Ownership Matters
by Ted Howard
Yes! A Journal of Positive Futures, Spring 1999

Page 5 of 6
Community owned enterprises

The New Community Corporation of Newark, New Jersey is an acknowledged leader in building and anchoring capital. In the late 1960s, race relations in the city Jersey were stuck in a sump of hatred and hostility. As in many other cities around the nation, people who could afford to leave the inner city -- predominately whites -- fled in droves to the suburbs. Riots in 1967 left Newark's Central Ward in shambles. Shops and service providers abandoned the area, leaving the Central Ward with no decent housing, no jobs, no health center, and no major grocery store.

Then, in 1968, the young, audacious, rabble-rousing Father William Linder (now the gray-haired, audacious, rabble-rousing Monsignor Linder) organized a group of committed parishioners and formed the New Community Corporation, one of the first community development corporations in the country. Thirty years later, NCC employs 1,200 people and has provided low-cost housing for over 7,000 more. Through its efforts, the Central Ward now has a new 55,000 square-foot Pathmark store, open 24 hours a day, 364 days a year. NCC wooed Pathmark to the area by accepting the bulk of the financial risk, and it has paid off. Within two years of opening, the Central Ward's Pathmark has become the chain's most profitable store. The union shop employs 150 full-time workers and 100 part-time workers, almost all from Newark, and the store's annual profits exceed $1 million. Where does the money go?

Most of it to the New Community Corporation: NCC owns 2/3 of the store's shares and reinvests its portion of profits back into the community. With ownership comes three out of five seats on the supermarket's board, allowing NCC to influence store hours, pricing, and programs with an eye on the community, not just the financial bottom line.

Asian Neighborhood Design (AND), a community development corporation based in the San Francisco Bay Area, is another success story. AND earns more than 60 percent of its $7.2 million budget from its for-profit architectural services, case work and furniture manufacturing business. With a staff of over 100, many of them southeast Asian immigrants, AND has trained more than 600 construction workers, about 80 percent of whom are now in jobs, returning to school, or moving on to more advanced training.

Community development corporations aren't the only nonprofits learning how to succeed in business. Seattle's Pioneer Human Services (PHS), a not-for-profit that works with former drug addicts, began operating with grant money. PHS has since become entirely self-supporting thanks to its for-profit enterprises: the 150-seat Mezza Cafe; the Food Buying Service which distributes over 7 million pounds of food to nonprofit organizations in 20 states; the 132-room St. Regis Hotel; Pioneer Industries, a light metal fabricator; and others.

Pioneer Industries offers all full-time employees training and a competitive, livable wage. With a budget of $18 million last year, PHS employed 860 people and served over 5,000 clients.

By operating successful business ventures, says acting president David Guth, "We have an ability to be self-sustaining and in doing so have an ability to call our own future."

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