|
Third Quarter=20
1997
Federal =
Reserve Bank=20
of Dallas
Commentary
An Interview with =
Andrew=20
Cuomo
Secretary =
of the=20
U.S. Department of Housing and Urban=20
Development
| Perspectives =
asked newly=20
appointed HUD Secretary Andrew Cuomo to =
discuss=20
his goals and priorities for the =
department as=20
well as programs and issues that affect=20
community and economic development.=20
|
|
Perspectives: =
Since becoming Secretary, =
what=20
priorities have you set for the Department of =
Housing=20
and Urban Development?
Secretary =
Cuomo: As HUD Secretary, I have =
four major=20
priorities, and they touch on the Department's =
most=20
important responsibilities: we must avert a =
crisis in=20
the Section 8 program; expand opportunities for=20
affordable housing; make welfare reform work; =
and=20
restore public trust in our agency.
As you know, before =
President=20
Clinton asked me to be his Secretary of HUD, I =
served as=20
HUD Assistant Secretary for Community Planning =
and=20
Development. We accomplished much in the =
President's=20
first term, and the Department once again became =
a=20
partner with America's communities.
But serious challenges =
remain: one=20
out of five American children still lives in =
poverty.=20
Over 5 million families spend more than 50 =
percent of=20
their income on rent. And because of the genuine =
need to=20
get control of federal spending and balance the =
budget,=20
we face these challenges at a time when the =
Federal=20
government has fewer and fewer resources.
So we have another, =
governmentwide=20
priority: meet our fiscal responsibilities and =
at the=20
same time address the important social issues =
that face=20
our nation. I think we can meet our priorities =
and=20
accomplish our goals with a government that is =
smarter=20
and smaller, and a Department of HUD that is =
more=20
sharply focused and better managed.
We will never lose sight =
of our=20
goals, but we need to examine and reject failed =
means.=20
We must be willing to admit that some programs =
don't=20
work and take action=97like we did with old, =
high-rise=20
public housing ghettos, and actively work to =
eliminate=20
them and replace them with mixed-income housing =
built to=20
the scale of the neighborhood. We must help =
create new=20
partnerships between government at all levels =
and the=20
private sector in our cities=97like we have in =
our=20
Empowerment Zone and Enterprise Communities =
program,=20
where these new partnerships are creating =
results all=20
over the country.
Perspectives: =
A record number of Section =
8=20
contracts are expiring, and millions of people =
are in=20
danger of losing their homes either through =
eviction or=20
sharp rent increases. What steps is HUD taking =
to=20
preserve Section 8 housing?
Secretary =
Cuomo: I'm hopeful Congress will =
renew these=20
Section 8 contracts because not renewing them =
would put=20
4.4 million people at risk of losing their =
homes=97either=20
through evictions or unbearably sharp rent =
increases. In=20
FY 1998 alone, contracts on 1.8 million =
units=97each one=20
helping to pay the rent for a low-income family =
or=20
senior citizen living in poverty=97will begin to =
expire.=20
They represent more units than have expired from =
1992 to=20
1997 combined, and this is at the heart of the =
crisis.=20
Many of these people are the working poor. None =
of us=20
would advocate a policy guaranteed to push =
hundreds of=20
thousands of elderly, children and disabled =
Americans=20
into homeless shelters and onto the streets of =
our=20
communities.
The Section 8 renewal =
crisis is=20
occurring, in large part, because 15- and =
20-year=20
subsidy contracts for tens of thousands of units =
are=20
expiring for the first time, and contracts with =
shorter=20
terms=97less than five years=97also are up for =
re-renewal.=20
We have asked Congress for the funding we need =
to avert=20
a crisis. The budget we have proposed for our =
next=20
fiscal year, 1998, meets this potential crisis =
head-on.=20
In FY 1998, we propose to renew expiring Section =
8=20
contracts on 1.8 million units that house 4.4 =
million=20
low-income people.
President Clinton has =
done the=20
hard work to help us get a balanced budget =
agreement=20
with balanced values that will help Americans =
buy a=20
home, start a business, save for retirement and =
send=20
their kids to college. The budget agreement =
gives us the=20
funding necessary to avoid the Section 8 crisis =
for the=20
immediate future and 5-year authority for =
contract=20
renewals, basically advancing all our priorities =
and=20
giving poor families a hand up to move from =
welfare to=20
work.
