HOPE TAKES ROOT
Cleveland program that boosts workers into homeownership could hold lessons for Milwaukee
CLEVELAND - Dozens of boarded-up homes and shells of once regal buildings line the streets on the drive to the Evergreen Cooperative Laundry.
Faded murals of jazz greats Dizzy Gillespie and Nat “King” Cole, who used to play at the clubs in the neighborhood, are still visible on a two-story building.
Fast-food joints have replaced the five-star restaurants that were the hallmark of the area in the 1950s; liquor stores have taken the place of jumping jazz halls. Instead of a bustling music scene, the area is littered with trash, loose dogs and broken dreams.
Like Milwaukee, Cleveland’s manufacturing sector experienced a swift, precipitous decline.
In 1978, Cuyahoga County, where Cleveland sits, had 241,862 manufacturing jobs, which accounted for 35% of all jobs. By 2000, just 128,450 of those jobs remained — a 47% drop.
The results have been the same as in Milwaukee: high poverty, large numbers of African-Americans unable to find jobs or own homes and neighborhoods plagued by crime.
But in Cleveland, the Evergreen Laundry, an 11,500-squarefoot building less than a mile from the old entertainment district, offers a hand of hope.
The nondescript concrete building is one of three businesses
that make up the city’s Evergreen Cooperative, launched in 2009, at the height of the Great Recession.
The co-op’s model helps residents of seven poor neighborhoods find jobs, build stability and buy houses. It benefits local institutions, such as hospitals and universities, which invest in the community and get goods and services they need.
It reduces the city’s impact on the environment through the use of green technology, solar panels, lower water consumption and local production.
Five years ago, representatives from Milwaukee visited Cleveland in hopes of replicating the effort here, but for now, that dream remains on hold.
The co-op concept has been around for decades: People buy into a business where they work or shop, sharing in the enterprise’s profitability. The Evergreen Co-op is unique because it emphasizes job creation rather than training.
In addition, the co-op draws its workforce from poor neighborhoods, where the unemployment rate is 24% or higher and median annual income is $18,500.
Here’s how it works: Large institutions rooted in the area, such as the Cleveland Clinic, agree to infuse some of their combined $3 billion purchasing power into the co-op’s neighborhood companies rather than outsourcing it. The companies, in turn, train and hire people who need jobs — then help them build equity in their own future.
To get off the ground, the project required more than two years of brainstorming and information-sharing among business and community leaders and elected officials.
“It sounds simple but it required getting them to the table and then getting them to share information and to trust each other,” said Ted Howard, cofounder and president of the Democracy Collaborative, a nonprofit organization that helped design the strategy that became Evergreen. “That took years.”
Last year, the three coops — Evergreen Cooperative Laundry, Evergreen Energy Solutions and Green City Growers — boasted a combined revenue of $6.3 million.
Evergreen Laundry is the only commercial laundry operator headquartered in Cleveland. Energy Solutions designs, installs and develops solar panel arrays for institutional, governmental and commercial buildings. The company maintains the panels and sells the energy generated by them. Green City Growers produces pesticidefree produce year-round in a state-of-the-art greenhouse for local restaurants, cafeterias and grocery stores.
Workers, who buy into the co-ops through payroll deductions, share the wealth. The business model calls for workers to own 80% of each business. An independent holding company owns the rest. Workers who participate in a home buying program can own a home within four to six years on the co-op plan.
To ensure success, established businesses — led by the Cleveland Clinic, Case Western Reserve University and University Hospitals — pledge to spend a percentage of their business with the co-ops. Most start-ups don’t have that kind of guarantee, which makes them more likely to fail.
But it isn’t charity. The Evergreen companies must provide quality goods and services and must compete for business once their initial contracts end. As they grow, they are required to seek additional contracts.
On a chilly, overcast day in Cleveland, it was 72 degrees inside the well-lit Green City Growers greenhouse, the largest urban food production facility in the nation. The greenhouse produces 3 million heads of lettuce and 300,000 pounds of herbs per year.
It’s the last place Laurie Cook, 45, expected to find a job when she got out of prison.
A felony conviction for assault and burglary of a neighbor sent her to prison for 10 years. Before that, she battled poverty and addiction to methamphetamine. She figured after prison no one would take a chance on her.
A Cleveland employment program connected her with Green City Growers.
“I saw a lot of people do the time in prison and they come out even worse because they are angry. And they end up on that same destructive path,” Cook said. “I wanted something better for myself, and Evergreen gave me that opportunity when not many people would.”
After a year, greenhouse employees — who earn between $10 and $14 per hour — are eligible to buy shares in the company through payroll deductions.
Of the 38 full-time greenhouse employees, 20 are owners, according to John McMicken, chief executive officer.
For many workers, including Cook, it’s their first business investment.
“It feels good to be a part of something positive and diverse,” Cook said. “I want to see our business grow beyond Cleveland because it gives people like me an opportunity.”
