CPN - About CPN

CPN is designed and maintained by ONline @ UW: Electronic Publishing Group.

E-mail us at cpn@cpn.org

Topics: Community

The Neighborhood Works, continued

Special Issue on the
Empowerment Zone/Enterprise Community Program

Index

Editor's Note:A Work in Progress
Introduction: Open for Business
Services: Juggling Act
Economic Growth: Innovative Job Creation
Governance: Who Calls the Shots?
Case Study: Opportunity Lost
Environment: Growing Green Projects in Urban Zones
Profiles: All Over the Map

Contents

Profiles: All Over the Map

Atlanta, Baltimore, Chicago, Cleveland, Detroit, Kentucky Highlands, Los Angeles, Mississippi Mid-Delta, New York, Philadelphia/Camden, Rio Grande Valley

Profiles: All Over the Map

Profiles by Cheryl Bardoe & Lora Engdahl
Maps by Peter Haas, CNT Cartography

THERE IS NO TYPICAL EMPOWERMENT ZONE. When the federal government called for EZ/EC applications, hundreds of urban and rural communities responded, from Sunflower, Miss. to South Central Los Angeles, and each had its own goals, programs, governance structure and participants. Since the announcement of the six urban, three rural and two supplemental EZs in December 1994, every zone has taken its own path— as the following profiles show.

However, they are linked by a few common threads. For example, zone size and population were capped by the federal government. Consequently, most applicants sought to maximize their zones, often creating oddly shaped boundaries. In some cases, the unintended result was that communities and groups fought for inclusion.

Governance issues are paramount in every zone. Each EZ was required to build an inclusive structure to oversee projects and make funding decisions. But no zone has been able to escape the grasp of city hall, although the tightness of that grip varies widely.

Getting a governance structure in place has been one of the main roadblocks to getting projects up and running. In general, whether or not a zone can boast of tangible results two years after designation depends on how quickly its governance was put in place. It is worth noting that zones with the least to show so far are, by-and-large, the same ones held up by disputes over citizen inclusion. Perhaps neighborhood involvement and good business aren't at opposite ends of the spectrum after all.

Atlanta

EZ residents fought for a place at the table, but are finding it hard to be heard

IN MANY WAYS, Atlanta is a two-tier city. The income gap between white households and African-American households is nearly $40,000 per year. During the EZ process the city government established 24 neighborhood planning units but now prefers to let business and institutional leaders call the shots. And until residents raised a stink, it looked like they weren't going to get much say in how the Empowerment Zone worked.

City hall's first attempt at the EZ application was created with the help of business leaders and large institutions and nonprofits. "They said they had talked to 'community leaders,' but there had been no public hearings and no mass input," says Mary Porter, who has been active in her neighborhood planning unit for several years. "They had nearly finished writing the application, and they hadn't engaged the community's participation."

Uproar over this closed process led the city council to veto the first proposal. Mayor Bill Campbell— who had taken office in January 1994— appointed a Community Empowerment Board with representatives from each of the 69 neighborhoods eligible for Empowerment Zone designation to develop zone boundaries and a strategic plan.

Once Atlanta was awarded Empowerment Zone status, however, the community began losing its hold on the process again. To implement EZ programs, the city established a nonprofit management entity, the Atlanta Empowerment Zone Corp. The mayor serves as board chair and appoints 10 of the 17 board members; the remaining six are members of the Community Empowerment Advisory Board. Claire McLeveighn, special assistant to the president of the corporation, says this governing structure allows for adequate community participation. "The structure is set up so that ideally we won't have to go door-knocking to find out how the community feels," she says.

The community would prefer a majority vote on the board, but "this is the way it works in the real world," says Porter, now a director of the Community Empowerment Advisory Board, which reviews the agenda for each executive board meeting. The advisory board includes one representative elected by each of the 30 zone neighborhoods and six at-large representatives from adjacent communities.

So far, $20 million in Empowerment Zone projects have been approved by the corporation in four categories: housing, community safety, family poverty, and employment and investment opportunities. Proposed projects include an asthma prevention program designed by hospitals and other medical institutions that will train community health workers to assist families in improving the home environment and a self-sufficiency center to support home-ownership through counseling, referral services and training.

Striking the balance between community and city participation has been tough, leading to some gridlock in getting projects approved by all parties. One of the biggest difficulties, McLeveighn says, has been developing a sense of trust between community groups and the other players. "There is a history of distrust of outsiders and a history of distrust of initiatives that claim to want to revitalize a neighborhood," she says, predicting that once EZ projects are up and running, the community will have more faith in the process.

Porter isn't so sure. Although the community is having some success in making its voice heard, she fears that they are fighting a losing battle. "This award was given to the city," she says. "It is not what it has been touted to be. It was never intended for the citizens to be in charge. As long as the city has the purse strings and writes the checks, the bottom line is business as usual. It's going to be a struggle." — C.B.

Atlanta EZ Statistics:

Area: 9.29 square miles
Poverty Rate: 57%

Pop: 49,998
African American: 90.3%
White: 7.3%
Other 2.4%

Notable Accomplishments:

$20 million in Empowerment Zone projects approved
Approximately 185 jobs created through economic development

For more info:

Atlanta Empowerment Zone Corp., 101 Marietta St., Atlanta, GA 30303, (404) 331-4480
Community Empowerment Advisory Board, 1611 Jonesborough Rd. SE, Atlanta, GA 30315, (404) 622-5050.

