Looking Back at Our Foundation

Today in a special guest blog, CEDAC’s founding executive director, Carl Sussman, shares how and why CEDAC was established. Before CEDAC, Carl was a Cambridge Institute fellow in the early 1970s, and in the mid and late 1970s, he was active in crafting the state’s community development finance policies. Carl was the executive director of CEDAC for 15 years and played a pivotal role in launching the Children’s Investment Fund before founding Sussman Associates in 1995.

CEDAC is a product of its time: it grew out of both the post-civil rights era movement for community control in African-American neighborhoods and a period of extraordinary economic development policy innovation in the Commonwealth. Almost lost in the fog of time is the specific local political context that made it possible for policy makers and others to imagine an institution like CEDAC and more remarkably, to win its legislative enactment.  Understanding that context helps us to understand why CEDAC came into existence and how it has evolved.

In the late 1960s, a coalition fought the construction of the Southwest Expressway, the extension of Interstate 95 from Route 128 into Boston, where it would merge with another eight lane behemoth, which was called the Inner Belt. It, in turn, would have carved its way through the Fenway, Cambridge and Somerville. Responding to mounting protests, Governor Sargent placed a moratorium on the highway planning and construction in 1970. By then, large tracts of now vacant land had been taken in Roxbury and Jamaica Plain.

 

Mornings with Mel King

A few years later Mel King, a community organizer and political activist from Boston’s South End who founded and ran MIT’s Community Fellows program, ran for state representative and won. Mel wanted the neighborhoods to gain control of development along the now abandoned Southwest Expressway corridor. To make that possible, he reasoned, community-based development organizations would need access to capital. Making that possible became one of his first legislative priorities.

To help him develop that legislation, Mel invited a collection of community activists, students, professors and others for breakfast at MIT. It became a weekly ritual. Mel cooked fish and grits for whoever showed up Wednesday mornings. These roll-up-your-sleeves working sessions became the Wednesday Morning Breakfast Group (WMBG).

At the time, I worked in Central Square at the Center for Community Economic Development (CCED). The federal Office of Economic Opportunity (OEO) funded CCED to serve as a technical support organization for newly-organized community development corporations (CDCs) funded through OEO’s Special Impact Program. These second wave CDCs sought to replicate pioneering prototypes like Brooklyn’s Bedford Stuyvesant Restoration Corporation and Cleveland’s Hough Development Corporation.

Soon, I was awakening early Wednesday mornings and climbing the stairs to the windowless room where the WMBG met at MIT. In exchange for breakfast and stimulating discussion, Mel conscripted attendees to serve as foot soldiers to carry out research and writing assignments for the succeeding week’s breakfast meeting.

 

Not Just a Bill

After debating whether the state program Mel envisioned should restrict its funding to the Southwest Corridor or be made available statewide, the group drafted a bill to create the Community Development Finance Corporation (CDFC) as a statewide development bank. Among other things, the bill created a statutory definition of a CDC in Massachusetts as a not-for-profit organization operating in a geographically defined target neighborhood with a low median income. They had to be membership organizations open to all target-area residents. And, to maintain the principle of community control, a majority of the board had to be elected by these members.

Ten days before the 1974 gubernatorial election, Mike Dukakis, the Democratic nominee, accepted an invitation to attend the Breakfast Group. He voiced his support for the proposed bill, but not the technical assistance provisions because, unlike CDFC’s bond-financed venture fund, technical assistance activities would require an on-going state appropriation.

Even after its enactment in 1975, constitutional issues delayed CDFC’s implementation. That gave the Breakfast Group time to draft legislation that created CEDAC as an independent organization to deliver technical assistance. Chapter 40H, CEDAC’s enabling legislation, was enacted in 1978.

 

CEDAC & The Evolution of Community Development

After Governor Dukakis appointed CEDAC’s initial board of directors and advertised for an executive director, Mel encouraged me to apply. I did and became CEDAC’s first executive director. It was a modest start. CEDAC’s board chairman and the head of the State Employment and Training Council, Ralph Jordan, let me work out of a cubicle in the Hurley Building while I rented office space, secured phone service, opened bank accounts and attended to the other mind-numbing start-up chores.

Those early months, however, included some of the most consequential decisions for CEDAC’s future: hiring decisions including the early decision to recruit Mike Gondek. Of all the things I did while CEDAC’s executive director, the caliber, commitment, intelligence and skill of those who I hired during my tenure with the agency remains my most important contribution.

