Choice Thoughts from “Choice” Winners

7 min read

NH&RA Members involved in all five projects

In early October, the Department of Housing & Urban Development awarded its 2015 Choice Neighborhood Initiative Implementation Grants to projects in five cities—Atlanta, Kansas City, Memphis, Milwaukee and Sacramento. NH&RA members were awardees as developers or funders in each of the cities.

• McCormack Baron Salazer is a developer for the projects in Atlanta, Memphis and Sacramento;
• Milwaukee Housing Authority of the City of Milwaukee is a funder in their town;
• Enterprise Community Investment and Bellwether Enterprise are funders in Atlanta;
• LISC, the Richman Group and Sugar Creek Capital are all funders of the Kansas City project;
• US Bancorp Community Development Corp is a funder in Memphis.

Choice describes itself as “an interagency partnership between HUD and the Departments of Education, Health and Human Services, Justice, and Treasury to support locally driven solutions for transforming distressed neighborhoods.” Its prime purpose is “to begin the process of transforming, rehabilitating and preserving public housing” — much of which is distressed and obsolete.

Since the program’s founding in 2010, winners, now totaling 17, have received more than a total of about a half-billion dollars in grants.

People involved in the FY 2014/2015 Choice winners, which were announced on September 29, 2015, have thoughts to add. McCormack Baron Salazar (MBS), a St. Louis-based for-profit U.S. real estate development firm specializing in economically integrated urban neighborhoods, has been involved with nearly half of all Choice-winning projects since the program’s inception, including three of this year’s five current winners. Its description of these projects reveals the complexity involved; the Memphis grant, for example, “will be used to revitalize the South City neighborhood and is focused on the redevelopment of the 420-unit Foote Homes public housing site. In addition to the redevelopment of mixed-income housing, the plan includes investing in needed community assets, like a grocery store, an early childhood education center, neighborhood retail and small businesses. A Human Capital Plan will address the challenges faced by low-income families in the community including education and job training, health care and access to recreational opportunities. Partners on the project include the Memphis Housing Authority, the City of Memphis, Urban Strategies and US Memphis HOPE, Shelby County Schools, the Women’s Foundation for a Greater Memphis, the Downtown Memphis Commission, MATA, and others. Over $450 million is anticipated to be leveraged from local, regional and state sources.”

“In our experience,” says Vincent R. Bennett, chief operating officer of MBS, “a strong Choice Neighborhood application has three main components: the first is a strong, committed team that brings the city, the Housing Authority and other public agencies, together with private funders, the philanthropic community, local business interests, non-profits and service providers, and the residents and stakeholders from the community – and that everyone says, ‘Yes, this is our priority.’ Without all these people around the table supporting the same plan, the effort can unravel quickly.

“The second component is a thoughtful plan that responds to the needs and nuances of a particular community.” This is not about dropping in a standard model that worked in a different city and a different neighborhood. This is about developing a transformation plan that responds to the pressures, challenges and assets of each community.

“And, the final component is having the team that can implement that plan – and an experienced developer is probably the easiest team member to find. Finding a group who can really run the Human Capital ‘People’ portion is a huge challenge – many of our Choice Neighborhoods include the non-profit Urban Strategies, Inc. in this role because they really understand social service delivery and the metrics involved. And the cities need to identify good team members to run the economic development ‘neighborhood’ programs – sometimes it is a city agency or department, other times it is a CDC or a private developer specializing in commercial and retail investments.”

Others working on the same projects with MBS agree. “Success is achieved through the creation of a true public- private partnership, with high capacity partners, and a comprehensive strategy that includes meaningful community engagement,” says Meaghan Shannon-Vlkovic, VP and Southeast market leader, Enterprise Community Partners.

“The commitment, strength and capacity of the public-private partnership, including financial and human resources, is critical to qualifying and attracting significant debt and equity to associated Choice developments,” adds Jeffrey A. Mion, Senior Vice President, Bellwether Enterprise Real Estate Capital, in Duluth, Georgia.

A similar message comes from Milwaukee, whose Westlawn neighborhood, says Mayor Tom Barrett, will, thanks to the recent Choice grant, “see over 700 new mixed-income apartments and homes, new retail, services and amenities for residents, high-quality educational opportunities for youth of all ages, and many other qualities that will transform the area into an inclusive community of opportunity.”

Barrett, like Choice winners in other cities, emphasizes partnerships. “The quality, strength, and breadth of the partnerships were key, as well as Milwaukee’s experience in transforming neighborhoods and developing quality housing that is accessible and sustainable,” he says. “There are over 30 partners who have committed over $200 million to strengthen and expand services that will create a more vibrant, cohesive neighborhood in which people will choose to live, work, learn, play and shop.”

Perseverance is also essential, said Bobbi Marsells, Assistant Secretary of the Housing Authority of the City of Milwaukee. “Westlawn was the largest public housing development in the State of Wisconsin with 726 public housing units on over 75 acres. We have been planning for the redevelopment of Westlawn since 1991 and were fortunate to receive 9 percent tax credits to redevelop half of the site, which was completed in 2012. By redeveloping half of the site, people were able to see new possibilities for Westlawn and how it could contribute to neighborhood transformation and become a true asset for the neighborhood. The stark contrast between the old and new helped to keep the focus on real transformation and the catalytic possibilities.”

In addition, Tony Pérez, Secretary-Executive Director of the Housing Authority of the City of Milwaukee, points out that, “Choice funds are instrumental to the comprehensiveness of our approach to include community and supportive services, education, job training/employment, business development and support, and improved neighborhood amenities.”

He explains that “this interface of services, education, and quality neighborhoods with housing gives people the tools and foundation that they need to be successful. One example of a program that transforms peoples’ lives is the ‘Make Your Money Talk’ program, a financial literacy program the Housing Authority offers in partnership with the Wisconsin Women’s Business Initiative Corporation. Since 2004, 1,364 people completed the financial literacy program, and 789 persons invested $455,095 in an Individual Development Account (IDA), which had matched savings of $1,207,124. Savers have used their IDAs to purchase their first home, created or developed a small business, and invested in continuing their post-secondary education.”

Similar comments about the fifth current Choice winner—a project in the Paseo Neighborhood of Kansas City—come from Stephen Samuels, executive director with Greater Kansas City branch of the New York City-based Local Initiatives Support Corporation (LISC). “This plan,” he says, “has been years in the making and directly reflects what people in the neighborhood have told us they want for their families and their community.”

Planning, partnerships, people, and perseverance —their importance also emerges from the comments of Celia Smoot, Director of Housing for LISC. Smoot emphasizes that “Choice is critical because it also helps support broader revitalization efforts in the surrounding area and services programming for residents. It helps us address a range of challenges facing low-income residents—especially, in this case, public housing residents in a deteriorating project. It is more than just a bricks-and-mortar approach. Choice helps increase the impact and the long-term value of the rebuilding effort to the community.”

She adds that it, also, “all boils down to resources. Without a Choice Neighborhoods grant, it would be very difficult to do large-scale recapitalization/revitalization projects that are literally sinking into the ground. They are too big to address without a significant infusion of capital. Choice offers the soft subsidy these projects need to make the financial structure work.”