In addition, within a =
decade=20
virtually all of HUD's roughly 3 million Section =
8=20
project- and tenant-based units will be =
converted to=20
1-year terms. As part of the contract renewal =
process,=20
HUD also intends to stop paying excessive =
subsidies to=20
owners of Section 8 properties whose rents are =
well=20
above those for comparable housing in their=20
neighborhoods.
Throughout the country, =
more than=20
800,000 units in about 8,500 projects have been =
financed=20
by FHA-insured loans and supported by =
project-based=20
Section 8 subsidies. About two-thirds of these=20
projects=97500,000 units of housing=97have rents =
in excess=20
of market rents. HUD wants to use market =
discipline to=20
control the spiraling cost of Section 8 =
renewals, and we=20
are working with Congress and the Treasury =
Department to=20
restructure our multifamily portfolio and mark =
rents to=20
market.
By restructuring the =
projects so=20
that Section 8 rents reflect "real" rents in the =
area,=20
we will realize cost savings that can be used to =
support=20
other properties, where the subsidies are truly =
needed.=20
This policy will reduce rents on more than half =
of all=20
project-based Section 8 units that receive FHA=20
insurance. Projected savings from our =
"mark-to-market"=20
proposal would save $1.4 billion over five =
years.
Perspectives: =
HOME and CDBG funds have =
been=20
successfully used in
partnership with =
private-sector=20
investments and loans to spur economic =
development and=20
new affordable housing. As the federal budget =
decreases,=20
do you envision any significant changes in the =
Community=20
Development Block Grant and HOME Investment =
Partnerships=20
programs?
Secretary =
Cuomo: CDBG and HOME are two of =
HUD's most=20
successful programs, and because of their block =
grant=20
nature, they produce excellent public-private=20
partnerships. Mayors in every state in =
America=97big=20
cities and small cities alike=97tell me these =
are the HUD=20
programs most important to the long-term health =
of their=20
communities.
I don't see a need for =
legislative=20
or structural changes to CDBG or HOME, because =
we made=20
important administrative changes in 1993 and =
1994 to=20
improve and streamline both programs. What is =
more=20
important for their continued success is that =
all of our=20
community development programs are integrated =
into a=20
local, computer-based, comprehensive planning =
approach.=20
We developed this approach because we wanted to =
link=20
local needs=97human services, environmental =
health,=20
economic development, physical renewal=97into a =
seamless=20
community revitalization plan.
All of our community =
development=20
programs are working better than ever at the =
local=20
level, and I'd like to integrate more of HUD's =
programs=20
into this "community-friendly" planning =
approach.
Perspectives: =
Partnerships among =
financial=20
institutions, businesses and local government =
are often=20
formed to foster economic development and =
increase jobs.=20
Does HUD have any strategies in place to =
encourage=20
workforce development through public-private=20
partnerships? Secretary=20
Cuomo: HUD has =
become=20
well known for emphasizing partnerships through =
existing=20
programs like CDBG and HOME, and our strategies =
continue=20
that approach through newer programs like =
Empowerment=20
Zones and Enterprise Communities. One unique =
partnership=20
we recently launched is called "Bridges to =
Work," and=20
it's part of HUD's Welfare to Work strategy. =
Bridges=20
links inner-city welfare recipients with jobs in =
the=20
suburbs=97right now it's a demonstration in five =
cities:=20
Baltimore, Chicago, Denver, Milwaukee and St. =
Louis.=20
I've never had anyone =
ask me for a=20
welfare check=97people want a paycheck. Bridges =
to Work=20
helps people in the inner city become part of =
the=20
growing suburban job market by helping them with =
transportation, placement and supportive =
services.
Rapidly growing suburban =
employers=20
need good workers, and low-income people in =
America's=20
cities need good jobs. As part of the =
Administration's=20
larger welfare reform efforts, we want to make =
Bridges=20
to Work a nationwide initiative in 1998. We =
expect we=20
can help as many as 100 metropolitan areas =
develop=20
strategies for Bridges to Work programs, with a=20
preference for communities designated as =
Empowerment=20
Zones and Enterprise Communities.
Once Bridges to Work =
programs are=20
in place, they will be eligible for funding =
under the=20
President's $3 billion welfare-to-work jobs =
initiative,=20
HUD's Community Development Block Grant program =
and=20
public housing social services block grants and =
other=20
federal funding sources. In addition, the =
President has=20
proposed tax credits for private-sector partners =
who=20
hire long-term welfare recipients.
