The plight of our inner cities has been the focus of elite concern since before Lyndon Johnson's Great Society, seemingly impervious to all manner of initiatives and palliatives from governmental or private institutions.  While hundreds of billions of dollars have been spent in the War on Poverty, Rebuild LA, and other major projects, the problems of these blighted neighborhoods are still with us, with no solutions in sight.  Conceptual differences by people on opposite sides of the political spectrum have led to an inability to correctly define the problem and a consequent failure to solve it. 

Thinkers on the conservative side have tended to view only organic change as authentic for both individuals and communities.  Caricatured as a 'let them eat cake' approach, this view assumed that it was the responsibility of the residents of communities to pull themselves up by their bootstraps and change their own communities as other more successful groups have done. 

Liberal thinkers have appeared to take an entirely different view of both individuals and communities.  Put baldly, they assumed that these objects of their concern were incompetent, unable to function effectively as individuals or in groups.  They were to be pitied, helped, and condescended to. Therefore the question was how best to deliver services to these needy clients, and how to deliver ever more resources when what was sent did not appear to have the desired effect.

In the debate over how to help the poor and inner city communities, the primary imperative of the conservative view was to let the problem alone, thus ceding the ground to the other side. It is unfortunate that conservatives, whose view of the problem is much more respecting of these citizens, have just not cared enough to join the battle.  The result has been that every facet of policy, left to the liberals by default, from vouchers to affirmative action to the way the work is done in communities, is infused with 'the soft bigotry of low expectations '.

It would be folly to maintain that the hundreds of billions of dollars that have been spent on communities have been totally wasted.  But the persistence and magnitude of the problems is eloquent testimony that the maladies of the inner city are not just related to a lack of financial capital. Money is important. There are promising private initiatives, like John Bryant's Project Hope, that bring capital to people in the inner city.

But experience has shown that money is a necessary but not sufficient factor in transforming the lives of our fellow citizens who live in these neighborhoods.  The major problem is a lack of human capital. In healthy communities, development proceeds on its own, step—by—step, with citizens taking charge of their lives and the problems in their neighborhoods.  That is not the case in the inner cities of our country. These areas are drenched in apathy, powerlessness, and despair.  Until that situation changes, spending money will not do a thing of lasting consequence. 

The sad thing about these communities is that when people in the inner city become successful, they move out.  There is an understandable exodus of the best and brightest from these neighborhoods, while those left behind have the same ambition.  In a sad Catch 22, only a revitalizing of these neighborhoods can retain the very people who are important to sparking the further progress of the revitalization effort itself.

The other problem is the burden of bad policy. The reigning policy paradigm that these folks are incompetent to run their own lives and communities means that someone else has to do it for them.  This has resulted in a bureaucratic attitude that treated the citizens of these communities as clients, dependent receivers of benefits and services, instead of actors in their own betterment.  This has created a poisonous marriage, with a compassionate condescension on the part of the bureaucrats handing out aid creating an almost cargo—cult like passivity on the part of the recipients.  Add to this witches brew domestic politics and the development of a racial and ethnic spoils system, and the all—important imperative to increase the human capital has been dealt a mortal blow.

First Principles
The purpose of this essay is to explore these problems of community development based on lessons learned in a comprehensive effort in development being conducted by the Jacobs Center for Neighborhood Innovation in southeastern San Diego.  It is informed by 8 years of hard—earned lessons by the dedicated staff of the Jacobs Center for Neighborhood Innovation, and especially the analysis of Jennifer Vanica, its CEO.

The guiding principle the Jacobs Center has taken is that the residents of these communities have to be afforded the dignity of being treated as citizens and not clients, as agents in their own improvement and not passive recipients of help.  Just as helping the nascent butterfly out of its cocoon ensures it will not have developed the strength from its struggles to fly away, doing things for and to inner city residents will not have the effect of empowering them to do things for themselves. Any attempt to do community work that does not empower residents to own and effect their own change is not getting at the root problems of the community, because it does not build in the capacity for the community to change itself. 

A second principle attendant on the first is to focus on the strengths of the community as assets to build on, and not just bemoan the problems and weaknesses.  Just as the military and business organizations are strengthened by a system of awards and recognition for outstanding performers, so a community needs to focus on its outstanding people and the small platoons which are often times making heroic efforts to hold neighborhoods together.

