Suppose #VineCity and #EnglishAvenue had a #venture #capital mindset

The Atlanta City Council yesterday voted unanimously to approve a community benefits plan for the city’s Vine City, English Avenue, and Castleberry Hill neighborhoods.  The plan amounts to a goodie bag of proposed initiatives designed with the intent of improving the economic conditions of the neighborhoods.  The plan does not lay out specifics as to how these goods would be delivered and everyone in the neighborhoods may not benefit as access to these funds is subject to an application process orchestrated by Atlanta’s investment arm, Invest Atlanta.

If you want an example of one guise of the patronage system, this community benefits program is it.  Approval of the plan was necessary in order for the city to move forward with a $200 million bond issue that will help finance a new stadium for the Atlanta Falcons.  This injection of funds into the neighborhoods might be the last opportunity for decades to stimulate growth in the communities, especially English Avenue.  My concern is whether the city’s application process for the funding and any development that is spawned will actually be shared by a significant portion of the residents.  If the growth is not democratized, residents may have only themselves to blame for not using all resources available to ensure that they receive their piece of the pie.

Putting aside any discussion of whether $15 million from the city may be enough (The Arthur M. Blank Family Foundation is chipping in another $15 million for social programs), neighborhoods appear to have taken a more consumption posture versus an investment one.  Most of the items in the plan don’t strike me as investments with any significant multiplier effect.  As The Atlanta Journal Constitution reported:

“The community benefits committee doesn’t have the authority to direct how the money will be spent. Instead, the plan offers suggestions for projects to address environmental impacts, traffic congestion, public safety concerns and potential gentrification. Suggestions include a business incubator, childcare programs, land banks, affordable housing programs and more.”  The plan was also amended to include consideration of a jobs workforce program.

These items can burn through $15 million real fast.  The staffing and other administrative needs attached with these programs may see cash going “poof” quite quickly.  The city expects to disburse funds over a three-year period and I suspect larger, politically connected groups will be applying for funds.  If the neighborhoods wanted to maintain transparency and inclusiveness, one approach would have been to create their own venture capital firm.  The firm’s shareholders could have been made up of homeowners, other property owners, business owners, and other residents.  The firm’s board members could have come directly from the community, and its executive board could have come from experienced managers not too far away at Clark Atlanta, Spelman, or Morehouse.

Once established and certified by the community benefits committee, this firm could have entered into an agreement with the city for the receipt and return of capital, and investment of funds into the community; investments with multiplier effects that such that shareholders and the city would profit.

As it stands, this is $15 million down the drain with little probability of profit or community inclusion beyond drafting a wish list. .

About Alton Drew

Alton Drew brings a straight forward and insightful brand of political market intelligence. Alton Drew graduated from the Florida State University with a Bachelor of Science in economics and political science (1984); a Master of Public Administration (1993); and a Juris Doctor (1999). You can also follow Alton Drew on Twitter @altondrew.
This entry was posted in Atlanta, Atlanta Falcons stadium, Atlanta politics, capital, Economy and tagged , , , , , . Bookmark the permalink.

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