The Committee on Community Economic Development (CED) provides a forum for lawyers to share their expertise and perspectives derived from working with (i) entrepreneurs and community-based organizations seeking to revitalize communities and (ii) the institutions that finance such initiatives. The Committee provides an opportunity to (i) share knowledge and develop policies on the emerging law of CED, (ii) support transactional lawyers involved in CED, and (iii) work with other committees of the Business Law Section, as well as other ABA entities. To join the Committee go to http://apps.americanbar.org/committee_join/ocj_action.cfm?comid=CL746000.

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Michigan Community Resources (MCR), formerly known as Community Legal Resources, supports and empowers nonprofit community organizations in Michigan that serve low income individuals and communities, with an emphasis on community economic development, by providing pro bono legal services and technical assistance. We hope to create an environment that helps nonprofits improve their services and the communities they serve.

MCR was formed in 1998 as a project of Michigan Legal Services and the ABA Business Section Pro Bono Committee. Formed to provide pro bono legal assistance to nonprofit organizations serving low-income communities, MCR is the only organization focusing on this type of work in Michigan.

I am the Chief Executive Officer, and my role is to ensure successful programs and strong internal operations that accomplish our mission. I oversee a team of 17 staff and a budget of $2.5 million. We have three separate programs (Legal & Policy, Planning & Technical, Education & Outreach) staffed by a diverse mix of professionals. We currently serve over 300 organizations annually.

Founded to meet the unfulfilled business and transactional legal needs of Michigan nonprofits, our transactional pro bono legal services referral program is the backbone of our organization and gets bigger and stronger each year. But we recognized early that achieving impact requires a varied approach.

The first stage of evolution diversified the pro bono legal services opportunities for business attorneys beyond traditional representations. We launched a legal education program that addresses important issues identified by our clients. We started our legal team approach to address specific systemic barriers to social justice. We also developed a policy program to inform policy decisions that affect our clients.

Our second stage of evolution occurred in 2007 when we became the lead organization of the Detroit Vacant Property Campaign (DVPC), a collaboration of local community leaders committed to turning vacant properties into assets and preventing vacancy. The DVPC develops vacant property plans in neighborhoods throughout Detroit, creates and disseminates vacant property publications that help communities combat blight and vacancy, and provides technical assistance to address specific threats and improve overall systems that affect Detroit's vacant property crisis.

Our third stage of evolution occurred in 2010 as a result of a strategic planning process and organizational restructuring. As a result, we have three defined programs that work collaboratively to achieve greater impact for our clients, not just in Detroit, but throughout Michigan. Though pro bono will always be the backbone of our organization, our multi-disciplinary approach allows us to leave no stone unturned as we work tirelessly to help our clients stabilize and ultimately transform their communities. To reflect this diversification, our name was changed to "Michigan Community Resources."

Pro bono attorneys help our clients with their basic business and transactional legal needs that benefit the organization and its community projects. Our pro bono legal services include:

• Draft/ review simple contracts/agreements/leases
• Intellectual property
• Computer law
• Legal compliance review
• Corporate advice, including strengthening advice and ensuring corporate compliance
• Review, draft and/or advise on partnership agreements (not with for-profits)
• IRS/Tax advice/Charitable giving
• Loan document review and advice
• Employment and benefits advice
• Health care advice
• Fiscal sponsorship
• Insurance/Liability Advice
• Advice and guidance on CHDO qualifications
• Bankruptcy assistance
• Administrative law/Civil Infractions/Regulatory Assistance
• Environmental law, including assistance with environmental assessments, EJ and NEPA
• Real estate advice, including advice on clearing title or help preparing for closings
• Community Land Trust advice
• Advice on joint ventures and partnerships with for-profit entities
• Strategic restructuring (including dissolution)
• Community partnership (i.e., establishing a one-year, corporate counsel relationship with a firm)

Our legal services are limited to nonprofit organizations working in low-income communities that can demonstrate inability to pay for the legal work. Our other programs serve a wider range of clients from block clubs to municipal departments. Our work helps different clients use information (legal and otherwise) to strengthen their organizations and increase their impact given decreasing resources. In our vacant property work, we help our clients better understand what is happening with properties in their area in order to hold owners accountable.

Foreclosure, vacancy, and a weak economy have changed the community development environment in a significant way over the past six years. In the 1990's, there was a push to create affordable housing opportunities for families and at the same time target the housing investment in communities that needed an economic boost. During that time, there were ample resources to fund affordable housing construction.

Things are different today. The weak economy and housing and foreclosure crisis has changed the funding environment and supply of and demand for single-family housing. Many communities are now faced with surplus housing stock, insufficient demand for housing units, and inadequate sources of funding to otherwise kick-start weak housing markets.

Community development organizations are challenged with creating and implementing new business models for this environment. They have to determine what interventions can effectively improve neighborhood conditions and then learn how to deliver them with diminishing resources.

Moreover, now that housing is more affordable in regional neighborhoods of choice, many communities are facing increased competition for fewer buyers. Particularly weak market cities have to overcome unfriendly tax structures, poor quality schools and city services, lack of access to viable employment, and other disincentives and find creative ways to retain and attract jobs and residents.

Nuisance Abatement

• MCR is piloting a Nuisance Abatement program that will work with community partners to utilize private nuisance court actions as a tool to eradicate nuisance properties.
• Limited government resources and the growing prevalence of vacant and/or blighted properties in Michigan communities have made it necessary to identify creative solutions.
• In 2010, through the use of volunteer attorney services and the assistance of a local community group, MCR initiated its first private nuisance action. The action is designed to compel the property owner to abate the existing nuisance, thereby positively impacting the immediate neighborhood.
• Building on this work, MCR proposes to initiate ten (10) private nuisance actions in 2012. MCR staff will partner with volunteer attorneys to develop a standard process for initiating private nuisance actions that will be transferable to communities throughout the state.

