[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
THE USE OF FEDERAL HOUSING
AND ECONOMIC DEVELOPMENT
FUNDS IN ST. LOUIS: FROM
``TEAM 4'' INTO THE FUTURE
=======================================================================
FIELD HEARING
BEFORE THE
SUBCOMMITTEE ON
HOUSING AND COMMUNITY OPPORTUNITY
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
MARCH 8, 2008
__________
Printed for the use of the Committee on Financial Services
Serial No. 110-96
U.S. GOVERNMENT PRINTING OFFICE
41-727 WASHINGTON : 2008
----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC,
Washington, DC 20402-0001
HOUSE COMMITTEE ON FINANCIAL SERVICES
BARNEY FRANK, Massachusetts, Chairman
PAUL E. KANJORSKI, Pennsylvania SPENCER BACHUS, Alabama
MAXINE WATERS, California DEBORAH PRYCE, Ohio
CAROLYN B. MALONEY, New York MICHAEL N. CASTLE, Delaware
LUIS V. GUTIERREZ, Illinois PETER T. KING, New York
NYDIA M. VELAZQUEZ, New York EDWARD R. ROYCE, California
MELVIN L. WATT, North Carolina FRANK D. LUCAS, Oklahoma
GARY L. ACKERMAN, New York RON PAUL, Texas
BRAD SHERMAN, California STEVEN C. LaTOURETTE, Ohio
GREGORY W. MEEKS, New York DONALD A. MANZULLO, Illinois
DENNIS MOORE, Kansas WALTER B. JONES, Jr., North
MICHAEL E. CAPUANO, Massachusetts Carolina
RUBEN HINOJOSA, Texas JUDY BIGGERT, Illinois
WM. LACY CLAY, Missouri CHRISTOPHER SHAYS, Connecticut
CAROLYN McCARTHY, New York GARY G. MILLER, California
JOE BACA, California SHELLEY MOORE CAPITO, West
STEPHEN F. LYNCH, Massachusetts Virginia
BRAD MILLER, North Carolina TOM FEENEY, Florida
DAVID SCOTT, Georgia JEB HENSARLING, Texas
AL GREEN, Texas SCOTT GARRETT, New Jersey
EMANUEL CLEAVER, Missouri GINNY BROWN-WAITE, Florida
MELISSA L. BEAN, Illinois J. GRESHAM BARRETT, South Carolina
GWEN MOORE, Wisconsin, JIM GERLACH, Pennsylvania
LINCOLN DAVIS, Tennessee STEVAN PEARCE, New Mexico
PAUL W. HODES, New Hampshire RANDY NEUGEBAUER, Texas
KEITH ELLISON, Minnesota TOM PRICE, Georgia
RON KLEIN, Florida GEOFF DAVIS, Kentucky
TIM MAHONEY, Florida PATRICK T. McHENRY, North Carolina
CHARLES A. WILSON, Ohio JOHN CAMPBELL, California
ED PERLMUTTER, Colorado ADAM PUTNAM, Florida
CHRISTOPHER S. MURPHY, Connecticut MICHELE BACHMANN, Minnesota
JOE DONNELLY, Indiana PETER J. ROSKAM, Illinois
ROBERT WEXLER, Florida THADDEUS G. McCOTTER, Michigan
JIM MARSHALL, Georgia KEVIN McCARTHY, California
DAN BOREN, Oklahoma DEAN HELLER, Nevada
Jeanne M. Roslanowick, Staff Director and Chief Counsel
Subcommittee on Housing and Community Opportunity
MAXINE WATERS, California, Chairwoman
NYDIA M. VELAZQUEZ, New York SHELLEY MOORE CAPITO, West
STEPHEN F. LYNCH, Massachusetts Virginia
EMANUEL CLEAVER, Missouri STEVAN PEARCE, New Mexico
AL GREEN, Texas PETER T. KING, New York
WM. LACY CLAY, Missouri JUDY BIGGERT, Illinois
CAROLYN B. MALONEY, New York CHRISTOPHER SHAYS, Connecticut
GWEN MOORE, Wisconsin, GARY G. MILLER, California
KEITH ELLISON, Minnesota SCOTT GARRETT, New Jersey
CHARLES A. WILSON, Ohio RANDY NEUGEBAUER, Texas
CHRISTOPHER S. MURPHY, Connecticut GEOFF DAVIS, Kentucky
JOE DONNELLY, Indiana JOHN CAMPBELL, California
THADDEUS G. McCOTTER, Michigan
KEVIN McCARTHY, California
C O N T E N T S
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Page
Hearing held on:
March 8, 2008................................................ 1
Appendix:
March 8, 2008................................................ 43
WITNESSES
Saturday, March 8, 2008
Geisman, Barbara A., Executive Director for Community
Development, City of St. Louis, Missouri....................... 7
Gimont, Stanley, Acting Director, Office of Block Grant
Assistance, U.S. Department of Housing and Urban Development... 6
Jones, Michael, Senior Pastor, Friendly Temple Missionary Baptist
Church......................................................... 24
Kennedy, Hon. Terry, Alderman, 18th Ward, St. Louis Board of
Aldermen....................................................... 10
Mallory, Hon. Mark, Mayor of Cincinnati, Ohio.................... 30
Rogers, Jamala, Chairperson, Organization for Black Struggle..... 23
Talmage, John, President and Chief Executive Officer, Social
Compact, Inc................................................... 26
Zuniga, Tom, Managing Director, DSG Community Marketing Services
LLC............................................................ 28
APPENDIX
Prepared statements:
Geisman, Barbara A........................................... 44
Gimont, Stanley.............................................. 63
Jones, Michael............................................... 65
Kennedy, Hon. Terry.......................................... 69
Mallory, Hon. Mark........................................... 73
Rogers, Jamala............................................... 77
Talmage, John................................................ 82
Zuniga, Tom.................................................. 92
Additional Material Submitted for the Record
Waters, Hon. Maxine:
Written statement of Matt Fellowes, The Brookings Institution 97
THE USE OF FEDERAL HOUSING
AND ECONOMIC DEVELOPMENT
FUNDS IN ST. LOUIS: FROM
``TEAM 4'' INTO THE FUTURE
----------
Saturday, March 8, 2008
U.S. House of Representatives,
Subcommittee on Housing and
Community Opportunity,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to notice, at 12 p.m., at
the St. Louis City Hall, 1200 Market Street, St. Louis,
Missouri, Hon. Maxine Waters [chairwoman of the subcommittee]
presiding.
Members present: Representatives Waters, Green, and Clay.
Chairwoman Waters. This hearing of the Subcommittee on
Housing and Community Opportunity will come to order. Good
afternoon, ladies and gentlemen. I am Congresswoman Maxine
Waters, the Chairwoman of the Subcommittee on Housing and
Community Opportunity. I would like to start by thanking the
City of St. Louis for allowing us the use of this beautiful and
historic building, the St. Louis City Hall.
Today's hearing is titled, ``The Use of Federal Housing and
Economic Development Funds in St. Louis: From `Team 4' Into the
Future.'' And I would especially like to thank my friend and
colleague, Representative Clay, who is a dedicated member of
the subcommittee, for requesting and arranging for this hearing
here today. I am very, very honored to serve on the overall
Financial Services Committee and on this subcommittee with Mr.
Clay. He has been not only a valuable member, but I depend on
him to help us plan and organize all of the activities of this
committee, not simply for St. Louis or Missouri, but for the
entire United States of America. Thank you, Congressman Clay.
Mr. Clay. Thank you.
Chairwoman Waters. And, of course, I'm always pleased to be
in the city of my birth and have the opportunity to visit with
friends and family and just reminisce about old times, of which
we did a lot last evening. I would also like to thank Mr.
Cleaver who had wanted to be here today, had signed up to be
here today, but found he could not come because he had an
emergency. But he certainly wanted to be here to share with us
in the learning curve that we have been afforded.
He is not here, but we have with us Mr. Al Green.
Representative Green is from Houston, Texas, and he took time
from his busy schedule to come serve on the subcommittee today
because he is interested not only in what is happening in the
planning process and with housing and economic development here
in St. Louis, but in his own city, and he, too, is one of the
treasured members of the subcommittee.
I worked very closely with him and Mr. Clay as we planned
the activities of this subcommittee, and I have to tell you--
and I don't want to brag--that we're one of the hardest working
committees in the Congress of the United States of America. We
have passed out more legislation than any other committee, and
we have many more bills in the hopper that we intend to get to
the Floor of the House. Our bills always make it to the Senate
side. They are a little slow over on that side of Congress, but
we are putting the bills before them because we recognize so
much work had not been done prior to us taking over the
leadership of these committees.
So I know that some of the circumstances and challenges
that you have here in the City of St. Louis are the same ones
that I have in the City of Los Angeles, and Mr. Green has in
the City of Houston. We think that by being here today we can
not only hear more and learn more about these opportunities and
these challenges, but we can apply what we are learning to
those problems and opportunities that we have in our own
cities.
I am from a city where the median price of a home is
$529,000. The housing costs in Houston, where Mr. Green comes
from, seem downright reasonable at nearly $400,000 median. And,
of course, here in St. Louis, it is less than that to purchase
a median priced home. On the other hand, reasonable does not
necessarily mean affordable; 40 percent of owners with
mortgages, 21 percent of owners without mortgages, and 51
percent of renters in St. Louis City spend 30 percent or more
of household income on housing, making them housing cost-
burdened, as defined by the Department of Housing and Urban
Development.
Almost a quarter of St. Louis City renters are severely
housing cost burdened, meaning they pay more than 50 percent of
their income in housing costs. As in every community in the
country, work no longer guarantees being able to afford housing
in St. Louis. The National Low Income Housing Coalition
estimates that in order to afford a reasonable two-bedroom
apartment here, a renter would have to earn at least $12.88 an
hour, which is 2\1/2\ times the minimum wage. The affordability
crisis is most pronounced among St. Louis' poor and disabled
neighborhoods. Well over half of St. Louis City's poor
households are severely cost burdened, including over 1,200
households in the North St. Louis area.
We're going to be talking a lot about that today. Disabled
persons receiving supplemental security income, that is, SSI
benefits, are particularly vulnerable to affordability
concerns.
The HUD fair market rent for a one-bedroom apartment in St.
Louis, $711, was 118 percent of the monthly SSI benefit of
$603.
In addition, St. Louis has been hit hard by the foreclosure
crisis, ranking 36th among American cities in foreclosure rates
in 2007 with over 15,000 filings, a 58 percent increase over
2006.
And like most communities in the Nation, the Federal
housing resources available in St. Louis don't come close to
meeting the need. Thanks to 8 years of this Administration, and
an assault on the HUD budget, only one out of four households
eligible for Federal housing assistance actually receives it.
Here this means that there are over 4,000 eligible families on
the waiting list for public housing and over 5,000 eligible
families await housing choice vouchers.
Similarly, the City has had to make due with less in terms
of CDBG and HOME dollars over the past few fiscal years, again
due to this Administration's concerted efforts to cut these
programs, efforts we in Congress manage largely, but not
entirely, to defeat. As a consequence, the City's home
allocation in Fiscal Year 2008 of $4.1 million is nearly
$600,000 less than it received in Fiscal Year 2004, and the
City's CDBG allocation of $19.6 million is nearly $5.5 million
below its funding level 4 years ago.
That is why it is especially critical for the City to spend
these monies wisely, and it is equally important for us as
Members of Congress to fight to maintain, and perhaps one day
under new a situation we will actually increase, appropriations
for these programs to really understand and influence how the
City is targeting funds to help sustain and revitalize
neighborhoods like those we toured this morning in North St.
Louis.
It is also essential that we acknowledge and learn from the
often troubling history of prior initiatives to energize the
urban core of America's great cities. I can tell you that even
though I hail from here, I confess to not knowing a lot about
the Team 4 plan before Mr. Clay approached me about holding
this hearing. Indeed, I think the title of this hearing may
have set a record of inquiries to my subcommittee staff from
other offices, some wondering if they had missed some hearings
in the past on Teams 1 through 3.
But in learning about it from Mr. Clay, and through the
materials his able staff provided, it became clear to me that
this was another instance of the song titled, ``Been a little
bit different,'' but the tune remained the same. When it comes
to locating the bad stuff like pollution-generating factories
or clearing out housing and breaking apart communities to make
room for a highway, poor and predominantly minority
neighborhoods have always seemed to get more than our share,
but when it comes to resources like good transportation,
affordable housing, and access to credit and key public
services, somehow it has been historically difficult to get
what is needed and what is deserved. Indeed, too often we are
intentionally ignored and locked out.
I want to know more about Team 4 and I want to know whether
or not there has been an informal implementation of Team 4,
because we hear that has not been a formal implementation, but
I am very interested to know whether or not the kind of
thinking that went into Team 4, in fact, is seen in what we saw
on the tour today in North St. Louis.
I look forward today to hearing about better ways to go
about our oversight. That has certainly been a priority for me
in my own district, but it brings a new set of challenges.
Right now, for example, I face daily the question of how to
bring in large scale businesses that want to explore the
underserved markets and poor sections of South Los Angeles
while ensuring that those businesses bring us good jobs as well
as low prices and do not crowd out our local small
businessowners.
I know we have two panels of real experts on such
questions, and I look forward to hearing from both panels. And
with that, I will recognize now St. Louis' own, my colleague
and good friend, Congressman Clay, for his opening statement.
