COMMUNITY DEVELOPMENT CORPORATIONS: COMMERCIAL LEASING STRATEGIES AND SOCIAL OBJECTIVES TIFFANY ENG PROFESSIONAL REPORT Submitted in partial satisfaction of the requirements for the degree Of Masters of City Planning in the Department of City and Regional Planning Of the University of California, Berkeley APROVED Prof. Karen Chapple Prof. Michael Smith-Heimer Joshua Simon Spring 2003Table of Contents Introduction .....................................................................................................2  Goal of Report ......................................................................................2  Target Audience ...................................................................................3  Scope of Report....................................................................................3  Methodology .........................................................................................4  Overview...............................................................................................4 Community Development Corporations (CDCs)...........................................5  CDCs and Commercial Development ...................................................5  Conceptual Framework.........................................................................6 CDC Goals for Commercial Development.....................................................8  Community Economic Development.....................................................9  Neighborhood Commercial Revitalization ...........................................10  Community Development and Empowerment.....................................11  Generating Unrestricted Income .........................................................12 CDC Commercial Leasing Strategies ..........................................................13  Overall Strategies ...............................................................................13  Identifying Commercial Uses ..............................................................14  Lease Terms.......................................................................................23  Engaging the Community as Stakeholders .........................................25 CDC Leasing Challenges and Lessons Learned ........................................28  Developing Commercial Leasing Capacity and Competency .............28  Identifying and Tracking Successful Outcomes ..................................30  Clarifying the CDC – Tenant Relationship ..........................................32 Conclusion.....................................................................................................34  Minding Mission, Market, and Money..................................................34  Towards a Community-Based Model for Commercial Leasing ...........36  Future Research .................................................................................36  Final Thoughts ....................................................................................37 References.....................................................................................................39 Appendix........................................................................................................412 Introduction Commercial and mixed-use development projects led by non-profit community development corporations, or CDCs, take a tremendous amount of effort, time, public subsidies, and private investments. In return, successful projects, can contribute to broader neighborhood renewal, economic development and community empowerment by creating jobs, revitalizing commercial corridors, supporting locally owned businesses, and inspiring private investment and development. This report examines CDC leasing strategies as a key variable in transforming social goals into social outcomes. Ultimately, these strategies suggest larger policy and practice implications for non-profits who continue to develop and manage commercial and mixed-use development projects. Given the wide range of commercial projects that they undertake, it is difficult to make many generalizations about CDCs social objectives and leasing practices. For example, CDCs working on shopping center developments, commonly anchored by a grocery store, might rely on a for-profit partner and target national credit tenants. On the other hand, an urban, mixed-use affordable housing project with limited ground floor retail might be leased by internal staff, and target local independent businesses. Nevertheless, non-profits community development corporations, by their very definition, share several common threads: they are community-based and mission driven. Success is measured not by how much profit they generate, but rather, to what extent they achieve their mission, and to what degree they accomplish desired social outcomes for a project. Consequently, successful commercial projects are not only financially sustainable, but also accrue additional benefits to the local neighborhood and community. As community-focused developers, these non-profit development organizations are constantly confronted with the challenges and rewards of pursuing multiple bottom lines. Goal of Report The goal of this report is to further the discussion between community development corporations, lenders, and key stakeholders on social objectives and commercial leasing practices. In doing so, this report is guided by two primary research questions which lie at the core of how and why community development corporations develop commercial space:  How do cities and non-profit developers implement commercial leasing strategies in order to support larger goals of neighborhood stabilization and revitalization, economic development and community empowerment?  How do they balance these activities with a viable bottom line? A thorough discussion of these two questions will incorporate lessons learned, and review ways that CDCs have developed leasing strategies to achieve their social objectives. In addition, this report suggests a framework for community-based3 property management strategies, and includes ways that property managers and developers other than CDCs might also consider the social and community benefits of their leasing decisions. Ultimately, this report will assist CDC developers and property managers to more conscientiously and systematically integrate