And we are helping to =
build=20
economic opportunity through our Section 108 =
Economic=20
Development Loan Fund. We recently awarded about =
$22=20
million to eight cities=97funds that will bring =
in at=20
least $60 million in private investment, and =
result in=20
hundreds of jobs for low- and moderate-income =
people.=20
Our Jobs-Plus program is a new partnership we've =
established with the Rockefeller Foundation and =
the=20
Manpower Demonstration Research Corporation, =
with=20
additional financial support from the Surdna =
Foundation.=20
Jobs-Plus is a welfare-to-work demonstration =
project=20
designed to significantly increase employment =
and income=20
of public housing residents in seven cities =
across the=20
country. Still another initiative, $31 million =
in=20
Economic Development and Supportive Services =
grants,=20
will help 45 public housing developments give =
people the=20
training, education, child care, transportation =
and=20
other services to help them get jobs and become=20
self-supporting.
Perspectives: =
You have spoken in the past =
about the=20
impact that cities and suburbs have upon one =
another.=20
How do you view the interrelationship between a =
city and=20
its suburbs with regard to economic development =
and=20
housing?
Secretary =
Cuomo: It's difficult to =
understate the=20
importance of regional cooperation. Today, =
neither the=20
city nor the suburb can stand alone and =
thrive.=20
Our national economy has =
been=20
transformed. The old growth engines like=20
manufacturing=97which provided a good third of =
all "city"=20
jobs just 30 years ago=97are gone either =
overseas or to=20
the suburbs=97or gone for good. But new =
industries have=20
sprung up all over America, and they compete in =
a new=20
global economy. The most successful of these =
industries=20
get their strength from a regional base, not =
from any=20
one city or suburban location. The most obvious =
example=20
is California's Silicon Valley, which is =
successfully=20
linked to the region's transportation systems, =
financial=20
infrastructure, workforce and educational=20
institutions.
Industries benefit from =
strengths=20
throughout the entire region, and the entire =
region=20
benefits back from the industry. In economic=20
development, metropolitan areas that came =
together as=20
one region benefited first from the new American =
economy. Many of those that were slow to see the =
change=20
now understand=97and are working to =
create=97regional=20
cooperation for economic growth.
There is a parallel in =
housing.=20
Just as many cities relied on old-growth =
industries to=20
provide jobs for residents, they relied on =
traditional=20
public housing to shelter the poor. But the =
nature of=20
poverty changed: with more female-headed =
households,=20
more social and behavioral problems-more =
homelessness.=20
Public housing became warehouses of the =
poor.
Today, the most =
successful=20
low-income housing programs address the variety =
of=20
problems faced by the poor=97from job training =
to life=20
skills-and help these families move to new=20
opportunities. HUD has worked to encourage this =
approach=20
by changing national policies to make low-income =
housing=20
programs more flexible and more regional in =
nature.
We've begun to demolish =
and=20
replace those old high-rise public housing =
projects, and=20
given low-income residents more opportunities to =
move=20
throughout the region. At the old sites, we're =
helping=20
build mixed-income low-rise developments that =
better=20
reflect a community's broader economic base and =
serve=20
families with a wide range of incomes.
Contemporary HUD =
programs support=20
expanded regional housing opportunities. =
Low-income=20
families can use a Section 8 housing voucher to =
find=20
rental housing wherever employment and education =
opportunities are greatest. We see time and =
again that=20
families who move out of the concentrated =
poverty of the=20
inner city=97the kids do well in school, the =
parents do=20
better economically=97do better than most =
families who=20
can't or don't seek out that opportunity.
At the regional level,=20
metropolitan-wide solutions to affordable =
housing have=20
grown. In some places, this has been through =
unifying=20
their local governments=97where surrounding =
areas are=20
annexed by the central community. In regions =
that are=20
too large and complex for formal unification, =
it's=20
happening through increased support for "fair =
share"=20
housing. HUD will continue to encourage =
metropolitan=20
cooperation throughout the country, because when =
access=20
to housing and economic opportunities is opened =
at all=20
levels, families benefit and the entire region=20
benefits.
Perspectives: =
What would you like as your =
legacy=20
when you leave the Department?