Mr. Clay. Thank you so much, Chairwoman Waters, and let me
thank you for bringing the Subcommittee on Housing and
Community Opportunity to St. Louis today to consider this
important issue. Thank you for coming to my hometown, and
welcome back to your hometown.
I want to also thank my colleague from Texas, Al Green, for
his attendance at today's hearing. And he is a star. If you
ever--for you C-SPAN junkies, you will find him at every
hearing before the Financial Services Committee, and we
appreciate his diligence. We appreciate his commitment to
helping turn this country around. So thank you, Mr. Green, for
being here.
Mr. Green. Thank you.
Mr. Clay. Good morning and greetings to all of the
witnesses and the members of the St. Louis community who are
here today. I want to acknowledge the staff from the
Subcommittee on Housing and Community Opportunity, as well as
staffers from my office here in the District, as well as those
who came here from Washington D.C. Thank you all for preparing
for this hearing and for all of the hard work you have put in
today.
We completed a bus tour this morning around parts of the
First Congressional District, and that long suffering--this
part of the District has long suffered from many development-
related errors. Large sites like the abandoned Pruitt-Igoe
housing projects and the old Carter Carburetor site on North
Grand have not received the proper attention from either the
government or the private sector.
And, you know, growing up in this community, I remember
this site. I remember Dr. King Drive being such a robust retail
and commerce section. So that's--you know, you can never go
back to the past, but you certainly can reflect on that and
remember what the potential is for this community.
Neighborhoods have experienced major economic development and
housing decay steadily over the past 30 years and in some
instances even longer than that.
In the hearing this afternoon, we cannot place blame on a
single person or government agency or even groups or
individuals in government and government agencies. I mean, we
are not here to play ``gotcha'' or the blame game today. What
we can do today is listen to how we are supposed to attack
these problems. We can listen to how citizens feel underserved
by past policies, but most importantly, I hope we listen to new
ideas and solutions and really try and figure out not so much
what has gone wrong but figure out our respective roles in
being part of real conclusions that benefit our constituents
and fellow citizens' needs. And I hope that everyone is looking
forward to today's hearing and this discussion with that
perspective.
Madam Chairwoman, I thank you very much again for
conducting this hearing and I yield back.
Chairwoman Waters. Thank you very much. Now we will hear
from Representative Al Green for his opening statement.
Mr. Green. Thank you, Madam Chairwoman. And I thank
Representative Clay whom I will say more about in just a
moment, but I especially thank the chairwoman. It was stated
that she is one of the hardest working persons in Congress, and
I am proud to tell you that it is said that the Congressional
Black Caucus is the conscience of the Congress. And if this is
true, the chairwoman is the conscience of the conscience. She
really deserves an expression of appreciation for what she does
for people all over the country.
I am so honored to be here with my very good friend and
colleague, Representative Clay, which is an appropriate name
for him because he is somewhat of a sculptor of ideas. He is
very creative. He doesn't think out of the box because he has
never been in the box. See, he comes to us open-minded and
always available to help a colleague with a new idea. I think
that this area is indeed blessed to have him as a
representative and I think he deserves a special thanks.
I'm honored to be in this historic building on what I
perceive to be an historic occasion. I think it's historic
because this may be the first time that Congress has looked
into Team 4. It seems to me that this is long overdue, and if
not for Congressman Clay and a committee chairwoman who saw the
need, we might not be here today. So I'm honored to be in this
historic building on this historic occasion, and I trust that
our results will be historic as well, because while plans are
not always codified and put into motion, we have to find out
whether there's an informal process of putting into motion
policies that can work to the detriment of communities.
We want to make sure tax dollars are fairly allocated and
that taxpayers get a fair amount of their tax dollars returned
to their community. It is my belief that we sleep in houses and
we live in neighborhoods. I went through your neighborhoods on
the north side today, and I'm concerned about where you live.
And I'm honored to be here with my colleagues to hear from this
august panel and another so that we can do what we can in the
United States Congress to make a difference. I yield back the
balance of my time.
Chairwoman Waters. Thank you very much. Now we will hear
from our panel. We have a panel of witnesses, the first of
which is Mr. Stanley Gimont, Acting Director, Office of Block
Grant Assistance, U.S. Department of Housing and Urban
Development. And I would ask Congressman Clay to introduce the
other witnesses on this panel.
Mr. Clay. Thank you, Madam Chairwoman. Also on the first
panel, we are joined by a person whom I have known for over 20
years. She has been a fixture in city government, and she is
now the executive director for community development for the
City of St. Louis, Ms. Barbara Geisman. Thank you for being
here today.
Ms. Geisman. Thank you.
Mr. Clay. Also on this list is someone else whom I have
known for 25 years, whose father has been honored with the
naming of this room by--of his father, and he is the Alderman
of the 18th Ward, Alderman Terry Kennedy. Thank you also for
being here.
Mr. Kennedy. Thank you.
Mr. Clay. Thank you very much. I would like to thank all of
you for appearing before the subcommittee today. Without
objection, your written statements will be made a part of the
record, and you will now be recognized for a 5-minute summary
of your testimony, starting with Mr. Gimont.
STATEMENT OF STANLEY GIMONT, ACTING DIRECTOR, OFFICE OF BLOCK
GRANT ASSISTANCE, U.S. DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT
Mr. Gimont. Good morning. My name is Stan Gimont, and I am
pleased to be here in St. Louis on behalf of Secretary Alphonso
Jackson. Thank you, Chairwoman Waters, for scheduling this
field hearing to discuss the Community Development Block Grant
program and the HOME Investment Partnership Program.
Within the Office of Community Planning and Development at
HUD, the Office of Block Grant Assistance is responsible for
administration of the CDBG Program, while the Office of
Affordable Housing Programs manages the HOME Program.
The CDBG Program has been the Federal Government's primary
vehicle for assisting State and local governments in
undertaking the wide range of community development activities
aimed at improving the lives of low- and moderate-income
families. Since its inception in 1974, more than $123 billion
has been appropriated for the CDBG Program. These funds provide
a ready source of funding for housing rehabilitation, public
services, infrastructure, and economic development activities.
The President's Fiscal Year 2009 budget proposes a State
funding level of $3 billion for CDBG with the recognition that
the Program's impact has become diffused over time. An
additional $1.9 billion is proposed for the HOME Program in FY
2009. Concurrently, the Administration is again proposing CDBG
reform legislation that would improve CDBG's ability to target
funding to community development needs and demonstrate results.
These revisions address the CDBG formula, implementation of
the CDBG challenge grant, consolidation of duplicative
programs. and improved performance measurement requirements
that will enable HUD and its grantees to demonstrate the
benefits of the CDBG program.
One of the distinguishing features of both the CDBG and
HOME Programs is the importance of local decisionmaking. The
CDBG authorizing statute requires citizen participation in the
development of plans for the use of CDBG funds and enables
local officials to make the final funding decisions. HUD's
focus is on the question of whether the activities funded by
the local government meet applicable requirements with the
particular focus on whether they are eligible for CDBG funding
and meet a CDBG national objective. HUD's monitoring processes
are intended to ensure that the requirements are met by
grantees in the course of administering their CDBG and HOME
Programs.
HUD collects extensive data on the use of CDBG, HOME and
other formula program funds through its Integrated Disbursement
and Information System (IDIS). HUD provides detailed
disbursement information from each CDBG and HOME grantee on its
Web site and aggregates the data to provide a nationwide
snapshot on the uses of the CDBG and HOME funds.
Looking over the past 7 years, we see little change in the
percentage of CDBG funds disbursed nationwide on a year-to-year
basis for activities such as public improvements, housing,
public services, and economic development. Public improvements
represent the largest use of CDBG funds nationally, accounting
for approximately 32 percent of annual disbursements in each of
the past 7 years. The dollar amount associated with these
disbursements is in excess of $1.5 billion annually, and
through IDIS, HUD tracks disbursements for 24 different
categories of public facilities.
With regard to housing, the single largest use of CDBG
funds nationally is for rehabilitation of single residential
units. In FY 2007, more than $582 million or 12.75 percent of
all CDBG funds were disbursed for single family rehab purposes.
This resulted in assistance to more than 117,000 units
nationwide. Since the inception of the HOME Program in 1992, 53
percent of the HOME funds have been spent on rental housing
development, 27 percent to assist new home buyers, and 20
percent for single family rehabilitation. In FY 2007, 28,000
rental units were produced using HOME funds, 29,000 new home
buyers were assisted, and over 11,000 single family homes were
rehabbed to Code.
Economic development is another focus of this hearing, and
over the past several years, CDBG grantees have spent between 8
and 9 percent of their funds annually for economic development
activities, such as financial assistance to for-profit entities
and commercial and industrial infrastructure development. It
should be noted that most economic development activities
funded with CDBG dollars are carried out through the State CDBG
Program. Over the past several years, the CDBG disbursement
pattern for St. Louis is approximately 20 percent on housing
activities, 20 percent for repayment of Section 108 loans, 17
percent for administrative and planning expenses, 15 percent
for economic development activities, and 13 percent for public
services.
Chairwoman Waters. I'm sorry. What did you say the
percentage was for administrative?
Mr. Gimont. 17 percent. Annually, pursuant to the
Appropriations legislation, there is a 20 percent cap.
HUD is pleased with the initial results of the new
performance measurement framework that establishes clear
measurable goals and community progress indicators for our
formula programs. The collaborative effort to develop the
framework stretched over 2 years and involved grantees, public
interest groups and the Office of Management and Budget.
Grantees were requested to begin entering data for all
activities open in IDIS as of October 1, 2006. Fiscal Year 2007
represented the first full year of data from the framework, and
HUD has been reviewing those data with an eye towards improving
our reporting guidance and ultimately enhancing the data that
we receive from our grantees.
I thank you for this opportunity to speak with you about
the CDBG and HOME Programs and I look forward to answering any
questions that you might have.
[The prepared statement of Mr. Gimont can be found on page
63 of the appendix.]
Chairwoman Waters. Thank you very much. Ms. Geisman.
STATEMENT OF BARBARA A. GEISMAN, EXECUTIVE DIRECTOR FOR
COMMUNITY DEVELOPMENT, CITY OF ST. LOUIS, MISSOURI
Ms. Geisman. Thank you. I'm going to turn my computer on,
and would it be a terrible thing if I talked from over there?
Chairwoman Waters. No. Go ahead.
Ms. Geisman. Thank you. Congresswoman and Congressmen,
thank you very, very much for this opportunity to be present
today. As Congressman Clay said, I am Mayor Slay's director for
community development, and I am in charge of monitoring the
agencies that work with the Community Development Projects.
First, I want to say that I am extremely pleased that you
have given me the opportunity to talk today, and also I hope to
learn something from all you other panelists, and I hope that
if I ever get my computer working, you will learn from me.
The first thing I want to say is that the Team 4 report is
3 decades old and that I was in college when it was written. I
have never read it and I don't know anybody else who has ever
read it, and it really isn't relevant to anything that we have
been doing for the past 7 years.
First of all, Mayor Slay has been in office since 2001, and
what I'd like to do is just take a little bit to tell you about
where we were in 2001 and where we are today. St. Louis is a
city not within a county. It is landlocked by its 1876
boundaries of 62 square miles, and we have no way to annex
other geographic areas, as some other cities do.
We were continuing to lose jobs and businesses, continuing
to lose people, and we have lost more than 60 percent of our
population since 1950. In 1950, we had 850,000 people, and over
the last 5 decades, that has shrunk to approximately 350,000
people, or 60 percent of the population. And, as you might
imagine, the fleeing population left behind wholesale
abandonment of residences and business property, particularly
in North St. Louis, and when property came up for sale, there
was no one who wanted to buy it. There was no internal or
external confidence in the City's ability to make progress and
very little help.
In 2001, we established a series of goals. Those involved
making the City a place where people affirmatively choose to
live, choose to work, value physical diversity and, most
importantly, value cultural diversity. We are working to
rebuild the market for real estate throughout the City so that
when a property comes up for sale, there is someone there to
buy it and it does not get abandoned. We are working to retain
and attract businesses, to rebuild our tax base, and to improve
housing quality for our low- and moderate-income residents and
our special needs residents all across the City.
Some of the strategies that we employed--and I could give
more detail if there was more time--were to provide clear
direction. One of the first things we did when Mayor Slay took
office was to do the City's first land use plan since 1947. We
did this in partnership with each of our 28 Aldermen and
identified throughout the City areas where we wanted to
encourage new development, areas where we wanted to preserve
the physical assets that were there, and areas where we did not
quite know yet what we wanted to do but there were
opportunities for new stuff.
We wanted to capitalize on the City's unique historic
properties, and to that end, we have been making more historic
districts all across the City. We wanted to identify and build
critical mass from neighborhood and City anchors, preserve and
grow the City's revenue base, provide a wide variety of housing
opportunities--affordable, luxury, rental, homeownership,
historic, new construction, and single and multi-family.
We also--and this is a very important part of our
strategy--as Chairwoman Waters mentioned, the block grant money
has been strengthening, so we needed to expand the pool of
incentives that we could use to augment scarce block grant and
HOME funds. Federal and State historic tax credits, State
Brownfields tax credits, tax increment financing, special
Federal grants, low-income housing tax credits, and the City's
own Affordable Housing Trust Fund are the tools that we have
been using to make progress.
