YOUNGSTOWN, Ohio – Access to capital is one of the things Emerald City Construction owner Keland Logan has struggled with since starting his business in 2020.

He believes an emerging developers training program, as recommended in a housing strategy study released last month, could help.

“My issue has been consistent opportunities that make this business sustainable,” Logan said. “Construction is a cash-heavy business. You do have to have a bank, so to speak – either have to have access to funds or hard capital that you can access to do the jobs that you want to bid on.”

Emerald City, based in Austintown, has its Disadvantaged Business Enterprise certification, which qualifies the business for set aside opportunities.

“But being able to access the resources to do these, you know, million dollar jobs, it still might as well be on the moon,” Logan said.

He often struggles to compete – and to make a profit.

“Having access to an entity or something that could help us to identify and become more proficient and effective would be huge,” Logan said.

The housing report was completed by the Greater Ohio Policy Center and the Reinvestment Fund and paid for by Eastgate Regional Council of Governments.

The report said an emerging developers training program “would grow the ecosystem of local developers, builders, general contractors and subcontractors, expanding the region’s capacity to build.” The Mahoning Valley suffers from a lack of affordable housing that’s in good condition and meets the needs of the people who need it.

Spearheading It

Valley Partners is leading that recommendation’s implementation, but Theresa Miller, Valley Partners executive director, pointed out it’s early in the process.

She said Valley Partners is working with an intern from Youngstown State University to research and determine what developers need.

Part of Valley Partners’ mission is helping small businesses. Though affordable housing technically isn’t part of the mission, Miller said organization officials recognize affordable housing is required if jobs are going to be created.

“It’s all connected,” Miller said.

The study listed several programs in the region that focus on emerging developer training or similar initiatives. Pittsburgh’s Centralized Real Estate Accelerator and Cleveland’s Contractors on the Rise are among them. And both have a Valley connection.

Other Programs

Presley Gillespie, the first executive director of the Youngstown Neighborhood Development Corporation, has been leading Neighborhood Allies for the past 10 years. Neighborhood Allies launched the Centralized Real Estate Accelerator in 2020.

The organization’s work focuses on communities that are underresourced, Gillespie said.

“The first thing is, there’s no capacity or real knowledge and understanding in communities to use real estate to lead their own revitalization – to use real estate tools to really try to embed a community wealth aspect,” he said.

Big developers may do a project in the inner city and secure grants and subsidies for the work.

“And many of those projects are good, but it’s transactional. It’s not transformational,” he said.

Gillespie, who worked in the banking industry for 20 years before moving into community development, wanted to create a better system to share knowledge about real estate in communities. It also needed to involve capital.

“So how do we reduce some of the barriers in terms of access to capital, particularly when most of these projects are high risk or they wouldn’t even be community development,” he said.

The program continues to evolve.

“But the notion was to have a sort of a one-stop shop for all aspects of community-based real estate,” Gillespie said.

Neighborhood Allies raises money for redeveloping capital to invest in projects that may be riskier. Funding comes through philanthropy.

The program also involves training. The Real Estate Coempowerment Series is a classroom-based training aimed at demystifying real estate, Gillespie said. Planners, real estate developers and lawyers teach aspects of the curriculum.

Gillespie estimates that participants of the program have bought about 200 properties since the program started.

Contractors on the Rise started in 2020 in Cleveland.

“One of the things that we were trying to combat is that on Cleveland’s southeast side, where there had been significant disinvestment over decades and not a lot of new or renovated homes, we needed to find a way to incentivize developers to take on that risk,” said Dione Alexander, president of Village Capital Corporation.

VCC, a lending subsidiary of Cleveland Neighborhood Progress, created Contractors on the Rise. It previously worked in the Valley through a grant from the Raymond John Wean Foundation.

Those Cleveland neighborhoods where the program concentrated needed safe, clean, affordable homes, but the firms most likely to do that kind of single-family renovation were largely small, emerging firms, Alexander said.

“So we also said this is an opportunity to build better networks for them, professionalize their practice, help them grow and sustain their businesses and create generational wealth,” she said.

Triple Bottom Line

The program aims for what Alexander calls a triple bottom line effect.

“The first one was to improve the quality of housing,” she said. “The second bottom line was to improve the profitability and productivity of the developers themselves, and the third was to create generational wealth …”

Small and emerging developers are family-owned businesses, so the more money they make, the more they’re able to invest in their children or in buying other properties, Alexander noted. They also pay more taxes.

Each cohort includes up to 10 participants, and the program runs for two years. The second group just completed the program. Since it started, 25 properties have been redeveloped.

Logan, the owner of Emerald City Construction, stressed that the barriers are socioeconomic, not racial.

“You know, doing the work is usually what we are great at,” he said.

The structure and the nature of how business is conducted is where he and others struggle.

“It’s where it becomes discouraging to want to, you know, do your own deal, or work for yourself,” Logan said. “It’s like either we’re trapped being a handyman or we get killed trying to, you know, spread our wings and fly.”

He believes an entity like an emerging developers training program could help.

“It makes a lot of sense,” Logan said.

Pictured at top: AP Photo | David J. Phillip, File.