[Senate Hearing 116-21]
[From the U.S. Government Publishing Office]


                                                         S. Hrg. 116-21

                 LIBERTY CITY RISING: ACHIEVING UPWARD
                    MOBILITY THROUGH SMALL BUSINESS
                       AND COMMUNITY PARTNERSHIPS

=======================================================================

                             FIELD HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                          AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            FEBRUARY 1, 2019

                               __________

    Printed for the Committee on Small Business and Entrepreneurship
    
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           COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                     ONE HUNDRED SIXTEENTH CONGRESS

                              ----------                              
                     MARCO RUBIO, Florida, Chairman
              BENJAMIN L. CARDIN, Maryland, Ranking Member
JAMES E. RISCH, Idaho                MARIA CANTWELL, Washington
RAND PAUL, Kentucky                  JEANNE SHAHEEN, NEW HAMPSHIRE
TIM SCOTT, South Carolina            EDWARD J. MARKEY, Massachusetts
JONI ERNST, Iowa                     CORY A. BOOKER, New Jersey
JAMES M. INHOFE, Oklahoma            CHRISTOPHER A. COONS, Delaware
TODD YOUNG, Indiana                  MAZIE K. HIRONO, Hawaii
JOHN KENNEDY, Louisiana              TAMMY DUCKWORTH, Illinois
MITT ROMNEY, Utah                    JACKY ROSEN, Nevada
JOSH HAWLEY, Missouri
             Michael A. Needham, Republican Staff Director
                 Sean Moore, Democratic Staff Director
                            
                            
                            
                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Rubio, Hon. Marco, Chairman, a U.S. Senator from Florida.........     1

                               Witnesses
                                Panel 1

Edmonson, Hon. Audrey, Chairwoman, District 3, Miami-Dade County 
  Board of Commissioners.........................................     6
Wilson, Hon. Frederica, Representative, Florida's 24th 
  Congressional District.........................................    14

                                Panel 2

Bendross-Mindingall, Dr. Dorothy, School Board Member, Miami-Dade 
  County School Board............................................    17
Liu, Mr. Michael, Executive Director, Miami-Dade County 
  Department of Public Housing & Community Development...........    19
Van Hook, Mr. Brian, Associate Director, Florida SBDC at Florida 
  International University.......................................    26
Baker, Ms. Mary Burke, Government Affairs Counselor, K&L Gates 
  LLP, Washington, DC............................................    33

                          Alphabetical Listing

Bendross-Mindingall, Dr. Dorothy
    Testimony....................................................    17
Baker, Ms. Mary Burke
    Testimony....................................................    33
    Prepared statement...........................................    35
Edmonson, Hon. Audrey
    Testimony....................................................     6
    Prepared statement...........................................    10
FIU Report on Small Businesses in Miami-Dade County
    Report titled ``Small Business, Big Impact''.................    52
Liu, Mr. Michael
    Testimony....................................................    19
    Prepared statement...........................................    23
Rubio, Hon. Marco
    Opening statement............................................     1
Van Hook, Mr. Brian
    Testimony....................................................    26
    Prepared statement...........................................    29
Wilson, Hon. Frederica
    Testimony....................................................    14

 
                 LIBERTY CITY RISING: ACHIEVING UPWARD
                    MOBILITY THROUGH SMALL BUSINESS
                       AND COMMUNITY PARTNERSHIPS

                              ----------                              


                        FRIDAY, FEBRUARY 1, 2019

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                         Miami, FL.
    The Committee met, pursuant to notice, at 9:08 a.m., in the 
Sandrell Rivers Theater, Fantasy Theater Factory, 6103 NW 7th 
Avenue, Hon. Marco Rubio, Chairman of the Committee, presiding.
    Present: Senator Rubio.

