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(upbeat electronic music) - Good afternoon.

And, welcome to the City Club of Cleveland.

I'm Dan Moulthrop, chief executive here, also a proud member.

And, we're in person here at the City Club today for our forum, from policy to progress, partnering to create equitable community development.

It's sort of a mouthful, but we'll get into it in a second.

Our forum today is the final forum in our series marking the Lincoln Institute of Land Policy's 75th anniversary, which is co presented with the Lincoln Institute and the law firm Mansour Gavin.

And, for our forum today, we're talking about the power of policy and collaboration, I want to underscore that word collaboration, to solve some of the biggest challenges our communities face.

If the last 18 months have reminded us of anything, it is the power and importance of a robust response to a crisis.

The influx of federal funds to state and local governments amid the coronavirus pandemic has helped thousands of families to keep food on the table and make ends meet.

But, funding is just one way that government policymakers, philanthropists, and other organizations can influence how communities evolve.

So, how can thoughtful policy implemented well, I'm gonna underscore that too, thoughtful policy implemented well, how can that help our regions and communities and be the determining factor in successful equitable community development?

With us today are Dr. Raphael Bostic, he's president of the Federal Reserve Bank of Atlanta.

He's been at the federal reserve bank of Atlanta since 2017, and he's instructed me not to call him president or doctor for the rest of this program.

So, I just want to clear that up.

Also, with us is Dr. George Mac McCarthy, who is instructed me to call him Mac as well.

He's president and CEO of the Lincoln Institute of Land Policy for the last seven years.

I want to thank you both for joining us today.

Please, join me in welcoming them.

(everyone clapping) So, in the news yesterday, and this morning, was an announcement from Cleveland City Hall for Mayor Frank Jackson, about the plan to deploy roughly a quarter of a million dollars in the first round of money from the American Rescue Plan Act, the big chunk of funds, total of 500... More than 500 million is coming to the city of Cleveland, another quarter of a million coming to Cuyahoga county.

And, some of the ways in which there's a lot of, as you would imagine, if you had $255 million to deploy, you'd create a long list of things, but the...

Some of the stuff that's most... Can germane to what we're discussing here has to do with community development, and funds for housing, funds to support community corporations in their work in helping homeowners and businesses thrive.

But, I want to hear from both of you, if you were in charge of the spending of $255 million and keeping in mind that the mayor has just a few more months until the end of the year in his term, what would you be doing?

What would you focus on?

What would be top of your list, Raphael Bostic?

- So, I think for me, first of all, good afternoon, everyone.

It's really good to be here in Ohio and in the Cleveland area, it's been a long time since I've been here and it's a city I always enjoy being in.

In thinking about this, I really think about the context, and the context is, a pandemic which put extra stress on all the ways that we had precariousness.

And, so for me, as I think about, sort of, the things that I would want to see bolstered, it would be the areas where we know that there are stresses and weakness.

So, affordable housing, clearly, 'cause we know there's a lot of housing insecurity and that we are still at risk of this with eviction moratorium rolling off, and jobs not having come back as much.

I think, also, a lot about food security, and making sure that our food infrastructure is robust and able to meet people where they are and address that kind of concern.

And, then I also think a lot, particularly, in this context about health, we know that health is one of the areas where it's a major barrier to people being able to get jobs and keep jobs.

And, so if we don't have a healthy community, and we know, I don't know if Cleveland's done a health Atlas, but in my district, a number of cities have, and there are some real specific places where we know that the poor health outcomes co-locate.

And, so you can have very concentrated investments that can try to move the dial there, and that can reduce another or relieve another area of precariousness.

So, those are three off the top of my head, three areas that come to mind.

- So, for me, I think the... First of all, let me join Rafael in thanking you all for having us here.

And, it's been a great pleasure to work together with the City Club for our 75th anniversary at the Lincoln Institute.

for me, I think that, just as a principal, I think that we have to be ready to tap the brakes on the money and how we use it, because there's this sense of urgency that people have that we need to spend it right away.

And, I think we very often make some bad choices when we try to spend money right away.

This idea of looking for shovel-ready projects, shovel-ready projects are already on the shelf, and they've not been invested in, because maybe they're not the right projects.

And, I think we have to really think about, kind of, this existential moment, and it's not just a COVID crisis, but we're really facing a climate crisis That's gonna require a different kind of institutional organization kind of regionally, to kind of deal with it.

And, so for me, I would think about the 250 million, the $500 million as a down payment on an investment in new institutional arrangements that can help us to do the big things we're gonna need to do to create kind of the...

I guess we would call the regional positive sum game.

And, so what does that mean?

Well, it means we stop with this beggar thy neighbor kind of approach to urban sprawl, stealing businesses, stealing middle class households, and driving them out to the fringe.

And, we find ways to reinvest in kind of the core city, reinvest in the neighborhoods that have been struggling for the last 20, 30 years.

And, we find ways to turn them into kind of the thriving mixed income neighborhoods that kind of defined this region back in the industrial revolution, because I think there is going to be a new kind of industrial revolution.

And, I think that the American Midwest is gonna be the recipients of lots of climate migrants and lots of new ideas.

And, I think that the pandemic has opened up an entirely new way of thinking about the relationship between where we live and where we work.

