Five banks in Florida are putting up $385,000 to help fund an ambitious effort to create for-profit community development corporations to redevelop poor areas.
Bank of America, Citibank, Wachovia Bank, Fifth Third Bank, and Wells Fargo Bank are contributing $50,000 to $150,000 each to fund the initial stage of a 10-year program sponsored by Brandeis University and the Florida Minority Community Reinvestment Coalition. The goal of the “War on Poverty” is to stimulate more than $300 billion of redevelopment of lower-income neighborhoods throughout the state.
The first stage of the program entails “asset mapping” of poor communities in Florida’s four largest urban counties: Duval, Dade, Hillsborough, and Orange.
Asset mapping catalogs a community’s resources, including the leaders and financial assets that could be used to form for-profit community development corporations. The effort will start in October in the four counties and then expand to communities in six more counties. The total cost is estimated at $750,000.
Other investors in the program include Workforce Florida, a state-funded organization that has pledged $250,000, and GMAC, which has chipped in $50,000.
“This is about helping community leaders learn just how much capacity already exists for them to become self-sufficient” in redeveloping their neighborhoods, said Thomas Shapiro, a professor of law and social policy at Brandeis’ Heller School for Social Policy and Management in Waltham, Mass.
Al Pina, the chairman of the Florida coalition, said his group and Brandeis will mentor the corporations being formed, using the $400 million-asset Telacu Community Development Corp. in Los Angeles as a model.
Founded in 1968, Telacu and its for-profit construction subsidiary, Telacu Industries, builds and rehabilitates affordable housing and industrial parks in lower-income neighborhoods and lends to homebuyers and emerging businesses there.
“The for-profit model is critical to the success of community redevelopment, because it’s really the only way community-based organizations can be self-sufficient in fighting poverty,” Mr. Pina said.
He was Telacu’s vice president of development from 1999 until last year, when he formed the Florida coalition. Its 52 community organizations work to increase reinvestment in underserved communities by financial institutions, insurance companies, governmental entities, and nonprofits — in much the same way the Greenlining Institute in Berkeley, Calif., does.
Mr. Pina said Greenlining is helping him form a similar coalition in New Jersey.
The Florida coalition chose to work with Brandeis University, he said, because of Prof. Shapiro’s research in asset mapping to help poor communities in Illinois and Massachusetts.
Prof. Shapiro said asset-based community development — drawing upon the resources of poor communities before seeking outside help — is becoming increasingly popular throughout the country. Banks like it, he says, because it demonstrates the communities’ own financial commitment to redevelopment.
Greg Barnard, a spokesman for Bank of America Corp.’s community development programs in Washington, said its initial $50,000 contribution in Florida would be money well spent.
“We are trying to empower these communities to develop the capacity” to bring the Charlotte company redevelopment deals “that we might eventually be able to finance,” he said.
B of A has a 10-year commitment to lend or invest $750 billion in underserved communities throughout its markets, and supporting this program should help the company reach its goal in Florida, Mr. Barnard said.
Barbara L. Romani, a community relations director for Citibank in Doral, Fla., said that asset mapping lower-income communities could reveal “diamonds in the rough,” such as budding export/import businesses. The newly formed community development corporations — with the support of banks — could then foster the growth of these companies and help spawn related businesses around them.
Mr. Pina said that other Florida banks have said they would consider making loans to any of the corporations formed to satisfy Community Reinvestment Act responsibilities.
Mr. Pina said it would be two years before the community development corporations apply for bank loans and investments to help redevelop their neighborhoods.