We also want to make more neighborhoods eligible for these
incentives, like historic districts, so that we can save the
scarce block grant and HOME funds for neighborhoods where they
are necessary because the market does not exist anymore. We
want to leverage private dollars, and a key component of our
strategy is teamwork with the City's 28 aldermen whom we
consider our very important partners in Mayor Slay's drive to
make St. Louis a great city again.
Now, after 7 years, the City's population is growing again
for the first time in 50 years. We have produced, in
partnership with our aldermen, 26,000 new and substantially
rehabilitated housing units, and that is approximately 15
percent of the housing stock, 176,000 units that existed at the
time of the Census. We have stabilized our job base at 220,000.
Our revenues are growing. Vacant buildings are declining, and
development is occurring throughout the City.
We have 12 wards that are led by African Americans. These
wards include approximately 41 percent of the City's
population, 47 percent of the City's land area, 55 percent of
the City's low- and moderate-income population, and 54 percent
of the City's population in poverty. It's also important to
note that the City's African-American population is now
scattered throughout the City and, according to a study by the
University of Wisconsin, we are one of the most integrated
cities in the country on a block-by-block basis. We have
focused in this presentation on the wards that are led by
African Americans because there was a short timeframe to do
this and because we have been working closely with them to make
progress.
An average of 59.3 percent of the combined HOME and block
grant funds used in specific geographic areas was used in wards
led by African-American aldermen, then that percentage was 69.4
percent in 2007. I have some more stats here, but I won't take
the time to go through them.
I will tell you, however, that an average of 64.3 percent
of our dollars that are allocated for housing production went
to wards led by African Americans, and that grew to 68.6
percent in what we budgeted for 2008. In these wards, there has
been $1.7 billion in physical investment, according to the
City's building permit records, over the last 7 years, and
8,200 new and substantially rehabilitated homes. That
investment is throughout--there is investment throughout the
north side in the City, and it's growing north and south from
the central corridor because the central corridor is the
anchor--the primary anchor from which we grow.
I also want to point out that less than half of 1 percent
of our block grant funds were spent downtown in the last 7
years. It was approximately a half-a-million dollars, and these
went for loans to start up new businesses. We have, you know,
almost exclusively reserved our block grant funds for use in
neighborhoods.
And in the top ten wards for investment in the last 7
years, 6 of those 10 wards are led by African Americans. We
believe that those facts and figures show that we have made a
lot of progress, both in North St. Louis and throughout the
City, but as you saw on your tour this morning, we know we have
a long way to go, particularly in the most distressed parts of
North St. Louis. That is why we have been working closely in
partnership with the City's African-American aldermen to
identify major residential development initiatives, to develop
a 5-year plan to fund those initiatives and to focus our block
grant and HOME money and other limited cash incentives on
projects of sufficient scale to engender long-term
revitalization.
These projects involve $141 million in residential
development to produce 350 homes, using $54 million from a
variety of incentive mechanisms, HOME and block grants
certainly, but also the Affordable Housing Trust Fund, capital
improvement sales tax money, City demolition and parks money
and a variety of other incentives. And our goal is to produce a
major project in each of the City's wards.
We also have--and I have a list of them in my handout that
the Congressmen have--a number of other initiatives.
And the final point that I want to make is that all of this
revitalization, particularly in the most distressed
neighborhoods, is expensive, and if we had more block grant and
HOME funds, we could certainly do a lot more. As Congresswoman
Waters pointed out, our block grant funding since 2001 has
dropped 30 percent and we lost $2.2 million--
Chairwoman Waters. Your time is up. Thank you very much.
Ms. Geisman. Thank you.
[The prepared statement of Ms. Geisman can be found on page
44 of the appendix.]
Chairwoman Waters. We will move on. Alderman Kennedy.
STATEMENT OF THE HONORABLE TERRY KENNEDY, ALDERMAN, 18th WARD,
ST. LOUIS BOARD OF ALDERMEN
Mr. Kennedy. Thank you, Madam Chairwoman, and members of
the subcommittee. You know, I'm also the chairman of the
African-American caucus, and on behalf of that caucus, we
welcome you here. This is an historic occasion, and we are
happy to be here. We have a number of our members also out in
the audience.
It is difficult to talk about the expenditures of money
without talking about the culture from which it emanates. The
story is that St. Louis is in the Midwest. We must keep in mind
that if it is, it is one of the few Midwestern cities that had
slavery. That gives you some notion of the culture that is
here, my point being that St. Louis has a history of the
illness that has also affected other portions of this country
that, in my opinion, has yet to be either fully diagnosed or
remedied, this illness that says one person is less than
another or that one person deserves less than another and the
same illness that causes people to oppress one and not the
other. Frederick Douglas said if you put a chain on one person,
the other side of that chain is on the person who chained them.
Ultimately this kind of oppression and discrimination hurts
everyone, those who are the victims as well as the ones who are
applying the victimization.
In that context grew the Team 4 plan. We are taught that
this plan developed around 1974. For me it is history. For some
of the other aldermen who are here it is memory. They were in
office at the time that the plan was created. You must
recognize the context. At that particular time St. Louis was
losing population. Its height of population around 1950 was
around 900,000 people; by 1970, it was around 700,000. Its
African-American community was growing. Its poor underclass was
also growing. That population primarily resided in North St.
Louis, the white population primarily in South St. Louis. The
central corridor itself primarily held the major institutions,
businesses, and factories throughout the City. This is a
corridor that runs straight through the middle of the City.
You'll find your major universities there; Washington
University, St. Louis University; your major hospitals;
downtown St. Louis; the Central West End, and it extends all
the way out to Clayton to the county. They call it the east/
west corridor, the central corridor.
The Team 4 plan grew out of that time period of the change
in population, as well as the context of the Civil Rights
movement, the growing black cultural movement, the women's
movement, and the anti-war movement. Out of all of that, grew
this Team 4 plan in 1974. It basically put forth that the City,
in terms of its development, should categorize itself in three
major portions: conservation; redevelopment; and in transition.
The conservation area was to receive a significant amount
of Federal dollars for development, as well as concentrated
City services. The areas that they say were for redevelopment
were areas that were essential not only to the City but
possibly to the region, and that area also deserved, in the
opinion of public Team 4 plan, to be--to receive a significant
amount of dollars and concentrated City services. The area that
was called conservation itself was a relatively stable area
from good to, in some cases, very excellent housing. The area
that was considered for redevelopment, primarily the central
corridor, did require some work, but it still had good housing
stock.
And then the area in transition was primarily the area
where African Americans found themselves, and that was in North
St. Louis. The notion for that area is that the land would be
able to--the area basically would be allowed to die.
City services would be somewhat relaxed, and the response
time would not be as great as other parts of the City. And then
ultimately the notion would be that people would move and the
land would be banked for future endeavors or future
development.
Though the City--now, you can imagine that in 1974 with the
activity and all the kinds of movements that were going on at
that time that when people heard this, it created a fire storm,
certainly it did. Elected officials, people in the community
all raised up against it. The City at that time did not
officially adopt this plan; however, if you put it in the
context of the culture of the mentality of the City, then of
course you can recognize that it became a natural step for many
to continue in that direction.
Recognizing that is not an indictment on any one
individual, I'm trying to put it in the context so that we
recognize that even the ones who may be implementing this are
also suffering. They suffer in that this kind of
discrimination, in my opinion, limits everybody. To think about
discriminating against another is a limiting act.
You carry that and you limit yourself. We all suffer from
it. And I believe that St. Louis is suffering from that.
Ultimately, it has seen what we see today, large tracts of
land that are in North St. Louis.
The central corridor down through the years has received
significant amount of monies for development. The north side
has not seen that. And South St. Louis for the greater part has
seen the stabilizing kinds of actions.
Now, even if you could statistically prove that was not the
case, the negotiation of Team 4 itself is still this specter in
the minds of people, and that itself can cause the kind of
distrust that you can presently feel in the City of St. Louis.
I have to put it also in this context, because St. Louis,
though it was a city in a State, Missouri State, that had
slavery, it did not, in my opinion, benefit from the
reconstruction that other parts of the United States in the
South received when the North occupied and reconstructed the
economic and political systems. So the South did have its
problems. I mean, even the St. Louis Police Department has been
controlled by the State since 1861 when the war broke out.
Again I'm just trying to put it in the context of understanding
how these dollars have been spent and why they have gone in
those directions, and therefore when you traveled in those
areas, you saw the result of that.
That is not an indictment of this particular
Administration; it is the culture, in my opinion, that also it
emanates out of that we also must address. That is more
difficult, but certainly legislation, very solid legislation,
can begin to address it.
There are certainly more monies that are needed. We're
beginning a dialogue in a way that we have not had a dialogue
before, even with the present Administration, that we're
feeling is moving to some benefit, but if we're going to
ultimately end this specter, then the whole thing, in your
opinion, needs to be reorganized and significant amounts of
dollars, not just portions of the block grant but major
portions, if not the entire piece, comes into the areas of the
greatest in need. These are the areas that generate the
dollars. These are where the dollars should be directed. Thank
you.
[The prepared statement of Mr. Kennedy can be found on page
69 of the appendix.]
Chairwoman Waters. Thank you very much. I would like to now
begin our question and answer period. I had organized a few
questions based on the voluminous material that I had reviewed,
but since hearing your testimony, I think I'm going to reduce
these rather academic questions to some very pointed ones,
recognizing that our colleague here, Mr. Clay, has set the tone
by saying we're not out to blame anybody, that we're here to
see what we can do about finding out how resources are
allocated and how we can better plan, if that's a need.
Let me ask Ms. Geisman, why has the Pruitt-Igoe site been
left undeveloped and basically in the middle of the City in
ruins and, as I understand it, become a dumping site and even
have animals that are there? Why hasn't something been done
with that?
Ms. Geisman. The Pruitt-Igoe site--I believe Pruitt-Igoe
was demolished in the late 1960's, early 1970's, and through
the years--and, again, you know, this has gone on for a really
long time--it has become a repository for people in the middle
of the night dumping--
Chairwoman Waters. We know all of that. What is the plan?
Ms. Geisman. The environmental clean-up cost is in the
neighborhood of $15- to $30 million. So the St. Louis
Development Corporation, Otis Williams and Rodney Crim, whom I
believe some of you met, have been working over the last 5 or 6
years on getting a handle on what the environmental conditions
on that site are, because it's 33 acres, there is a whole bunch
of different stuff scattered all over it, and once that
characterization is complete, we could begin to figure out what
we can do to reuse it.
Chairwoman Waters. So you don't have any real concrete
plans?
Ms. Geisman. No.
Chairwoman Waters. At this time?
Ms. Geisman. No.
Chairwoman Waters. No identification of resources or
dollars, not even an assessment of the property to talk about
what the clean-up really, really should be? It's just sitting
there, as it has been for the past 30 years or so.
Ms. Geisman. Yes. And I'm sure you all know, there are
different clean-up standards for different uses. That's why I
gave the range of $15- to $30 million. I think we believe that
the best use of the site would be a commercial use that would
produce jobs and not require the--
Chairwoman Waters. What about the Carter Carburetor site?
Ms. Geisman. Carter Carburetor is another problem, and let
me take a second to explain that. Carter Carburetor was a
building that was sold to a private, quote, ``re-developer''
probably about 15 years ago. That private re-developer took a
backhoe and broke up all the electrical transformers, which
were PCB transformers at the time. He dragged that stuff all
over not just the building but over the acreage adjacent to it,
and Otis and Rodney have been working again diligently for 5
years with the EPA and with the previous owner of that
property, ACF, Carl Icahn's company, to clean up the site.
Chairwoman Waters. Did anybody file a lawsuit?
Ms. Geisman. I think the--it's a Superfund site, so it's in
the EPA's hands, and we are just attempting to cooperate with
the EPA. The problem is--and I think finally he might be ready
to do so--the guy who owns it won't let the EPA and the, you
know, ACF people who do have money on the site to clean it up.
So--
Chairwoman Waters. Am I left to believe that the City of
St. Louis does not have the ability, the authority, the
wherewithal to confront that kind of resistance?
Ms. Geisman. One thing that has changed recently is that
the gentleman was way behind in his property taxes, and we had
been encouraging the former collector of revenue to file a tax
suit on him for a number of years. The new collector of
revenue, when he got elected, was ready to jump on that, but
then the guy magically came up with the tax payment. So--
Chairwoman Waters. So someone who has been sitting on such
a property in the middle of the City has been able to outfox,
outsmart, and elude all of the smart people in the City?
Ms. Geisman. Unfortunately, that is correct.
Chairwoman Waters. Mr. Gimont, I know that you attempted to
describe HUD's responsibility and you attempted to make it
clear that the decisions are made locally and that you have
only limited authority to put the money out there, etc., but I
want to make sure that we understand what you're saying,
because this oversight committee is taking a look at CDBG
management and the relationship to the Feds, to the cities, to
see what we may be able to do in the future. Would you quickly
tell me what you think is your responsibility for the
management of CDBG funds in the City?
Mr. Gimont. First off, HUD's primary responsibility on the
front end is to ensure the equitable distribution of money to
the local governments pursuant to the statutory formula, so the
distributions to the local government are driven by that
formula which is written into the law. Once we notify the
grantees as to what their allocations are, they go through
their annual planning processes to identify on a 3- to 5-year
period the broad uses that they would like to achieve with
those funds and then they file an annual update to that, an
action plan, which gives a little bit more specificity with
regard to the activities--
Chairwoman Waters. Are you familiar with St. Louis' plan?
Mr. Gimont. Personally I am not, but I do have with me Ms.
