IN THE NEIGHBORHOOD / CRENSHAW : Developing Property for the Public Good : Fraternity Turns Empty Lot Into Commercial Enterprise Without Government Help

The Los Angeles alumni chapter of the black social fraternity Phi Beta Sigma has a long history of civic activism. The chapter sponsors a camp in the San Jacinto Mountains near Idyllwild, trips to athletic events and tutoring for kids from low-income neighborhoods. It organizes community seminars about career development, teen-age pregnancy, conflict resolution and gang prevention. But development of a commercial property in South Los Angeles is by far its most ambitious effort. According to the project’s participants, it is also the first minority-owned, privately funded commercial facility to be developed on a site destroyed in the 1992 civil unrest.

OPPORTUNITY: JUNE, 1993

A fraternity member learns that a 6,300-square-foot office building in Downtown Los Angeles is available for just the cost of removing the building from the site. The brothers accept the offer. They need a site and financing to move and restore the building.

The Black Employees Assn., workers’ advocacy organization, needs a new location for its credit union and joins the venture, providing a $40,000 down payment on a vacant lot at 8th Street and Vernon Avenue, where a liquor store burned down during the riots.

SETBACKS: JUNE-AUGUST, ’93

Four banks turn down the venture’s financing requests on the vacant lot.

REBOUND: September, ‘93-October ’94 To meet the $162,000 price tag on the lot the fraternity collects $20,000 in donations from its members and mortgages its fraternity house on Crenshaw Boulevard for the difference.

To pay for moving the building, the fraternity mortgages the lot for $67,000. A community lender, Royal Thrift and Loan, makes the loan after two fraternity brothers personally guarantee repayment.

To rehabilitate the building, the fraternity secures two additional loans from Royal Thrift using personal guarantees and the structure as security. While negotiations on the $380,000 in loans are in progress, but the contractor, Apex Construction, agrees to continue rehab, using $35,000 of its own money.

RESULT

Building is moved, rehabbed and ready to rent by November, 1994. Of the 13 spaces in the building, only two small business suites remain vacant.

WHAT THE PROJECT REPRESENTS

“With all the talk of building a better and safer Los Angeles, we assumed that this project would be well-received in all the right circles. Just about everyone in those circles agreed that the project was on target but were unable to help us. Being men of substance and good faith, we did what we’ve done as a people for generations: We passed the hat and conducted private loans from the membership and community.

“This project involved African American groups--the fraternity, the Black Employees Assn., lenders and an African American contractor who employed so many African Americans who live in the community that people stopped their cars and stared. It created a place for the South Central People’s Federal Credit Union, Black Employees Assn., businesses and other groups. But more important, it showed positive things happening in the community without government assistance.”

--Timothy C. Harris

President, 1991-1993, Los Angeles Alumni Chapter of Phi Beta Sigma fraternity; Los Angeles police officer

TO GET INVOLVED

Call (213) 295-8865.

Researched by Catherine Gottlieb / Los Angeles Times