Fueling South Phoenix’s Economic Rise
WHY YOU SHOULD CARE
Because an inclusive city is a strong city.
By Laura Elizabeth
OZY and JPMorgan Chase have partnered to take a deeper look at how businesses can impact society for the better. Enjoy the rest of our special series here.
Crossing the Salt River from downtown Phoenix to South Phoenix is very much a tale of two cities. Downtown booms with restaurants, bars, museums and big business; across the river, low-income residents are more likely to live in homeless encampments, failing schools and food deserts.
And yet, the potential for all of Phoenix to prosper is plain. Located in Maricopa County, Phoenix is the heart of the fastest-growing region of the United States. According to the Census Bureau, Maricopa County boasts the highest population growth in the country, adding an average of 222 people per day. Arizona is also one of the strongest states in the nation when it comes to job growth. According to 2015 forecasts from Moody’s Analytics, Arizona’s projected job growth is 3.1 percent annually through 2019, the highest in the U.S.
That sort of growth could translate into an equally flourishing economy. But the reality is the opposite. According to the U.S. Census:
Maricopa’s poverty rate (16.3 percent) exceeds the national average.
One nonprofit is hoping it has hit on a solution. The Raza Development Fund (RDF) leads a coalition of development groups gathered under the umbrella of Adelante Phoenix. Their mission is to take what already makes South Phoenix special — its diverse blend of cultures and small businesses — and help them thrive.
While lots of big companies have promised to create new jobs in the state, Mark Van Brunt, RDF’s chief operating officer, notes that these often go to outsiders. He wants to safeguard the economic security of the local Phoenix population. To do this, he believes in a more holistic approach to investing.
For starters, Adelante Phoenix doesn’t just invest in jobs, but also in local housing, education, health care and cultural development. One of its major projects, the South Phoenix Lending Fund, launched in 2018 to build up small businesses in an isolated area that is one day slated to border the forthcoming expansion of a light rail service. This $1 million fund will help these businesses secure loans, fortify their potential to expand and increase their revenues. Investing in businesses that already exist in Phoenix, Van Brunt believes, is every bit as important as creating new jobs.
Helping fund the vision is a $6 million cash injection from JPMorgan Chase. The firm awarded the grant as part of its Partnership for Raising Opportunities in Neighborhoods initiative (PRO Neighborhoods). The goal is to give businesses that are woven into Phoenix’s fabric a fighting chance. “RDF’s South Phoenix small business lending fund will help underserved entrepreneurs get the capital they need to sustain and grow their businesses,” says Barb Tripp, Business Banking Market Manager for JPMorgan Chase. “JPMorgan Chase is proud to support this collaborative effort to advance job creation and community development in South Phoenix.”
The investment so far has really inspired people here to believe there is hope.
Tommy Espinoza, CEO, Raza Development Fund
Thus far, Adelante Phoenix’s investment has translated to 51 small business loans, 128 jobs created or preserved, and over 700 units of affordable housing, a total of $32 million in loans so far. Adelante Phoenix has also raised an additional $180 million in funding from other sources to date, which is being funneled into those areas.
Investing in Phoenix’s success is a long game. The businesses that line the forthcoming light rail, for instance, will have less foot traffic while the project is under construction (it doesn’t wrap up until 2023, when the infrastructure project is scheduled to launch). In the meantime, Adelante Phoenix is working to establish strong relationships with small business programs and partners to create credit opportunities and offer the support these small businesses will need to get through the waiting period.
According to Tommy Espinoza, RDF’s CEO, investment is providing local businesses with a sense of hope. “The investment so far has really inspired people here,” he says.
- Laura Elizabeth, OZY AuthorContact Laura Elizabeth