Baltimore

Village Centers plan to connect neighborhood residents to good jobs

BALTIMORE'S distinguishing contribution to the EZ program is its creation of Village Centers. The centers are essentially community organizations that will both facilitate collaboration among local service providers and serve as neighborhood hubs. But as of October, not one had opened.

Each Village Center will get $4 million in operating funds from the nonprofit Empower Baltimore Management Corp., which was created to run the EZ. Though 18 of its 30 board members are appointed by Mayor Kurt L. Schmoke, Empower Baltimore runs virtually free of city control, says Michael Seipp, former chair of the EZ planning committee and executive director of the Historic East Baltimore Community Action Coalition Village Center. "The planning group that put together the application recommended this third party entity, and [the mayor] has vested it with a lot of power," he says. A 50-member Advisory Council also was established to incorporate resident opinion.

Each Village Center has a board of directors, at least a third of whom are elected by EZ residents, and will send one representative to Empower Baltimore's governing board and four members to the advisory council. The centers could take on the role of community development corporations in a city that has few, explains Diane Bell, Empower Baltimore president and CEO. She says officials are hoping the networks they create will survive long after the EZ program ends.

Village Centers carry heavy responsibilities: They are charged with identifying a job-ready workforce, creating safe and healthy communities, looking for ways to enhance business opportunities and selecting training, counseling and health care programs. "We will be a central location with strings that go out revolving around training," says Doris Hall, chairperson of the Village Center of Poppleton. "For example, a student working on a GED may be at a GED center, but the casework management will be done from the Village Center. We intend to track every single person involved in any program so that we can track end results." In addition to offering job training and social services, Village Centers also are charged with leveraging funds from other sources.

To become a Village Center, groups from adjoining neighborhoods had to come together and submit a proposal to Empower Baltimore. Many of the zone's 33 neighborhoods fought over who would join with whom. According to Governing magazine, some larger neighborhoods wanted to become centers "all by themselves," while smaller neighborhoods feared being paired with large ones who might dominate. At press time, two of the six centers still had not signed the needed agreements for start-up funds because of the extensive negotiating and jockeying.

A steady stream of news on the job front, however, has helped assuage concerns. To date, Empower Baltimore has spent most of its resources on job-creation projects, including technical assistance through a $4 million Business Empowerment Center, access to capital through a venture capital loan fund and training incentives. As of July, new businesses in the zone had created 503 jobs; nearly 1,000 more have come through expansions and business relocations. For example, minority-owned Dynatech Integrated Systems brought 21 high-tech jobs when Empower Baltimore helped the company land a city contract. And Fairfield, an industrial area in South Baltimore, is planning an eco-industrial park which will use one industry's waste as another company's raw material and is projected to generate more than 1,500 jobs. — L.E.

Baltimore EZ Statistics:

Area: 6.8 square miles
Poverty Rate: 82%

Pop: 72,362
African American: 78%
White: 20%
Other 2%

Notable Accomplishments:

Creation of six Village Centers as a means for citizen input
Fifteen hundred jobs created; 1,500 more projected

For more info:

Empower Baltimore Management Corp., 111 S. Calvert St., Ste. 1550, Baltimore, MD 21202, (410) 783-4400, fax (410) 783-0526
HEBCAC, 808 N. Chester St., Baltimore, MD, 21205, (410) 614-4216
Village Center of Poppleton, 1099 W Fayette St., Baltimore, MD 21223, (410) 947-4027.

Chicago

City hall has kept control of a process fragmented since designation

CHICAGO'S EMPOWERMENT Zone consists of three noncontiguous clusters. Collaboration is supposed to occur within the clusters, among them and between clusters and city government. But this has been easier said than done.

For starters, each cluster has its own history, resources and problems. The South Side, once a thriving but overcrowded African-American community, has suffered severe disinvestment and now has one of the country's densest concentrations of public housing. Pilsen/Little Village is a major port-of-entry for Mexican immigrants. And the West Side, still showing scars from the riots of the '60s, includes an industrial corridor whose businesses have been reluctant to hire from the area.

From the outset, Chicago's EZ was unusual— communities were asked by the city to create strategic plans on their own. In Pilsen/Little Village, for example, 12 organizations co-wrote the proposal and 13 more signed on. "There had been different collaborations at different points [before the EZ plan],'' says William Velazquez, director of the area's cluster council. "But this is the first opportunity to have everyone working together toward one common goal."

Problems started shortly after the EZ boundaries were defined, however. The city had received 33 community proposals and pieced together 11 into the final zone, in some cases combining neighborhoods and groups that were at odds. Cluster councils were formed but began losing city support after applications were submitted, and the historic tension between community groups and city hall began to re-ignite as citizens saw their connection to the process wither away.

Keeping communities involved requires resources earmarked for outreach, says Wanda White, who was director of the Community Workshop on Economic Development when it helped communities submit zone proposals. "When we started the process there was great support for the clusters," she says. "[Then] the program began to look more like a government program than a community structure."

