Why?

Asking why is one of the most important questions in life...

The question I have been asked recently is “why are you writing this blog, and why is it important?”

Yes, the first post tells you why I am doing the blog, but it does not tell you why you should listen to me. That is the why on your part. Why am I qualified to write the things I am? Experience and context are crucial as my business partner tells me all the time.

In discussing the blog with a friend over a couple bourbons, it became apparent to me there is a gap in the background and experiences to get to “the why.” Yes, there are stories are sprinkled in here and there in the posts, but the history/background will make it more apparent why I am driving the conversation in the direction I am. For those that know me and have heard it all, sorry. For those that do not, now you understand the question of “what do you do?” I do everything I can.

It is helpful to back up and tell how I got to this point to give some context. When I was in my last year of university, studying History, my father said, “come down to LA, finish off at UCLA and try your hand at this new business we started to help small businesses get contracts with the government.” I was not sure what I wanted to do with my life at that point, but it was either be a lawyer or professor. Learning business at the side of someone, a Wharton graduate, who had made and lost millions in their lifetime was a good hands on chance to try something different. He said something that stuck with me at that time, “Stevie, you can be one or you can hire one” with regards to being a lawyer.

I loved it. I got to work with small businesses to grow and scale their businesses. I sat at the right hand of owners and was able to say and do the things no one else could. The owners that worked with us grew their businesses fantastically.

In the meantime, I also ran my own tool company which sells parts to the military. We worked with a vocational rehabilitation program and employed veterans with mental health ailments as well as some experiencing homelessness. I saw how to provide a good job, wrap around services, and scale a business from a few hundred thousand dollars a year in revenue to almost $10 million in one year. I learned how to finance a lot of functions on a bootstrap budget and to get things scaled up and down quickly and efficiently.

Meanwhile, as my clients grew, we came into contact with a large nonprofit organization which competed with us.

They were very powerful politically. They employed people who are blind and visually impaired. They wanted our contracts. We danced around competing with one another, but after many legal tussles (I serve as the point person for many of the legal questions with the lawyers), we decided to see how we can work together.

I learned all about nonprofits, social enterprises, and running organizations in that sphere through this relationship. Unfortunately, the relationship fell apart and we were never able to consummate a paradigm shifting deal we had been trying to put together. We got into a final legal battle which took me through many levels of federal courts, with the case even going to the Supreme Court. They lost. When a powerful party loses, the only other option is to go to Congress and get legislation to change the court decision.

As we danced through Congress, we had to advocate at the highest levels. We learned to write up “white papers” to express policy positions and work with multiple members of the House and Senate as well as the Administration. We dissected the issues. We researched a lot of the background. The Program we were up against had never been challenged politically in the 80+ years it existed. We did it. We highlighted various issues which were contradictory and uncomfortable. We showed how it could be done differently, and in compliance with modern regulations. The “old way” fought us tooth and nail. We won a group of staffers and members who admired our fight and how we kept coming back. Most would have been thrown off or given up going through what we did, but we did not and kept on going.

Eventually the situation resolved with amended language to legislation right before COVID. We had accomplished the unthinkable, taken on a Powerful entity, weakened it, and done it with little or no leverage in the DC Game. There were multiple scars from knives being put in my back. Still, to survive the Game and win, it was exhilarating.

Since no good deed goes unpunished, after the tussles through the wilds of government contracting priorities and legislation, I got a call to start looking at homeless housing at the West Los Angeles VA. At the time, a number of LA City Council members were being indicted. Was the deal going to fall apart because of political concerns? The project was being “renegotiated” as part of a new “master plan.” I learned all about Low Income Housing Tax Credits, or LIHTCs, and asked a question about why there was not an employment angle on the solution? There were other incentives for economic development which were missed in my mind. We had employed people who were exactly who were going to be housed in the VA location being considered, so why not build on what we had done?

The VA project morphed into work to see how we could get economic and workforce development to work together and bring it under something called a Community Development Corporation or CDC. The CDC could have been a solution to a problem we were trying to solve during our legal battles.

The CDC-model went back to the 1960s and 1970s, but there was an exception to government contracting affiliation rules that the CDCs had which was extraordinarily valuable. What if a nonprofit can own subsidiaries and companies and then spin those companies off to the workers and create a sustainable revenue model?

The CDC discussion and VA homeless question brought me into a project in LA County called California Jobs First or CJF which was examining these exact questions. Could the CDC be a model we can use to go forward in terms of development? We thought it fit perfectly into where the State was going with the CJF program and shifting the paradigms of economic and workforce development. Through the CJF model, we got to the Federal Reserve and discussions around Community Reinvestment Act or CRA. If we could find a way to securitize the CRA funds, perhaps those funds can be a multiplier to use for economic development without burdening businesses with interest costs, maybe we can do a new way of equity participation?

As the stimulus bills were being questioned and the election occurred in November 2024, the answer from DC was tax reform was to be the key to going forward. But, what if there was a way to unlock the $200 billion delta between COVID and current CRA spending to provide money for projects which were commercially viable? What if we could do so using this new mechanism? Would $1 trillion over 5 years be helpful to Congress? The answer was obviously, yes, but how?

So on the plane home I wrote up proposed legislative language for what a bill could look like. It would likely have to be a State driven initiative to get scale for the project. Could the State understand it? What if we offered the bill and let it sit dormant until the need presented itself and Congress cut the funds off.

The security in the bill would be able to unlock those funds to invest in projects which make sense and can attract funds. We also thought maybe we could use the CJF program to prove out the pilot of the model. We would use through a community driven nonprofit, or even a CDC.

The language was all but ready to go and the bill was in its last stages when the fires hit. Since the mechanism was legally vetted and ready to be presented in a bill, it was a question of where to apply the mechanism. The real estate question looked most ominous in the days after the fire because of the concern of property value depression.

We could deploy a backstop through a bill and mechanism to people who most needed it and because much of the bill was written, maybe we could possibly get it into the emergency measures the Assembly passed a week after the fire. The first push did not happen, but the bill was formulated by our Assemblyman into AB 797, which is now in the Assembly.

After six weeks of no plan emerging, we put out a plan to discuss what could be next. We needed to move the conversation,,whether it was right or wrong. The point was people were saying they needed something, anything. From there, the idea came to do a Substack after saying what a great idea it would be to document the fire and its rebuild. A Substack can also drive the conversation forward, telling the story, helping people see what could be.

Nothing is hard and fast. Nothing is perfect. It is a living project. Something on this scale has to be iterative. Fearing iteration is ridiculous. Nothing like this event has ever happened before, and hopefully never happens again. Nevertheless, it is a blank slate. My experiences brought me here. Politics, business, navigating development, understanding for/nonprofits, and so forth. There is context here to understand why we have these plans. We have touched so many pieces and will touch so many more.

Once I explained it to my friend, he understood. I hope this post helps you understand too.