Building an Economy That Works for Everyone

Last year, as Coastal Enterprises, Inc. (CEI) conducted a strategic review as part of its leadership transition, we found ourselves asking the same questions that were being asked across the country, on both sides of the political aisle. At the heart of those questions was the recognition that our economy is not working for everyone. And a major takeaway was that rural regions, gateway cities, and the people who live there were being left behind.

Maine-based CEI is taking strides to change that. CEI invests in small companies, coaches people as they are starting and growing businesses, helps connect low-income jobseekers with training and good jobs, works to accelerate natural resources-based industries, and advocates for pragmatic policy solutions in our home state of Maine as well as in rural regions throughout the U.S. And over the years, as we have developed our track record of expanding shared prosperity in these regions, we have helped to create new ways to channel public and private investments into communities that are starved of capital.

The story of St. Croix Tissue, Inc. in the rural Maine town of Baileyville (population ~1,450), illustrates the unique role that CEI plays in community investing. CEI’s subsidiary, CEI Capital Management, invested in St. Croix Tissue using a New Markets Tax Credit which provided an opportunity for partial vertical integration of the host pulp mill operations of a related company, Woodland Pulp LLC. This investment contributed significantly to the stability and future viability of Woodland Pulp’s 300 employees, while also creating 80 new jobs at St. Croix Tissue. CEI stayed close to the company in this growth phase, offering deep knowledge of workforce development, public sector resources, and qualified organizations able to provide job training — essential support for a distressed community. This investment with wrap-around services has helped jumpstart the economy and provide some hope in Maine’s poorest county.

Now in its 40^th year, with $96 million in total assets, CEI is in a strong position to advance its mission further and deepen its impact. CEI grew from an early community-development innovator founded on the rocky coast of Maine to a nationally-known best practices leader and policy advocate for inclusive regional economic growth, and a trusted channel for impact investing. Its wholly-owned for-profit subsidiaries expand its suite of financing products targeting underserved communities and contribute to its financial self-sustainability. Two years ago, CEI and its subsidiaries, including a seasoned management team and next generation of forward-looking leaders, moved into a LEED Platinum-certified building that generates half of its power from solar energy and 100% of its heating and cooling with geothermal energy.

From its beginnings as a small non-profit serving mid-coast Maine, the CEI family of organizations has invested in 2,724 businesses and projects, helping to support over 39,000 jobs in Maine and across the country. CEI is entering a new phase of its work, based on a new strategic plan that will guide us for the next three years. We are growing good jobs, environmentally sustainable enterprises and shared prosperity.

By all measures, Maine’s lobstering industry is an economic powerhouse, providing thousands of jobs and adding more than $1 billion annually to the state’s economy. This bright picture, however, belies two startling statistics: a very small percentage of Maine’s 3,500-mile coastline provides commercial access to fishermen and nearly half the licensed lobstermen are over the age of 50. Transitioning this industry to the younger generation, while preserving working waterfront access, is crucial to the future of Maine’s economy.

Purchased in 1978, Millers’ Wharf in Tenants Harbor serves as home base for a lobstering business operated by the four Miller brothers and their extended families. Over twelve years, CEI worked closely with the Millers, providing a loan in partnership with Key Bank to expand the wharf and dredge so that bait and catch can be off-loaded regardless of the tide. With CEI financing, the Millers added four hoists, increasing efficiency and the number of boats they could serve. CEI also helped secure the property through the Working Waterfront Access Protection Program, ensuring access not only for future generations of Millers, but other fishermen as well. With the impacts of climate change already visible to Mainers, CEI is now helping to diversify income streams by teaching the fisherman to grow and harvest shellfish and kelp.

In the late 1970s, CEI’s early supporters were motivated by Martin Luther King, Jr.’s call for social justice and the War on Poverty at a time when options for young Mainers to earn a decent livelihood were shrinking. Maine was losing good jobs in forestry and farming, access to working waterfront infrastructure and species for fishing were declining, and larger companies were closing and leaving the state.

CEI began work in other rural regions as well as in its “gateway” cities of Portland, Lewiston and Auburn. These small cities that were magnets for immigrants a century ago were undergoing economic transitions and again attracting immigrants and refugees from countries in East Africa and the Middle East, who drew on their entrepreneurial drive and skills to build a new life in the U.S. In response, CEI launched StartSmart, a program to coach and finance immigrants and refugees seeking to launch small businesses to support their families.

