Adriana Abizadeh-Barbour on Building the Neighborhood Commons: What Happens When the Neighborhood Owns the Block

Adriana Abizadeh-Barbour Yeah, of course. Thanks for having me.

Speaker A So I think we'll take it pretty slow, even though people are used to housing commons and tenant equity trusts and stuff like that. But I think it'd be good just to level set for anyone who's coming into the new season and just be like, you know, what, what is this again? And so I think a great way to start before we get into all of that is just to get to know you a bit. So could you introduce yourself maybe the way you would to a neighbor in Kensington, in the Corridor Trust itself, you know, who you are and how you describe your job?

Adriana Abizadeh-Barbour Of course, happy to. Yeah, so I'm Adriana Abizadeh-Barbour, Executive Director of the Kensington Corridor Trust. We are the nation's first neighborhood trust. What that means is we purchase real estate on Kensington Avenue, which is one of the primary commercial corridors in the neighborhood. And we place that real estate in trust for the neighborhood to directly own, govern, and control. So the neighbors and the small business owners in the 19134 zip code are the power holders. They are the decision makers, and they are working together to create a new and preferred future for Kensington.

Speaker A Super cool. So if I'm a shop owner or just someone who might end up being a tenant of one of the commercial or even residential spots in the trust, how do you go about sort of explaining it to them on this level? Because when you come into just the regular economy, you're like, that's my landlord, my insurance, and whatever, right? So I'm sure some questions come around like, well, you know, maybe even suspicious ones like, well, what does that mean for governance and government? Well, first of all, I never even hear that word. You know, how does it intersect with what I do? I just want to run a business, right? So like, tell me how you, how do you break it down in plain language for folks who are new to the concept?

Adriana Abizadeh-Barbour Yeah, it's a great question. And I'll use the framing of a small business owner that meets us for the first time that's interested in leasing on Kensington Avenue, because in that, you know, exchange of building relationship, We have to both explain to them what the trust is and then how leasing works, because it is distinct and different from traditional landlord relationships. So, you know, we introduce ourselves, we talk a little bit about some of the assets that are held in trust. So currently there are 32, we have our 33rd under agreement. We will point out to some of the small businesses on the corridor that are currently inside of community-owned spaces, right? So point out the church, point out the tax office, point out the hair braiding studio, the diner, the candle making studio, just so they get a sense of which businesses and also so they can see the density with which we're attracting businesses back to the corridor. And then we'll talk about, you know, how it is community owned, how they will also be part owners should they lease from the trust as a business that's based in the zip code. And we'll talk about the process. And oftentimes this is the part where people start to see the difference, which is, In a traditional landlord relationship, particularly for small business owners, so kind of commercial space, it's all about financial fit, right? So you approach the landlord. Do you have the money for the security deposit and the rent? Do you have a viable business model that will generate sufficient revenue to cover rent into the future? If so, great. Sign on the line. Here are the keys. See you the first of next month, right? And don't call me for anything in between. At the trust, We say, hey, we want you to know that from the time that we just met you right now today to the time that you have keys to a spot to move in could be 6 months to a year, depending on if the spot that you want to move into is already rehabbed. So that's indicator part number 1. But also, we have a multi-month engagement process where the neighborhood has to approve of your business coming into one of the community-owned spaces. And so we're going to need you to come with us. You know, staff of the trust, board members of the trust into community to say, hey, XYZ businesses is interested in leasing one of your community-owned assets. How do you feel about that? What questions do you have for the business owner? What curiosities are coming to mind? Do you have any concerns about cultural fit or affordability that you want to air and have, you know, acknowledged and responded to? Assuming that the community engagement process goes well, About 6 months in, we'll be able to get the board to give the final approval to meet the fiduciary responsibility required by the trust, and then we can sign a lease with you. And so you could move in then if the spot's ready. If the spot's still under construction, we're gonna have to have a conversation about the construction timeline. But there's no opportunity inside of community-owned assets at the trust to just sign on the line and have some keys for the first of next month. That opportunity just does not exist. And the neighborhood has already precluded extractive and predatory businesses. So we won't even present those to the neighborhood. So no one has actually come to us to date. You know, like a pawn shop hasn't come looking to lease from the trucks. I think that's probably because the pawn shops know that we cannot lease to them. The neighborhood is very vocal about what is allowable inside of their community-owned spaces. And so, but hypothetically, if we did have a pawn shop that ever approached us, we would just say, it was so nice to meet you. We are wishing you the best in your business model elsewhere. But Kensington is not interested in having another pawn shop on its corridor, and definitely not inside of one of its community-owned spaces. And so that makes it easier on that front to kind of know what we can and cannot lease to. But then every, you know, every individual business owner has their own special sauce. And what I will say is that 100% of the small business owners that we've attracted to Kensington Avenue are from Kensington. So they either grew up in Kensington, or they live there now, or already had a small business operating somewhere in the neighborhood now. And that was extremely organic, right? So that wasn't necessarily planned. That's just the way it's panned out. Community ownership has over time centralized a circular economy. And we, you know, stand by that both in terms of the way that we're attracting businesses and also the way that we're deploying our dollars, right? So thinking about local subcontractors and consulting partners in our ecosystem in the 19134 so that we can keep those dollars local and keep the economy, you know, circulating and fed.

Speaker A Wow! There is so much in that. Thank you. I have so many questions. So, I think maybe we start somewhere with— I love how you took the perspective of the small business owner and kind of laid out if you're going after the standard financial model, you get the keys, bada-bing, bada-boom, that's how it works. Laying it out this way, so maybe you could tell me a bit about what is the process like? There are obvious— it's almost like a vice clause in investment where it's like you're barred from doing certain things we can't even invest in certain things. On the flip side of this, it's more like we can't even offer you space if you're doing certain things. Can you tell me about the process? I assume it was something community-driven that defined the types of businesses that the community wanted to see within the land trust. How did they come to that decision? How did it get shaped? And kind of how is it moving on now that the KCT stood up?