Mayor Richard M. Daley delivered the crowning blow when he hand-picked 37 of the 39-member Empowerment Zone/Enterprise Community Coordinating Council, which includes nine business people, 10 government representatives, five at-large members, four members from each cluster and one from each Enterprise Community. (Although Chicago's three ECs did not receive federal designation, the state and city decided to support EC projects.) The decisions from this council still must receive a stamp of approval from the Chicago City Council. Cluster councils no longer have a formal connection to the process.

Within the clusters, tensions surfaced over competition for EZ funds. Approximately $40 million has been approved by the city council for 75 projects, but the money has yet to be released.

Organizations have formed collaborations for many of the approved projects. For instance, the Wells Community Initiative will coordinate service delivery for a new welfare-to-work program, and a new partnership has been created among 10 job-training agencies in the West Side cluster to create a $1.3 million job-link program.

"These [l0] are groups who traditionally haven't had an opportunity to work together, have a different clientele and have competed for dollars," says Jose Cerda, the city's Empowerment Zone director. But collaboration hasn't been problem-free, as some groups simultaneously submitted individual proposals. "There was some angst that one partner was going to come out ahead," he says. — C.B.

Chicago EZ Statistics:

Area: 14.33 square miles
Poverty Rate: 49.9%

Pop: 199,938
African American: 72% Hispanic: 24% Other: 4%

Notable Accomplishments:

About $40 million approved for 75 Empowerment Zone projects
Survey of 400 area businesses completed; shows that employers are using the zone tax credits for at least 1,200 zone employees

For More Info:

Chicago Dept. of Planning and Development, 20 N. Clark, Ste. 2800, Chicago, IL 60602, (312) 744-9623; CWED, 100 S. Morgan, Chicago, IL 60607, (312) 243-0249
Mid-South Planning and Development Commission, 4305 S. Martin Luther King Jr. Drive, Chicago, IL 60653, (773) 924-1330
Pilsen/Little Village Empowerment Zone, 2570 S. Blue Island, Chicago, IL 60608, (773) 890-0055.

Cleveland

Using CDCs has allowed Cleveland's zone to hit the ground running

BY TAPPING INTO an already-established economic development process, Cleveland has approved a total of $12 million in loans, securing commitments from 10 businesses to retain 452 jobs, create 77 more and develop 49 new housing units.

The city was able to get the money into the community fast because it didn't stop to create a new entity to implement the program, says Patti Choby, program director at Fairfax Renaissance Development Corp., which helped produce the city's zone application. "Everyone has tried to re-invent the wheel 20 times over, " she says. "We decided not to expend energy on that."

Instead the city has relied on its partnerships with nonprofits like Fairfax. "Cleveland has a strong relationship with community development corporations," explains India Lee, a zone resident and director of the Empowerment Zone for the City of Cleveland. "They have been the catalysts for economic development in this city." Four CDCs in the zone are charged with identifying economic opportunities, helping package loans, offering workshops and ensuring citizen participation through neighborhood advisory councils.

The city's 18-year relationship with its CDCs has been further strengthened over the last five years by Mayor Michael R. White, who has shown his commitment to Cleveland's neighborhoods as well as its central business district, Lee says. A resident of the Empowerment Zone, the mayor has made a special effort to recruit a community-oriented staff. Lee, for example, ran a community development corporation before coming to city hall.

Cleveland has established an 18-person Citizen's Advisory Council to review and track EZ activities. The Council includes nine members appointed by the mayor and nine nominated by the community and approved by the mayor. Among White's appointees are government officials, school representatives and business leaders.

The city has focused its resources on educating area businesses about zone opportunities, hosting workshops for firms and marketing an outreach strategy that included sending 60 volunteers door-to-door to visit zone businesses. "From doing that blitz and through personal relationships, we had 150 businesses and more than 350 people attend [workshops],'' Lee says.

Cleveland's process also has been expedited because it is a supplemental zone with much more targeted funding. Unlike other EZs, Cleveland is not eligible for the tax breaks or the $100 million for social service grants. Instead it will receive $90 million in EZ funds over the next ten years, mostly for business loans to stimulate job creation and community economic development. Cleveland also is designated as an Enterprise Community, allowing the city to take advantage of EC tax incentives. While about half of Cleveland's funding comes from EZ grants, the city will receive an additional $87 million through the HUD 108 Loan Program, which allows a city to borrow up to five times the amount of its Community Development Block Grant allocation. A city can use this money to make economic development loans, and when the loans are repaid, the city repays HUD. If the loans aren't repaid, they are deducted from future block grant allocations.

Only $8 million of the funding is set aside to help zone CDCs grow. Fairfax is expanding its Job Match program, which seeks to match 350 zone residents with jobs in the next year. If all goes well, the program will be replicated by other CDCs in other parts of the zone. — C.B.

