To improve access to quality education, a real estate developer aims to puts public schools in commercial buildings—and convince investors her for-profit model works
The Entrepreneur: Andrea Christie Pizziconi, 28
Background: A classical singer and chartered financial analyst, Pizziconi co-founded her first urban development company, Christie Wareck Co., in 2004 in New Haven after several years of managing retail development projects for Yale University.
The Company: In 2007, Pizziconi launched a second development company, Christie Co., which focuses on integrating schools and universities into mixed-use revitalization projects. Since its launch, the company has secured angel investor capital for projects in the U.S. and various countries in Africa, and is now in discussions with venture capitalists and institutional investors.
Revenues: Pizziconi projects Christie Co. will have revenues of $750,000 in 2008 during pre-development and $2.5 million in 2009. She expects it to be profitable in 2008.
Her Story: When I was in college at Yale, I asked my mentor how to shape my career around combating social inequality. As the daughter of an inner-city schoolteacher, I grew up believing that the real way to effect change was by providing access to quality education. But my mentor, a respected lifelong public servant, told me to become a real estate developer. I was aghast, awash in visions of developers as smarmy, greedy opportunists. His point was that few industries have more of a direct influence on social disparity.
I reluctantly heeded his advice and started working for Yale as it began a controversial commercial redevelopment project back in 1999. Within a few years our success, mostly defined by fancy new stores and restaurants downtown, had made international news for its positive impact. But I found the results somewhat superficial. After all, real revitalization required more quality urban schools. Still, I recalled my mentor's advice: To sustain socially responsible acts over the long run, someone has to make money in the process. Since most problems boiled down to real estate, I decided to marry my vision of improving access to quality education with my newfound belief in the power of real estate development. The caveat? I'd become an entrepreneur who did well by doing good, not just while doing good.
Too Good to Be True?
I had my first pivotal idea for how to execute this vision in 2000, after working for the New York City Mayor's Office. During that time I had seen plenty of desirable office space left vacant from the dot-com bust while urban schools continued to struggle to find quality locations. I became convinced schools could be built faster and cheaper if integrated into private commercial buildings. In turn, schools could pay market rents and make great, creditworthy tenants, especially when markets went soft—as they were in 2000 and are again today. Also, it seemed any kid or teacher would far prefer to go to school in a swanky office building than in most traditional schools, which to me often resemble prisons.
At first, investors and government officials thought the concept sounded too good to be true, and assumed the catch was either that schools would drive out surrounding commercial demand or that such facilities would compromise the integrity of school environments.
But I thought I had a win-win scenario for all stakeholders. I just needed to show them it could actually work. In 2003, I received a Gates Cambridge Scholarship. It was a perfect fit because it brought me the credibility to go from being a commercial developer to an education policy reformer, and allowed me to prove my idea was both possible and scalable. After a year of intense research, I had strong evidence that my concept could indeed create enormous benefits to student achievement, including enhanced teacher retention and increased access to professional role models. During that time, I also co-founded my first urban development company, the Christie Wareck Co., returning to New Haven to begin several downtown redevelopment projects with the hopes of bringing schools into them.
A Breakthrough in Africa
However, it took a couple of years and a few non-school development projects under my belt before I gained any serious traction with public officials and investors around anchoring my projects with schools in the U.S. It got easier when I started to partner directly with respected organizations such as the Big Picture Co., a nonprofit that runs 55 schools in the U.S. and several internationally, that had come to see the value of having sympathetic private developers as strategic partners.
But the breakthrough came in 2005. I unexpectedly found myself in Africa visiting friends who were struggling to make a measurable impact through the traditional NGO [nongovernmental organization] paths. It was then, witnessing their frustration, that I began to see how well-suited my business strategy was to developing countries under pressure to increase access to quality education with extremely limited financial resources.
Moreover, I saw how quickly African stakeholders understood the mutual benefits I offered, compared to their U.S. counterparts. After all, they were tired of philanthropy that left them dependent on others without sustainable solutions. I first encountered this attitude when I met Aiah Gbakima, the vice-chancellor of the University of Sierra Leone in Freetown. After discussing my experience working on university development for Yale, he immediately started listing intriguing business ideas to fund the university through its budget crisis. He then called Wilfred Sam King, who I learned was considered the country's most successful businessman and a model social entrepreneur. He had risked his life to push economic development initiatives throughout a bloody civil war.
When we first met, I thought it most prudent just to offer my help in their efforts to rebuild. King's response was sharp and clear but also refreshingly on par with what I've encountered at universities across the continent since, "We are not seeking charity. We have a lot of work ahead of us but we also have serious opportunities to be cultivated. If you want to partner with us, as business partners, only then do we have something to talk about."
When I raise capital, I live the challenge we social entrepreneurs often face of not being easily categorized by philanthropists and investors. Social venture funds assume we're exploiting students or targeting privileged families, neither of which is the case. Conversely, I struggle to convince mainstream investors, distracted by the compelling social outcomes, that they're investing in a commercial real estate deal, not a philanthropic venture. Luckily, some sophisticated investors familiar with emerging markets do indeed get the point. After all, many of them made a killing through microfinance using similar principles.
Still, several investors have asked if I'd set up a nonprofit to accept a donation for a tax shelter rather than make an investment that could yield robust returns. This is disheartening. It shows how many still assume social and economic returns are mutually exclusive.
The silver lining is that the skepticism of others creates my first-mover advantage to seize fringe opportunities they can't yet see. But I suppose that's what all risk-taking entrepreneurs do—arrive unfashionably early to the party and warm up the dance floor for all those watching but too afraid to get their groove on.
More journals are available in our ongoing Entrepreneur's Journal series.