The Great Land Grab

A nonprofit "charity" is pursuing millions in taxpayers' money to redevelop the Fourth Ward. The question for Houston Renaissance is, charity for whom?

Renaissance is indeed planning 350 houses priced within reach of buyers determined by HUD to be "moderate income" wage earners. That's nice, but it's hardly charity: Taxpayers, not Houston Renaissance, will foot the bill. The city's $3.4 million grant will be used to "buy down" the cost of the land for the 350 low-cost units, savings that will be passed onto homebuyers.

But if Renaissance gets its way, a portion of the grant will be held back and used to buy land for market-rate housing that will generate significant revenues for the nonprofit. Board members maintain that Renaissance will eventually meet its affordable housing obligations, though it's easy to get the sense they'd prefer they didn't have to.

"Our quid pro quo with the city is to ensure that there is a true, mixed-income, diverse community," says board member Gilbert Herrera, who has a significant stake in Renaissance's success, having personally guaranteed a $250,000 bank loan for the project. "The only way the city can ensure that certain units are set aside as affordable is to participate in a meaningful way."

Herrera acknowledges that Houston Renaissance, as a nonprofit, has thus far been able to overcome the kind of obstacles that have thwarted previous efforts to redevelop the Fourth Ward.

"First, it allows us to take advantage of these public-private partnerships with the city," he says. "And two, it removes the very issue that got American General in trouble, which is a bunch of white, for-profit developers coming in and trying to dictate to a black community what they're going to do."

Herrera was referring to Founders Park, a Fourth Ward redevelopment project proposed in the late eighties by American General and the Cullen Center, the corporate legacies of two local civic deities, Gus Wortham and Hugh Roy Cullen, respectively. Founders Park was to be financed in part by property tax subsidies, but the plan dissolved after the administration of then-mayor Kathy Whitmire failed to lend its support.

Another factor in the death of Founders Park was Allen Parkway Village, which lies just north of the Fourth Ward. In opposing the redevelopment, low-income housing advocates rallied around the near-empty housing project to highlight the failure of the proposal to address the needs of poor residents.

"If you reflect back on it," says Frank Kelly, Renaissance board president and an architect who worked on Founders Park, "these were two corporations that had all the bucks necessary to make the thing happen without anybody else doing anything. But in the end, they just concluded that, with the political atmosphere and the lack of support from the city, it just didn't make sense and they quietly let it drop.

"We don't have that sort of corporation. The city's health is pretty doggone important, and I think this is a classic case of folks who care trying to figure out how to make something happen."

What Houston Renaissance came up with was to fashion itself into something called a "community-based development organization," a HUD designation that qualifies the nonprofit group for certain federal subsidies. By definition, a CBDO, as they are known, assumes a grassroots approach to economic development. For-profit corporations, as well as nonprofits, can qualify, as long as 51 percent of their boards of directors are either "low- and moderate-income residents of its geographic area of operation" or active in serving the area, either as, say, the owner of a business or pastor of a church.

Last August, as Renaissance was preparing its EDI grant proposal, Laguarta wrote Jim Tipps, the city's deputy director of housing, asking for "expeditious approval" of the group's CBDO status. Laguarta opined that Renaissance qualified because a "preponderance" of the board were "owners or senior officers" of area establishments that served the community. In case the city didn't agree, Laguarta indicated he was prepared to let HUD make the determination.

However, Laguarta wrote in closing, "We trust the enclosed materials are sufficient for your department to qualify [Houston Renaissance] as a CBDO without doing so." Apparently, Laguarta failed to immediately convince city housing officials. It wasn't until two months later -- during which time Houston Renaissance went ahead and described itself as a CBDO in its grant proposal to the city -- that housing director Margie Bingham notified Laguarta that HUD had agreed to the designation.

Houston Renaissance probably could have skipped the CBDO gyrations if it had simply put a few Fourth Ward residents or ministers on its board of directors. The most obvious choice would have been Gladys House, director of the Freedmen's Town Association, one of the city's oldest community development groups.

A longtime Fourth Ward activist, House is probably the most strident defender of the neighborhood's black heritage, and she was instrumental in getting Freedmen's Town listed on the National Register of Historic Places. Not surprisingly, she was left almost apoplectic when Laguarta announced Houston Renaissance's plan in November 1994, and she has remained pretty much of the same mind since then.

After so many years of neglect, House wondered, why is the Fourth Ward suddenly so popular with private developers? And why is the city so anxious to accommodate this particular group, especially when House has been trying for years to launch a few modest community development projects of her own?

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