Indianapolis replicating East Lake with help from Warren Buffett and Tom Cousins
By Maria Saporta
Indianapolis, Ind. — Atlanta developer Tom Cousins witnessed first-hand the early phases of the “miracle” that he pulled off in the transformation of East Lake community at the Avondale Meadows community in the northeast section of Indianapolis.
In an effort to spread the success to cities across the country, Cousins founded Purpose Built Communities; and he was able to get philanthropic support from two business superstars — billionaire Warren Buffett and former hedge fund leader Julian Robertson.
On Wednesday, the three investors in Purpose Built Communities were able to cut the ribbon on Avondale Meadow’s community center at the East Village — a mixed income development that is replacing a neighborhood that had five public housing projects and had become a haven for crime and poverty.
The East Village eventually will have 800 apartments — 70 percent for lower income families and 30 percent leased at the market rate. Nearly 250 units are under construction, and 24 percent of the apartments have been pre-leased.
Purpose Built Communities provided consulting services free of charge as well as some seed capital to help make Avondale Meadows as successful as East Lake.
The Tom Cousins of Indianapolis is Gene Zink, chairman and CEO of Strategic Capital Partners. Zink first started in the creation of a charter school in the community eight years ago.
Then he met Cousins three years ago, when he began drinking the “Kool-aid.”
“Like Mr. Cousins, I’m forever a real estate guy,” Zink said. “When I started this project, I didn’t have a clue about mixed-income housing and mixed-income communities.”
But from Cousins, Zink said he learned to appreciate the Cousins’ model of “the holistic redevelopment” of a community.
“We learned that you can’t just fix one thing,” he said. “If you only fix one thing, the bad will come back. You’ve got to fix everything.”
The most valuable contribution that Purpose Built Communities made, however, was to give Zink moral support.
“Every time I would say this is hard and I give up, they would say: ‘No you can’t,” Zink said. “We drank the Purpose Built Kool-aid.”
Purpose Built was founded three years ago. Earlier this year, it hired former Atlanta Mayor Shirley Franklin to be its CEO. She had worked on the East Lake community transformation before she ran for mayor. Greg Giornelli, her former chief operating officer, now does the same role at Purpose Built.
Currently, the Atlanta-based nonprofit is working with several communities across the country. The second annual “Network Member Conference” is meeting in Indianapolis to see this city’s Purpose Built Communities and to learn best practices from each other. Nineteen communities from around the country are represented at the conference, which has about 200 attendees.
For Buffett, the Purpose Built model has been a rewarding philanthropic investment.
“I just sit back and cut ribbons,” Buffett said. “Here I have a chance to join something. It really was a miracle what was done in East Lake. We now can make the next one even better.”
Asked how much he would be willing to invest in Purpose Built, Buffet said there was no limit.
“There will always be loads of money for good ideas,” Buffett said. “You don’t even want to put a limit on it. If you can change the lives of 500 or a 1,000 people, why limit it.”
Cousins was obviously proud of what has been accomplished through Purpose Built.
“We are a free consulting service,” Cousins said. “We are a McKinsey (consulting firm) to these projects, but we don’t charge. We do provide seed money if there’s local commitment. It’s critical that the funding for these developments that there is local money.”