Cleveland EZ Statistics:

Area: 5.8 square miles
Poverty Rate: 46%

Pop: 50,597
African American: 94% Hispanic: 1% White: 4% Other: 1%

Notable Accomplishments:

Loans totaling $12 million made to 10 businesses
Expected to retain 452 existing jobs, create 77 new jobs and develop 49 new housing units

For More Info:

EZ Office, Rm 335, Cleveland City Hall, 601 Lakeside Ave., Cleveland, OH 44114, (216) 664-3470
Glenville Development Corp., 540 E. 105th St., Cleveland, OH 44108, (216) 851-8724
Fairfax Renaissance Development Corp., 8520 Carnegie, Cleveland, OH 44106, (216) 421-1111
Midtown Corridor, 4614 Prospect Ave., Ste. 322, Cleveland, OH 44103, (216) 391-5080.

Detroit

To bring in jobs & industry, city hall and residents work hard at working together

FOR YEARS Detroit's businesses and residents seemed to be giving up on the city, which now has a poverty rate of 32 percent. The effects of international trade on the U.S. auto industry hit Detroit hard— the Motor City lost 30 percent of its jobs in the l970s alone and hundreds of middle-class families fled to the suburbs. Critics of five term former Mayor Coleman Young say he left a legacy of division between the city and community groups.

The Detroit EZ, with the support of a new, community friendly mayor, Dennis Archer, has been a catalyst for a combined urban renewal effort involving business, residents and government. "Mayor Archer restored the confidence of people in this metropolitan area as a good place to live and do business," says Kate Levin, executive assistant to the board of the Empowerment Zone Development Corp. One of the most striking indicators of this confidence is the more than $2 billion the private sector has committed to investing in the zone to retain and create jobs.

In 1993 Archer ran on a platform of economic development and bringing back business. Once he took office, the Empowerment Zone became his tool. The city educated the corporate community about the zone and its opportunities, worked with business leaders and lobbied companies for financial commitments. The results are noteworthy:

The Chrysler Corp. has committed to a $750 million new engine plant expected to employ up to 1,000 workers.
The 25-year-old Dana Container Company is planning a $2.2 million expansion that will double its payroll to 83 zone residents.
Four Hispanic owned companies are turning an abandoned plant into the Hispanic Manufacturing Center, which includes plans for a jointly run, on-site program to train workers.
In one year, the Empowerment Zone Financial Institutions Consortium, a partnership of seven banks and three financial intermediaries, increased lending to the EZ nearly tenfold, to $285 million.

William Sledge, who has lived in central Detroit for 30 years, says he already notices the impact of the zone on his community. "If you drive around the city, you can see it," he says. "Buildings that were just sitting there are being renovated for businesses, houses are being created."

President of the Woodbridge Citizens District Council, Sledge was on the original committee that developed Detroit's zone plan. "The community input into this has been tremendously high, not like in the past," he says.

Detroit's application was very specific, down to identifying many projects. Zone residents and community groups were involved in developing the application, and, after a struggle with city hall over control of funding distribution, now have 30 community representatives on the Empowerment Zone Development Corp.'s 50-person board of directors (staff are still being hired). However, Mayor Archer appoints board members, and the board only has the power to make recommendations to the mayor and city council.

Community groups also are involved in implementing the plan's social service and community building activities, such as youth programs and job training and placement. Currently 80 programs are identified, 50 of which are at implementing agencies and will receive funding from the EZ social service grants. "Some groups said 'We do this kind of work anyway, so we'll commit to working together,' " Levin explains.

With a new commitment from long absent stakeholders, community development corporations and other community groups are now part of a strong push to restore the city. — C.B.

Detroit EZ Statistics:

Area: 18.4 square miles
Poverty Rate: 47%

Population: 101,279
African-American: 60% Hispanic: 11% White: 21% Other: 8%

Notable Accomplishments:

More than $2 billion pledged from banks and businesses
$285 million loaned in 1995 through the Empowerment Zone Financial Institutions Consortium

For More Info:

Empowerment Zone Development Corp., 1 Ford Place, Ste. 2D, Detroit, MI 48202, (313) 872-8050
Woodbridge Citizens District Council, 1931 Merrick, Detroit, MI 48208, (313) 896-3138.

Kentucky Highlands

High-profile conflicts and scandals overshadow jobs progress

THE KENTUCKY HIGHLANDS Empowerment Zone is trying to work its way back into the public's good graces after a series of controversies. And while some residents question whether zone benefits will trickle down to ordinary folk, officials say jobs— a projected 600 in two years and 3,000 in ten— and an improved local economy will convert the skeptics.

Some say the zone was set up for conflict from the outset. The EZ consists of one entire county, part of an adjacent county and a third far removed. The zone's strategic plan was created by a committee of local officials, business leaders and service providers, facilitated by the Kentucky Highlands Investment Corp., a CDC headquartered outside the zone. Public hearings were held only after the initial draft proposal was written. KHIC now serves as the zone conduit to federal funds and as the manager of programs that cover all three counties. Each county has its own governing structure, with a dozen or so members appointed for life by the county judge.

"The governance structure is not designed for citizen participation," says one observer, who asked not to be named. "There's been a tremendous amount of in-fighting in all of the counties, and that's an indication that people who are on the outs are not being heard."

