Penn Law's Entrepreneurship Legal Clinic: Helping Community Economic Development
In today’s economic climate, community development through the successful creation and growth of small businesses is a critical challenge for most U.S. cities, including Philadelphia.
So when Praveen Kosuri, practice associate professor at Penn Law, came to the Law School in 2007 to lead its Entrepreneurship Legal Clinic (ELC), he started by reaching out to local community economic development experts to determine how pro bono legal services could help revitalize Philadelphia neighborhoods and the broader area. His approach met with immediate success.
As Kosuri created relationships and found clients for the Clinic, he learned that The Enterprise Center, a West Philadelphia ‘business accelerator,’ was looking for ways to support local businesses and create sustainable jobs. “The Enterprise Center had identified a parcel of land--a boarded-up grocery store at 48th and Spruce in West Philly--that it wanted to acquire and transform into something that could anchor the community, but they weren’t quite sure what it would look like,” said Kosuri. “But the first step was to acquire the parcel.”
Thus during the 2008 spring semester, Kosuri received a call from The Enterprise Center asking for a referral for someone who might be able to help negotiate with the owner of the grocery store. “I said, well, we can do that,” Kosuri noted. He pitched the services of the Clinic to Della Clark, the president of The Enterprise Center whose brainchild the project was, and convinced Clark and her team that the Clinic could be of assistance.
The ELC is one of nine clinics at Penn Law’s Gittis Center for Clinical Legal Studies, which engage the Law School’s students in direct legal representation of individual and organizational clients in a range of domestic and international venues.
The commercial real estate transaction for which the ELC agreed to provide its services would launch the Center for Culinary Enterprises (CCE), an innovative multi-use commercial kitchen and educational restaurant, designed to be an engine for creating food-related jobs and businesses and to provide resources to emerging food entrepreneurs in Philadelphia.
The project sought to transform the unoccupied 12,500 square-foot former grocery store on South 48th Street into a major economic development project that will provide jobs, education and opportunity to Philadelphians. Upon opening in early 2012, CCE will include three fully licensed commercial kitchens; Little Louie’s BBQ, a restaurant with a training program that will provide high school juniors and seniors with real-world experience in restaurant management; two retail spaces available to local food businesses; and a multimedia learning center called the eKitchen, which includes a 36-seat classroom with a demonstration kitchen.
“How it worked is that in January of 2008 our students met with the client and figured out exactly what it was The Enterprise Center wanted to do. In that first semester, students worked to devise a negotiation strategy, and then helped the client negotiate with the seller,” Kosuri said.
The value of the commercial kitchens to the community is that while many entrepreneurs seek to apply their skills in the food industry, “One of the biggest barriers to formal entry and business growth for entrepreneurs is often that they don’t have a health-certified commercial kitchen where they can produce their products,” said T. Stephen Jenkins L’11, who worked on the project during the fall 2010 semester. “The CCE will help to lessen this burden by providing access to these kitchens to local entrepreneurs at an affordable cost.”
As the Entrepreneurship Legal Clinic has between 20 to 30 clients at any given time and 16 students per semester, students are teamed for more complex clients.
Jenkins worked with Angela Redai L’11 on the CCE case. “It was valuable to see the structure of the organization and to get a feel for the steps they needed to take to realize their end goals,” said Redai. “Building on what students had done in the past, one of our responsibilities was organizing all of the CCE’s funding, as it is a non-profit organization, so that the lenders would know going forward how these loans would be repaid.”
“From reading the transition memos [from the previous semester’s students] and speaking with the client directly,” Jenkins explained, and working primarily with Gregory Heller, managing director, Economic Growth & Community Revitalization at The Enterprise Center and the CCE’s project manger, “Angela and I were able to come up with a game plan for what we wanted to present to our client.”
For the teams of students each semester who worked on the matter, “the first part of it was acquiring the land,” Kosuri noted. “And as we progressed, the second part was, how do you structure this larger enterprise, and what’s it going to look like? We needed to figure out a structure that would protect The Enterprise Center from liability associated with the food businesses and wouldn’t jeopardize its 501(c)(3) status.”
As part of the clinical experience, “Students are in the role of coordinating the entire deal,” Kosuri said, “just like they would be as associates in a law firm. What we seek to do here is to provide students with an experience that will last years into practice rather than merely months.”
From the very beginning until the present the students, Kosuri pointed out, “reviewed and commented on the architect contracts. There have been several pieces of financing – the students have been involved in all of that."
"Under our supervision,” Kosuri said, “students have been doing basically everything – from the acquisition of the parcel to obtaining the property tax exemption to securing zoning variances from the City [of Philadelphia] to the bidding process to select a general contractor, to the various rounds of financing, and even the commercial leases.”
“The Entrepreneurship Legal Clinic has been a tremendous partner on the Center for Culinary Enterprises, and we at The Enterprise Center are very grateful for the Clinic’s support,” said The Enterprise Center’s Heller, who has worked with the Clinic’s students since heading up the project in the summer of 2009.
He added: “There are substantial legal costs associated with commercial real estate, and as a not-for-profit organization that develops projects to benefit the community, we work hard to focus our limited resources directly on building projects and investing in community-based programming. Thanks to the Clinic’s pro bono support, we have been able to redirect dollars that would have been spent on legal counsel directly into the project’s community-based outcomes.”
In addition, the Clinic was able to draw on the pro bono counsel of the attorneys at the Philadelphia office of Dechert LLP. “We partnered with them from the beginning, and they’ve been outstanding,” said Kosuri. “If there’s something about which we need their guidance, we can go to them. But as part of their professional development, our students manage the process as opposed to the Dechert folks managing the process.”
Working in the Clinic and with the CCE, “It definitely honed my eye for detail and my attention to how language needs to be framed to achieve certain objectives,” said Redai. “For example, we were meeting with Greg [Heller], hearing his perspective as the client, hearing where they were with the project at the CCE and everything they needed to move forward. Then, working with our clinical supervisors, we had to figure out what steps we needed to take legally to help them achieve their goals. The client work was pretty much entirely on our shoulders.”
“One of the things that I was interested in during law school was to get some hands-on practical skills,” said Jenkins. “And being involved with the Entrepreneurship Legal Clinic allowed me to do that, including substantive experience with corporate/transactional work.”
“The Clinic’s students and staff, led by its Director Praveen Kosuri, have done a very professional job, consistently worked with us to overcome challenges, meet our deadlines, and fulfill all of the legal needs of a complex project,” said Heller. “The Clinic is a fabulous resource for Philadelphia’s communities, and we are proud to be one of the Clinic’s partners.”
For more information about Penn Law’s clinical programs, please visit http://www.law.upenn.edu/clinic.
Center for Culinary Enterprises: A Recipe for Economic Development
(A Penn Law VLA Production)