Reflecting back on that period, I marvel at Mel’s extraordinary legislative skills. It has never been easy to enact legislation and there was little about either of the WBMG’s bills to draw broad-based support from legislators. But Mel was indefatigable in his demand that legislative leaders do the right thing. In the process, Mel gave birth to the first and most ambitious state effort to spur community-based development in the nation. And it spurred the emergence of a third wave of CDCs. These have proven to be the most durable and productive generation of CDCs – in total, the Commonwealth’s CDCs are responsible for the development of over 18,000 units of housing. Over the last ten years alone, CDCs have been responsible for $4.4 billion in investments, much of it in the state’s most economically distressed communities.

It is quite extraordinary to realize that all of this arose from a community struggle to prevent the encroachment of Interstate Highways into Greater Boston’s inner city neighborhoods. It came also from Mel King’s vision of and commitment to empowering communities. It is a testament as well to Mel’s organizing abilities that Massachusetts created the institutional infrastructure to support the growth and success of the emerging community development industry; one that became a national model. Today, the Commonwealth’s community-based development sector is the nation’s most robust and enduring. In the final analysis, it is this achievement we celebrate by marking CEDAC’s 40th anniversary.

Investing in Spaces for Children

Massachusetts is only the second state in the nation to make capital bond financing available for early childhood education (ECE) and out-of-school time (OST) facilities. In 2013, state legislators passed a bill that led to the creation of the Early Education and Out of School Time (EEOST) Capital Fund, which provides capital grants of up to $1 million for providers across the Commonwealth to improve existing, or create new program facilities. (Read more about EEOST and the need for high-quality child care facilities in INSITES: Guiding Quality Early Education Facility Design).

On August 31st, Lieutenant Governor Karyn Polito announced the most recent EEOST awards – $4.1 million to five programs. She was joined in Webster, MA by U.S. Representative Jim McGovern, State Senator Ryan Fattman, State Representative Joseph McKenna, Massachusetts Secretary of Education James Peyser, Massachusetts Commissioner of Early Education and Care Tom Weber, CIF’s Director of Children’s Facilities Finance, Theresa Jordan and Webster Town Administrator Doug Willardson. This impressive turnout of elected officials reflects the recognition that investing in early education environments is imperative to Massachusetts families and communities.

 

Success To-Date

Over $15 million has been awarded to support 21 projects across the state since 2014. These projects are collectively increasing the capacity of the early education and care system by 448 new slots, improving the quality of learning environments for 2,036 children, and creating 34 educator jobs and 360 construction jobs.

Take two examples:

One afterschool program provided care in two locations. One was a site that the provider owned; the other, space leased from a church. The classrooms in the church were small and in disrepair. There was little flexibility with the space, given that each weekend it was used for church programming. With a $1 million EEOST grant, the afterschool provider was able to add onto the building that it owned and move the children from the church to consolidate its child care space.

Another program served children in an old storefront, in which classrooms received no natural light and were poorly ventilated. The provider received $400,000 from EEOST to build a brand new facility that not only includes spacious classrooms but a commercial-grade kitchen, separate homework space, a yoga studio, and a gym (see AFTER picture at top of post).

These projects transformed their spaces to high-quality facilities for the children they serve. With EEOST funding, providers are moving children from basement classrooms with no or limited daylight to bright and airy, well-equipped learning environments. They are addressing years of deferred maintenance that put a strain on an organization’s operating budget as well as impact the health and well-being of the children in their care. They are serving the state’s neediest children.

 

A Focus on Low-Income Children

Of the more than 2,000 children that EEOST is impacting, 86 percent are children from low-income families. While the grant program requires that at least 25 percent of the children applicants serve be from low-income families that are eligible to receive public subsidies (such as child care vouchers, TAFDC, or SNAP benefits), most awardees well exceed that threshold. Four out of the five organizations awarded in FY17 serve over 85% low-income children.

The focus on children from low-income families is intentional, given decades of research demonstrating that the achievement gap begins well before a child’s first day of kindergarten and that children experiencing poverty benefit the most from high-quality early learning experiences. EEOST continues to meet this need by focusing on organizations serving under-resourced populations.

 

Leveraging Additional Resources

EEOST funds, while significant, only cover a portion of the full cost of a construction or renovation project. Most programs piece together additional funding from community banks, foundations, individual donors, and federal sources. The 21 projects funded by $15 million in EEOST are leveraging over twice that amount—$36 million—in additional funds. Many organizations note that EEOST acted as a catalyst for fundraising by demonstrating the state’s commitment to the project.

