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The Rise of the Anchor Institution: Setting Standards for Success

01/14/2014 02:45 pm ET | Updated Mar 16, 2014

In urban development circles, strategies that leverage the staying power and scale of anchor institutions -- universities, hospitals and other place-based powerhouses -- are on the rise. Brimming with valuable intellectual property, and often rooted in struggling neighborhoods in desperate need of jobs, anchor institutions offer an alternative to the race-to-the-bottom development strategies favored by economic development officials for decades, in which struggling cities and towns sign over the farm to out-of-town corporations in return for modest job commitments, hoping that the recipients of taxpayer largess hang around for a few years.

But anchor institutions will only succeed in transforming communities and revolutionizing the way cities approach their developmental futures if they adopt high-road practices. This means creating decent-paying jobs accessible to a wide swathe of residents, promoting localism and community-based entrepreneurship and engaging residents in the process of planning for growth.

One central feature of anchor institutions is that they can't move, at least not easily, and that makes them special in a global economy built on capital mobility. They're often the last employers left standing in cities that have been abandoned by corporate America, and are thus a good place to start with rebuilding efforts. In Detroit, for example, city leaders and foundations have identified Midtown, anchored by Wayne State University and Henry Ford Hospital, as the focal point for an integrated set of investments in housing, commercial development and medical research. In a city as vast as Detroit, creating density and walkability, the holy grail for urban planners, must start somewhere, and Detroit's leaders have rightly settled on the district that shows signs of life and offers the prospect of employment growth.

Similar strategies are unfolding in Cleveland, where the Cleveland Clinic, Case Western, the Cleveland Foundation and other leading institutions have built an innovative partnership in the Greater University Circle district. One highly innovative feature of the Cleveland strategy began with a thorough-going analysis of the anchor institutions' procurement policies, which revealed that some services, such as laundry and food service, could be re-localized in a way that generated new entrepreneurial opportunities. With help from the Democracy Collaborative, the Cleveland project leaders took the unorthodox step of seeding the Evergreen Cooperatives, a network of worker-owned cooperatives that now grow produce and provide industrial laundry services.

In Syracuse, university leaders founded the Connective Corridor, which includes major investments in housing, public art and sustainable design, to break down barriers with the community. Bush Creek Community Partners in Kansas City, which includes universities, museums and neighborhood associations, has generated more than one billion in investment in housing, cultural amenities and infrastructure in its urban district.

The growing popularity of anchor development strategies is a welcome turn toward asset-based economic growth, rooted in the idea that cities and regions must develop human talent and cultural and commercial assets from within, rather than paying corporations to give them a chance.

But given the growing popularity of anchor strategies, and the large public investments flowing to anchors, now is the time to define them in ways that ensure maximum community benefit. Some institutions that we might categorize as anchors have not always acted as beneficent community partners. The history of town-gown relations is rife with conflict around real estate, employment practices and fair taxation. For example, both NYU and Columbia have been locked in long-term acrimonious disputes with their surrounding communities regarding displacement, affordable housing and community planning process. Labor conflicts over poverty wage rates have raged at many universities and hospitals in recent years, including the University of Miami and Georgetown. A recent analysis showed that more than 700,000 workers on college campuses are paid beneath the living wage standard.

Steve Dubb and Rita Axelroth Hodges, leading practitioners in the field, define anchors as "institutions that consciously and strategically apply their long-term, place-based economic power, in combination with their human and intellectual resources, to better the welfare of the community in which they reside."

The Democracy Collaborative has developed a useful anchor dashboard, which includes twenty indicators that help to clarify whether a particular anchor institution is having a positive impact on its surrounding community.

Many of the standards included in the dashboard are derived from the community benefits movement, led by groups like LAANE and other members of the Partnership for the Working Families network. Through decades of organizing, these organizations have won commitments from major developers to pay living wages, hire diverse residents from low-income census tracts and to use green building techniques in their construction.

One recent community benefits agreement signed by the developer of the Kingsbridge Armory in the Northwest Bronx, the largest such facility in the country, may be the gold standard. It stipulates a living wage policy for all employees, and local hiring for at least 50 percent of the workforce at the Armory, which will be transformed into one of the nation's largest ice skating facilities. The Bronx victory is also important for the 52,000 square feet of community-controlled space that will be incorporated into the development going forward.

The Bronx agreement is part of a new wave of community organizing campaigns, led by networks like National Peoples Action -- of which PUSH, the organization I direct, is an affiliate -- focused on gaining community control over resources needed to build wealth in low-income communities.

Distilling the CBAs down to their essence, it seems fair to expect any organization that seeks the mantle of anchor institution to pay a living wage (in the realm of $12/hr and above) to all workers on its campus, whether directly hired or outsourced; to create clear training and hiring pathways for low-income people and people of color; to build long-term careers, to ensure adequate housing for people of all incomes in its vicinity; to adopt sustainable building practices, including next-generation green infrastructure to manage storm water; to set clear and ambitious goals for MWBE contractor participation; and to ensure ongoing community input in planning decisions.

Without such standards, the idea that anchor institutions can be the linchpin of progressive economic development strategies will ring hollow. Creating a district of vitality and wealth for some while subjecting others to poverty wages is not a sustainable practice, or one that can lead cities devastated by histories of racism and labor exploitation forward.

The rise of the anchor-led development is the opening salvo in a long-term campaign to root economics in communities, rather than the priorities of multinationals bent on profit at any cost. At this early stage in the anchor institution movement, the time is right to adopt clear standards, such as those outlined in the anchor dashboard, for what it means to be a successful anchor developer.