Environmental, Social & Governance Briefs

Confronting the Wave: Revitalizing Local Food Districts While Strengthening Racial Equity

June 05, 2018

Michigan nonprofit Eastern Market Corporation (EMC) was created in 2006 to revitalize Detroit’s public market and adjacent food district. In its first 10 years, EMC was responsible for more than $40 million invested in building and infrastructure improvements along with major expansion of food access, and food entrepreneurship programs. More recently, real estate markets in Detroit woke from a long slumber, unleashing an investment wave similar to those that decimated food districts in other cities (e.g., the Meatpacking District in New York City, or Fulton Market in Chicago). EMC has pivoted from priming the pump to confronting this wave to ensure that the market’s core values are not lost and that racial equity is strengthened as a tsunami of new real estate investment hits the Eastern Market District.

Eastern Market has launched independent businesses since 1891. It’s been the place where those with little went to begin their pursuit of economic success. That legacy continues in EMC’s work to incubate and accelerate small businesses. Program support in this area comes from corporate partners including Chase, Citizen’s Bank, PNC Bank, and foundations such as W.K. Kellogg, Kresge, New Economy Initiative, and Surdna.

A distinctive public market complex that provides businesses with low cost access to both wholesale and retail customers, Eastern Market operates four different markets on different days of the week and at different times of the year. More than 600 small businesses peddle their wares under the five sheds that comprise the market campus.

Eastern Market District, the 225-acre area around the market, hosts more than 175 brick and mortar businesses with a focus on food processing and distribution. This sector is a key Detroit employment cluster because a high percentage of its 1,500 jobs are entry level, which pay living wages.

The authentic food-making character of the area is especially important at this time. Changing consumer demand favors local makers and healthier products that give established businesses in the district, as well as emerging businesses from our food entrepreneurship programs, a chance to grow and add significant employment.

Managing a resurgent real estate market

The resurgence of Detroit’s real estate industry became evident in 2015, when EMC led a Knight Foundation-funded strategic planning process to consider how Eastern Market would survive the pending boom with its three core values intact.

The key goals of that plan and early implementation steps were:

• Eastern Market will remain an authentic food-making place by expanding the market district. The failure of Detroit’s real estate industry hollowed out areas adjacent to the market over the last 50 years, providing the opportunity to double food processing and distribution jobs over the next 10 years if we can assemble vacant land into sites for expanding businesses.

Repurposing urban land is a challenge, but two-thirds of land in the expansion area has already passed into public ownership for non-payment of taxes. EMC created Eastern Market Development Corporation (EMDC) that, with support from the Ralph C. Wilson Jr. Foundation, Chase, and W.K. Kellogg, is working hand in glove with key city agencies to assemble sites.

Strengthening remaining pockets of residential use is a high priority and utilizing green stormwater infrastructure to help buffer land uses is an opportunity to repurpose urban land where people live in close proximity to jobs. To best achieve this goal, EMDC is partnering with The Nature Conservancy.

• Eastern Market will remain a place where those with limited means go to get a start by achieving high graduation rates from food business acceleration programs of businesses owned by people of color and by filling 66 percent of all new food processing and distribution jobs with Detroit residents.

EMC already provides many services to incubate food businesses that has helped increase the number of emerging food businesses owned by Detroit residents. The current expansion of EMC’s acceleration services to hasten food businesses’ growth is an important way to create jobs and to overcome barriers to growth for businesses owned by people of color.

• Eastern Market will continue to be a place where all are welcomed by fostering a steady supply of affordable commercial space to:

1. Avoid displacement of long-time businesses
2. Continue to attract edgy, independent businesses
3. Increase the number of storefront businesses owned by people of color
4. Ensure that Eastern Market continues to provide daily goods and services for low- to moderate-income residents of adjacent neighborhoods.

In addition to helping assemble and prepare new sites for development in the expansion area, EMDC also works with developers to ensure that 25 percent of commercial space is held at below-market rents.

EMDC is currently completing funding for its first major project in which it will use capital from donors to secure a 20-year lease for 15,000 square feet of space in a larger project. Leasing that space to targeted businesses at below-market rates will generate net income that will be used to invest in similar projects to create a self-funding anti-gentrification cycle to ensure the retail mix of businesses continues to serve everyone.

Additional community benefits

In addition to the revitalization efforts mentioned above, EMC operates a comprehensive food access program to get fresher, healthier food onto the tables of vulnerable households. With support from corporate partners, EMC distributes food to underserved areas, provides incentives, and delivers food education programming.

Corporate partners include:

• The Detroit Lions,
• Community Foundation for Southeast Michigan,
• Ford Motor Fund,
• Sun Communities,
• Target, and the health care industry (Beaumont Health, Michigan Health Endowment Fund, and St. Joseph Mercy)

Given the investment coming at it, the market district will be transformed over the next ten years. The diligence of EMC, EMDC and its partners can help shape this transformation to provide a model for how to preserve local food-making districts, how to repurpose abandoned urban land, and how to achieve revitalization along with racial equity goals.