 

Looking Ahead

The Massachusetts Department of Early Education and Care (EEC) recently announced that $3.6 million is available in the FY18 EEOST Capital Fund grant round. EEC will hold information sessions in Boston on October 2nd, and Springfield and Worcester on October 4th.

The Commonwealth’s dedicated funding source for ECE and OST facilities is unique. Around the country, community development financial institutions have mentioned to Children’s Investment Fund that they are intrigued by EEOST. On September 27, Roger Herzog and Theresa Jordan will participate in a panel on child care facilities at the Opportunity Finance Network’s (OFN) fall conference. The session, entitled “State and Local Innovations to Finance Child Care Facility Development: Examples from Four Communities,” features EEOST as one of these innovations.

It’s clear that the demand for high-quality child care facilities continues to grow in Massachusetts. Once again, the Commonwealth has set the standard for creating innovative community development solutions. We are looking forward to working with the next group of EEOST awardees as they seek to build a stronger future for the Commonwealth’s children.

Recognizing CDCs: Partners in Community Development

Over the past four decades, CEDAC and the Massachusetts CDC movement have literally grown up together. We even share a piece of legislation: Chapter 40H contains both CEDAC’s enabling language, and the definition of a Community Development Corporation. As we look ahead to our 40th anniversary, we’ve taken note that in the past few years, we’ve spent many an evening and weekend celebrating some of our CDC partners’ 40th (and even a few 50th!) anniversaries at gala dinners and street parties – and, our friends at Massachusetts Association of Community Development Corporations (MACDC) will mark their 35th anniversary this November.

Community development corporations (CDCs) form the backbone of the state’s affordable housing sector. As of this year, 61 CDCs have been formally certified by the Department of Housing and Community Development (DHCD), representing every corner of the state – from the Berkshires to Nantucket. With thousands of affordable housing units in their portfolios and programs that include small business lending, community organizing and workforce development, these organizations represent a major engine of revitalization and redevelopment in the Commonwealth.

40 years ago, CDCs represented a new and exciting pathway for the redevelopment of our neglected cities, driven by the people who live there.  But as new non-profit organizations, CDCs needed to develop technical real estate skills, and few had balance sheets that would readily attract conventional lenders. That’s where we came in.

Supporting the Sector

CEDAC put together a small team of “experts” who could provide the technical assistance that CDCs required to get some of those early projects done, in some cases even acting as project managers for organizations that had only minimal staffing. And while many organizations have grown into large, sophisticated real estate developers, CEDAC staff continue to provide deep technical assistance, especially to smaller non-profit developers.

We quickly learned, however, that what organizations needed most was money: early stage financing to pay for predevelopment activities such as architectural design, development consulting, environmental engineering and legal analysis. Our predevelopment lending program responded to that need, and remains one of the only available sources of unsecured predevelopment loans for CDCs and other non-profit developers. Since that time, we’ve added our acquisition loan program, line of credit, and bridge loan program – each time in response to what our borrowers tell us they need.  It’s worth noting that our loan loss rate is less than half of 1%, far lower than that of most commercial lenders – it is a testament to our partnerships, and to CDCs’ high capacity to manage their projects to completion.

Developing as we Develop

Together with our CDC partners, we’ve learned to use tax credits, to integrate commercial uses into residential developments, to support our most vulnerable residents with supportive services, to preserve existing affordable housing at risk of loss to the market, and so much more. We’ve also been MACDC’s partner as a founding donor and steering committee member of the Mel King Institute for Community Building, which offers trainings and workshops on every conceivable topic in the field of community development. And we’ve cheered on CDC advocacy on so many topics, including the passage of the Community Preservation Act in Boston and other communities; the Community Investment Tax Credit legislation that provides CDCs with unrestricted operating funds; and the new Community Scale Housing Initiative for small housing projects.

The community development sector in Massachusetts has matured over the past four decades into a sophisticated movement. CEDAC is so proud of the opportunities we’ve had to support our CDC partners throughout that time, and we can’t wait to work together on the next wave of innovation.

 

Guiding Quality Early Education Facility Design

A well-designed, well-equipped environment supports learning, but child care programs are often located in church basements, old storefronts, and other substandard spaces that were not intended for educational uses. At Children’s Investment Fund (the Fund), we believe that all children deserve to learn in safe physical environments that help support healthy development. That is why we have spent the last 26 years working with non-profit providers to create high-quality educational spaces for Massachusetts’ children. We are pleased to release the Design Guidelines for Construction or Renovation of Facilities for Early Education and Out-of-School Time Programs, a new resource that presents standards and best practices unique to early childhood education (ECE) and out-of-school time (OST) settings.