Adriana Abizadeh-Barbour Yeah, absolutely. And just one distinguishing factor real quick. I just want to make sure as a point of clarity, we're not a land trust. We're a neighborhood trust. It's a legally distinct offering of community ownership. And so in the neighborhood trust model, what we did several years ago— the trust has been around for 7 years. So about 5 years ago, we did a year-long engagement process where we invited neighbors and small business owners in to have long, intentional conversations about how they wanted the trust governed and how the trust would function and act intergenerationally, right? So like, what was the purpose of this work? How would we uphold the work? What would be the guardrails of the work? Who would be allowed to govern? Who would not be allowed to govern? What types of small businesses could we attract? What couldn't we attract? What type of capital will we accept? What type of capital won't we accept? All of those decisions were made during that year. And ultimately, the, the process that was designed for small business owners and for the small business attraction is that folks will fill out an application similar to probably any other tenant application that asks about your business model. You know, how do you plan to generate revenue? How many jobs do you plan to create? Will you be paying living wage, which for Philadelphia is, for Philadelphia County is $23 per hour? You know, what are, what are your plans around that and your strategy for local sourcing, etc.? We'll then take that to the board, and the board will review it and assess simply for financial fit. So not if they believe that the neighborhood wants the business or not, even though they're all neighbors themselves, right? 100% of our governance is from the 19134. So in order to govern, you have to be a co-owner. To be a co-owner, you have to live in or have a small business in our zip code. And so those folks at the table are part of the neighborhood, but they're not making decisions solely by themselves. And so they're looking at it simply for financial fit. So does this small business tenant meet the requirements of being able to lease from the trust? If the answer to that is yes, then the board authorizes the staff side to begin the engagement. Engagement is typically about 3 to 4 months. We create a one-pager for every small business that comes through that makes a past financial fit. We work with the small business owner to generate it. It provides an overview of the business model, of the business owner, where they're potentially going to be leasing. So like if we've identified a building, which building specifically will they have their small business at? When we anticipate they'll open, any special information about their business that makes them unique or stand out or that we think would— the neighborhood would find attractive or appealing. We use that one-pager and then we also bring the business owner along into every community, community meeting that we can get into and get on the agenda for over the next 3 to 4 months, in addition to canvassing, flyering, social media. Texting, email blasting, just to make sure that we reach as many folks as possible during that engagement process. If we hear a resounding yes, that folks are like, yes, we want this small business on our corridor, we're good with it coming to the Ave, we then take it back to the board for the final approval. So we say, hey, we did X number of engagements, you know, we saw X number of residents and small business owners, and everyone said yes, or we had, you know, 3 people say no. whatever the larger kind of voting or tallying was, and then the board takes the final vote. Once the board's taken the final vote, we can sign the lease. And then, as I said, it depends if the spot's available or if we're still under construction. Right now we have a waitlist of small business owners that are waiting to move into KCT spaces. So we're doing engagement while construction is ongoing so that as soon as the construction is ready and complete, they can move in. So we, for example, on June 30th, we just opened a small community grocery store on Kensington Avenue that we've been working on Like since the beginning of the trust. And that engagement was done well in advance of construction completion. So we knew it was going to take us a while longer to finish this physical space, but we wanted to have the engagement done, make sure that the neighborhood approved of this specific business owner and this specific grocery store. Before bringing them to the Ave. And that was even after the neighborhood had requested a grocery store. We still were required to go back with the specific business owner and the specific business model.

Speaker A Cool. So tell me a little bit about— it sounds like consensus building around this and awareness. So you're doing that, you're trying to tell people what's coming, who's coming. Then once you do that and you have kind of like a fingertip feel of, oh, this is something people want and they won't object to outright, then it goes to a board vote. So tell me a bit about what happens at that point because, you know, is it just a bunch of people? Like, how engaged are they? How do they come to the decision? How transparent is it? Would love to learn about that.

Adriana Abizadeh-Barbour Yeah, so at that point, the board has probably been in one of the community meetings. So, because again, they're all neighbors and small business owners, so they've probably seen and met this business owner directly already, have had a conversation with them, have been able to see what their neighbors think and feel, and they can bring that back to the larger board. So if everybody on the board hasn't had that opportunity, different board members are gonna weigh in and say, hey, I saw them when they came out to the Harrogate Civic meeting. You know, I met the business owner, Tom. He seems great. He said he's going to create X number of new jobs. He's committing to living wage. It sounds like there's going to be affordability and cultural fit. I think he'd be a great, you know, fit for this specific location because it's right across from the park. So it's accessible. The train's right there. Like, whatever the facets or the assets are, folks are going to lift that up. And then any concerns that they heard, they're going to lift those up. I will say, of the businesses that we've attracted to the corridor, because the mission fits and like the the fact that the business owners were from Kensington, it has been a very smooth process, right? So we've never actually brought a business to the neighborhood for engagement that the neighborhood said no. That hasn't happened yet. I'm sure that it could happen in the future. We're kind of just like waiting to see when that will happen and what type of business that will be. But for now, folks have just been very excited to support these businesses. And I— what I can say on the back end, and we believe this firmly, is that because we do this multi-month engagement process where the neighborhood is affirming the small business owner for the community-owned space, 100% of our small businesses that we've attracted have stayed. So we've not lost a single business that we've brought to the corridor because the neighborhood has bought into their business model. So you automatically have a stream of folks that know you're coming. They know what you're about. They're excited to support you and they want to see you sustained. Right. And so that's what we say to folks, right? When we meet people at the beginning, it's like, hey, it's going to be a lengthier process. Like, I don't want to lie to you. I want to be very transparent with you that this is not your traditional landlord experience. And also on the back end of this, there's real success, right? And I can introduce you to some of the small business owners who can talk about it directly, what they've seen, what they've experienced, both in the process with the neighborhood, but also in having the neighborhood as their landlord. It's a vastly different experience than a traditional landlord relationship.

