Running a community development corporation can be like preparing a volatile mixture: One misstep and a banker can end up with a disaster.

Mark A. Willis, president of Chase Manhattan Corp.'s community lending effort, said that communicating frequently with the myriad parties involved in a bank's inner-city lending effort is a vital part of the mix.

Among those who must constantly be updated and consulted -- and occasionally reassured -- are community residents, politicians, the media, and people inside the bank.

Role of Mediator'

"In addition to being a partner, you also act as a mediator and arbitrator when things fall apart and assist in negotiating a deal," said Mr. Willis, who set up the Chase Community Development Corp. in 1989.

For example, he said, if even one of the parties involved in a project does not have a full understanding of the many government programs affecting the deal, there can be trouble.

"It's very vital that the corporation has a good team with very specialized skills," he said. "And most important is the community's involvement."

Mr. Willis also said that he has worked hard to explain his unit's mission internally.

"A community development corporation doesn't fit into any neat basket," he said.

"We do a range of things. Chase has been very supportive, and we've shown Chase what can be done -- namely, that you can lend in a prudent way to a project that they didn't think was possible."

Selling the Program

Mr. Willis biggest missionary work at the inception of his business was persuading people in communities to take it seriously.

"My staff is very committed, but we have to prove that we have the skills to do the job," he said. "We tell people to challenge us and see if together we can make something happen."

The primary goals of the Chase unit are to create housing and support economic development in low-income and moderate-income neighborhoods in New York City.

Although legally allowed to make equity investments, it has primarily limited itself to the role of lender.

Chase has committed about $353 million through its community development subsidiary since it began operations four years ago.

In addition to the usual mix of building rehabilitation programs and small-business loans, the Chase unit has a crew devoted to third-party financial providers from the community.

Closer to Home

In many cases, Mr. Willis said, local financiers are better able to reach the marketplace than the downtown banking giant.

"New York National Bank, a minority-owned bank in the South Bronx, is an important bank for us to have a good relationship with," Mr. Willis said.

Chase and New York National are working on a major construction and financing contract for the Puerto Rican Organization to Motivate, Enlighten, and Serve Addicts, a drug rehabilitation center in the South Bronx, and with the South Bronx Overall Economic Development Corp.

Serafin Mariel, the president and chief executive of New York National, praised Mr. Willis for overcoming inertia at Chase about such ventures.

A Turnaround

"A few years ago, Chase, like a lot of the other giant banks that were closing branches, seemed to have written off the South Bronx," he said. "That's changed. We probably won't see many branches reopening, but Chase seems to be leading the way in recognizing that this South Bronx community needs the financing and capital resources of the giant banks in much the same as the developing countries."

Lloyd Williams, president of the Greater Harlem Chamber of Commerce, had a similar view.

Chase had been ineffective in the community for a number of years, Mr. Williams said. Now, through the community development corporation under Mr. Willis, things have begun to change, he said.

Mr. Williams described Mr. Willis, who serves on the board of directors of the chamber of commerce, as a "bottom-line, practical person, who comes to you with a business attitude and concern for all parties involved. He is concerned with who benefits, who manages, and who are the developers."

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