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Denver, Los Angeles and San Francisco named beta sites for testing new approach to community and economic development
The greater Denver, Los Angeles and San Francisco Bay Area regions have been selected as beta sites for a project to research and develop methods that will help communities attract and deploy private investment capital for public purposes.
The project is an effort by Kresge to increase its ability to benefit low-income communities. “Cities should have the infrastructure and expertise needed to expand their economies for broad-based community benefit,” says Rip Rapson, Kresge’s president and CEO. “We want to help take the mystery out of this vital process.”
The project will study capital absorption, which is defined as a geographic location’s ability to attract and make effective use of various forms of capital. It builds on work pioneered at Living Cities, a collaborative of 22 financial and philanthropic institutions working to advance the welfare of cities. Kresge is a member of the Living Cities collaborative.
Work in the three metropolitan areas is being led by philanthropic organizations in each location: The Denver Foundation, the California Community Foundation in Los Angeles, and The San Francisco Foundation. Each beta site will receive $80,000 along with in-depth, hands-on technical assistance.
The three sites were ideally suited for this work, according to Rapson, because each has already undergone an extensive multi-sector strategic planning process that included identifying community needs and investment opportunities.
“Effective capital absorption requires not only a sufficient supply of capital from diverse sources, but also a set of capable borrowers,” Rapson adds. “Stakeholder interactions, clearly established goals, the regulatory environment, a pipeline of investable projects – these are essential aspects of successful capital absorption.”
Robin Hacke, a senior fellow at Kresge, heads the project and is working with Marian Urquilla at Strategy Lift and David Wood at the Initiative for Responsible Investment at Harvard University. The MacArthur Foundation is supporting the Initiative for Responsible Investment’s contribution to this project. Hacke, Urquilla and Wood were involved in the original work done by Living Cities. With Hacke’s move to Kresge, the foundation has taken up the broader investigation and development of capital absorption; Living Cities is focusing on applying the work in communities where it currently is active.
The project grantees each have identified equitable transit-oriented development as their community goal and the focus of their capital absorption work. At the Denver Foundation, the transit effort is called Mile High Connects. At the California Community Foundation the effort goes by the acronym LA THRIVES, which stands for Los Angeles Transit, Housing, Resources and Investment for a Vibrant Economy. The San Francisco Foundation has named its effort the Great Communities Collaborative.
The Kresge project will utilize an assessment tool created by Hacke, Urquilla and Wood that enables cities and/or regions to identify the missing aspects of their social and municipal infrastructure and capacity that impede community investment efforts. The tool has been used previously in 10 other cities, including Chicago, Salt Lake City and New Orleans.
The project grantees will convene twice over the next year to share experiences and learn from each other. Kresge expects to share tools, case studies and other materials regularly via its website kresge.org.
At the end of the grant period, Kresge hopes each region will:
- Have engaged and aligned a wider group of stakeholders
- Be able to deliver community benefits based on a set of investable opportunities
- Have a faster, more cost-effective development cycle for investment transactions
“We expect this project will yield insights that increase our understanding and improve our ability to work with cities,” Rapson says. “The lessons learned also may prove valuable to those working in the public, private and nonprofit sectors.”