And, if we find ways to kind of make the right investments to make that happen and have an eye towards maybe a little bit longer future than just the next four or five years, we're gonna... We'll be better at making that happen.

- Having an eye towards a future of more than beyond the next election cycle is not something American governments writ large, whether that's at the municipal level, the state level, or the federal level are particularly good at, Mac.

How would you... How do you frame that in a way that is in the best in...

In everybody's best interest and in the self-interest of elected politicians?

- Well, there's a renewed interest at the national level in what we call kind of cross agency collaboration, where we're gonna find ways to get transportation agencies, housing agencies, the education departments, actually thinking more carefully about working together at the national policy level to make things work better locally.

And, the problem with reorganizing at the national level is that we don't have concurrence with the local and regional level.

We don't have counterparties that can work across, kind of, the thematic areas, housing, transportation, education, and work at some level of geography higher than a jurisdiction.

So, I think we have to begin to kinda elevate the role of the metropolitan planning organization, as more than just the recipient of transportation money and figuring out where you're gonna put highway interchanges and think more about how that becomes a coordinating agency across housing, transportation, education, and how it becomes kind of both the guiding agency, but also the accountable agency for how that money gets spent and used in plans.

And, so, I know, I was reading a lot of the stuff you sent in advance of this, and there's just all this debate about where you put highway interchanges.

- It's a tremendous rounded debate in the greater Cleveland-- - But, highway interchanges are not what you need in a carbon neutral future, right?

We need better public transportation.

We need to have people living closer to where they work.

We need a bunch of other things that will make the region work better.

And, we need to think about that kind of in the longer term, but we need an entity that's in a position to kind of cohere all the different, tiny jurisdictions that are gonna be too busy trying to... Make themselves better off in isolation and work together.

- George Mac McCarthy is president and the CEO of the Lincoln Institute of Land Policy.

Raphael Bastic, go ahead.

- Yes, so I was gonna just jump in on this.

Mac, you're always so thoughtful on these things and raise these issues.

(Mac laughing) And, I have like 800 things I want to say in response.

So, one, I would say, sure, if we can get a regional governance structure that is enduring and that is respected by all the jurisdictions, then that can work.

That's hard.

And, I've actually done some research to show that just the rules of how you decide who is the representative in each wave of funding is determined, determines where money goes across the region though.

So, it's not as if there's a stand back kind of fully objective approach to this and that that personality isn't an individual's matter.

I think if you can get that body to be more muscular though, it does lead to different kinds of conversations and it makes and it helps a region sort of face trade-offs or are potential trade offs more directly and more explicitly.

I think that's a good thing.

The thing I've been thinking a lot about this, because when I think about economic development efforts, particularly in communities that have often not been invested in, what I've seen is one mayor or administration picks four neighborhoods to invest in.

They start it, but these investments are gonna be tenured projects, 15 year projects.

They're not gonna be a four year project.

A mayor's term is what eight years in most places tops?

So, then that mayor terms out, the next person comes in and picks for other neighborhoods, starts all over again.

And, so you wind up with these cycles that don't actually work.

You don't see anything really emerged from that.

So, I think one of the things that needs to be considered is how do you get partners, like real partners, who aren't on a four year election cycle to be in the conversation more robustly?

How do you get the foundations to be in?

I actually think, I live in Atlanta, and in Atlanta, the private sector plays a very significant role in a lot of...

In guiding a lot of the civic conversations.

Their arcs are not in these election cycles.

And, so they can be that continuous memory.

The, no, we had that conversation six years ago, and we're not gonna do that again, right?

- When you say the private sector, are you talking about the for-profit private sector or the not-for-profit private sector, or both?

- Private, however you want to take it.

So, I think the for-profits, they actually have an interest in the region functioning.

And, one of the things that I've seen in Atlanta is businesses care about what's happening on the street, because that's their workforce attraction.

That's one of the messages they're gonna say.

You can...

If you come here, it's a place that works, there are interesting things, you can get to places.

So, they actually have an interest that goes beyond just, I need to make a profit today.

And, if you can galvanize that and really get a shared sense of purpose and vision, I think there's an opportunity for them to play a role as well.

And, so you wind up being able to draw capital from multiple sources in different sort of arcs of time, but everyone stays focused in a really coherent way.

- Would you say that that's really the... That's the secret sauce to Atlanta's growth over the last two, three decades, or... - So, that's... Books have been written on this.

- (chuckling) Summarize them please.

Go.

- So, I would say two things on that, one, public leadership matters.

The leaders in Atlanta decided that they were going to compete for an airport in the fifties and sixties, and that airport has made a big difference.

So, decisions by public sector leaders to invest in infrastructure is hugely important.

The second thing I would say is, I think Atlanta has succeeded in part because it has projected togetherness, that people, when they invest in Atlanta, Atlanta is what?

Their tagline, which I'm not crazy about, I'm just gonna say that, is a city that's too busy to hate.

Like, we got things to do.

We're not gonna bicker with each other and we're not gonna be dysfunctional in that way.

- I like that.

I'm not gonna lie.

I like that.

- Well, you should call some people in Atlanta before you start using that.

I'm just gonna say that.

(everyone laughing) - Okay, on that, I just like it.

- But, it...

But, it is...

It sends the message.

So, through the civil rights era, when other cities were having demonstrations and riots, Atlanta didn't have that.

