University of Pennsylvania has contracts with community-owned businesses in West Philly. That's one of the many ways "anchor institutions" can encourage growth. Flickr/universityofpennsylvania

They've got a permanent presence—and great hiring and purchasing potential.

Last year, standing across the entrance to the University of Chicago Medical Center in Hyde Park, I eavesdropped on a conversation about how the expansion of the hospital building had eaten up a neighborhood corner store.

When a big, well-funded institution sets itself down in a struggling neighborhood, it can disrupt things. But if these "anchor institutions" really include and engage the communities, they can also turn the neighborhood around. That's the core of a new report by the Center for American Progress. The report details how the government can help leverage the potential of these "anchors" in revitalizing the cities where they're located.

Universities and hospitals are economic powerhouses. Universities represent three percent of the national economic output and employ more than 3 million people. Hospitals employ even more: Five million. One in eight universities and one in 15 hospitals are located in inner cities. But what's key is that, unlike industries that have driven growth in the past, these institutions have permanent ties to their communities, says author Tracey Ross.

"General Motors in Flint, Michigan, picked up and left. And with it went all of these jobs, and that really decimated the economy," says Ross. "Wayne State University in Detroit? They’re not going to be picking up and leaving."

Since these institutions get a lot of money from the government, Ross argues that the government can help facilitate a more inclusive relationship between the institutions and the neighborhoods they're in. For example, affordable housing plans can ensure that the diversity of the neighborhoods remains intact, and grants can help institutions hire and contract locally.

“This is just a great opportunity to consider, "Just what does this resource mean to us? How can we better tap into this resource?',” she says.

Increasingly, universities are reevaluating their roles. Over the past couple of decades, the University of Chicago has launched a number of community development programs to better understand and improve the Hyde Park community it's in. These include initiatives to increase economic opportunities, hire locally, and revitalize retail.

In a 2012 New York Times article about how the university's initiative to enliven the "blighted" 53rd Street retail district near the campus, university Executive Vice President David Greene underlined the institution's effort to "rethink its relationship with the neighborhood."

“Over the years and particularly in the 1950s and ’60s, there was a lot of development aimed at creating a barrier around the campus,” he said. “We’re now trying to reverse that trend.”

The University of Chicago has reached out to the Hyde Park community. (Flickr/Oscar_Shen)

The University of Pennsylvania is another good example. The university was the first customer at Telrose Corp., an office supply company West Philadelphia native Todd Rose started in his apartment. Now, UPenn is the company's largest customer, with a $5 million contract. The relationship has bolstered the company's size and reputation, Rose says. He attributes the deal to the university's then-president Judith Rodin, who pioneered several urban initiatives to improve the West Philadelphia neighborhood.

But "community engagement" isn't a term you can just throw around, Ross says.

“It’s not about holding one town hall meeting," she says. It’s about really working closely with community-based organizations that the local residents trust.

Democracy Collaborative facilitates these kind of deep relationships. Currently, director Ted Howard is in Cleveland, Ohio, helping to convene a leadership table with all the city's stakeholders—the community leaders, government, and anchor institutions. That's the way to repair the disconnect between institutions and community members: to have them make mutually beneficial decisions as one ecosystem, he says.

He says that although many institutions veering in this direction, they're the early adopters; the place-based community revitalization strategy has yet to take off.

"For a long time in the United States, we got away from the idea that place matters," he says.

But soon, he expects, it will become the new normal.

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