A neighborhood developer from Ethiopia and a pin-striped banker from downtown.
A man who wants housing for his distressed neighborhood and one of the nation`s most successful developers of affordable homes.
A community activist and the city`s top politician.
These unlikely alliances make Pittsburgh a city of partnerships, a place where differences of culture and color and class are shoved aside for a more important agenda: saving the neighborhoods.
”Downtown won`t succeed if all the communities that surround downtown decay,” said Sandra Phillips, executive director of the Pittsburgh Partnership for Neighborhood Development. Her group is funded by foundations and corporations to support neighborhood redevelopment efforts that those donors will back with more money.
”It is the city, the foundations and the banks that have found it in their best interest,” she added. ”All of the institutions-the symphony, the opera, the hospitals-need a healthy environment.”
So in Pittsburgh, the boardroom has moved to the streets. It`s not unusual to find bankers in poor neighborhoods for business meetings and seminars on community reinvestment programs.
”You could talk about how everybody works together. That doesn`t happen very often in the world,” said Edward Randall, executive vice president of the Pittsburgh National Bank and founder of the Pittsburgh Partnership for Neighborhood Development.
”The whole thing is neighborhood-driven. They`re developing the agenda.”
Once the neighborhood redevelopment groups decide on a project, Randall said, the banks, corporations and foundations help fund the projects along with state and city financing from sources that include the federal community development block grant.
”It`s layer-cake financing,” he said. ”If you do the projects right and you spread the risk around so it`s not one bank, and you do this layer financing, you ought to be OK.”
This kind of layered financing is rare in many cities. In Pittsburgh, it`s used all the time-with startling success.
From the edge of a gleaming downtown, Pittsburgh`s distressed communities stretch northeast through The Hill, East Liberty, Homewood-Brushton and beyond.
Troubled as they are, each has a focus, a bustling core of activity that receives full redevelopment support, including money, from corporate foundations, banks and City Hall.
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The Ethiopian and the Banker
Meet Mulugetta Birru, an Ethiopian who runs the Homewood-Brushton Revitalization and Development Corporation. Birru`s alliance with Randall, of Pittsburgh National Bank, turned a shuttered post office into a farmer`s market for small vendors whose products fill the air with smells of success.
”I never thought I`d see the day I`d see a farmer`s market, housing and a Dairy Queen on Homewood Avenue,” Randall said.
Randall knew his bank would never approve the deal on its own. So he bent the rules, forwarding a plan he knew would be a financial risk. He recalls structuring the deal around an unorthodox financial question: ”How much can we lose without getting fired?”
It was decided that his superiors would probably ignore up to $125,000 in losses. That`s where they struck the deal.
The arrangement stuck: Homewood-Brushton is on the way back, and Randall is still at the bank, still looking for ways to help.
For his part, Birru saw the challenges of redeveloping Homewood-Brushton as no greater than those facing his homeland.
”People say, `You have so many abandoned buildings.` I say, `Great,`
” Birru said. ”We can pick them up for very little, rehab them and bring in housing and business.
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”Normal people say, `It`s poor, it`s boarded up, you can`t do anything with it.` But we have. We own more than half of Homewood Avenue.”
With a doctorate in international affairs and a master`s degree in finance, Birru knew the key to success in Homewood-Brushton would be the control of a benevolent monopoly.
By buying up abandoned property, his corporation controls 42,000 square feet of commercial space on the six-block business strip. This allows him to lure minority entrepreneurs into the blighted area with guarantees of low rent and protection from competitors.
His formula brought a Dairy Queen and an Athlete`s Foot store to the strip. A $4.5 million mini-mall is under way. Other businesses he fostered include a maid service, five neighborhood newspapers and a radio station.
He doesn`t stop at commercial revitalization.
Birru`s corporation, which receives $5 million a year from foundations and government sources, has developed 99 housing units, including a program to help residents who earn less than $20,000 a year own a home.
”The private sector is not going to do this,” Birru said. ”So we decided we would have to be the developers ourselves.”
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Reconnecting a neighborhood.
Between Homewood-Brushton and downtown lies The Hill, the largest black community in Pittsburgh.