Speaker A Yeah, absolutely. I can, I can imagine a number of ways. I mean, it has a lot of obvious, like, you know, just if you take the grocery store example, should every grocery store be subject to not just the profit motive of one landlord, but eventually just becoming rolled up into a national stock that then is speculated on? It doesn't seem like a great way to mobilize units of square footage in a retail space. So I can already kind of understand the benefit on that space where you're just like, buddy, we're just trying to sell apples, right? Like, chill. That makes sense. So I think that's really interesting. So I want to actually I do, before we jump off the governance talk, I did want to break down a little bit, and you already did, but the one that I wanted to kind of dig into a bit was you mentioned when you were managing the expectations of a new small business owner, you're telling them, hey, it could be 6 months to a year. Some of that sounds like it's constrained by construction and very physical, actual constraints. Others, I'm curious, how much of that is also just the process of decision-making consensus and getting people to come together and make decisions? The ones that are not the SME or not the small business owner, but the actual community, right? Like, how long can you talk to— can you speak to that a little bit?

Adriana Abizadeh-Barbour It's about 6 months. Yeah. So the process of having the first board meeting to do financial fit, doing about 3 to 4 months of engagement, and then having the board meeting for the board to affirm what the neighborhood has said and then approve us engaging in a lease, it's about a 6-month process. And it's by design. You know, we've thought about and had conversations about shortening the engagement aspect in the middle, But essentially, the neighborhood has said no, because then you won't be able to actually reach that many of us, right? Because then you're just going to, what, attend one meeting, canvass 3 streets, right? And folks really want to make sure that they have the opportunity to weigh in. And so for that reason, it's remained in this like 3 to 4 month space. And so I would say the shortest amount of time that it could get done is probably 3 to 4 months. And that's if the board meetings align perfectly. Yeah. Like, we just met you, you got your application in super fast. There just happens to be a board meeting in 3 weeks. We get you in that meeting, we run out to the community, we do the engagement, we run back in time for the next board meeting. We could try really hard to knock it out in like 4 to 5 months, but realistically, you know, I would say more like 5 to 6 months is a typical engagement from the time an application is submitted to the time that the board has approved the lease.

Speaker A Have you, you know, you mentioned anyone you brought always gets through, but have you had anyone step away because it takes too long?

Adriana Abizadeh-Barbour We haven't. We have not had anybody step away because it takes too long. I will say we have had lots of entrepreneurs that we've met that haven't met financial fit. So they, they come in and their business model is just not quite there. It's not at a space where we can feel comfortable leasing. But we've had folks like step away and come back, right? We've had folks be like, okay, yeah, let me go work on this thing. Let me get this technical assistance from this organization that does, you know, small business plans or that can support me with thinking about the hiring strategy or local sourcing. And then we've had folks come back and say, okay, I'm ready. Let's do this again. So we have had that, but we've not had anyone who was like, you know what, I'm actually qualified to do the thing and this is taking too long and I'm not doing it anymore. We, we haven't had that yet.

Speaker A All right. And correct me if I'm wrong, you folks have been around since September 2019, right?

Adriana Abizadeh-Barbour Spring of 2019. September 2019 is when it was like formalized, legalized. But we were born in the spring.

Speaker A Nice. Let's take a little trip back there because, you know, Everything that I have seen that you can casually Google about Kensington has drug problems, this, whatever. I haven't been there. I can only speak to what I've seen on the internet. So I'd love to understand a little bit when you go back in time and you roll it forward. If I'm walking down the street in Kensington today, you guys, from what I remember, have something like 33 properties. Is that right that you have under—

Adriana Abizadeh-Barbour We have 32 in trust currently and our 33rd is under agreement. We should be closing in the next Nice.

Speaker A So, I mean, you can drive an immense amount of change in 7 years within that. So I'm curious to hear, like, you know, you, you, you folks have been doing it for 7 years. What have you seen change in those 7 years? Like, you know, if you take us back through time a little bit.

