City Council meets to discuss future of Community Development Corporations
by Joe Narkin

(Plain Press, May 2010) Anticipating an ongoing decline in Community Development Block Grant (CDBG) funds for Community Development Corporations (CDC’s) at a time when the City of Cleveland is in a state of profound crisis, Cleveland City Council held two half-day retreats to discuss the future prospects of CDC’s during March and April at the Maxine Goodman Levine College of Urban Affairs of Cleveland State University.

“Cleveland is in a period of transition and this is our toughest period ever; we are dealing with macro-forces that we are not responsible for, but we are trying to address,” said Bobbi Reichtell, Senior Vice President for Programs at Neighborhood Progress, Inc. (NPI). The current crisis is due to a myriad of convergent issues such as population loss, population shifts within the city, housing foreclosure and high vacancy rates, job loss, and a declining manufacturing base in the face of global competition, according to Reichtell.

While there are 27 CDC’s receiving CDBG funding through Cleveland City Council, there are currently only 19 wards in the city and, based upon population projections made prior to the 2010 Census, it is likely that at least two council wards will need to be eliminated in the near future in accordance with the City Charter. Many consider mergers and consolidation of CDC’s to be imperative.

There are 9 CDC’s on the West Side of Cleveland. West Side CDC operating budgets range from the Detroit Shoreway Community Development Organization with a $3.3 million budget to the Stockyard Redevelopment Corporation at $400,000, according to information provided by NPI.

“When I participated in CBGD hearings for the first time as a councilman in 2002, the CDGD budget for the City of Cleveland was $38 million; in 2010, it is $25 million,” said Councilperson Matt Zone (Ward 15). This represents a 38% decline in funding in less than a decade.

Cleveland City Council has allocation control of approximately $9.8 million of the $25 million (39% of total) in CDBG funds available citywide during the current fiscal year. This figure includes $8.4 million in funding for the Neighborhood Development Activity (NDA) Fund under which each councilperson receives $440,000 to distribute for services in their wards. Citywide, 80% of NDA funding is allocated towards the operation of local CDC’s.

City council, as a whole, also allocates $1.4 million for a Competitive Grant Program, providing awards of up to $74,000 to CDC’s for special projects in neighborhoods.

In addition to CDBG funding, each CDC raises additional revenue through a variety of sources, including, but not limited to, local and national foundations, corporations, fundraising, and development and property management fees, according to Reichtell.

Depending upon the mission, scope of services, and success in generating outside revenues, the level to which each CDC is dependent upon CDBG funding varies widely throughout the city. On the West Side, for example, Cudell Improvement receives 71% of its annual budget ($416,000 of $585,000) from NDA and competitive CDBG grant funds. Detroit Shoreway receives only 10.9% of its resources ($363,000 of $3.3 million) through the same sources.

Given the likelihood that CBGD funding will continue to decline (and, perhaps, be eliminated entirely, as suggested for a time during the administration of President George W. Bush), those CDC’s that are more heavily reliant upon CDGB funds will need to develop more sources of outside funding or face extinction.

But all CDC’s will need to diversify their financial base and pay close attention to the way in which they operate. “What we have now is an unsustainable model; what we are doing now is not working,” said Zone. “If we continue to do business as usual, this whole thing is going to implode,” said the councilperson.

“Reinvention is the name of the game; there are some cases where a blank slate might even be better than (continuing) a wreck that has conflicting expectations,” said Councilperson Jay Westbrook (Ward 16).

During a March interview with the Plain Press, Council President Marty Sweeney (Ward 18) defended the practice of equally splitting NDA funds among council members. Referring to the forthcoming council CDC retreat, Sweeney said, “Everything should be on the table.”

“I like having some discretion over dollars,” said Sweeney, adding, “We (council members) have an intimate understanding of our areas.”

A brief discussion during the retreat of the equal split among councilpersons was inconclusive, but heated. Responding to Councilman Zachary Reed (Ward 2), who called this practice into question, Councilman Jeffrey Johnson (Ward 8) said, “DOA; as far as I am concerned, this discussion is dead on arrival because I do not trust the administration to do what is right in Glenville.”

In addition to finding a way to compensate for declining CDBG revenues, CDC’s also must make a transition away from an emphasis on the development of new housing units and focus on finding solutions to the problems brought about by population loss and the foreclosure crisis. There are an estimated 12,000 vacant properties in the City of Cleveland, according to Ward 12 Councilperson Tony Brancatelli.

“A paradigm shift has already occurred from bricks and mortar and how many (housing) units have been produced,” said Brancatelli. “We must transition from a model of development to doing neighborhood stabilization,” said Reichtell.

In meeting these challenges, CDC’s must find new ways to work together in collaboration and eliminate duplication of services while remaining responsive to the unique needs of neighborhood residents and local businesses, according to retreat participants. “You cannot have the same template as a model of services for the entire city,” said Zone. “What functions CDC’s should perform should depend upon typologies and needs of neighborhoods,” added Brancatelli.

According to the majority of participants, the way to assure that the needs of each neighborhood are addressed and the best way to build community life is to enhance the community organizing capacity of CDC’s. While many CDC’s have staff members that engage residents and the local business owners on a regular basis, the bulk of their “time is spent addressing quality of life issues like safety and vacant housing” and “working to get the (city service) system to work,” said Reichtell.

Assigning staff members to work on code enforcement and safety services is equivalent to hiring “a high priced babysitter,” said Zone, citing shortcomings on the part of Building and Housing as an example of an “underperforming” city service. “Both City Council and CDC’s are operating within the constraint of getting the city to perform,” said Brancatelli.

“Some CDC’s have the belief that, because (they) are providing services to individuals, (they) are doing their jobs, but there is a real breakdown of communication and services to groups and organizations at the grassroots level,” said Councilperson Brian Cummins (Ward 14).

The need for increased community organizing efforts should not be construed to mean that CDC’s should be in the business of providing social services, however, according to Brancatelli. “Social services and senior citizens services are not in the purview of a CDC; there is a whole other subset of social service agencies in the community,” said Brancatelli.

There is also an inefficient and ineffective duplication of services within CDC’s, according to retreat participants. “Not every CDC can be expected to have the expertise to provide all services,” but they should be sharing expertise and resources, and should not be bound by geographical boundaries,” said Cummins.

“The flip side of (a geographical) barrier is the opportunity to provide leadership and incentives to encourage CDC’s to use the services of (CDC’s in) adjacent areas; CDC’s that have a capacity can help other areas where they do not have a capacity,” said Councilperson Cummins.

There is a distinction to be drawn between providing leadership and exerting control on the part of council, however. While it is “a fiction that CDC’s set priorities independent of a councilperson, a councilperson has to know their role” and “avoid overstepping,” said Kevin Kelley, (Ward 13).

Retreat facilitator Steve Minter, an Executive in Residence with the Levine Urban Affairs College of CSU, stated that he found it encouraging that the Cleveland City Council has agreed to continue discussions about the money, mission, merit, and strategy” regarding the future of CDC’s. Future discussions will be held within the Community and Economic Development Committee of City Council. Input from CDC’s and other community stakeholders will also be sought during the process. A formal plan for presentation to the full council is projected to be ready in September 2010.

“Cleveland has been and will remain in the forefront of the CDC movement,” said Minter, noting that the pioneering work of community organizers in working with residents began in the late 1960’s. Many of these efforts have been replicated nationally and other communities continue to look at Cleveland as a model for community development, said Minter.

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