Prepared Remarks of Secretary Shaun Donovan at the CEOs for Cities National Fall Meeting

12 East Ohio Street, Chicago, IL
Tuesday, October 11, 2011

Thank you, Julia, for that introduction and for all that you do at the MacArthur Foundation. You've been a partner in so much of the Obama Administration's work to build stronger, more sustainable communities across the country.

I'd also like to thank CEOs for Cities for their invitation to speak here today, and Lee Fisher for his leadership. Under Lee's direction, I know this organization will continue to be the catalyst for change it's been since its founding 10 years ago.

And finally, thanks to Governor Quinn and Mayor Emanuel for their leadership of this state, and of this city.

I know that Mayor Emanuel spoke to you last night about what it is that makes cities great. And from working with him closely these last few years, both in Washington and Chicago, there are few better authorities on the subject.

Rahm understands, as Mayor Daley did before him, the importance of strong cities to America's future -- and what they need to be successful.

And as we continue to emerge from the worst economic crisis since the Great Depression, leadership like theirs will be critical to the revitalization of cities and regions around the country.

So, today, I want to talk to you about how growing cities and regions requires us to capitalize not only on our cities' leadership, but also the unique assets of their so-called "anchor institutions" -- the hospitals, universities, foundations, and businesses that bring not only resources to a city, but also a sense of power, prestige, and connection to get the most out of those resources.

Indeed, in so many cities and regions, it is the presence of these institutions that defines the place itself.

So today, I want to discuss the importance of capacity in driving the growth of strong cities -- the capacity you bring and the role your institutions play in creating it.

And I want to describe how the Obama Administration is offering a new kind of federal partnership to ensure you can partner with communities, cities, and regions -- and help them become the dynamic, diverse, resilient economies America needs to win the future.

The Power of Institutions and Chicago's Transformation

For evidence of what anchor institutions can do, look no further than right here in Chicago.

Chicago's revitalization these last 20 years is a well-known story.

As the Wall Street Journal put it seven years into Mayor Daley's tenure, on the front-page, Chicago became "American's urban paradise" -- and for skeptics who were all too familiar with the city's checkered past, added the suggestion "don't laugh."

Well, certainly, no one is laughing now -- after Mayor Daley led the transformation of a symbol of the 20th century industrial economy into one of the dynamic centers of the 21st century global economy.

But perhaps less well-known outside of the city is the role institutions like the University of Chicago played in supporting his vision.

In retrospect, it might not have happened without it. After all, the University and its hospitals represented the city's second-largest employer -- and its campus bordered many of the neighborhoods that were in most desperate need of transformation.

As such, by endorsing the Mayor's Plan for Transformation, the University not only lent critical support to the goal of providing low-income families a path to real housing choice -- it provided the knowledge and expertise the city needed to do the job right.

The school also joined local businesses and "third" sector partners like the MacArthur Foundation and Chicago Community Trust to fund city and neighborhood revitalization efforts.

To attract the diverse mix of incomes neighborhoods need to thrive, the University sponsored and supported an array of charter schools in troubled neighborhoods near its campus -- including the Donoghue School, which with a HUD-funded HOPE VI grant is transforming the once-distressed North Kenwood neighborhood on the Near South Side into a successful, mixed-income community.

And that's only the tip of the iceberg, as U of C has played critical roles in spurring commercial revitalization on the South Side and, through employer-assisted housing programs, helped university employees find affordable housing that would allow them to live closer to where they work.

We've seen similar stories in cities across the country -- like in Cleveland, where for the past five years a coalition led by the Cleveland Foundation has been reinvesting in the city's "Greater University Circle" district.

Partners ranging from Case Western Reserve University to the Cleveland Clinic are engaging with neighborhoods in an unprecedented way -- from helping low- and moderate-income families with mortgage assistance and home repair, to providing job training to local residents and supporting local businesses owned by neighborhood residents.

With this investment, the Greater University Circle initiative is connecting neighborhoods that are already in transition to the city's cultural center -- creating a thriving urban core that will help transform the city into a more dynamic, attractive place to live.

In Detroit, we see a similar effort at the beginning of the process.

