The Money Picture

By Bruce Checefsky

Community Development Corporations (CDC) are nonprofit, community-focused entities whose mission is to support affordable housing, economic development, safety, and social services. CDCs work closely with a representative from the local government but are not a government entity.

The first CDC in Cleveland was the Hough Area Development Corporation, formed in 1968. By 1989, the City of Cleveland dedicated nearly $9 million to housing-focused nonprofit corporations through the Community Development Block Grant (CDBG) program.

CDBG is a federally funded grant program administered by the U.S. Department of Housing and Urban Development (HUD) and provides annual grants for housing, and expanding economic opportunities for low and moderate-income individuals and families.

Cleveland Neighborhood Progress (CNP), created in 1987 by the Gund Foundation, Cleveland Foundation, and Mandel Foundation, leverages resources for a coordinated, strategic, and scaled approach to rebuilding the city. CNP works in partnership with members of the City Council to distribute federal CDBG funds to the local CDCs.

In 2021, more than $21 million in CBDG funds went to Burten, Bell, Carr Development in the Kinsman neighborhood, Famicos Foundation in Glenville and Hough neighborhoods, St. Clair – Superior Development, MidTown Cleveland, Inc., and twenty-two other city-wide CDCs.

CDCs are traditionally set up by community members or local groups like churches and civic associations and run by paid employees. For example, a review of Form 990 for the period ending June 2020 shows that Burten, Bell, Carr Development holdings include land, commercial and apartment buildings, and equipment totaling more than $9,746,359.

Former Executive Director Timothy Tramble had an annual salary of $151,896. Joesph Marinucci, the former President & CEO of Downtown Cleveland Alliance, had a base compensation of $269,045. When added to his deferred compensation and nontaxable benefits, Marinucci earned more than $303,000 in 2019.

Critics claim the spillover effects of CDCs hinder urban economic revival and threaten to keep the poor in poverty.

During a breakout session at the Cleveland City Council retreat last January, several council members expressed concern that CDCs need a better vision for the community. Repairs to commercial and residential properties often go unresolved. Processing claims is painstakingly slow, and contractors do not get paid on time.

CDBG funds are spread unevenly across the city, with some neighborhoods receiving disproportionally more than others.

“Historically, Cleveland proved that community development was possible at the hyper-local level,” said Molly Schnoke, Project Manager, Center for Community Planning and Development, Maxine Goodman Levin College of Urban Affairs, Cleveland State University. “One of the consequences of funding is how CDBG dollars get allocated in Cleveland. The city decides where and at what level to support, and the CDCs have to operate within that limitation.”

Schnoke said residents need to understand how the city will use federal funds to support the Cleveland 2030: A Housing Equity Plan. The report states that 55,600 currently habitable homes need substantial repairs by 2030, and 20,000 units need replacing. A continuing population decline suggests that, without new investments in homes and neighborhoods, the city will lose 310 households every year between 2020 and 2030.“I do not know if the city has articulated that yet,” Schnoke said.

Adam Drue King, a technologist with a community development focus and owner of several properties in the Hough neighborhood, said CDCs could be good or bad depending on the leadership. People are leaving their jobs at the CDCs under the Bibb administration, and residents of Kinsman, Buckeye, and parts of Central feel the CDC is ineffective. “CDCs do not use enough resident voice and impact in the work that they do,” said King.