Secretary =
Cuomo: Let me talk to you about my =
goals for=20
the Department; legacies are for others to =
decide. Our=20
goal should be to create a future unlike any =
that has=20
come before; a future that is open to all and in =
which=20
no person is left behind, and in which no =
community is=20
forgotten; a future in which everyone who is =
willing to=20
do his or her part will be empowered with the =
tools to=20
reach as high as their talents and hard work =
will take=20
them.
While I'm here, I want =
to help=20
more families, especially young couples and =
people with=20
moderate incomes, become homeowners. I'd like to =
see=20
American communities become stronger and =
healthier, with=20
more and more inner city neighborhoods taking a=20
bottoms-up, empowerment approach to their =
physical and=20
economic development problems. I want to see an =
end to=20
America's problem with homelessness.
Public &=20
Private Partnership
A Touch (Up) of=20
Class
Teamwork =
restores=20
Amarillo apartment complex
Time can be cruel to =
buildings.=20
Glory can fade. And once-elegant housing =
developments=20
can grow old and deteriorate. The reasons this =
occurs=20
are complex, but the fact is that no city is =
immune.=20
When yesterday's wonderful apartment complex =
becomes=20
today's eyesore, communities can face a =
difficult=20
choice: tear it down or renovate it. Sometimes, =
though,=20
the choice to renovate is clear. This was the =
case with=20
Astoria Park in Amarillo, Texas.
Even from its =
construction shortly=20
after World War II, Astoria Park has occupied a =
unique=20
place not only in the hearts of the people of =
Amarillo=20
but also near the heart of the city of Amarillo =
itself.=20
"Astoria Park was the first garden apartment =
complex of=20
its size and stature in Amarillo," says Dale =
Cook, chief=20
financial officer of the Amarillo-based American =
Housing=20
Foundation (AHF), a nonprofit corporation =
dedicated to=20
the promotion, creation and preservation of =
housing for=20
low- and moderate-income families and =
individuals. "It=20
was where a lot of young couples lived in the =
early=20
years of their marriages, raised families and =
began=20
their careers. Over the years, many of them, as =
their=20
families outgrew the complex's two-bedroom =
apartments=20
and their careers prospered, moved on to other =
parts of=20
Amarillo."
As it turns out, in a =
small twist=20
of fate, one of the couples who lived in Astoria =
Park in=20
those early days were the parents of Steve =
Sterquell,=20
who founded the American Housing Foundation in =
1989.=20
Sterquell had seen Astoria Park deteriorate over =
the=20
years, a victim of time, economic changes and =
poor=20
management. So, in 1995, when the opportunity =
arose to=20
purchase the troubled property=97which by this =
time was=20
only about a third occupied=97from the =
Resolution Trust=20
Corp., Sterquell and the AHF were willing to =
commit the=20
funds and tackle the rehabilitation of Astoria =
Park.
The rehabilitation work =
would be=20
daunting. Astoria Park consisted of eight =
buildings,=20
more than 170 apartments, a swimming pool and a=20
playground=97all outdated, dilapidated or in =
various=20
stages of disrepair. Moreover, 60 units were =
still=20
occupied, so construction would have to take =
place=20
around them. By the time the rehabilitation is =
complete=20
in September, Astoria Park will have 164 =
apartments (148=20
two-bedroom and 16 three-bedroom), and each will =
have=20
new plumbing, individually controlled central =
heating=20
and air conditioning, new doors and windows, an=20
all-electric kitchen with dishwasher and new =
cabinets.=20
In addition, the pool and the playground will be =
refurbished. And finally, there will be one new=20
building: a clubhouse/community center. Clearly, =
right=20
from the beginning, the AHF knew that =
rehabilitating=20
Astoria Park would be an ambitious undertaking =
and that=20
a substantial financing package would be =
required.
For this financing, AHF =
turned to=20
Bank One-Amarillo. "We had worked with Bank One =
before,"=20
says Sterquell, "and we knew that they could =
satisfy our=20
banking needs. We also knew that the bank could =
put=20
together complex deals that require layered =
financing.=20
Moreover=97and this is important for us=97while =
the bank=20
naturally maintains a focus on the bottom line, =
it also=20
makes certain that it does the right thing for =
the=20
people who will eventually move into the =
rehabilitated=20
housing."
