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Starting small: How community developers can build up neighborhoods

Starting small: How community developers can build up neighborhoods

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The bright-red painted brick building that dominates the corner of Whitney Place and Carolina Street used to be a boarding house.

Local architect Grace Bird sees its future as a pair of single-family homes within the existing structure – a vision she plans to turn into reality through her first development project.

Local real estate agent Christie Nelson is doing the same thing. She's renovating a two-family Victorian house at 350 Ashland Ave. in her first foray into the development world.

Nelson and Bird are local professionals who are taking the steps to become community-based developers – tackling small-scale projects that tap into their neighborhood knowledge and local ties. Both Black women are seeking to transform neighborhoods from the bottom up – by starting small but dreaming big.

"When this opportunity came up last year, it was the culmination of my real estate passion to be able to do this," Nelson said.

Ernst Valery, Christie Nelson

Christie Nelson and Ernst Valery brainstorm together as they walk through a property she is rehabbing on Ashland Avenue with his help, Thursday, June 9, 2022. 

Bird and Nelson are part of a new national push to empower communities to help themselves from within. And one of the biggest backers of such efforts is supporting both Bird and Nelson, along with more than three dozen other Black and female novice developers elsewhere: Ernst Valery of SAA-EVI.

"They were never seen as developers. No one encouraged them to be developers," Valery said. “The best development opportunities in the world are in these impacted neighborhoods.”

Nelson spent years in real estate as a broker – including as director of real estate for the city. As a New York City native and University at Buffalo engineering student, she saw the potential to make change through real estate, and even bought a house for herself. But when she started a property management business, she struggled to get financing to do more.

Prospectus-Ernst Valery

Ernst Valery near one of his properties at the intersection of Carolina Street and Whitney Place on Buffalo's West Side.

Bird, a Bronx native, spent much of her childhood growing up on the Caribbean island of Antigua with her sister and extended relatives, while her parents tried to build a life for the family in New York City.

She would watch her great-aunt, a seamstress, spend hours every day sketching designs for wedding dresses or other clothes, and then making them on a Singer sewing machine. When Bird moved to the United States to rejoin her parents at age 11, she learned that her father had wanted to become an architect.

"It really is deep in me," said Bird, who spent a few years in New York City designing night clubs and boutique hotels. "If you can think about what you want to make, you can make it."

Developer of developers

Valery has spent 20 years making his mark in the American real estate world – as a successful Black and immigrant developer.

Starting after college with small row houses in Philadelphia, the Haitian native who grew up in New York City parlayed his Ivy League education, skills and perseverance into a real estate career, focused on building up neighborhoods and communities, particularly those in long-neglected inner-city areas.

Ernst Valery, Christie Nelson

Ernst Valery checks his phone as he tours a property he is helping to rehab on Ashland Avenue, Thursday, June 9, 2022. 

Now, as co-managing partner of SAA-EVI, he and his company are deploying that expertise in Buffalo, with projects like the 158-unit Forge on Broadway and a partial redevelopment of Pilgrim Village with 237 new senior and multifamily apartments.

"We are very bullish on the East Side," he said.

But Valery believes it's time for him to do more than just develop properties. He saw how difficult it was for him to gain acceptance as a newcomer to the industry – even with three professional degrees.

"All this time, I was training to be a developer, but the world doesn’t see you as that," he said. 

He wants to help develop a new cohort of community developers – from among the minorities, women and immigrants who are too often ignored or dismissed by the traditional finance and real estate world. And one of the places he is targeting is Buffalo.

With the support of SAA-EVI, and investments from two national nonprofits, Valery launched a national initiative and a $6.5 million private-equity fund to cultivate new neighborhood developers who are female, Black or brown. The goal is to train and inspire a new generation of diverse community developers who will undertake projects in their own neighborhoods, starting with single-family homes or doubles but eventually graduating to larger projects. 

Working in several cities, he has already recruited 37 participants – or "founders" in his program's parlance – who were already interested or involved in real estate. Of those, 28 are women, of which the majority are Black. And two are here.

But they still have to prove themselves.

