© The Financial Times Ltd 2016 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
When Steven Fulop became mayor of Jersey City, New Jersey, last July, he set out an ambitious goal for the municipality of 250,000 people.
Jersey City, just a ferry ride across the Hudson River from the skyscrapers of lower Manhattan, would be the best midsized city in America, Mr Fulop said. And it would happen by making it a top destination for entrepreneurs and start-ups, attracting young talent who would expand their businesses – and the city’s economy at the same time.
However, realising that vision is not easy in an era of fiscal austerity. Jersey City has undergone a renaissance in recent decades, attracting big companies, including Goldman Sachs and JPMorgan Chase, and big developers such as Donald Trump, who have helped reshape the city’s waterfront. Luxury apartments, restaurants and sweeping views of New York’s financial district have lured affluent young people and growing families across the river.
Such improvements have not reached large parts of Jersey City, however, particularly lower-income neighbourhoods troubled by high crime rates and underperforming schools. Meanwhile, the city’s Economic Development Corporation – a non-profit that promotes business and investment – had its funding slashed in 2010 and Mr Fulop inherited a $20m budget gap when he took office.
It added up to a challenge worthy of McKinsey or Bain. Instead, Mr Fulop turned to his alma mater, NYU Stern.
That was how Janessa Brown-Stonbraker and Lillian Guidry came to Jersey City last autumn under the umbrella of the Stern Consulting Corps, a 10-week project that sends MBA students to work as management consultants on real-world business and economic problems.
“When I got elected, I figured they were a great resource,” says the mayor, who received his MBA from Stern in 2007. “It was a way to leverage some really smart, talented people, and Stern gets the benefit of practical experience that’s really hands-on and meaningful.”
The students were commissioned to rethink the EDC’s mission and relationship with the city government. In 2010, New Jersey cut funding to its statewide Urban Enterprise Zone programme, which provides a large portion of the money that the EDC distributes. Jersey City lost $15m in annual funding and in the years that followed, Mr Fulop says, the EDC lacked “a really defined mission where it can benefit core goals” of improving life in the city.
“We wanted to redefine [the EDC] based on the vision [Mr Fulop’s office] wanted for Jersey City as a whole,” says Ms Guidry describing the Stern team’s approach.
Mr Fulop predicts that Jersey City will become the state’s biggest by population, eclipsing nearby Newark, by 2016. He wants to prepare for the influx of residents, and encourage the city’s fast pace of growth, by improving city services and increasing business investment.
This is where the EDC comes in. While traditionally, the bulk of the work done by such organisations is distributing loans to small businesses, Ms Brown-Stonbraker and Ms Guidry saw an opportunity for Jersey City’s organisation to embrace broader social innovation. That includes bringing in private sector partners to encourage investment – economic and social – in the community.
“How do you leverage the people that live in the city to make it a place that people want to be?” Ms Brown-Stonbraker says. This has been a looming question for Jersey City, as many employees of the big companies that have built office space there prefer to live in Manhattan or Brooklyn.
“There are cities that just accept that they’re commuter cities,” she adds. “Jersey City is not accepting that . . . They want people to move there, have families there, have gardens there.”
Ms Guidry says: “It is a matter of thinking about, would this large business be willing to put their own money to start developing certain areas of the city that would attract their employees to live near work, rather than living in Manhattan?”
The students spoke to local business owners and a major developer. They also studied other EDCs and development organisations in cities across the US, including Denver, Colorado; Dayton, Ohio; and Nashville, Tennessee, to identify programmes and practices that might work for Jersey City.
In Irvine, a city of 230,000 in southern California, they noted a youth employment project that matched jobless teens with employers who could use less-skilled labour. This year Jersey City’s EDC is launching a similar programme, placing teenagers in their final year of high school who need summer jobs with 20 local companies.
There were some challenges, the students said, in trying to find the right examples to match Jersey City’s “unique” situation. “None of the other cities we looked at had the big city right next door,” says Ms Brown-Stonbraker. “Are you competing with Manhattan or are you collaborating with Manhattan? How do you make Jersey City its own entity?”
After 10 weeks of research, the Stern team presented its findings and recommendations to the mayor’s office and members of the EDC’s board of directors.
The students suggested a new vision and mission for the EDC that added public-private partnerships and a focus on social improvement. They also laid out an 18-month implementation plan to structure how the EDC would work with the mayor’s office and how it would put “the system and processes in place that could allow them to go after these cool and innovative projects that they were looking into”, says Ms Guidry. Finally, they made recommendations for projects that could be taken up by future Stern students.
Mr Fulop describes the project as “a great marriage” and is planning to bring another team of Stern students to work on Jersey City’s public library system. “I’m getting top-calibre talent who are donating their time and doing meaningful work. There is no other way that I could get that type of person with the capacity to donate that type of manpower and hours without this relationship with Stern.”
The students say their work has allowed them to build on, and go beyond, their classroom experiences.
“I took a class on doing business in Costa Rica, and we talked a lot about branding a country. Being able to turn around nine months later and be able to do that for Jersey City was just a good way of reinforcing that,” says Ms Brown-Stonbraker, who graduated from Stern’s part-time MBA programme last week.
For Ms Guidry, a civil engineer who will receive her MBA in January, it was a further chance to broaden her skill set.
“I came from a very technical background, so the MBA programme for me was a chance to step outside of my comfort zone,” she says. “I don’t want to be a civil engineer in the back office for the rest of my career, I want to be managing groups and bringing my company forward . . . This programme was a way for me to apply those lessons learnt in a tangible way, over the course of the semester.”
Mr Fulop sees partnering with Stern as a way of expanding recruitment among students and graduates who can bring valuable backgrounds in areas such as technology, marketing, development and property to public service.
“I try to show people their career path shouldn’t be so linear,” says the mayor, who previously worked as an equities trader at Goldman and served in the Marine Corps in Iraq. “You can get exposure and get a couple years in government, then go into private equity . . . It’s the type of relationship that’s beneficial in both directions.”
Copyright The Financial Times Limited 2016. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.