Planning & Technical Assistance
Our innovative approach to providing planning and technical services is rooted in the following four characteristics:

• Community-Driven: We see community organizations as the lead planners and implementing entities and it is our role to develop services to support their work.
• Data-Driven: We join data and analysis with decision makers to improve their ability to create effective responses to destabilizing factors.
• Market- and Asset-Based: Our services are informed by the market conditions in a neighborhood and focus on reinforcing and generating community assets.
• Actionable: In order to respond effectively to vacant properties, any plan must employ the use of many layered strategies that take into consideration variables such as ownership, property condition, and location.

Code Enforcement

• MCR supports communities in reporting properties that require boarding. We coordinate the community-driven initiative of the Boarding Coalition by leveraging our relationship with the Department of Building Safety & Engineering (BS&E).
• Over 1,500 properties have been reported to BS&E for boarding - most of which have been boarded. This relationship between the Boarding Coalition and BS&E is a successful model for community-based code enforcement, community partnerships with municipalities and community-led, action-based advocacy.

SAFE Mini-grant Program

• MCR administers a mini-grant program in Detroit to provide grants of up to $5,000 to community-based organizations that support neighborhood-led projects.
• The SAFE mini-grant program is an innovative approach to addressing factors that affect neighborhood security and insecurity. It sets a precedent for funding neighborhood-led actions to mitigate the effects of vacant and abandoned properties. It is also designed to increase neighborhood stabilization and improve quality of life by investing in neighborhood-initiated activities that make neighborhoods safer.
• This year, we received over 130 applications and awarded seventy-five (75) SAFE grants.
• This is the only funding source of this kind in Detroit. This program has been shown to have a positive impact on particular properties. Most importantly, it has been shown to incentivize and strengthen community mobilization and action.

Education and Training

• In 2010, MCR created and implemented the Vacant Property Education Series (VPES). The VPES was developed to augment the technical assistance provided under the Detroit Vacant Property Campaign (DVPC).
• The VPES is providing a comprehensive approach to vacant property education by fostering a peer-to-peer and community-to-community learning model.
• Topics for the VPES include, but are not limited to: Nuisance Abatement, Code Enforcement, Web-Based Resources, Squatters Information, Code Enforcement, Creative Strategies in Vacant Property Mitigation, and Community Organizing and Mobilizing Strategies. The series will include an annual Vacant Property Best Practices Seminar.

We believe in an approach that tailors solutions to the unique needs, conditions and capacities of each community. We also believe in a comprehensive approach to community development that integrates the perspectives of all stakeholders. We believe that the most important part of our model is to equip the community with information and resources to make strategic and impactful decisions about its fate and then connect those community decisions directly to policy-making and resource allocation. After all, nobody knows a community's challenges and opportunities better than that community.

Our staff attorneys are active in the private bar. All of our staff participates and is frequently asked to present at professional conferences and trainings. We are also asked to submit and/or contribute to articles and other publications. Last, we regularly disseminate information about our work to our contact list, which includes thousands of practitioners in Detroit, across Michigan and throughout the country.

Community economic development attorneys provide top-notch legal representation to our clients and actively contribute to our educational publications, workshops and trainings, policy work, and legal teams projects. The private bar also contributes financially in support of our legal programs through the Access to Justice Fund administered by the Michigan State Bar Foundation. Our board and its committees are also led by members of the private bar.

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Developers of community development projects and their legal counsel should be aware of the requirements of the Davis-Bacon Act ("the Act" or "Davis-Bacon") because the consequences of not complying with Davis-Bacon could challenge the viability and completion of these projects. Davis-Bacon was passed by Congress in 1931 to ensure federal construction contracts paid laborers a fair wage. The Act applies whenever federal funds are used to enter into contracts over $2,000 for the construction, alteration, or repair of public buildings or public works. Contractors and subcontractors are required to pay their workers a minimum prevailing wage rate based on the local rate as determined by the Department of Labor ("DOL"). DOL issues wage rate schedules for thousands of areas across the country and will periodically revise wage rates to account for inflation and cost of living adjustments. Many public housing funding sources, such as HOPE VI funds, trigger Davis-Bacon when used to fund construction work. Therefore, developers and contractors must pay close attention to the applicable Davis-Bacon rates when entering into construction contracts assisted by federal funds. This article will discuss the importance of the applicable law and regulations for developers and contractors entering into public development contracts and will give practical advice regarding ways to maintain compliance with the strict Davis-Bacon rules.

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Currently, there are millions of Internal Revenue Code Section ("Section") 501(c)(3) tax-exempt public charities in the United States. A substantial number of these charities are committed to what would be classified as community economic development ("CED") work. A growing concern among government regulators is the potential for tax evasion schemes involving Section 501(c)(3)'s that take advantage of their tax-exempt status and unfairly compete with private, tax-paying corporations. The Internal Revenue Service ("IRS") has generated a list of frequent tax-evasion scams. Included on the IRS tax-scam list is the practice of non-profit organizations erroneously invoking the unrelated business income tax provisions to avoid paying taxes on certain income. Due to the IRS tax-scam list, individual donors should also be concerned about whether or not their donations to a Section 501(c)(3) organization are being spent on the Section 501(c)(3) organization's stated exempt purpose.

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The Committee on CED invites you to submit an article for possible publication in future issues. The articles do not need to be long. Submitting an article is a great way to share your perspective and/or expertise with fellow practitioners and to participate in Committee activities. If interested, please email your article for consideration by clicking on the name of any of the newsletter editors listed above. Thanks.

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