Bank One is experienced =
in=20
providing both construction financing and equity =
investment through the purchase of low-income =
housing=20
tax credits. In fact, the bank had just recently =
provided construction and equity funding for the =
rehabilitation of the 38-unit Bel Aire Apartment =
complex, also in Amarillo. The Bel Aire =
rehabilitation=20
was completed in 1996 and is now fully occupied. =
However, the Astoria Park renovation was larger =
than=20
most renovation projects=97not only because of =
the amount=20
of money involved but also because of the sheer =
size of=20
Astoria Park and the in-depth nature of the =
repairs.
"Putting together =
financing for a=20
development like Astoria Park is often a very =
drawn-out,=20
time-consuming process," says Bill Davies, =
president of=20
Bank One-Amarillo. "It can take five, six or =
even seven=20
months of hard work, and a lot of things really =
have to=20
fall into place correctly, given the wide range =
of=20
fairly complex regulations that have to be =
complied=20
with, approvals that must be obtained and =
diverse groups=20
that must work toward a common goal. Typically, =
a=20
transaction like this falls apart not because of =
a lack=20
of effort or will but because someone can't take =
care of=20
some detail or meet a deadline."
In this case, though, =
all the=20
pieces fell into place, thanks largely to the =
energy and=20
determination of Ellen Dunn, a commercial =
banking lender=20
for Bank One-Amarillo who arranged the $2 =
million=20
construction loan, and Wayne Koehler, vice =
president of=20
the Columbus (Ohio)-based Banc One Community =
Development=20
Corp., which provided an equity investment of =
$1.348=20
million by purchasing the low-income housing tax =
credits=20
allocated to the project by the Texas Department =
of=20
Housing and Community Affairs.
"For us," says Koehler, =
"the=20
project makes a lot of sense, and our =
involvement is a=20
logical decision. It's a good investment =
opportunity for=20
us. However, equally important is that Astoria =
Park=20
means a lot to the city of Amarillo, to the =
developers,=20
to the investors and to the people who will live =
there.=20
And, because of the experience and commitment of =
the=20
American Housing Foundation, we know the job of=20
rehabilitation will be done right. This is a =
project=20
we're proud to put our name on."
John Mullaney, vice =
president of=20
Midland Mortgage Investment Corp., which =
provided the=20
$2.5 million, 25-year mortgage loan, agrees with =
Koehler=20
that the decision to invest in Astoria Park was =
a=20
logical and sound business decision. "Although =
rehabs=20
can occasionally be a problem, a good =
rehabilitation=20
project can be more economically sound than new=20
construction. This project lent itself to =
rehabilitation=20
because Astoria Park is so aesthetically =
pleasing. In=20
addition, the economics are favorable, and it's =
near=20
downtown=97an employment center."
Now, as the project is =
near=20
completion and ready for tenants-one building, =
completed=20
in March, is already occupied=97Astoria Park is =
once again=20
an asset to the community, something in which =
the city=20
can have pride. As Bank One's Davies says, "It =
was a=20
win-win situation all along."
|
Fast Facts
Astoria Park
Astoria Park, a=20
deteriorated and largely unoccupied =
multifamily=20
housing complex in Amarillo, Texas, has =
been=20
redeveloped through a public-private =
partnership=20
into 164 safe, modern and affordable =
two- and=20
three-bedroom apartments for low- and=20
moderate-income individuals and families =
(148=20
two-bedroom units and 16 three-bedroom =
units).=20
Astoria Park was financed through two =
sources of=20
funding from Banc One Corp. Bank One- =
Amarillo=20
provided the construction loan, and Banc =
One=20
Community Development Corp. provided =
equity=20
financing through the purchase of =
low-income=20
housing tax credits. The complex was =
developed=20
by a nonprofit developer, American =
Housing=20
Foundation, and the permanent financing =
was=20
provided by the Midland Mortgage =
Investment=20
Corp. through the Midland Affordable =
Housing=20
Group Trust.
| Sources of=20
funds |
=20
|
| Bank=20
One=96Amarillo construction loan |
$2,000,000 |
Banc One=20
Community Development Corp.