"Whenever I say women, minority, Black folks, brown folks and immigrants, people instantly think it’s some sort of handout," Valery said. "If someone’s not talented, we tell them. This isn’t everyone getting a trophy. Not everybody is going to be good at development."

Leveling the playing field

Valery is zeroing in on a common urban struggle – how to spur neighborhood revival and growth in areas that have not historically received much attention from developers and investors. Those areas are often poorer and primarily minority in makeup, and may be pockmarked with deteriorating and vacant buildings. They're also less familiar and welcoming to outside developers. But they're still in need and untapped, he says.

"Genius exists in every ZIP code, and every gender and every race, but the data shows we haven’t been tapping into everyone," Valery said. "One of the things we’re going to prove is that it’s actually lucrative to invest in talented people."

Valery is also taking aim at the real estate industry's historic dominance by white males – especially among multigenerational families that have been working in the field for decades. That entrenched elite makes it much harder for newcomers to break into the field and be taken seriously when they appear to lack the expected pedigree.

"Development is such a male-dominated field," Valery said.

Dubbed the Aequo (Ay-kwo) Fund – which is Latin for "making equal" – Valery's venture is designed to identify potential candidates from colleges, universities and communities, and then to provide the financial support and mentoring to get them started on acquisitions and renovations. A separate foundation will help students complete degrees in real estate development or related fields before starting out.

But instead of lending the novice developers money and charging interest, Aequo is taking an equity stake in their real estate projects as a partner. That gives the fund and Valery a vested interest in helping the "students" to generate outsized returns from resales.

"Your success is our success, because we’re partners," Valery said. "We’re all stakeholders."

A matter of equity

Valery believes those who come from neighborhoods are in a better position to know what their own communities need, and how to achieve it. They just need the confidence and financial backing that no one is providing – except at very high rates from alternative or "hard-money" nonbank lenders, he said.

"If you start investing in Black folks who can be the developers in their own community, they’re stakeholders," Valery said.

Valery started the new fund with $1.5 million of his own money, and obtained support from the Reinvestment Fund in Philadelphia, with $4 million, and Enterprise Community Partners, with another $1 million. He's identified women and minority developers in Philadelphia, Baltimore, Richmond, Memphis, Chicago and Portland, Maine, and has invested in 117 active projects with them – mostly in Philadelphia and Baltimore – after just a year of operation.

In each case, the fund buys the property, and the founders are responsible for handling the redevelopment and resale.

"It’s not a flip," Valery said. "It’s taking a building that’s been vacant and an eyesore in the community and making it an asset."

Already, the fund is up to $8.3 million, after the early founders completed and sold their first projects and reinvested over $2.5 million in profits in the last year. Valery is already eyeing the launch this year of a second Aequo Fund, for commercial and multifamily projects.

Aequo at work

Standing on a sidewalk in Buffalo's West Village Historic Neighborhood, Valery admires the three-story brick building at 69 Whitney, with its mansard roof and domed windows. For years, it was used as a "single-room occupancy" house for years, with 12 to 15 rooms for rent.

But Valery sees the potential to remake it into a pair of single-family homes, separated by a party wall and with separate entrances.

More importantly, though, it's the first opportunity for Bird to develop and practice her skills, not only in architecture but in project management. Valery's fund bought the building for $189,900.

"The Aequo Fund gave me a different sense of confidence, that I could be doing more and doing it for myself," Bird said. "It was an opportunity for me to live out my purpose."

Ernst Valery, Christie Nelson

Christine Nelson takes a break at a property she is rehabbing on Ashland Avenue with the help of investor Ernst Valery, Thursday, June 9, 2022.

Meanwhile, Nelson is renovating the 2,349-square-foot house at 350 Ashland, which the fund acquired in May for $220,000.

Aequo also partnered with Kulback's Construction to regularly identify women, minorities and immigrants that come to work for the contractor, and help them renovate properties in Buffalo. And the fund bought a building on Elmwood Avenue that will now be the local base of operations.

"If we just start recognizing people’s talents and investing in that talent, we’ll get to a better place," Valery said.


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