CED Case Study: Making an Asset out of a White Elephant

Jamaica Plain Neighborhood Development Corporation - Boston, MA

Publication Date: June 29, 2018

This case study is a part of the CED Lessons from the Field resource.
To learn more and explore the case study library, go to CED Lessons from the Field.

The Haffenreffer Brewery complex is a five-acre site with 16 buildings situated in Jamaica Plain. At its height, it employed 250 people, many of whom were residents of the Jamaica Plain neighborhood. The Haffenreffers started brewing in Jamaica Plain in the 1870s and were, by reports, successful. However, the company started to decline in the 1950s as national firms took over an increasing share of the beer business. By 1965, it ceased operations altogether, leaving the site to squatters and a moving company that used a portion of the complex for storage.

 

In 1977, the Jamaica Plain Neighborhood Development Corporation (JPNDC) Visit disclaimer page considered the old brewery, which stood as a vacant eyesore, as having the potential to be a new job center. It began planning how to turn the site into a small business center that would (1) house at least 250 jobs to match what the brewery employed at its height, and (2) be a supportive environment for small businesses, especially those owned by women and minorities.

By 1978, JPNDC secured an option to buy the brewery complex, but some of the buildings were near collapse, with trees growing through some of the foundations, some walls and ceilings crumbling, and graffiti on nearly all of the 16 buildings. It took another five years to assemble the financing needed to close on the purchase of the site.

After JPNDC bought the Haffenreffer brewery in 1983, it took another $25 million to bring about the transformation of the old Brewery, of which JPNDC received five CED grants amounting to about $2 million over the 30 years of Brewery work. What transpired during those 30 years has been truly amazing and inspiring.

The CDC’s Breadth

JPNDC is one of Boston’s oldest and largest Community Development Corporations. Both the city and State of Massachusetts have a legacy of supporting nonprofit developers, and the leaders of this organization took maximum advantage of the many public and public-private programs available. The organization has placed into service more than 600 affordable homes, with another 250 in planning or development. It has won seven regional or national awards for its developments. It has helped to create, or link neighborhood residents to some 1,500 jobs.

The CDC has, in addition to its active housing development operation, divisions working on workforce, small business, and community organizing. The workforce programs include bilingual services on finding jobs, preparing people to apply for those jobs, adult education classes, job training, and counseling. It also has a program to assist neighborhood women to set up licensed, home-based child care centers. The small business division has provided technical help to about 500 businesses since 1997, including assisting in securing more than $9 million in loans for area merchants and entrepreneurs. JPNDC’s community organizing has included leading a coalition to halt the construction of an interstate highway through the neighborhood, as well as helping tenants organize for better housing and assisting housing cooperatives to form and thrive.

The Jamaica Plain neighborhood is diverse in culture, race, and economic status. Its 40,000 residents include 45% whites, 30% Latinos, 18% African Americans, and 5% Asians. It has a 22% poverty rate, double the Massachusetts rate and above the 15% rate for the country in 2012. The community includes the largest Latino business district in all of New England. Yet, it is also a high- cost housing location. The 2011 median sales price for single-family homes in Jamaica Plain was more than $500,000, and the median rent approached $1,950 for a two-bedroom apartment.

The Brewery

Because of the neighborhood’s diversity—and high costs—the CDC placed a high priority on using the Haffenreffer Brewery to create decent paying jobs and draw in additional companies that would do so. It received its first big break when, in 1985, the newly created Boston Beer Company sought a building in which it could brew and distribute its signature Samuel Adams beer. Boston Beer is still at Haffenreffer, hosting busy brewhouse tours and brewing specialty craft beers in one of the old buildings.

When Samuel Adams beer took off (and helped launch a national rebirth of craft breweries), the old Haffenreffer site became a magnet for other food-related small businesses. Some of those food businesses were local, including a pretzel-maker (which sells at Boston area stadiums); a Middle Eastern-themed manufacturer of hummus, tabouli, and other foods (which is now a private label manufacturer for the Trader Joe’s chain); a health food maker; and a tortilla manufacturer.

Many of these businesses have grown and stayed in the Brewery, including several that started there in the 1990s. Others have outgrown their initial Haffenreffer space. One such business is Stacy’s Pita Chips, which started making its chips at the Brewery to sell at its downtown Boston sandwich stand. Stacy’s is now a national firm owned by Frito-Lay.

In keeping with one of the original JPNDC goals of supporting small businesses, the Brewery also houses an incubator kitchen operated by another Boston-area nonprofit. The facility enables neighborhood residents to try new business ideas and grow their products. The incubator, as of the end of 2012, hosted about 40 food entrepreneurs and “graduated” more than 100 businesses. Many cater to the growing food truck “industry” in Boston or, with logistics or other help from the incubator operator, sell to food stores and restaurants across the region.

In addition to food, the Brewery attracted a number of small manufacturers, arts groups, and nonprofit organizations. Several woodworking firms, a landscaper, a silk screener, and others are located in the Brewery or have used the space in recent years. Arts organizations that cater to youth or various cultural groups in the city have long made the Brewery home.

A unique source of help to local businesses is JPNDC’s sliding scale of rent charges. As JPNDC Executive Director Richard Thal explained, with square foot rental charges from $5 to $25, the CDC adjusts lease costs depending on the type of business, its financial needs, and such neighborhood- serving goals as the number of neighborhood residents employed by the business.