OPENING STATEMENT OF HON. MARCO RUBIO, CHAIRMAN, A U.S. SENATOR 
                          FROM FLORIDA

    Chairman Rubio. Today's hearing of the Senate Committee on 
Small Business and Entrepreneurship will come to order.
    I want to thank everyone for making the time to be here on 
this topic, which I know is important to this community.
    This hearing is significant to me. It's my first as the 
Chairman of the Senate Committee on Small Business and 
Entrepreneurship, and I'm very happy to be able to do it here 
at home and here in the heart of Liberty City. I also want to 
be able to use this gavel.
    [Laughter.]
    So anyway, it was originally scheduled, actually, to be 
last summer when I wasn't the Chairman. Unfortunately, we had a 
tragic situation in Jacksonville that we had to respond to or 
pay attention to, so we couldn't do it. And then we got off to 
a slow start in Washington this year, as you may have followed 
on the news, so I'm glad that it was able to be resolved and we 
were able to get to this point today.
    I want to thank all of our witnesses, and I want everybody 
to understand that the record--this committee has numerous 
members, a bipartisan committee, obviously. The testimony here 
becomes part of the record, which then becomes part of our 
work. Members and staff will look at that, and we use it to 
justify and to point to as the reasons why we need to do 
certain things and the laws that we're going to be thinking 
about doing.
    So my number-one priority as the Chairman is to pass 
bipartisan legislation, which in the Senate, if it's not 
bipartisan, it's very difficult to pass anything, but 
bipartisan legislation that is going to expand economic 
opportunity for small businesses and for entrepreneurs who are 
forced to take on personal risk and sacrifice to compete in the 
global marketplace.
    Entrepreneurship relies on ingenuity, it relies on 
innovation, and it also relies on access to capital. If you 
don't have access to money, you can't start businesses, and 
that's a huge challenge for small business.
    And for a small business to be able to compete and to 
thrive, it has to have access as well to markets, it has to 
have access to funding, it has to have access to a workforce, 
to the people that can work there.
    These are enormous challenges. Big companies can afford all 
of this, and it is why you have seen growing consolidation of 
business activity at the expense of small business activity.
    And I can just tell you that I have nothing against big 
businesses, but they are no replacement for small businesses, 
because small businesses are rooted in the community. They are 
from the community. They hire people from the community. The 
leader, the founder, the president of a small business is 
likelier to be your PTA president, your Chamber of Commerce 
president, involved in your community than some large chain.
    And so that's why we're so deeply committed to ensuring 
that we can do everything we can to get small business activity 
going in this country and focused in the right places.
    Inherently, when you start a small business, you're growing 
jobs, you're growing opportunity. And when these are done 
successfully, then that's when upward mobility becomes 
possible.
    The issues of upward mobility in South Florida, which is 
close to home for me, and that's both geographic and personal--
I was born, raised most of my life, and still reside about 30 
minutes from here, at this time of day maybe, and I don't know 
how much in tolls. That's another topic. But about 15 minutes 
or 20 otherwise, and so I'm acutely aware of this community, 
and everyone identifies this community with shining buildings 
and beautiful access to the ocean and all the fun things there 
are to do here. All of that is true. What I try to explain to 
people about South Florida is that within just a few blocks 
from some of these landmarks, internationally recognized 
buildings and activities are people who are really struggling 
for a lot of different reasons.
    And so I hope that we can find a way, not just for the 
families of Florida but across the country, to have the ability 
to build better lives for themselves and for their loved ones, 
and I truly believe that that begins with dignified work.
    Work is not just about a paycheck. Work is about the 
dignity that comes attached with the fact that you get up in 
the morning and that your efforts are rewarded, and with that, 
it feeds the spirit and human soul, and the lack of access to 
dignified work has the reverse effect. It's corrosive to the 
individual, ultimately to families, and then to communities.
    I believe our economic policies should be anchored first 
and foremost in the creation of dignified work. You can't have 
it without economic growth, you can't have it without 
prosperity. But the goal of that prosperity and that growth 
should always be to provide our people the opportunity to 
acquire dignified work, and small businesses are an incredible 
engine for that.
    And it's reflected in the policies we've pursued; for 
example, the increase to the Child Tax Credit. We didn't get 
there all the way but we got a lot, and this year millions of 
American families will have more of their own money--this is 
their money--in their pocket, particularly lower-income 
Americans who are working and whose primary tax liability is 
the payroll tax.
    Everybody pays the payroll tax, and more and more American 
families are going to have that money left in their pocket 
because, I don't need to tell people in South Florida, raising 
children is more expensive than it's ever been. There are more 
costs than ever, and everything costs more.
    We are also working in a bipartisan way with Congresswoman 
Wilson on enhancing safety standards at HUD-assisted housing. 
It's great to have facilities that, obviously from a physical 
structure perspective, are appropriate, but they also have to 
be safe. You can't prosper, you can't have upward mobility if 
you can't sleep at night because you're worried about the 
gunshots, you're worried about your children even being 
outside, you're worried about the violence and the security 
standards are not in place.
    So we really want to continue to press HUD to ensure that 
both the funding and the requirements are in place so that 
people living in HUD-assisted housing are living in a safe 
environment.
    We also want to sort of deal with the regulations that have 
an inordinate impact on small business. Big businesses hire 
these large law firms that help them navigate this stuff, and 
accountants that help them find loopholes. Small businesses are 
stuck. So we all agree we have to have regulations that keep us 
safe and keep it fair. But when those regulations become an 
onerous cost of being in business, small businesses really 
struggle because they just can't afford the lobbyists, lawyers, 
and accountants to figure their way through all of this, and 
that's what we've pushed our agenda here to do.
    Being here today is an honor. Liberty City has a long and 
proud, and yet a complicated history. It's something I don't 
need to tell people here today, but my colleagues need to know, 
and it needs to be in the record.
    In recent years, Liberty City has been characterized as a 
community that suffers from poverty and schools that have 
struggled and majority single-parent households and a declining 
workforce. However, history tells us that this is a community 
that not that long ago was a thriving community of 
entrepreneurs with economic opportunity, with strong families. 
I think those virtues, those values, and those ambitions remain 
in the heart and in the soul of the people who live here.
    It was built during the New Deal as one of the first 
housing projects in the South. It was the home, as I said, of a 
thriving African-American middle class. And when I-95 was built 
in the 1960s, the landscape of this community changed, and so 
did the socioeconomics.
    Obviously, we've seen what's happened since then, the 
economic opportunities disappearing and too often being 
replaced with gangs and drugs and violence. And despite that, 
resilient families still live here and are raising their 
children and finding a way forward. They're incredible success 
stories.
    This is a resilient community. It's made incredible 
contributions. Individuals who grew up and were raised here 
have gone on to do extraordinary things on behalf of our 
county, our city, the State of Florida.
    Obviously, a recent--maybe some of you have seen the series 
on Starz on the Warriors, which is a program we're familiar 
with because of my own sons' participation in youth football. 
Our record wasn't very good against them, but it just 
highlights the extraordinary success stories that have emerged 
despite all these challenges from this community.
    I think it's also the home of the Bulls. Is that right, 
Dorothy? Well, I don't want to get into the football rivalry.
    [Laughter.]
    I saw them up there in--they were up in Orlando this year, 
and they did very well. But Booker T's coming back. They'll 
have a good year this year. Okay. Right? You have both of those 
in your district? Okay. I don't want to put you in a tough 
spot.
    [Laughter.]
    So what is the thing that turned the community around? That 
is what we are here to find out about. I have some thoughts 
coming in, but I can tell you that it's going to take a 
combined effort, a partnership of local, State, Federal, school 
board, elected officials, community leaders and, of course, the 
residents. We shouldn't be in a position of telling people what 
they need. We need to be in a position of giving people the 
opportunity to tell us what needs to happen.
    And I want you to know, that does happen. Last year, we 
were in South Florida, we were in Broward and Palm Beach, and 
we heard about a local problem with sober homes, where people 
were opening up these fake rehab centers and it was undermining 
the community, and we were able to take that local concern and 
turn it into Federal legislation, and that's what we're hoping 
to do here today.
    Now, with that in mind, let me just give you my one 
thought. This is about upward mobility. But oftentimes, upward 
mobility means the people living there have to move out. That's 
what upward mobility has meant. Yes, tax changes or something 
happens and there's investment in a community, but then it gets 
too expensive for the people who are there to stay, or housing 
is replaced by something else.
    We are not here to talk about upward mobility in that 
sense. We're here to talk about an upward mobility that belongs 
to the people who are here, that this can continue to be home, 
that people don't have to find a way to move out because, 
frankly, there is nowhere to go. There are no other housing 
options, and plus this is a community that belongs to the 
community.
    So we are not here today to promote gentrification. We are 
here today to try to figure out what we can do at the Federal 
level to promote upward mobility for the men, women, children 
and families of Liberty City, what can we do in Federal policy 
to work alongside our local and State officials to make that 
happen.
    It's my hope that the hearing today will highlight the 
impact that small business and entrepreneurs and other 
community stakeholders can have to help this community achieve 
that because, as I said, small business is rooted in the 
community. When the small business owner grew up in the 
community, lives a few blocks away from the business, they're 
going to hire locals, and they are going to be contributors to 
local partnerships and local organizations. There is no way--we 
are grateful to the big businesses that give the big checks to 
the organizations once a year--nothing wrong with that. But we 
understand the intrinsic value of businesses that are deeply 
rooted in the community that they work in and serve.
    In 2017, there was a provision in the tax law that created 
Opportunity Zones. This law was championed by my very close 
friend, Senator Tim Scott of South Carolina. That law is going 
to encourage investment in communities such as this. It will 
allow investors to defer certain taxes on income when they 
choose to invest in qualified areas like Liberty City. But it's 
important that that be done in a way that's long term and that 
doesn't force out the people that are here and the 
opportunities for locally based investment.
    We've experienced that here firsthand in South Florida. As 
I mentioned at the outset, the disparities in Miami are a 
testament to the uneven prosperity of globally driven rapid 
growth of a 21st century economy. This new economy has been 
very good for a lot of people, and God bless them, we're not 
against them, but it has left some people behind, and that is 
what we need to figure out, how we can balance out.
    And that is where the Opportunity Zones can come in if 
appropriately used as a tool. When investors are in a global 
economy, they are always seeking a bigger bottom line by taking 
jobs and sending them somewhere else, maybe another country. We 
don't want to see that happen. Instead of sending those jobs to 
another country, being able to bring those jobs to the 
communities that have been left behind by the 21st century 
economy.
    And one of the things that this law does to prevent that 
from being short-term thinking, like how can I get somewhere 
and maximize my gains and then move on somewhere else, is you 
have to hold the investment for at least 10 years. You don't 
get this benefit unless you are anchored in for at least 10 
years. That's not a long time, and we want this to be 
permanent. But if you can anchor someone down to 10 years, 
they're probably staying, especially as the roots grow deeper.
    By the way, and I've already highlighted this, 
Congresswoman Wilson and I, who will be here later, we have 
sponsored two pieces of bipartisan legislation. The first is 
Liberty City Rising Act. What it does is it increases the 
safety standards and prioritizes funding for additional 
security measures at public housing projects located in areas 
that statistically have suffered from high crime.
    We introduced the Safe Temperature Act to allow HUD to 
require air conditioning units be installed in properties 
located in very hot places. Miami's a very hot place in July. 
Actually, it's okay right now too, especially if you live in 
Chicago and it's 74. It's cold up there. But no family, 
particularly no child, should be forced to live in a home that 
doesn't have air conditioning and the temperatures are over 100 
degrees.
    Last year I had a bill that passed called the Spurring 
Business in Communities Act that was signed into law. This 
encourages the creation of new small business investment 
companies. We're going to hear more about that today. But it 
encourages setting them up in under-licensed states, and 
Florida is an under-licensed State. This will encourage more 
private-equity investment to fund small business 
entrepreneurship and innovation, particularly focused on left-
behind communities like Liberty City has been, and we've talked 
about that at the outset. One of the biggest impediments to 
small business formation is you need money to make money 
sometimes. You need money to start a business. This will 
hopefully drive more of that investment in that direction.
    These are a few of the measures that we can do at the 
Federal level. There's probably more that needs to be done. 
These are very useful to us because it allows us to come up 
with ideas that we wouldn't otherwise have thought of, because 
as I said, there is a lot of technological advances, shifting 
economic trends globally, but we have to fight to remain 
economically competitive, and that begins with our people. And 
we are going to work with our colleagues to make sure that we 
see this through.
    So today what we have is two panels that will testify, and 
their testimony will be a part of our record, and from it we're 
going to pull out ideas, and they're going to be able to speak 
to that further.
    I want to thank the Deputy Mayor of the county, Maurice 
Kemp, for joining us today. I know Mayor Gimenez couldn't be 
here today, but our first panel is going to be Congresswoman 
Wilson, when she gets here, and Chairwoman Edmonson. We have a 
tight timeframe as well, because we've got to be out by 10:45, 
so we have an hour-and-a-half here. So I'd just ask everybody 
to keep that in mind with their comments, because we have a 
second panel that's coming up.
    Maybe I'll start with you, Madam Chair, because you 
represent this community on the school board. You've worked on 
the issues of the tenants.
    Did I say school board? You're not the Chair of the school 
board yet, are you?
    [Laughter.]
    That's probably what confused me. Of the county. I 
apologize. You're Chair of the county, but you're also the 
Chair of the Housing and Social Services Committee and the 
Building Safer Neighborhoods Subcommittee.
    As a member of the Youth Crime Task Force, your activity on 
Operation Restoration, which is an anti-crime strategy group, 
your expertise in youth development runs deep.
    You've worked here for a long time, and I can't think of a 
better witness to start off our hearing with, so thank you for 
being here.
    [Applause.]