Adriana Abizadeh-Barbour Yeah. So let's see, to back up and say everything that you see online is, yes, accurate, right? Those, those things are happening. There is a large amount of drug trade and sex trade, high crime, high vacancy happening on our corridor. And there's also a lot of external pressure coming in through investment and speculation. So that's happening simultaneously, and that's why the trust was launched 7 years ago, was in the face of some of that investment and trying to make sure that the upside was captured for the neighborhood, that the community was able to build wealth together through the real estate acquisition and ownership and control the future of Kensington Avenue and the neighborhood more broadly. To say that there's been vast sweeping changes as a result of KCT's work would be a gross statement, right? Our work is one of many different tools that are in a very large toolbox for Kensington, including city government, which is a critical lever. And I think oftentimes when folks talk about neighborhoods, you know, like Kensington, they forget about all the systemic issues that caused the conditions of neighborhoods like Kensington, right? There's policies that have been very intentionally supported, upheld, and invested into to ensure that poverty remains concentrated, that crime remains concentrated so that it's not spilling out into more affluent neighborhoods, higher-income earning neighborhoods. And so want to name that because I think if we're not moving from the context of systems and policy, we're doing a disservice to the people in Kensington who have had to live through all of its various cycles of investment and disinvestment. That being said, KCT does have 32 assets that are held in trust. 9 of them are still under construction. 11 of those are our community gardens. The community garden was our very first kind of pilot project, right? It was the, hey, these assets have been put into the neighborhood for community control and community ownership. What do you want to do with them? The neighborhood said, we want green space. We converted it into green space, and it's sustained as a green space this entire time. It's a very active third space. Neighbors are utilizing it. We have keyholder agreements with neighbors, with small business owners, with other nonprofit organizations. to host events there at no cost. So anything that happens in the garden must be free and open to the public. So no closed events, no private events, because it is community-owned. And so that space gave us a starting ground from which to start to organize folks both around policy and the advancement of community ownership, right? So simultaneously saying, hey, we need to move policy and advance systems change in order to get the outcomes that we want. So if we want to see crime go down, if we want to see a reduction in unhoused population, if we want to see a reduction in drug trade and sex trade, if we want to see a reduction in external investment, but, you know, not to continue to see vacancy, then here's the other side, which is let's start to co-own this stuff, right? Let's start to buy some real estate together so that we can be part of the physical change while we work on the systems change. And what we've seen is on the blocks where KCT is currently holding assets with any form of density, which is on 4 blocks, we've seen a reduction in crime. We've seen a reduction in vacancy. We've seen an increase in public art, an increase in street lighting, an increase in greenery. Those are all investments not just made by the trust, but made by city government, made by our nonprofit partners. And we work very closely with an ecosystem of folks in Kensington who are working very intentionally day in, day out to make sure that the streets are clean, that folks have access to the resources that they need, and that people have the relationships in place to have those resources met. or are those needs met with the resources, you know, when they, when they need them and want them? Does that take away from the fact that we're still in a corridor that has high crime and high vacancy? No, right? It's 4 blocks on a much longer corridor, and those 4 blocks are not angelic either, right? Like, there are still issues that happen on a very real base— on a regular basis. And that's the reality of Kensington, is that it is an ebb and flow, right? You, you start construction on one block, it pushes folks to a different block. Then someone starts construction on that block, it pushes folks to a different block. City of Philadelphia does their enforcement strategy. You do some policing, you do some corralling, it causes further push. So everyone's doing something which is causing it to just kind of tilt and move in different directions at different times, which causes issues. You know, you create little hotspots, you create pockets where there's potential for additional activity. And the reality is that you just have to be mindful of that. Be aware of that, try to mitigate that when you can. And then continuing to work with the service providers, right? There are a ton of harm reduction organizations that are working out on the Ave day in, day out, you know, around the clock, 365, to support folks in getting into services, whether that's, you know, addiction support services or housing services or mental health services, family reunification, employment, you know, the list goes on and on. But the larger kind of macro thing to hold in that is that there's hundreds of unhoused folks in Kensington, right? So we're not talking a very small problem. We're talking a very large-scale problem. And the data point that exists is that it takes about 100 meaningful touchpoints to engage with someone that's unhoused and actively utilizing before they'll accept supports. So that means you have to be continuous in your efforts, and you have to build deep and meaningful relationships with these folks in order to get them to build trust and to be able to accept services. And I think People try to underplay how difficult that is, right? They're just like, oh, you just need to get them into housing. It's not that simple, right? There are lots of intersectional and coexisting issues that simply housing someone— that's assuming that you have housing for them, which City of Philadelphia does not. But simply housing them would not be the single solution. It is a great first start. And there is a shortage of sufficient units that are made available in the City of Philadelphia for folks to move into. Which is one of the larger problems.

Speaker A Got it. Well, I think you touched on a lot of interesting things there. The thing that you see ending up happening in most places, which is what's so surprising about KCT, is that, well, you have private equity, you have various policies that have attempted to do things that are either full of adverse consequences or just never— no one stuck with them or enforced them. So I'm curious, You know, going back to September or spring 2019, how did folks, you know, you and others included, how did this come up as a way, a viable solution, a viable approach? Because I think, you know, what I love to see in experiments like this is that when the community comes together and realizes that there are a lot of similar problems, problems that have similar causes, a lot of the time people are just like, Well, this isn't my problem, or I'm about to retire, or I'll just get out of here, or whatever, right? So there aren't a lot of systemic solutions like this that bubble up to the top because they just feel too hard once you put too many people in the room. I have my own theories for why this stuff falls apart. What I thought was really interesting was that you said these words, systemic change, right? That's this being like a thing that you can put out there. So I'm very curious because some of the circles I run in, when I hear the word systemic change, it's honestly just lipstick on a pig, right? Because people are like, oh, I did this blended finance thing and that's systemic change or whatever, right? So this, from what I can tell from the outside, has real potential, but I've always found a major blocker to be like when you throw those words out there, people are like, what? Change the system to what? So I'd love it if you could take us back to those formative conversations. How did KCT Bubble up to the, to the, as a potential solution? And how did you get people on your side for systemic change?