As of the start of 2014, JPNDC reported that it had completely leased all 150,000 square feet of space at the Brewery. More than 40 businesses are located at the facility. About two-thirds of the businesses are for-profit firms, and more than half of those are owned by women and/or minority owners. In addition, they doubled the CDC’s original job creation goal of 250 jobs and created 500 jobs onsite!

The Brewery is not just a successful job center: it is now a neighborhood magnet. People have become familiar with the site and its businesses so it is fitting that the Brewery now includes two restaurants, a coffee shop, and a gym—all of which help bring residents onto the site. Its new, pedestrian-oriented entrance was opened in time for the 25th anniversary of the CDC’s ownership of the site, in 2008, enhancing the site’s appeal.

CED Grants

It took about $25 million to bring about the transformation of the old Brewery. The CDC was able to finance portions of the work—which was done over several phases—through a variety of sources. The first phase of work (roughly from the mid-1980s through the mid-1990s) was financed in large part through CED grants, grants from the Economic Development Administration and City of Boston (using Community Development Block Grant [CDBG] funds), and assistance from the Local Initiatives Support Corporation, known as LISC,, as well as bank financing. The second phase (from the mid-2000s through the early years of the current decade) was financed largely through loans from state-related programs designed for nonprofit and other developers of housing and job centers, as well as extensive use of tax credit programs (New Markets and federal and state Historic Tax Credits).

JPNDC received five CED grants amounting to about $2 million over the 30 years of Brewery work. A key factor in the success of these grants was JPNDC’s responsiveness to the shifting needs of businesses for the space they occupied.

For example, in 2007, JPNDC received a CED grant of $150,000 to make space available for a new children’s oriented food and play space. The goal was to employ 15 low-income people (and five more market-rate positions). However, the recession of 2007 through 2009 forced the business people behind this new endeavor to drop out of the project.

JPNDC adjusted course and made space available for two other businesses, both of which are family-oriented and minority-owned. One was a restaurant that had been located for 15 years in another part of the community, serving food and making space available for entertainment. Its old space became problematic when the landlord nearly doubled the rent on short notice. It threatened the viability of the whole business. The CDC offered a space near the new, pedestrian- oriented entrance to the Haffenreffer campus, and the owners readily accepted. The CED grant enabled the JPNDC to prepare the space for the new tenant. The new restaurant offers a menu largely comprised of Latin cuisine and entertainment five evenings a week, attracting a vital mix of Latino, African American, Eastern European, gay, and other segments of the community. The relocated restaurant even buys a range of prepared foods made at the Brewery’s kitchen incubator. As of the end of the CED grant period in 2012, the restaurant employed 40 people, half of whom are full-time, supporting what has become one of the most visible retail tenants in the Brewery.

The CDC also used a portion of the CED grant to support the expansion of Mike’s Fitness, the only publicly available gym in Jamaica Plain. Mike’s Fitness, a minority-owned enterprise, had been a tenant of the Brewery since 2006 but needed more space. The CDC renovated a space near the CED-assisted restaurant that was adjacent to Mike’s existing space which enabled the gym to expand its membership fourfold. Mike, himself a low-income neighborhood resident when he approached JPNDC with his fitness business idea in 2006, used the CDC’s jobs program to find new low-income employees to help him manage the new and increased space.

In addition to these two expanded businesses, JPNDC used this CED grant to relocate two smaller tenants within the Brewery complex, enabling the firms to reduce costs by assuming more efficient spaces. As a result of the overall rebuilding project, the CDC was able to report twice as many new low-income job positions as its originally established CED goal, including many workers who graduated from the CDC’s job-training program and live in the neighborhood. These gains were made by two minority-owned businesses whose patronage appeared to grow exponentially during a national recession.

Why Did This Project Succeed?

The work, time, and money it took for the Jamaica Plain Neighborhood Development Corporation to transform the Haffenreffer Brewery were monumental. It took 30 years and counting and $25 million, and the results have been amazing. These efforts have made this old industrial outpost, tucked away in an old mixed-income neighborhood, a destination for tourists, foodies, residents, families, and 500 people who work at the 40-plus businesses located onsite.

The transformation demonstrates several important attributes of nonprofit developers in general and JPNDC in particular. These attributes include resilience and a deep understanding of the community and of the local economy.

JPNDC’s resilience is reflected in its commitment to this project for three decades. The endeavor almost led to the CDC’s failure several times. It fought early on to get approvals, funding, and support for the idea of the Brewery’s transformation. Many potential sources of planning capital, for example, resisted the CDC’s requests, indicating that the project was just too big and uncertain. The CDC persisted through those problems. It also managed through several economic downturns, bringing in resources and assisting small businesses to cope and grow.

Not only did the organization’s resilience help, but its knowledge of the community and the economy also helped. Its ongoing work in community organizing and housing and workforce development allowed the CDC to gain an intimate knowledge of what types of jobs people needed and what skills they had or could build. Then, instead of converting the industrial space into a high-tech center, which had been trending for the last couple of decades, the CDC chose a different route. The food industry allows lower skilled workers to gain a foothold in the working world and thus held greater promise for employing more Jamaica Plain residents. The JPNDC was fortunate that a new brewer rented the space and grew into a national giant; nevertheless, the CDC had a larger vision for the complex and leveraged that early tenant to achieve success.

Jamaica Plain Neighborhood Development Corporation

31 Germania Street
Boston, MA 02130
https://jpndc.org/ Visit disclaimer page

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