Time - Man of the Year/Time_Man_of_the_Year_Compact_Publishing_3YX-Disc-1_Compact_Publishing_1993.iso/moy/071392/07139926.000

Text File | 1993-04-08 | 9KB | 178 lines

                                                                                CITIES, Page 34

The Struggle Over Who Will Rebuild L.A.


Raising the money is only half the battle. South Central's blacks
and Hispanics want an end to the practice of redlining and a
stake in the action.

By SYLVESTER MONROE/LOS ANGELES


    As dozens of mostly black and Latino students at the
Maxine Waters Employment Preparation Center gathered for an
open-air press conference in the school parking lot last month,
Peter Ueberroth, the chairman of Rebuild L.A., lavished praise
on executives of Japan's Pioneer Electronics (U.S.A.), who had
just donated $600,000 to the Watts vocational school, created
after the 1965 riots. "This company did this on their own,"
Ueberroth said, "because it should be good business for them to
recognize the importance of the inner city."

    Earlier the same week in another part of South Central Los
Angeles, black activist and entrepreneur Danny Bakewell,
president of L.A.'s Brotherhood Crusade, led a coalition of
minority contractors who were protesting their exclusion from
riot-related demolition and construction by shutting down work
sites that employed no African Americans. After one South
Central site that had not a single black on a 10-man crew was
shut down on a Friday, it was reopened the following Monday with
newfound black workers. "Miraculously, black people were born
and gained five years' experience," says Bakewell sarcastically.

    Ueberroth, the high-profile former Olympresario and
baseball commissioner, and Bakewell, a real estate developer
turned community organizer, are on opposite ends of the daunting
effort to rebuild South Central Los Angeles, torn apart three
months ago in the most expensive riots in U.S. history. From his
end, Ueberroth recognizes the need to break three decades of
redlining, whereby big corporations, banks and insurance
companies have systematically shunned South Central L.A. as an
unprofitable business venue. From theirs, Bakewell and other
black community leaders are struggling to ensure minority
inclusion in the rebuilding process -- and ultimately in the
renaissance of South Central. "We need a cheerleader like
Ueberroth," says black businessman John Bryant. "But while he's
working from the top down, there needs to be a lot of people
working from the bottom up to meet him halfway."

    The going has been tough so far on both ends. The greatest
impediment to success, naturally, is money -- where it comes
from, how it is spent. The April riots led to more than 6,000
insurance claims totaling $775 million, mostly on commercial
property. Now, with more damage in the area from the two major
earthquakes on June 28 heaping new claims on insurers and
frightening already skittish tourists, funds will be scarcer
still.

    Last month Ueberroth moved his Rebuild L.A. staff into
donated offices downtown and appointed to a still growing
50-member board community, corporate and government
representatives, reflecting his "tripod" approach to the task.
He says he is committed to breaking down the barriers that have
sealed wealth out of the city's minority communities. "It's
important that this neighborhood gets greenlined instead of
redlined," he proclaims. But in the two months since he became
Los Angeles' designated rebuilder, his critics say he has made
little progress toward that goal, and they are skeptical that
his efforts will be enough to overcome years of discriminatory
practices.

    The immediate concern is that minorities are not being
included in enough of what rebuilding is taking place. "What
people want is an active voice at the table," says Janet Clark,
a staff coordinator at the Maxine Waters center. "They want
inclusion. They want their needs to be discussed so it's not
something shoved down their throats." With black-male
unemployment over 40% in South Central, they also want a fair
share of riot-related rebuilding contracts and jobs in
inner-city areas. "I don't have a problem with other people
working," says Bakewell. "But the bottom line is if black people
can't work, nobody can. We are no longer going to allow people
to do business in this community if they don't include us."

    Shortly after black contractors and community activists
closed two construction sites, Mayor Tom Bradley put together
a consortium of five companies, including two owned by Latinos,
one by blacks, one by Koreans and one by whites. He awarded the
group $10 million worth of contracts to demolish nearly 500
fire-damaged buildings, and ordered that 80% of the subcontracts
let by the consortium go to minority companies located in
riot-affected areas.

    "It's a good step, a bold step, but it can't be the only
step," says Bakewell. "The issue is more than demolition. It's
financing. And insurance companies do most of the financing in
this world." Increased access to credit and capital is critical
for rebuilding and empowering inner cities, says Brentwood
Thrift & Loan Association president Jeffrey Hobbs. "Because of
the way we do things in the 1990s, insurance companies are an
essential ingredient. They have to come to the table."

    Lack of access to a range of other financial products,
from basic bank loans for businesses to automobile and student
loans, also hinders the economic development of inner cities.
"The problem is access to the kind of financial dollars that
create a sense of self-worth in community stakeholders," says
Carlton Jenkins, managing dirctor of Founders National Bank in
South Central, California's only black commercial bank. "Not
only do people here now not have supermarkets or liquor stores
or cleaners, they never have had somewhere they can go and talk
with someone about a financial plan."

    As an owner of one of only three black financial
institutions in California, Jenkins believes his 18-month-old
bank has a unique opportunity to take advantage of the riots by
attracting new deposits and filling some of the financial void
in inner-city L.A. But the combined assets of Founders bank and
the other two black-owned institutions are only $300 million,
compared with the $1 billion or more in assets of some of the
state's larger banks.

    Jenkins' scheme is to make his bank a conduit for big
Establishment banks that have been unwilling to do business in
South Central or do not know how. "Founders National Bank can
be the major banks' ears and arms into this marketplace,"
Jenkins says. With help from the black community, he hopes to
grow his fledgling bank into an even greater financial asset for
South Central. Late in May a coalition of more than 600 black
ministers launched a campaign to persuade black residents to
shift up to $15 million in deposits from mainstream banks to
black institutions. "The larger we can become vis-a-vis deposits
and things like that," says Jenkins, "the easier it will be for
us to become a significant part of the rebuilding effort."

    In the meantime, creative black entrepreneurs like John
Bryant are filling the gap. Just days after the riots, Bryant
formed Operation Hope, a nonprofit community-development
organization. The next day he secured the $370,000 needed to
rebuild a South Central landmark, a pharmacy owned by Gilbert
Mathieu, destroyed in the riots. Bryant's goal for the next year
is to finance similar deals for 100 businesses with average
loans of $200,000. "If we don't create other Gil Mathieus, then
we shouldn't be around," he says. Jenkins, for one, is confident
they will. "In the '60s," he says, "we were worried about
getting on the bus. This group of people is worried about owning
the bus line."


    Though Ueberroth has taped the Rebuild L.A. name to a
dozen private initiatives since May, he knows the "rebirth" of
South Central Los Angeles will not happen without some pushing
and pain. Ultimately, it depends on whether the government
decides to provide incentives for long-term investment in inner
cities. "It has to be for good business reasons so it will
last," he says. "If you do it for charitable reasons, it goes
away as soon as the money runs out." He sees the prompt creation
of enterprise zones as critical to the long-term success of his
efforts. "If they don't want to do it for the whole country,
then they should experiment with the center of L.A.," he
argues. "Make it a blueprint for other cities."

    Ueberroth believes that his Rebuild L.A. program will be
able to prove itself in five years. That is an ambitious goal.
But an even more ambitious task will be to ensure that the
effort remains successful five years -- and 25 years -- after
that. To achieve such lasting improvements will require more
than a spurt of money and a flurry of energy; it will require
engaging the people of South Central L.A. and giving them a
stake in the outcome.