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.

According to the loan agreement, the financing would be secured by the Fourth Ward land that Houston Renaissance already has purchased, plus a $1.5 million guaranty from HHFC. Some Renaissance board members are concerned that Stevens would commit public money to collateralize a loan that has terms they consider onerous.

Stevens, for his part, sees no problem with the financing of the project, saying that only a "few technical issues" need to be settled before the loan is finalized. And while some Renaissance board members believe his service on the Bank United board constitutes a conflict of interest, Stevens says he's had no role in the institution's decisions on the loan. His interest in the project, he explains, is solely as a "proponent of affordable housing."

Nothing of the backstage maneuvering over the Houston Renaissance project was revealed when Fourth Ward residents and others with something to say about the project gathered at Antioch Baptist Church. Among those present were U.S. Congresswoman Sheila Jackson Lee and City Councilmen Jew Don Boney and John Castillo, all of whom can count parts of the Fourth Ward in their districts. The elected officials presumably are aware of the deadlines facing the project and of Renaissance's need for more financing. But if they were worried about the public money at stake, they didn't mention it at Antioch Baptist.

Instead, Lee tried to set the mood by applauding "the rainbowness of this room," and by urging the participants to find common ground.

"I think one thing we need to emphasize is that we all love the Fourth Ward-Freedmen's Town area," said the congresswoman. "Unity should be the goal."

And maybe it was to the assortment of white bureaucrats, builders and sycophants who were eating pastries and drinking coffee on the fringes of the crowd. Among them were Stevens; Doug O. Williams, the assistant to special assistant Stevens; architect Frank Kelly, the board chairman of Houston Renaissance; and Bob Eury, the executive director of Central Houston, a partnership of downtown businesses and landowners.

But most of them, apparently confident that David Lee would not promise something that couldn't be delivered, were gone by the time Fourth Ward advocates began to step up to the microphone in the center of the chapel.

Lee knew enough to agree with residents that Freedmen's Town, the former slave settlement sacred to the city's African-American community, should be the cornerstone of the redevelopment. The master plan, he said, would take full aesthetic advantage of the area's distinctive bungalows and shotgun shacks, as well as its narrow, leafy streets. The final product would also offer some physical lesson on the Fourth Ward's spiritual link to black Houstonians.

But whether this celebration of roots is spread throughout the ward or reduced to an eight-block theme park, as Renaissance has proposed, has nothing to do with a regard for history. Certainly, some historic structures unique to Freedmen's Town will be preserved -- not as monuments, but as selling points. There will probably be no more than enough to charm buyers to the new Fourth Ward's planned concentration of 2,000 houses and trendy townhomes.

Most sellers of the land Houston Renaissance has acquired since March, when it began borrowing down on the $3.4 million put up by the HHFC, were absentee owners who were pleased to accept $5 or $6 a square foot for their property. More likely than not, the rental homes on that land will be torn down, forcing the displacement of the majority of the residents.

The dozen or so owners who still occupy their houses might get a buyout offer from Houston Renaissance, or they might be able to stay as residents of whatever is left of Freedmen's Town Historic District, if their houses are in good enough shape to preserve.

Jacqueline Beckham has lived on Gillette Street for 34 years, and she's under no illusion that her modest desire to stay put matters anymore. Nor does she doubt Houston Renaissance regards "community participation" as a necessary indulgence -- inconvenient, but worth it to put the new Fourth Ward beyond the financial means of its current residents.

Beckham's participation at the Antioch Baptist meeting was brief and to the point: "Mr. Lee," she said, "you've stated and restated how you are new to this issue. Well, I can tell you, this is nothing but the same old stuff. We've been here again and again and again. If the developers had any love for our community, they'd have come to us long ago."

But the truth is that a "new Fourth Ward" is closer to reality than it's ever been -- just a few signatures and a $7.2 million loan away. The banks' terms, however, are intimidating.

Should Renaissance manage to somehow meet the most pressing obligations -- a master plan by mid-August, $3.7 million more in Fourth Ward land purchases and the sale of 36 lots by the end of September -- it's still not off the hook. The banks want the nonprofit to have generated $8.3 million in land sales by the end of 1999.

If Renaissance fails to satisfy those requirements, the most obvious penalty is default. The banks would then assume ownership of at least $3.4 million in Fourth Ward land -- but with all affordable housing restrictions removed, as stipulated by the loan agreement. Private developers would then be free to exercise their own vision, unencumbered by bureaucratic meddling.

Lucinda Campbell, a matronly black woman of about 70, stayed until the end of the session at Antioch, and never once heard David Lee mention that possibility. Nor was she informed of it Sunday evening, when she returned to the church to see a few of Lee's preliminary designs.

One never knows, but Campbell might live long enough to see completion of the "new Fourth Ward." If so, she might like what David Lee comes up with for her neighborhood, or she might not. But it will be impossible for Campbell to see the project as a success if it destroys her sense of place. At Antioch Baptist, Campbell offered a sobering appraisal of "inner-city redevelopment" under the Lanier administration: "It's no longer convenient for people to live in the suburbs," Campbell acknowledged, "but maybe those people don't want to live next door to me."

The prices of some new homes in the Fourth Ward could be as high as $150,000, and even the 250 to be set aside as HUD-subsidized "affordable housing" will be out of reach of the ward's current residents, if not beyond the means of families elsewhere who would never think to describe themselves as "low-income."

The HUD homes were agreed upon two years ago by residents and city housing officials as suitable replacement for an equal amount of public housing units demolished at Allen Parkway Village. But the two-, three- and four-bedroom houses and townhomes will average $103,000. Buyers could receive up to $20,000 in subsidies, but even then, the target market is people making about $40,000 a year.

"It's just the direction HUD is going in these days," explained Joy Fitzgerald, the executive director of the Houston Housing Authority. "There's just not enough money to build and maintain housing for people who would only pay $2 a month in rent."

Two people, in particular, are in a position to offer some solution to that dilemma: Lanier and Stevens. But their only priority, it seems, is to bring home the mother of all Neighborhoods to Standard projects, and then settle back and enjoy a mayoral legacy that includes the rebirth of the Fourth Ward.

And why shouldn't they? If Houston Renaissance suffers some ruinous financial calamity along the way, such as foreclosure on a $7.2 million loan, it will be Lanier's successor who will have to clean up the mess and take the heat. As for Stevens, he'll be safely back in the private sector, and the uncertain reality that faced 350 Fourth Ward residents this summer will be a distant memory.

As one participant in the community meeting at Antioch Baptist put it: "Gentrification takes no prisoners.

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