Deanne Ducote, who is our CPD director here in our St. Louis
office, and I would like to direct any question to her, if I
might, with regard to specifics on the St. Louis plan.
Chairwoman Waters. All right. I'm going to hold off on
that, because I want my colleagues to have an opportunity to
get their questions in, but I'm going to go to Mr. Kennedy.
I thank you for the historical background and for putting
it in a context that may help us to understand that it just may
be in some instances benign neglect. Knowing what you know and
us having seen what we have seen and understanding what some of
the problems are as they have been identified; diminishing
population, of course never enough resources, etc., do you
think that the resources of CDBG and HOME, Section 108 and
other kinds of Federal programs have been spent adequately and
equitably?
Mr. Kennedy. No. In the City of St. Louis, no.
Chairwoman Waters. In the City of St. Louis?
Mr. Kennedy. No. No. It primarily went--as I said, again,
though the Team 4 plan was not adopted, the money still
followed that kind of pattern.
Chairwoman Waters. Does that have anything to do with the
so-called initiatives of my past colleague, Mr. Gephardt?
Mr. Kennedy. Yes.
Chairwoman Waters. And his colleague at the time, as they
talked about, development of the south side.
Mr. Kennedy. Yes.
Chairwoman Waters. Would we be able to track that, the
resources of these programs being directed--
Mr. Kennedy. Yes.
Chairwoman Waters. --to the south side over a period of
time over--
Mr. Kennedy. Yes, you should be able to. Now, that is not
to say that according to the guidelines that they did not all
qualify, my point being that those were not the areas of the
greatest need. And that can be a significant difference. They
might have qualified, but were they areas that needed the
greatest input of dollars? No.
Chairwoman Waters. Then in your estimation, is the input of
the aldermen such that between the aldermen and the public do
you have the opportunity to take a look at and be a part of the
plan for the expenditure, for example, of CDBG and to make sure
that the plan that emerges is paying attention to all parts of
the City? How does that work here?
Mr. Kennedy. Well, here primarily we generally--the process
is that we propose projects. And, of course, to have a project,
you need to have a developer. And that's part of the problem in
our areas, having those with the capacity to be able to do the
projects. And when you've had a--a community of years of
disenfranchisement, you have to build that capacity. So that's
one problem.
So we basically go in and we propose projects and we
negotiate whether or not we can get those funded. That has been
since I've been in office since 1989.
Chairwoman Waters. Whom do you negotiate with?
Mr. Kennedy. We negotiate with the Mayor's office and their
representatives.
Chairwoman Waters. So does the process go through the Board
of Aldermen and subcommittees hear it and the community
proposes projects that could end up before some committee or
subcommittee? Does the Mayor have the ultimate say on these? I
mean, how does it work?
Mr. Kennedy. Well, you have--in anything here, you have to
have 15 votes to get it passed. It does have to come through
the Board of Alderman. And so then it's a matter of garnering
those votes. Now, we are, in terms of the African-American
community, out of 28 alderpeople and a president, 29
individuals, we are 12, so we do not have the majority. And
that has been the case down through the years. There have been
even less aldermen in earlier years.
Chairwoman Waters. The votes go on racial lines.
Mr. Kennedy. Oftentimes, yes. Because, again, if you keep
it in the context of the history and the culture, then you can
understand that usually being the case. We go in, we propose
projects if we have them. That means we have to have a
developer with the capacity to do it. If you're able to do that
and garner that, then you go in and negotiate on those
particular projects in relationship to the other projects and
then we try to get that passed. It is a relatively very
politicized process. Depending upon who is in office at a given
time, they may or may not want to hear what you have to say,
whether you have someone there or not. And unfortunately the
way the guidelines are written it does allow for that, you
know, at this kind of level. So there may be some other things
to be proposed at that point.
Which brings me to the point that, again, these other
projects may have qualified, but they are not the areas with
the greatest need.
Chairwoman Waters. Thank you very much. Mr. Clay.
Mr. Clay. Thank you so much, Madam Chairwoman. Let me start
with Mr. Gimont and Ms. Geisman, and Mr. Kennedy can respond
also. We understand that St. Louis is presently under
investigation from HUD because a recent audit showed that the
City has misspent CDBG funds. The allegation is that the City
lent block grant funds to businesses that should in turn hire
low- and moderate-income residents. These businesses did not
hire the low- and moderate-income residents. This is an example
of the types of local decisionmaking that is so disturbing to
so many residents. Can you explain how this can happen and what
are you going to do to turn that around? Let's start with you,
Mr. Gimont.
Mr. Gimont. Certainly. The audit that you speak of was done
by the Department's Office of Inspector General, I believe, and
they went out and did their audit and turned that back over to
the Office of Community Planning and Development here in our
St. Louis office for further resolution. CPD goes out and
monitors grantees periodically with regard to the activities
that they have carried out.
Again, on the front end we are looking to see that what
they are proposing is permissible, then we go out on the back
end and monitor for compliance. And the Inspector General steps
in wherever they feel that they have a role to play or that
there's an issue for them to investigate. I know that our CPD
staff here in St. Louis have been reviewing these issues with
the City in an effort to try and resolve the outstanding
findings on the City's economic development program. We give
the grantee the opportunity to present information which would
explain the findings of the audit, and then we work with the
Inspector General to resolve the issues.
If we find that what the Inspector General has come up with
is sustainable and that there is no support for the activity in
the sense of the national objectives, that the jobs were not
created, then we are in a position to take a range of sanctions
against the City for that shortcoming.
Mr. Clay. And in this case, how do you remedy this? I mean,
do you do it in the next cycle of CDBG funding where they have
to also offset what damage was done initially.
Mr. Gimont. Again, we have a range of sanctions that we can
go to, depending on the nature of the infraction. In some
cases, we require the grantee to put in place better processes
and procedures. In other cases, we would require the grantee to
reimburse its line of credit for the cost of activities that
did not meet the programatic requirements. We have not reached
the point yet with that audit as to what we are going to do.
Mr. Clay. Okay. Ms. Geisman, what's going to happen?
Ms. Geisman. First of all, I believe that the audit--I'm
not quite sure what the exact language was, but the issue was
that the St. Louis Development Corporation did not have
adequate records to document the job creation, or job retention
as the case may be. Since the time of the audit, SLDC's staff
has gone back and collected all of the records from all of the
businesses that are still in business.
Several of the businesses actually went out of business,
and so there may be one or two where the records could not be
collected.
So I think that then the other thing we did immediately,
even while the audit was going on, is put a new system in place
and hire new staff to make sure that the records were
maintained in the future, because I for one was thoroughly
disgusted that, you know, maybe you can't make a business stay
in business, but you can certainly keep the records that you're
supposed to keep. So we now have a whole new system, whole new
people monitoring it, and we collected all the records that we
could from the previous businesses. And I think that we have
responded through HUD's--
Mr. Clay. Well, wait a minute, now. You understand that
there has been some damage caused here because the jobs were
not created?
Ms. Geisman. Yes, they were.
Mr. Clay. The lower- and moderate-income people did not
receive that employment opportunity--
Ms. Geisman. They were created in accordance with HUD's
regulations.
Mr. Clay. Wait a minute, now. That's not what happened
here. You said the companies went out of business, so there
weren't jobs created there. You said that your recordkeeping
was not good, so you cannot document the creation of those
jobs. Now, understand that there has been damage done here.
People did not get those economic opportunities like the
law required and like we assumed, we the Federal Government and
HUD assumed, so going forward, the City should make the extra
effort to actually create those economic opportunities, create
those jobs based on every $50,000 of CDBG funding that you give
in the form of a loan to a company. Would you all go forward
and do that and make up for the jobs you didn't create in the
previous cycle.
Ms. Geisman. I think we did document that we created at
least one job for every--
Mr. Clay. Well, wait a minute, now. Hold on. That's not
what happened. I know you have your local person here, but it
didn't happen. It didn't happen like that, Ms. Geisman.
Ms. Geisman. We documented it after the fact, though, which
was a problem--
Mr. Clay. But you didn't create the jobs. If the company
closed, you didn't get the job anyway.
You know? It didn't happen like that. You have to realize
that you have to move forward and you have to be sincere about
what these dollars are for, that they are there to create
economic opportunities for the low- and moderate-income
citizens that we all represent. And we have to move forward and
you have to tie that funding to actually creating those jobs.
If you're going to have this loan program, it has to be done
this way.
Ms. Geisman. And we understand that and are doing it.
Mr. Clay. Let me go to Alderman Kennedy. According to Ms.
Geisman, the issues raised by the team for the plan are not
relevant. Can you give the subcommittee another perspective?
Have development policies treated all sections of the City
equally and does North St. Louis receive the same attention as
other sections of the City?
Mr. Kennedy. That's your question?
Mr. Clay. That is the question.
Mr. Kennedy. Again the answer is no, from our opinion. My
comments also included some of the thoughts and ideas from
other members of our caucus, so I was not just speaking from my
thoughts. No, we do not feel that those dollars have been spent
adequately. We feel that North St. Louis is the area of the
greatest need. Now, that has been since the Team 4 plan and
before, and it is--the Team 4 plan did not create the notion of
moving blocks and blocks of people of color. I mean, the City--
that had been done before then with Mill Creek. That was before
Team 4. So this notion existed before Team 4. Team 4 simply put
it in more modern terms in 1974, a document that was created by
a group of consultants that spelled out those specific three
areas. No. In our opinion, the dollars have followed the intent
of that plan, and therefore the bulk of that money went in the
central corridor and south.
Mr. Clay. I have another question, Madam Chairwoman, for
Ms. Geisman. You say that the Carter Carburetor site would cost
$15- to $30 million in clean-up cost. When you look at that
site in the City, I cannot find a similar site in any other
part of the City. I wouldn't find it in the Skinker-DeBaliviere
neighborhood. I wouldn't find it on the Gravois Boulevard. I
wouldn't find it in any other part of the City. And if it were
in another part of the City, it would be a major undertaking by
the City Government, and I think that the Carter Carburetor
site should be a major undertaking by this government and by
this community. Do you agree with that?
Ms. Geisman. I do.
Mr. Clay. Okay. And then we will now direct your resources
to tackle that issue, like Ms. Waters said, that we may need to
consider a lawsuit.
Ms. Geisman. Well, let's see. On Carter Carburetor, I do
not know what the cost to clean that up is. Pruitt-Igoe was the
one--
Mr. Clay. Well, you said $15- to $30 million.
Ms. Geisman. Yes.
Mr. Clay. Okay. Let me ask you one other thing about the
LRA property. You talk about access to property and how easy it
is for residents to buy or lease this property. When we rode
through North St. Louis--you have been there, too, and you have
seen these huge squabs of vacant lots and boarded-up buildings.
You know that LRA owns quite a bit of that property.
Ms. Geisman. Yes, they do.
Mr. Clay. How easy is it for residents of the surrounding
community to actually purchase those lots, to purchase that
property, or even to lease it? I know you do long-term leases,
too. How easy is it for my constituents to actually come down
to your office and to say, I want to purchase this lot? What
happens? What is the process?
Ms. Geisman. It is very easy for any owner to purchase a
side lot next to their home where they live that is not part of
something that we consider a development site. Ideally what we
want is for the abandoned areas of North St. Louis to be
rebuilt with new homes. In those instances where it is part of
a development site, then we will give the owner/occupant who
lives next door a garden lease on a year-to-year basis so they
have total control of the property until and unless there's a
development that comes along.
Mr. Clay. What is the timespan--
Ms. Geisman. The timespan of that should be 45 days.
Mr. Clay. 45 days, all right. Madam Chairwoman, I yield
back.
Chairwoman Waters. Thank you very much. Mr. Green.
Mr. Green. Thank you, Madam Chairwoman. And I thank the
witnesses for the testimony. Let me start with a commentary. We
live in a world where it is not enough for things to be right;
they must also look right.
And it doesn't look right--even if it is right, it doesn't
look right for a Team 4 plan to surface and for us to say that
it has not been adopted but to see all of the evidence of its
adoption. There's something wrong. I have some grave concerns
that I cannot go into because I'm going to honor the spirit of
this hearing, but we're talking about lives that have been
impacted adversely. Team 4 may not have been adopted, but it
appears that the spirit lives on. It may have died, but that
spirit lives on.
Now, let's talk about Carter Carburetor first. Is it true
that there's a school near this site?
Ms. Geisman. What there is, as far as I know, is the
Herbert Hoover Boys Club.
Mr. Green. Is it true that it is near the site?
Ms. Geisman. That club is across the street from the site.
Mr. Green. Is it true that it is within 100 yards of the
site?
Ms. Geisman. I believe it is.
Mr. Green. Now, is it true that the City has a legal
department?
Ms. Geisman. It is true.
Mr. Green. Is it true that the City's legal department
files lawsuits?
Ms. Geisman. That is true also.
Mr. Green. Is it true or not true that the City's legal
department has filed a lawsuit against Carter Carburetor, given
its juxtaposition to children?
Ms. Geisman. I do not believe that the City has filed a
lawsuit against the owner of the property. Carter Carburetor
has not owned that property for many, many years.
Mr. Green. Is it also true that the City has not petitioned
the Federal Government for clean-up funds?
Ms. Geisman. That is not true. We have been working for at
least 5 years that I know of.
Mr. Green. You mentioned the Superfund.
Ms. Geisman. I'm sorry.
Mr. Green. You mentioned the Superfund.
