Co-Op City

In the 1970s, New York City was starved for capital and forsaken by the federal government and financial institutions. The government gave away public incentives to wealthy and highly mobile corporations, without much debate, in the name of “economic growth.” Sound familiar? Recent attempts to lure Amazon’s HQ2 to the city were a caricature of this dynamic. New York City and State were poised to provide $3 billion in subsidies to one of the wealthiest companies in the world, until a movement of Queens residents, led by women of color, pushed the company to abandon its plans for a corporate campus in Long Island City.

Amazon’s capitulation marked a rupture of the growth consensus. Could it be that a critical mass of city residents no longer believe that the mere promise of tax revenue and jobs justified the negative impacts of the deal? And, if a model of economic development driven by private business no longer passes public muster, what could the alternative be?

While Amazon’s defeat garnered national attention, over the past 30 years, neighborhood groups across New York City have argued that the exchange of public benefits for corporate growth often creates jobs that don’t pay well, housing that isn’t affordable, dead-end training programs, and exclusionary public spaces.^[1] What’s more, the wealth generated by publicly-subsidized economic activity usually ends up leaving the neighborhood. Residents are exposed to all the risk — their landlord could raise the rent because the housing market is heating up, their children could get asthma because of increased truck traffic — but they typically see only a small fraction of the benefit.

The HQ2 defeat was not the first time organized resident opposition successfully blocked such a project. Throughout the 2000s, big ticket economic development projects like the redevelopment of Atlantic Yards in Brooklyn, Willets Point in Queens, and the Kingsbridge Armory in the Bronx all came under fire from residents. And though Atlantic Yards and Willets Point moved forward, the Kingsbridge Armory redevelopment plan ultimately collapsed under the weight of dissent. Out of the crater of that plan has emerged an alternative model of economic development that centers local wealth creation.

In 2008 the Bloomberg administration announced a plan to turn the long vacant Kingsbridge Armory in the northwest Bronx into a shopping mall. The city and the developer touted the plan as a necessity for a borough many outsiders continued to characterize through the lens of “urban blight.” Related Companies — also the developer behind Hudson Yards and Willets Point — described the Bronx as a place “with limited shopping options” and high unemployment.^[2] In exchange for the promised injection of capital, Related would buy the Armory from the city for a below-market price and receive an additional $50 million in public subsidies to redevelop the site.

Unconvinced, neighborhood organizers underscored that competition from big box stores would force out neighborhood businesses and that the promised jobs would pay poverty wages. These organizers had a key advantage in their fight to reject the redevelopment: planning. Resistance to the redevelopment of Atlantic Yards and the rezoning of Coney Island coalesced around the rejection of city plans already in motion. But in the late 1990s a coalition of northwest Bronx clergy, labor, and community leaders had founded the Kingsbridge Armory Redevelopment Alliance (KARA) with the explicit goal of shaping the future of the massive, castle-like structure looming over the neighborhood. By the time the city announced its proposal for the site, KARA’s members had a clear vision of what they wanted instead. KARA organized against a plan they considered both extractive and undemocratic, clashing with supporters during community board meetings and at public hearings. “What’s the alternative?” mayor Bloomberg demanded angrily, “Retail jobs don’t pay as much as rocket scientist jobs, but retail jobs are still new jobs.”

Yet the waning days of the Bloomberg administration would see an alternative come to life. A combination of political pressure and a credible counter-proposal resulted in a rare, near unanimous city council vote against the deal. In its stead, KARA and the city negotiated the development of the Kingsbridge National Ice Center, a 750,000-square-foot ice sports facility, which came with a Community Benefits Agreement (CBA) guaranteeing living wages for all employees and independent contractors, the procurement of goods and services from local and minority- and women-owned businesses, the establishment of a small businesses fund, and discounted access for students. CBAs are often met with skepticism among organizers because they can be informal, non-binding, or negotiated with handpicked members of the opposition. However, according to attorney Julian Gross, the Kingsbridge Armory was New York City’s first “real” CBA because it was legally binding, enforceable, and driven by a true community coalition.