There, the Henry Ford Medical Center, the Detroit Medical Center, and Wayne State University are using federal dollars to revitalize Woodward Avenue in the city's downtown core, Wayne State and private partners are forging business incubators like TechTown that have turned the city into the nation's fastest-growing tech job market.

Anchor Institutions as Economic Engines

In all of these places, we see that a city's institutions are inextricably tied to the success of the cities they serve -- and that their expertise, resources and capacity are essential to ensuring that success. And while that role has always been important, today it is more critical than ever.

Certainly, at a moment where every dollar is precious, you have resources. At last count, universities and academic medical centers alone have 7 million employees and generate $1 trillion in annual economic activity.

But equally important, particularly as economic and political headwinds shift, is your unique connection to place.

In a global economy where capital is mobile, the University of Chicago, UIC, Northwestern University and Cook County Hospitals, to name just a few examples, will always remain right here in the Chicago metro area -- always identified with this city and always destinations for people around the world to access the treatment they need or hone the skills that will help them compete.

That connection to place also gives many of you a strong economic stake in the health of your surrounding communities -- and an extraordinary influence on those communities, from hiring local workers, to buying from local businesses, to developing local neighborhoods.

And you have an emotional stake as well, spurred by the missions of your institutions -- from teaching and scholarship to service and community health.

And for those of you that are not mission-driven, per se, with this crisis, I think we all increasingly understand that the destinies of our institutions and our cities are not separate, but very much connected.

A New Kind of Federal Partner

But to ensure that all our communities can capitalize on the power your institutions have to help cities win the future, you need a federal partner.

Not the old one-size-fits-all, "command-and-control" federal model of the past, but a flexible, responsive partner -- one that supports the local leadership communities need to succeed.

For HUD, that means being a leader in forging innovative partnerships that create a geography of opportunity for all Americans.

It means being a resource to communities that want to think in more creative, more integrated ways about problem-solving.

It means changing the way we do business by opening our programs to the private and Third Sectors.

And it means, if I can coin a phrase, putting the "UD" back in HUD.

Take our Choice Neighborhoods initiative, in which we're bringing to bear mixed-use, mixed-income tools to create strong communities in distressed neighborhoods.

One of these neighborhoods is Chicago's Woodlawn, which for decades has struggled with disinvestment, failing schools, troubled housing, and little opportunity.

I was proud to join the mayor a little over a month ago to present a $30 million Choice Neighborhoods award to Woodlawn. Indeed, from the very first time I met with Rahm after he become Mayor-Elect, he was focused like a laser on the importance of this initiative.

He not only understood that cities can't compete and America can't win the race to educate our kids with 20 percent of our children growing up in poverty -- particularly when they live in neighborhoods where they feel unsafe.

He also understood that Woodlawn was just blocks from one of the world's greatest academic institutions.

Indeed, with HUD's Choice Neighborhoods grant, partners like the University of Chicago's Urban Education Institute are working to turn around neighborhood schools and bring vital assets like grocery stores, a youth center, and improved access to public transportation to Woodlawn.

Building Sustainable Communities

Of course, it's no coincidence that the places that faced the brunt of the economic crisis and had the highest foreclosure rates and the deepest job losses, were the most unsustainable.

These were the places with the least access to transportation, the most troubled schools and the least economic opportunity.

These aren't challenges you can tackle neighborhood by neighborhood, block-by-block.

And in a world where America's metros generate 90 cents out of every dollar, 85 percent of jobs and over 80 percent of our patents and exports, we need to tackle the challenges of driving growth at a metro and regional level.

I don't have to tell you that -- the decision by CEOs for Cities to bring Lee Fisher, a longtime state official, on as President shows that you understand the importance of a regional focus, too.

By forging creative interagency initiatives like the Partnership for Sustainable Communities, the Obama Administration is doing just that -- and anchor institutions are at the center of this partnership.

Indeed, of the $170 million grants we awarded with the Department of Transportation last year, to local partnerships, nonprofit participation wasn't just encouraged -- it was a requirement, and many were local and regional universities such as the University of Texas, which is using its grant to link its long-term regional transportation plan to 37 mixed-income communities near transit and job centers.

At every stop I've made in America, from Salt Lake City to Indian Country, you can feel the excitement and bipartisan interest about this partnership at the local level.