Ms. Geisman. Yes. The EPA meets with--
Mr. Green. Let me mention another type of petition. What
about something called an earmark? Have you requested an
earmark to help you with this?
Ms. Geisman. I do not believe that we have.
Mr. Green. We have bridges going to nowhere with earmark
backing. It just seems to me that the City would request that
we spend some Federal dollars. And we want the request to come
from you on this type of project.
Let's talk about now the Pruitt-Igoe matter. I hope I'm
pronouncing this correctly, Pruitt-Igoe?
Ms. Geisman. Yes.
Mr. Green. Have you asked the Federal Government to provide
clean-up funds for that project?
Ms. Geisman. I believe that we have received money from the
Federal Government to do the environmental characterization,
which is a process of testing each area of the site and
analyzing what the contaminants are.
Mr. Green. And without a long statement, what is the
timeline on this process?
Ms. Geisman. I would have to check. I don't think that it
should be too long before that's completed, but I don't know.
Mr. Green. Has the City developed a plan for the north
side, a revitalization plan for the north side?
Ms. Geisman. What we have done is develop a plan working
with the aldermen that identifies where we want to keep and
revitalize the existing housing stock and businesses, where we
want to attract new construction of both residential and retail
to support the residential, where we want to do large scale
commercial development to serve the people that live on the
City's north side and where we want to seek opportunities or
seek, you know, creative ideas for what to do with particular
locations that we think have a lot of potential but don't have
any, I guess, directive vision for them yet.
Mr. Green. Does that mean in some other language, perhaps,
that you're kind of working on it?
Ms. Geisman. No. 90 percent of the north side is in a
definitive area where we are working diligently to make
progress. Now, that does not mean that we're going to fix
everything overnight. For example, the North Riverfront area, I
think, provides jobs for a lot of north side residents. There
are many businesses in that area. We are working closely with
the aldermen and alderwomen to revitalize that business area.
Similarly, we are working with Alderman Bosley in the third
ward to revitalize and rehabilitate and use historic tax
credits to redo--
Mr. Green. Permit me to move to Mr. Kennedy before my time
is up. I appreciate your response.
Mr. Kennedy, from your perch, does there appear to be a
revitalization plan for the north side?
Mr. Kennedy. It is in progress. As I said earlier in my
opening remarks, that is a new dialogue that we have begun with
the Mayor's office, that we have worked on for the past several
months. That does not, of course, answer all the decades of
problems before then. So in answer to your question, no, there
is no overall plan for North St. Louis.
Mr. Green. No disrespect to anyone. Let me say this: I love
all of you, not in a romantic sense, but in a sense that I have
a deep abiding affection for you and I care about you as human
beings, so having said that, I think I can make this comment:
In Texas, what you have just said is what we call, ``fixin'
to do.'' Sounds like you fixin' to do something for the last
few months, which is not a long period of time to fix to do,
and it is my hope that we can continue to work with Congressman
Clay, who really has done this community a favor today. I'll
give it back to you, Madam Chairwoman.
Chairwoman Waters. I want to make sure that I have my notes
correct prior to leaving. Ms. Geisman, you have been in City
development for quite some time, not just the past, what, 8
years?
Ms. Geisman. I started out as an architect with the Public
Works Department in 19--
Chairwoman Waters. How many years ago?
Ms. Geisman. --1978. Then I was an architect for the
Community Development Agency for 5 years after that.
Chairwoman Waters. So you know this City pretty well.
Ms. Geisman. I hope so.
Chairwoman Waters. And in knowing the City pretty well, you
are quite familiar with not only the sites we have identified
today as problem sites but all the others.
Ms. Geisman. Yes.
Chairwoman Waters. You know where all of them--
Ms. Geisman. Well, I don't know where all of them are.
Chairwoman Waters. You know and understand the vacant,
boarded-up properties and what has happened over the years, you
know these toxic sites and these abandoned sites, you know all
of this as well as anybody, right?
Ms. Geisman. Probably as well as anybody.
Ms. Waters. Why is it this has only been a conversation for
the past few months?
Ms. Geisman. I don't think it has only been a conversation
for the past 2 months. I think we have been having
conversations with individual aldermen for the past 7 years. It
is only recently that we have been meeting with the African-
American aldermen as a group. Every year before we do our block
grant budget that goes to the Board of Aldermen, I have met
personally with each of the City's 28 aldermen to discuss what
is in that budget for their wards and to discuss initiatives
that they might be pursuing.
Chairwoman Waters. Is it safe to say that given the
aggressiveness maybe of Mr. Gephardt and others and attention
that they have paid to the south side that they have done a
better job, they have gotten more resources, and they have been
able to do the development much better on the south side?
Ms. Geisman. I think that might be true for when the people
were, you know, in office then and in charge of things then,
that may have been true then, but for the past 7 years, it is
certainly not true.
Chairwoman Waters. Certainly not true, meaning that you
have demonstrable achievements that you can point to on the
north side.
Ms. Geisman. Yes. Definitely.
Chairwoman Waters. I'd like to thank you all for your
testimony. Thank you for your patience. Thank you for
attempting to answer our questions. And I'm going to dismiss
this panel, but I'll leave you with this: There are some new
people in charge now, and we have new committee members who
come from communities that were denied and we have the
experiences to bring to Congress in ways that they have not
been brought before. And you'll find that there are children of
slaves and grandchildren of slaves and great great-
grandchildren of slaves who now are going to make some
decisions. And so we would like to share that information with
you because we want you to be in a cooperative mode as we try
and work out these problems. Okay? Thank you very much.
We would like to ask our second panel to come forward.
Let's see. The Chair notes that some Members may have
additional questions for this panel which they may wish to
submit in writing. Without objection, the hearing record will
remain open for 30 days for Members to submit written questions
to these witnesses and to place their responses in the record.
Thank you very much, panel.
I welcome the second panel. And Mr. Clay will be right back
to introduce the second panel. Thank you very much.
Okay. Mr. Clay will introduce our second panel.
Mr. Clay. Thank you, Madam Chairwoman. On our second
distinguished panel, starting off, we have Ms. Jamala Rogers,
who is the chairperson for the Organization of Black Struggle.
She is also a noted journalist. Thank you for being here, Ms.
Rogers.
Second we have, whom you have also met, Mr. Michael Jones,
the senior pastor of Friendly Temple Missionary Baptist Church,
and we have seen some of his development today. Thank you so
much for giving us your Saturday, Pastor Jones. We appreciate
it.
Third we have Mr. John Talmage. John is the president and
CEO of Social Compact, Inc.; he is going on this journey with
us as far as how we find solutions to some of the issues that
impact this community.
Fourth we have Mr. Tom Zuniga, the managing director of DSG
Community Marketing Services, L.L.C., and he went on our bus
tour today with us and he was just--I think he was totally
amazed today. We thank you. Welcome to St. Louis. Thank you for
being here.
Mr. Zuniga. Thank you, Congressman.
Mr. Clay. We look forward to your testimony.
And last, but not least, a young man whom I met a couple of
years ago once he was elected as the Mayor of Cincinnati, Ohio,
the Honorable Mark Mallory. Welcome to St. Louis, Mayor
Mallory.
Mr. Mallory. Thank you.
Mr. Clay. He was also on the tour today. And we look
forward to the entire panel's testimony.
Thank you.
Chairwoman Waters. Thank you very much. And without
objection, your written statements will be made a part of the
record. I'm going to call on each member of the panel for 5
minutes, and normally I would ask the Mayor to speak first--I
think that would be the correct protocol--except, Mr. Mayor, I
would like for you to really wrap it up and tell us about some
of your positive experiences after we hear all of this.
Mr. Mallory. That sounds great.
Chairwoman Waters. So if you don't mind, I would like to
start with Ms. Rogers.
Mr. Mallory. Absolutely.
STATEMENT OF JAMALA ROGERS, CHAIRPERSON, ORGANIZATION FOR BLACK
STRUGGLE
Ms. Rogers. Thank you. Good afternoon. I'd like to thank
the subcommittee for hosting this very, very important hearing
and particularly the office of Congressman Clay for seeing the
importance of it as well. I'd like to also acknowledge that
today is International Women's Day which I think is appropriate
because as we look at the impact, the negative impact, of Team
4 and its policies, it has disproportionately affected women
and children in the Team 4 area.
This has been an intergenerational struggle, in that when I
hear somebody like a young Alderman Kennedy--I worked with his
father around the Team 4. Kennedy was at Howard University in
school, and now he's here dealing with the same issue. The same
holds true for the young Congressman whose father was working
on this initiative at the time, and when I looked at some of
our organizational archives, it was Congressman Clay who sort
of led the charge against Team 4 during that era. So I think
that you have an obligation, Congressman Clay, to continue that
legacy and to really try to bring some remedies to the
situation that the north side has been hemorrhaging since the
Team 4 plan.
And although I agree that some of this was going on prior
to the Team 4, Team 4 certainly attempted to codify some of the
racist and economically unjust housing and economic plans that
we still see today. I find it interesting that the Mayor's
representative of, quote, ``development'' had not read the Team
4 plan, and not only had not read it but had already deemed it
irrelevant. I think that is the kind of arrogance and
insensitivity that we have seen from this administration for
the years that the Mayor has served, and I think you would be--
at least I'm offended by that kind of arrogance and
insensibility. But it gives you a sense of what we have to deal
with here in St. Louis.
I want to add a little bit to what Alderman Kennedy talked
about in terms of giving you some historical context, because,
again, he was away at school; we were right here in the center
of it. I will first start off and talk about the Kerner Report,
which coincidentally celebrated its 40th anniversary last
month. In the Kerner Report, many people thought that was also
a way to acknowledge the kinds of conditions and life, quality
of life, that African Americans had in this country in the
urban cities across the country, and they included chronic
poverty, police violence, high unemployment, poor schools, and
the lack of access to health care, all of those things
aggravated by racism, and true enough, that was also affirmed
in the Kerner Report, but many of us also know that it was a
clearing call for city fathers, particularly those cities where
there was concern about what was going to happen to middle
class--upper middle class white people, that they needed to
understand what was about to happen.
Because the Kerner report basically said that given the
circumstances, and given the circumstances that there's not
going to be very much intervention into these particular
factors, that we can expect more rebellions coming out of the
1960's and they would be even more deadly so that there needed
to some way of disbursing concentrations of black people so
that that would never happen again. So the backdrop really is
the Kerner Report. Several months after that, Dr. Martin Luther
King was assassinated, and we saw the kind of rebellion that
hit the country--the cities across the country.
But the stage was set for Team 4 based on that in 1973 when
you had Mayor Alfonzo Cervantes who was responsible for the
creation of the Land Utilization Authority which later became
one of the greatest and largest landowners in the City of St.
Louis of abandoned buildings. You also had that same year
Alderman Richard Gephardt, at the time alderperson, and John
Roach passing bills that were to demolish several thousand
buildings on the north side but preserve that same number of
buildings on the south side.
Ironically, John Roach then went on to become head of the
City's first community development ABT, and we know what
happened to Congressman Gephardt. So things were pretty much
buzzing around that time. And we also had that there was the
Team 4 plan where a number of developers were asked to look at
all that was going on and come up with a plan.
You also had probably one of the biggest declines in the
City's population from 1970 to 1980, and what we would have
seen if we had followed the trajectory was that the numbers of
African Americans should have been increasing, if we were to
look into the trajectories, at that time. And so we started to
see that that was not going to be the case, and we didn't see
it in the 1980 Census, the 1990 Census, and we certainly didn't
see it in the 2000 Census. And as we know, those kinds of
housing patterns, that kind of population, has a lot to do with
political power that's going to be consolidated in terms of
African Americans.
One thing I would like to correct in terms of what Alderman
Kennedy said is that the initial language for Team 4 was
consecration, redevelopment, but the other piece was depletion.
It wasn't just in transition. And I think that word has some
more negative connotation than ``in transition,'' because that
means you're really going from one place to another, as opposed
to you're going to be left to die.
I have included in my written testimony some very specific
proposals. One is that I think we need to have the Office of
Community Development be a resource to the alderpeople in terms
of actually planning and that there be transparency up and down
through this so that the community knows how those funds are
being spent and how it is going to affect their immediate
community. There are a number of elder citizens who left this
world thinking that somehow they didn't do due diligence as
homeowners when they couldn't get home loans because of red
lines and other kinds of obstacles. So I'd like to see those
kinds of things addressed or given consideration as part of a
continuing effort of this particular panel.
[The prepared statement of Ms. Rogers can be found on page
77 of the appendix.]
Chairwoman Waters. Thank you very much. Mr. Jones?
STATEMENT OF MICHAEL JONES, SENIOR PASTOR, FRIENDLY TEMPLE
MISSIONARY BAPTIST CHURCH
Mr. Jones. Thank you, Chairwoman Waters, Congressman Clay,
and Congressman Green, for this opportunity to discuss our
community development accomplishments for the Temple Missionary
Baptist Church with you. FTMBC is a faith-based organization
committed to leveraging resources and building relationships to
revitalize this community. With the establishment of nonprofit
corporations, development of several properties, coordination
of congregational members, and the collaboration with various
community partners, FTMBC has been able to make a significant
impact on the community it serves.
FTMBC is located in the heart of the inner city of St.
Louis, Missouri. Our surrounding area is characterized as one
of the most deficient areas in the City of St. Louis. We're
located in an area which many of you are all too familiar with
that represents America's disinvested community. Some sobering
statistics include 38 percent unemployment, approximately 23
percent adults and children living below the poverty line,
substandard housing, and many tracts of vacant, abandoned, and
boarded-up homes. And it has been reported by the Census that
there are 8,000 incidents of crime in our area.
