Fourth Ward or Bust

Houston Renaissance still hasn't secured private financing to redevelop the Fourth Ward, and its time may be running out

Jacqueline Beckham didn't know whether to laugh or start packing.
It was almost noon in the chapel of Antioch Missionary Baptist Church on Clay Street downtown, where Beckham and about 80 other people gathered two Saturdays ago to listen as an authoritative black man with a salt-and-pepper beard outlined the latest plan to save the Fourth Ward.

"I want to create a different kind of neighborhood," explained David Lee, an architect and urban planner from Boston. "You guys, I hope, will be involved at every step of the process."

Lee turned away from his sketches and sat down, ending his three-hour monologue on the "new Fourth Ward." Like the old, beat-up Fourth Ward of today, the new one will stretch from I-45 west to Taft Street between Dallas and West Gray. About one million square feet of the blighted territory is now in the hands of Houston Renaissance, a nonprofit corporation which has proposed an 80-block gentrification of the old neighborhood, including all of the Freedmen's Town Historic District, and which retained Lee earlier this summer to devise a master plan for its project.

Lee has been the architect and planner for a number of similar publicly funded urban redevelopment projects in other cities, but it's unlikely he has ever had to face a challenge quite like the Fourth Ward.

The Renaissance project has been on the city's urban renewal agenda for a year now, yet Lee was only recently given an August 17 deadline to complete his redevelopment plan. Moreover, the sensitive process of soliciting input on the plan from the 350 or so remaining residents of the Fourth Ward didn't officially begin until the July 19 meeting at Antioch Baptist.

That's almost three years after Renaissance was formed, a fact that underscores Lee's role as a hired gun, brought in from out of town to convince Jacqueline Beckham and her neighbors that a coming deluge of upscale townhomes, houses and commercial enterprises doesn't have to destroy their lives.

To bolster his credibility, Lee made frequent mention of the once-wonderful but long-decaying South Chicago neighborhoods where he was raised. When residents' testimony became emotional or heated, he deflected it with an unwavering optimism.

But while Lee was essentially preparing residents for the day when they'd have to leave their homes, most for good, he never mentioned that Houston Renaissance is out of money. Nor did he tell them that unless Renaissance can strike an agreement soon with a consortium of banks lined up to provide private financing for its project, the "new Fourth Ward" may never be a reality -- at least not under the auspices of Houston Renaissance.

The nonprofit has managed to purchase land and carry out its business thanks to a $3.4 million loan from the quasi-public Houston Housing Finance Corporation, whose president, Michael Stevens, is Mayor Bob Lanier's unpaid special assistant for housing. Stevens and HHFC have pledged another $5 million investment to go along with more than $8 million in road, sidewalk and sewer improvements promised by the city. Another $21 million could materialize if the federal Department of Housing and Urban Development approves the city's application for a grant to subsidize 250 "affordable" homes in the Fourth Ward.

But Renaissance's raison d'etre is to attract private investment to the Fourth Ward. Indeed, the Lanier administration bankrolled the start-up costs for the nonprofit with public money on the assumption that banks, builders and private foundations would ante up later. That has yet to happen, apparently because the private sector seems to have no more confidence in Houston Renaissance's intentions than do the current residents of the Fourth Ward.

The financial linchpin of the project is a $7.2 million line of credit assembled by the consortium of three lenders, led by Bank United of Texas. The terms of the loan have been the subject of negotiations that began last December but reached a critical impasse in late May. Since then, Renaissance has been unable to convince the consortium, which also includes Bank One of Texas and Texas Commerce Bank, that its demand for a groundbreaking by the end of the year will be impossible to meet.

To satisfy the lenders' conditions, Renaissance must somehow take control of another one million square feet of land by September 30. By the same deadline, the nonprofit needs to sell 36 lots to builders or developers -- with 20 of those set aside for low- to moderate-income homebuyers.

Houston Renaissance is vigorously opposed to those terms, which seems to create something of a Hobson's choice for taxpayers. On the one hand, the project is likely to collapse if Renaissance and the banks fail to reach agreement, and the $3.4 million public investment through the HHFC will have been wasted. On the other hand, the loan saves the project (temporarily, at least) by guaranteeing the group up to $7.2 million to buy the land it needs.

All Renaissance has to do is duplicate in two months what it's taken almost a year to accomplish so far.

Adding urgency to the situation is pressure from the Lanier administration, particularly in the person of HHFC president Stevens, to get the Fourth Ward deal closed before Lanier leaves office in January. To that end, Stevens stepped in earlier this year with the $3.4 million loan, which left the HHFC holding the first lien on the almost one million square feet of Fourth Ward land already purchased by Houston Renaissance. At the same time, Stevens sits on the board of Bank United of Texas, the lead lender in the private financing consortium. If Houston Renaissance and the banks come to an agreement on the $7.2 million loan, Stevens, as a Bank United director, presumably will still retain some responsibility for the Fourth Ward's future -- even if he's not kept on as the special mayoral assistant for housing under Lanier's successor.

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