Hawkins: Invest in Community Enterprises, Not Private Developers


The Municipal Development Bank proposed for Syracuse would be the non-profit corporation pictured here in this graphic from the Evergreen Cooperatives in Cleveland, Ohio.

Hawkins Calls for a Municipal Bank and Eds-and-Meds Partnership to Drive Revitalization of Syracuse

Howie Hawkins, the Green candidate for Syracuse mayor, said today that “it is time for our city government to stop giving tax breaks exclusively to big private developers and start investing in community-owned enterprises. We can own our own jobs and anchor the wealth created by our work to our families and neighborhoods by developing businesses with democratic ownership structures. The best strategy to create living-wage jobs, build business asset wealth for working people, and expand the property tax base is to develop worker cooperatives and other forms of community-owned enterprises.”

More than half of the city’s current long-term debt was undertaken on behalf of private undertakings like Destiny USA, which won’t pay property taxes until 2035. Only three other cities out of 96 Rust Belt cities studied in a recent report have taken on more than half of their public debt for private purposes.

“Crony capitalism has failed in Syracuse. In theory, the bonding and tax holidays for the politically-connected big-shot developers were supposed to trickle down and out to the neighborhoods as jobs, business development, and improved housing. Instead, the number of high-poverty city census tracts has quadrupled since 2000. It’s time for a bottom-up strategy that devotes our resources to directly uplifting high-poverty neighborhoods with living-wage secure jobs in new community-owned businesses that serve those neighborhoods as well as larger markets,” Hawkins said.

Hawkins said that Syracuse should establish a Municipal Development Bank with a primary mission of planning, financing, and providing technical assistance to develop community-owned enterprises with a focus on worker cooperatives. Like the state-owned Bank of North Dakota, the Municipal Development Bank would also be the repository for city funds and participate in mortgage, consumer, and business lending.

Hawkins said the bank should provide the same planning and entrepreneurial services as the bank at the center of the Mondragon network of over 100 worker and consumer cooperatives. Based in the Basque region of Spain, Mondragon co-ops employ about 75,000 workers with annual revenues of about $14 billion from manufacturing, commercial, financial, and educational cooperatives and non-profit services funded by cooperative revenues.

Hawkins noted that Mondragon has had a 98% success rate for its start-ups since it began in 1956, compared to the 50% 5-year survival rate for U.S. start-ups. The thorough business planning and ongoing technical assistance provided by the Mondragon bank is the difference, Hawkins said. The city of Richmond, California under a Green mayor and Cincinnati, Ohio in partnership the United Steelworkers “union co-op” project have developed programs to develop worker co-ops in their cities with support from the Mondragon network.

Among the forms of community enterprise Hawkins wants the public bank to support are owner-operated small businesses; worker cooperatives; consumer cooperatives, including food cooperatives and credit unions; public utilities for power and broadband; “community corporations” where voting shares restricted to residents (like the Green Bay Packers), and a Community Investment Trust, where tax breaks and subsidies for private businesses are converted to ownership shares so the city receives a return on the investment of the money it risked if the business is successful.

Hawkins spoke in front of the Coyne Textile Services building, a recently shuttered industrial laundry on the south side. He said the last time he was in front of Coyne laundry was in the late 1990s for a community picket line he had organized at the request of national staff of Unite Here, the union that represented most of the workers inside. The community picket protested the abusive working conditions for just the legal minimum wage that the workers from the surrounding community were suffering. When Coyne closed in 2015, over 100 jobs were lost.
Hawkins said the Coyne industrial laundry plant could reopened as a worker-owned cooperative paying living wages and managed by the workers themselves to provide linens to the hospitals and universities on University Hill, which can be seen from the Coyne laundry building. He said the same development model could be applied to create an urban greenhouse worker cooperative that provides fresh produce for food services at the hospitals and universities. A solar panel manufacturing and installation worker cooperative to help the city drive its transition to 100% clean energy should also be developed, Hawkins said.

Hawkins said that all three of these types of worker cooperatives had already been developed around University Circle in Cleveland, the home of Case Western Reserve University, the Cleveland Clinic, and other educational and medical institutions. University Circle is surround by a low-income predominantly African American community, much like University Hill in Syracuse is bounded similarly poor, mostly minority neighborhoods on the south and near east sides. Hawkins said he wants to bring this model of the Cleveland Evergreen Cooperatives to Syracuse. The Evergreen cooperatives are supported by the city, foundations, and the “anchor institutions” of the city's “Eds and Meds,” which provide working capital and markets for the worker co-ops’ products.

Frank Cetera, the Green candidate for councilor-at-large and a business and co-op developer with the Small Business Development Center at Onondaga Community College, added that Rochester is using this model for developing worker co-ops with the support of its Eds and Meds. A feasibility study has been completed and the first co-op opened in April 2017.

Cetera is also a founder of the New York Cooperative Network, which is currently partnering with the New England Cooperative Development Institute in undertaking a census of cooperatives and worker-owned businesses in upstate New York. The result will be an evaluation tool to help employee-owned businesses make smart strategic decisions for the success of their own business and the sustainability of the regional network of cooperatives and other worker- and community-owned businesses.

Hawkins said worker cooperatives that create living wage jobs and build family wealth to lift people out of poverty is a practical and realistic alternative to the city’s traditional economic development and anti-poverty approach.

“Syracuse and the State of New York have spent decades wasting our tax dollars on the corporate welfare model of economic development. The end result has been increased poverty, abandoned housing, segregation, and suburban flight, particularly here on the south side. Our best asset is our people. I want the city to invest in the people in our neighborhoods, not wealthy campaign contributors expecting favors,” Hawkins said.

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Howie Hawkins is the 2017 Green candidate for Syracuse Mayor
Hawkins for Mayor