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To Combat Widespread Job Loss, Stay Local and Look to Import Replacement – Next City

“Starting with place-based strategy, you’ve got the physical revitalization of the most distressed neighborhoods in the city,” says McMicken, noting that the two laundry buildings have become anchor institutions themselves in formerly distressed locations; their presence brings in property tax and increases local neighborhood value.

“It’s an example of how an employee-owned business model can be very successful for a variety of stakeholders,” says McMicken. “You’ve got large hospital systems able to transact, that gives them the option to spend money locally, [and] meet diversity and inclusion goals with companies that are minority-owned.”

As an employee-owned cooperative, Evergreen also has a number of “wrap-around benefits,” says McMicken. “We have a robust home-buying program, to purchase homes and [for] stabilization in the neighborhood,” so employees have “less jumping from landlord to landlord.”

Filling the Food Gaps in Springfield, and Demand Stays High for Local Lettuce

“Consumers need to have ownership over their local economies,” says Moriarty. “With import replacement, we see it as consumers and business owners coming together to identify gaps, and coming together to fill them.”

“It’s a fact we can be producing everything locally. If costs go up, that’s fine by me,” says Emily Kawano, co-director of the Wellspring Cooperative, a non-profit network of worker-owned businesses that strives to create good jobs and wealth-building opportunities in Springfield, Massachusetts. Built on the Evergreen model, in partnership with anchor institutions, Wellspring identifies what those anchors are purchasing from outside the region, that they might be able to create cooperative businesses around.

Wellspring started talking about these ideas in late 2010, and then for several years, laid the groundwork to start businesses that would supply what anchor institutions purchase. Their first cooperative was a furniture upholstery business in 2013. Then came a women-owned window restoration company and a hydroponic greenhouse for lettuce. They just brought on board an eco-friendly house cleaning company that is converting to a cooperative.

Wellspring’s current anchor partners include Bay State Health, University of Massachusetts, and Mercy Medical.

“We’re small and mighty,” says Do-Han Allen, General Manager at Wellspring Harvest Greenhouse, the largest urban commercial greenhouse in the Commonwealth, which serves those three anchors and more.

Wellspring Harvest Greenhouse sold nearly 21,000 pounds of lettuce in 2019. (Image courtesy Wellspring Cooperative)

The greenhouse opened in May 2018, and its primary crop is hydroponic lettuce. Wellspring Harvest grows six varieties, free of pesticides, including red and green butter lettuce, green crisp and romaine. The greenhouse’s footprint is just one-quarter acre, but the business distributes to residents and to commercial retail. In addition to the hospitals and UMass, they supply 15 Big Y grocery stores in the Pioneer Valley, as well as more than 20 Whole Foods Markets between Massachusetts and Rhode Island, along with the local River Valley Market co-op. They also serve other local college and university customers including Mount Holyoke and Springfield College.

All these institutions have a stated mission to buy local, and they’ve “all stepped up,” says Allen. “All the money we make stays local. We’ve had our struggles, carving [out] our place in the marketplace. It’s an ongoing challenge to position ourselves in the produce and lettuce market. It’s very competitive. Our strength is we have a smart consumer market share that values local produce and local buying. That’s a benefit to us. A lot of our market understands we are worker-owned, that we provide meaningful jobs and address inequities in food access.”

The coop also donates to the local food pantry; last year it gave 1,000 pounds of lettuce.

Total revenue for Wellspring Harvest Greenhouse in 2019 was $118,173, based on selling 83,370 heads, which equals 20,843 pounds. Local hospitals accounted for $12,870 and 3,432 lbs. of that, while local colleges and universities accounted for $17,349 in revenue, or 4,957 lbs. in sales

“Before the 2020 coronavirus impacted sales, the schools were on track to purchase between 18,000 and 20,000 pounds of produce [in 2020],” says Allen. And hospitals were tracking to purchase 6,550 lbs. for 2020.

In order to mitigate the sales dropoff owing to COVID-19, Allen says they are working on products to sell directly to consumers via a community sustainable agriculture model, incorporating a variety of new crops including strawberries, cucumbers and tomatoes. They continue to donate to the Food Bank of Western Massachusetts. And they’ve expanded their approach with local restaurants, Allen says. While local restaurants can currently only offer takeout, they are purchasing more lettuce from Wellspring in order to meet the need for carry-out salads. Perhaps surprisingly, because the supply chain from California has been interrupted, and there are concerns over the safety of products coming from elsewhere, the demand for Wellspring’s lettuce has increased, and their sales in the retail marketplace have actually spiked.

