Today, the Haas Institute for a Fair and Inclusive Society released Structuring Development for Greater Community Benefit: An Analysis of an Opportunity Model for Developing the Berkeley Global Campus at Richmond Bay.
As the University of California, Berkeley contemplates large-scale master planning and development of the Berkeley Global Campus at Richmond, both the University and Richmond are poised for unprecedented growth. The city is one of the last affordable communities in the Bay Area. Joe Recchie, Praxia Partners’ founder, and the Haas Institute are partnering to propose a development plan that ensures that local residents and businesses benefit from development.
Campus expansion will unavoidably affect the Community. UC Berkeley’s policy, procedure, and planning will determine whether or not the effects are mutually beneficial.
While privatization will undoubtedly be considered, a virtuous variation of this approach is to partner with the Community itself. A University-Community partnership will meet facility and infrastructure needs while innovatively working with Richmond’s government to attain the advantages of privatization without its pitfalls. This allows the University, Community, and municipal government to work in tandem to achieve mutual goals.
The key to fulfilling shared objectives is the creation of a nonprofit Community Development Entity (CDE) that can withstand election cycles while directing and amplifying private, state, and federal funding. In the CDE model, Community priorities are addressed by a team of third-party experts rather than by UC Berkeley alone. University-sponsored nonprofit developers have undertaken large-scale projects across the nation. For example, Johns Hopkins University, the Annie E. Casey Foundation, and state and local government formed East Baltimore Development, Inc. to execute a $1.8 billion redevelopment plan, and the Ohio State University’s Campus Partners leveraged $28 million to secure $135 million in funding.
To begin, the University will create a Memorandum of Agreement with the City to form a 501(c)(3) Certified Development Company, independent of the City and the University. In addition:
- A charter will articulate metrics of success.
- The CDE and UC Berkeley will develop a Master Plan that fulfills University objectives, the triple bottom line, and the express wishes of the Community.
- The CDE will work in an open book fashion to determine a highest value/lowest cost strategy and then, as master developer, build and operate facilities and infrastructure as designated by UC Berkeley.
- Fees that would otherwise flow to the private sector will be absorbed as CDE income. (Often, private developers take 15% of revenue as profit.)
- The CDE will take responsibility for job training, job placement, and small business growth in conjunction with an anchor institution mission.
How will the City and Community benefit from the CDE model?
- The City of Richmond and its residents will be the primary beneficiaries as a result of local job creation and subsequent tax revenue.
- Economic development will boost property taxes and augment public school upgrades.
- Community participation will be integral to designing a Community Benefit Plan. This leads to enhanced democratic participation in local government.
- The effects of spending on capital improvements, payroll, and purchasing goods will reverberate through the Community and support further economic development.
How will the University benefit from the CDE model?
- The University will save money on facilities and the capital improvement process (for example, reduced administrative overhead).
- The CDE will attract new sources of funding for UC Berkeley’s mission, education, and research.
- The University will negotiate lease incentives.
- The nonprofit will deliver high-quality public infrastructure.
How will the CDE model affect the cost of campus development?
The nonprofit CDE model is the best value for the University because it can access a wide range of funding opportunities, including grants, private sector support, completion and cost overrun guarantees, tax-exempt bond offerings, and New Market Tax Credits. This proposal results in the lowest-cost delivery for both variable and fixed expenses. In addition to quantifiable savings, the social benefits to the Community will be invaluable.
How will the CDE model affect local and disadvantaged workers?
The CDE is best suited to build and support training and hiring of local employees and businesses. A Community Benefits Plan will be negotiated and executed without any administrative burden placed upon the University. A well-planned charter ensures accountability.
Would workers at the new campus be employed by UC or outside contractors?
Through the lease structure, workers at the new campus could be employees of the University. Alternatively, services traditionally handled by University employees could be provided by the CDE.
Will the CDE model affect the opportunity to institute a living wage mandate, Project Labor Agreement, and contracting with local small businesses?
The CDE will address all of these components. The University is extraordinarily well suited to assist in the design of a system that advances the triple bottom line, to measure its impact, and to disseminate best practices for replication of the UC Berkeley model of expansion. The University will support and document its initiatives through its academic clusters, not its treasury.
In many instances, the University and Community’s objectives and needs converge. University-Community consensus ensures that UC Berkeley’s newest campus will be viewed not as an encroachment, but as a welcome addition to Richmond. The Community as a whole will not simply accommodate expansion, but will also mobilize and buoy community development. At this pivotal moment, UC Berkeley should seize the opportunity to become a global leader in University-Community partnerships.
This post was written in conjunction with our colleagues at Haas Institute for a Fair and Inclusive Society.