The African-American leaders and the white leaders of the time, they got...

They sat down and said, we're not gonna do that.

We're gonna find some other way to get to a solution.

And, I think it really affected the perception of the region in ways that caused people to be willing to invest there.

And, then once that happens, you start to get sort of a...

The cascading effect where a couple of businesses go there, big businesses plant a flag, then universities start to reorient towards serving the needs for those businesses.

And, then capital starts flowing in.

So, there's something there, but it takes...

It takes everyone coming together, and really having a conversation, and being public on it.

- But, then that the other side of the private sector is the civic sector.

And, there's a huge role of the civic sector, philanthropy, the nonprofit sector, CDCs, all the folks that kind of organize themselves around making a difference locally.

They also become institutional memory for the place and they can hold others accountable, but they can also do other things.

They can convene.

They can really like the city club itself, is a player in the civic sector that can raise issues that might not be raised in other fora, that can now be discussed differently.

And, so...

But, rolling back a little bit.

The other thing that we need to keep in mind is that we don't really have empowered institutions yet that can work regionally, but how do you get there?

You get there through the ballot box, you elect mayors and public officials that have an eye towards a functional region, not just taking care of their own single jurisdiction.

And, the best example I can think of recently was when John Hickenlooper was the mayor of Denver and he convened the mayor's caucus of all the jurisdictions around Denver to really think about what they were gonna do to make sure that Denver was what they considered to be a global city.

And, as Raphael pointed out, in Atlanta, they built the airport.

In Denver, they plunked down $6 billion to create a regional light rail transit system that was going to be the anchor of a whole different kind of regional plan, that was gonna really transform Denver from a hundred individual jurisdictions battling each other for jobs and tax base to a functional region.

And, I think that the transformation has been dramatic, if you look at Denver now compared to Denver in the past.

And, what really strikes me about that is that it's in the mountain west where people are individualists, right?

And, they found a way to do it.

And, it was one mayor, one vote.

It wasn't Denver, the big bully in the room, telling other people what to do, but they were able to actually then advocate on behalf of the region, all the different mayors coming up with a set of things they needed to do.

They created an art fund where they actually added a tiny share to the... To the...

Sales tax that they can invest in artists and public art that they could put all around the region.

The mayors did that and they all agreed to add whatever it was, it was 25 basis points or something to the sales tax, but it created millions of dollars, but it created pride through all of Denver where new art and new artists were really starting to change kind of whatever it is, the feel of the place.

- That is such a beautiful vision you've painted.

(Mac laughing) For our region here.

And, I'm curious to know exactly what the actual numbers are.

I mean, here in Cuyahoga county, we have 59 municipalities, the surrounding counties don't have quite as many municipalities, but there have been efforts around regional collaboration for the last two decades, at least, going back further and as well.

But, I mean, but the recent ones and they've...

There has been, the furthest anybody has gotten is like a shared dispatch service or something like that.

And, I mean, and it's...

I'm sure there's more collaboration that has gone beyond that.

And, I don't mean to minimize that, but you're talking...

I mean, the note about public leadership and how much that matters, I think it resonates here, and I don't think it's actually been an issue that has been raised in the current mayor's race right now.

And, I'm looking around the room and I'm seeing people agreeing with that.

And, it seems like it should be.

And, you seem surprised.

- Well, I don't know if I'm surprised.

I guess, what I would say is, well, first of all, I haven't been following the race, so... - [Dan] You should.

(everyone laughing) - So, that's why-- - [Dan] But, who would you like to enforce?

- That's why I can't be surprised, 'cause I actually don't know anything.

So...

But, I do think this is hard.

Right?

And...

I say, when I was a professor, I used to say, all the easy problems have been solved.

Like, if it was easy, we figured it out.

We got it done.

All the things we're gonna be talking about from here on out are just going to be hard things.

And, it's going to take people and communities to be willing to take 80% and not 100%, and all of them have to be willing to do that, because on some level, regionalism is, a collective is about some degree of compromise that I get a little less, but we get a lot more.

And, if you can get to that kind of mindset, that's important.

And, I will say, I just talked about Atlanta, and all the things, Atlanta is not good on this, right?

We are having an election... Well, there's a threat of an election that where part of the city wants to break off and be its own jurisdiction.

And, so there are these tensions that flare up all the time and it is one person at a time.

I liked how Mac said it.

Like, one person, one vote, they all come together.

The other thing I would say is, and this is what, and I'm not sure how you do this, but small victories like baby steps before you're trying to run a marathon, pick a couple of things that are... That maybe you think you can build consensus on and let's all show that we can get... We can do it.

And, then that becomes the building block to trying something a little harder.

And, then you can sort of... Because, a lot of this, I feel like, I know for me, even just in just exercise, Tony was talking about exercise earlier.

Like, the first time you do an exercise, like running up that hill is a killer.

So, maybe you run a quarter of the hill, and then walk, and then you run a half a hill and then walk the rest.

And, if you can sort of build up to it, I think there is some potential there, but it takes someone to pick up those first things and then to try to make it happen.

- The Denver vision is a really interesting one and instructive Mac.

I want to ask you about your experience assisting the city of Detroit.

'Cause we talked about the challenge of getting funds out the door.

If you... With this current influx of, this sort of generational influx of funds from the federal government through ARPA, what... And, you worked with Detroit through your capacity connected with the Ford foundation.