equity=20
participation
(Purchase of low-income =
housing=20
tax credits) |
1,348,000 |
| Midland=20
Mortgage Investment Corp. permanent =
loan |
2,500,000 |
| Southwestern=20
Public Service utility rebate |
86,044 |
| American=20
Housing Foundation acquisition costs and =
capital=20
advances |
1,433,688 |
| Total sources=20
of funds |
$7,367,732 |
| Use of funds |
=20
|
| Acquisition of=20
property |
$925,000 |
| Construction/rehabilitation =
costs |
3,112,351 |
| Soft costs,=20
such as architects, closing fees and =
application=20
fees |
150,000 |
| Construction=20
interest (estimated) |
135,300 |
| Construction contingency=20
reserve |
150,000 |
| Operating reserve =
fund |
125,000 |
| Reserve fund for =
replacements |
1560,000 |
| Payoff of Bank =
One-Amarillo=20
construction loan |
2,000,000 |
Partial=20
payment of development fee =
to
American=20
Housing Foundation |
620,081 |
| Total use of=20
funds |
$7,367,732 | |
For more=20
information:
Dale Cook, Chief =
Financial=20
Officer
American Housing =
Foundation
P.O.=20
Box 7606
Amarillo, Texas =
79114-7606
(806)=20
=
372-7500 |
Resource
Flying to New=20
Heights
San =
Antonio=20
addresses economic development challenge =
Four years from now, San =
Antonio=20
will still have the distinction of possessing =
the=20
world's largest free-standing airplane hangar. =
However,=20
it won't have Kelly Air Force Base, where the =
C-5=20
military aircraft hangar is located, because the =
base is=20
scheduled to close and be privatized on July 13, =
2001.
One might expect the =
loss of a=20
major economic engine=97and the consequent =
wrenching=20
social and economic impact on the city and the =
region=97to=20
be met by shock, handwringing and a "what'll we =
do now?"=20
attitude. Not so, however, in San Antonio, where =
a=20
coalition of banks and civic development groups =
have=20
sprung into action to provide funding and =
planning=20
options for the base and the surrounding areas. =
They are=20
determined to be proactive, to have plans in =
place and=20
money available for new development, retraining =
and=20
conversion before the base closes.
The keys to the response =
of San=20
Antonio=97where the military is a major =
employer=97have been=20
teamwork and speed. Shortly after the base =
closing was=20
announced in mid-1995, 166 leaders representing =
all=20
aspects of San Antonio's civic and social life =
drew up a=20
strategic plan, including long- and short-term =
goals and=20
objectives for the privatization effort. "The =
committee=20
was able to put aside special interests and work =
to=20
create a plan that was best for all of San =
Antonio.=20
We're almost two years into the plan and, =
because it was=20
so well conceived and so balanced, it continues =
keeping=20
us on course and focused," says Paul Roberson, =
executive=20
director for the Greater Kelly Development Corp. =
GKDC=20
was established by the city of San Antonio in =
early 1996=20
to coordinate all privatization activities, =
including=20
Air Force contracts that will be awarded in the =
next few=20
years, and will eventually commercialize the =
base and=20
lease facilities out to major corporations, as =
well as=20
small businesses.
GKDC will learn about =
its=20
prospects for success as soon as the Air Force =
contracts=20
with major aerospace firms as tenants for the =
base's=20
major facilities=97including the C-5 overhaul =
facility,=20
engine overhaul facility and warehousing =
complex, all of=20
which will act like anchors in a shopping mall =
and serve=20
as a magnet to attract smaller businesses. =
Meanwhile,=20
Judy Ingalls, director of the Kelly Small =
Business=20
Assistance Center, which is funded by a =
consortium of=20
local, state and federal agencies, is working =
with some=20
of the 10,000 civilian Kelly employees whose =
jobs will=20
be affected by the closure and who are =
considering=20
starting their own businesses. Since January =
1996,=20
Ingalls has been conducting classes and seminars =
for=20
employees who may be interested in small =
business=20
opportunities that they can use to their =
advantage. "So=20
far," says Ingalls, "almost 4,800 people have =
attended=20
our classes, and we're doing our best to guide =
them to=20
the local resources that will help them make the =
transition to self-employment."
Among these resources is =
the $130=20
million Kelly Redevelopment Small Business Loan =
Program.=20
This program, established by 10 banks=97Bank =
One, Broadway=20
National Bank, CaminoReal Bank, First National =
Bank of=20
South Texas, Frost Bank, InterContinental =
National Bank,=20
McMullen County State Bank, NationsBank, Norwest =
Bank=20
and Texas Commerce Bank=97will run until August =
31, 2001.=20
It is intended to help small businesses that =
will be=20
involved in the redevelopment of the base, =
businesses=20
that will service the major corporations that =
will be=20
coming to Kelly when it is privatized, =
businesses within=20
five miles of Kelly that may want to or need to =
change=20
their direction and Kelly employees trying to =
start=20
their own business. The loans, which will range =
from=20
$10,000 to $2.5 million, will be made available =
to=20
businesses with sales or revenues of less than =
$5=20
million.