That's because this kind of catalytic approach leverages more than just dollars, as important as they are.

It also leverages the deeper, lasting, cross-sector engagement communities need to solve three or four problems--from skyrocketing housing costs to traffic congestion to protecting parks and open space--with a single investment.

Still, we all recognize that this is a different moment -- one that requires more. One that requires us to accelerate the pace of change and speed of economic recovery -- and to bring in the partners who can help us do it. One that cannot afford any of our high capacity anchor institutions to stay on the sidelines.

That's why the President has introduced the American Jobs Act, including a new Project Rebuild that would create 200,000 jobs, put people to work rehabilitating homes, businesses and communities, and leverage private capital and other public-private collaborations.

Project Rebuild would build on existing neighborhood stabilization efforts with new innovations, such as allowing for-profit organizations to apply directly for funds and ensuring that businesses who have participated in neighborhood stabilization efforts can be full partners in this transformation.

And by allowing for the first time the rehabilitation of not just of vacant and abandoned homes, but vacant commercial properties, it would also provide the spark entrepreneurs need to start small businesses and create jobs.

The inclusion of Project Rebuild in the American Jobs Act not only reflects President Obama's belief that rebuilding our neighborhoods is essential to rebuilding our economy -- it represents an important opportunity to accelerate the work we're doing together to build more sustainable communities.

For sprawling cities like Atlanta, neighborhood stabilization efforts have provided a real opportunity to fundamentally re-think land use and better link housing investments with jobs, schools, and transportation.

In places like these, communities will be able to combine Project Rebuild and HUD's sustainability planning grant resources to spur transit-oriented development, more closely connect housing to job centers and speed economic recovery.

Building Capacity

Of course, no matter how big the grant or well crafted the policy, no place can succeed without strong institutional capacity to see those policies through -- and that's particularly true for those communities which were struggling long before the current economic crisis.

That's why this summer, the Administration unveiled the Strong Cities, Strong Communities pilot initiative to build capacity by providing on-the-ground technical assistance and resources in 6 distressed cities and regions -- Detroit, Cleveland, Memphis, New Orleans, Fresno, and Chester, Pennsylvania.

And make no mistake -- we chose these six places not just because of the challenges they face, but also because of the assets and partnerships they bring.

I've already discussed the role institutions like Wayne State University and the Cleveland Clinic are playing in Detroit and Cleveland. But these connections have also helped smaller places like Chester, which partnered with Widener University to redevelop the city's downtown.

Perhaps one of the most exciting aspects of Strong Cities, Strong Communities is based on an idea first forged by Mayor Harold Washington at a time when Chicago faced capacity challenges of its own in the 1980s.

Mayor Washington reached out to the Chicago business community -- and the business community responded by creating the Civic Consulting Alliance, recognizing that the best way to protect their investment was through civic engagement.

Today, the Civic Consulting Alliance's $2 million operating budget leverages $12 million in pro-bono professional assistance funded by the private sector to fill the city government's capacity gap.

That's bang for the buck -- and that's what we're hoping to stimulate with Strong Cities, Strong Community's Local Resource Networks.

As CEOs for Cities, so many of you have figured out how to grab hold of the futures of your company or institution by changing practices and investing in new processes. Many of you are also just as committed to the future of these cities.

And so, I challenge each of you here today to commit to being a part of these cities' reinvention and be a founding member of a Local Resource Network.

An Opportunity to Lead

As all this work demonstrates, this is an Administration that not only believes in cities -- but in the power you have to change them.

Leading an agency like HUD, I know what it's like to be seen as not only as not part of the solution -- but worse, part of the problem.

But whether we're a university or a hospital, a foundation or a business, our missions are never closer to being fulfilled than when we have made our presence felt -- not just in the classroom, lab, or boardroom, but in our communities.

After all, in the words of your mayor, "a crisis is a terrible thing to waste" -- because with any crisis comes an opportunity for change. For new thinking. For new investments. For new partnerships.

This moment is your opportunity. Not just to serve, not just to study -- but to lead.

And when you do, you'll have a partner in this administration.

A partner willing to bring the full scale of America's public, private, and third sectors to bear on America's cities and the challenges they face.

Working together, I know that we will. Thank you so much for having me here today.

###