A “Pretty Severe Education” in Raising Capital Dollars: What It Took to Get NYC’s Civic Hall Funded
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Civic Hall’s new location at 124 East 14th Street in Manhattan.
On November 1, New York City Mayor Eric Adams and a host of community leaders celebrated the grand opening of Civic Hall at Union Square, a digital skills training center aimed at cultivating an “inclusive talent pipeline for family-sustaining jobs” in the city’s tech sector.
As the ceremony commenced, Adams made a beeline to Civic Hall cofounder Andrew Rasiej, sitting stage right. The pair embraced and shared a few words before taking their seats. After an introduction from New York City Economic Development Corporation (EDC) President and CEO Andrew Kimball, Adams stepped up to the microphone.
“With over 355,000 people working in the tech sector, New York City is the second-largest technology hub in the world,” Adams said. “And with tech and digital training hubs like Civic Hall providing skill-building and world-class educational training to New Yorkers in diverse and traditionally underserved communities, we are aiming for number one.”
The event was the culmination of Rasiej’s arduous, seven-year effort to bring the project to fruition, and while I don’t claim to have the ability to read minds, I suspect that he was overcome with joy, gratification and relief as he watched the mayor cut the ceremonial ribbon.
Founded in 2015 and originally located in Manhattan’s Flatiron District as a nonprofit collaborative work center and event space, Civic Hall won a bid in 2016 to become the anchor tenant in an impressive new physical location that would include a state-of-the-art workforce development center focused on digital skills training for city residents, particularly those hailing from historically underrepresented communities. Overnight, Rasiej assumed the role of capital mega-project fundraiser, tasked with raising approximately $22 million. “I thought, ‘This is going to be the largest digital skills training center of its kind,” he said. “Funders are going to love this.”
Rasiej was only partially correct. In 2019, Craigslist founder Craig Newmark, who had been providing support to Civic Hall since 2015, announced a $5 million gift. “My intuition said that this would be a great way to stand up for good uses of technology in a way that could propagate across the country,” Newmark told me via a recent video call. “It’s a pure win from my point of view.”
Not everyone agreed. Rasiej was unable to secure major commitments from other tech entrepreneurs or private foundation leaders who were enthralled with the project but prohibited from allocating discretionary capital funds. “If I had known how hard it was going to be to raise capital dollars, I probably wouldn’t have embarked on this journey,” he said, underscoring how incredibly difficult it can be to raise money for such projects, especially if the nonprofit doing the ask isn’t a four-year university, “legacy” museum or marquee performing arts organization with a roster of reliable, deep-pocketed donors dating back decades.
Fortunately, Rasiej’s journey has a happy ending. He hit that $22 million figure through a mix of public funding and corporate sponsorships — all leading up to that moment on November 1. The 85,000-square-foot facility includes a community space, a conference and events center, and a 42,000-square-foot Digital Learning Center to “harness and develop the untapped talent within NYC’s local communities.”
Here’s a look at Civic Hall’s backstory and how Rasiej deftly navigated the myriad legal and administrative machinations involving its new home.
“To our surprise, we won the bid”
Rasiej is the cofounder of the Personal Democracy Forum, an international conference exploring the intersection of technology, politics and government. He also founded mouse.org, which provides technology education in New York public schools and other locations.
It was in 2015 that Rasiej and Personal Democracy Forum’s cofounder Micah L. Sifry started Civic Hall, a collaborative work space, in an effort to replicate the forum’s work on a more place-based, day-to-day basis. Within a year, the organization, which operated as Civic Hall LLC, welcomed over 100 organizational members from fields like the nonprofit sector, tech and government. A year into its operation, it created a 501(c)(3) called Civic Hall Labs, through which it received support from funders like the Omidyar Network and Google.org. The space has hosted over 2,000 events like hackathons, panel discussions, book talks and workshops since its launch. (Sifry left Civic Hall in September 2020.)
In 2015, the EDC put out an RFP to construct an office building for tech companies on a city-owned property in Union Square. A friend put Rasiej in touch with Robert Levine, founder and CEO of real estate development firm RAL Development. “I proposed to him that we’d offer the city less money than everybody else,” Rasiej said. When Levine asked why the city would play ball, Rasiej said because they would propose for the site a newer and larger Civic Hall.