I wonder if you could share a little of that story.

- Yeah, so one of the things that everybody, yeah, I mean, it kind kinda lives behind the veils, but money that flows from the federal government comes with lots of strings attached, but the biggest string is compliance, and any money you get, you have to... You have to be able to show that you used the money the right way.

You have to know the right forms to fill out.

You have to report on the right deadlines, all those kinds of things.

And, so when I first came to Detroit, well before the bankruptcy, one of the most vexing things I encountered was when one of the mayors of Detroit would come to me at the Ford foundation and asked me to give him a grant to open the city parks for kids, 'cause the city didn't have the money.

And, so then we would look at kind of the city finances and we saw that the city was actually leaving, on an annual basis, $100 million dollars of federal and state formula money on the table.

And, so we just...

It started Hella Mayor, said I don't...

I don't get it.

I mean, why should I give you a couple of million dollar grant when you have all this money that's available and you're not using it.

And, he said, well, we'll have to look at that.

So... (Dan laughing) Yes, right?

And, so when Detroit was going into bankruptcy and Kevin Orr was set up as the emergency financial manager and full disclosure, Kevin Orr is also a member of the board of the Lincoln Institute.

Now.

Yes, he wasn't then.

And, I wasn't on the...

I was...

So, Kevin and I sat down, he would... And, he'd...

He would come there.

He'd been there just a few weeks.

And, he just asked me, he goes, what would you do?

And, I said, I'd find a way to get the city to use its money.

He goes, what do you mean?

And, then I explained to him that it's been driving me crazy, a hundred million dollars a year that...

The city had a billion dollar annual budget and they were leaving $100 million dollars on the table.

And, so we agreed that the Kresge Foundation, the Ford Foundation, would invest in A consulting team would come in and kind of figure it out, why this was happening.

And, what we found out was that the city, and this doesn't...

This isn't all that surprising, had really broken down responsibility for the money it received from the state and federal government to the individual departments in the city that were using it.

So, like the community development block grant money was going to the planning department where they would dole it out, or the education money would go to the school department.

And, as the city shrunk and as its budget shrunk, and as people left, they lost a lot of talent in the private sector and public sector.

And, so what was happening was that people who knew how to comply and knew how to use those federal monies left.

And, then the people who were left, weren't actually doing a very good job at compliance.

And, so what was happening was not only were they not using the money, the inspector generals from HOD or from education were coming in and finding that they hadn't complied and clawing the money back.

And, every year, they were getting like $20 million clawed back, which was being pulled straight out of their general fund to pay back the federal government for money they'd already spent in the wrong way.

So, people got so scared that they just stopped asking for the money.

So, the recommendation we got from the consultant group was look, why isn't Detroit, like any average sized research university, having a grants office that knows how to do compliance and knows how to manage the money, and knows how to do the reporting?

And, so Ford and Kresge agreed that we would put the money on the table to fund a centralized grants management system for the city, and staff it for the first three years.

And, they hired a new CFO.

They brought in a new team, we got them an IT system.

And, within three years they were using all their money and the third year, and that was the year that I left Ford, I was talking to the CFO, and he goes, right now, we might get $20,000 clawed back, but we think we're gonna find the receipts.

It's all gonna be good.

So, they were gonna use all their money-- - So, it went from 20 million clawbacks to $20,000 clawbacks-- - So, $100 million left on the table, 20 million in clawbacks to the $100 million being spent and no clawbacks.

Right.

And, the thing is that that is actually anomalous in the U.S., because most cities do not manage grants centrally.

They still...

It's really disparate.

And, we actually started a research effort at Lincoln Institute looking at that.

And, it was my theory that it was distressed places like Detroit, that couldn't use their money.

It turns out that's not true.

Lots and lots of places cannot use their money.

And, what's even more interesting-- - [Dan] Did you learn anything about Cleveland?

- I didn't look at Cleveland specifically, but my guess is Cleveland is probably in the middle of the pack there, but we then started talking to the states who are kind of the interlocutors between the federal government and the local governments.

And, the states are complaining all the time about local capacity to manage grants and all that, and how much money gets left on the table.

But, Illinois created an enterprise level system at the state to aid people in doing a compliance with all 1700 grant programs with the federal government.

And, they estimated that they saved a million human hours a year in compliance costs by doing it at the state level, and then offering it up to the jurisdictions at the state.

So, this is a solvable problem, right?

- That's the most exciting story I've ever heard, (crowd and Mac laughing) that involves the word, that centers on the word compliance.

- (laughing) Yeah, compliance.

Yeah...

But, it was...

It's really interesting because during era, the American recovery act and under Obama, they actually set up these kinds of compliance and reporting structures at state levels around the country, because they actually required people who were receiving ARA funds to report on a quarterly basis on how the money was used, the number of jobs, all that kind of stuff, and those...

They got dismantled, those systems.

And, in fact, the Illinois system that was created that saves that million human hours a year was based on a system that was built in Massachusetts during era that a lot of states looked at, and decided they were gonna replicate.

When they changed governors in Massachusetts, they shut down that system.

(chuckling) So, they... And, if you look at the state website, you can find almost no kind of notice on the system that existed.

And, it was an enterprise level system that people... Other people from other states would come and study and ask, how can we do it, right?

