A Possible Strategy for the North Grand Corridor

This is the fourth post on the North Grand corridor, prompted by the announcement Schnucks would close a store. Here are the first three posts:

1. Some Possible Reasons Why the North Grand Schnucks Didn’t Make a Profit
2. Rethinking the North Grand Corridor for Jobs, Economic Opportunity
3. Institutions & Businesses That Might Help Plan Rejuvenation of North Grand Blvd

The store is now closed. I’ve been reviewing materials on revitalizing low-income areas and one theme is repeated: JOBS! Critics would correctly point out it would take a lot to convince an employer to move their business to a depressed low-income area, that’s why the business and jobs must be created from within.

Anchor institutions—hospitals, colleges, and other institutions deeply rooted in their communities—are a form of commons that is viewed as crucial to revitalizing low-income neighborhoods. Besides being major employers and big customers for local businesses, they have an intrinsic stake in making sure their neighborhoods thrive. Your local hospital, for instance, is not going to pack up its beds and move to Mexico. 

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An initiative in Cleveland aims to help local residents become owners of new businesses that serve a cluster of hospitals, universities and cultural institutions on the city’s struggling East Side, including the famed Cleveland Clinic and Case Western Reserve University. The Cleveland Foundation teamed up with Ted Howard of the Democracy Collaborative at the University of Maryland to launch the Evergreen Cooperatives: 1) Evergreen Cooperative Laundry, an environmentally conscious employee-owned firm with a contract to clean linens and scrubs for local hospitals; 2) Green City Grower Cooperatives, an employee-owned 3.25 acre greenhouse that produces greens year-round for hospitals and the university; and 3) Evergreen Energy Solutions, where worker-owners install photovoltaic panels and make weatherization improvements for anchor institutions and local residents. (source)

Let’s take a closer look at the Cleveland Example, Evergreen Cooperatives:

The Evergreen Cooperatives of Cleveland, Ohio are pioneering innovative models of job creation, wealth building, and sustainability. Evergreen’s employee-owned, for-profit companies are based locally and hire locally. They create meaningful green jobs and keep precious financial resources within the Greater University Circle neighborhoods. Worker-owners at Evergreen earn a living wage and build equity in the firms as owners of the business.

From their Vision & Goals page:

The strategic pillars on which the Initiative is built are: (1) leveraging a portion of the multi-billion dollar annual business expenditures of anchor institutions into the surrounding neighborhoods; (2) establishing a robust network of Evergreen Cooperative enterprises based on community wealth building and ownership models designed to service these institutional needs; (3) building on the growing momentum to create environmentally sustainable energy and green collar jobs (and, concurrently, support area anchor institutions in achieving their own environmental goals to shrink their carbon footprints); (4) linking the entire effort to expanding sectors of the economy (e.g., health care, our aging population, local food, and sustainable energy), many of which are recipients of large-scale public investment; and (5) developing the financing and management capacities that can take this effort to scale (that is, to move beyond a few boutique projects or models to have significant municipal impact).

In the 2nd post, above, I listed the major institutions in the area. Between them they hire out for many goods & services. It’ll take a lot of effort to do what Cleveland has done, but I don’t think we have a choice in the matter.  There’s no guarantee this will work, it certainly isn’t a magic bullet to solve all the ills. If you’ve got another idea I’d love to hear it.

— Steve Patterson

Readers Not Among The Unbanked

The number of unbanked citizens in St. Louis is high, but according to the unscientific poll last week readers of this blog aren’t among them:

Q: Not everyone uses all available financial tools, which of the following do you use? (check all that apply)

1. Debit card(s) 56 [14.58%]
2. Retirement account through employer 43 [11.2%]
3. Credit card(s) paid each month 43 [11.2%]
4. Checking account at brick & mortar bank 42 [10.94%]
5. Investment portfolio 39 [10.16%]
6. Checking account online 38 [9.9%]
7. Savings account online 35 [9.11%]
8. Savings account at brick & mortar bank 28 [7.29%]
9. Savings account at brick & mortar credit union 20 [5.21%]
10. Credit card(s) with a balance each month 20 [5.21%]
11. Checking account at brick & mortar credit union 18 [4.69%]
12. Other: 2 [0.52%]
    • dwolla (for online payments)
    • checking with interest at credit union
13. None: no checking, savings, debit, credit, portfolio 0 [0%]

I was a little surprised to see online checking/saving ranked higher than credit unions. However, we just recently opened an online savings account separate from our credit union checking & savings accounts, it’s very user friendly. We both had bank accounts for years but a few years ago I switched to a credit union. I never ordered physical checks since bills can be paid online, with debit card, or via bill pay online. I never liked paper checks — all that processing:

On a normal day, about $6 billion was literally up in the air as checks flew to their destination. That amount grew to $47 billion after the FAA grounded planes in the wake of the 9/11 terrorist attacks.

That spurred passage of the Check 21 Act, which allowed banks to use electronic images of checks instead of paper. (Business Insider)

But to the unbanked out there financial life isn’t as easy.  Apparently many have their income, often social security, sent to check cashing places. They go in monthly to get their money in cash, less enormous fees. Then they end up buying money orders to pay bills. Meager incomes made even worse by the costs of being unbanked.  Prior experience with bank overdraft fees and closed bank accounts have left many thinking cash is their only option. Businesses like check cashing places, tax refund lenders, title lenders, etc prey on the less financially literate in our community.

Here’s more on who is unbanked:

Among common demographics (income, education, age, race and family structure), several vulnerable groups emerged:

• Households with incomes less than $15,000 were unbanked at a rate of 31.4 percent.
• African-Americans were unbanked at a rate of 26.5 percent.
• Households headed by single mothers had unbanked rates of approximately 23.5 percent.
• Individuals with no high school degree lacked transactions accounts at a rate of 24.5 percent.