These principles informed the Jacobs Center's work when it began a commercial development in southeast San Diego, as a catalyst for doing community development.  Board members and staff quickly found that the reigning liberal paradigm was comfortable for the politicians and bureaucrats, but left the citizens frustrated and feeling powerless.  It soon became obvious that every part of the effort was tied to every other part, and things that were routine in healthy communities were really hard in this context.  This was in large part due to the fact that the human capital, for reasons delineated above, was lacking or inchoate. 

Difficult though it has been in every respect, the experience has been gratifying because we have seen that, when people are liberated from their old expectations and passivity, they respond in positive ways. Leaders emerge, residents band together to grapple with issues that concern them, and grow in ways they never thought possible.  Out of this citizen—led problem—solving comes a newfound self respect and pride in change that is meaningful because it's self generated. This change is at the heart of what may be a new synthesis between liberal concern with the plight of these residents and conservative concern with self—reliance and individual initiative.

Structural Problems
In addition to the human dimension of the community development problem, the Jacobs Center's experience has uncovered serious structural difficulties in how the work gets done in these communities.  There are four main actors involved in the development process, each of which utilizes a different model to do its work.  These models are not complementary, they are not reinforcing, and they often work at cross—purposes.  Unless and until the strengths of each of these models can be coordinated and combined, it is hard to see how development can be anything but fragmented and piecemeal.

The four models at work in community development we have called the philanthropic model, the organizing model, the non—profit development model, and the for—profit development model.  Each model has unique strengths and abilities, constraints and limitations.  By examining the strengths and limitations, we can find the interstices and begin to devise strategies to best utilize each model.  As will be seen, we have been able, with varying degrees of success, to marshal the most appropriate parts of each model and coordinate them as we moved forward in our project.

The philanthropic model represents the attempt by philanthropies to 'alleviate the plight of inner cities'.  It is typically narrowly issue—focused and consists of making grants and conducting training.  Because of the nature of foundations, it must operate at one remove from the object of its largesse, and cannot partner or experiment with its roles very well.  It usually is focused on the short term, and treats symptoms and not causes.  It's also risk averse and least inclined to fund the organizations that need resources the most.

The organizing model convenes and facilitates residents in addressing neighborhood issues, conflicts, and problems.  While this model gives community residents a voice, it doesn't enable them to control assets or develop properties, and it does not place them in decision—making roles over issues that concern them.  It makes them supplicants to the power structure, again clients of the bureaucratic state.

The non—profit development model refers to the work of neighborhood agencies such as Community Development Corporations (CDCs).  (CDC's are neighborhood non—profit corporations that are supported by public and private funds.  They can seek tax credits and other government subsidies.) Use of eminent domain, tax remittances, and other tools gives governmental agencies, in conjunction with CDCs, power to affect land use planning and spur development. They can require the use of local contractors and mandate measures to benefit the community. But they don't have access to capital, and must work with for—profit developers, the fourth model.  Additionally, it cannot be assumed that they always have the interests of residents as their first priority.

Commercial developers, with their own money and survival at stake, are understandably leery of working in areas that need the kind of community development discussed here.  While they know how to do the physical work involved in building, leasing, and operating projects, the imperative of their bottom line means that they don't have much time or interest in listening to community residents.  Consequently, the residents' interests are not directly addressed, they don't directly benefit, and they often get unwanted and counterproductive land uses.  And of course, since none of this involves them, there is no building and nurturing of their own capital. 

Finding a Successful Model
All these problems and others faced the Jacobs Family Foundation as it purchased an 18—acre site on southeastern San Diego, with an eye to beginning its own version of community development. The Foundation first moved its headquarters to the community.  It hired local residents to begin a survey of community desires for the property it had purchased.  It formed an operating foundation, the Jacobs Center for Neighborhood Innovation, so that it could become the developer. It began surveying the residents and identifying and making small strengthening grants to local non—profits that were working in the neighborhood. The Jacobs Center offices became the meeting place and focal point where these organizations could organize, talk, network and get advice and 'tea and sympathy' from Jacobs Center staff. 

The resident surveyors soon became the nucleus of new neighborhood self—help groups, which tried to reach across cultural and ethnic lines for new understanding and solidarity.  In all this the Jacobs Center played the role of listener and facilitator, a sort of older sibling with advice and resources.  The focus was on helping the community strengthen its sinews.  The Jacobs Center worked to do everything it could to strengthen the organizing model, intending to let the community lead it as it moved forward in the development.

