,” Kleb said. “A dozen guys are going to come up to you waving vials in your face and trying to sell you heroin and cocaine. A lot of folks just drive around the block and go home.”
It was 1993, and Baltimore was dealing with decades of economic disinvestment that left the area desolate and blighted, a prime environment for crime. Two-thirds of the properties in the neighborhoods surrounding Bon Secours were vacant, said Kleb. He refers to those blocks as a “disinvestment gap”—an area left vacant due to economic decline. The foundation decided to do something about it.
80 percent of a person’s health is determined by social factors, such as their job and community.
By 1995, the hospital had bought 31 of the 67 vacant properties, including an unused school. With this expanded neighborhood presence, it made three public commitments: It would renovate the homes as affordable housing; do something with the school that would help families; and stop making unilateral decisions about its activities in the area. Bon Secours developed a steering committee of representatives from the surrounding neighborhoods, including preachers and local business owners. Today, the old school is a center for young children and the vacant apartments have been renovated as affordable rentals. Bon Secours, without realizing it, had adopted a strategy that in the following decades would boost the economies of many areas hit by disinvestment, poverty, and unemployment. It had taken on an “anchor mission.”
Anchor institutions are large entities like universities, hospitals, and museums that command vast budgets for hiring, purchasing, and real estate development. While anchors traditionally avoid risk and purchase from whatever company offers the best deal, an increasing number have begun to direct business and resources toward local enterprises and to develop workforces composed of locals.
Doing so benefits both the anchor and the neighborhood. Unlike factories and private companies, anchors are “place-based,” meaning they are tied to their community through their goals and investments. So it’s not easy for them to relocate, and improvements in the neighborhood are clearly in their interest. Meanwhile, anchors direct spending to local businesses, in the form of jobs, purchasing, and community development programs. For example, the University of Pennsylvania spent nearly $100 million on goods and services from local merchants in 2011. Just a few years earlier, it had spent almost nothing in the area.
Many universities and hospitals have also begun to offer trainings to support local entrepreneurs and new businesses in the community. Portland State University’s Business Outreach Program provides technical assistance to low-income workers. LeMoyne-Owen College in Memphis started its own community development corporation, offering free business courses and grants, and has launched 75 businesses since 2010. Some anchors, like Bon Secours, even take on the role of property developers, buying up empty lots and blighted land to be turned into businesses or affordable housing, or directing resources to education and health services.
But anchor strategies go beyond corporate social responsibility. The World Health Organization estimates that 80 percent of a person’s health is determined by social factors like their jobs and communities rather than access to and quality of medical care. Anchor strategies attempt to treat that 80 percent by providing jobs or supporting businesses and improving neighborhoods.
City governments have taken notice and have begun partnering with anchors to leverage their collective economic might. Nationwide, cities both large and small are adopting anchor strategies. Last year, Rochester, New York, announced a plan to leverage $1.7 billion from local hospitals and universities—the approximate amount they already spend each year on goods and services—toward local investment, especially in cooperatively owned businesses. In New Mexico, Albuquerque’s hospitals announced in late 2016 they would adopt an anchor strategy to help create jobs.
Baltimore’s plan is further along. Under then-Mayor Stephanie Rawlings-Blake, the city officially adopted its anchor plan in 2014 with the aim of improving public safety and quality of life. Announcing the plan, Rawlings-Blake called rallying anchors the way “to ensure that our communities are growing,” citing their power to attract and retain residents, create jobs, and drive economic growth. The plan brought together eight anchors and spanned 59 neighborhoods. It will affect 22 percent of Baltimore’s population—about 136,000 people.
Ted Howard, co-founder and executive director of the Democracy Collaborative, an institute that researches local economic development, has spent years coaching cities and institutions on how to develop effective anchor missions. Howard believes this approach could transform cities by filling the voids left by shrinking federal antipoverty programs.
“Folks working in community development face the challenge of ‘Where do we find the money?’” he said. “The money exists already. We just don’t recognize it.”
The idea of using anchor institutions in this way was pioneered nearly 12 years ago in Cleveland, when Ronn Richard first stepped into his role as CEO of the Cleveland Foundation, a community development nonprofit.
The residents of the seven neighborhoods surrounding the foundation’s office were among the poorest in the city—including University Circle, home to a number of anchors. Poverty rates in this section of the city ranged from about 30 to 60 percent, far above the 2005 national average of 12.6 percent.
Richard noticed the chasm between the people who lived in the neighborhood and those who attended its museums and universities. He knew that three of the Circle’s most powerful institutions—Case Western Reserve University, Cleveland Clinic, and University Hospitals—were planning nearly $3 billion in projects, so he approached them with a vision of collaborating to help the community. They were all struggling with problems similar to Bon Secours’: Despite local investment, it was difficult to recruit talent, students, and patients. Together, they decided to start implementing programs to benefit their surrounding neighborhoods, eventually expanding to include other anchors and nonprofits in University Circle.
“It’s about eliminating the barriers to quality of life.”
