If one didn’t know any different, Market Creek Plaza in the Diamond Neighborhoods of San Diego would seem like a typical shopping center. It has a Food 4 Less grocery store and a Starbucks, a Curves women’s fitness center and a utilities payment outlet. Yet Market Creek is far from typical. Just ten years ago it was an abandoned 20-acre manufacturing complex in a neighborhood with a median income half that of greater San Diego. An aerospace company had left their factory there years ago, and the site was considered unusable by the few potential buyers who’d come to see it. That is, until the Jacobs family bought the land through their foundation and reached out to the community to figure out how to improve the lives and livelihoods of local residents.
Far from a simple commercial development effort, Market Creek is a kind of culmination of the grass-roots-focused work the Jacobs family has been doing since Joseph Jacobs created the Jacobs Family Foundation in 1988, with the promise that he, his wife and his daughters – Valerie, Meg and Linda – would all be “equals at the table.”
As Valerie Jacobs Hapke tells it, equal footing did not automatically result in harmonious dealings. The Jacobs sisters had differing philosophical and political views from their father, and so in the early years of their foundation they had to find common ground where they could work together. “One thing we had in common was that we didn’t want to support traditional philanthropic organizations. Education, medicine, religion and the arts – we felt those things were already covered pretty well by traditional philanthropy.”
Eventually they decided to give to local grass roots organizations where they could “see their money at work.” One area where they saw significant need was in helping small organizations with business and administrative issues. “Grassroots organizations are great at delivering the service they provide. But often they’re not great at dealing with the business side of running a nonprofit.”
In response the Jacobs Family Foundation created an operating nonprofit to directly provide technical and business services in what they called Nonprofit Partnerships. After a number of failures they learned “to date first. We started with a small amount of money and a specific piece of work and see how we worked together and whether our values matched. Some values we thought we important were open communication, dealing constructively with conflict and understanding that we weren’t going to take over their organization.”
While the foundation was getting better at working with their nonprofit partners, they were also expanding their thinking about the impact they wanted to have.
“My sister Linda wrote a paper when she was chairman of the board which said that community development was the only way she felt systems really change.” Valerie recalls. “She thought it was important to attack everything at once because everything is related: You can’t deal with employment if you don’t deal with healthcare, childcare, transportation, housing, etc. etc.”
Call it serendipity or coincidence, around that time one of the Jacobs’ nonprofit partners pointed them to the abandoned site at Market Street and Euclid in Southeast San Diego. Thus, the Market Creek initiative was born and their operating foundation became the Jacobs Center for Neighborhood Innovation (JCNI).
“We formed our first community team, which we called the Outreach Team, and they put together a survey which asked residents what they wanted to see on that land. The number one thing they said they wanted was a supermarket.”
Still, the Jacobs family was not met with open arms.
“The trust level was zilch. The residents were used to being taken advantage of. Developers developed land and made the biggest profit they could and then left. They didn’t care about the neighborhoods. They didn’t give jobs to residents. They didn’t keep the money local. The money always left the area. So when we bought the Market Creek site the residents didn’t really know who we were or what a foundation was. We just looked like another developer to them.”
One of the efforts the foundation made to create more trust was to move their foundation headquarters into the neighborhood and to ensure that any resident who wanted to be involved or have a say in how the project proceeded could participate on a resident team.
“If you want to join a team you can do it today, you can do it a week from now. We have residents who have worked with us from the beginning and those who are just joining today. People can also use our foundation building for community gatherings – they can use it for free and there aren’t that many places in the community where you can have large gatherings.”
The result of their efforts to date, Market Creek Plaza, is the commercial hub of what the foundation calls The Village at Market Creek, a complex which will eventually include housing, more commercial space, some light industrial space, a community center expected to open early in 2008 and a youth park. To date, Market Creek Plaza has managed to recapture $34 million that was previously spent outside the community, and provided many dozens of jobs to local residents.
In addition to the initial purchase of the aerospace lot, the foundation has also been purchasing as much of the surrounding real estate as they can. “Economic Development 101 is to control as much land as possible around what you are building so you can control your development process.” Valerie Jacobs Hapke says they have forty-five acres that are contiguous and surrounding Market Creek Plaza and which the community will decide how to develop.
First up is a “pilot program with housing, which will be forty-two units of town houses. We have a housing team made up of residents who have worked with the architects on design, discussed financing for the project and established criteria for who will live there. It hasn’t yet broken ground but we hope to start next year.”
Far from doing this alone, the Jacobs Family has sought innovative ways to fund their initiatives through help from other nonprofits active in the domestic poverty arena. “We have foundation partners who have invested $3 million in Program Related Investments – the Rockefeller Foundation, the Annie E. Casey Foundation, [F.B.] Heron Foundation and the Legler Benbough Foundation. We also have New Market Tax Credit loans from community development financial institutions. We couldn’t do this work without the low interest grants and loans we’ve received from our partners.”
Despite the importance of financial partners, residents are still at the center of the Market Creek initiative. They are actively involved in how Market Creek is developed, but their role runs even deeper than that: In an unusual move JCNI has transferred partial ownership of Market Creek into the hands of the Diamond Neighborhood residents. The transfer was executed through a Community Development Initial Public Offering in which 20 percent of ownership of Market Creek, LLC, the company created to manage The Village at Market Creek initiative, was sold to 419 residents, an effort which raised $500,000 and gave locals a non-metaphorical stake in the success of the project. They are already reaping rewards: Just last week the first dividends were dispersed to the community owners with a 10 percent return on investment.
In addition to the individual owners, another 20 percent of Market Creek LLC is owned by a resident-owned-and-operated entity called the Neighborhood Unity Foundation. The remaining 60 percent is currently owned by the development arm of JCNI, Diamond Management, a for-profit company focused on the further development and sustainability of the Village at Market Creek. The plan is for the assets of the foundation to be turned over to the community resulting in a one-third ownership by individuals, one third by the Neighborhood Unity Foundation and one-third by the resident-run Diamond Management.
The vision for Market Creek is long-term, though Valerie does not intend to be involved to the end. “Dad believed strongly in foundation sunsetting. Our plan is to ramp up the resident participation and we kind of fade away.”
For More Information:
The Jacobs Family Foundation
The Jacobs Center for Neighborhood Innovation
Market Creek Plaza
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