While Wellspring’s cooperative businesses serve local institutional and residential customers as well as those as far off as Boston or Worcester, the benefit of having a local anchor is that, for example, when there was a slump, they called an urgent meeting with Bay State, and parlayed the meeting into a deal that made them the hospital’s primary upholsterer. Now they’re working to position their new cooperative cleaning company into a contract with Bay State.

Albuquerque City Government Buys Local, and No One Runs Out of Toilet Paper

As auditor of the state of New Mexico, Tim Keller found that the majority of Albuquerque city purchases were transacted with businesses outside the state. When Keller ran for mayor of Albuquerque, he promised voters he would look at every procurement being made outside the city, and do everything he could to bring that government spending home, to create opportunities for local businesses.

“He’s kept that promise,” since becoming mayor in 2018, says Synthia Jaramillo, director of Albuquerque’s office of economic development. “He directed every single department in the city of Albuquerque — all 18 departments — to look at every purchase that was leaving the state of New Mexico,” and shift as many procurements as possible to local small businesses.

Since January of 2019, the city of Albuquerque has signed nine contracts with local small businesses, spending more than $16.6 million with them.

“We have awarded a lot of local companies contracts based on that administrative instruction, [companies] that would have never otherwise done business with the city,” says Jaramillo.

“In the midst of this crisis, when it comes to family and human services, homeless services, they’ve been instructed to use local companies [when purchasing] items,” says Jaramillo, including gloves and face masks.

Albuquerque even has its own local, minority, family-owned toilet paper manufacturer, Roses Southwest Papers, just a few blocks south of the city’s downtown. In response to the COVID-19 crisis, the firm has an online ordering system, so locals can place their toilet paper order, and Roses will deliver it right to their doors.

Another big part of the city’s buy local initiative is the development of an online “dashboard” that will give local businesses access to information about out-of-state spending. The local business can then reach out about switching the contract to them locally, says Jaramillo. In addition, the Economic Development Department is working to increase access to capital, so local small businesses are better positioned to scale up in order to meet city needs.

Diverse Office Supply got a contract to provide the city with office supplies in November 2019. Already they have hired more employees. (Image courtesy Diverse Office Supply)

Jaramillo points to the success of making a city-wide shift in the procurement of office supplies, from a Florida-based office supplier to local, women-owned Diverse Office Supply, which employs “a diverse workforce of adults with special needs, focusing on sustainable, earth-friendly products” manufactured by other women- and minority-owned businesses. Thanks to the city contract, Diverse Office Supply has hired additional employees.

Debbie McLarty, CFO of Diverse Office Supply, stresses that in addition to a diverse group of special-needs adult employees, they also operate in a historically underutilized business zone (HUBZone) — a place in need of jobs.

“We started the city contract in November,” of 2019, says McLarty, and they immediately hired additional people. They were planning to hire more, but with the economic slowdown, haven’t done that, yet. “Because the City is one of our largest customers, we’ll fare better than other places,” she adds. “Had we not had this contract, I don’t know how we would fare.”

Still, the city contract keeps them going, including supplying needed office supplies to firefighters, police, forensics, and waste management. They also supply the city with binders made out of recycled cardboard and USDA-certified, bio-based pens, among other products. “The city is interested in things that are reusable. Green initiatives are our specialty,” says McLarty, “We’ve seen an uptick in demand for those types of things… and it does keep business going through the crisis.”

To Jaramillo, and to many in Albuquerque, it’s a no-brainer for the city to act as an anchor institution for local small businesses. “The majority of employees in New Mexico are employed by a small business,” says Jaramillo. “We don’t have big corporations like some places. Our economy is dependent upon small businesses. If they get a larger piece of the pie, they can recruit and retain employees who are New Mexico residents. The goal is to keep New Mexico and Albuquerque employed.”

Jaramillo admits it is still too early to see the economic boost this shift in spending has given to local businesses, although the city’s economist is tracking the data.

State and city leadership, she says, took action quickly. “I think we’re in a much better situation than other states that didn’t take action,” she says, noting that New Mexico, and Albuquerque specifically, were among the first to close businesses and issue stay-at-home orders.

Jaramillo says the city is also preparing for the aftermath of the COVID-19 crisis. “We are working on a development recovery plan. It will always be a buy local initiative — buy local will always be at the forefront.”

“It makes … that strategy to support and to really buy local so much more important today than it was when we rolled it out,” Jaramillo adds. “Working on city purchasing power to strengthen our economy and future is more important now than ever. The city of Albuquerque is an economic anchor institution in New Mexico, and we’ll encourage other institutions to do the same.”

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