Since the Kentucky EZ was announced, problems have plagued the process:

In Clinton County, environmental groups opposed a proposed Cagle, Inc., poultry processing plant, claiming wastewater pollution concerns were being ignored, and The Lexington Herald Leader reported that officials bought land for the plant at far above its assessed value from a county official's cousin. Cagle tabled the project, but last fall announced it would go forward with construction.
Wayne County's plans to build an industrial park hit rough waters when it surfaced that the county would be buying the land from a partner of a local official, prompting a federal investigation.
Clinton County hired a former school teacher as local coordinator, only to discover he had pled no contest to charges of having sex with a student.
|
A group from northern Jackson County felt so left out of the process, its members "seceded" and drew up their own strategic plan.

Timothy Collins, director of research at the University of Kentucky Appalachian Center in Lexington, attributes some of the problems to the compressed planning time frame and uncertainty over who was eligible to participate.

But Collins says it's too early to give up hope, citing the Northern Jackson County group, which has reconnected to the Jackson County EZ and started natural resource conservation education and single-family housing development projects with leveraged funds. There is other good news, as well. A zone-wide Development Venture Capital Fund has obligated $5.6 million in zone funds to 11 businesses that will result in more than 1,500 jobs, potentially leveraging more than $38 million in private capital. The Jackson County Industrial Park is being upgraded and adding facilities. And the first 12 graduates of the EZ-funded Jackson County Entrepreneurial Training Center have started five new businesses to date.

Other upcoming projects include new fire stations, water lines, recycling facilities, libraries and community youth centers. "Things started out with so much excitement, but it took a long time to get underway," says Michael Hayes, special projects coordinator for the zone. "We lost both credibility and that excitement, and we have to build back. Now people are starting to realize things are happening." — L.E.

Kentucky EZ Statistics:

Area: 753 square miles
Poverty Rate: 38%

Pop: 27,219
African American: 1.2% White: 98.7% Other: .1%

Notable Accomplishments:

11 businesses started with help from the Development Venture Capital Fund
Jackson County Rehabilitation Industries established to assist the disabled and disadvantaged

For More Info:

KHIC, P. O. Box 1738, London, KY 40743, (606) 864-5175, fax (606) 864-5194
Sara Bell, EZ director, Cabinet for Economic Development, 500 Mero St., Frankfort, KY 40601, (502) 564-7670, fax (502) 564-7697
University of Kentucky Appalachian Center, 110 Mexwelton Ct., Lexington, KY 40506, (606) 257-3948.

Los Angeles

Left off the list of full EZs, L.A. rebuilds with a mega community development bank

WHEN PRESIDENT CLINTON announced the Empowerment Zone program, Los Angeles thought it was a shoo-in. After all, the city's 1992 riots were the wake-up call that lead to the federal urban renewal effort. With such pressing needs, the city assumed it would be at the front of the line. Los Angeles was wrong.

The Clinton administration asked cities to show more than need; it wanted to see a variety of players at the table creating the plan. With 10 times as much of L.A. eligible for aid as could be included in the 20 square-mile zone limit, a diverse group of stakeholders competed to be included. More time was spent identifying boundaries than deciding what would happen within them— a factor some say contributed to the denial of L.A.'s application.

When the government announced the zones, however, Los Angeles found itself the recipient of a $125 million grant. With additional funding from the city and L.A. county, the country's largest community development bank has been created. The idea for the bank came from Los Angeles' application, says Mary Sue Teemley, a program manager in the L.A. office of the U.S. Dept. of Housing and Urban Development. "We created the bank to create jobs because that's what the city said it needed," she says, adding that HUD "was interested in seeing a city attempt to do community development banking on a large scale."

As a supplemental EZ, Los Angeles is not eligible for the social service grants or tax incentives that full EZs can receive. So far, the bank has been able to leverage $310 million in co-lending commitments from private lenders and has made two loans, totaling $1.7 million, to retain more than 100 jobs and create at least 40 new ones.

But among community groups, the sense of involvement is gone, and the jury is still out on whether the bank will meet residents' needs. "The development of this bank is not a grassroots effort," says Alice Salinas, senior project manager at the Esperanza Community Housing Corp. in South Central Los Angeles. Salinas gathered information on community groups and programs for the original zone application, but has not been actively involved in the process since.

Community organizations aren't guaranteed positions and have no power to appoint representatives to the 15-member board of the bank. Six board members are appointed by the city, four by presidents of area universities, four by bank incorporators and one by the county. The 12 members on the EZ oversight committee are appointed by local government officials.

Despite the official lack of community presence, the board is open to input, Salinas acknowledges. "The people on the board are accessible," she says. "The challenge is for the city and nonprofit organizations to make this work."

Opportunities for community involvement are being created, says board member Denise Fairchild, president of the Community Development Technologies Center at Los Angeles Trade Technical College. For example, the bank is looking for local organizations to identify opportunities and provide technical assistance.

Groups interested in providing labor force development programs can apply for funding through the city's block granting process (separate from the zone) and work with the zone oversight committee, which coordinates activities to "provide some synergy with what the bank is trying to do," says Fairchild. "There is both a great deal of skepticism and high expectations about what we could accomplish," she adds. "Everybody is in a wait-and-see mode." — C.B.