Adriana Abizadeh-Barbour Yeah, that's a great question. So the trust, when it launched, there was 4 co-founders that were working in the neighborhood. So a local community development corporation, a local small business incubator, a local private developer that has a B Corp designation, and then the City of Philadelphia's Public-Private Partnership for Economic Development. And they all came together. really focused on the state of the corridor, right? So high vacancy, high drug trade, high sex trade. We also have external investment coming in. What are we going to do? What potential solutions exist out in the country, right? So they took a national scan at different models. They looked at the community land trust model. They looked at business improvement districts. They looked at the private developer model and the community development corporation model, which are already at the table. And as they were doing their research around different potential infrastructure types, They came across this model in theory of a neighborhood trust. So there's a tenured law professor at Cornell. His name is Joe Margulies. And he wrote an article that landed in Social Stanford Innovation Review Journal, SSIR, where he basically said, wouldn't it just be great if neighborhoods own their own stuff and had the ability to self-determine and self-regulate, right? So self-control, outsiders are not influencing or telling them or making decisions for them or on their behalf. They control the real estate, they control the capital. And if someone built this thing, we'd call it a neighborhood trust, right? That was his article in essence, right? It's like, I'm theorizing that there is a way to make this possible. Wow. And so the founders, the co-founders of KCT picked that up, engaged counsel, engaged steward ownership experts from Europe, who then at that point had a California headquarters. And we started to do the deep work of figuring out what legal infrastructure could help to make this true, where the neighborhood could actually collectively own and control real estate. It would be protected intergenerationally. We could set up a purpose that prioritized affordability. We could think about solidarity and circular economics, later also thinking about restorative economics. How do we do that? We build a neighborhood trust, which for us, our legal infrastructure, we're part 501 nonprofit, and we're a perpetual purpose trust, which is a very specific type of trust that allows you to perpetually protect anything that you put inside of it for a purpose. And so our purpose as defined by the neighborhood is twofold. The first part of it is intergenerational affordability in a neighborhood that's actively experiencing displacement. And the second is collective control and ownership of real estate in the commons outside of the speculative market. And so the decommodification of real estate gives the neighborhood the opportunity to essentially live out America's proof point, right? And this is our theory of change, which is those who have amassed land have amassed wealth. And those who have amassed wealth have amassed power. And we're doing that at scale. And that's where we transition to the systems, right? And so the way we talk about KCT at a high level, Kensington Corridor Trust, KCT at a high level, is that the neighborhood trust model is a systems change model. We are not a silver bullet, right? So we require lots of partners to do other parts of the hard work while we hold this part of the hard work. Yeah. And alongside the fact that we're not a silver bullet, we still can control and do have control over several levers. Including real estate as a primary tool and method for building that power that comes from building the collective wealth. And systems change for us is really inherent to the model, not just in the way that the real estate is owned, but also in our organizing and advocacy. So we have a full-time organizer on staff. It was the second hire to our team, right? So it was me to support the co-founding of the organization. And then our next hire was a community organizer, someone who could really do the hard work of building the base in Kensington to say, hey, What are the issues that you want worked on that policy could change, right? That systems have enacted that we actually could undo should we choose to work really hard together and work hard with our legislators and our council and our mayor to say, hey, no, actually, this is no longer acceptable here. And this is what we want to see happen. This is what we want for the future of this neighborhood and for the city of Philadelphia. The other thing that I think is important to note is that when KCT is fighting for policy, we're fighting for policy at the city level. So it's not just Kensington-specific. We're saying, hey, people need access to transportation across the city. Hey, people need access to affordable housing across the city. Environmental justice harms have been caused across this entire city through industrialization, deindustrialization, not just in Kensington. All of these different things. And it gives us the opportunity, and the neighborhood has given us the opportunity to jump into intersectional policy areas. So we are a really strong advocate of transportation policy. and ensuring that there is accessible transit to folks of all ability types and at all financial access points, that's not just for Kensington, that's for Philly, right? And if we can take it national, we will go national, and we do go national at times when it is critical and when there are opportunities to co-collaborate with other cities.

Speaker A Nice. So when you, when these 4 entities started to address this issue in September 2019, it sounds like they very much, the people who were there, were very much thinking thinking outside of the box for new ways to approach this. Because if you survey the landscape, like you said, there's not really one thing fit for purpose. So you kind of have to make it. Mm-hmm. One thing I'm curious about is you have this process where you have a new business coming in and it's a kind of a long and drawn— this is very deliberate, purposeful process of 6 months that ends up being a bit long. I'm curious, on the— if you were around, or maybe you could speak to it— in the early stages, was there this— was there a similar approach to this with the community that lives there now? Because I think you mentioned a bank, a business accelerator, a couple other entities, right? Did they also go out and say, hey, Kensington community, this is kind of what we're cooking on?

Adriana Abizadeh-Barbour Yeah, so I would say it was a mix. So there was 4 partners that were at the table. One of them is the CDC, who I think was Well, not I think, I know for a fact, was the most community-facing out of the 4. So it was a CDFI, an incubator, a private developer, and a CDC. Mm-hmm. And the CDC has been in the neighborhood since the '80s, and the executive director there, along with their team and their board, worked very hard just in the kind of years leading up to the trust's formation on a neighborhood plan. And in that neighborhood plan, one of the things that emerged was a central focus on Kensington Avenue and all of the commercial corridors in the neighborhood, right? So how do we utilize corridors as a space for healthy safety neighborhoods and utilizing it as an anchor, kind of like an anchor or centralizing point. And the other thing was small business attraction, right? So how do we start to bring small businesses back to Kensington? And how do we ensure that there are opportunities for folks to stay here and thrive and not in the kind of big box commercial sense or franchise sense, but just like in the everyday small business owner operator, right? Because that's what folks have a memory of for Kensington Ave, right? For anybody who grew up in Kensington, you know, decades ago, They have a memory of a thriving corridor, zero vacancy. Everything you needed could be found on the Ave. People from other neighborhoods would come to Kensington to shop, right? So if you needed to get to the butcher and the clothing uniform store and the sneaker shop and get a haircut, and then, you know, find a space to worship and then get a haircut, you could have done all of that on the Ave. Now you can do some of those things, but all of those things are not. Still accessible or yet accessible on the avenue because we still have such a high vacancy rate. And so, you know, I would say the CDC that was at the table that helped to form and found KCT was very much kind of in alignment and conjunction with the neighborhood and knew what the neighborhood was asking for, supported that early development of figuring out that it would be a green space, right? That, that was what the neighborhood wanted and had asked for with those first 11 lots that the trust acquired. So I would say they were most proximate to the ground. The organization, you know, still in its inception phase, brought me on, and I come from an organizing background, from a policy background, and really helped to infuse some more of that into our work. And I think, you know, for my first year, year and a half at the trust, all I really did besides trying to figure out how to fundraise some capital to make this possible was listen, right? Yeah. Just what is it that this neighborhood wants? more broadly, and then from this trust, right? And I, you know, will be very transparent in saying when the trust first launched, there was a lot of hesitancy in the neighborhood around what it was that this trust was going to do and accomplish, both what it was saying and then what it would be actual, right? Like, how would this proof point actually show up? And it was a very fair assessment and continues to be a fair assessment of anything that comes into the neighborhood. Kensington is a neighborhood like many others in environments where there have been significant disinvestment, you start to see the systemic issues boil up, and you end up having a ton of social service providers who then flood in trying to support and provide resources and have solutions and whatever, all of the things that happen, right? And so there is a very natural distrust when something new emerges, right? Are you just here to do more of whatever has already been happening, right? The Band-Aid work— Yeah. That's not actually helping to advance solutions, that's not actually causing a change in my day-to-day experience, Right? I'm still walking past needles and human feces, but there's these service providers that have been out here for 10, 15, 20 years trying to support all of these different issues. And so there was a very real and earned, merited, you know, pause that people had. And so it took a while for me to build trust, to just keep showing up and keep listening, and then start to do some of those proof points. You asked for a garden, here's the garden. You want affordable housing, here's the first building coming online. You want to govern by yourselves? Great. The entire first board that was all the co-founders, they're all rolling off and you're all going to take on full ownership and full governance, right? Yes. So just continuing to bring forward what they were asking for, making it actualized. And some of them are small, easy wins, right, that we can like achieve in a short period of time. And some of them are long wins. This grocery store that just launched on June 30th, 7 years into the trust's existence, was asked for in my very first year at the trust. So my very first year at the Trust, when I was listening and asking folks what they wanted to see on the Ave, the number one thing that everybody said was the grocery store. And I remember thinking, they gave me the single hardest thing to accomplish, right? Like, they have asked for the behemoth. Because every grocery store that I spoke to said, no, not in Kensington. The crime is too high. The vacancy is too high. Parking is a challenge. There's no loading bays or loading docks, so I can't get my supplies and deliveries in. And it was just no after no after no after no. And we spent years trying to figure out how to make this happen, how to find the right piece of real estate, how to find the right operator, how to find the right suppliers. And it took this long, but we did it. We did the thing that the neighborhood asked us to do. And there's now a grocery store that is open on Kensington Avenue that is literally just like a 1-minute, if it's even a minute, walk off the train stop. So you can get into the grocery store, grab your groceries that you need, and jump right back on the L, right on the elevated train. But it took time, right? And so we had lots of small wins along the way, but this big one is the one that folks were waiting for, and it took this entire time. And we have other big wins that are underway too. Right now we're in the process of our single largest acquisition to date. We've been asked by neighbors to take on the acquisition of a $20 million property, and it's taken us a year to fundraise that capital, and we're slowly getting towards closing sometime in the next 30 to 60 days. It's going to grow the community control in the neighborhood, our square footage by 300%, our unit count by 150%. Wow. And so we're excited to take that on. We're excited to bring in this very large acquisition for community control, not just to show what's possible when you scale and deepen this practice in Kensington, but also what is possible with community ownership nationally.