At the Evergreen Laundry, which is located about 10 miles away in the former entertainment district, workers start a probationary period at $8 per hour. Within a year, they are considered for membership in the co-op by their peers.
If they are voted in, their pay increases to $10.50 an hour, with 50 cents of that put toward the ownership share in the co-op. After seven years, that ownership, and bonuses that come with the profits, add up to thousands of dollars, which can be used to invest in a home, pay for education or debt reduction, Howard said.
The laundry achieved a 10% profit margin last year. As a result, the 25 or so employees who are coop owners will receive bonuses of up to $4,000, said Allen Grasa, co-op president.
To become owners, people must work hard and follow the rules, Grasa said.
That’s where Claudia Oates comes in.
Oates, the laundry’s manager, describes her job as part mother, part supervisor.
She’s quick to offer words of encouragement, but just as quick to require a drug test if she suspects a worker is high. She knows many of her employees have experienced generational poverty, incarceration and long stints of unemployment.
She knows those problems can echo through the generations, with childhood experiences — from abuse by parents to widespread drug abuse to everyday violence — scarring their futures. So she makes it part of her mission to work through their challenges with
Could the Cleveland co-op model work in Milwaukee? Ted Howard (left), one of the driving forces behind Cleveland’s program, thinks so. But it would take vision, leadership and community institutions that believe in the concept, he said.
them.
If someone fails a drug test, she gives them time to get clean rather than firing them right away. If the person fails the second time, they are let go.
“This job is not for everyone,” Oates said. “Some people come in and they are not ready to work.”
At the other end, there are some who do so well that Oates pushes them toward other, better opportunities when they come along.
Nearly a dozen workers at the laundry participate in a homeownership program. Through payroll deductions of roughly $400 per month and property tax abatement, they can buy a city-renovated home in the neighborhood. Down payments are not required.
After five years, they can own the homes outright.
The program has the potential to boost Cleveland’s black homeownership rate, which is 37.4% compared to 73.6% for whites in the metro area. In the Milwaukee metro area, the black homeownership rate is 29% compared to 68% for whites.
So far, the housing program has turned 20 laundry cooperative members into homeowners. One of the seven poor neighborhoods the program aims to improve is Glenville, where the laundry is located.
Tim Coleman, a driver for Evergreen Cooperative Laundry, purchased a four-bedroom, two-bath home in Glenville in 2014. He will own his home outright in 2019.
“I’m 54 and this is the first house I’ve owned, and it’s right down the street from where I went to high school,” Coleman said.
Coleman said he would not have purchased the home 10 years ago because drug activity was rampant in the area. While there are still a few vacant homes on his block, he said things have been on the upswing over the past five years — in part because of the co-op.
“This area is coming back,” he said. “More homeowners are moving in. And while I may not see it in my lifetime, I can see white business people moving back to this area again.”
Glenville and the six other neighborhoods surround University Circle, a bustling district about four miles east of downtown Cleveland.
In the Circle, 17 major institutions employ more than 50,000 full-time workers, but only about 1,600 come from area neighborhoods, which are characterized by rows of dilapidated houses, overgrown lots and shuttered businesses.
The institutions, which include Case Western Reserve University and University Hospitals, can’t move their businesses from Cleveland like the manufacturers who left in decades past. That was the seed of the co-op idea — a focus on businesses rooted deeply in the city.
Five businesses inside the Circle chose to participate in the co-op project.
“They have come to realize that their health is dependent upon the health of the entire Cleveland area,” Howard said.
Steve Standley, chief administrative officer for University Hospitals of Cleveland, said the investment in the cooperatives helps provide livingwage jobs in tough areas and helps improve people’s health — especially children.
People who have jobs and medical insurance are more likely to address health problems before they become life-threatening, he said.
“We are helping to improve the lives of our neighbors,” he said. “And if they are healthier, that means that their children are healthier, and we are all better off.”
Working with the coops also builds goodwill among those in the community who want to make a positive difference.
“I can tell you at our annual meetings, it is the one thing that is talked about the most,” Standley said. “People want to know how the cooperatives are doing and what they can do to help.”
In addition to providing jobs and improving neighborhoods, the Cleveland co-ops have been pioneers in the movement to make businesses more environmentally friendly.
Their methods result in reduced carbon emissions, long-term savings for businesses and more options for consumers who want to “go green.”
Business owners who buy solar power from Energy Solutions are eligible for tax credits.
At the laundry, workers recycle imperfect linens by selling them as cleaning rags.
At Green City Growers, plants are cultivated in water rather than in soil. The business uses one gallon of water per head of lettuce compared to 40 gallons for field growing.
What’s more, 80% of the water used at the greenhouse is captured from the roof after rains and from melting snow.
Once packaged, vegetables stay local, saving the cost, fuel and emissions of cross-country trucking.
As a supervisor in the greenhouse, Cook oversees the team that moves seedlings from small areas to larger ones as they grow in the soilless culture. The process involves meticulous attention to detail, including inspecting the roots for damage.