While the CBA was a powerful win for Bronx organizers, many involved with KARA understood its limits. The Armory was just one site in a borough scarred by what policy expert Lena Afridi describes as a long legacy of structural disinvestment and systemic racism in the name of traditional economic development. Resource-strapped community groups would continue to face off against well-funded redevelopment projects on tight, externally imposed timelines; they would remain outmatched for time and resources to formulate their own visions for development, and even in the cases where organizers “win” neighborhood-based fights, the fundamental structural inequalities that reproduce poverty would remain in place. Still, in the wake of their victory, these veteran organizers were confident that their borough had long been sold a false choice between self-determination and economic development. To address the broader problem of wealth extraction, they would have to look beyond individual redevelopment projects to reorganize the borough’s economy as a whole, into a system of economic democracy: one where local people share ownership over the borough’s resources and infrastructure, with a direct say over how they are used, and reap the benefits of their use, and where people of color and women — who have been marginalized by traditional economic development structures — lead the charge.

To enact that vision, the pillars of the Bronx’s organizing community — including Northwest Bronx Community and Clergy Coalition (NWBCCC), Mothers on the Move, Northern Manhattan Coalition for Immigrant Rights, The Point Community Development Corporation (CDC), among others — launched the Bronx Cooperative Development Initiative (BCDI). BCDI rejects the existing economic paradigm, where a few actors have control over local resources and use that control to pull wealth out of the borough. Instead, its projects work to keep wealth in the Bronx by strengthening existing small businesses owned by women and people of color, incubating new locally-owned ventures, and ensuring that “anchor institutions” like hospitals and universities contribute to the borough’s equitable development.

With its history of alternative economies, the Bronx would be fertile ground for economic democracy to take root. The borough is the site of the world’s largest housing cooperative, Co-op City, constructed in the 1960s; the Young Lords Organization’s community control efforts in the 1970s; community development corporations’ use of sweat equity for housing development in the 1980s; and the US’s largest worker cooperative, Cooperative Home Care Associates since 1985. But BCDI’s vision goes beyond individual cooperative projects, drawing inspiration from efforts elsewhere to create infrastructures for economic democracy across entire cities and regions. In Cleveland, for instance, the Evergreen Cooperative Initiative (ECC) works closely with the city’s anchor institutions to create living wage jobs through worker-owned business development. The Mondragon Corporation, a 60-year-old federation of worker cooperatives based in the Basque region of Spain, is an international model of a functioning cooperative ecosystem that not only employs 75,000 people but also cultivates new cooperatives, engages in education, and conducts research and development to expand the cooperative sphere.

BCDI’s founders thought that the Bronx’s assets, including a sophisticated network of community-based organizations, cultural institutions, top universities, and hospitals with a lot of purchasing power, could be the key to addressing the problem of wealth extraction. But to bring a workable model of economic democracy to the Bronx, the founders needed to better understand the status quo. When Yorman Nuñez, an organizer with NWBCCC who became interested in urban planning, went to MIT, he formed a bridge that would connect the Bronx grassroots groups with technical assistance and planning capacity.  Eventually, BCDI partnered with the Community Innovators Lab (CoLab), a planning and development center at the MIT Department of Urban Studies and Planning, on a development study of the borough, prioritizing existing assets and growth areas with potential to further the core tenets of economic democracy. Katherine Mella, one of four members of CoLab’s team still working with BCDI, describes MIT CoLab’s multi-year commitment to the project in terms of participatory and community-led planning: a partnership with this grassroots project supports the transformation of an inequitable system locally and tests a model that can be applied elsewhere.

To achieve its ambitious goal, BCDI is pursuing several distinct but interconnected projects at the same time. Some are directed toward literally constructing the economic infrastructure that can make and keep wealth locally. Others focus on the long-term strategy for creating economic democracy in the borough through education, advocacy, and planning. In theory, all work in concert to transform the economy of the Bronx.

Today, a small fabrication lab in BCDI’s office conducts trainings for community members, but the eventual goal is to open an advanced manufacturing center with high-tech tools, providing Bronx residents access to infrastructure and training that is generally only available through elite academic institutions or corporations. When fully operational, the Bronx Innovation Factory (BXIF) will provide shared facilities for 3D printing, laser cutting, and electrical engineering, as well as targeted business incubation, and manufacturing and design training. Even as land use and policy decisions by the city and state continue to shrink available space for manufacturing, broader economic and political shifts, like Bronx Representative Alexandria Ocasio-Cortez’s Green New Deal proposal, point to potential future growth for the sector.

