Green laundry service gives  less fortunate chance to own their work

By Stephanie Davis

A new laundry service reaching out to the heart of the poverty-stricken neighborhoods of Cleveland aims to be as environmentally friendly as it is neighborhood friendly.

Evergreen Cooperative Laundry, a $5.8 million Leadership in Energy and Environmental Design (LEED) Silver new business equipped with Energy Star-efficient laundry machinery, is part of an employee-owned business model that was created to generate jobs and revenues in the impoverished neighborhoods surrounding University Circle. Some of the new hires are low-income and may have had difficulty finding jobs elsewhere due to potential criminal pasts.

The Evergreen Cooperative is set up in such a way to enable each worker to buy a share of the company and thereby share in its profits, which would help distribute much-needed wealth back into the poor neighborhoods in which the workers live.
The cooperative, designed by the Ohio Employee Ownership Center at Kent State University, is a part of a greater project, the Greater University Circle Initiative, which was organized with the help of a grant from the Cleveland Foundation. In 2006 a feasibility study was done with the help of the University of Maryland’s Democracy Collaborative, pertaining to the area around greater University Circle. Next, KSU leaders helped set up a business plan.

“The thought was that we have these anchor institutions — Case Western Reserve University, the Cleveland Clinic, University Hospitals, the Cleveland Institute of Art — that are not going to be moving elsewhere, and they procure approximately $3 billion annually,” says Jim Anderson, the CEO of Evergreen Cooperative Laundry on E. 105th St. in Cleveland. “Of that money, $400 million is spent with companies in northeast Ohio.

“But it’s a contradiction in that the neighborhoods that surround these anchor institutions are very poor — an average income of $18,500 — and underserved. There’s just no sense of stability — and no sign that it’s on the way. Given this backdrop, we asked what can be done to change the outlook of the city of Cleveland with regard to this neighborhood?”
The question arose as to whether a company or business model could be created that would not just provide jobs but also provide a chance for workers to own the company. The employees would receive wages and earn capital over time. Evergreen Cooperative Laundry was born.

This cooperative laundry services the healthcare community and is “very sophisticated,” according to Anderson. There’s $2.5 million in environmentally efficient equipment, and the building that houses the laundry has been modified at a cost of more than $1.3 million dollars. A significant goal was to create a Green Laundry in a LEED Silver Recycled building.
“To us, being green is a difference maker — we believe it’s important to our customers to have the smallest carbon footprint possible,” Anderson says.

The cooperative has been running about three months now, employing people with barriers to other employment. Towards Employment is doing all the hiring and screening.

Co-op nuts and bolts

Depending on how the laundry is received by the community and the employees, the goal is to employ at least 50 people for the laundry as well as other Evergreen cooperatives. The laundry currently employs nine people, including the general manager. All employees are temporary for the first six months. They may be invited to become members of the cooperative when they complete the six-month tour of duty.

Once invited, employees have to pay $3,000 for their jobs, Anderson says. Not surprisingly, very few people from the less-privileged neighborhoods can afford that. So, in addition to wages, these employees earn 50 cents an hour over three years to enter into the co-op. The money is rolled into an employment account. The employees also have a patronage account, which involves profit sharing. Wages range from $10 to $16 an hour; the highest-paid member cannot earn more than five times the lowest paid person.
Anderson says, “We’re not just offering jobs to these workers — we’re giving them a chance to earn ownership capital. “We plan to invest time in educating the worker-owner on co-ops. We invested in training on owning and running a business. We’re staying connected. We’re not going to walk away.”

Evergreen Cooperative Laundry is part of a handful of companies that Anderson and his employees want to build. Already, the leadership has developed Ohio Solar Cooperative, which installs solar panels on roofs of nonprofits, and Green City Growers Cooperative under the Evergreen umbrella. “The companies we create have to be for-profit companies that can be sustained on their own over time. The expectation is that as they become profitable, they will provide ongoing opportunities for the worker-owners to earn capital and own the company for many decades to come,” he says.

Spanish origins

The model for the cooperatives is derived from Mondragon, Spain. Two study trips to Mondragon have been organized and completed in the past two years — one in 2008 and one in 2009, in which about a dozen folks, including leaders from the city of Cleveland, Cleveland Clinic, CWRU, Cleveland Foundation, and the banking community, toured the businesses in Mondragon to learn Spain’s cooperative history. Today the Mondragon Cooperative Corp. operates with 120 companies that employ 85,000 people — all for-profit with career ladders from company to company, according to Anderson.

Cleveland’s laundry co-op is in the process of building its clientele, which includes the Judson at University Circle nursing home, McGregor (Nursing) Home and Ursuline College’s retirement home.
“We’re also meeting with hospitals in the area to solicit their business as well,” says Anderson, who notes that the laundry is in a market that is very competitive.”

“We’re focused on smaller hospitals and nursing homes. We have to survive and exist in the market we’re in,” he says. “When we conducted the feasibility study, we demonstrated there’s enough market for another entrant. We’re just trying to see whether this works.”

“We’re not just offering jobs to these workers – we’re giving them a chance to earn ownership capital.” 
For more information: evergreencoop.com