So... - I wanna... We're about to go to the Q&A with the audience, and I just want to take a step back and summarize what we've been discussing.

'Cause it's kind of gone all over the...

In a lot of different directions, but I feel like there's a thing here.

I mean, we started out talking about, kind of, how to spend this unprecedented amount of money coming into the city of Cleveland, and Cuyahoga county, and the region.

And, we talked about the importance of investing in health, and food, and housing, but also like the possibility, and the possibility of regional collaboration around these things that hinges on public leadership.

And, then ultimately, but what a lot of it comes down to is that the people involved are actually doing the most efficient thing possible, rather than protecting turf.

I dunno if that's a decent summary of what we've discussed, but go ahead, Rafael Bostic.

- I was gonna say it a little different than that, which is, this is a both end situation.

You need vision and you need basic blocking and tackling, because there are lots of times we have the vision, people have these big picture ideas, but then they don't have anyone who actually gets down and goes through the muck to get the stuff done.

And, what Mac's story just says is, just getting the stuff done, even with no real vision, he wasn't talking about vision at all, was gonna make a big difference for Detroit, for that city.

If you can get the total package, if you can get the vision with the getting things done, then places can move, and that's kinda gotta be the goal.

That's what I heard.

- I hear that too.

Yes, you're a better summarizer than I was, which is why you're president of the Atlanta Fed.

- Yeah, I don't know about that.

(everyone laughing) - But, Dan, I think it's two things, right?

One is the structures, right?

The institutional structures, the organization, how you actually kind of prepare yourself to be able to execute, but then it's also capacity.

And, it's the...

The capacity of the individuals in the roles they're in.

And, one of the things that we've done at the Lincoln Institute is commit ourselves now to building the capacity of local public sector officials to do... To be able to do all the things they need to do, because, frankly, most of them are so stressed out, they're putting out fires.

And, when you're in the tactical mode of putting out fires, you don't have the luxury of being able to step back and think strategically.

And, so for us to be able to begin to build those capacities and help to kind of reduce the noise and give people new tools to be able to do their jobs better is key to having kind of the right kind of counterparty, at the local level, to actually do the blocking and tackling that has to be done.

- And, I know you want to go to Q&A, (Mac chuckling) but I'll just give a plug for capacity at the community level as well, because a lot of times, if things are gonna happen in communities that are maximally effective for those communities, the communities need to have people who are familiar with the process, understand the language of grants, and approvals, and legislation, and can really represent the community fully.

So, and that's an area where, in many communities that have the most need, they have the least capacity, then they're least prepared to have those conversations.

And, it's hard.

Then, it becomes hard to know what's going to be the most impactful.

So, I think this capacity issue comes up again and again.

Super important.

- Raphael Bostic is president of the Federal Reserve Bank of Atlanta.

He's also a board member at the Lincoln Land Institute, which makes him Mac McCarthy's boss.

Mac McCarthy is president CEO of the Lincoln Institute of Land Policy.

And, we're talking today about the power of policy and collaboration to solve some of the biggest challenges our communities face.

And, may we have our first question, please?

- Yes.

So, our first question is a text question.

What mechanisms can be created to make housing affordable for working families?

All development on the near west side has priced working families out of the rental slash purchase market.

- Alright.

So, the near west side, you're not from Cleveland, but it's close to the river, close to downtown, and probably the location where we've had the most, the most housing development in the city.

- Well, I'll start.

I mean, one of the that I know is happening at Cleveland and in lots of other places is the development of community land trust as a scaled kind of affordable housing solution.

If you don't know what a community land trust is, it's where you separate the ownership of the land from the ownership of the homes themselves.

And, the land is owned in trust by typically the nonprofit organization.

And, then they sell the homes and they're owned free and clear by the actual residents, but they're maintained as affordable, because most of the appreciation of housing is actually in the land and not in the structure itself.

And, so we can then create neighborhoods that are stable longterm and maintain affordability, because we've kind of separated the land from the structures, and the way you do that, and the way you get started, and you already have the ability to do that in Cleveland is by acquiring and then providing the land through a land bank.

And, you have one of the oldest and best land banks in the country in Cuyahoga county that is able to then provide that land, and at deep discounts, or sometimes for free, to the right counterparties, to then build and sell these community land trust homes.

- I think we have some community land trusts that have begun operation in recent years.

Yeah.

In greater Cleveland, but we don't have one on the near west side.

We do?

We do have one on the near west side.

Thank you.

Thank God, Tanya Manas is here, (everyone chuckling) to nod at me and tell me what's going on.

Our next question?

- Thank you.

I wanted to ask you about tax-based sharing.

It seems it's one of the easiest ways to get a collaboration going quickly.

We in Cuyahoga county, like a lot of your Metro counties, have obviously a lot of disparity between impacted cities and growth communities.

I'm gonna nod to our former mayor, Jane Campbell, who I thought successfully executed one back when, when the first ring suburb of Shaker Heights and Cleveland were asked to pitch Office Max for a site that was thinking about Cleveland or Chicago, and two mayors, the other mayor being Judy Ross, and got together and said, let's not have this race to the bottom.

So, that was a success, not because we captured that company, they did go to Chicago, but the next company that came in university hospitals actually executed on tax sharing.

