Transforming Lives Beyond Campus
An idea that was sparked in December 2006 at a community wealth-building summit has become a reality with the launch of Evergreen Cooperative Laundry, an employee-owned cooperative designed by the Ohio Employee Ownership Center at Kent State University and a product of the Greater University Circle initiative and the Cleveland Foundation. It is the first of a group of employee-owned cooperatives in Cleveland’s Greater University Circle area, home to some of the country’s richest nonprofit institutions yet surrounded by some of the poorest urban neighborhoods. The cooperatives are meant to help build community wealth to transform Cleveland and change lives.
The Cleveland Foundation turned to Kent State’s Ohio Employee Ownership Center, a leading support organization for employee ownership, to take a look at the feasibility of setting up local green businesses to meet the needs of Cleveland’s major anchor institutions and then recruit and train local residents to work these newly created jobs. The center is a Kent State University-based program, housed in the Department of Political Science, that provides assistance to employees who are trying to buy the businesses they work at and retiring owners who choose to sell to their employees.
“The Ohio Employee Ownership Center also works with 80 employee-owned companies, providing training and development programs,” explained Dr. John Logue, who up until his death in December 2009 was the director of the center and a major contributor to the success of launching Evergreen Cooperative Laundry along with the center’s Program Coordinator Jim Anderson. “Now with Evergreen, we’re in the business of starting new businesses.”
The Cleveland Foundation relied on the Ohio Employee Ownership Center and its expertise in employee ownership. “We brought in the center to look at Evergreen Cooperative Laundry as the first business to launch and met these amazing people like Jim Anderson and John Logue, and it’s been a happy partnership ever since,” says India Pierce Lee, program director for Neighborhoods, Housing and Community Development at the Cleveland Foundation. “The years of work that John has done with the center and his wealth of knowledge as to setting up these cooperatives and what it takes to make them successful was so helpful. We leaned on them for their expertise to set them up and determine the structures needed as we go forward.”
The Ohio Employee Ownership Center conducted the feasibility study, developed the business plan and worked on the acquisition of equipment, site selection and construction to prepare the site.
Located on East 105th Street in Cleveland, the $5.8-million laundry accepted its first order on Oct. 23, 2009. It specializes in health care laundry for Cleveland-area hospitals and nursing homes, including the Cleveland Clinic and University Hospitals. Evergreen Cooperative Laundry is also the region’s first LEED (Leadership in Energy and Environmental Design) certified commercial laundry facility. LEED is an internationally recognized green building certification system developed by the U.S. Green Building Council. Evergreen has the smallest carbon footprint of any industrial-scale laundry in Northeast Ohio.
The energy-efficient laundry currently has 10 employees and can process up to two million pounds of laundry a year. “It has the capacity to handle up to 10 million pounds of laundry a year, and when we’re running up to capacity, we anticipate we’ll have 50 employees,” says Anderson, who also serves as Evergreen Cooperative Laundry’s business manager. “The folks who are now employed with Evergreen will then train the next folks who join the cooperative.
“The goal of Evergreen is to take people from poverty to paycheck,” Anderson continues. “The majority of the employees have had some difficulty in their past. They have spent time in prison. Evergreen gives them a way to rebuild their lives and have the opportunity to own a piece of the business.”
Workers who join Evergreen serve as temporary employees for the first six months. After six months, they are invited to join the cooperative. They earn $10.50 an hour plus benefits and are asked to pay $3,000 for their stake in the business. To build equity in their firm as an owner of the business, they agree to have 50 cents an hour taken out of each paycheck. Then at the end of three years, the $3,000 is paid, and the employee gets to share in the profits. The Evergreen employees receive superior training in operations, life skills, and sustainability and ownership principles, empowering their performance at work.
“All of us at Kent State are enormously proud that the Cleveland Foundation turned to the Ohio Employee Ownership Center to lay the groundwork for the laundry,” says Kent State President Lester A. Lefton during a ceremony to mark Evergreen’s grand opening. “As an institution committed to excellence and focused on translating ideas into impact, Kent State looks forward to supporting the exciting evolution of the Evergreen brand. In the meantime, it’s a privilege to be part of an initiative that not only will transform the lives of individuals and families, but also holds so much potential for transforming Greater Cleveland itself.”
The Ohio Employee Ownership Center continues to provide training to Evergreen Cooperative Laundry workers and its supervisors, ensuring that the business and its workers succeed. In addition to the laundry, the Cleveland Foundation plans to have nine other businesses up and running in the next three to five years employing 500 to 600 people in those neighborhoods.
Logue said that Evergreen is a model for the rest of the country and that it has already generated an amount of interest in other cities such as Detroit. “The model of using the procurement dollars of those big anchor nonprofit institutions in University Circle to create better jobs with better wages and better benefits is a model that can be replicated anywhere in the United States,” Logue said. “We make it work in Cleveland, it’s highly transferable to anywhere in the country. It can make a real difference for those people who have less opportunity in this economy than anyone can wish.”
For more information on the Ohio Employee Ownership Center, visit its Web site.