Speaker A Well, I think that's— you kind of transitioned right where I wanted to go next, which is the money. So tell me a little bit about— I think my background research might be wrong on this, so feel free to correct me where you see fit. But I think it was something to the point of you take on unsecured debt at 0% to 2% with interest deferred through redevelopment. So tell us a bit about— I can imagine fundraising for that being very difficult. So tell us a bit about maybe speaking a little bit to the type of funders who this attracts. What has that been like? And then we'll touch on everything else that emerges from that, but maybe we just start there.

Adriana Abizadeh-Barbour Yeah. Leveraging unsecured capital for real estate is probably the hardest thing I've ever done. I mean, I've done lots of hard things over my career, but walking up to a foundation, so foundations tend to be large investors of ours, walking up to a high net worth individual who also tend to be large investors of ours and saying, hey, the neighborhood wants to purchase real estate for community ownership, to build neighborhood wealth, to build neighborhood power, but we are not willing to take securities. So you, you can't lien the property. The neighborhood's going to own the thing outright no matter what happens on the financing stack side. It's a really hard conversation because we are socialized that my dollar has to be secured on something, right? I can't just lend you money and hope for the best, especially if you're going to be holding a multimillion-dollar asset in exchange for my dollars that are now unsecured. And so if for whatever reason you don't pay me, you know, the collateral— because we're so used to collateralization— is really not there. Yeah. That's a hard conversation. And for the first few years of KCT, it was extremely difficult, right? So when the trust was launching, It was in the middle and height of COVID right? So my first day at the Trust was in March 2020. So I was in the office for like 3, 4 days, and then it was work from home was mandated in the city of Philadelphia. And I remember having conversations with funders, both local and national funders during that time. And everyone was pivoting or moving their dollars towards COVID response, and rightfully so, right? Folks were dying. Folks were housing insecure, employment insecure, food insecure, didn't have sufficient access to healthcare. There were very real needs that folks needed support with and that we needed to resource. What that did for the trust is it made it extremely difficult to launch, right? Because fundraising was close to impossible. Because at the beginning, to say to folks in the middle of a global crisis, hey, I need $5 million so that I can purchase some real estate that you won't be able to collateralize so that the neighborhood can own it so that 10, 15, 20 years from now you can see systems change. was a, like, far-gone conversation, right? Like, it was just, like, not the thing that folks were prepared to hear. And so we did have some really early investors who saw the importance of building for systems amidst crisis, amidst a global crisis and a localized one in so many ways. And, you know, grateful to those early adopters and to those early investors. You know, years now into the trust, we can raise $20 million in a year from, you know, unsecured sources primarily. For the first time, we're actually taking secured capital. for this project, but historically to now, until this closing, everything has been unsecured. And so, you know, we've really been able to build a base of supporters who are willing to steward on our behalf to other supporters why this work is critical and important. I think it helps that the trust has been solvent, right? And we've been able to service our debts, and we've been able to bring the buildings online and start leasing and attracting the small businesses and successfully have neighborhood governance, right? We've done the things. So I think that, that has helped us a lot to be able to, you know, kind of check off the elements that folks were looking for. But yeah, it's— this is not— these aren't banks, right? So banks aren't going to give you unsecured capital. These aren't your traditional investors, right? They're looking for market rate returns. They're looking for secured capital. It's a very specific type of investor profile who's going to say, yeah, I'm good with giving you 0% money for 10 years. And I'm also good with having zero power in the structure, right? So no voting rights, no say, just like I'm out here watching y'all do great work. And if there's anything that I can do to support, I hope you'll call me back. Right. And yes, we're checking in with folks and we're maintaining right relationship with folks. But it is very clear when you invest in the trust that there is no power here, right, for you as an investor, that really you are being supportive of Kensington in its own power-building journey. And, you know, there are folks who are uncomfortable with that, right? So there's not— we can't take capital from everyone, right? And I think we've had to get comfy with that too, right? It's like, it's okay to not take all the money, like, right? We're gonna take the right money because all money is dirty anyway, right? Starting from the basis of that, right, as a reality and a proof point. Now let's find the money that can find some alignment with what we're trying to do and what we're trying to accomplish. And there's been millions of dollars worth of folks who are willing to do that. And foundations have definitely been some of our strongest partners, both locally and nationally, lending to us directly from their endowment, utilizing program-related investments and mission-aligned investments, which many foundations don't even know that they have as tools.