 

A State Resource
In 2014, the Early Education and Out of School Time (EEOST) Capital Fund was established to provide capital grants to ECE and OST providers to improve the quality of program facilities. The early education and care sector rejoiced and 21 projects have received EEOST capital grants for a total of $15.2 million.  The demand for this valuable state resource is high.

EEOST supports the learning and healthy development of young children, many of whom spend over 40 hours a week in early learning and afterschool settings. Because of EEOST, children are benefiting from facility improvements such as larger classrooms with access to sinks and bathrooms, indoor gyms, more natural light, and better heating, cooling, and ventilation.

When it comes to child care facilities, both quality standards and best practices often push beyond  regulations and codes, making it difficult for programs and their consultants to make decisions about their facilities based on these overlapping frameworks. The Fund has worked closely with the Massachusetts Department of Early Education and Care (EEC), which administers EEOST and is responsible for licensing ECE and OST facilities and ensuring the health and safety of children served, to create guidelines on facility design.

Three tiers of design considerations come into play:

  1. Licensing regulations (overseen by EEC; focus on minimum square footage, the safety of stairways and furnishings, and the absence of potential hazards) and Codes (Building, Fire, Energy)
  2. Quality standards (Quality, Rating, and Improvement System (QRIS); Head Start guidelines; National Association for the Education of Young Children (NAEYC) accreditation)
  3. Best practices for children’s spaces, based on child development research and on-the-ground examples

 

A New  Tool
The Design Guidelines resource was created to be a tool for organizations applying to EEOST, however the information is helpful to all ECE and OST providers in Massachusetts, architects, and others working to create high-quality spaces for children. A training on the Design Guidelines will be held on September 19th at the Boston Society of Architects. Architects who attend can earn two AIA continuing education credits.

It comes down to this: quality space matters. The physical environment in which a child learns is important to their social, emotional, and cognitive development. Through the Design Guidelines, we continue working to ensure that more children benefit from high-quality learning environments.

Celebrating 40 Years of Community Development in Massachusetts

Welcome to CEDAC’s new blog.

We plan to use this platform to share additional news, helpful information and perspectives on important topics. The launch of this blog coincides with a very special milestone for CEDAC – our 40th anniversary year – and we thought we’d take this opportunity to announce an exciting year-long effort to celebrate CEDAC past, present, and future.

Despite it feeling like yesterday to many, it has been 40 years since CEDAC was established. Sponsored by then state representative Mel King of Boston, the legislation that established CEDAC sought to strengthen the state’s economic development infrastructure as a result of the urban disinvestment process in the 1960s and 70s that impacted Massachusetts communities. Mel and community allies determined that successfully reshaping the state’s approach to economic development would require a new organization exclusively focused on providing specialized knowledge, capital assistance, and other capacity-building tools to accelerate the ability of non-profit community development corporations to move forward with their projects.

CEDAC was just that.

We began as a provider of technical assistance to these nascent community economic development efforts. Soon the focus turned to affordable housing development, and almost immediately our assistance expanded to providing access to capital in the form of very early-stage predevelopment financing that non-profit developers needed to turn their vision into a reality.

It’s important to note that Massachusetts did not always have the well-developed, savvy network of community development organizations that now exists. In addition to the evolution of the CDCs, we’ve seen the Commonwealth’s community development infrastructure grow to include other crucial organizations and important capital funding programs to meet the needs of communities and their residents.

We’ve evolved too.

In 1991, Children’s Investment Fund, which provides grants and loans to non-profit community-based child care providers to help them improve their facilities, became an affiliate of CEDAC. From 2003 to 2017, CEDAC founded and managed the Commonwealth Workforce Coalition (CWC), which provides professional development to the state’s workforce development community. CWC is now managed by the Center for Social Policy at the University of Massachusetts Boston.

Enhanced by these changes, CEDAC’s mission remains strong. As a unique community development financial institution, we continue to support the growth and effectiveness of the state’s non-profit community development sector. We are proud of the work that we do and proud to partner with community-based organizations across Massachusetts that strengthen their communities through three key building blocks of community development: housing, child care, and workforce development.

Over the next year, we will highlight the important work that CEDAC, our community partners, and others have done to promote community development in the past four decades in a variety of ways. This blog will periodically focus on developments and initiatives that are important to the community development sector in Massachusetts. Additionally, we will have additional exciting events to announce in the upcoming months. So please stay tuned!