This form of city-anchor collaboration has become known as the “Cleveland model” of economic development, and in recent years it’s taken hold in a number of cities. Many, like Baltimore, have long histories of disinvestment caused by the exit of manufacturing industries. With the help of the Democracy Collaborative, the anchors decided to direct a portion of their purchasing power to local businesses and to emphasize local hiring and relationships. But most of the existing establishments were small stores and bodegas, which couldn’t supply the huge contracts anchors needed. So the institutions also helped develop Evergreen Cooperatives, a family of new worker-owned cooperatives that support and are supported by local institutions. Evergreen Cooperative Laundry, for example, handles millions of pounds of laundry from local anchors each year, while Ohio Cooperative Solar employs local residents to improve anchors’ energy efficiency. Evergreen also runs an employer-assisted housing program that has helped 24 worker-owners buy homes.
For Baltimore, steel was the industry. The postwar economy was fueled by activity at the nearby port, and Sparrow’s Point, the industrial complex that owned and operated Bethlehem Steel, was the largest single employer in the region with approximately 30,000 workers.
As the market for steel slowed and production moved overseas, jobs disappeared and workers began to leave. Sparrow’s Point has changed hands five times and today employs just 2,000 people. Meanwhile, Baltimore’s population has sunk from a peak of about 900,000 to a little over 622,000 today.
Many of those who remain face economic hardship. According to the latest census data, nearly 24 percent of Baltimore’s population lives below the poverty line. And while the unemployment rate is 7.4 percent, that number grows to 37 percent when narrowed to young black males.
Yet the city has eight established anchor institutions that together spend $10 billion in goods and services every year and employ nearly 90,000 people—more than Sparrow’s Point at its peak.
With the help of the state of Maryland and the Baltimore Integration Partnership (BIP), which matched anchors with local foundations, these institutions launched the city of Baltimore’s anchor plan. In it, seven universities and colleges, along with Bon Secours Hospital, committed to investing in their neighborhoods. Although the mayor’s office changed hands in November, the partners don’t expect that to be a problem. The newly elected Mayor Catherine Pugh has spoken publicly in favor of the plan, but has yet to announce any next steps.
The city began by approaching institutions that were already involved in community development in some way. Divided into three groups based on their location, the anchors identified four priorities they would work to address: public safety, quality of life, local hiring, and local purchasing. From there, they developed a unique action plan for each local group.
In the neighborhoods surrounding Johns Hopkins University, for example, residents wanted to see public schools with higher test scores that could compete with charter and private schools. “We want programs that will appeal to families who have choices,” said Andy Frank, an advisor on economic development at the school. “Instead of sending their kids to a charter school or private school, they would send them here.”
To achieve this, Johns Hopkins started the Homewood Community Partners Initiative (HCPI), giving small amounts of capital to schools to fix up immediate problems, such as infrastructure and cleanliness issues. It has also planned a partnership between Barclay Elementary/Middle School, a local public school, and Johns Hopkins to develop a curriculum to teach students engineering and computer science.
One of the benefits of the city’s anchor plan, says Marianne Navarro, anchor institution coordinator for the mayor’s office, is “the power of convening”: The collaboration helps the anchors and the city see what initiatives already exist, or what goals they have, and how they can leverage each other’s assets. For example, Bon Secours’ Community Works program—which offers resources like job training, eviction prevention, and assistance to ex-offenders—helps anchors connect with and develop a local workforce. In the neighborhoods surrounding Bon Secours, this means assisting residents like Delvin Fuller.
Twenty-eight years ago, Fuller was a college student playing football for his university when his coach interrupted him on the field at practice: One of his twin daughters had suddenly fallen ill. Before the night ended, his daughter, just two years old, was pronounced dead. “My wife went into immediate shock,” Fuller said. “I had to stop school and take care of my wife and kid … By me having to deal with that and not deal with [myself], I started a situation of drug abuse.”
His problems spiraled and, in 2004, landed him in prison for seven years. He began his reentry to society as a probation officer, but the drug addiction kept creeping back. It wasn’t until he joined Community Works’ reentry program around 2011, he says, that he was able to find the support and resources he needed to stay clean. He eventually went on to become a minister at Baltimore’s Jesus of Nazareth Free Will Baptist church.
“It’s about eliminating the barriers to quality of life,” says Talib Horne, Community Works’ executive director.
Block by block
Despite the huge potential of anchor strategies to support local economies, in many places the process has taken years to get off the ground. Many anchors are accustomed to acting alone, and some are used to making decisions around hiring, procurement, and investment based only on efficiency and dependability—standards that aren’t always met by small businesses.
“To create an intentional strategy around supporting area businesses, you have to break out of that shell,” says Kurt Sommer, director of the Baltimore Integration Partnership. He says that it can be a challenge for anchors to prioritize businesses that may not have been able to compete effectively outside of the anchor strategy. But more and more anchors are shifting their considerations to put their communities first.
“These strategies aren’t ultimately successful if they are top-down.”
Another challenge is the contentious relationships that often exist between communities and nearby anchors. Johns Hopkins, for example, took over numerous city blocks and displaced families when it moved in, resulting in years of isolation from the neighborhood. Proponents of the anchor mission are now working to overcome the fallout of that history by collaborating with community leaders.
“These strategies aren’t ultimately successful if they are top-down,” says Howard. That’s why Baltimore’s anchor plan emphasizes collaborations between anchors and community organizations, with the goal of getting the local residents to participate in decision-making.
For Bon Secours, the progress has been slow but visible. “We’re dealing with seemingly intractable problems,” said Kleb. “When we started, the disinvestment gap was 14 blocks. Now, it’s about six blocks. Maybe it will take another 15 or 20 years, but at least you can see it happening.”