In the Black and the Green Part II of II
In 1998, through one of his holdings, the Johnson Development Corporation (JDC), he entered into a 50/50 partnership to build Starbucks stores in areas described as “underserved.” Urban Coffee Opportunities was formed and over the course of 12 years, over 100 UCO locations were opened in Los Angeles, New York, Seattle, Chicago, Denver, Detroit, Atlanta, San Diego, San Francisco and Washington, D.C.Starbucks specifically noted their retail success in Harlem in New York, Bronzeville in Chicago and the Crenshaw district in Los Angeles claiming the partnership “anchored redevelopment of the areas.”
In 2010, Magic Johnson sold back his 50 percent stake in the 100-plus Urban Coffee Opportunities locations to the parent company and in a joint release with Starbucks CEO Howard Schultz, declared success in creating economic opportunities and delivering quality service by bringing a popular brand into the Black community and providing more than 2,100 jobs paying an estimated $29.8 million in salaries/wages and benefits.
“Through our partnership with Starbucks, we were able to serve as an economic catalyst in urban cities through the creation of new jobs, use of local suppliers, support for community-based organizations, and by attracting other retailers to the area,” said Mr. Johnson. “Our success also validates the loyalty and support of urban consumers to companies who bring quality products and services which meet their needs into their communities.”
It would be hard to argue with him. Certainly, the Starbucks located at 71st Street and Stony Island Avenue in Chicago and a location in the Chatham Ridge strip mall located on 87th Street, both enjoy steady streams of regular customers. The Starbucks location in Bronzeville, a Black neighborhood on Chicago’s South Side, enjoys brisk business from loyal customers as well, and at all three locations, easily the high majority of those working are Black and female.
Mr. Johnson also counts the launching of six theaters in “underserved” areas of Los Angeles, Atlanta, Houston, Cleveland, Harlem and Largo, Md., as another accomplishment in the way of bringing more quality entertainment choices, jobs and services to communities in need of economic investment. He is also part of a group of investors that purchased Major League Baseball’s Los Angeles Dodgers in 2012 and the Los Angeles Sparks on the Women’s National Basketball Association in 2014.
Some critics reject this corporate top down approach. Whole Foods recently broke ground in the Englewood neighborhood where crime and violence is high, and in many areas, business investments are low. Some sections in Englewood are described as “food deserts” where reasonably priced and nutritious food is hard to get, especially for those without vehicles, yet there are complaints that the corporation is coming in to exploit, not serve.
Ms. Alleyne says it takes a “collaborative effort” involving the private sector, non-profits, governmental policy and ordinary people to solve the economic problems that exist, but they are not insurmountable.
Forbes contributor Cedric Muhammad says neither the activists nor the corporations are going far enough.
“Neither the activists who fight the exploitation of incoming corporations nor those who raise the issue of our being ‘underserved’ go deep enough to the root of the problem,” said Mr. Muhammad. “They don’t advocate the independent pooling of financial resources which could provide investment to struggling small businesses, talented entrepreneurs and skilled professionals at home. The activists have to add a new dimension to their work of protest and that is offering solutions which bring the untapped capital and talent of each neighborhood together into productive business activity,” he added.
Whenever residents and activists identify a need, they should take inventory and even a census of those with skills and talents in the community that might be able to form a business to fulfill the need, added Mr. Muhammad. In his view, this would create a new relationship between residents, community banks, political leaders, small business owners, investors, the unemployed and underemployed. After that takes place, if it is determined that a need cannot be satisfied creatively and proactively from within, or that a non-resident can offer better quality, an outside corporation might be invited into the community, he argued.
Until such a comprehensive and strategic approach is used, these conflicts between businesses and community activists will continue, Mr. Muhammad said.
Instead of calling for “jobs and justice” a more effective demand would be for “ownership and justice,” said the author of a book series titled “The Entrepreneurial Secret.”
When a community produces what it consumes and owns the businesses which provide employment, dollars circulate within the neighborhood and will find their way back to supportive institutions in the form of sales, wages, salaries, profits and investments making them independent, autonomous and more difficult to exploit. You would never hear a community like that described as “underserved.”
This is consistent with what Minister Louis Farrakhan outlined in his book “A Torchlight for America” when he wrote: “The challenge to America’s business community is to find ways to make the people owners of the businesses and property in their communities, as shareholders and under profit-sharing plans. This is what true economic justice looks like.”
Minister Farrakhan has long lamented the brain drain that occurs within the Black community, as well as the reluctance of those who have achieved professional success to invest in their own communities. He has also encouraged the learned and professional class within the Black community to use their knowledge and expertise for wealth production for their people and not simply to accrue wealth for themselves. This was a point he also emphasized during speaking engagements at many of the country’s historically Black colleges and universities. Many HBCU’s are suffering because those who matriculated there have not returned to support the institution financially.
Entertaining a consumer nation
Though not monolithic, Black people have been described as a “consumer nation” in terms of spending habits, and in some ways, this appears to be paying off, but not in a way that benefits the masses.
The 43 million plus Black people in America have a current buying power of $1 trillion forecast by economic analysts to reach $1.3 trillion by 2017. Of that amount, $3.1 billion is spent on leisure and entertainment. The most recent Nielsen report on America’s television habits found Blacks watch significantly more television than any other group, making them excellent targets for advertisers.
Likewise, there is no denying that many Blacks are among the most visible and highly compensated in American society, especially in the area of entertainment. In fact, a quick glance at Forbes’ 15th Annual Celebrity 100, which uses power, influence, and earnings to determine rankings, reveals seven of the top ten on the list are Black.
Topped by glamorous entertainer Beyoncé with estimated earnings of $115 million in 2014, superstar athlete LeBron James followed and in the 3rd position was producer Dr. Dre. Rumored to become hip hop’s first billionaire, Dr. Dre’s $620 million is the most earned in a 12-month period than any other person in the history of the Forbes Celebrity 100 list. Oprah Winfrey lands in 4th place with Beyoncé’s husband JayZ 6th, boxer Floyd “Money” Mayweather 7th and Barbadian recording artist Rhianna in the 8th position.
Are these individuals moving towards establishing generational wealth, are they simply highly compensated employees, or are they successful entrepreneurs capitalizing on their skills talents and opportunities?
“They are what we call high growth entrepreneurs,” said Ms. Alleyne. In her view, these individuals are moving toward creating legacies by leveraging their resources.
Mr. Muhammad used the term “intrapreneurs” to describe those like Beyoncé, JayZ, and Oprah Winfrey seeing them as both highly-paid employees and highly successful entrepreneurs, depending on their contracts, where they are on the “economic power pyramid” and their contracts.
“In some ways it may be more accurate to say that Jay-Z, Beyoncé and Oprah are intrapreneurs because they sell ownership of what they create. An intrapreneur effectively perceives and conceives of an opportunity but does not build or own the institution which ultimately finances it or brings it to reality or the point of sale to a consumer,” said Cedric Muhammad.
“The long-term money is not in the quick and one-time sale of a creative product like an album, TV show or movie. The larger income streams which come down through the generations, can be found in owning the rights to continuously distribute, use and sell that creative work. What is encouraging about Jay-Z and Oprah is that over time they have negotiated stronger deals which allow them to share in this kind of economic power. As they grow in power and skillfully utilize technology, they will function more like entrepreneurs than employees,” said Mr. Muhammad.