Speaker A Oh my goodness. Oh, we could write entire books on that. And dApps and everyone not knowing how to do that. That's funny. Well, tell me a bit about the sustainability of this, right? Because I think like there's a number of things that are super interesting. One is that Your stewardship committee, like you said before, is entirely residents and local business owners, but they're also paid, which I thought was really interesting. Yes. Because this is the thing that I just feel like every alternative investment or alternative governance or alternative ownership thing kind of starts off on the wrong foot. They're like, well, we're doing it for good, so you shouldn't have to be paid. And that's just terrible footing because then you're just setting all the wrong incentives from the get-go. So, did you start paying? Was that always the case?

Adriana Abizadeh-Barbour We started paying when it became residents and small business owners. So not with the co-founders. So the co-founders were not paid or compensated for their time. When we transitioned to neighborhood governance, and we did that year-long process, neighbors said, you know, our time is valuable, right? Like, if this organization says that it's an organization that's rooted in social, racial, and economic justice, then, you know, time is a social justice issue, and we will be compensated for the expertise. And the lived experiences that we bring to this table.

Speaker A Governance is work. So yeah, it totally makes sense. Absolutely.

Adriana Abizadeh-Barbour So they voted that rather than to set it to a static number so that they wouldn't have to constantly be changing it, it's tied to living wages. Living wages are put out every year, and they decided that 1 hour worth of living wage was insufficient. So it's double the living wage. So it's a little bit over $46 an hour that folks are being compensated on our governance. It amounts to about a $1,200 stipend per person per year, which for many folks listening, you might think, oh, $1,200 isn't much. When the average household median income in our neighborhood is $30,000 a year, $1,200 is actually a real sizable investment. Absolutely. And most of these folks aren't in their everyday job earning $46-something per hour. So they're compensated for the amount of hours that they put into the trust's work each year. It's provided as a lump sum stipend at the end of the year, and we raise it every year as gen op. So it's just general operating capital that we bring into the trust every year to compensate our governance. And by practice and the way that we've been thinking about this work over the last, I would say, 5 to 6 years is if I'm in the room getting paid, you're in the room getting paid. So if we can afford to pay staff to be here to ideate and to thought partner and to do the work, anybody else that's present is also going to get paid.

Speaker A And I think I read also that, so this, just to stay on the money topic and we'll close it out here in a little bit. So all of this takes money and you walk through where the money comes from and the types of things you're deploying into, the diligence you're doing to make sure that these are sustainable projects, sustainable companies, and entrepreneurs are coming in. Can you tell me a little bit about what is the sort of inflection point that you need to reach for this to be self-sustaining? Because at what AUM basically do you sit where you can go, great, we can pay dividends, we can pay our tax, we can pay everything, and this is a self-sustaining project?

Adriana Abizadeh-Barbour Yeah, this is the question that we get all the time. And when the trust first launched, and I think we still stand by this, we think it's about 60 properties. So once we have 60 properties held in trust, we believe that there'll be sufficient revenue generated from the leasing, still affordable, but from the leasing to service the debt and cover the operations of the organization. When we first started leasing, about $5,000 that first year was rent money because we started leasing in like Q4 almost. Yeah, it was Q4. of that first year. And so we got $5,000 in rent the first year. We thought we were big fish. We were like, look at us, the neighborhood is officially a landlord. We have stuff online. Last year, so 3 years in, last year, our rental proceeds were about $300,000 of our total operating budget. And our budget annually for operations is about $1.5 million. So we're slowly creeping up towards, very slowly creeping up towards where we need to be. And with this major acquisition that we have underway currently, our revenue proceeds are going to significantly increase because it's a very large building. In the building, there's 116 residential units, and there's about 5 or 6 small businesses that are in place as well. And we're excited to see, you know, what that puts us at in terms of sustainability long-term. Will that get us, you know, half of the way? Will that, you know, bring us to about half of our annual operating budget or more? We'll— we will see in the year ahead as we acquire, bring it in, onboard it into the trust. We're also scaling our team now, so our operations will actually increase in order to sustain the asset. So there's like a little bit of growing that comes with the growth of real estate and in terms of the internal side as well. So we're bringing in a full-time maintenance person and a full-time controller internally to take on this asset.

Speaker A Nice. And if I read this correctly, you're looking at replicating this in Trenton, is that right?

Adriana Abizadeh-Barbour Yeah, yeah, yeah. So we're actively supporting a model on the ground in Kensington called Vesi. which is run by April DeSimone, founder of Vessi, to do community ownership in Trenton. And then we're in conversation with 6 other cities across the country right now. We're working to identify which 2 we will go to next in 2027.

Speaker A Nice. So if a state economic development agency wanted to do this in their state, what should they learn from you? Like, what are the things that— what are the hard-won lessons that you've had to win over the last almost It's almost your 7th anniversary officially according to the books, right?