A comparison of the at-risk groups with the District average (9.5 percent) is stark: They were two to three times more likely to be unbanked. (Federal Reserve of St. Louis) 

This problem is a community problem. I don’t know the solution for reducing the number of unbanked in St. Louis, but organizations like Justin PETERSEN are working on the problem.

— Steve Patterson

DollarHelp Contest: Enter to Win a Trip to St. Louis Cardinals Spring Training!

This winter has been extra cold and some in our region need help staying warm. The DollarHelp program is an easy way to help those truly in need:

DollarHelp is a not-for-profit organization founded in 1982. Over the past three decades, with donations from St. Louisans across the city and counties, DollarHelp has raised more than $20 million. As a service to the community, Laclede Gas, in partnership with United Way of Greater St. Louis, provides the administrative services to DollarHelp, so that every dollar you donate passes directly to those in need. Laclede Gas Company also donates more than $50,000 in matching funds annually.

Approximately 90% of DollarHelp donations are from Laclede Gas customers who “Check the Red Box.” More than 68,000 Laclede customers contribute to DollarHelp through the automatic giving option, a plan that enables Laclede customers to make regular monthly donations by having the amount they specify added to their gas bill. What if I want to contribute but I’m not a Laclede Gas customer? This year alone, more than $1 million has been contributed by these generous donors in the Laclede service area. Dollar by dollar, we make a difference together.

DollarHelp is more than just making a donation. It’s about people helping people. Through relationships with local social service agencies, DollarHelp grants pay the heating bills for those who have exhausted all forms of public assistance. What are some other public assistance heating programs? DollarHelp is their last stop to get the help they need. And DollarHelp grants pay the household’s primary heating source, no matter the type of fuel. What type of heating bills is covered by DollarHelp grants? The typical grant for a household is $300, but under certain circumstances a grant can range as high as $700. However, when a special medical, housing or financial crisis exists, additional grants up to $400 are available. Where can I get help? Donations to DollarHelp are tax deductible.

DollarHelp heating grants reach families in St. Louis city and the counties of St. Louis, St. Charles, Franklin, Jefferson, Iron, Butler, Madison, Ste. Genevieve, and St. Francois. (DollarHelp)

This year Laclede Gas is holding a contest that should appeal to baseball fans:

You could win the Ultimate Winter Warm-Up – a trip to St. Louis Cardinals Spring Training! Enter the DollarHelp “Share The Warmth” photo contest and you could win a trip to Jupiter, Florida, to meet Cardinals’ left-fielder Matt Holliday and watch the Cards in action! Visit Laclede Gas Company’s Facebook page for contest details. Must be a current Laclede customer with a Facebook account to enter.

Hurry, the deadline is the 19th!

— Steve Patterson

Poll: Which Financial Tools Do You Use?

I’m learning more and more about the “unbanked” and “underbanked” citizens in our community. From September 2012:

The percentage of households in the St. Louis region that are ‘unbanked’ rose to an estimated 9.7 percent in 2011, according to a survey released by the Federal Deposit Insurance Corp. Wednesday, an increase from 7.6 percent in 2009, when the survey was last conducted.

The percentage of unbanked African-American households soared to 29 percent locally, among the highest rates in the nation, though down slightly from the last survey.

Nationally, 8.2 percent of U.S. households, or about 10 million, are unbanked, an increase of about 821,000 households since 2009. (stltoday)

A year ago a local effort was made to spread good financial literacy:

Financial institutions, community based organizations, social service and faith based agencies, community leaders, local and state officials, advocacy groups and grassroots members formed to create the St. Louis Regional Unbanked Task Force. The Task Force’s mission is to identify and address systemic and individual barriers that prohibit unbanked and under-banked households from utilizing traditional banking products and services. The Task Force is using data from sources such as the FDIC, Neighborhood Data Gateway, and data collected by individual member banks in a variety of ways: to understand and educate people about the need, to help set goals for the number of unbanked households who will open and maintain new accounts, to target marketing and outreach initiatives, and to measure their progress. The Task Force’s first major initiative, driven by data about the specific needs of the unbanked and underbanked in the St. Louis region, will be BANK-On SAVE-Up, which is launching February 21, 2013. (source)

The Bank On Save Up St. Louis program

Which brings me to the poll this week:

Q: Not everyone uses all available financial tools, which of the following do you use? (check all that apply):

• Checking account at brick & mortar bank
• Checking account at brick & mortar credit union
• Checking account online
• Savings account at brick & mortar bank
• Savings account at brick & mortar credit union
• Savings account online
• Investment portfolio
• Retirement account through employer
• Credit card(s) paid each month
• Credit card(s) with a balance each month
• Debit card(s)
• None: no checking, savings, debit, credit, portfolio

The poll is in the right sidebar, the answers will be presented in random order.

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November 28, 1939: Black Tuesday In St. Louis

Tomorrow is known as “Black Friday” but 74 years ago today is known as Black Tuesday here in St. Louis.

The day became infamous as Black Tuesday, the worst of many smoke-choked days in what was to be St. Louis’ smokiest cold-weather season. The city already was known for the nation’s filthiest air, worse even than Pittsburgh’s.

The reason was the area’s reliance on cheap, dirty, high-sulfur “soft” coal dug from the hills and hollows across the Mississippi River in Illinois. St. Louis’ first anti-smoke ordinance dated to 1867. But as the city grew in population and industry, the smoke kept getting worse. (stltoday.com)

This day finally prompted the city to ban the use of cheap soft coal, a hard sell during the Great Depression. Watch a brief KETC9 Living St. Louis video here.

On this day be thankful earlier generations took steps to protect the air we breath.

— Steve Patterson