Scranton Community Wealth-Building Initiative Gains Momentum By Austin…

Scranton Community Wealth-Building Initiative Gains Momentum
By Austin Burke and Sondra Myers
December 20, 2007

In Scranton, Pennsylvania, community efforts to develop a comprehensive community
wealth-building economic development strategy have progressed considerably since a
Leadership Roundtable was held in October 2006.

That Roundtable­ "Choosing an Effective and Just Economic Future" ­ cosponsored by
the Greater Scranton Chamber of Commerce, the Scranton Area Foundation and the
University of Scranton, produced a day of intense discussion on strategies for effective
and just economic development. Speakers included Gar Alperovitz and Ted Howard of
Community-Wealth.org and The Democracy Collaborative at the University of
Maryland, and Joseph Blasi, a noted employee ownership expert and professor at Rutgers
University. Community leaders in Scranton were impressed with the soundness and
pragmatism of the change strategies that the speakers advocated and expressed great
readiness to turn sound development ideas with strong economic justice goals into on-
the-ground realities.

The idea for the roundtable was born of conversations held over a two-year period
between Chamber of Commerce CEO Austin Burke and Sondra Myers, a Senior Fellow
for International, Civic and Cultural Projects at the University of Scranton, who had
previously consulted with The Democracy Collaborative.

The vision of the Democracy Collaborative and Community-Wealth.org, of course,
centers on economic development, but not the run-of-the-mill kind, which all too often
results in patterns of economic development that fail to meet the goals of either economic
justice or sustainability. Instead, Community-Wealth.org promotes a number of ideas and
models that taken together can help pave the way for a more progressive, enlightened
form of development.

Fortunately, Scranton had in its Chamber of Commerce head, its mayor, its county
commissioners, and in a number of corporate and civic leaders, individuals who were
ready to learn about and act upon this particular brand of economic development. And so
we set a date, developed an agenda and drafted an invitation list. It speaks volumes that
1) no one among the busy people we invited turned down the invitation and that 2) before
the roundtable adjourned it was decided to have three action committees to follow
through on what appeared to be the most useful and doable recommendations proposed.

Of these three committees, one is focusing on promoting local purchasing by large anchor
institutions such as the area's universities. A second is promoting the use of employee
ownership (especially Employee Stock Ownership Plan companies, better known as
ESOPs). The third is leading a process of community-based strategic planning, which is
investigating the feasibility of developing a Scranton-based community land trust. For
over a year now, the three groups have continued meeting on a regular basis. And their




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efforts show great promise for generating positive results in Scranton and Lackawanna
County.

The purchasing committee has chosen to work on two aspects of purchasing: 1)
encouraging large non-profit institutions to pool their purchasing power through
cooperative joint purchasing to more strategically act to benefit the Scranton economy,
and 2) encouraging area non-profits and for-profits to buy local whenever possible in
order to increase local economic multipliers and hence support local area job creation.

The committee has decided to include the neighboring Luzerne County in the program to
maximize our ability to strengthen the local economy. It is currently in the process of
completing final joint purchasing and local purchasing plans. The committee has already
met with the University Purchasing Collective to discuss a "buy local" session for
Lackawanna and Luzerne County businesses. Meantime the theme of the Chamber's
Business Industry Services Show, to be held in the spring of 2008, will be "Buy Local."

Efforts to develop employee ownership in Scranton are still getting off the ground, but
we are optimistic about long-term prospects for job creation, and importantly, job
retention, through this initiative. It is a well-known fact that the most common way
ESOPs are formed is as a mechanism to preserve a family-owned business by transferring
ownership to the employees. Studies have shown that less than a third of family
businesses survive into a second generation, but when the businesses are converted to
employee-ownership, the survival rate climbs to as high as 80 percent. To help spur
further effort in this direction, we invited J. Michael Keeling, President of the National
ESOP Association, to give the keynote address to a meeting of local business leaders this
coming April. Mr. Keeling has accepted our invitation and we look forward to hearing
from him at that time.

The third committee, led by Scranton Tomorrow and chaired by Mike Hanley of United
Neighborhood Centers of Northeastern Pennsylvania, is investigating the possibility of
creating a Scranton-based community housing land trust. The committee has already
created a draft "white paper" on the concept and plans to conduct an information-sharing
session in early 2008 with a key representative from the Burlington, VT land trust, one of
the most successful in the country, as part of its feasibility analysis. The session will
include key stakeholders in the community in order to educate them to the value of this
major undertaking.

A little more than a year after our initial Roundtable, we are greatly encouraged by the
progress we have achieved and look forward to reporting on further progress in the year
to come. The Roundtable held last year helped energize the private for profit, private non-
profit and public sectors of the community to all work collaboratively on projects and
practices that will enhance the fairness and sustainability of economic development in our
region.

We encourage other communities to learn from our experience. A wealth building
roundtable will not solve all your problems but undoubtedly can be as galvanizing and



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catalyzing a force in other communities as it has been in Scranton. We heartily commend
it and will be glad to discuss the "how to" with others.




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