Los Angeles EZ Statistics:

Area: 19.3 square miles
Poverty Rate: 40%

Population: 198,703
African American: 38% Hispanic: 57% White: 3% Asian/Pacific Islander: 2%

Notable Accomplishments:

$310 million in private lending commitments secured
Two business loans made totaling $1.7 million

For More Info:

Community Development Technical Center, 400 W. Washington Blvd., Los Angeles, CA 90015, (213) 744-9065
City of Los Angeles Community Development Dept., 215 W. 6th St., Ste. 300, Los Angeles, CA 90014, (213) 485-5725
Hill & Knowlton, 6500 Wilshire Blvd. 21st Fl,, Los Angeles, CA 90048, (213) 966-5727.

Mississippi Mid-Delta

Community educators are helping build from the ground up

ETHEL MCMULLEN REMEMBERS when Sunflower, Miss., had all the doctors, stores and movie theaters a small town needed. But like many other towns in the Mississippi Delta, Sunflower had a hard time keeping pace with urban areas that offered easier access to the necessities of modern life.

"There's nothing here now," says McMullen, a small-business owner and the founder of the nonprofit Sunflower Economic Development, Inc. "Through the Empowerment Zone we want to get Sunflower back on the map and going again."

But the Mid-Delta needs substantial work before it can start down the road to economic recovery, says Tommy Hart, director of economic development for Washington County. Much of the zone has never been developed and lacks the infrastructure to attract businesses and jobs. Hart, who helped compile the area's EZ application, calls it a "chicken and egg situation." Without tax revenue, the area can't build capacity, but a tax base requires the presence of businesses.

So far, however, the $40 million Social Service Block Grant available to the rural zone has not shown results, and the community is growing impatient.

For example, McMullen's organization is waiting on $18,000 to set up a GED program. "We've been in the process going on 18 months and the community needs to be awarded something," she says. "We're grabbing at straws to keep hope alive."

Hart says the delay has to do with building human capacity. "When you bring groups to the table that have never been a part of this type of operation," he says, "it's going to take longer than if you bring in a professional. A good deal of learning is going on."

The best evidence of this learning is the 20 or so community educators who have met with nearly 1,000 zone residents, organized zone committees for municipalities, talked to local businesses and helped with grant applications. The certification process for community educators, which was meant to be a one-time deal, has snowballed into a full-scale organizing effort and a permanent program for leadership development.

The area's status as an EZ has shown results, however, by helping the community leverage other government funds: The Mound Bayou neighborhood received a federal block grant to upgrade its water system. The Western Line School District leveraged a $90,000 grant from the state and the Mississippi Authority for Educational Television to establish an interactive video classroom at a local high school. Other communities are seeking non-zone funding to improve sewer systems, fire protection and housing. Businesses also have used this strategy: Freshwater Farms, Inc. received a $2.5 million federal loan guarantee to build a modern catfish processing plant that will retain 171 jobs and create 65 new ones for zone residents.

The Mid-Delta Empowerment Zone Alliance Commission, the 75-member body that oversees the zone, is still setting up procedures for tracking the total number of jobs created with zone tax credits and resources. The Alliance's charter requires that at least 38 percent of commission members be zone residents. Other members are from government, agriculture, banking, industry and education.

Putting in the time up front on infrastructure projects is about to pay off, Hart promises. "We are at the verge of marching forward and showing results across the board. It has to be built, but we have the capacity to direct our destiny." — C.B.

Mississippi EZ Statistics:

Area: 981 square miles
Poverty Rate: 46%

Pop: 29,457
African American: 69% White: 27% Other: 4%

Notable Accomplishments:

Over $20 million in grants approved
Attracting 800 jobs to the zone through new and expanding zone businesses

For More Info:

Harry Bowie, Mid-Delta Empowerment Zone Alliance, P. O. Box 588, Greenville, MS 38701, (601) 335-5291
Ethel McMullen, Sunflower Economic Development, Inc., P.O. Box 219, Sunflower, MS 38778, (601) 569-3328
Pamela Moore, P. O. Box 4935, Greenville, MS 38704-4935, (601) 846-4339
Tommy Hart, Industrial Foundation of Washington County, 900 Washington Ave., Greenville, MS 38761, (601) 334-2653.

New York

Slowed by politics, NY zone works to rebuild Harlem, Bronx

U.S. REP. CHARLES B. RANGEL, a Democrat from Harlem, authored the legislation that created the Empowerment Zone program. New York's former Democratic mayor, David Dinkens, designated Harlem the city's EZ before leaving office in 1993. But his successor, Republican Rudolph Giuliani, modified the zone to include the portion of the Bronx housing Yankee Stadium— a strategy to keep the baseball team in the city. Bronx Borough President Fernando Ferrer lobbied for Bronx residential areas to be included, but Rangel fought against shrinking Harlem's piece.

