Making an impact

An unusual blend of entrepreneur and social justice advocate, Bay has built the nonprofit rural community development corporation he helped create in 1970 into a major economic force in Northwest Wisconsin.

The son of an Ashland County logger and graduate of the University of Wisconsin-Superior, Bay began his career working for community services and employment training nonprofits groups in the area.

Working as a consultant, he helped seven economically depressed northwest counties (Barron, Burnett, Dunn, Polk, Rusk, Sawyer and Washburn) seeking to reverse their slide develop one of the nation’s first rural community development corporations, Impact Seven (I-7).

Bay has expanded that model to the northern, western and southern corners of the state, offering an array of community and business development services to small companies, small towns and Native American tribes. It’s a business lender, investor and consultant, and it partners with communities to develop housing, day care, chemical dependency treatment programs, tax increment districts, recruit new industry and write grant applications.

Along the way, I-7 has grown to more than $43 million in assets held in nonprofit and for-profit subsidiaries, many of them affordable housing projects developed with faith-based groups and foundations.

In 1989 it forged a coalition, — The Wisconsin Housing Ministry Partnership — that has developed 510 new affordable units, bought and rehabbed 71 more. The partnership is one of just 18 groups nationwide certified by the Indianapolis-based Lilly Endowment for funding it’s allocated for community development.

But the single-largest source of financing for I-7 projects is the federal government. Bay is considered a master at sleuthing project funding from Small Business Administration loan guarantees, the Department of Housing and Urban Development and the Agriculture Department’s Rural Development programs.

“Bill is one of the best I know at accessing federal funds,” said Frank Kempf, executive director of the Ashland Area Development Corp. (Kempf, who still lives in Glidden, first crossed paths with the older Bay when both played for the town baseball team four decades ago.)

I-7 keeps getting that federal money because the programs it develops work, said Elise Hoben, rural programs vice president for the Local Initiatives Support Corp. (LISC).

In the mid-1990s, I-7 was one of 52 community economic development corporations selected by LISC to partner in rural projects. Since then, I-7 has borrowed $1.1 million from LISC to finance projects, money well spent, Hoben said.

“It’s a premier rural development corporation,” she said. “People in Washington recognize that, and that’s why he can keep coming back.”

There’s another reason, as well.

“We don’t take ‘no’ for an answer unless we know what ‘no’ is,” Bay said. “We fight, and we fight damn hard.”

While I-7 assets are scattered from Ashland to LaCrosse, nowhere are they more visible than in Almena (pop. 625) near the Barron-Polk county line.

Almena’s agriculture-dependent economy was struggling mightily when it forged a partnership with I-7 in 1990 to diversify its business base. I-7 moved there from its first home in Turtle Lake 10 miles west.

A decade later, that partnership, called the “Almena Idea,” has established zoning laws, created two industrial parks as well as new affordable and market-rate housing, added 23 new business startups or expansions and 142 new jobs, expanded an elementary school and begun a downtown renovation.

These initiatives have been noticed in faraway places.

• The “Almena Idea,” was one of 25 U.S. public-private partnerships honored in 1996 at the United Nations Conference on Human Settlements in Istanbul, Turkey.

• I-7 has been used as a case study at Harvard Business School for its linkage of business development with employment and training programs.

• And in 1999, it was one of 22 organizations nationwide to share an award from “Social Compact,” a coalition of corporate executives joining forces to marshall private investment in fragile communities. I-7 shared the award with Northern State Bank in Ashland for their partnering role in the “Ashland Alliance,” aiding the city’s recovery from the loss of Ft. James Paper, a major employer.

Even though Bay grew up in rural Ashland County, it’s a relatively new market for I-7’s business development efforts.

But he’s made up for lost time with several recent projects in Ashland.

I-7 has:

• developed a “speculative” building to attract new manufacturers to the city’s east side industrial park. I-7 is looking for a tenant, or tenants.

• bought, rehabilitated and expanded existing downtown commercial space on Ellis Avenue for Safeco Insurance Group The firm expects to add more than 100 new jobs.