Question to you, especially with these growth community mayors, back to your, could we ask for 80% or maybe I don't get 100%, but we get more, what's the best strategy to try to go after tax-based sharing?

And, what's the environment where you see it best working?

- So, that's a very hard question.

I guess what I would say is when I talk to business leaders, they can choose anywhere to locate.

And, the... What they've told me, more often than just about anything else is that they're going to avoid places where they're gonna get yelled at if they put the building 20 feet in one direction or another, that is more headache and stress than most of them want to put up with.

And, so I'm familiar with a number of sort of multi-county, I've seen this more at the county level than at local jurisdiction levels, but multi-county consortia that have come together and said, we're gonna be a collective business attraction entity.

And, if it locates anywhere in the county, we all share in that.

And, that has been most effective in, from what I've seen, sort of the outer ring counties in Metro areas that are really trying to find their way and manage their growth and not...

So, when you're on that fringe, you're on the cusp.

You're on that boundary of going fully rural and becoming...

Going into shrinking dynamic or being embraced into the Metro area.

But, that can happen in ways that leave your control.

And, so this is a way to sort of manage it, have a much more smooth transition that can work.

And, it was really the leaders coming together and seeing the forces that were upon the geography to say, yeah, this is one of the things I try to say all the time, economies and markets, they don't recognize jurisdictional boundaries.

And, they don't know where a city line ends or where a county line ends.

- [Dan] Watersheds are the same, right?

- They're the same thing.

And, so forces are gonna just want to go where they want to go.

And, so either you can try, and I was in LA, I used the you can ride the wave, or you can try to fight against it, and try to act as if these forces are gonna know that this street is where the force that the action has to end.

And, those always end harder.

So, for me, I think, and this is one of the reasons I like coming to Cleveland, because when I come here, I seem to meet people who are very cleared eye... Clear-eyed about what's happening with the economy, sort of where the city has been, and have aspirations about where the city wants to go.

And, that's not a...

It's not something I see in every city.

I go to a lot of cities now, but Cleveland has always been super refreshing and that's been true for a long time.

And, so that's one of the reasons I was really excited that you invited me to come, because it's a thoughtful group and we have good conversations.

- Besides that, one quick thing.

So, the best example of tax-based sharing is Minneapolis St. Paul, where they've been doing it for decades.

And, it takes a certain kind of leadership.

It takes a certain kind of commitment to equity that got people to voluntarily do it, because they did it at the polls.

It was a referendum issue.

They got people to voluntarily choose to share their tax basis across jurisdictional boundaries.

That's a huge thing.

But, in recent years when I've in Minneapolis, St. Paul, I've talked to folks there and they...

I asked them, about this taxpayer share, and they go, we're so lucky we got it done twenty-five years ago, because if we try to do today, it would go down in flames.

So, the... Maybe, it's a moment, but, and maybe we have a new moment that we can find ways to kind of articulate whatever it is, a positive sum game, that when people would see why everybody benefits from sharing a tax base, but it's a big, big lift, right?

- Go ahead.

- Hi.

So, on the private side of things, what do you think the role is for an organization like the Greater Cleveland Partnership, who may say that they're already doing this sort of regional convening.

- Greater Cleveland Partnership is our chamber of commerce, our regional chamber of commerce.

There's also a Greater Akron Partnership, or Greater Akron Chamber, right?

So... - So, I guess...

It would have to start with being able to articulate a vision, right?

And, then it would be being able to do, I guess what Rafael was saying, pick small targets, and exhibit success, and build on success.

So, I would say that you just pick, 'cause there are things that are going on at a regional level.

I remember, Jane, by the way, another board member of the Lincoln Institute is sitting right here, Jane Campbell.

All my employers are here, right?

(everyone laughing) So, yeah.

But, the whole restoration of the waterfront went well beyond the boundaries of Cleveland, right?

And, that required some level of cooperation and some level of generosity across boundaries.

And, so being able to do those things, and then tell the story, and build on that success is I think the best thing you can do, the other thing is, I don't know, if you really have kind of the ear of businesses get businesses to stop trying to kind of pit jurisdictions against each other, as ways to kind of sweeten the pot for moving.

I know that Sherwin Williams is gonna move their, one of their main offices, and somebody's gonna lose a lot of jobs.

Somebody's gonna gain a lot of jobs.

- [Dan] No, they're staying in Cleveland.

- Oh, they're gonna stay?

- They're staying in Cleveland.

- Oh, I'm sorry.

Maybe, I have it... That was old news-- - [Dan] That was perhaps old news, yes.

Yes.

- But, those kinds of things, I mean, get the the private sector to also participate in creating a regional vision, right?

- But let me, let me...

I'm gonna go a different place than where Mac went.

So, they may think they're doing it and they may think they're doing a good job.

I guess the question is, do you think they're doing it?

And, do you think they're doing a good job?

And, how do you have that conversation?

Like, when does the check-in happen?

So, one of the things we've started doing at our bank is when we start an initiative, part of the upfront planning is that after a certain amount of time, we're gonna do a retrospective, we're gonna do a retro and say, how did it go?

What worked well?

What didn't work well?

And, so how do we redirect or pivot given sort of that experience in that feedback?

And, so for me, I don't know a lot about what the partnership has done.

They've, I'm sure they've done some things.

And, so the question is once they got those things done, sort of where is the next thing to go?