It's little wonder, then, that political troubles continued to dog the project once New York was designated an EZ. News reports speculated that Mayor Giuliani and Republican Gov. George E. Pataki, were less than enthusiastic about their predecessors' pledges for city and state contributions of $100 million each. And the pair disagreed for 11 months on a governing structure, during which time no federal funds were released. Not until HUD threatened to revoke New York's designation did the parties manage to come to an agreement. New York's EZ is split in two. The heavily residential Upper Manhattan subzone, which includes parts of Central, East and West Harlem and Washington Heights/Inwood, is run by the Upper Manhattan Empowerment Zone Development Corp., a nonprofit corporation created to run the EZ program. The primarily industrial Bronx subzone is managed by the Bronx Overall Economic Development Corp., a 15-year-old local development corporation. The New York Empowerment Zone Corp., composed of seven city and state-appointed representatives, coordinates funding and approves all contracts.

Once a thriving center for artists, writers and musicians, Central and East Harlem now have nearly 6,000 abandoned apartments. Their EZ strategy is quick retail and tourism success and long-term development of industry, building on major assets such as medical institutions. Approved projects include:

Harlem USA, a $56 million retail and entertainment complex slated to open in 1998 with the promise of 500 jobs.
Minton's Playhouse and Restaurant, a reopening of this famous restaurant billed as the birthplace of be-bop.
116th Street vendors market, a business management training program for street and market vendors.

Here, too, politics played a role. Harlem's Latino community leaders raised questions about Upper Manhattan's staff diversity and the corporation's discretion in project selection. Concerns appear to have been assuaged, as a stringent selection procedure guarded against political favoritism and as projects in Hispanic East Harlem have been approved, including a community art and cultural center.

One focus of the Bronx subzone— which, due to its size, only receives 17 percent of EZ funds— is to use vacant industrial land for distribution and manufacturing facilities. In addition to attracting new businesses, Bronx Overall projects aim to shore up approximately 1,200 existing businesses, many of which are struggling because they lack financing and up-to-date technology.

"We view business ownership not only as a way for job creation but for selfemployrnent," says Yvette Clarke, director of the Bronx Empowerment Zone program. "Many industries which are considered disadvantaged could, for lack of a better term, be legitimized— things like catering, dressmaking, child care, hair care— things that people are doing out of their homes. If we can show people how to manage those operations in an efficient way, they can be our future clothing distributors and banquet hall owners." — L.E.

New York EZ Statistics:

Area: 7.6 square miles
Poverty Rate: 42%

Pop: 199,375
African American: Harlem 51%, Bronx 33.2%
Hispanic: Harlem 41%, Bronx 61.8%
White: Harlem 4%, Bronx 2.4%
Other: Harlem 4%, Bronx 2.6%

Notable Accomplishments:

City and state each pledged $100 million to add to federal benefits
$56 million Harlem USA retail/entertainment complex to provide 500 jobs

For More Info:

UMEZDC, 163 W. 125th St., Ste. 1204, New York, NY 10027, (212) 932-1902, fax (212) 932-1907
BOEDC, 198 E. 161st St., 2nd Flr., The Bronx, NY 10452, (718) 590-6202, fax (718) 590-6249.

Philadelphia/Camden

Philadelphia held up as a national model, while Camden lags behind

PHILADELPHIA AND CAMDEN, N.J. — separated only by the Delaware River— carved out the only bi-state Empowerment Zone. Since designation, however, each subzone has gone its own way, with significantly more progress on the Pennsylvania side.

Philadelphia is spending its $79 million of the EZ allocation in what are essentially three distinct subzones: American Street, West Philadelphia and North Central. Each has a separate plan and staff and is governed by its own volunteer Community Trust Board. Residents chosen in community elections hold 60 percent of board seats; the rest are business and nonprofit leaders appointed by Mayor Edward G. Rendell, whose office has final approval of projects. Community Services organizers paid with EZ funds recruit residents for input.

Community influence is partly what helped ensure the adoption of area projects, according to Robert Bailey, assistant professor of public policy and administration at Rutgers University. And although there has been some drop-off in citizen participation since the application stage, the Philadelphia EZ program has been "much more participatory than the programs of the sixties," he says.

Each subzone has a neighborhood lending institution, and as many as 700 housing units are planned zone-wide over the next two years. American Street's plans include connecting residents with jobs in the suburbs and building an expo center and mobile police stations. North Central hopes to bring in tourist dollars with jazz and blues clubs and shopping. And West Philadelphia is working on tapping business opportunities within a network of area hospitals.

By marketing its proximity to major trucking, rail and shipping lines, the city has begun rebuilding its manufacturing base. Forty-four new companies have announced plans to move into the zone, creating 481 jobs— 817 if you count Temple University's new stadium project.

Meanwhile, over in Camden, America's fifth poorest city, there has been little progress. The biggest problem was the city's reluctance to allow its entity, the Camden Empowerment Trust Commission, to be reconfigured as a nonprofit, says Richard Cummings, Camden's EZ president. But, in light of the city's reputation for poor fiscal management and because a nonprofit could attract more funds, the state insisted on the change, he says. Negotiations stalled until HUD Secretary Henry Cisneros stepped in to resolve the conflict.

In the end, the trust commission was changed into a nonprofit and renamed the Camden Empowerment Zone Corp. It retained its original board— eight members elected by zone residents and 13 business, nonprofit and religious leaders appointed by the mayor. Staff has yet to be hired, however, as the group is arguing over whether it must relinquish its authority to The Camden Partnership, an entity created in September as part of the EZ structure to oversee all HUD funds flowing into the city.