Genny Rakowitz, vice =
president and=20
Small Business Administration loan coordinator =
for Frost=20
Bank=97whose chairman, Dick Evans, took the lead =
in=20
establishing the loan program=97notes that the =
program=20
offers a number of advantages. "Bank =
loan-origination=20
fees have been waived," says Rakowitz, whose =
bank has=20
already provided one of the first of the loans =
to a=20
tortilla factory that wanted to expand. "In =
addition,=20
the interest rates are quite favorable; for =
short-term=20
loans of a year or less, the rate is prime =
floating, and=20
for long-term loans, up to seven years, the rate =
is=20
floating at prime plus one or fixed at prime =
plus two.=20
And finally, these loans can work in conjunction =
with=20
other loan programs offered through other =
agencies=20
helping small businesses. It's really a good =
deal for=20
businesses, for Kelly and for the city of San=20
Antonio."
Mike Bonham, vice =
president of=20
Broadway National Bank, agrees with Rakowitz. =
"The loan=20
program can be a source of optimism for everyone =
involved in the commitment to redevelop =
Kelly."
And ultimately, that's =
the key to=20
how San Antonio is responding: teamwork plus =
planning=20
plus commitment=97all of which add up to =
justifiable=20
optimism.
Did You =
Know...?
McAllen Affordable Homes =
Receives=20
Maxwell Award
McAllen Affordable Homes =
Inc.=20
(MAHI) has received a Maxwell Award of =
Excellence from=20
the Fannie Mae Foundation for the Los Encinos =
Community=20
project. MAHI, a nonprofit organization based in =
McAllen, Texas, received a $25,000 grant from =
the=20
foundation in recognition of its exemplary=20
accomplishments in creating affordable housing =
for=20
low-income citizens.
MAHI planned and built =
the Los=20
Encinos Community on 60 acres of land near =
McAllen in a=20
Foreign Trade Zone along the Texas-Mexico =
border.=20
Although there are employment opportunities for=20
residents of the area, adequate housing and =
amenities=20
have been in short supply. MAHI plans to =
construct 246=20
single-family homes in Los Encinos. To date, 20 =
of the=20
homes have been completed. The new development =
is=20
located near a new elementary school, and the =
city will=20
soon construct recreational facilities nearby, =
including=20
a jogging trail, and baseball and soccer=20
fields. Social Compact =
Award=20
Goes to Fifth Ward Community Redevelopment =
Corp./Bank=20
United Partnership=20
The Fifth Ward Community =
Redevelopment Corp. and Bank United have =
received a=20
Social Compact Outstanding Community Investment =
Award.=20
The theme of this year's awards was "The =
Business of=20
Rebuilding America's Neighborhoods."
The Fifth Ward Community =
Redevelopment Corp. teamed up with Bank United =
in an=20
effort to revitalize the Fifth Ward, one of =
Houston's=20
poorest neighborhoods. The partnership has =
already built=20
77 single-family homes that are being purchased =
by low-=20
to middle-income families. The partnership is =
offering=20
more residents an equity stake in the community =
and=20
attracting middle-income families to move into =
the=20
community, which has a rich history and is =
located near=20
downtown.
|
About Banking and =
Community=20
Perspectives
Perspectives
Federal=20
Reserve Bank of Dallas
Community =
Affairs=20
Office
P.O. Box 655906
Dallas, =
Texas=20
75265-5906
Gloria Vasquez=20
Brown
Vice President |
Nancy C.=20
Vickrey
Community Affairs =
Officer |
Ariel D.=20
Cisneros
Community Affairs =
Specialist |
Jim V.=20
Foster
Community Affairs =
Specialist |
Bobbie K.=20
Salgado
Houston Branch
Community =
Affairs=20
Specialist |
|
The views =
expressed are=20
those of the authors and should not be=20
attributed to the Federal Reserve Bank =
of Dallas=20
or the Federal Reserve System. Articles =
may be=20
reprinted on the condition that the =
source is=20
credited and a copy is provided to the =
Community=20
Affairs =
Office. |
| |
|
|
Disclaimer/Privacy=
=20
Policy | |
|
|
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