An Investment Playbook Guide for Accelerate El Paso
An Investment Playbook for El Paso, Texas: Using Federal Funds to Build a More Competitive & Exclusive El Paso [PDF]
For the past few months, the Nowak Lab has worked to launch ACCELERATE El Paso, an initiative intended to spur an inclusive recovery by building a structured ecosystem of coaching and capital for Latino businesses. Developed in collaboration with the Aspen Institute Latinos & Society Program (AILAS), Christopher Gergen of Forward Impact, and economic development leaders in El Paso, we created an investment playbook for a major health corridor which (1) identifies opportunities for equitable economic growth, (2) strategically prioritizes shovel-ready and shovel-worthy investments, and (3) blends philanthropic and private capital with federal funding to fully launch large-scale projects.
Investment playbooks are a new and effective tool to organize assets, build stakeholder consensus and align investment. Earlier this fall, we spotlighted the development of an investment playbook in Buffalo as one of the most ambitious community transformations we have seen in the United States. The co-investing strategy brought together multiple sources of capital to implement a transformative vision for the East Side neighborhood. Overall investment playbooks present opportunities for investors and local leaders to connect with each in a mission to reinvigorate promising neighborhoods through inclusive economic development.
The investment playbook presents a unique paradigm for equitable economic development and demonstrates how to bring it to fruition, focusing on the configuration of private, public, and civic capital. In El Paso, we worked with the Hunt Institute, a local data partner housed in the University of Texas at El Paso, to develop a methodology that could identify areas (census tracts in particular) with (1) strong municipal incentives in place and a significant number of anchor institutions, who typically also have ownership over their underlying land; (2) physical presence, through jobs or businesses, of a growing and promising industry; and (3) historic disinvestment and marginalization from the larger community.
Through an interview process with local practitioners and key community stakeholders, we ultimately identified a campus (referred to as “the Medical Center for Americas, or MCA, Area”) that included a hospital network and university (anchor institutions); a growing presence in health services, which had spurred on a burgeoning “medtech” industry; and a commercial and residential community with low incomes. Using a data-driven methodology that wove these elements together, the MCA Area emerged as an area that reflects true nodes of production, innovation, and potential.
In addition to a strong narrative built around quantitative and qualitative analyses, the MCA Area included a strong community anchor that could bring multiple stakeholders in economic development together: the MCA Foundation, a nonprofit organization seeking to develop “a growing hub of innovation for the Paso del Norte region’s healthcare and biomedical industries.” Formed in 2006, the MCA Foundation was created when business, civic, and government leaders sought to transform El Paso’s economy and improve upon the need for health care. Since then, the organization has used its contracted, allocated funding from El Paso City Council to fully build out a campus and programs. It has also fostered strong, authentic relationships with key stakeholders across civic, public, and private sectors at both the local and regional level.
As the Nowak Lab continued its work with the MCA Foundation, the team recognized the need for an operating paradigm that could guide economic development decision-makers. Our previous work on community wealth, main street regeneration, and innovation districts informed the creation of five unique dimensions in our equitable economic development strategy: entrepreneurship, innovation, community regeneration, workforce development, and infrastructure. Each of these elements can manifest in different ways, depending on the idiosyncrasies of the geography.
To operationalize this paradigm, the Nowak Lab identified different investment needs, or local uses, within the area. We engaged with the Steering Committee created by ACCELERATE El Paso to understand these needs and categorize them within our five dimensions. This allowed us to strategically prioritize transformational investments and fully leverage all capital sources available. In collaboration with the MCA Foundation, we focused our attention on two projects: the buildout of a Devise Product and Realization Hub, which would support budding entrepreneurs and job seekers specifically in the region, and three Centers of Excellence that could possess equitable health and wellness services creating a higher quality of life. These projects meet national goals and can leverage up federal funding to achieve community purposes. We identified gaps in financing and matched various federal sources with specific local uses of each project. Within this matching process, we focused on where federal subsidies should fill in gaps, thinking about how these subsides can operate where the market naturally cannot. The ultimate goal is to help practitioners better understand how to braid philanthropic, private, and public capital in the most efficient way for these projects.
The work we conducted with the MCA Foundation is emblematic of a process that can be scaled and replicated in communities across the country. How an investment playbook shapes out will depend on the distinctive shape of a locality’s market—it is an iterative process that presents unique lessons as we replicate them in different places. In this playbook, we demonstrate how a city like El Paso can capitalize on this once-in-a-generation federal opportunity by building upon its areas of opportunity. Furthermore, our work informed a unique paradigm that illustrated five key mechanisms for achieving equity. Smart practitioners who understand how to combine “the market play” with “the equity play” can create innovative strategies that allow marginalized residents, families, and communities to build up wealth and thrive.