Who's involved in those conversations?

And, how do you then come to a... A consensus, a regional consensus, about what the next priorities should be?

So, like these things, and this is one of the things that we're...

It's the our agility journey in our bank, which is every project has a life.

Every effort has a life.

And, it has ebbs and flows and it evolves.

And, you've got to continue to check in with it periodically through that life cycle to make sure that you're just not blindly following a direction, because that's what we decided to do three years ago, if the world has changed, or if we saw that some parts of it didn't work, we should change.

We should adapt and adjust.

And, those mechanisms are also not ones that you see a lot of in any of these sorts of initiatives, but they can be really important.

Frankly, we didn't see that a lot in our bank.

And, since we've gone that route, it's opened up conversations, we're having conversations we never had before.

We are speaking to tensions that everybody knew were out there, but nobody actually said out loud, and it's allowing us to have a different... A different trajectory and a different energy around things.

So, to me, I think this is a conversation to have, that could be really important and valuable.

- Well, now's the time, I mean, with respect to the Greater Cleveland Partnership, and there's a brand new leader there as well.

So, with new leadership comes opportunities for that kind of feedback and so forth.

I want to remind our listening audience that that was the voice of Dr. Raphael Bostic, president of the Federal Reserve Bank of Atlanta and board member at the Lincoln Institute.

Mac McCarthy of the Lincoln Institute is with us as well.

Do we have another question?

- Hello, my question's about community development corporations.

They're a part of this conversation of institutions that take that funding, distribute it.

And, I know there's a lot of criticisms about what responsibilities they take from the government, how much influence they should have on the private sector.

I know university circles here, but they don't bite.

(laughing in background) But, I want to know, what do you guys think about community development corporations?

How do they fit into this equation?

Because, they're so opposite of that regional big picture influence.

- Alright, so I'll start.

So, one thing to understand about community development corporations is their own history, why they exist in the first place.

And, the community development corporation was created as a kind of a bridge for public and private capital into capital starved neighborhoods.

And, so they were an institutional kind of arrangement, a new institution that was called to really fill a role that hadn't been filled, because the banks weren't investing, because money wasn't flowing in that way, and you needed what?

The capacity and the counterparty who could actually get the stuff done.

And, so we started with three CDCs in the late sixties.

We have thousands of them now, and they're... And, they've done yeoman's work at actually transforming the neighborhoods they work in, housing, jobs, education, even public safety, right?

But, the problem with CDCs is that they've always been constructed as kind of a thousand points of light.

And, if you've met one CDC, you've met one CDC, right?

Because, they're all a little bit different.

And, so I don't know, whatever it was, 10 or 15 years ago, when I was at the Ford Foundation, we created this thing called metropolitan opportunity.

And, we decided we were gonna go and focus in regions of the country to kind of work together with folks to do things like in Denver, transform the region by getting housing, and transportation, and education kind of coordinated locally.

So, we invited the... We work with local philanthropy.

We got these big tables together.

We brought all the CDCs together, and we sat there in these big meetings when we're trying to figure out if we're gonna work in these places.

And, we look at the CDCs, all looking at each other like their competition, not like their partners.

And, we said, and we said to them, we said, look, you guys gotta get over it.

You gotta... You cannot just think about Huff, the neighborhood Huff, right?

You have to think about Huff within the context of Cleveland, within the context of Northern, Northeastern, Ohio, and you got to stop thinking about just what you're gonna do for that one area.

And, you also got to stop thinking about doing everything for that one area, right?

You can't just do housing, and economic development, and public safety, and all that, and you have to think about how you work together now as a coalition of CDCs in a region.

And, some regions have been better than others at actually figuring out a way to get a CDC table together and forging a collective vision about how you work together to address the region's challenge, right?

CDCs are great, but they have to kind of evolve into kind of the next round.

And, in some places, the way they've done it is by doing what the business sector did, creating a table, where they really, and they honestly go, and engage each other in trying to find ways to contribute to a solution to a regional problem, not just the one little neighborhood.

And, it's hard to do, but you can't just replicate what we've done all along, which is to fragment and fragment, because when you have fragmented government, you have fragmented private sector, public sector.

Then, you end up with all these kind of people working in isolation for their own good and coming up with something that's not good for the body politic, right?

- So, I want to go, I thought you were gonna go a different place on that.

(Mac mumbling) (everyone laughing) I like where you went.

So, that was good.

But, the other thing I think about with CDCs community development corporations is spending time actually figuring out which ones are actually working, and then trying to get those to scale, and being an... And, funders in particular, having the courage to say, the CDC X, love your effort, love your passion.

This model just doesn't seem to be producing the results that are gonna change these communities, so we have to go a different way.

That doesn't happen very often.

And, it's one of the reasons why you do see such a tremendous proliferation of them and the persistence of them, even when change isn't happening.

And, so I...

So, one of the things I think we all need to be thinking about is...

I wouldn't say it that way.

I want to say the goal of a CDC is to change people's lives and to change communities' trajectories.

That's what they're trying to do.

And, if they're not accomplishing that, then we should try something else to try to do that.

And, that's gotta be a...

Sometimes, these are hard conversation sometimes, because no one does this to not work, right?

They all do it.

They have passion.

They have tremendous belief in the model and the strategy that they're taking, but start up, small businesses don't work a lot of times as well either.