  STATEMENT OF HON. AUDREY EDMONSON, CHAIRWOMAN, DISTRICT 3, 
            MIAMI-DADE COUNTY BOARD OF COMMISSIONERS

    Ms. Edmonson. And thank you, Senator. I liked the 
introduction. Maybe one day I'll be school board and Dorothy 
will be on the county----
    Chairman Rubio. Don't start rumors.
    [Laughter.]
    Ms. Edmonson. Good morning and welcome to Miami-Dade County 
and Commission District 3. I was honored to accept the 
invitation to be a part of this distinguished panel, along with 
Congresswoman Frederica Wilson and Mayor Carlos Gimenez, who I 
think is not here, but we do have Deputy Mayor Maurice Kemp, 
and they have provided tremendous support on the Liberty City 
Rising project.
    As the District Commissioner for this area, I'm honored 
that you have chosen this community to convene this hearing of 
the U.S. Senate Committee on Small Business and 
Entrepreneurship as we discuss Liberty City Rising specifically 
and achieving economic growth around our housing communities in 
general.
    After being elected by my colleagues to serve as Chairwoman 
of the Board of County Commissioners, I have now said 
affordable workforce and public housing would be one of my top 
priorities. The Board of County Commissioners recently received 
a report that indicated that since 1989 the county has funded 
238 affordable housing projects, and that's including public 
housing.
    In spite of these efforts, because of our rapidly growing 
population and the rising cost of housing, we still have 
thousands of people who cannot afford to live in greater Miami 
and struggle with the cost of housing. I am committed to 
ensuring that the county continue to redevelop our aging public 
housing and to build suitable, affordable housing for our 
working class and our most vulnerable residents and our 
elderly.
    I know that we must explore collaborative ways of working 
with private entities and developing community partnerships, as 
well as fostering small business creation and entrepreneurship 
to achieve upward mobility for distressed communities. So I 
thank this committee for coming to Miami-Dade County to put a 
spotlight on this issue.
    We welcome the Federal Government's participation and 
support in our efforts to rebuild our communities from the 
ground up. This county has certainly done its part to prove our 
commitment to this cause by putting a great deal of our own 
skin in the game. The Liberty City Rising project is one of the 
fine showcases of these efforts, and I have devoted countless 
hours working to ensure this multi-million-dollar plan to 
revitalize Liberty Square and other public housing projects are 
a success.
    The Liberty Square redevelopment, which was first announced 
in February of 2015, seeks to address the issues of crime and 
poverty in the area by raising the standard of living for 
residents and creating opportunities to earn a decent living. 
The project, which broke ground in May 2017 and is expected to 
be completed by the end of next year, involves demolishing and 
rebuilding Liberty Square's 709 public housing units in phases 
without displacing any residents.
    The end product will be a bustling mixed-income community 
with shops, parks, and 1,400 condos, townhouses, and 
apartments. It will transform residents' lives in the community 
by bringing health care, early childhood education, educating 
for youth and adults, job training, youth programs, elderly 
programs and, yes, small business development to the area.
    I am grateful to Senator Rubio for addressing the need for 
safety and security in our public housing across this Nation 
and to know that we are not alone in this fight to redevelop 
our public housing and ensure the safety of our residents. 
Miami-Dade County has committed $74 million for the Liberty 
City Rising revitalization initiative, which will be used to 
leverage over $390 million of economic activity and private-
sector investment.
    Miami-Dade County has already allocated $46 million in 
funding for the redevelopment of Liberty Square and Lincoln 
Gardens, which will generate over $307 million in economic 
activity and private-sector investment.
    Chairman Rubio. You don't have to start over again.
    [Laughter.]
    Ms. Edmonson. I'm not going to start over again.
    [Laughter.]
    They told me to stick to the script, so I'm trying to stick 
to the script so I won't go over.
    Thank you. Okay. Can you all hear me better? Okay.
    We have allocated an additional $28 million to revitalize 
the Liberty City neighborhood. These funds will be utilized to 
create additional safety measures and economic activity through 
the construction of new multi-family housing, affordable and 
workforce housing, affordable home ownership opportunities, 
economic development, and capital improvements.
    The Liberty City Rising revitalization initiative will 
create an estimated 2,300 jobs, in addition to addressing the 
high unemployment rate in this neighborhood, and ensure that 
many of these jobs are filled by local residents. The county 
established the Employee Miami-Dade Program to train and assist 
in the hiring of residents from the Liberty City Rising zip 
codes.
    So often when a community has been plagued by the violence 
that tends to go hand in hand with poverty, it cannot attract 
small businesses and thrive economically unless these 
initiatives are combined with our efforts to address the 
epidemic of gun violence. That's why I have also made fighting 
the scourge of gun violence one of the top priorities of my 
two-year chairmanship. I'm strategizing with local law 
enforcement, our school systems, multiple agencies and 
community-based organizations to address this epidemic. I have 
introduced new legislation before the Commission to enhance 
these efforts with a boots-on-the-ground approach, which should 
be starting somewhere near March, next month. You will start 
seeing billboards out there warning the people that we are 
serious about gun violence.
    We are working with local organizations, clergy, law 
enforcement, and our juvenile services department to bring 
peace and safety to our neighborhoods.
    Working with my colleagues on the Board of County 
Commissioners, our Federal, State, and local partners, and 
especially our community partners on the front lines, I am 
confident that all the efforts will be approved and that 
Liberty City Rising will not only transform the community but 
will serve as a model of urban revitalization in other parts of 
our county and the entire Nation.
    Thank you, and I look forward to continue working with you 
on these very important efforts. We welcome and appreciate your 
vital support and participation.
    And before I step down, I don't think we introduced one of 
my colleagues, our former Chair of the board, Mr. Esteban Bovo.
    [Applause.]
    [The prepared statement of Ms. Edmonson follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Rubio. Thank you so much. I know you're going to 
be here for a while, but if you need to step out early--she's 
got the whole county to overlook now. She's the Chair. But we 
appreciate you being a part of it, and we want to thank 
Commissioner Bovo, who is the previous Chair, and a lot of the 
projects he's been very supportive of that started under his 
Chairmanship. So it's important to see that continuity in this 
county-wide commitment. I appreciate your comments and in 
particular your goal, which is something I should have said, 
and I'm glad you did.
    Our hope here is not just to get this right but to do it in 
a way that other people are coming down and asking us how did 
you guys do it, because we want to do what you did.
    But thank you for everything you're doing. I really look 
forward to working closely with you on all of this. Thank you.
    Ms. Edmonson. Thank you.
    [Applause.]
    Chairman Rubio. Congresswoman Wilson, are you ready?
    [Applause.]
    As she walks up and gets ready, I've already outlined our 
two projects that we're working on together with Liberty City 
Rising and the safety features of HUD, and also the air 
conditioning requirement. But we've been working together for a 
long time. It goes all the way back to our time in Tallahassee. 
So it's been a great partnership, and it will take a Federal 
and State partnership here, and having her as the leading voice 
in the House on these issues is going to be incredibly 
important.
    So, thank you for being here today.