As BCDI builds infrastructure within one niche sector of the Bronx’s economy, it is also lifting up existing Bronx businesses and bringing them into economic democracy framework through the BronXchange platform. The goal of BronXchange is to connect a growing network of over 50 Bronx-based businesses that are primarily owned by women and people of color — including cleaning, pest management, construction, daycare, and food services — to the Bronx’s $9 billion anchor institution procurement pipeline, which, for the most part, leaves the borough.^[3] Even though the BronXchange’s current footprint is small, by educating and supporting a growing number of businesses, a greater portion of economic activity in the borough could gradually shift toward a more democratic model.

In other economic democracy experiments, anchors have not always been reliable partners. ECC cooperatives have been unable to compete with the low prices provided by existing vendors to Cleveland’s hospitals, which have not extended as many contracts to ECC businesses as initially expected.^[4] According to Evan Casper-Futterman, Director of the Economic Democracy Learning Center at BCDI, the organization is learning from the challenges faced by ECC: the BronXchange is doing more work with anchor institutions ahead of time and is not developing cooperatives from scratch. Further, BCDI has expanded the definition of “anchor institution” to include value-aligned non-profits, including affordable housing developers, which can change their procurement practices for services like pest management and cleaning with greater ease. Organizations in BCDI’s network also use the platform — The Point CDC, for instance, acts both as vendor (for its event space) and as a procurer (for its community solar project).

But to change the whole economy demands going beyond individual institutions, no matter how powerful. BCDI’s organizers knew that for economic democracy to take root, the Bronx’s residents themselves have to both understand what it is and decide that it would benefit them more than the existing economic model. Thus BCDI’s Economic Democracy Learning Center is developing a training curriculum, which includes lessons, workshops, and exercises meant to make the concept accessible. Recently, the Center has conducted trainings though the city’s Summer Youth Employment Program and is tailoring versions of the curriculum to other constituencies, like local business owners and labor.

But the Center’s main focus to date has been on its core community partners. Bronx’s community development organizations are veterans of struggles for economic democracy in everything but name, but a lack of common terminology has kept the individual conflicts disconnected from one another in the Bronx and elsewhere, according to Afridi.  Thus the Center has begun training staff of core community partners to develop a deeper understanding of what economic democracy means for the Bronx. This, in turn, has influenced the way these grassroots groups approach their work. For The Point CDC, the economic democracy framing helps them remain “intentional about honoring members’ leadership and expertise, and acknowledging their labor,” said Angela Tovar, Director of Community Development.

Bringing BCDI’s economic vision to scale also requires long-term planning. Over the past two years, BCDI’s Planning and Policy Lab (PPL) convened the Development without Displacement Roundtable, working with eight local groups to reflect on past struggles and to study examples from elsewhere. A resulting toolkit, produced by BCDI, the Roundtable, and MIT CoLab, offers tools and practical lessons for grassroots organizations in the Bronx and beyond. It includes mechanisms to “fight back” against displacement, including a mapping tool to analyze speculation and neighborhood change, as well as mechanisms to “fight forward” with equitable economic development strategies like community land trusts.

According to Mella, local organizations will have to continue to say no to development on a regular basis. But there is a need to move past what Casper-Futterman describes as the “fight/build dichotomy.” The city’s plan to rezone Longwood and Crotona Park East along Southern Boulevard will allow local groups to test out the toolkit.  Both neighborhoods were decimated by urban renewal and are beginning to experience pressure from land speculation. As the rezoning moves forward, organizations are planning to use tactics outlined in the toolkit to try to give residents more say in the process and develop a counterproposal rooted in a collective vision. And PPL is working with coalition partners on developing the North Bronx Community Land Trust, which NWBCCC frames as a way to promote “collective governance over community land” — to enshrine principles of economic democracy in collective land ownership.^[5]

When BCDI’s founding organizations successfully challenged the city’s plans for the Kingsbridge Armory, they came armed with the results of a local planning process for the site that began years before the city’s plan was announced. Now, they can do the same thing for the entire borough. In the near future, the Bronx’s residents will embark on a new process, supported by BCDI, to imagine their future. After weathering dozens of unrealized and draining top down planning processes, this one will allow them to work without the pressure of an externally imposed timeline, and to consider how they engage with city agencies on their own terms.^[6]

At the same time, BCDI’s vision faces what Casper-Futterman describes as a problem of scale — how to plan for success while also making sure that the project’s growth does not undermine its underlying goals. In order to sustain its work long enough to cultivate new businesses that grow community wealth and to see the borough-wide plan come to fruition, BCDI will need to raise money and advocate for public resources. Cooperatives and other values-driven businesses competing in traditional markets often face a choice between loosening their commitments to strong labor and environmental standards, or losing market-share to businesses willing to pollute and underpay their employees. BCDI’s staff and board, Casper-Futterman says, are keenly aware of points in the development cycle where a project’s values are tested. Whether accessing capital, taking on debt, or competing with traditional businesses for contracts, economically democratic businesses are at a disadvantage under the status quo. When they reach traditional market success, like a limited equity cooperative accruing value in a gentrified neighborhood, owners face a different type of a dilemma: to cash out or to maintain the democratic spirit of their original enterprise.

