With its selection as a federal empowerment zone, Chicago has become a major laboratory for what could be one of the last large-scale government attempts to pump life into urban America.
The Clinton initiative is a pioneering effort that radically breaks from government’s one-size-fits-all approach to helping cities where federal experts shape programs. Instead, community leaders drive the process.
While it is targeted at distressed urban and rural communities, this stab at reinventing government seeks to create jobs as a way to address crime, poverty and other problems that affect entire metropolitan areas.
Though it was introduced last winter, the approach meshes with this fall’s anti-government sentiment.
Even as elated supporters celebrated Chicago’s selection, they acknowledged that the $100 million windfall will come with challenges. Perhaps the most crucial will be convincing private businesses to take advantage of the program’s tax incentives and invest in some of the city’s most troubled communities.
In addition, if this new approach is to work, the unprecedented coalition of community groups that played a major role in writing the city’s winning proposal must hold together-at least long enough to help determine how the money will be spent as it flows in over the next two years.
And the City Council, which eventually has to approve any plans, must resist the urge to dominate the process as the city’s elections approach.
City officials estimate the $100 million could leverage another $2 billion from banks and investors. The three designated areas-on the West, Southwest and South Sides-also will benefit from loosened federal rules and streamlined city procedures.
The package could, for instance, help rehab 200 rental units in Near Southwest Side Pilsen or waive environmental cleanup rules for businesses willing to locate on industrial land in West Garfield Park on the West Side.
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But the question remains whether such attempts to improve community conditions and prepare people for work will attract enough employers to create jobs and turn the communities around.
On Friday, city representatives will meet in Chicago with Henry Cisneros, secretary of the U.S. Department of Housing and Urban Development, to determine how soon funds will start flowing from various federal agencies.
While community groups have proposed more than 200 projects that might be funded by empowerment zone money, “20 to 30 are ready to go,” said Valerie Jarrett, the city’s planning and economic development commissioner.
Future recommendations will be made by a committee of representatives from non-profit community groups, banks, businesses and city government. The money will be funneled through the state, but officials have agreed to pass it through quickly, she said.
Previous smaller-scale efforts at empowerment zones have had mixed results.
“A firm would move its location from a non-designated area to a designated area, so there was no net gain of jobs in the broader community,” said John Kretzmann, of the Center for Urban Affairs and Policy Research at Northwestern University.
“This is much more ambitious, much more broadly based,” said Kretzmann, who has worked with community development groups across the country. The holistic approach reflects a growing realization, he said, “that unless communities have a clear voice in and even some control over what the development plans are . . . nothing’s going to succeed.”
“We’re going to use this money in a different way,” said Angelo Rose, executive director of Ahkenaton Development Corp., a non-profit group in Grand Boulevard. Rose, who is on the committee that wrote the plan, said its purpose is “not to create a new welfare system, not for the city to take 10 percent off the top for administration. But to use that money to create . . . jobs.”
That will mean persuading businesses to join the effort, which supporters predict will happen when investors learn of the empowerment zone’s incentives. Those include a $3,000 tax credit for every zone resident hired.
A plan to rehabilitate rental units in Pilsen shows how the empowerment zone would work.
The city Department of Housing could commit government funds to help developers finance the rehab of 200 rental units before specific sites are identified or acquired, said city Housing Commissioner Marina Carrott.
An estimated $2 million in enterprise zone money then would be used as seed money to pay property taxes and architectural and legal fees, helping to generate another $12 million from private lenders, low-income tax credits and other sources.
The city also would pair with a bank so the two don’t duplicate efforts in reviewing plans, cost estimates and the progress of the rehab work. And the city would seek waivers from HUD to cut red tape and get more flexibility in how the money is spent.
Such plans for changing how government works still must contend with old-style politics, as was apparent Wednesday. Moments after a conference call from President Clinton officially announcing the zones, U.S. Rep. Bobby Rush (D-Ill.) was speculating about its effect on the mayoral campaign.
“Basically there will be a lot of rhetoric about how wonderful this all is,” said Rush, who supported the federal grants.
“And that’s good as far as it goes. But at the same time, it puts the Daley administration in a position to leverage control over . . . whole community areas. And we have to be vigilant that Daley doesn’t use this power to play politics. Because that’s (what) his father did years ago.”
At his news conference a few minutes before, Daley said his administration would not play politics with the funds. “No. Never, to be very frank,” he said.
Whatever the politics, community group leaders insisted that after months of working on the empowerment zone proposal, they weren’t about to take a back seat.
“No way you’re going to keep these people away from the table now,” said Mary Nelson, president of Bethel New Life, a West Side community development group.