 STATEMENT OF HON. FREDERICA WILSON, REPRESENTATIVE, FLORIDA'S 
                  24TH CONGRESSIONAL DISTRICT

    Ms. Wilson. It's so wonderful to be here with you. It's so 
great to be here with you this morning. This is what we call a 
field hearing, and a field hearing is when Congress leaves 
Washington and comes to a particular community to talk with you 
and listen to you. We all know that everyone can't come to 
Washington to meet with us, so we have field hearings. So I 
want to thank my good friend and partner in crime on so many 
issues, Senator Rubio, for organizing this field hearing in the 
heart of Liberty City.
    We have some economic situations that we need to discuss 
today, and this is the kind of bipartisan working relationship 
that puts people first that voters envisioned when we went to 
the polls last fall.
    As some of you may know, I grew up in Liberty City. I was 
born in Overtown, and I was raised in Liberty City. We were 
among the first black families to own a home. Our family was 
very fortunate because my father was both a small business 
owner and a small business employer. Although we maybe had 
advantages, we were very much aware of how little other people 
had, and my parents never passed up an opportunity to help 
someone in need.
    During the recent government shutdown President Trump 
said--he made a very insensitive comment in which he suggested 
that furloughed workers who have difficulty buying food, they 
should make an arrangement with their local grocer. That 
doesn't work today, but that's how things used to work. I'm 
sure some of you remember that back in the day if you went to 
the grocery store and you didn't have the money, Chairman 
Edmonson, you could say to the grocer, well, we don't have the 
money, but we'll come back and pay you later.
    So decades later there are still many, many people in this 
community who are greatly in need of assistance in being safe 
and keeping a clean roof above their family's head, having a 
job, and putting food on their tables. Public housing residents 
are particularly vulnerable, which is why I have introduced in 
the House legislation to increase and enhance security 
provisions in public housing, and another bill requiring 
comfortable and safe temperature levels in Federal-assisted 
housing. Senator Rubio has introduced companion bills in the 
Senate.
    But a very big part of living with dignity is having a job. 
If you don't have a job, you don't have dignity, and that's 
what's wrong with so many people in our community, especially 
men of color. There are Liberty Cities in just about every 
State where month after month, and sometimes for years, seeking 
employment has become a full-time job, always trying to make 
enough money so you won't have to work three jobs or to just 
keep food on the table.
    Since my first day in Congress, my mantra has been ``jobs, 
jobs, jobs.'' I've introduced several bills to increase 
employment. In fact, today I'm co-hosting a Jobs and Career 
Fair in Miami Gardens that I hope will result in a lot of job 
offers to people in that area, and I hope that many people will 
be hired who have been looking for a job for a long time.
    So I'm very intrigued by the potential of the economic 
zones program that will bring jobs to this area that for too 
long has experienced high poverty and sluggish job and business 
growth. It also would mandate property owners to make 
improvements that will in turn attract new home and business 
owners, and we hope lots of new jobs. In theory, it sounds like 
a win-win situation.
    Spurring Business in Communities 2018, which was signed 
into law in December, the Safe Temperature Act, and the Liberty 
City Rising Act.
    Now, Liberty City has gained a reputation for high levels 
of poverty and high crime rates. According to 2014 data from a 
report of the Miami-Dade Economic Advisory Trust and National 
Liberty University, the Liberty City neighborhood has an 
unemployment rate of 25 percent, a poverty rate of 27 percent, 
a high school graduation rate of 82 percent, and a violent 
crime rate of 25 crimes per 1,000 people.
    It wasn't always like this. The neighborhood that was 
created in 1937 aimed to relieve overcrowding and decrepit 
living conditions for African-American families living in what 
was called the Overtown neighborhood. Liberty Square housing 
project was one of the first housing projects in the Nation and 
is the oldest housing project in Miami-Dade County. From the 
1930s to the 1950s, the neighborhood was seen as the ideal 
housing project, with a low crime rate and people of various 
income levels living around the project.
    In the 1960s and 1970s, absent affordable housing in the 
neighborhood, some claim that led to deteriorating conditions. 
In 1980, the neighborhood was the epicenter of a three-day riot 
after the acquittal of police officers accused of beating a 
resident to death, and Liberty City never came back after that. 
Attempts to spur business development have been largely 
unsuccessful, and struggling schools have been found to be a 
major problem for the community. The $307 million redevelopment 
of Liberty Square began last year. All units will be demolished 
in phases, and 400 mixed-income condos will be constructed 
within approximately five years.
    I represent this community, and my district staff meets at 
least once per month with residents and has been very engaged 
in the Liberty City Rising project. Our concern is that as 
these improvements are being made, they will be pushed out, and 
I get that. Gentrification is a very real fear of low-income 
people, and there are cities all around the Nation that are 
prime examples of how it can push people out of their homes and 
communities. Because these are uncharted waters, I want to 
learn more about what successful models investors will follow 
that will mutually benefit them and the people of this 
community, because we want Liberty City to come back.
    Has any research been done to determine what kinds of 
businesses have the best chances of succeeding in a community 
like this? Have job creation benchmarks been set? Is helping 
local residents start small businesses an option?
    I look forward to hearing your perspectives today and hope 
that these and other questions will be answered. And just keep 
in mind, we all want Liberty City to come back. Thank you.
    [Applause.]
    I want to shout out to Mr. George Ray.
    Stand up, George.
    George is a product of the 5,000 Gold Bottles of Excellence 
Project. Wherever I go, he's there, and he likes me to 
introduce him.
    [Laughter.]
    Chairman Rubio. Congressman Wilson, I remember when it was 
500. It went from 500 to 5,000, and maybe it will be 50,000.
    So, how long will you be able to stay with us? A little 
bit? Are you going to be able to stay with us a little bit 
before you have to go to the job fair?
    Ms. Wilson. I'm going to stay as long as I can.
    Chairman Rubio. Okay. And as we get to our witnesses on the 
second panel, if you have any questions, just come on up. We'd 
like to have any input that you have on that, as well.
    All right. So we're going to introduce our panel now, our 
second panel, who are going to talk a lot about some of these 
issues.
    Before you arrived, I pointed out that the goal here is not 
just to redevelop. We can redevelop our community, you can 
attract investment, but we want to do it in a way where the 
families that are already here can stay, so their kids when 
they graduate from college don't have to move to Atlanta or 
move to Chicago or move to Washington in order to have 
opportunity. They may choose to do so, but it's because they 
chose to, not because they have to. We want to figure out how 
that investment can be geared at rebuilding and not 
transforming it in a way that people have to leave, and that's 
been a challenge.
    Redevelopment largely in the country has meant the people 
who are there have to go because we're going to put some 
expensive condominiums in, and so forth. So we do want to focus 
on that, and I'm really happy that you mentioned something that 
I touched on but didn't get into the detail you did, and that 
is that it wasn't always this way. And the same could be said 
for Overtown, by the way. These were thriving communities that 
were in many ways models of extraordinary success, and there 
are people still around today that remember that time and that 
were key instruments of it, and your own family's experience of 
owning a small business--I don't know all the details of it, 
but I guarantee that your customers and many of the employees 
were from the community.
    So small business was rooted in the community, not just 
located in the community. There's a difference between being 
rooted in a community and located in a community, and that's 
what we're hoping to achieve.
    Our second panel has four really great witnesses, and we 
thank them all for being here today. I think we should start 
first with Dr. Bendross-Mindingall, who serves on the Miami-
Dade School Board and is, again, someone who I've worked with 
for a long time as well. She's been a strong voice on these 
issues for a very long time, and her experience on this topic 
as both an educator and now as an elected official, first at 
the State level and now on the school board, is going to 
provide an incredibly helpful background in the community and 
what makes it unique, and something I know is very close to 
Congressman Wilson's heart and her heart is the number of 
successful young men and women who, once they completed their 
degrees, even advanced degrees, they have to move somewhere 
else, not even out of Liberty City but out of Miami-Dade 
County, in order to find opportunities. We can't rebuild our 
communities if we can't keep our talented young men and women 
and have opportunities for them to be here.
    So as I said, I'm glad you're here, and we really look 
forward to your testimony.

STATEMENT OF DOROTHY BENDROSS-MINDINGALL, SCHOOL BOARD MEMBER, 
                 MIAMI-DADE COUNTY SCHOOL BOARD

    Dr. Bendross-Mindingall. Good morning, everyone. I'm 
delighted to be here. I am so proud of Senator Marco Rubio. As 
he said, I worked with him on issues to make sure that our 
children and families do better, and we've been creeping along.
    Marco, I don't know why I'm sitting here because there are 
others who could tell this story, but I'm just happy that 
someone saw the name and said Dr. Christian will be sitting on 
the front row, and Dorothy needs to speak, because that was not 
always the case. So we're just going to move along with knowing 
that in Liberty City we welcome all people.
    But as you said earlier, we don't want to be pushed out. 
Part of what I will tell you is that I grew up in Liberty 
Square housing projects. I spent 15 years of my life there, and 
that's why I am the person that I am today, because there were 
those there--I'm going to do my best to stick to the script, 
but it's hard, it's very hard.
    So there were those there who did not look at the zip code 
and, of course, told us that we are the very best. We went to 
the high schools. We went to the elementary schools. As you 
said, some of us came back. It's not because we didn't have 
other places to go, but there is so much more to be done, and 
we will continue to work, and we will work with everyone to get 
it done.
    I think that I should talk a little bit about how I got to 
where I am. I started that, but I want you to know that I'm one 
of seven children, the first in my family to go to college. 
Why? Because I had older brothers, and they followed my life 
closely, and as my parents said in the kitchen, in Liberty 
Square housing projects having the best breakfast in the world, 
because my mom was probably one of the best cooks ever, and one 
of my brothers, Deacon James Bendross, told them she's too 
smart not to go to college.
    Well, my daddy was doing construction work, and I heard him 
say to my mom, ``How is she going to go?'' So my brother said, 
well, if we can all pull out of this house in the morning, she 
will go. And they trusted to send me to a private college. I 
was a little girl on welfare, and I didn't know I was on 
welfare, Senator, until I got to college, because the best days 
of my life were in Liberty Square housing projects. That's why 
I visit 6312 NW 14th Court, Unit 115 every year. It doesn't 
look the way it used to, and I've been concerned about that for 
a long time.
    I spoke with Director Liu, and he was coming to the school 
board, and we were having great conversations. But for some 
reason, the story that I'm telling today was not allowed to be 
entered in any meeting. Very, very concerned. I didn't call you 
because when things get a little tough, you know I'll call you. 
But I had no idea that I'd be sitting here, as I said earlier.
    In my life I've been evicted twice; gentrification. And I 
see, I guess you would say, generation three back there 
somewhere. We were evicted from colored addition--not 
``edition,'' ``addition.'' And then from there we went to 
Liberty Square because we didn't have anywhere else to go, but 
I didn't know it was going to be the best years of my life.
    And my dad, who was doing construction work--they built 
Liberty City [inaudible] some of the hotels on the beach that 
we could not enter. So the story started back in, as I said, 
railroad shop colored addition, where we were put out of our 
houses in the rain, 35 families, all off [inaudible] again, Mr. 
Senator.
    But I'm telling you, my heart breaks when I go by some 
places knowing that the treatment is still there. I don't know 
all that is happening in Liberty Square because, as I said to 
you at the start, I was trying to keep up by being a school 
board member, trying to educate children. I could not keep up, 
and I don't know whether that was by design or what, but I'm 
going to do my best to get back involved in what is happening 
there.
    From the time I went to college and became a teacher, and 
then from a teacher to a reading specialist, then to an 
administrator, then to a principal, and met you in Tallahassee 
on the school board, that's not the story of most people who 
lived in Liberty Square. It just isn't.
    So I want you to know that I'm working very, very, very 
hard to do my due diligence with the circle of brotherhood who 
thought it not robbery to name the former Floral Heights 
Elementary School in my honor, the Dr. Dorothy Bendross-
Mindingall Socioeconomic Institute, doing a great job, but 
that's not enough.
    Again, as you said earlier, jobs. My dad would always say 
to us when we started our careers, get up in the morning and 
act as if you will not have a job, so go in there and do your 
very, very, very best, otherwise you won't.
    I'm very, very, very, very happy to let you know that 
without what we're doing today, a lot of people in this room 
will not know it, a lot of people don't know that we are here. 
So my goal is to meet with some of the people who have 
struggled and made sure that the word got out that we are doing 
something in Liberty Square. I don't know all that we're doing 
in Liberty Square, as I said earlier.
    We've got to keep up with what's going on there because the 
people--and I wrote down the note. You said that we want to do 
what we can for our communities, but we do not want the people 
that are there not to participate and not to have homes, not to 
be able to go to stores.
    It was a thriving community. We didn't have to leave for 
anything. Liberty Square is just what it says, it's a square. 
We walked across the street to our stores, and they were owned 
by people of color, to our restaurants. We even had what was 
called a little night club scene. I couldn't go because I was a 
little too little for that.
    [Laughter.]
    But 15th Avenue was the place. When I ran my election last 
August I was asked over and over, are you crazy? Have you lost 
your mind? Why are you setting up a campaign office there? To 
give people jobs.
    I want you to know that I'm going to follow this. Please do 
what you did in Tallahassee for MCI. If it were not for you and 
your telling others, whatever Dorothy wants for that community, 
you give it to her--Marco, we're working very, very hard. The 
Chairwoman can attest to this. That was supposed to do more 
than it did, but we're going to do our best to move forward 
with MCI.
    Thank you again. No, I didn't stay on the script, but I 
tried to. Well, no, I didn't try to.
    [Laughter.]
    Thank you so much for the time. God bless.
    [Applause.]
    Chairman Rubio. Well, we're going to hear now from Director 
Liu, who directs the Miami-Dade County Public Housing and the 
work at Liberty Square.
    We thank you for coming. We want to hear that update and 
see how that fits into [inaudible].