Adriana Abizadeh-Barbour Yeah, the trust is official 7 years this past spring. But yeah, looking at the books, September. And hard one. There's been so many hard-learned lessons. I would say the number one thing, particularly because you named a state agency, is don't try to build it from inside of the state without going to the ground. You need to go to the ground and talk to the folks that would ultimately be the community owners and hear from them what they want and what they need so that you're building in right sizing from the beginning rather than having to do a conversion, which is what we did to move away from founders towards the neighborhood. It's just lost time. It's lost energy. And I could have spent my first year, year and a half already moving in trust rather than having to build and work towards that trust. And that's not to say that I still wouldn't have had to earn it and work for it, but it would have been a different positioning had it come from neighbors and had it, you know, really swelled from the ground up. So that's what we tell folks across the country, right? It's like, make sure that your ears are on the ground and that you're really hearing what folks want and need, and that those folks are the power and decision makers, that you're not just bringing folks in and placating or tokenizing, right? Like, oh, we held one town hall and therefore we know all the things that everybody needs. Please don't do that. Please don't just host one town hall and think that you have all of the solutions.

Speaker A Agreed. Well, we'll close out with 2 final questions. So you're going to be at our summit this year, October 1st in New York. You're on the Housing Commons session with Sheila foster in front of, you know, we have allocators who are, you know, market rate return. We have foundations who are not. We have policy people who sit in between or kind of thinking about connecting the dots. Like, what, what really, what helps Kensington out of that room? What are you looking for specifically?

Adriana Abizadeh-Barbour Yeah, I would say one, right now we're trying to identify other cities where we can support replication of this model. We want to make sure that as many neighborhoods as possible can stand up community ownership projects for them to own and control and govern. And so we're just there as a supportive role, a technical assistance provider. So that's one. 2, we obviously need to continue to fundraise and get supporters for this work. We're scaling and replicating, which takes a very specific type of capital nimbleness in order to be willing to support kind of both sides of that work. And so building relationships with people that can bring capital to this work. And then I would say 3rd is we're always trying to build our community of practice. So we are also a national convener of folks that are practicing collective ownership. And so making sure that we are in community with those folks who are on the ground doing the hard work day to day, day in, day out, as we are, we want to build community with those folks and get to know them as well.

Speaker A Awesome. And last question. So one thing that I thought was interesting that you mentioned was that you've taken on your first secured capital and it's Some people might look at that as like, oh, they're caving into demand or changing or whatever. But I actually think that's a really great sign. It means that you've been able to execute to get enough confidence over the last 5 or 6 years for the regular asset capital to come in here and be like, yeah, I want some of that. That looks like a good investment. So I wanted to ask you, 10 years out, does winning look the same way as it does now? Will you be attracting all forms of capital? How do you manage expectations? between these different crowds that kind of come in and go, hey, that's actually— who knew having the neighborhood be a landlord is a great investment?

Adriana Abizadeh-Barbour Yeah, that's a great question. So I'll say 2 things. One, we're taking secured capital for this project so that we don't lose the asset to the market. So this is a speed test, right? So this asset has another buyer that if we don't close, that other buyer will step in with their capital and purchase it. And that buyer is not the community. And so we spent a good 6, 7 months running a fairly silent campaign from last fall until this spring, trying to bring in purely unsecured capital. And we realized in that time that we just weren't going to be able to get to the $20 million. Just in the amount of time, the relationships that we had to build, the amount of asks that we had to make, it just wasn't going to happen. And so thankfully, we have CDFI partners around us in the Philly ecosystem who have been wanting to support our work, and we've been saying no. Because we didn't want to touch secured capital, we didn't want to touch market rate capital, who have been willing to come in and say, hey, no, like this Project Pencils, KCT Pencils, y'all have been doing great work. We want to be partners with y'all, and we're grateful for that partnership. But they also have no repayment penalties, right? And that's built into our relationship because we want to take the capital out. So this is truly a time sensitivity for us, not an evolution in the model per se. But that being said, we're also learning that, like, this is a new toolbox that we can tap into should we have urgency requirements, or should we, you know, have the ability to pencil slightly higher debt so that we can take on more acquisitions in a perhaps shorter period of time. The other thing is that KCT hasn't utilized government capital this entire time either. So for 7 years, the trust operated without government capital, not city, not state, to do this work. And we've just now tapped into government capital for the first time this year. So just about 2, 3 weeks ago, it was announced on the same day that we were awarded $1 million from the City of Philadelphia Commerce Department to support us with this acquisition in the form of a grant. And that exact same day, we received a $1.5 million appropriation from our senator's line item. So we received a line item in the budget for support with the redevelopment of a different project. And so all of a sudden now we are government partners, right? And we're an organization that takes government funding. And so that's a change for us too. And so I think 10 years from now, we will likely continue to see the integration of different capital types. And to really think about our blend in a different way. Up until now, we've talked about integrated capital as being the grants from the people who want to give grants and the debt from the people who want to give debt. But it's getting a little more nuanced, our integration, as we accept government capital, as we accept secured capital. And so I think winning and being successful 10 years from now is that we continue to attract small business owners, that we don't lose small business owners, that we continue to create permanently affordable housing, that the community remains 100% control of these community assets and that we've continued to scale and replicate nationally.

Speaker A Super cool. I mean, look, already the, just the idea of there being a non-single person or non-single entity as the landlord is fantastic. I think it's a great idea. It just, that makes all the sense in the world that the people who are there can govern it collectively as a landlord instead of having just some person or entity do it. So, you know, kudos to you folks. It's amazing. Last bit, where can people find you on the internet and learn more about your project?

Adriana Abizadeh-Barbour Yeah, so you can find us on the socials @KCTPhilly. So K like Kensington, C like corridor, T like trust, Philly. And then you can use that same kctphilly.org to find us on the web.

Speaker A Awesome. Well, thank you so much for your time, Adriana. We'll see you in New York in October. And yeah, don't worry, we'll edit that last bit out of me struggling to