Richard Baron, an idealistic Legal Aid lawyer representing low-income tenants in St. Louis, and Terry McCormack, an experienced labor leader and home builder, joined forces in 1973.
They formed a company with hopes of rebuilding struggling communities by providing housing options for all people. Now celebrating 50 years, McCormack Baron Salazar is one of the nation’s leading developers of economically integrated urban neighborhoods.
The company has developed more than 25,000 homes and 1.6 million square feet of commercial space over the years.
To commemorate its landmark anniversary, the St. Louis-based firm is looking back at some of its most transformative projects and lessons learned in a new book. Affordable Housing Finance caught up with Baron to discuss the company’s history and future.
When McCormack Baron was established, did you have an idea what the company would look like in 50 years?
I had been at Legal Services in St. Louis on a fellowship, representing a number of nonprofit organizations working in the North Side, which is the historic African-American area. All of these organizations were trying to find developers they could work with to help rebuild their neighborhoods with new housing principally. When I started the company with Terry McCormack, it was a desire to see if we could go into these areas and begin to partner with neighborhood groups. I had no expectation of what would evolve, other than the fact I knew that in St. Louis there were a number of places we would be able to work and with organizations with whom I had already met and knew because I was their attorney. As we started doing that, there were other Legal Aid offices in the United States that had heard about the business. We would get a call periodically from other Legal Aid colleagues who had representation of neighborhoods in their cities and asked if we were willing to work there. That started me on a path where I started to move to other cities—Cleveland; Louisville, Kentucky; Kansas City, Missouri; and others.
What was a pivotal moment in the company’s history?
It was more in terms of understanding the way in which we had to put financing together. We began to deal with local foundations in different cities and understand how we could leverage local philanthropy and resources. And, of course, tax reform under [President Ronald] Reagan, which created the housing tax credits. We began to look at ways we could leverage federal dollars with local housing finance agencies, local philanthropy, and the investors interested in buying those tax credits, which gave us a template that became a way in which we approached financing these projects.
In what ways has affordable housing development gotten easier and harder?
It’s certainly not easier. By and large, we’ve never been able nationally to create any kind of a real housing platform with the Congress. Things are always fragmented. Having to do what we have to do in order to put financing together has been a challenge and continues to be a challenge. … There’s never been a national housing policy. That never happened. We’ve never had it. … The tax credits are channeled through state housing finance agencies. The Department of Housing and Urban Development is administering the Section 8 program, but beyond that there’s no urban development. Any of that went by the wayside a long time ago. … The New Markets Tax Credit program, which has been useful in some underserved neighborhoods to help finance nonresidential projects like day care centers, schools, and the like, is administered by the Treasury. It’s this kind of schizophrenic approach to rebuilding these targeted neighborhoods that’s been a challenge, and it hasn’t gotten any easier. Apart from the recovery funds that came through the [American Rescue Plan] with Biden, cities were being constantly cut back on their Community Development Block Grant money and HOME dollars. It’s been very challenging to do anything of scale in cities to really transform neighborhoods. It’s been a very difficult process to work through all of that.
What’s a lesson that you can share with other developers?
It’s always been part of what I’ve tried to do, which is essentially be a good listener. … A tenant leader who became a dear friend used to say to me, ‘Baron, let me tell you something about the people who work with you. You’ve got to find people that have mother wit. They can have all them fancy degrees from Harvard and Stanford and the business schools, but if they don’t have a sense of how you have to operate in a neighborhood, in a community of residents, and have the ability to listen, you’re never going to make it. You just can’t come in and try to impose your own ideas on a community.’ That’s true in terms of design, urban planning, and working on amenities. I think that’s been the most important aspect of our work.
I’ve never had any training in this. I went through law school and a lot of courses in graduate school, politics, and the rest of it. [What’s important is] the ability to sit in a community room with a group of residents and to listen to them and give them the respect they deserve and realize that without the local support and leadership the ability to move forward is simply not possible.
A lot of these communities suffered through urban renewals, heard all kinds of promises about what was going to happen, and many of them were displaced. One of the things that we’ve always done is to make sure that those people living in the community get the benefit of the work that we do. They have a right of first return. We have built housing for the indigenous residents so they can share in the development that we do as new people come into the community. We’ve been focused on schools. I’ve been very interested in the arts and bringing that into the community.
There isn’t a playbook where you start on page one and go to page 40. It doesn’t work that way. You’ve got to have a feel, and you’ve got to understand where people are and how to satisfy their concerns.
Tell us about the new book, “McCormack Baron 1973-2023: A Legacy of Community Partnership, Housing Innovation, and Reinvestment in America’s Urban Neighborhoods.”
It’s been an interesting project that’s been spearheaded by a local writer who knew our work, Anne Kessen Lowell, and Adi Shamir-Baron, my wife. What they decided to do with a lot of collaboration here was rather than trying to do some sort of anthology of all of the projects that we’ve done over 50 years, they chose to allow us to explore projects that were particularly significant given the history of these places. It will be a discussion about a lot of the historic neighborhoods in which we went in as they declined over the decades and the transformational work we did in those places to bring them back. There’s a discussion about the Hill District in Pittsburgh; the history of Galveston, Texas; and the work we did in New Orleans after Hurricane Katrina. … There are a lot of historic photographs, a discussion about the leadership, the evolution of these neighborhoods, and the impact that our developments have had in helping these neighborhoods to recover in terms of providing housing and other amenities to the community.
A lot of our staff who have come to the company within the last 10 or 15 years really had no understanding of the early history of our company and the early projects that we did in different places. I wanted it to be a kind of historic review of what has gone before and the kinds of projects that we took on in various cities so they had a better understanding of the evolution of the company.
Is the book aimed at a particular audience?
We had a lot of discussion about it. I wasn’t interested in putting it in a Barnes & Noble and have it sell as some sort of an urban policy book. I wanted it to be an internal document for our company and for our employees to really understand what has happened. We’ll see if there will be interest from other venues. There may well be some academic institutions or urban planning departments that will pick this up and read it and say, ‘my students need this to really understand what it took to get these things off the ground and given them a practical background how challenging these projects are and the rewards of seeing them succeed.’
What's next for the company?
We’re going to continue to do what we’re doing. In the late ’70s, I created Urban Strategies, a nonprofit that has worked alongside of us and doing work independently of McCormack Baron. We are partnered in many of these cities where Choice Neighborhoods projects are located. The integration of the human capital programs with the development has been a real important part of our work. Most development companies aren’t really doing that kind of engagement. Moving forward, what I’m eager to see is more and more families in our developments that have an opportunity with their kids to get better services, quality of life, job training programs, and the like.