STATEMENT OF MICHAEL LIU, EXECUTIVE DIRECTOR, MIAMI-DADE COUNTY 
     DEPARTMENT OF PUBLIC HOUSING AND COMMUNITY DEVELOPMENT

    Mr. Liu. Thank you very much, Mr. Chairman. It's an honor 
to be here, and a special thank you for those visits.
    Chairman Rubio. Do you want to pull that mic closer?
    Mr. Liu. I want to say thank you for the visits, and I want 
to underscore the ``s,'' plural, the visits that you have made 
to Liberty Square and Liberty City to assess what is going on 
in reality.
    As Director of Miami-Dade County's Department of Public 
Housing and Community Development, I have followed the 
direction of Mayor Carlos Gimenez and the Board of County 
Commissioners, the Chairwoman and District 3 Commissioner, 
Audrey Edmonson, in the vanguard of managing the Liberty City 
Rising initiative, and in particular the component of the 
effort that encompasses the redevelopment of the Liberty Square 
public housing.
    Liberty City Rising, announced in early 2015, as previously 
mentioned and referenced by Chairwoman Edmonson, is not just 
about public housing. Liberty City Rising comes with a 
financial commitment by the county of over $74 million, $46 
million in base financing for Liberty Square, which has 
resulted in a redevelopment project that's going to cost at the 
end of the day over $350 million, which is a leveraging factor 
of about seven to one; and in addition, $28 million in economic 
development and other non-public housing in Liberty City.
    Indeed, Liberty City has great potential to become a vital 
part of the county's growth and strength in the future. With a 
population of approximately 50,000 persons and 15,500 
households, Liberty City, if it were a formal city, would be 
the seventh largest in the county. Economists have said this 
``market area'' to reach over 500,000 persons with an aggregate 
household income for the market area of over $5 billion.
    Chairman Rubio. I think they're saying they can't hear you 
in the back.
    Mr. Liu. Over $5 billion, which represents significant 
purchasing power. It should be of particular interest to the 
committee that of the total number of businesses in Liberty 
City, 1,599, 92 percent of them employ less than 20 people, and 
94 percent are single-location businesses, small businesses.
    Hence, it makes economic sense to allocate resources that 
will support area small businesses and provide education and 
job training options to assist Liberty City residents and 
businesses to link up and maximize job opportunities for 
Liberty City residents. This is a direction that the county is 
embracing as it proceeds with the Liberty Square redevelopment 
component of Liberty City Rising.
    Our private-sector partner in the project is obligated--
this is not aspirational--is obligated to provide 20 percent of 
the 1,158 projected construction jobs to HUD Section 3, that is 
public housing and lower-income residents of Miami-Dade County, 
and 75 percent of the approximately 257 post-construction jobs 
to Section 3 residents of the county. Priority is given to the 
residents from area zip codes of 33142 and 33147. In addition, 
50 percent of all subcontracts, with an estimated value of $90 
million, must be awarded to Section 3 small businesses, 
minority-owned businesses, and women-owned business 
enterprises.
    As of today, as we move through Phase I of the project, $50 
million of the total development costs of that first phase, 
$25.5 million, has gone to small businesses. That's 59 percent 
of the subcontracts of that total development cost.
    To date, there have been over 13 subcontractors that have 
been awarded contracts to Phase I, Section 3 small businesses, 
and there have been--beginning this summer there are 42, but as 
of today there are 105 jobs that have been captured, that have 
been hired by Section 3 qualified workers, and another 93 of 
them come from 33142 and 33147 zip codes.
    Employ Miami-Dade has been a key component of this. Employ 
Miami-Dade brings together Career Source of South Florida, 
which is the business and operational entity for the South 
Florida Workforce Investment Board, created pursuant to the 
Federal Workforce Innovation and Opportunity Act, Miami-Dade 
College, and county and private-sector interests. By the time 
the backhoes and shovels are in the ground, there were Employ 
Miami-Dade trade workers with skills that could be considered 
for hiring.
    The construction firms doing the work in Phase I could not 
and cannot plead that there are no qualified Section 3 workers 
to be hired, and that's a huge difference here that the 
direction of Chairwoman Edmonson and Mayor Gimenez made a 
requirement, that Section 3 hiring of low-income residents 
would be a requirement, not just to the extent feasible, which 
is the HUD regulation, which has been a huge loophole in 
Federal policy for the 34 years that Section 3 ``requirements'' 
have been in place. Federal law does not really require it, it 
just says ``to the extent feasible.''
    We have gone a step further in Miami-Dade County. We have 
made it a contractual requirement under penalties of not 
meeting those requirements to, in fact, make those hires real.
    In addition, as again referenced by Chairwoman Edmonson, 
the project by contract, under threat of penalties, will have 
15,000 square feet of retail commercial space along NW 15th 
Avenue specifically set aside for mom and pop small businesses.
    Phase I of Liberty Square is well underway, and the first 
two buildings are on target to be completed by the end of this 
first quarter of this calendar year. Mr. Chairman, we'll make 
sure that you and all of your committee members get invitations 
to come to the grand opening there.
    Phase II is ready to close. All of our documents on our end 
are ready to go, and we're planning on closing in February. 
We're just hoping that HUD will be able to catch up after this 
Federal shutdown. We've been in communication with them, and we 
hope that we can make that happen.
    You picked a very auspicious day to have this hearing, 
because beginning today, actual assignments of units in Phase I 
are being made to the residents who will temporarily transfer 
to units on site, so there is no displacement, units on site, 
and they will see and get to pick the units that they will be 
moving into in Phase I.
    Finally, we are hopeful, as you have mentioned, sir, that 
the new Opportunity Zone Program contained in the Tax Cuts and 
Jobs Act will be an added incentive for private-sector 
investment in this area. It was included in the Governor's 
designation of Florida Opportunity Zones, and we have been 
reaching out to a number of funds that are in the process of 
being formed and educating them on what has happened in this 
community.
    Liberty City is really happening. The attention to this 
community by the United States Senate and your committee could 
not have come at a better time. Any resources that the Federal 
Government can set aside for Liberty City to help in its 
economic revitalization I assure you will not be wasted, and I 
pledge that my department, under the direction of the county, 
will assist in leveraging those resources to the maximum extent 
possible. We know how to make use of those resources and how to 
engage the private sector at the local level here.
    Thank you for giving me the opportunity to participate on 
this panel, sir.
    [The prepared statement of Mr. Liu follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Rubio. Thank you so much. I appreciate it.
    Now we're going to hear from Brian Van Hook, the Associate 
Regional Director of the Small Business Development Center, and 
I believe a former staffer of this committee at one time.
    Mr. Van Hook. Yes, sir. It's a little weird to be on this 
side of the witness table.
    Chairman Rubio. So, there's life after the Senate.
    [Laughter.]
    We're interested to hear from you about the services that 
you provide to small business, helping them to gain access not 
only to SBA programs but other programs that are available. 
Thank you for being here.