The projects that BCDI is cultivating tend to perform better where there is regulation in place to promote high labor and environmental business standards. Thus BCDI is developing an advocacy project that will coordinate policy and legislative advocacy at the scale of the borough. Here it is taking cues from a local success story: Cooperative Home Care Associates (CHCA), the nationally recognized, worker-owned home care agency in the Bronx that is also the largest worker cooperative in the US. Founded in 1985, CHCA set out to offer higher wages and better working conditions than the industry standard, but CHCA’s worker-owners quickly understood that would only be possible if the overall industry standards, for both employees and receivers of care, were higher. BCDI’s Civic Action Hub, which is still under development, will emulate the nationwide advocacy arm CHCA established to encourage the shift.

But even in the most supportive regulatory environment, how can an organization premised on sharing wealth gather sufficient capital to take models of economic democracy to scale? Banks and foundations often come up short when evaluating cooperatives and other values-driven businesses. Experiments in economic democracy across the country show that banks often do not know how to interact with alternative governance structures, and foundations’ short, outcomes-driven timelines do not mesh with the long-term goals of economic transformation. To provide a steady revenue source for BCDI and other economic democracy efforts in the borough, BCDI’s board is developing the Bronx Fund. The organization also stands to benefit from a growing economic democracy financing sector, which includes traditional credit unions and public banks. BCDI partnered with The Working World, a financing institution that explicitly focus on funding economic democracy projects on developing its strategy and vision.

Wendoly Marte, president of BCDI’s board and long-time Bronx organizer, says that BCDI’s ultimate goal is to have economic democracy become the central frame through which anchor institutions, organizing groups, and elected officials understand economic development. The groups that have shaped BCDI’s strategy since the beginning are shifting to use this frame to think about their work, but BCDI’s organizers acknowledge that there is a lot of work to be done in getting local elected officials on board. Here, MIT CoLab’s support has proven crucial — including a convening of 13 New York City and State legislators representing the Bronx and Central Brooklyn, culminating in a joint City and State hearing to introduce policymakers to the principles and mechanisms of economic democracy.

Even with growing support from some legislators, shifting economic development away from business as usual is a gargantuan lift. The financial and real estate sectors that play an outsize role in shaping the city’s policies benefit actively from maintaining the status quo. And the Bronx continues to be seen, both externally and internally, as a site in need of traditional economic development. But Amazon’s capitulation and the wide-scale disgust with Hudson Yards point to a shift away from the growth consensus. And as the public’s distaste with the status quo grows, economic democracy could rise up as replacement. As Afridi put it, “New Yorkers could and should be asking for more.” Meanwhile, politicians, public agencies, and anchor institutions may be more willing to listen. BCDI’s members aren’t the only ones in the city pushing for alternative economic models: the Cooperative Economics Alliance of New York City’s (CEANYC) is working to multiply and strengthen worker co-ops across the boroughs and the New Economy Project’s policy advocacy suggests the possibility of even larger-scale changes. The real test will come when the organizations and individuals furthering these ideals begin asking for a larger say over the city’s resources and infrastructure, and demanding changes to tax policy, land use, and capital budgeting.

Rather than reacting to the conditions created by poverty, BCDI’s projects are oriented around addressing poverty’s root cause — the way the economy is organized. It offers a new way for residents and organizers to think about land, ownership, and political power in their borough in ways that extend beyond the limits of what is deemed possible under a market economy. Beyond imagining a brighter future, BCDI is developing concrete ways to get there. Today, as foreseen by Kingsbridge Armory organizers in the 1990s, displacement pressure on both residents and small businesses is intensifying throughout the Bronx, adding up to a cascade of market pressure that threatens to compound older racist policies and extractive economic development experiments. BCDI’s vision offers an alternative to the unfortunately all too familiar gentrification story that has played out on the Lower East Side, in Williamsburg, Hell’s Kitchen and elsewhere. What’s more, in BCDI’s vision, this counter-narrative is something the Bronx’s residents can craft themselves.