CDCU Critical In Rebuilding New Orleans' 9th Ward
NEW ORLEANS -
The community development credit union, which is teaming up with nearby Mary Queen of Vietnam FCU, is one of just a handful of financial institutions approved as intermediaries for the Louisiana Business Recovery Grant and Loan Program.
"We had requests for as many as 300 applications on the first day," said Sarah Taylor, senior vice president of the $240-million CDCU and director of the credit union's fledgling community development corporation, known as A Shared Initiative Inc.
Uncertainty Brings Mixed Response
Originally there were as many as a dozen intermediaries approved for the rebuilding fund, including at least one other credit union, HOPE Community FCU, but as many as half have declined to participate because of uncertainty. "A lot of them have bailed out," said Taylor.
ASI/Mary Queen of Vietnam will serve as financial intermediary and administrator of loans to be distributed in the $138 million initiative, which will include $38 million in grants and $100 million in no-interest loans. ASI, which has been central in the rebuilding of the Crescent City, will screen applications for local businesses and then administer the funds being provided by the state.
To qualify for the funds, a business must have fewer than 50 employees, has to show that it lost 30% of its revenues since before the storm, and has reopened or plans to reopen, said Taylor. Applications will be accepted for the rebuilding funds at ASI and other participants in the loan program between Jan. 23 and Feb. 16. ASI is the only credit union participating.
Unveiling of the new loan program came as ASI was being granted $300,000 from NeighborWorks America, a quasi-government housing agency, to help rebuild a block in the city's heavily damaged upper Ninth Ward with new modular housing.
The funds were awarded to ASI's development corp., through which much of the credit union's rebuilding efforts have come. A Shared Initiative Inc., has acquired 10 condemned homes from the city of New Orleans that it plans to demolish and replace with 11 modular homes, according to Taylor. The credit union will then offer the neighborhood's low-income low-interest mortgages to buy the properties.
A Foundation Is Born
ASI decided to form a subsidiary community development corp., like at least two others CDCUs, Self-Help CU and Alternatives FCU, to take advantage of some of the tax breaks and other programs available for CDCs, explained Taylor. In addition, the CDC will allow the credit union to buy and own property for redevelopment, she said.
Years Of Blight
The block being rebuilt was not destroyed by Hurricane Katrina but had been blighted for years, noted Taylor, but is considered important to adding new affordable housing stock to the neighborhood, most of which was flooded by the massive storm.
"Before Hurricane Katrina, we didn't even consider housing a major need," said Taylor. "Since then, it's exploded as a need, with all of the homes that have been destroyed and the increase in rents."
The project's site is opposite the Musician's Village, an affordable housing project being developed by famous New Orleans trumpeter Wynton Marsalis and crooner Harry Connick Jr. with Habitat for Humanity.
ASI's efforts in the upper Ninth Ward's St. Claude neighborhood got a boost last summer with a $100,000 grant from the National Federation of CDCUs to help it buy and renovate a community center, which will include a credit union branch. It will be the only financial institution branch in the community.
The neighborhood, one of the poorest in New Orleans, sustained the worst damage by Hurricane Katrina, sending thousands of its inhabitants fleeing to other towns and states. ASI itself lost 16,000 of its 90,000 members as a result of the flight.