But we took the gavel by the hand and determined that we
were not going to leave our community. We had an investment
there and we were made to stay. So we developed our own
outreach community development corporation and developed six
components: Children and youth development; education; health
services; counseling; food and clothing; and affordable
housing. And we also have drug and alcohol programs, homework
assistance, abstinence programs, clothing, financial literacy,
and counseling.
Of all of these, we get very few Federal dollars, if any,
but yet we were determined from a volunteer base, a community
base with partners, to forge a coalition to work.
So we have people volunteering their time from the areas of
counseling, education, law, accounting, carpentry, general
maintenance, child care development, and we have pooled our
resources to make sure that this community will be a viable
community in the future. We serve about 4,000 or more families
within this community. We have 21 affordable housing units that
we have developed on our own. They were dilapidated buildings.
We took our own dollars and renovated these communities, or
these houses--took a 40,000-square-foot building that was left
abandoned and we used our resources, even when the bank did not
want to give us a loan. They told us to demolish it. We took
our resources, got our people in there together. We renovated
it and slid the appraisal on the banker's desk, and they wanted
to give us as much money as we wanted. We told them we didn't
want their money. We renovated it, and at the time of
completion it was worth $5 million, and now they're really
ready to give us the bank. We have done that. We have built a
community center and office space in this building as well.
One of the fortunate things that we did get from the
Federal Government is at least $10 million on the 202 program
that affords us the ability to serve senior citizens within
this community, and we appreciate HUD for that, but in this
disinvested area we have invested at least almost $40 million
worth of value within this community. We want to do more. We
have a plan to build houses. We have a plan to build a
commercial development center, bring businesses back.
We have about 4,000 members who are ready to relocate,
bring their resources in. We have approached the City for
housing. It's on the Board now, if you will. They're planning,
they're talking about it. You've heard some of that discussion
here today. We want to build about 300 to 400 new homes in our
community. We're telling them that we have the members with the
wherewithal to relocate.
We're starting our own school as well so that we can give
some balance to the community. But what we need is we need
acquisition dollars. We need that. We need monies to fill the
gap, if you will, to make it affordable for these families to
relocate. And I just hope that this kind of discussion here
today will enable possibilities of us receiving those dollars,
because who better can manage it than the people who are living
in this community, who have been in this community for over 40-
plus years or more and have shown the ability to develop and to
manage it and have a stake within this community? I appreciate
the opportunity to share and answer any questions that may
follow.
[The prepared statement of Pastor Jones can be found on
page 65 of the appendix.]
Chairwoman Waters. Thank you very much. Mr. Talmage.
STATEMENT OF JOHN TALMAGE, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, SOCIAL COMPACT, INC.
Mr. Talmage. Congresswoman Waters and members of the
subcommittee, thank you very much for this opportunity today.
Let me start with a horrible cliche, and that is that
information is power. It's a cliche we use all the time. We
don't necessarily know what it means all the time, but we use
it. But the corollary of that also is that the lack of
information leads to a void and misinformation can lead to
absolute destruction. And so community developments we have
known to today really have grown from a trajectory of 50 years
of planning that has captured the good and ill will of people,
the prejudices and insights of people, but a lot of the
programs as we know them today started 50 years ago and follow
in this trajectory. So whether it's the war on poverty and
urban renewal where it started to today's downtown development,
there's a continuum there that has to be acknowledged. And I
think that's part of the conversation we're having today.
This is--from a benign point of view, this has led to
misunderstanding of neighborhoods. From a less benign point of
view, if you look at New York City in 1970, the mid 1970's, Los
Angeles in the early 1970's, Detroit, Philadelphia, there were
many plans to decommission parts of cities. Mayor Koch
advocated a plan in 1978 to decommission the South Bronx, to
take it out of commission. And so it wasn't just post-Katrina
New Orleans where we began to hear about decommissioning large
parts of cities; this is something that has been in urban
planning for the last 30 or 40 years.
And so there's a context in urban planning that has
occurred that we have to address.
We at Social Compact come at this from the point of view of
how do we capture accurate information? How do we look for the
missed population? Mayor Villaraigosa in Los Angeles estimates
that the 2000 Census undercounted Los Angeles by 180,000
people. Mayor Booker in Newark estimates that for the last 30
years the undercount of Newark has averaged 19 percent. And our
work, by the time we finish, 30 cities that they did this year,
beginning of next year, we will have expected to have found
3\1/2\ million people missed in low- and moderate-income
neighborhoods in only 30 cities in the United States. Those
3\1/2\ million people and the people who have been counted
represent almost $600 billion unrecognized and recognized
economic income, but $120 billlion of that has just been
unrecognized--$120 billion. That's a market.
In your own district and parts of your district in south
central--in south LA, we have found 52,000 people missed by the
U.S. Census in 2000 and 2000 estimates. In Congressman Green's
district, we found 78,000.
And maybe more importantly than the missed population is
that the households in your district earn 30 percent more than
the U.S. Census documented. That's 40 percent that the site
selectors in Los Angeles or in Charlotte, North Carolina, they
aren't capturing that. And so what maybe you're seeing as a
benign undercount is actually an informational barrier and an
investment barrier to try and address and readdress some of the
disinvestment that has happened over the last 40 years.
To put this in a different way, we don't have a public
policy construction to support this kind of investment. And I
will give you two examples before my 5 minutes runs out.
First, downtown Detroit. No city has taken more body blows
than Detroit. The greater downtown Detroit area has income that
is 51 percent higher than the Census has documented. Putting
that into a market anomaly perspective, there are 22 stores
that count themselves as grocery stores in the greater downtown
Detroit area. None of them are larger than 5,000 square feet,
but they are functioning at $855 a square foot. The
International Council of Shopping Centers says that the average
delta square foot nationwide is $355 a square foot. That's a
$500 spread in downtown Detroit. That's a market. That's a
market for 120,000 square feet of grocery stores. But it's not
just, wouldn't it be nice to have a grocery store, but the
public policy imperatively correlates rates of obesity and
diabetes to the saturation of fast food restaurants and the
lack of access to full-service grocery.
There is a public policy imperative based on research that
states that African-American families live a mile-and-a-half
further from grocery stores than their white counterparts, but
35 percent don't have cars. We have condemned that portion of
the community to poor public health output because we don't
support advanced--a correct type of incentive to build grocery
stores in communities that are disinvested.
In the case of the financial services as well, Santa Ana,
California, a community of about 100,000 people off the
downtown, the Census said the average household income was
$47,000. It is actually $62,000. Not only that, the median home
value is $420,000. Also, 52 percent of the homes are owner-
occupied, but 69 percent of the homes don't have credit
records. How do you have 52 percent of the homes owner-occupied
and 69 percent of the houses don't have credit records.
And it's not that credit records are important just per se.
Your utility deposit is determined often by your credit score.
Your automobile insurance rate is often determined by your
credit score. You can't rent an apartment in Washington, D.C.,
without a credit score. So you're paying a poverty tax for not
having a credit score.
So the fact of the matter is it shouldn't surprise people
this correlation between incidence of crime and alternative
financial services, such as check cashers and payday lenders.
So when we go through North St. Louis as we did today and we
see so many check cashers, so many payday lenders, so few
financial services, so few grocery stores, it's not a matter of
what is the next silver bullet to try to change the
landscaping. Let's just try to fix the numbers so that both
public and private investment can find some way there
appropriately.
And just to conclude on one point--Congressman Clay made a
very, very good point about a Home Depot they wanted to open
there. They said that they told him that they weren't going to
come because of shrinkage. Now, it may surprise everyone here
in the audience that there is no shrinkage in the suburbs. The
fact of the matter is, there is no quantitative evidence that
shows that shrinkage and crime is an investment competitor to a
Home Depot or other big box retailers in communities. In fact,
in our own surveys with the International Council of Shopping
Centers, crime and shrinkage is not even a top indicator for
the site in the community. It's market.
What we have to do with information that we have to be very
careful with is that if you say, I want you in my neighborhood
and I say, oh, you don't have the market for my investment and
you say, yes, I do, then what am I really saying is your
customers don't look like my residents or there are other sort
of things that we have to--information to address.
And so I'm just here to conclude that information is
important. Information is available in U.S. cities and
underserved cities in every one of your congressional
districts, but we just had to create the tools, the adjustment
bridges for investment, the adjustment bridges for information,
to try to make sure that that's not what the barrier to
investment is.
[The prepared statement of Mr. Talmage can be found on page
82 of the appendix.]
Chairwoman Waters. Thank you very much. Mr. Zuniga.
STATEMENT OF TOM ZUNIGA, MANAGING DIRECTOR, DSG COMMUNITY
MARKETING SERVICES LLC
Mr. Zuniga. Madam Chairwoman, Congressman Clay, Congressman
Green, and distinguished staff and members of the Subcommittee
on Housing and Community Opportunity, thank you for this
invitation to offer testimony about innovative strategies and
programs that are needed to bring about important changes in
community development. I would like at the outset to
acknowledge the leadership in community economic development of
this subcommittee's chairperson. I admire and wish to
congratulate you, Congresswoman Maxine Waters, on your
commitment to improving the wellbeing of low-income and
minority communities. Thank you for shining the spotlight on
St. Louis.
I am excited as a professor, as a student of community
development, and as a real estate developer to be part of
today's historic proceedings. In my remarks today, I hope to
encourage local communities to adopt economic development
policies that engage in public/private partnerships that rely
on market information, such as John Talmage has mentioned, to
drive investment in low- to moderate-income communities.
In that regard, I hope to identify strategies and
approaches that seek to rectify mistakes in programs of the
past. I am grateful, by the way, for the relationship that I
have with John Talmage and his staff at Social Compact who have
provided us new possibilities through information for
understanding the incredible market potential and untapped
purchasing power of inner city residents. Social Compact has
truly been a catalyst in infusing new energy and significant
investment to communities. As a former resident of Washington,
D.C., I'd say a former public official who by the way at one
point I had the responsibility for cleaning up Columbia
Heights, I'm very familiar with what has now happened. I know
what has been accomplished in Columbia Heights as a result of
the work of Social Compact.
Let me also, just to put things in perspective, acknowledge
that some of the past practices that we've now kind of heard
about, some of the legislative and regulatory actions that
precede us that may appear wrong-handed, were not always,
underline the word always, willful mistakes. Many of our
predecessors in community development were problem solvers in
search of solutions and answers to problems, in much the same
way we are doing today. The older I get, the more willing I am
to acknowledge that economic development is more art than
science and that smart, well-meaning people in search of
answers arrived at solutions that may have solved some
immediate short-term problems but resulted in unintended
consequences in long-term.
And that's part of what we're dealing with today.
The value of a forum, Madam Chairwoman, is that, like this
that you're having today, is that it enables us to think about
what has gone before us and to reflect on what has worked, what
has not worked, and why. Now, in the past we know we placed
much emphasis on physical development. Oh, we remember the
language; slum clearance, urban renewal, model cities.
Solutions aimed at reversing decline of urban neighborhoods.
The solution to the problem was to remove it. We adopted
community development strategies that relied on top-down
massive infusion of Federal dollars, and to a degree we still
do. The unintended consequence, although some would argue
otherwise, was the displacement of families as their homes were
destroyed to make way for commercial redevelopment.
In trying to signal community renewal, most of these
commercial revitalization efforts were not enough to create the
new vibrant neighborhoods that their creators envisioned, nor
did they stem the flight of businesses and families from the
inner city. Well, there are several paradigm shifts now in
community development that suggest a bottom-up kind of an
approach, and to just summarize it, a significant change that
you all see in community development is a new emphasis on
opportunity. I hear John talking about it.
Our language is changing from distressed communities to
underserved neighborhoods to communities of opportunity.
Language is an important signal of change. Community
development strategies are evolving to focus on community
assets rather than on community needs. In other words, instead
of describing a neighborhood by its problems, we have begun to
emphasize the hidden assets, the market potential. We look at
things like historic architecture, etc. In a speech last year,
Federal Reserve Chairman Ben Bernanke said that quantifying
these assets and helping investors become aware of the
opportunities in underserved neighborhoods can help enlist
market forces in the service of community development.
And I want to be clear when I say help investors. That's my
next point. The shift that we are experiencing by development
by the numbers requires a concurrent change in the attitudes of
indigenous community leaders who in the absence of market
information have in the past and for a long time depended on
ideology and a government grant driven focus which emphasizes
neighborhood deficiencies and weaknesses rather than assets and
market opportunities as a way to attract capital for their
various projects. There is a culture of poverty that has become
associated with people of color, particularly African
Americans. Inner city residents are not only surrounded by
crime and drugs and homelessness and poverty; they are blamed
for it.
Residents have come to believe that unless an initiative
comes with a low-income tag, it is not intended for their
community betterment. That has to change. There's also an
underlying assumption that residents of underserved
neighborhoods are unwilling to or do not, even if given a
chance, want to participate in the rebuilding and the
revitalization of their communities. During a recent consulting
assignment I had arranged for a supermarket located in inner
city neighborhood Richmond, Virginia, I described how our
consulting team had assembled a capital to build a supermarket,
all outside capital, of course, and thankfully I was
reprimanded by a long-term resident of the area that I had not
presented residents of the community a chance to invest in the
supermarket, which without a doubt promised to be a cabinet for
further evaluation.