 STATEMENT OF BRIAN VAN HOOK, ASSOCIATE DIRECTOR, FLORIDA SBDC 
              AT FLORIDA INTERNATIONAL UNIVERSITY

    Mr. Van Hook. Thank you, Chairman Rubio, and thank you for 
the opportunity to appear before the committee today.
    As you mentioned, I'm a former staffer of the committee, so 
it's extra special for me that your first field hearing is here 
in Miami, here in Liberty City.
    Chairman Rubio. My first hearing, period.
    Mr. Van Hook. Your first hearing, wow.
    Chairman Rubio. I can't lose the gavel. We've got to take 
this back.
    [Laughter.]
    Mr. Van Hook. It's a pretty cool gavel.
    But I know the amount of time that you have to spend in 
terms of putting these field hearings together, and I know, as 
you said, this is your opportunity to bring Washington to the 
community. So I know it's very important, and I think it's very 
important that you're holding it here in Liberty City.
    As you mentioned, my name is Brian Van Hook. I'm Associate 
Director of the Florida Small Business Development Center at 
FIU. Our center is a Small Business Administration, SBA, 
resource partner, and we're focused on helping businesses in 
Miami-Dade County grow and succeed. It's a really great job. 
It's not a tough sell that we basically say, hey, we want to 
help you start a business, we want to help you grow a business. 
Actually, we did such a good job here in Miami-Dade County that 
they also let us expand to Monroe County as well. So we have 
the tough job to say, hey, we're going to help businesses in 
Miami, but also we get to go to the Keys and help businesses to 
grow down there as well, so it's a really tough job.
    But we help these businesses through our dedicated team of 
17 experienced experts. They're not jack-of-all-trades/master 
of none. They're all specialists in a particular area. And 
since Congresswoman Wilson recognized George Rain III, I'd ask 
him to stand up again for a second shout out because he's one 
of our business consultants. Each of these, as I said----
    Chairman Rubio. Is he in charge of the keys?
    Mr. Van Hook. No.
    [Laughter.]
    He does have a couple of clients down there, though. I 
don't know how he worked it, but he got a couple of clients 
down there.
    But they're each a specialist in a specific area, and they 
work one-on-one with the business owners in access to capital, 
government contracting, international trade, HR, business 
plans. This consulting is confidential and it's provided at no 
cost to the business owner.
    Overall, our center works with approximately 900 business 
owners a year. Actually, one of these clients that I'm proud to 
talk about is Ed Haynes.
    Ed, can you stand up? I didn't recognize you because you 
didn't have your security outfit on. You're dressed to impress.
    But Ed Haynes is the founder of Haynes Security Services. 
He's been in law enforcement for more than 30 years. He served 
in the United States Marine Corps, and he was also the first 
black police officer in the Village of Miami Shores. Actually, 
Ed started his business in 2011 right near here in Liberty 
City, and his first client was Congressman Wilson. He has kind 
of grown since then, and basically Haynes Security Service has 
expanded to provide security for real estate development 
companies at events, and also Miami-Dade Metrorail. Our center 
worked with Ed in terms of maintaining existing contracts that 
he had, and also securing the capital to go after new 
contracts.
    In particular, our team worked with him to prepare 
financial documents and also find the right lender. The result 
was a $50,000 loan from the Miami Bayside Foundation for 
equipment and working capital to help with payroll costs, and 
this has allowed Ed to grow his company from eight employees in 
2015 to more than 35 today. Our center has continued to work 
with Ed--I don't let him off the hook now that he's going after 
larger contracts and larger projects.
    Now that we've talked about Ed, one of the great clients we 
work with, let's focus on what's going on here in Liberty City. 
As you guys mentioned, the Liberty City Square project is one 
of the largest affordable housing projects in the country. It's 
almost $300 million total. The redevelopment promises new 
opportunities for families, for the community as a whole and, 
as we're here to discuss, local small businesses.
    It's my understanding that, as Director Liu mentioned, the 
developer has committed to create small business programs for 
construction and goods and services for the project. There's a 
commitment to provide contracts to Section 3 small business 
enterprises, minority business enterprises, and women-owned 
business enterprises. But with any redevelopment project this 
size, it's common for larger out-of-state firms to come in and 
compete to be part of this project, and a lot of times also 
there's a local preference office that's set up to kind of 
filter the local small businesses, but a lot of times those 
LPOs, businesses don't get much farther from that.
    So you see a lot of also national restaurants and retail 
establishments that come in to set up shop in the community. As 
Chairman Rubio mentioned, it's important to not lose sight of 
the successful locally grown anchor businesses that have been 
here and that are committed to being here for the long term.
    In terms of the challenges that these businesses face when 
they're bidding on these contracts and winning them, access to 
capital, as the Chairman mentioned, is a major issue. As 
businesses grow and compete for larger contracts, they often 
struggle to maintain the cash flow necessary to service the 
contract, and that's actually where groups like SBDC come in.
    We work with business owners to improve their financial 
management. It's a better budget for expected growth. Otherwise 
successful businesses, they struggle because they have those 
standard 30-day, 60-day, 90-day delays from when you do the 
work and it's completed until you get paid. So access to 
capital is a necessity, not just for these contractors but also 
for businesses in the community that are looking to grow.
    So for our center's purposes, we cast a wide net when we're 
helping local small businesses obtain capital. We basically 
want to help people access loans, but also equity investors or 
other types of financing as well. We want as many tools in our 
toolbox as we can get. So for that reason, we appreciate the 
attention that you put on the SBA's SBIC program. It's my 
understanding that the original intent behind that program was 
to address gaps in long-term funding for scalable, growth-
focused small businesses. But actually today, Chairman Rubio, 
if you go to the SBIC website on the SBA's website, they list, 
as you mentioned, seven SBICs in Florida. Of those seven, three 
are listed as likely not still investing. And two of the ones 
that are likely not investing are here in Miami. They're 
actually right down the street from my office.
    So to better help those small businesses grow, it's 
important, as I said, to have as many tools in the toolbox as 
possible. That's because, depending on the business size, the 
business stage, the expected use of the funds and industry, 
suitable financing options are going to differ from business to 
business. Therefore, we encourage opportunities such as your 
legislation that is going to increase the pool of capital 
that's available to grow Miami-Dade and Liberty City's small 
businesses.
    In closing, I just want to thank you again for the 
invitation to speak today. It's our hope that this field 
hearing is going to ensure that development here in Liberty 
City is going to create opportunities for local small 
businesses, as well as jobs for the community. And for SBDC's 
part, we're looking forward to any collaborations that come out 
of this hearing or any of the groups that we can work with. I 
actually see Jordan from Legal Services Miami, and we've 
actually been working with them on an Opportunity Zone Working 
Group to try to find businesses that are in the Opportunity 
Zone so that we can market them and hopefully get investors.
    Thanks again for your time.
    [The prepared statement of Mr. Van Hook follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Rubio. Thank you. The bill that we passed, it's 
not a law. It's designed, we hope, to fix that issue with the 
SBICs, the investment companies in Florida. As you said, 
Florida really only has three or four active ones, and they 
have to be a key cornerstone of driving that investment into 
the right communities. Florida is the third largest State in 
the country. It doesn't make a lot of sense that we're that low 
on the totem pole.
    Our last testimony on this panel, and then I'm going to 
have a few questions, we're going to hear from Mary Burke 
Baker. She works as a Government Affairs Counselor at K&L 
Gates, but she has extensive background in tax implementation, 
with a special focus on the newly enacted Opportunity Zone 
provisions. We kind of want to hear how similar provisions have 
worked in the past and how these programs are likely to succeed 
now, especially given our very clear goals here locally.