In what is widely regarded as the biggest planning blunder in Pittsburgh history, the city severed the neighborhood from downtown decades ago when it built the Civic Arena, home of the Pittsburgh Penguins hockey team.
Stanley Horn`s job is to reconnect the neighborhood. Horn, who moved from his job at the Chicago Housing Authority to take the challenge as director of The Hill Community Development Corp., is getting a lot of help.
Bulldozers are clearing away rubble to make way for more than 500 apartments and for-sale houses at Crawford Square in The Hill. A supermarket and retail shopping area are planned next to the housing. And Horn has no intention of slowing down.
His lead partner in the project is Richard Baron, head of McCormack, Baron & Associates, headquartered in St. Louis.
Horn`s financial assistance comes from four local banks, the state, the federal government, three philanthropic foundations and the Pittsburgh Partnership for Neighborhood Development.
”In Pittsburgh,” Horn said, ”they put their money where their mouth is.”
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Across the Allegheny River from The Hill, tucked behind Three Rivers Stadium in offices over a corner store, community activist Stanley Lowe plots his strategy for pressuring bankers to invest where they would rather not.
Bankers hold the money needed to rebuild neighborhoods, said Lowe, executive director of the Pittsburgh Community Reinvestment Group, a coalition of 26 neighborhood groups, including the Hill`s and Homewood-Brushton`s.
”To sit back and wait for the federal government to do the job is insane,” Lowe said. ”It`s not their job. It`s the banks` job.”
Lowe gathers lending data to learn whether each bank is making loans in depressed neighborhoods. Those with inadequate loan records risk public demonstrations and boycotts coordinated by his group.
He shares that data with City Hall, and Mayor Sophie Masloff uses the data to apply some pressure of her own. The city ranks each bank`s lending performance and passes the information on to local news reporters.
Masloff, 73, a veteran of ward politics, enforces her pressure by pulling city deposits from banks that perform poorly.
”Housing is my priority,” Masloff said. ”What good is anything else, if there`s no place to live? We need to keep people in the city for the tax base.”
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The relationship between these disparate people is not fleeting. Their cooperation is institutionalized and accepted to the point that progress is now simply a fact of life in Pittsburgh.
”It can work in other cities, if you can get the banks, foundations and the city involved,” said Randall, of Pittsburgh National Bank.
Pittsburgh`s simple redevelopment formula relies on these diverse players:
– The Pittsburgh Partnership for Neighborhood Development. Funded by banks, philanthropic foundations and corporate sponsors, the partnership spends $3 million a year in support of 12 neighborhood groups. Half covers their operational costs; the rest is for development. The partnership also gives financial, architectural and planning assistance to all neighborhood groups.
The partnership has evolved so successfully that it has taken over the role formerly played by the Local Initiative Support Corporation, a national non-profit organization that brings financial support to neighborhood housing in 25 cities.
Since 1982, the Pittsburgh Partnership for Neighborhood Development has helped neighborhood groups build 477 housing units.
– The neighborhood groups. More than 30 non-profit ”community development corporations” have risen in the city.
They are politically independent, with officers selected by members, not the mayor. For some, operations are independently funded by the partnership, not by block grant money. That funding comes with a single string attached:
The neighborhood group must hire a qualified director, even if it takes a national search.
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Their focus is not only on affordable housing, a recognition that renewed neighborhoods also need businesses and jobs.
– City Hall and its Urban Redevelopment Authority. They bring money and strength from a host of sources, foremost among them the block grants. One of every four homes has been improved or built under city programs.
– The Pittsburgh Community Reinvestment Group. Lowe`s coalition began as picket-carrying protesters railing against banks that red-lined city neighborhoods. And it has succeeded in getting banks to make hundreds of millions of dollars in loans to poor people.
– The city`s foundations. The Pittsburgh, Heinz and Mellon foundations provide housing development grants plus funding for neighborhood groups through the partnership.
– Corporations. Many business leaders have placed housing high on their civic agenda. They back this conviction with money for affordable housing and the commercial development that creates jobs in the neighborhoods.
Phillips, of the Pittsburgh Partnership, said neighborhood rebirth could not be forced upon the residents.
”The way to do community development and have it really work is to have the community involved,” she said. ”If it is decided by the city, or some outside entity, it really won`t last. You have to have all entities working together.”