We need to challenge ourselves to create investment
vehicles that are investments by residents, stakeholders who
may only have $100 or $1,000 of their savings to invest, but
would like to be and need to be a part of the community
development fabric as investors. Madam Chairwoman, I thank you
for the time.
Chairwoman Waters. Thank you. Thank you very much.
[The prepared statement of Mr. Zuniga can be found on page
92 of the appendix.]
Chairwoman Waters. Mr. Mayor, what's happening in
Cincinnati?
STATEMENT OF THE HONORABLE MARK MALLORY, MAYOR OF CINCINNATI,
OHIO
Mr. Mallory. Thank you. Thank you, Madam Chairwoman,
Congressman Green, and Congressman Clay. Thank you for the
opportunity to come here, not just to see St. Louis, but to
share what we're doing in the City of Cincinnati as it relates
to the proper use of accurate data. You all know that
demographic data is routinely used by the private sector, by
the public sector, and even by private individuals to make
decisions about where they want to locate something, about
where they're going to invest. In order to make certain that
services are located where they are needed most, mayors in
particular must have the most accurate data as it relates to
their cities, and with the most accurate data in hand mayors
can assess the most underserved part of their community and
begin to drive investment to those areas.
Let me tell you what we did in Cincinnati. In June of 2006,
the Census Bureau released its 2005 population estimates, and
those estimates claimed that Cincinnati had lost more
population than any city in the United States, any major city
in the United States, since the year 2000, making it the
fastest shrinking city. The local media ran multiple high-
profile stories about the population decline. They included a
lot of speculation about the cause of the loss of population,
and our civic pride was at an all-time low.
Nobody in the media questioned the validity of the Census
Bureau's data. After all, you know, the Census data comes with
a lot of credibility and believability. However, with all of
the new development and housing starts and general energy that
I witnessed in the City of Cincinnati since becoming Mayor, the
data that we got from the Census just didn't make sense to me,
so I decided to challenge those figures. We did that using a
statistical analysis of City records, including building
permits, demolition permits and conversions of commercial and
industrial buildings into new housing, and we were able to
prove that Cincinnati was not losing population at all. In
fact, we were able to prove that Cincinnati was gaining
population for the first time in 50 years. And that Census
challenge began changing the perceptions about the City itself.
Shortly after that I became aware of the Social Compact
organization, a national nonprofit, and John Talmage you just
heard from. They came into Cincinnati and did a drill-down of
our population using 27 different pieces of data as it relates
to income and other things. They were able to find almost
47,000 additional people in the City of Cincinnati, and more
importantly those additional people represented $2 billion in
uncounted resources in the City of Cincinnati.
So armed with this new information, I set out to change the
way we look at our City. The first thing I did was I created
Shop 52. There are 52 neighborhoods in the City of Cincinnati,
so we have been using that data to help drive investment in
those 52 neighborhoods. We're trying to get financial
institutions to pay closer attention to what's going on,
retailers, of course, and not long ago we held--I put together
actually a retail attraction task force.
I think John has mentioned this number a lot, but it's a
number that people, I don't think, really cue into. 80
percent--80 percent of the commercial retail decisions that are
made in this country are made using Census-derived data. So if
that number is wrong, they're making the wrong decisions about
your city. So since I have this new information, we now go to
the International Convention of Shopping Centers' annual
convention out in Las Vegas. We use that information in an
effort to attract retailers to the City of Cincinnati. We're
selling the City armed with much more accurate information.
In May of this year, I'm going to be working with the
International Franchise Association, because one of the things
we learned at that retailers convention is that they have
trouble attracting people to buy franchises, so we're going to
put together an education seminar that will encourage minority,
women, and veteran-owned franchises in the City of Cincinnati,
and that seminar is going to help connect individuals with--not
just with franchises, but we're going to connect them with the
financial resources to get those franchises going.
In order to fill the need for increased services in under-
served communities, Cincinnati can't rely just on national
retailers alone. Small businesses, small local-owned
businesses, are actually vital to any city's growth. So this
past February we put together 100 community leaders, community
development experts, small business service providers, and
banking professionals for an urban markets summit. Now, that
discussion centered around barriers and opportunities in the
local small business development environment, and the group
looked at four specific underserved neighborhoods to discuss
improvements in their individual business districts.
I have always believed that any neighborhood development
must be driven by community leaders with full input from the
citizens of that neighborhood and the assistance from
government. So with that in mind, I have been meeting with the
representatives of all of the 52 communities in the City of
Cincinnati. We have been sharing with them the Social Compact
drill-down information that gives them a much clearer picture
of the actual population and the buying power within each of
those neighborhoods. They will now be better prepared to tell
us what kinds of services they want and what kind of services
they need in their communities.
With the amount of emphasis that my administration has put
on data-driven policy, the 2010 Census is going to be central
for the development of the City of Cincinnati. Getting that
number right is crucial. So the drill-down study taught us
exactly how many people are in the City of Cincinnati. We're
taking a new approach to the Census. We're not telling our
Census takers to go out and count the people who are here. We
know because Social Compact came to Cincinnati that there are
378,259 people in Cincinnati. The new paradigm is to go find
those people. That is our baseline number; there are at least
378,000 people in our city.
So this is an ongoing process for us.
It's an evolving process for us. This concept of the better
utilization of accurate data to drive investment in underserved
communities, to drive a new focus into areas that need services
and need help is a new way of thinking for the City of
Cincinnati but is our new method of operation. And I'll tell
you, I'm on a crusade. I'm telling everybody I can everywhere I
can that this is the only way that you can intelligently and
accurately redevelop cities throughout the United States of
America.
Thank you very much.
[The prepared statement of Mayor Mallory can be found on
page 73 of the appendix.]
Chairwoman Waters. Thank you very much. I would like to
thank you all for your testimony here today and I would like to
just raise a few questions with some of you who have testified.
Reverend Jones, I want to thank you for being on the tour with
us this morning and showing us your tremendous accomplishments
in the development of the much needed housing and the
revitalization of that community.
I'm now interested in how much support you have been given
for the development of the infrastructure in and around the
area, both a combination of services and other kind of
infrastructure supports in order to keep that community going
and vibrant and maintained. And because of this discussion
about Team 4 and what I read, still not knowing whether or not
it was implemented informally, tell me about police and crime.
Do you get quick response? Do you meet with the captains? Do
they interact with the residents? What kind of support do you
have from the basic infrastructure that every community needs
in order to be safe, secure and protected?
Mr. Jones. We are blessed in our community to have an
alderman who works with us. We are also blessed that he's a
member of our church. That helps. So we--our relationship with
the community, with the government, the agencies, are
improving. There's a ways to go. The partnerships are there.
We're moving aggressively towards bridging relationships, but--
and the alderman helps and others will provide assistance, and
others do as well, but again, I must acknowledge and be frank,
we have a ways to go.
With relation to infrastructure and partnerships and
services that we receive, we challenge these public servants
whom we believe we help to pay their salaries that they ought
to give our community a priority. We have seniors in our
community. We have a health services center in our community.
We have about 1,000 children who come into our church every
week. And so we challenge them to be active and to be on-call
and to respond aggressively and timely to our needs.
Now, I will say that with that aggression that we have, the
reality is it is a community that has a stigma of crime, of
poverty, and there are occasions where they are not responding
always as well as we would like, but I will say that when
developing and building relationships to challenge them to do
such--
Chairwoman Waters. That's very important. When you complete
development and you do your ribbon cuttings and all of that,
are you blessed with the presence of the Mayor along with your
alderman?
Mr. Jones. The alderman certainly is there. The Mayor has
been there in the past. He has been there. I think our most
recent opening of our senior building, I'd have to recall
whether he was present.
I don't think he was present, I must say, at that occasion,
but in most occasions he has been. He has recognized the
strength of our church and our community, and I think it's
incumbent upon him to show up on those occasions.
Chairwoman Waters. Have you been offered any assistance in
your economic and business development from the Office of
Development? The vice mayor of development was here today and
was being questioned by Congressman Clay about monies that have
been given to businesses that were supposed to develop jobs who
do not appear to be able to document that they have done that.
Were you offered assistance with monies coming from CDBG or
anyplace else to do business development?
Mr. Jones. Madam Chairwoman, if we were, I'm not familiar
with it. I will say that we did sit with her recently with our
public and private developers and we placed an initiative
before that office, and we're waiting a response now. And I
hope and pray that it will be favorable, especially since this
kind of setting is happening in the City.
Chairwoman Waters. If you were afforded the opportunity to
get some of the City money to help create jobs, would you be
able to use that money to create jobs for people who need
employment?
Mr. Jones. No question. We're creating jobs without the
City dollars now. What we tell them is that they will help
accelerate our process. They will help us to maximize and do
far better and far quicker with the resources we have. If they
are to provide assistance, we can do far more, far better.
Chairwoman Waters. And you said the banks have been
cooperative. Usually in order to develop communities not only
do you need government assistance, but you need a commitment
from the financial sector. You need banks. Banks can determine
whether or not communities get the resources they need to
develop.
Do you have the cooperation of any of the financial
institutions or banks that are willing to put money into a
community where you have demonstrated success?
Mr. Jones. Well, I can speak on behalf of our church. We
have learned the art of leveraging. We leverage our people, we
leverage the resources we have. And not only that; everything
we own is debt-free. And so banks line up for us under these
circumstances. And so we're probably not typical, though, as I
must say, but we haven't had a problem yet with getting a loan.
It's just a matter of us negotiating what we want. But we
challenge them.
What we do, though, since we are favored in this position,
we make sure that the next church, the next business, the next
partner, we leverage our resources so they can also get a rate
that they can also get the loan and also be blessed and
benefited thereby.
Chairwoman Waters. Do the streets get swept and the
potholes fixed in the areas where you're doing all of this
investment?
Mr. Jones. Well, let me speak of snow. We have our own
clean-up, snow removal. We--you know, it's a business
investment for us to do such. We don't wait on the City. It's
strange, odd, peculiar, but we happen to be in an area of the
City where maybe the resources are depleted by the time it's
time to enter into our section, so we have stopped waiting on
them. We have our own snow removal because it's incumbent upon
us--we have thousands of people and so it's an economic and a
spiritual initiative for us to do it ourselves.
Chairwoman Waters. The reason I asked that, Reverend--and I
hate to interrupt you--is that part of what we're researching
is whether or not the services are in these communities or
whether or not there is a plan or just benign neglect of
providing the support services, because you are not typical and
others who would invest or develop need to have police and
fire, they need to have the potholes fixed, they need to have
the snow removed, they need to have the involvement of the
Mayor, they need to have the fire department who will come out
and let the kids climb up on the fire engines and trucks like
they do in other neighborhoods; they need to have engagement.
And without that, most development attempts will fail.
And so this is what we're looking at here. If somehow
through the processes of the City and the City plan, those
resources have not been available, communities die. They
literally die.
And in addition to that, in addition to what you're doing--
and you have been very, very fortunate and visionary to make
these acquisitions, this property, long before this crunch and
so you have property that's valuable, that you're able to--
because most people can't purchase this land, it's just too
costly, but in addition to your having done all of this, the
properties adjacent to yours that people can't afford to keep
up, you have to have a program in the City that will allow
people to rehab their homes with no or low-interest rate loans.
So all of this--and that's what we are kind of looking at.
You are a model and you're a leader and you're unusual and
you're doing something for the City, not only for your members,
but you're providing services for yourself that the City really
should be providing. And so we all love people like you who do
this, I mean, we really do. Mr. Green loves everybody, but I
don't. I love doers.
And so I just want you to know that, first of all, let me
just underscore this, that we appreciate what you showed us
today and what you are doing, and we are hopeful that your
vision, your full vision, is realized with the support of your
City and your Federal Government and everybody else that you
really should have.
I have used up more than my time, and I have to let Mr.
Clay have a turn.
Mr. Clay. Just to follow up on what Chairwoman Waters was
saying, Pastor Jones, if the faith community would get the
collaboration, necessary funds they needed from the Government,
as well as private entities, would they have the necessary
resources and the will to actually create the schools that you
talked about that would take us block by block in this process
of rebuilding communities? Do you think the faith community
would step up here in St. Louis and do that?
Mr. Jones. Congressman, I believe that historically the
faith community has shown the ability to build schools,
businesses, to train individuals, to provide housing for people
within the community as well. Our challenge again is an
economic challenge. We have the management ability. We have the
desire to do it, to accomplish it. Resources would help us
tremendously. If we are afforded the opportunity to have the
resources, I think there's no question at all that we can
accomplish that.
Mr. Clay. Thank you so much for that response. Mayor
Mallory.
Mr. Mallory. Yes.
Mr. Clay. You talked about the additional $2 billion in
Federal funds that you were able to capture because you found
47,000 additional Cincinnatians and you also talked about a
collaboration with Social Compact as far as the drill-down, as
you called it. And just to make you aware, I do have the
responsibility of the oversight over the Census Bureau and up
to the 2010 Census, and you mentioned a new kind of approach
with the Census and a new type of partnership, and I think you
have the model that the rest of urban America has to get with.
So I look forward to working with you in that respect as far as
how we actually count the traditionally undercounted and want
to hear more about your experiences with the Census Bureau.