After all, Rasiej reasoned, the city was already familiar with the organization, as staffers had attended events at its original space. Even more importantly, a larger Civic Hall would accommodate 20 to 25 new classrooms to provide underserved individuals — Rasiej prefers the term “underestimated” — with digital skills training programs, which happened to be a top priority for then-Mayor Bill de Blasio.
Rasiej and team submitted their proposal in November 2015. “In my presentation, I said something to the effect of, ‘The amount of money you’re not going to get from us is a pittance [next] to what it would take for you to replicate the programs that will eventually be in this building,” Rasiej recalled. “And to our surprise, we won the bid.”
Addressing community concerns
Rasiej was obviously thrilled, but he didn’t have much time to celebrate. “All of a sudden, we went from being a tiny little start-up to having this huge project that needs to get built.”
Civic Hall at Union Square occupies 85,000 square feet across seven floors in Zero Irving, a 21-story, 176,000-square-foot, mixed-use tower. When the bid was approved in 2016, some community leaders pushed back, arguing that the space would trigger a wave of commercial development that would displace residents and jeopardize neighboring historical landmarks.
Rasiej sympathized with these concerns, especially given the fact that the city chose to employ the term “tech hub,” which brings to mind swarms of tech workers swooping into a neighborhood and driving up housing costs. “My recommendation to the city was to call it ‘Civic Hall at Union Square’ and not a ‘tech hub,’” Rasiej said. “But we lost that argument.”
Over the course of six months, Rasiej met with about 80 civic groups, plus state and local politicians and members of the local community board. Given his work with mouse.org and having run for public office in 2005 on a platform of free wireless access, community representatives mostly did not perceive him as an interloper. Nonetheless, it was grueling work. Rasiej said his efforts to build support across the community “was probably even more arduous than trying to raise the money.”
But the efforts paid off. The project received unanimous approval from the community board, the City Planning Commission, the Land Use Committee, and in August 2018, the City Council, which officially signed off on rezoning for the Union Square “tech hub.”
“It gave us wind in our sails”
After Civic Hall LLC won the bid, Rasiej determined he’d need to raise approximately $22 million for the “guts” of the facility — interior work, glass, carpeting, lighting, air conditioning, and electrical and internet systems. “Our goal was to create a facility that was sustainable, but the proposition for for-profit investors just didn’t exist,” he said. “It became clear that we would need philanthropy for this.”
Enter Craig Newmark. Rasiej and Sifry’s relationship with Newmark dates back to the mid-2000s when Newmark attended Personal Democracy Forum events. In 2015, Newmark donated $25,000 to support a Civic Hall scholarship program for veterans and their family members. Two years later, he donated $100,000 to create a program developing early-stage community organizations focused on human and civil rights. And in 2018, he gave $500,000 to launch Civil Hall’s Digital Learning Center.
Cognizant of Newmark’s track record and interest in issues like women in tech and cybersecurity training, Rasiej and Sifry made their pitch, and in July 2019, Craig Newmark Philanthropies announced a $5 million gift to expand Civic Hall’s Digital Learning Center and support ongoing operations in preparation for the move. “It was an amazing commitment,” Rasiej said. “It gave is the wind in our sails that we needed to make us feel like we could do this.”
Newmark’s support for Civic Hall reflects his unwavering belief in civic technology, which he says enhances the relationship between citizens and government. “There are often boring uses of technology, like getting permits for real estate approvals and getting potholes filled, but it can improve people’s lives,” he told me. “There’s little or no profit in it, but people who’ve been lucky in this business need to stand up and help out.”
In April 2019, RAL and its financial partner Junius, a real estate investment unit of JPMorgan Private Bank, closed on a 99-year ground lease with the EDC for Zero Irving and made an up-front payment of $5 million. Construction on the new Civic Hall space commenced four months later, with planners setting an opening date of 2020. Rasiej and his team still had to come up with an enormous amount of capital while simultaneously navigating what he called an “arduous lease negotiation process” with RAL Development.
Faced with what he called an “existential crisis,” in October of that year, Rasiej reached out to Christine McMahon, the CEO of the Federation of the Handicapped and Disabled (Fedcap), a nonprofit holding company with subsidiaries in education, health and workforce economic development. McMahon submitted a letter of support for Civic Hall when it submitted its initial bid to the EDC, and Rasiej proposed that Fedcap become a formal partner in the project. Its board agreed, and in 2020, FedCap officially became Civic Hall’s parent organization.