Healthy roots are cream-colored and long, she explained, while damaged roots are brown and have a sliminess to them. If roots are damaged, workers remove them and sort out why — and how — the damage occurred, making adjustments so it doesn’t happen again.
“It’s a good feeling knowing that we are providing nutritious food to people all over Cleveland,” Cook said.
Could the Cleveland co-op model work in Milwaukee?
Howard, one of the driving forces behind Cleveland’s program, thinks so. But it would take vision, leadership and community institutions that believe in the concept, he said.
Like Cleveland, Milwaukee is home to longstanding institutions that need services and cannot easily move, such as hospital systems and universities.
Milwaukee may even be a step ahead of where Cleveland started.
That’s because Cleveland had to invest millions to prepare sites in impoverished areas for the co-op businesses. The business investors had to buy land, tear down abandoned homes and, in the case of the greenhouse, build it from the ground up. The laundry facility needed many renovations to get it up and running.
In Milwaukee, the former A.O. Smith factory on the city’s north side is a bus ride away from the 53206 ZIP code, one of the poorest areas in the country. It’s an easy walk from my neighborhood, where the parents of some of my
classmates at Samuel Clemens Elementary School used to work at the site welding auto and truck frames bound for Detroit.
The city already has invested more than $35 million in the site and has constructed a new 53,160-square-foot light industrial building, which sits vacant.
Meanwhile, two local hospitals, Froedtert and the Zablocki Veterans Affairs Medical Center, already outsource their laundry to Goodwill Industries, which helps people in need.
About five years ago, a delegation from Milwaukee visited Cleveland to learn about the co-op initiative.
Among those on the trip was Bill Krugler, president of the Milwaukee Community Business Collaborative, Inc., a nonprofit organization that aims to help people with the greatest needs find jobs and become self-sufficient.
Healing the individual from the trauma of poverty — and all it brings with it — is just as important as finding people a job, Krugler said.
“That’s what makes this so difficult,” he said. “It’s not just about employment, although that’s part of it. We have to fix the individual as well.”
Krugler has identified several institutions that could become involved in a Milwaukee co-op. But he can’t start one alone.
“There are a lot of similarities between Cleveland and Milwaukee,” Krugler said. “At the same time, we have a number of differences … You can’t just copy a model from somewhere else and expect it to work. It’s not that easy.”
Proponents of the Cleveland model in several other cities have run into the same challenges, according to Howard. For the concept to get off the ground, an influential charitable foundation, business leader or mayor must bring all the players together.
In Cleveland, it was the Cleveland Foundation and Mayor Frank Jackson.
The foundation was the key to getting people to the table and keeping them there. Jackson, who had the respect of the leaders of the city’s large institutions, inspired key players to trust each other and share information they might not otherwise want their competitors to have.
In Rochester, N.Y., a co-op program is being developed after Mayor Lovely Warren took a trip to Cleveland, then committed to funding a similar project.
She went there in 2014, when unemployment for some of her constituents was more of a challenge than it was during the Great Depression. The same is true in Milwaukee.
The unemployment rate for working age black men in Milwaukee, currently hovering near 50%, is roughly twice as severe as what the nation as a whole endured in the worst days of the Great Depression.
In three Rochester neighborhoods, nearly half the residents receive food stamps and 40% live below the poverty line. By comparison, in 61 of Milwaukee’s 210 census tracts at least 40% of the population lives in poverty.
“We are hoping that strategy doesn’t just create jobs, but also wealth-building opportunities that can contribute to a comprehensive neighborhood revitalization,” Warren said.
Milwaukee’s efforts to revitalize neighborhoods focus largely on training workers rather than creating jobs.
In August, the state allocated $2.5 million for job training in Milwaukee after violence erupted in Sherman Park following the fatal shooting of a 23-year-old black man by police.
In January, Gov. Scott Walker proposed a plan in his state budget that would require able-bodied Food Share recipients to either receive state job training or work 80 hours a month in order to collect benefits.
Job training can be valuable. But if it doesn’t translate into real work that pays the bills, it only leads to more frustration, said Howard, a founding leader of the Cleveland effort.
That’s why the co-op model first creates jobs, then works with people in poor neighborhoods to get them to come to work each day and show them how work will pay off in the long run.
It’s a path to long-term success that many of them have never experienced or even seen before, after growing up in poor and broken families. And it takes patience, time and passion to elevate others.
Cook, the greenhouse supervisor, is a perfect example of that concept in action.
While she was in prison, she received more than 6,000 hours of machine maintenance training. But when she got out, factories refused to hire her because of her criminal record.
Through on-the-job training from the co-op, she transformed her life. Today, she is not only a manager and owner of Green City Growers, she also serves on the board of directors.
McMicken, Cook’s boss, said he strives to hire more people like her.
“What she’s done and what’s she’s overcome is incredible,” he said. “She’s a hard worker, and she understands how her success and the success of what we are doing here is tied together.”