Mr. Mallory. Well, I appreciate that. You know, one of the
things that I see that's critical as we move to 2010 is that
for any major city in the United States the low hanging fruit
is getting the Census count number right. There are 170 Federal
programs that distribute billions and billions of dollars based
on the Census count. So the low hanging fruit, the best
opportunity that I think mayors have to garner additional
resources for their cities in the next few years is to ensure
that that number is right.
I mean, we are lucky that we were able to find Social
Compact and have them come in and do our drill-down analysis
and discover those 47,000 extra people and discover that
undercounted $2 billion in spending power. Our challenge now is
going to be to ensure that we are counting absolutely as many
people as possible in 2010 so that we can get not just the
money that comes along with the Federal programs, but, again,
all of these agencies, all these organizations, all of these
businesses, all these financial institutions that use Census-
derived data have to have the most accurate information.
We're in the middle of--in Cincinnati, we're in the middle
of a school building process where the public schools are
building 20 new buildings. Well, they're using outdated Census
information, so they're putting the wrong schools in the wrong
neighborhoods. It becomes very, very critical as you start to
look at all of those decisions that are made around the use of
that Census data that we get that number right.
Mr. Clay. And that whole piece about franchisees and the
International Council of Shopping Centers, all of that plays
into that data. How successful has Cincinnati been as far as
being able to attract new retail or needed services to
particular communities.
Mr. Mallory. Well, we went to the convention in Vegas in
May of last year, May or June, and it was the first time that
anybody from the City administration of Cincinnati had ever
gone to that convention. It's very disappointing that the
previous administrations did not recognize the need for it. We
met with probably 15 or so different--
Mr. Talmage. 22.
Mr. Mallory. --22 different retailers, and we actually have
had a few successes from that. We did get a retailer on
Fountain Square as a result of that. There are several others
that are taking a second look at Cincinnati because they
already looked at us using the wrong information. We gave them
the right information, and they are now taking a second look at
us.
But we're committing to going back to that year after year
after year and making sure that retailers are paying attention
to us. One of the pieces of feedback we did get is that we
weren't on the radar screen for a lot of these retailers, but
because of this information that we had and because of our
approach and our organization, they're taking a second look at
us and really seeing us as a possibility.
Mr. Clay. Thank you so much. Ms. Rogers, we have heard a
lot of testimony today, especially in the first panel, from
HUD, as well as from Ms. Geisman and Alderman Kennedy. Given
what we know that has occurred over the last 35 or so years,
what we've heard today about how it seems as though the City
wants to turn over a new leaf, adopt a new policy, if this
community is given the opportunity to actually purchase those
vacant lots and actually purchase those abandoned buildings and
property owned by the LRA, do you think this community will
take charge of its own destiny and move forward?
Ms. Rogers. I think absolutely they will, but to me
purchasing a lot is probably on the micro level. What I now
think is even more important, and just hearing the panels
discuss this, is a comprehensive long-range plan. And it's not
a planning that's based on what your relationship--political
relationship is to the Mayor or to the alderperson. I suspect
that there is somebody like Reverend Jones in other
communities, but because they don't have access to those people
who have power, then somehow they get locked out of the
process.
And so to me, even what Mayor Mallory was talking about, I
mean, it seems so logical that you would be operating in that
level, but here it's very fragmented, it's very politicized,
and I think Alderman Kennedy acknowledged that it's very
racially motivated, and so when we look at who gets to be at
the table--I mean, we have had empowerment zone planning where
money specifically is supposed to go to the areas that we've
talked about today, but yet year after year they continue to
look the same. And I think we have to ask why is it that, why
is it still looking the same or worse when dollars are supposed
to be coming in.
And so if we understand that there's a plan and people were
a part of that plan, we won't have to ask those questions;
we'll know. We'll have the understanding that it's not just
going to go to the conservation areas. And we know from looking
at this place, downtown is one of them, another one is the
Central West End, so the depletion areas are pretty quickly--
you are able to quickly tell where those are. So they need to
be brought into the plan, and it needs to be a comprehensive
one where we're not just looking at little pieces of property
but we're looking at overall what would the ward look like in
20 years, what will the City look like in 20 years. It
shouldn't be based on who has the money, or who is the closest
to the Mayor or anybody else in political power.
Mr. Clay. Mr. Zuniga, your testimony brought out the fact
that you have quite a bit of experience all around this country
in attracting and revitalizing neighborhoods. In your brief
stay here today, do you see the potential for St. Louis? Do you
see how we can actually go about turning around this community,
turning around, tapping into the economic potential of this
community, and just how difficult or easy would that be?
Mr. Zuniga. Congressman, thank you. Just to follow up, it's
one thing to have the numbers; it's one thing to attract
retailers; it's one thing to attract investors. Part of my real
concern is, how do we as disenfranchised residents of some of
the communities we talked about participate in that
revitalization process?
There's an impediment by the way that really has to do with
the infrastructure of our economic system. At the point that we
gather up investors, more than 35 people requires a public
offering. And I have to tell you something. It's strange, you
know, you're dealing with high level, you know, high net worth
individuals, but it was never designed for folks who have $100
or $200. This lady in Richmond I told you about, she said that
most of the time the only investment opportunity we have is we
go on Friday evening to the liquor store, buy $50 worth of
lottery tickets, and hope we get lucky. Well, it ought not to
be that way. People like me need to start focusing on what do
we do to create the new infrastructure for real indigenous
community investment? It is $50 here, $100 there. We don't have
that.
But with that in mind, when we talk about acquiring
available land--you know, the one who owns the land controls a
lot of what happens. There was an earlier discussion today
about bringing developers to the table as capacity. Being able
to be an effective partner in community development has to do
with being able to bring something. If we had a vehicle for
investing in land and we can state a group of people who are,
in fact, resident investors, you own this land, you can attract
a development partner and it's a different kind of footing at
that point. Okay? Those are the kinds of observations I have.
Mr. Clay. Finally, let me just get to John. I don't know if
you have done your initial study on St. Louis yet. Just what
have you found so far? What are our potentials? What is our
untapped purchasing power?
Mr. Talmage. We have not done the drill-down yet, but based
on the information gathering, some of the preliminary
information, research we conduct, there are some things that
strike me, that the Census from 2000 to 2006 estimates that in
North St. Louis the population--you have lost 2.3 percent of
the population. Just look at Federal data such as the U.S.
public housing and IRS returns. That number is inaccurate just
on the face of it so that we expect now to find a positive
number because we have--we were never granted the foundation.
The first--the income, the average income of first-time
home buyers who bought homes in North St. Louis between 1998
and 2005 was 40 percent higher--I'm sorry--60 percent higher
than the Census had documented in 2000 so that the trend of
investment is a very positive trend. That's not duplication
trend. These are still middle income, you know, the cop and the
teacher, but it's a strong indicator of sustainability.
And finally, the percentage of owner-occupied units in
North St. Louis is almost 40 percent higher than the national
average, that people own--in many parts they own their own
homes, so they have invested ownership in their community. So
when we do the study itself to find the missed population, the
missed purchasing power, we can put that together with the
numbers that are already there to make the case that North St.
Louis is a good place for investment, especially because of the
sites we saw today. Put aside the environmental problems which
you can't ignore, but there are large assemblages on wide
streets adjacent to major highways with good utility access,
and so in terms of a development site, you really can't have
things teed up any better than they are right here.
Mr. Clay. Thank you so much.
Chairwoman Waters. Thank you very much. Congressman Green.
Mr. Green. Thank you. I will be terse and laconic. Mr.
Talmage, your diction was superb, but I do ask that you be a
bit more pedestrian in explaining shortage and shrinkage,
because some people may have missed the point.
Mr. Talmage. And I should say that in a non-terse and
laconic way?
Mr. Green. Just be precise.
Mr. Talmage. Shrinkage is a term that retailers use to
describe what they--what we might call pilfering or employee
theft or shoplifting; the amount of product that disappears
from the store for any number of reasons.
Mr. Green. Would a person who is less sophisticated, such
as I am, use the term stealing?
Mr. Talmage. You might use stealing, yes, sir. The
policemen who arrest you might use stealing.
Mr. Green. And let me ask you this as well: Assuming that
you have a plethora of empirical evidence supporting a need, as
well as supporting the ability to sustain a given business, if
you have a depletion mindset, will empirical evidence offset a
depletion mindset?
Mr. Talmage. That's a very good point. One of the things we
have been doing for the last year is working through the
International Council Of Shopping Centers and other industry
associations to make sure that the retail investors are
prepared to use the information that we provide. And one of the
reports where we are very interested in publishing in the very
near future shows, using our national retailers' own score
performance data, that--and I'm sorry for the technicality--
that the median income and the average income of a household is
not correlatory to what households perform. It is the
aggregated income that has the highest correlation of value.
What that really means in simple English is that it's not
monies that the suburban household is making $80,000; it's the
aggregated neighborhood of--and so any neighborhood is the best
indicator of performance.
And so there's a whole variety of national retailers that
are waiting to--
Mr. Green. Just one quick intervention, and I'm really
going beyond the time that I thought I would, but I want to ask
you this: You do recall that the plan that they had was one
that was encouraging depletion?
Mr. Talmage. Yes.
Mr. Green. And I'm not sure that empirical evidence would
offset that type of mindset. I'm just not sure. Sometimes you
have to use the adverse of the Elizabeth Barrett Browning
process. She said, how do I love thee? Let me count the ways.
Sometimes it literally has to be, how can I hurt thee? Let me
show you the ways, in the political world. I'm not talking
about physically hurting anyone. But Bishop Jones?
Mr. Jones. Thank you for the promotion.
Mr. Green. Excuse me. I was tempted to say ``prophet,'' but
I scaled back. I do want to compliment you on understanding
that we are blessed, that we may be a blessing, and you
apparently have done well in your community and I thank you for
what you have done.
And I know, Mayor, you wanted to give a comment, so--I saw
you pull the microphone over, so I'll give you the last word.
Mr. Mallory. Thank you. I just wanted to emphasize on this
conversation about data and empirical data and analysis. It
only makes a difference if the leadership is willing to embrace
it and drive it. It has to be driven by the leadership. One of
the first things I did when I got the data from Social Compact
about our new population estimates, I rounded the entire
administration, said the new population for the City of
Cincinnati is 378,000. That had better be the number I hear you
use publicly. That had better be the number I see in every city
document. That number is actually on Wikipedia's Web site. If
you go and Google Cincinnati, it will show our population at
378,000.
So it has to be driven by the leadership, it has to be
pushed by the leadership, and it has to be embraced by every
member of the administration.
Mr. Green. If I may just close with this, Madam Chairwoman,
I want to thank Congressman Clay for hosting this hearing. And
I say that because I have learned a lot.
Chairwoman Waters. I want to thank the panels for coming
here today and sharing this very important information. And I
recognize that some of you have traveled from far away to be
here today in the City, and we're very appreciative for that.
And let me just say to the residents and the leaders of St.
Louis that we recognize some of this is complicated. We are
very strong believers in the possibilities. We believe that
these communities, not only in St. Louis, but across this
country, can be redeveloped, can be saved, and that people can
have involvement in doing that. We have adopted some principles
in our public policy work, and this is what's difficult for
some of the redevelopment attempts. One of the principles that
we have adopted is one-for-one replacement of all housing.
That's important because, Mr. Zuniga, you're right, some of
the developers who are coming along, big developers, have
recognized that there is gold and then there are hills. And
what they are looking at, for example, are public housing
projects along certain transportation corridors that are very
valuable, and they want them. But what they don't talk about is
what happens to the people who occupy those units.
And now we're in a situation where everybody's talking
about these terrible public housing projects and how they
don't, you know, meet the standards and how they need to be
improved, when really the language is, get rid of them. That is
the language that is underneath all of this. Those of us who
are in these new leadership positions understand this language.
And so we are saying that we support HOPE VI, but you
cannot reduce the number of poor people with so-called market
rate and ownership because not everybody wants to own a home.
Some people just want to rent a decent place to live.
And so we are trying to, in our public policy, embrace
development, protect people and neighborhoods, and involve
people in the decisionmaking to determine what's going to
happen in these neighborhoods. Now that's a little bit
different, but we can do this because, really, we came from
these neighborhoods. You know what I'm saying? And we
understand this. So we thank you for further educating us
today.
I'll look forward, Mr. Talmage, to seeing you. And we had
talked before when you first came into the Los Angeles area.
There is work to be done there.
And finally, let me just say on the commercial development
side of this, every major development, whether it is in my area
of Inglewood along Century Boulevard that leads to the airport
or Western Avenue near Slauson where Magic Johnson put in money
or La Tierra where Magic is over there with TGIF and all of
that, every one of those businesses surpass their counterparts
in other parts of the United States. Our Starbucks makes more
money than any other Starbucks, I believe, in the country, and
we can identify other black commercial entities that do that.
We know that there is money in our neighborhoods, and we
know there are people who are willing to spend money if you
treat it right, and we have decent services and all of that. So
we need to marry the need for the investment with the
infrastructure development and protection from the City and the
involvement of the people. That's the formula. We get it. We
know it. And we're going to do it. Thank you so very much.
The Chair notes that some Members may have additional
questions for this panel, which they may wish to submit in
writing. Without objection, the hearing record will remain open
for 30 days for Members to submit written questions to these
witnesses and to place their responses in the record.
Without objection, the written statement of Dr. Matthew
Fellowes of the Brookings Institution will be made a part of
the hearing record.
Chairwoman Waters. This hearing is now adjourned.
[Whereupon, at 2:40 p.m., the hearing was adjourned.]
A P P E N D I X
March 8, 2008
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