Fundraising challenges
When the pandemic hit, the original Civic Hall shuttered its doors and construction work slowed on the new site. Fortunately, Fedcap’s involvement freed up Rasiej to build on the Newmark gift. But while foundation leaders voiced support for the project, most of them told Rasiej their hands were tied because they didn’t have grant dollars earmarked for capital purposes. “There’s no bucket for it,” a foundation president said ruefully. “But come back and talk to us when you have programs running.”
Rasiej and his team also talked to consultants about rolling out a capital campaign of the type we typically see in performing arts and higher ed, but nixed the idea due to Civic Hall’s organizational immaturity. “It’s one thing if you’re the 92nd Street Y or the Lincoln Center, where you have a 50-year history of community and affluent benefactors,” Rasiej said. “It’s another thing to do a campaign when you’re a five-year old nonprofit. We just don’t have the depth of legacy. We realized that a capital campaign wasn’t going to save us.”
Nor was salvation coming from Newmark’s peers in the tech sector. Rasiej approached many deep-pocketed entrepreneurs, and they all took a pass despite expressing admiration for the project. Rasiej has a few theories as to why this is the case.
First, “one tech entrepreneur doesn’t get another tech entrepreneur to put money into something,” he said. Here, Rasiej speaks from experience. He was the founding senior technology advisor to the Sunlight Foundation, a nonprofit committed to boosting government transparency, and while the organization received support from the Omidyar Network, other civic-minded tech givers didn’t follow suit. In addition, major tech givers, much like foundations, typically don’t fund brick-and-mortar projects en masse — nor does it follow that they would be drawn to a civic tech project any more than a journalist would necessarily donate money to a journalism outlet.
Rasiej also theorized that Civic Hall’s unique value proposition made it a harder sell. “It isn’t a tech or workforce training organization,” he said. “It’s a facilitator that’s going to push the tech industry to be more diverse.” In contrast, his other organization, mouse.org, “empowers all youth and educators to engage with computer science and creative technology to solve real problems,” according to its mission statement. “It’s a much simpler narrative,” Rasiej said.
“Places like this need to exist”
In October 2022, RAL Development finalized a 25-year lease with the Fedcap Group to house Civic Hall in Zero Irving. A little over a year later, Rasiej has raised roughly $22 million, with Newmark’s $5 million being the only funding that could be classified as what he called “pure philanthropy.” Of the remaining balance, he secured $10 million from the EDC through a rent abatement, $5 million from Mayor Adams’ capital budget, and $2 million from companies like Amazon and Google for classroom naming rights, plus smaller capital grants like a $500,000 grant from Manhattan Borough President Mark Levine.
“To get a piece of civic infrastructure built today, irrespective of funding, is quite a complex process,” he said — an understatement, to be sure. “And it ties back to philanthropy, because there are no Astors or Morgans or Vanderbilts who are building libraries or museums the way that they did in the industrial era.”
I’ll go out on a limb and assume most readers have no desire to go back to the late 19th century, nor is anyone particularly keen on ceding even more influence in the civic sphere to our less-than-benevolent tech overlords. But as organizations grapple with brutal inflationary pressures, Rasiej’s assessment suggests that philanthropy should, at the very minimum, revisit its reluctance to provide capital funding and general operating support that can used for capital purposes.
“If you're funding a program, then how is it possible that you expect your program grantees to succeed if you’re not looking at the infrastructure that they need in order to execute on that program?” Rasiej said. “It seems to me like a fundamental box that has to be checked before you give the grant.”
I spoke with Rasiej about a week before Civic Hall’s grand opening. He was deeply grateful that Fedcap’s involvement pulled the project back from the brink and understandably proud of shepherding the project through New York City’s regulatory labyrinth. He also made a point of mentioning some of the new space’s tenants, including LaGuardia Community College, which is launching technology education programs to provide digital skills training at little or no cost, and the Data School, a U.K.-based company that trains people in the Salesforce ecosystem.
Rasiej says their work speaks to Civic Hall’s overarching mission of cultivating a more diverse tech industry. He hopes that in time, other community leaders and funders will follow its lead. “Unless we change the color of the faces in the room designing the future, the future will look like the present,” Rasiej said. “Places like this need to exist.”