And, so we just have to acknowledge that there are going to be times when it just didn't work and those resources are scarce resources, as you know.

We need to make sure they are continually being funneled to the things that are having the most impact.

- [Dan] Thank you.

- Going back to community, capacity, and political corruption, what recommendations do you have for making sure that the voices of people of color are heard, that are heard that do not sit in seats of power and privilege?

- So, yeah, I probably went, so he has more patience than I do on this.

So, I should...

I should let him go.

This is a really important question.

I mean, I spoke to this a little bit earlier in that I do... One of the concerns that I have in this space is that the people who often have the resources and the power think they know what the solution is, when the people who live in the community actually think it's a different problem, right?

And, that something else needs to happen.

And, they never, their view never informs how resources are deployed or spent.

And, that... That, one, creates frustration for the people in the community.

When I was teaching my class for affordable housing, I would tell my students who all had great hearts, they wanted to do the right thing, when you go in those neighborhoods, they are not gonna see you as riding in on a white horse.

They're gonna see you as the next person telling us that you know what we need, as opposed to asking us, asking us what we need.

And, that's not a perspective that a lot of people have, but I think it's really an important one that we take.

So, how do we change this?

I think, one, I think for the students...

This needs to be something that you internalized, that anyone who's gonna work in this space needs to say, if I'm gonna think about resources going into a particular neighborhood or community, the first thing I need to do is make sure I know what they think the issues are, so that their items are on the list.

Now, we may not be able to do their items today, but they should at least be on the list and that's gonna be an important thing.

And, a second thing, I talked about capacity and communities as well, and trying to create environments where the residents of our communities actually have space to dream, and to aspire, and to talk about those aspirations.

My first answer, I talked about precariousness, and when people feel like they're in a precarious situation, they don't take time to think longterm anything.

They're thinking, can I... Am I gonna have a roof over my head tomorrow?

Am I gonna have enough food for my kids?

How am I going to make sure that my child gets home safe?

Those are like two hour thought windows, right?

And, what we're talking about here are five-year thought windows, 10 years thought windows, and it's a different mode of thinking and it need... People need to be in a different space to think that way.

So, I think you got to deal with the precariousness inherently, if you're gonna get people to be able to be in that space, but then we need to actually take them seriously, and say, look, you have every, as much of a right to have a vision and a dream for the city as I do.

And, so I'm going to do things to make that happen.

And, I think this isn't...

This is one of those, this is a blocking and tackling thing.

And, it's a city prioritizing all of his residents.

And, it's...

I think it's regrettable that doesn't happen everywhere.

But, with conversations like this, I think it will happen in more places.

And, that's good.

- I'll just add one footnote to that.

And, so, back in the day I worked with an organization, I don't know if they're around anymore, called Urban Habitat.

And, one of the things that Urban Habitat did was really articulate a very sharp long-term vision for empowering the community.

And, they did it in an odd way.

They created kind of an academy to train people, to be on boards and commissions.

And, if you want to get your community voice heard, you've got to get into a position to make it heard.

And, so one of the things that they identified was the idea that lots of low-income folks, lots of people of color didn't even think of getting into or onto boards and commissions as an avenue towards being able to articulate their voice.

And, in order to do that, they needed just some basic training and Robert's rules of order, those kinds of things.

And, so at Ford, we invested in kind of that little academy to get people ready.

And, then the community organizers went out and found the right kind of candidates and cultivated them to take those positions.

Because, otherwise, you get a lot of people who think they have the answers to all the questions.

They're wealthy.

They have the time.

They can go sit on these boards and commissions and make all sorts of mischief for people like me, right?

(everyone chuckling) Like the historic commission, right?

So, the...

I think that it's... That's an invisible area that actually starts to change the way a place works.

And, there's hundreds of boards and commissions-- (crosstalk) - So, can I just jump on this-- - [Dan] You, very quickly, because we're almost out of time.

- Yeah, you said, one thing that I want to push back on, which is we're gonna identify the right kind of people to do this.

I actually think that we don't know all the right kinds of people.

And, there are people who have visions and skills that are not allowed to reveal.

because of the chaos that is around in their lives.

And, so we've seen this a lot in places I go, where if you can create some structures for people and is non chaotic, all of a sudden the C minus student is a straight A student.

And, so I try to go through life not knowing where the next great idea is coming from and being open to it coming from anywhere.

And, I have to remind myself that sometimes, but it's an important, it's an important approach to sort of the human enterprise, that there are smart people everywhere.

There are insightful people everywhere, and we don't hear from all of those insights, and that makes all of us worse off.

And, so if we can get those voices heard and understood, we can all be much better.

- Very practical advice from Dr. Raphael Bostic of the Federal Reserve Bank of Atlanta.

Also, the board of the Lincoln Institute and Mac McCarthy of the Lincoln Institute of Land Policy.

I want to thank you both.

Please, join me in thanking them for their time today.

(crowd clapping) This is the final forum marking the 75th anniversary of the Lincoln Institute of Land Policy.

Congratulations to all of you.

It was a pleasure being a part of this partnership over the last year, and we are deeply grateful for you for the partnership.

That brings us to the end of our forum.

Thank you both so much for joining us.

Thank you, members of friends of the City Club.

Our forum is now adjourned.

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