• purchased a long vacant downtown hospital and the adjacent Wilmarth mansion, converting the two structures into 18 units of senior housing.

“They’ve done good things here,” said Ashland Mayor Lowell Miller. “I expect Safeco Insurance is going to be a significant employer here,” he said.

While it’s still vacant, the spec building will prove useful in the city’s business development effort, the mayor said. A former hospital administrator, Miller seems most taken by I-7’s risk-taking purchase and creative conversion of the old Trinity hospital building and mansion into housing. “Trinity was progressive and aggressive,” Miller said, noting that I-7 shares those traits. “I don’t know who else could have done that,” he said.

With its “Ashland Alliance,” I-7 has encountered typical developer issues. The Trinity project has encountered unexpected site drainage issues, and has been slow to fill up. “We aren’t seeing the demand we thought there would be,” he said of the market for the new apartments. And the spec building remains a challenge. “We have to get that spec building leased.”

Bay minimizes his agency’s political and financial risk in places like Ashland by collaborating with local players, and drawing upon a network of partnerships forged in other deals. For instance, a lender for the hospital conversion to housing in Ashland is the Midwest Minnesota Community Development Corp. in Detroit Lakes. In turn, I-7 is providing $748,000 in financing for the Graystone Hotel renovation in that western Minnesota community. It’s an adaptive reuse that’s turning a longtime downtown eyesore into affordable housing, and revitalizing an entire city block. “It’s a wonderful project,” said Detroit Lakes Mayor Larry Buboltz.

That kind of collaboration is essential for attracting financial resources to rural communities, Bay said. “When you bring in more people you spread the risks and everybody gets credit for the leverage,” he said.

It’s a gospel that sounds reasonable. But it isn’t always embraced in rural communities, particularly when proposed affordable housing is perceived to benefit only disenfranchised groups, such as immigrants and the developmentally disabled.

“Affordable housing can be thought of as intrusive, even when 99 percent of (the beneficiaries) already are in the community,” said Hoben of rural LISC. “ CDC’s are at their best when they’re actively engaging the community to respect a program. But change doesn’t come from inertia, it’s often noisy to get the buy-in,” she said.

I-7 and noisy resistance to its housing initiatives often have traveled together in rural Wisconsin. While low-income elderly housing isn’t controversial, that need is largely met.

“But there’s huge need for affordable housing, and it’s a big issue in economic development. But if you want to pick a fight, low- and moderate-income housing is a good place to get one. And community misinformation can kill you,” Bay said.

As the nonprofit’s longtime board chairman until he stepped down in March, and as editor of the Amery Free Press, Jerry Sondreal has witnessed several of those I-7 housing battles, including one in his hometown.

“We’ve done some very unpopular things. But every project requires local sponsorship. And our guiding philosophy is that you have to link housing projects to family housing if it’s needed,” he said.

Sondreal views I-7’s battling image as a function of the intense competition for the federal funding upon which it depends, and the combative nature of its longtime chief executive.

“This is no pie-in-the-sky organization. Bill’s a hard guy to work for. Everybody works hard there, and he works harder than anyone else.

“He can be very irascible, it’s his Irish temper. He can be a pitbull and he doesn’t care who he takes on. That’s one of the reasons I-7 is still around,” Sondreal said.

I-7 and Bill Bay are hard to separate, but at age 63, Bay acknowledges the organization’s board needs to move the matter of succession closer to the top of its list. Those directors haven’t given it much thought, Sondreal said.

Sondreal predicts I-7’s search for its next chief executive likely will tap the national rural community development sector. If so, Bill Bay might even have a hand in that decision, given his influence in its development over the last three decades.

Certainly, no one has scouted the field as well as he. There are 76 rural CDCs in the nation, Hoben said, adding that Bay has worked tirelessly with several as they’ve evolved.

“He’s been absolutely wonderful working with other CDCs, helping them think through their strategies,” Hoben said. “A nicer man you can’t find.”