Energy Conservation/Housing Rehabilitation
                 
  I. TOPIC:         Economic Development
  
  II.     SUBJECT:       Energy Conservation/Housing Rehabilitation
  
  III.    LOCATION: Caro, Michigan - The "Thumb" area
  
  IV.     SUMMARY
  
   Cass River Enterprises (CRE) is a self-supporting and diversified 
       company , it has addressed  the needs of the public, enhanced the
       local economy, and improved the lives of area residents. 
       Approximately 100 individuals have been provided employment and
       training by CRE.  Most of these were low-income residents and had
       little work experience.  The company began as a custom storm door
       and window manufacturer in 1981 in response to the need for a local
       manufacturer in the rural "thumb" area of Michigan.  Funding sources
       include private funds,  CETA (U.S. Department of Labor), Office of
       Community Services (U.S. Department of Health and Human
       Services), and U.S. Department of Energy (Weatherization).     
       
  V. SUCCESSFUL PRACTICE           
  
     Created a new, not-for-profit business to supply custom storm doors   and windows at lower cost for a local housing rehabilitation and      weatherization program.       
  
  VI.     CONTACT
  
     Mary Ann Vandemark
     Executive Director
  Human Development Commission
          (A Community Action Agency)
  429 Montague  Avenue
          Caro, MI  48723
     (517) 673-4121
     (517) 673-2031 (Fax)
  
  
  
  VII.    CASE STUDY
  
  The Problem:  The nearest supplier for storm windows was over 100
       miles away.  Older homes in the area needed special order windows
       that could take up to three weeks to be shipped.  Since the agency
       operated in a rural  four county area covering 3,000 square miles, it
       was not cost effective to make more than one trip to a home for
       weatherization services.
       
       The Approach Adopted:   In 1981, the agency  formed a company to
       manufacture storm windows.
       
       How They Implemented The Approach:  The business was started on
       a very small scale to meet only HDC needs.  The initial cost for
       equipment was $12, 638 with an average inventory of $20,000.  A
       neighboring CAA became interested in the venture because of similar
       difficulies regarding weatherization in a rural area.  Six months later,
       HDC began using private contractors for its weatherization program
       and received a Community Development Block Grant (CDBG) for
       Home Rehabilitaion.  This led HDC to conclude that there was a
       private market for its services.
       
       The storm window unit was initially set-up in a rented building
       owned by the village in which HDC was located.  As sales increased
       with orders from private individuals, in addition to small orders from
       lumber companies, HDC determined that continued growth would
       depend on expanding into the production of storm doors and moving
       to a larger site.
       
       In 1984, HDC  received an $80,000 discretionary grant from the
       Office of Community Services, Department of Health and Human
       Services (OCS/HHS).  This funding was applied to the purchase of a
       former farm equipment building which was located next to the HDC
       office.  Following acquisition of the building, the HDC Board of
       Directors established a separate economic development arm of HDC
       known as Thumbody Enterprises (TE).
       
       
  
  In 1985,  TE received a $50,000 Energy-Related Business Grant from
       the Department of Energy which enabled HDC to hire a general
       manager to explore the possibilities of creating a holding company,
       syndication strategies, sale of stock, additional product lines and
       service expansion.  In April 1991, HDC established a subsidiary
       corporation, Cass River Enterprises, Inc. (CRE) which now
       encompasses all services previously provided by TE.                   
       
  Results:  HDC reduced the cost and time needed to weatherize a
       home.  Home rehabilitation services were provided  to low-income
       households at a reasonable cost.  Jobs were created in the local area. 
       The business venture gained additional visibility for HDC, created
       income for the agency and became an entry point for HDC to join the
       local business community.
       
  
  VIII.   PROGRAM SPIN-OFFS
  
  Beginning as a manufacturer of storm windows to meet the
       immediate needs of the HDC Weatherization Program, Cass River 
       Enterprises  diversified to become a  manufacturer  and distributor of
       a wide variety of related products to the general public.  It also
       established itself in the areas of home repair and rehabilitation,
       mobile home repair, cleaning services and business management
       services.  In addition,  utilizing the waste from window and storm
       door production, it  branched out into the manufacture of  picture
       frames and mirrors. 
       
  IX.     KEY WORDS
  
     Office of Community Services
     Weatherization
     Housing Rehabilitation
     Community Development Block Grant  (CDBG)
     Office of Community Services
     Economic Development
     
     
  
        
       
  
  
  
  
  Ref: sprilrc.doc