 STATEMENT OF MARY BURKE BAKER, GOVERNMENT AFFAIRS COUNSELOR, 
                 K&L GATES LLP, WASHINGTON, DC

    Ms. Baker. Thank you, Chairman Rubio. Thank you for 
inviting me to testify today about Opportunity Zones. I should 
note that I'm participating in this hearing on my own behalf, 
and my comments are not necessarily reflective of K&L Gates or 
our clients.
    Chairman Rubio. The lawyers wrote that. I bet a lawyer 
wrote that.
    [Laughter.]
    It's like the car advertisement with that little stuff on 
the bottom. All right, we got it.
    Ms. Baker. And I have to say that I've just been very 
inspired by meeting folks today and listening to the comments 
and the stories, and I do believe that Opportunity Zones is 
entirely consistent with the goals that are being expressed 
here today.
    Today is an important step toward ensuring that Liberty 
City and other Opportunity Zone locations in Florida are well 
positioned to reap the considerable advantages of the 
Opportunity Zone Program, including long-term investment 
leading to a sustained stronger local economy and the creation 
of well-paying jobs for residents.
    It is important that city officials, economic development 
advocates, and business and community leaders understand the 
potential of the program, how it works, and what they can be 
doing in order to maximize OZ benefits for Liberty City. 
Accordingly, my testimony focuses on ways that the OZ program 
can help Liberty City and what champions of the city can do to 
help attract OZ investment into the area.
    Liberty City's selection as an Opportunity Zone is 
significant because it provides Federal tax incentives to 
investors to make quality, long-term investments in the 
community. Chairman Rubio mentioned that these investments need 
to occur for at least a 10-year period, minimum. These 
incentives include deferral of income taxes on capital gains 
that are invested in Opportunity Funds that must hold at least 
90 percent of their assets in new businesses or new tangible 
property physically located in the Opportunity Zones, and tax-
free treatment of capital gains arising from those investments 
that are held for at least 10 years.
    OZ incentives can reduce the cost of capital for 
development projects, new businesses, and emerging technology 
initiatives, and attract capital to areas that otherwise might 
be passed by.
    Opportunity Zones have the potential to be a win for 
everyone involved, including the investors, developers, 
entrepreneurs, but most especially and most importantly the 
communities that can benefit from new affordable housing, 
accessible retail like grocery stores, services like daycare 
and medical clinics, industry and good jobs. OZ is particularly 
effective when paired with other Federal, State, and local 
development incentives.
    It's important to stress that tax benefits accrue only if 
the investments are in Opportunity Zone assets and businesses 
that are substantially located, used, and operated within the 
Opportunity Zone. Businesses must be active trades or 
businesses of the type that will generate economic activity and 
new jobs. Passive investment activity is outside the scope of 
the policy and severely curtailed. For example, Opportunity 
Zones do not permit speculators to buy up and sit on land 
unused for 10 years and then sell it at a profit. The 
Opportunity Zone incentive is deliberately designed to boost 
the local economy through active investments.
    So what type of investments are we talking about? The OZ 
incentive can help attract investment dollars for a wide 
variety of projects and businesses. Rehabilitation of outdated 
or abandoned buildings or new construction can provide 
affordable housing for residents. Commercial real estate 
development can provide accessible and modern space for new 
enterprises. New and expanding businesses, including 
manufacturing, assembly, warehousing, distribution, retail, 
restaurants, daycare, start-ups, energy, research facilities, 
medical and other services can provide the base for long-term 
economic sustainability by offering permanent, well-paying jobs 
within practical commuting distances of current residents in 
the Opportunity Zone, all while improving the quality of day-
to-day living.
    Further, the ripple effects of stable investment in the 
city, particularly from related suppliers and service 
providers, can result.
    How can Liberty City get in on this? The impact of 
Opportunity Zones on any particular area, including Liberty 
City, is largely dependent on the Opportunity Zone's ability to 
attract investment. There are no statutory caps or allocations 
limiting the use or the investment in Opportunity Zones. 
However, there is competition for investor dollars in projects 
among communities as awareness of the program and as potential 
to create substantial economic growth and job creation spreads 
across the country.
    To compete, economic development authorities, government 
agencies, business associations, and community leaders in urban 
and rural areas throughout the country are taking steps to 
proactively encourage investment in their Opportunity Zones by 
publicizing the program and their community needs and 
coordinating with investors, developers, and business owners to 
facilitate the use of Opportunity Zones.
    It's vitally important that communities like Liberty City 
understand the OZ incentive and act promptly in order to 
maximize their ability to attract investment and ensure they 
receive their fair share of OZ benefits.
    Thank you again, Mr. Chairman, for inviting me to 
participate, and I'm happy to take any questions.
    [The prepared statement of Ms. Baker follows:]