ARWO opened in April 2015 on Forest Avenue, a hub for immigrants and refugee businesses in Portland, Maine. In two years, the center has grown to an enrollment of 70 children and 18 employees. ARWO means “prosperous” in Somali—the center’s wish for every child in its care. Founder Naima Abdirhmon immigrated to the U.S. from Somalia, and worked closely with CEI’s StartSmart and the Portland Jobs Alliance to identify, train, and hire numerous staff members, including five new Americans. Prior to launching ARWO, Naime attended Portland public schools and then earned a Doctorate of Pharmacy Degree from University of New England. She is passionate about educating young people and helping them succeed.

As CEI grew its geographic footprint, it also identified an array of investment tools needed by businesses in rural markets. CEI’s for-profit subsidiary, CEI Ventures, Inc.’s four funds have raised over $45 million, investing in growth-oriented companies that have created over 2,000 net new jobs, approximately two-thirds of which are located in distressed or rural areas[1]. At the federal level, CEI advocated for rural regions to get their fair share of New Markets Tax Credits to finance larger transactions. Since 2004, CEI Capital Management LLC has placed over $944 million into 91 projects in communities from Maine to Hawaii. In addition to creating and sustaining jobs, these projects have generated renewable energy and alternative fuels, conserved over 833,000 acres of forestland under easement, and developed over 550 units of affordable housing.

CEI works statewide in Maine using its full suite of financing tools, business advisory services and policy advocacy, while expanding its reach nationally via its for-profit subsidiaries. These subsidiaries provide resources in support of the parent nonprofit and extend its rural expertise and mission impact to small cities and towns across the U.S. This model has strengthened CEI’s financial health and self-sufficiency.

A New Path Forward

CEI’s new strategic plan calls on the organization to harness its investing capacity, deep expertise and broad networks, and program and policy know-how to revitalize rural regions and gateway cities. We invest to create impact for people with low incomes, expand the numbers of good jobs, and ultimately, increase shared prosperity. We take risks on early stage innovators that conventional lenders won’t—calculating good jobs and environmental benefit as core to its return on investment.

We see opportunity in Maine’s burgeoning local food movement, and creating access to new markets for food producers. We work in partnership with others, locally and nationally, to make sure that capital is available for entrepreneurs throughout the food system, from farm to consumer. We are exploring the opportunity to grow the aquaculture industry and renewable energy industry in and beyond Maine, and building support for forest reliant communities in the Northeast to advance community and economic development, conservation and forestry. In 2017, the CEI family of organizations deployed $51.7 million to 79 businesses in mostly rural regions. We are committed to our role providing impact investment channels, coaching, and industry expertise to ensure that everyone has a foothold in our economy.

CEI Leadership

When founder and CEO Ron Phillips decided in 2016 to retire after 38 years, CEI undertook a national search to identify new leadership. CEI’s Board selected Betsy Biemann to serve as CEO and Keith Bisson as President.

Betsy Biemann came to CEI with experience in philanthropy, entrepreneurship, innovation-based economic development, workforce development and executive leadership, having worked at the Rockefeller Foundation for nine years, ending as Associate Director, and served for over seven years as the president of the Maine Technology Institute. She has strong research and analysis credentials, including having led a year-long study of Maine’s food and agriculture industries at Harvard University’s graduate schools of business and government. Within Maine, she has served on the Maine Innovation Economy Advisory Board, the Maine Philanthropy Center Board, and currently is Treasurer and a member of the Board of the Elmina B. Sewall Foundation. She serves on the Better Quality Employment Advisory Committee of the Federal Reserve Bank of Boston and was selected by the Aspen Institute to be in their inaugural cohort of Job Quality Fellows. She earned her BA at Harvard College and her MPA in development economics from the Woodrow Wilson School at Princeton University.

Keith Bisson brought a dozen years of progressively-senior management responsibilities at CEI as well as experience at the Federal level advocating for policies that strengthened the community development financial sector. He has a background in program and resource development and brings a passion for aligning social justice, environmental stewardship and economic opportunity through his personal and professional work. A graduate of McGill University and the Yale School of Forestry & Environmental Studies, Keith is active in the community and currently serves on the Board of Directors of: Opportunity Finance Network, the CDFI Coalition, and Family Focus Early Learning Center. He also serves on the advisory board of Four Directions Development Corporation, a CDFI serving Maine’s four Native American tribes.

 

Article by Article by Betsy Biemann, CEO and Keith Bisson, President, Coastal Enterprises, Inc. (www.ceimaine.org)

Article Note

[1] At their peak, CVI portfolio companies employed 5,600