How food can create economic growth in East Baltimore
For the past nine months the media has reported about a new project that would act as an urban revitalization catalyst for East Baltimore.
Soon the Baltimore Food Hub will start transforming the area around the old Eastern Pumping Station into a canning commissary, an inner-city community farm and a kitchen incubator.
The $16.3 million project should be completed by the end of next year and has big names and organizations behind it like American Communities Trust, The East Baltimore Community Action Coalition, Johns Hopkins University, Big City Farms, Spike Gjerde and Woodberry Kitchen, the Maryland Food Bank and a host of others.
This all sounds wonderful but us Baltimoreans have a tendency to be skeptical when we hear about grandiose plans that will revitalize blight stricken areas of the city – and rightfully so. Of all the articles I’ve read, no one covering the story has outlined why these plans will do what the planners forecast it to achieve.
However, if this project is correctly managed, it should be as good as advertised.
An example has been set forth
A blueprint was laid after the financial crisis that was beneficial to small businesses. Incubators were used to promote technology and other entrepreneurial endeavors on the local level. Incubators provided capital and mentoring to many entrepreneurs and small businesses. Over the past few years, the food industry has latched on to the idea.
Food hubs/kitchen incubators provide shared kitchen space to give assistance to start-up catering, retail and wholesale food entities. By clustering together, all the businesses share all the costs – such as buying equipment, rent, and fees – that can be astronomical in the food industry.
Food Hubs and Kitchen Incubators are a perfect match for urban areas
The Initiative for a Competitive Inner City (ICIC) – a nonprofit research and strategy organization and the leading authority on U.S. inner city economies and the businesses that thrive there – created a presentation to the Inner City Economic Summit back in October of 2011 for the cities of Detroit and Boston.
In “Designing an Inner City Food Cluster Strategy,” ICIC research showed that food production, wholesaling and retail make up a broader food industry that’s a bigger part of our overall economy. More than 700,000 food “entities” are in this country that employ about 12 percent of the U.S. workforce.
But it’s the small business nature of hubs and incubators that make them beneficial to urban economies. ICIC found that more than 40 percent of all companies in food incubators have four or fewer employees.
Another 50 percent of these food companies have between five to 49 employees. As far as education was concerned, 60 percent of workers have a high school diploma or less compared with 44 percent for the overall economy – which means the industry has less of an educational barrier to employment.
As of the summer of 2013, more than 140 food incubators are in the U.S.
Opportunities for growth
ICIC researchers found that the growth opportunities for food hubs like the one proposed for Baltimore lay in the areas of production, distribution, institutional food service and retail and restaurants. When constructed in the right manner, a food hub should address each of these processes as a part of free flowing food ecosystem. It looks like the Baltimore Food Hub will do that.
The kitchen incubators spur entrepreneurship that will translate into small business creation. Couple this with urban farming and you have your production.
With a food hub, you can create one of the only venues in this section of Baltimore City where residents will have access to fresh local food. That’s distribution.
Now that you have a specific physical foundation, you can establish or strengthen those relations with institutions such as the Baltimore City School System and Johns Hopkins. The hub will benefit greatly from the Johns Hopkins Real Food Challenge pledge that states that at least 35% of the University’s purchased food must be “local, sustainable, humane and fair trade by 2020.” Institutional food service seems ripe with possibilities.
Incubators provide low cost facilities and mentorship to allow start-ups the time to get off the ground. Woodberry Kitchen’s Spike Gjerde will use space at the Hub to can and preserve a host of different produce for use at all his other restaurants. These types of activities cover retail and restaurants.
Backers believe that the Baltimore Food Hub will create 100 jobs in the neighborhood in three years. In addition to the facility’s job creation, you also have on-site job training resources for people to enter into the culinary hospitality industry.
Step in the right direction
One program or idea will never be a cure-all for all the ailments of Baltimore City. But this one has legs. Baltimore’s violence problem was addressed last week and the Mayor and her Administration should put into place policy initiatives. Now we can take a look at economic growth. This isn’t the growth you get from giving subsidies to major developers; East and West Baltimore won’t work that way. The foundation has to be based on grassroots’ policy and change.
Jason spent eight years at T. Rowe Price serving in various roles from investment counseling to retirement planning. In 2005, he became Senior Security Analyst at Wells Fargo Corporate Trust in their Residential Mortgage-backed Securities division. He has contributed to several financial newsletters and the Motley Fool website while completing his thesis and Master’s Degree in Government from the Johns Hopkins University Advanced Academic Program. He resides in Baltimore.