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    Chairman Rubio. Thank you.
    Let me just start by saying that all this talk about 
reinvesting and revitalizing our community, sometimes there's a 
perception created that we're talking about charity, that this 
is a nice thing to do. This is not charity. The biggest 
challenge of the 21st century is the competition with China in 
every realm, okay? China has 1.4 billion people. The U.S. has 
330 million people. We need everybody. They have four times as 
many people as we do. We can't afford to be leaving anybody 
behind.
    So the idea that we have communities with incredibly 
intelligent and talented young men and women who, because of 
the circumstances they find themselves in, sometimes born with 
four or five strikes against them, and you start adding it up--
substandard housing, dangerous neighborhoods, a difficult 
family situation--when you start adding all of that up, these 
children are going to struggle to succeed unless some dramatic 
things happen to change that cycle, and that was the thought 
process behind the Miami Children's Initiative and the Magic 
City Initiative. It now has been renamed a couple of times, but 
it's based on the Harlem Children's Initiative.
    Oh, it's Miami Children. Was it Magic City at one time? 
Then it went back to Miami. It started out as--what was the 
original when we first did it? Magic City Initiative, right. 
Children's Zone, exactly. And expanding, hopefully. And there 
are similar groups now in Jacksonville, Orlando, and some other 
places. That was the idea behind that, and that continues to 
grow.
    To break that cycle, you have to get involved in those 
factors. But ultimately, it's in our geopolitical interests as 
a country to deal with it. That's how big this is.
    So I want to start with Dr. Bendross-Mindingall. We've 
talked a lot about talented young men and women. This doesn't 
get enough coverage, but there are children and students 
growing up in this community that are going away to incredible 
colleges, getting advanced degrees, and then we don't see them 
again. People have the right to do that. But in these 
instances, many times they cannot come back. There's nothing to 
come back to in terms of a job or employment.
    So I wanted to talk to you a little bit about what do you 
think is a major obstacle to keeping our talent here.
    Dr. Bendross-Mindingall. Thank you, Mr. Senator.
    Partly, almost in a sense shutting them out. I'm looking at 
the audience, and I don't see what I expected to see. When you 
come to Liberty City, I expect to see Liberty City. And if 
they're here, if they were here, they could take the message 
out.
    The district that I serve on the school board includes 65 
schools, but I'm up for the challenge, the idea that we want to 
have as much curricula in the system so that children can find 
a pathway to success. And I don't like the statement that all 
children are not going to college. You should add to that, 
``but they can go here.''
    So right now we're looking at more technology is needed 
because, as you said, children in Liberty City are absolutely 
bright, and I pat myself on the back because I'm one of them. 
Liberty City is known for just being closed out.
    In my opinion, when I look at certain neighborhoods and I 
travel all over because I can, I don't see our children sought 
after to be in parts of the neighborhood. I just saw something 
on TV last night where two young men of color were arrested. 
Why? Because the officers said you don't look like you should 
be in this neighborhood.
    Well, I think the first look at me, you would not think 
that I was evicted twice. So what does that look like?
    We've got to provide--and as you said, Mr. Senator, we 
don't have now the housing that's needed. We're working as hard 
as we can bringing programs into schools. I have 15 traditional 
high schools and five alternative high schools. We are filling 
those alternative high schools as fast as we can. Lindsey 
Hopkins is one. D.A. Dorsey is another.
    We have to make sure that we have something for the 
children to come back home for, and the jobs are not there. But 
if you're not educated, how are you going to get those jobs?
    I'm glad we have this panel where we're reaching out to 
small businesses, but that has to be something--I'm digressing 
now--that the circle of brotherhood--and I keep saying that, 
they are creating jobs. I don't know if you know Leroy Jones, 
Mr. Senator? Good. They create jobs. They are now helping those 
people, our people, all people, who are returning citizens. But 
before they were able to go ahead and interview for a job, they 
were allowed to become their own bosses.
    But our children don't have to come back and struggle as 
maybe generations before them did. They can go everywhere and 
anywhere other than Miami. I have a daughter who works for the 
City of Miami. Her efforts were looked at by one of the former 
mayors, and when she came home from Spellman she came out of 
high school to that job.
    But we have to look out for the other children, and I don't 
think we're doing enough of that. I really, really don't. 
Schools are trying as hard as they can, but we've got to 
combine all efforts, all efforts. The zip codes that Mr. Liu 
mentioned, those are hard core zip codes, and we should be 
trying our very best to go in there almost daily, what's going 
on.
    And let me just add this before I close. Years ago I worked 
with a beautiful woman named Janet Reno. We rewrote the lease. 
We met Monday nights talking about what was supposed to be done 
in public housing. Mr. Senator, I don't know if you have the 
time or want to send someone in. Please take a look at that 
lease. Things that were supposed to be done were not done. One 
was either a resident would go to school or get a job. That was 
not enforced. So it's like a domino effect. If the parents 
cannot take care of the children, then the children will take 
care of themselves in a fashion that we don't like.
    So it's not the greatest place for our children to come 
back to, but we can do it. I know a little bit about your 
family. We didn't come from greatness, but somebody in that 
house said to us you're going to get an education because 
that's going to be your key and your pathway to success. Well, 
parents who have not seen that kind of a world will not insist 
that their children go to school.
    So it's not here for our children to come back. We have to 
work as a unit to bring them back.
    Chairman Rubio. We're going to try.
    The committee rules limit--we're bumping up on the time 
here, but that's why I want to rush through it real quick. But 
let me just say this. We do have to highlight success, and many 
of you are aware of Judge Rodney Smith, who is from the 
community, grew up in the community.
    Dr. Bendross-Mindingall. Yes.
    Chairman Rubio. He's going to be a Federal judge as soon as 
we work through the labyrinth that is the Senate rules and how 
complicated it all is. But we're very proud of that nomination.
    [Applause.]
    And children in the community will know there's a Federal 
judge--he's still in the community. ``That could be me'' is 
what we hope they'll think.
    I want to rush quickly because I don't want to run out of 
time.
    On the issue of feasibility, you talk about the feasibility 
loophole and the local hiring. One of the things I was most 
interested in when I went down is that there are still 
challenges. One of the things is it's great to hire someone and 
do the construction work, but it's also important that as a 
result of that work they acquire the licensing and the skills 
so that's not the last job they have. They now become people 
working in that industry that can be hired by somebody else. 
How have you worked through that?
    Mr. Liu. Well, in partnership with Related Urban--and 
Alfred Milo, the principal of Related Urban, is here. To their 
credit, and working with us and the school board, as an 
example, we have created for the first time ever a legally 
operating school board-endorsed apprenticeship program that 
formally will assist these entry-level workers to work up the 
scale to become actual tradesmen. There are a number of 
examples right now on Phase I. If you go out there, you will 
see people working who have worked through that program and are 
working in the program that then, even after this project is 
over, they will have the skills to continue to work with the 
subcontractors they're working with now or with other 
companies, and there are mentorship programs that are being 
facilitated right now, again in partnership with Related and a 
number of their subcontractors.
    I would also mention that there's strong collaborative work 
going on with the county's boot camp effort where we're taking 
young people who have a record, ex-felons, and giving them a 
trade, giving them an opportunity to increase their level of 
skills so that they will be able to continue in the line of 
work that they're involved with.
    Chairman Rubio. Okay. And I do have to hurry. I got a note 
that the Vice President is in town at an event I'll be at 
later, but they're closing roads. They don't close them that 
often. Our traffic is bad enough as it is.
    But, Mr. Van Hook, quickly, about the SBDC's, a lot of 
people aren't even aware they exist. If you could briefly just 
tell us what do they do, how do they help a small business?
    Mr. Van Hook. SBDC, as I mentioned, we have a team of 
consultants such as George Rain, who's here, and they basically 
work one-on-one with the business owner to help them start a 
business or grow a business. Actually, we don't sit in an 
office basically waiting for people to come to us. We actually 
go out into the community and meet with the business owners at 
their place of business, go out to events such as here and 
around. So we pretty much try to be out of the office, and we 
intentionally set up our center to be kind of decentralized 
versus kind of the traditional SBDC model.
    Voice: [Inaudible.]
    Mr. Van Hook. I can give it to you, ma'am. SBDC.FIU.EDU is 
our website, and our phone number is 305-779-9230.
    Chairman Rubio. Ms. Baker, I wanted to ask, you talked 
about briefly the type of investments that communities like 
this should be focused on to anchor it in the community so that 
we can ensure that this is not leading to gentrification, 
forcing people out, and actually is employing people here 
locally.
    Ms. Baker. Sure. The initial round of interest in 
Opportunity Zone, simply because of the guidance that's been 
issued, has been focused on real estate development. So we're 
seeing a lot of clients that are interested in affordable 
housing. That's been a particularly important aspect of 
investing in Opportunity Zone property.
    We do expect, as additional guidance and clarification 
comes out from the Department of the Treasury, that we're going 
to see much more interest in businesses, because that's really 
where you get the long-term sustained economic growth and the 
job creation.
    So this can be virtually any type of a trade or business, 
as long as it's an active trade or business and a new trade or 
business. It's not intended to take a business that exists and 
retrofit it into qualifying. It needs to be new economic 
activity that's going to create new jobs, and it can be 
anything from retail to grocery stores to clothing stores to a 
movie theater to a medical clinic to daycare, as well as any 
industrial or any type of manufacturing. It's really a very 
resilient, flexible program.
    Chairman Rubio. They will all be staying after because 
we've run up against the clock here for the time allotted for 
the hearing. All of this stuff is now included in the record, 
and we're going to continue to engage with everybody who is 
here and all the partners.
    We wanted really to do this so we can get it in the record 
as we go back, and even from here we've already developed ideas 
about what we can do on those loopholes on hiring and what we 
need to do to ensure that we're attracting not just investment 
but the right type of investment, and where we can work, 
whether it's through the HUD programs or the Small Business 
programs, to ensure that the Federal laws reflect--or even on 
the lease. Someone mentioned how the leases were reworked and 
how all that has been sort of left behind, and the programs 
that need to be at the housing and HUD level to ensure that 
they're tied to employment opportunities so that you're not 
just providing housing, you're providing more than housing. 
You're providing the opportunity to get skills and/or a job so 
you move forward. It's a hand up. So we're hoping people 
prosper and move forward.
    We did it with about one minute to spare. Everything here 
can be followed up on. By the way, the record is going to 
remain open for two weeks. So if anybody has anything written 
that they want to see part of this record, we're going to give 
you the opportunity to submit that here. We'll give you our 
contact information, because in about two weeks----
    Voice: May I say something?
    Chairman Rubio. I'm sorry?
    Voice: May I say something?
    Chairman Rubio. It will have to be real quick because we're 
going to run out of our rule time here that we have.
    Yes, sir?
    Voice: First of all, thank you for coming. I would just 
echo some of the concerns----
    Chairman Rubio. Just use your preacher voice so we can all 
hear you.
    [Laughter.]
    Voice: I want to echo some of the concerns that the 
Congresswoman made when it comes down to gentrification and 
making sure that as we are for upward mobility, we are for 
economic development, we are for all of those things, but we 
are also for traditional neighborhoods such as Brownsville, 
Livingston, Overtown----
    Chairman Rubio. Don't forget anybody. You'll get in 
trouble.
    [Laughter.]
    Voice: We are concerned about the rich culture that these 
communities exhibited many, many years ago. If given time, in 
Overtown, you can walk down the street and you'll see a James 
Brown or an Aretha Franklin or many other greats of that time.
    What we're seeing is that when we talk about the programs, 
the housing project that we have at Liberty Square and 
Brownsville, those are two rich communities. Out of Liberty 
Square you have not only our great school board member, we have 
Miss [inaudible]. I can just name many, many great people who 
came out of Liberty.
    Let me just wrap this up right here. I want to be 
respectful to the Senator because he has to go with the Vice 
President.
    But what we're seeing is that when we have this public-
private partnership, we want to make sure that all of the regs, 
all of the regulations are followed, and especially the 1968 
Public Fair Housing Act, which Dr. King, in the 1964 Civil 
Rights Act, had this in mind. He had this vision that low- and 
moderate-income housing individuals would not be taken 
advantage of, and gentrification would not exist.
    So what we're saying is that we would like for you, as our 
U.S. Senator, to monitor this, making sure that the civil 
rights are not violated of the citizens in those low-income 
neighborhoods because many of our communities--you take 
Brownsville, you take Adam [inaudible], Overtown, we have a 
project going on right now, an $802 million project going on by 
395, the 836, and the I-95 project.
    I attended a meeting the other day with the Department of 
Transportation, and we asked whether or not there was any 
minority participation on the Federal level. They said they 
don't have to put set-asides, but they're going to try to reach 
a 10 percent threshold; and whether or not there was community 
engagement. There was not any community engagement. I represent 
the district, and I have not heard about one meeting in these 
projects where we have $802 million.
    Let me just say this, because there are so many things I 
wanted to say, and I like to talk fast. I will make my 
statement in writing since we've got a two-week period----
    Chairman Rubio. Yes, yes.
    Voice: I'll put it in writing so that you will be 
monitoring these Federal dollars. These are dollars in the 
Constitution and in acts that are supposed to protect low-
income families and people.
    We are concerned about the fact that our neighborhoods are 
changing. Liberty City and Brownsville and all of these areas, 
Overtown, they just ripped out eminent domain, 85 housing in 
this 395 project.
    So what we're seeing, Senator, we need your help. You're 
doing a good job representing us, but we're not going to sit 
back. Those of us who have children and grandchildren, when we 
leave here on this earth, we want to make sure that they can 
live in Liberty Square, they can live in Overtown. We don't 
have Overtown [inaudible].
    So I'm not busting at you, Senator, because that wouldn't 
be the right thing to do, but I will say this: We need your 
help.
    Chairman Rubio. Yes, sir. And that was the purpose of this 
hearing, to ensure that we just don't have redevelopment.
    [Applause.]
    The purpose of this hearing was not just to have 
redevelopment but to have redevelopment that allows the 
community to be the community, because it's easy to just--we've 
seen it happen all over the country. It's happened all over the 
country, and we thought this was a great place to start 
focusing on because it was the opportunities there. But if it's 
not properly managed, you're going to wind up with a community 
that has really fancy, $2 million condominiums, but the people 
who made it what it was aren't there anymore to enjoy it.
    So the record will remain open for two weeks. Please submit 
in writing everything you have.
    And I apologize. We had an hour and 45 minutes allocated 
for this. But we thank you, and we're going to take these ideas 
and turn them into something.
    And with that, the meeting is adjourned.
    [Whereupon, at 10:39 a.m., the hearing was adjourned.]

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