"We don't want the involvement of residents in deciding the investment of Empowerment Zone funds to be supplanted by the board of The Camden Partnership," says Cummings.

When funds do come through, about 60 percent will be spent on economic development activities, especially building a strip of shops, theaters and restaurants, he says. A small-business development fund to provide financing, peer group lending, brownfield restoration, job and life skills training is also in the works. Already underway without zone assistance is construction of a new commercial shipping pier at Kaighns Point, which is expected to create new jobs. — L.E.

Philadelphia/Camden EZ Statistics:

Area: 4.4 square miles
Poverty Rate: 50%

Pop: 49,645 (Philly: 39,301; Camden: 10,344)
African American: Philly 62.2%, Camden 66.4%
Hispanic: Philly 24.8%, Camden 26.4%
Other: Philly 13%, Camden 7.2%

Notable Accomplishments:

At least 200 jobs created through expansion of existing businesses
Launching three neighborhood financial institutions

For More Info:

Carlos Acosta, Philadelphia Empowerment Zone, 1600 Arch St., 14th Fl., Philadelphia, PA 19103, (215) 686-9404
Robert Bailey, Graduate Dept. of Public Policy and Administration, Rutgers University, 401 Cooper St., Camden, NJ 08102, rbailey@crab.rutgers.edu
Richard Cummings, Camden Empowerment Zone Corp., 412 N. 2nd St., Camden, NJ 08102, (609) 541-2836

Rio Grande Valley

By leveraging federal funds, this rural EZ hopes to build a healthy economy

BONNIE GONZALEZ is almost aggressively optimistic. But then she has to be. As CEO of the Rio Grande Valley Empowerment Zone in Texas, she is charged with overseeing a plan to bring jobs and businesses into one of the nation's least developed regions. Nearly 80 percent of the Rio Grande Valley's EZ population live in substandard housing-often shacks without indoor plumbing.

The zone, encompassing census tracts in four counties, is a landscape of sharp contrasts: Well-to-do tourists share waterfront views with out-of-work shrimpers and commercial fishers; grandiose cattle ranches sprawl for acres, not far from overcrowded neighborhoods that are frequently flooded by poor sewage systems.

With such pressing needs, it's hard to image how Gonzalez and her peers in the four rural subzone communities can think about job creation. "Forty million isn't much when you have the needs we do," she says. "I could spend $40 million overnight. That's why we're going to follow what President Clinton advised and develop public/private partnerships."

In each county, subzone advisory boards of seven to 14 residents, business owners and employees make recommendations to the zone administrative staff, who review projects for fiscal viability and try to secure additional funding. The Rio Grande Empowerment Zone Corp. board of directors, comprised of subzone board representatives and county judge-appointed members, issues contracts for the projects and zone-wide initiatives.

To date, the board has allocated $23.4 million in zone funds and leveraged $49 million from state and local agencies, USDA set-asides and the private sector. Another $8 million in grants have been awarded to other entities in the region because of its zone status:

An EZ partnership with the University of Texas, Pan-Am Center for Entrepreneurship and Economic Development and the U.S. Small Business Administration created a One-Stop Capital Shop that has already served several hundred businesses and made about $1 million in loans.
More than $8 million has been pledged to add to $4.4 million in EZ funds for housing programs, including construction of low-income single-family housing and loans for affordable housing, rehabilitation and weatherization.
The Hidalgo County subzone will spend $1 million in EZ funds and more than $3 million in funds and resources from school districts and community colleges on training youth for employment in health care, geriatric care and child care.

EZ infrastructure development, such as water system expansion, flood control and waste-water treatment, should "level out the playing field" with other communities competing for industries with interest in the region, says Michael Morales, operations manager for the zone corporation. Forty-nine businesses producing more than 350 new jobs have come into or expanded in the EZ, Gonzalez notes. On the social service side, the zone will fund the construction of family education centers and training programs for at-risk youth.

Even though the Rio Grande Valley EZ is moving forward with projects funded and dollars leveraged, critics give it lower marks on community involvement and capacity-building. "The difficult philosophical question is: 'Are we really empowering people or signing onto an old boys' system?' " asks Cruz Torres, associate professor at the University of Texas, Pan-Am. "Building capacity is a time consuming process, and these programs are focused on outcome measurements— how many funded, how much money leveraged— that forces communities back into the old system." — L.E.

Rio Grande EZ Statistics:

Area: 227 square miles
Poverty Rate: 52%

Pop: 29,859
Hispanic: 88% White: 10.7% Other: .5%

Notable Accomplishments:

Project VIDA graduates placed in well-paying jobs
Nearly $1 million in loans from One-Stop Capital Shop

For More Info:

Bonnie Gonzalez, Rio Grande Valley EZ, 301 S. Texas Ave., Mercedes, TX 78570, (210) 514-4000
Roland Arriola, Center for Entrepreneurship and Economic Development, University of Texas, Pan-Am, 1201 W. University Dr., BAIZOA, Edinburg, TX 78539, (210) 381-3394
Cruz Torres, University of Texas, Pan-Am, P. O. Box 1824, Zapata, TX 78076, (210) 381-3321.

Index

Back to Community Index