SPECIAL REPORT >> AFFORDABLE HOUSING HALL OF FAME

THE DEVELOPER:
Urban Pioneer

BY DONNA KIMURA

AFFORDABLE HOUSING FINANCE • OCTOBER 2007

Richard Baron has not only built thousands of units of affordable housing across the country, he’s also built developments that transform inner-city neighborhoods.

Chairman and CEO of McCormack Baron Salazar (MBS), a firm focused on rebuilding neglected and struggling urban communities, he has been a leader in creating mixed-income projects. He also helped shape the HOPE VI program that aims to revitalize the nation’s most distressed public housing units.

As a result, Baron is one of the nation’s most successful and influential affordable housing developers.

One of his strategies, and perhaps his most important, has been to create developments that house not only low-income families but also those that can afford higher rents.

“Economically diverse communities are vital because they provide greater opportunities to attract businesses, services, and jobs to their neighborhoods,” Baron said, adding that the socialization process that occurs when different people are brought together is also good for children.

MBS has closed on 122 projects in the last 34 years. The St. Louis-based for-profit company has developed 13,693 housing units and more than 1 million square feet of commercial space in 33 cities across the nation, with development costs in excess of $1.7 billion. Approximately two-thirds of those housing units are affordable housing.

Baron, who turns 65 in October, has also been a key figure in the federal HOPE VI public housing program.

“More than any other single person, Richard’s ideas helped shape HOPE VI,” said Henry Cisneros, who was secretary of the Department of Housing and Urban Development when he was first introduced to Baron around 1993. HOPE VI was launched in 1992.

Baron had been thinking about the need for a program like HOPE VI for a long time, according to Cisneros. “He contributed hugely to the framework of the program,” he said, citing Baron’s ideas about combining public and private investment, restoring street grids, and building developments where low-income and market-rate units are indistinguishable. These ideas have become important characteristics of some of the most successful HOPE VI projects.

“I would trust him with any project,” said Cisneros, who is now chairman of CityView, a national housing investor and developer.

Over the years, MBS has been involved in the development of 19 HOPE VI communities.

Baron and MBS have been committed to community building, of which affordable housing is one component, said Andrew Trivers, of Trivers Associates Architects, who has known Baron for 30 years. He designed the firm’s first development, as well as others for MBS.

“Rather than create isolated projects, these are developments that reach back into the community,” Trivers said, noting that Baron is concerned about enhancing educational and health-care opportunities.

Baron founded a nonprofit company, Urban Strategies, which operates as a companion to MBS in revitalizing communities. Urban Strategies works with communities to plan for improvements in schools as well as youth, arts, and job training programs. Urban Strategies is working with MBS in eight cities.

A taste for the inner city

When Baron was a young student at Ohio’s Oberlin College in the 1960s, he volunteered to work with children in a Cleveland neighborhood beaten down by poverty, riots, and teacher strikes.

The experience inspired Baron to be a pioneer in revitalizing urban communities. After receiving a law degree from the University of Michigan, Baron settled in St. Louis and worked as a Legal Aid Society attorney, representing public housing residents.

During this time, he met and forged a relationship with labor leader and homebuilder Terry McCormack, and in 1973, they formed their development company, McCormack Baron & Associates. The firm became McCormack Baron Salazar in 2003 and boasts approximately 500 employees. Kevin McCormack is president, and Tony Salazar is president of West Coast operations.

The company’s first project was the Washington Apartments in St. Louis, which the firm still owns and recently renovated. Early projects were small, single-site developments. The firm did several historical rehabilitation deals in St. Louis.

Aiming to make an even bigger impact, Baron began building large-scale, multiblock developments that transform entire city neighborhoods. MBS developments can be found in Pittsburgh, Kansas City, Los Angeles, San Francisco, Atlanta, Minneapolis, Phoenix, and Memphis.

One project took him back to Cleveland, where he first got a taste of working in inner cities.

Longtime Cleveland Councilwoman Fannie M. Lewis recalled taking Baron on a midnight tour of the Hough neighborhood in the 1980s, going to a corner that even “the devil was scared to go to at night.” After showing him around, she asked Baron if he could build a project in the area. “He didn’t hesitate,” Lewis said. “He said, ‘I can do something with this.’”

The 277-unit Lexington Village development has had a waiting list since it opened, according to Lewis, who credits the project with jump-starting the neighborhood’s revitalization. “Richard was the one who planted the seed,” she said.

Continued innovation

Baron continues to be a leader in the field. This year, he urged a Senate subcommittee to reauthorize the HOPE VI program.

MBS is also behind other groundbreaking projects. Its 6 North project in St. Louis is the region’s first large-scale multifamily rental development to feature universal design, meaning all of the units are accessible and usable to all residents regardless of physical limitations. Completed in 2005, the 80-unit development is a mixed-income project.

This year, MBS opened Triangle Square in Hollywood, Calif., the nation’s first affordable housing development supporting the needs of gay, lesbian, bisexual, and transgender seniors.

In 2006, MBS also received a $60 million allocation of federal New Markets Tax Credits that will help finance real estate projects in low-income communities.

These moves come from the willingness of Baron, McCormack, and Salazar to try new approaches. “We can innovate, and we can take a risk,” Baron said. “Creating these ideas and providing a way for that to happen is important.”

In 2004, he received the Urban Land Institute J.C. Nichols Prize for Visionaries in Urban Development.

Baron is also the founder of the Center of Creative Arts in St. Louis, a communitybased visual and performing arts center that serves more than 50,000 children and adults annually.

Through the years, Baron’s focus has remained steady. “We’ve never wandered out of the cities,” he said. “We’re always in the cities.”