To that end, a conscious decision was made that every facet of this planned commercial enterprise, envisioned as a shopping center mall anchored by a name grocery, in accordance with neighborhood desires, would be treated as an opportunity for involving the community members, training them and building their capabilities. 

Teams of interested individuals were formed to help guide the Jacobs Center as it planned and began the enterprise.  An art and design team was instrumental in tossing out the standard shopping center look and creating a unique and pleasing design reflecting neighborhood tastes. The team selected neighborhood 'heroes' whose pictures were painted on murals by local artists for permanent exhibit at the mall.  Local students under the supervision of a local college professor told these hero stories in print and video.  The construction team vetted and trained workers and prospective subcontractors for bidding on the work, so that in the first phase of construction over 60% of the work was done by people and companies from the neighborhood. 

An employment team negotiated with the prospective anchor tenant so that over 95% of the jobs created went to neighborhood residents.  Graffiti artists were formed in a group subsidized by the Jacobs Family Foundation, trained by local artists, and have started a business employing their artistic talents.  Leasing teams interviewed local businesses to find suitable fits for tenants.  In all, 8 teams involving over 1000 community residents have been formed to help the Center ensure that every part of the project reflects the imprint of the community. 

Several other decisions were made to involve the community early in the process.  When a local redevelopment agency tried to gain approval for an inappropriate use on a parcel in the community, residents found out and staged a successful protest.  The residents leading that effort organized as a grass roots planning body.  The Center subsidized them, helped train them, and expects to be closely guided by their input as it buys and develops land parcels in the neighborhood.

One of the dreams of the Jacobs Center was to enable residents to have a chance to literally own the commercial development.  Accordingly, an ownership team was formed and the legal work begun to build a corporate structure whereby community residents would be afforded the opportunity to purchase shares of preferred stock in the enterprise.  In preparation for that day, enthusiastically—received financial literacy classes have been conducted for adults and children, to help them prepare to make an informed decision about purchasing shares when they become available.

An Education in Finance and Politics
The limitations of the for—profit development model soon became evident.  After extensive discussions with several grocery chains, it became obvious that they would only consider the risk of locating in the neighborhood because the Foundation had already made a large financial contribution by purchasing the land. Other potential lessees expressed little interest in the site for all the standard reasons associated with avoidance of underserved neighborhoods.  After Herculean efforts and the necessary financial guarantee, a national supermarket finally agreed to open on the site. 

In the 1 1/2 years it has been open it has become one of the best performers in the county, justifying the risk we took.  Additionally, once the site has proven itself, a parade of national tenants has expressed serious interest in locating there. 

Our experience with financial institutions was similarly frustrating.  In extensive negotiations with numerous banks, no bank would ever agree to finance the construction project. In the end, the Foundation had to pledge its assets as collateral for a line of credit to complete the first phase of the project.  It was a considerable risk for the Foundation, but also an imaginative use of Foundation assets.  While all the politicians were enthusiastic about our efforts and there were endless ceremonies and civic accolades, our relationship with the political world was difficult and problematical. 

The time, money, and resources expended in dealing with permits, inspections, and all the requirements of the modern regulatory state had our CEO swearing that the process was turning her into a libertarian.  Additionally, our dealings with the local political entities often made us feel that we were an interloper and competitor rather than an organization that was trying to help the community.  On a more optimistic note, recent changes in the community power structure hold the hope for a more positive working relationship.

Conclusions
No commercial developer would ever think of doing this project.  In order for organic development in underserved or run—down neighborhoods to begin, there must be a huge financial reward commensurate with the risk taken to justify those hardy individuals or developers taking the first step.  In the parlance of the business, this project was much too 'green' to be viable. 

Additionally, this project took much longer and cost much more than a normal project.  However, the extra time and expense in listening, organizing, training, and capacity building, an unnecessary and expensive distraction for a normal developer, was the major reason for our being there. The founder of the Jacobs Family Foundation and a chemical engineer by trade, Joe Jacobs, always looked upon this project as a 'pilot plant,' a way to test out his theories of developing human worth and dignity in the people often left out of our capitalist system. 

The endeavor has been a challenging, difficult, but very rewarding one so far.  In trying to combine the best of each of the development models, we have had successes and frustrations and learned greatly from each.  With the help of our neighborhood partners and the experience our work has brought us, we approach the end of the beginning with a sense of cautious pride and optimism.     
 
Norman F. Hapke Jr. is a director of the Jacobs Family Foundation