Progress Comes in Bits and Peaces
If we have learned one heartening fact in the five years since the riots, it’s that big talk and big plans may not materialize but that small cooperative efforts between the public sector and the private often produce results.
Maggie’s Furniture, on Florence Avenue near Broadway, is a family-run store that lost business and was slightly damaged in the general violence of 1992. Maggie’s has had its ups and downs since then, but now business is improving, says owner Antonio Rodriguez. And he is expanding the premises with the help of a $15,000 loan from the Community Financial Resource Center and an accompanying $25,000 loan from Bank of America.
The resource center, on Figueroa Street near Martin Luther King Jr. Boulevard, is a financial services organization backed by the city of Los Angeles, the U.S. Commerce Department and 39 banks. The center was organized before the riots to deal with the credit needs of South-Central L.A., an area that had been languishing for decades.
The center offers financial counseling to local residents and loans to start-up and expanding businesses ranging from $500 to $250,000. It has backed 66 entrepreneurs, all but two of them still operating, says Forescee Hogan-Rowles, the resource center’s executive director.
Stephanie Tyler founded Allstaff Temporary Services, a temp agency based on Wilshire Boulevard near La Brea Avenue, in 1994 with the help of a $25,000 seed loan from the resource center. Tyler, 39, a former legal secretary, reaches into the South-Central community for the personnel she sends out on clerical jobs all over Southern California. She finds work for 78 to 100 people daily.
“It’s the kind of small, unsung effort that makes jobs for the area,” says Don Mullane, B of A’s vice president for community development in Los Angeles. Bank of America committed $25 million to lending in the area in the week of the riots. Five years later it has collected on most of its loans, and 70% of the businesses are still viable. Wells Fargo last year made 312 small-business loans, averaging slightly more than $25,000 apiece.
Such sums are a far cry from the promises of $100-million investments that a lot of corporations made five years ago but never delivered on. Yet realism and confidence are emerging.
“Our progress will be with singles rather than home runs; from local efforts, not corporations coming in out of the blue to create jobs,” says Dr. Clyde Oden, chairman of United Health Plan, the Watts Health Clinic, Family Savings Bank and head of this weekend’s Black Business Expo at the Convention Center. The expo, a showcase for African American entrepreneurs, has 400 exhibitors this year, up from 300 last year.
Make no mistake, small loans and cooperative efforts can have a powerful ripple effect on jobs and property values, even in an area as large as Southern California.
“Two percent of the area of Los Angeles accounts for 10% of the city’s assessed valuations,” says Michael Tennenbaum, head of his own property investment company. “We’re all paying now for South-Central. But if real estate values there can be brought up near those of other areas, the result could be an economic boom.”
The hopeful news, three decades after riots in Watts and half a decade after the 1992 disturbance, is that finally Southern Californians seem to realize the essential interdependence of the region and that the economy of a small area affects the economic well being of all.
Enormous problems remain. Jobs and training and neighborhood renewal are needed. Hogan-Rowles points out that all around the Community Financial Resource Center’s headquarters, in a vacated branch bank, lie vacant lots and rundown properties. She is organizing neighborhood renewal efforts.
And she’ll get help because property owners on Figueroa Street are launching a $157,000 effort to improve private security and lease and beautify properties from downtown to Vernon Avenue. The research firm of HdL Coren & Cone, of Diamond Bar, reports that property values along that area, dubbed the Figueroa Corridor, have fallen 23% in the last two years.
The renewal effort is being funded by such major property owners as USC, Orthopaedic Hospital and family-owned real estate companies. The aim is to pick up the business action along the street and thus pick up the values, explains Carol Schatz, head of the Los Angeles Central City Assn. The alternative, she warns, is that businesses and institutions, even some operations of USC, will move out of the area.
Money is not available for every good cause. In a Compton industrial park, Myra Wallace designs big and tall clothing for her firm MKO Man, which she founded a year and a half ago. MKO Man (which stands for “my kind of man”) makes clothes that basketball players, and other large men, can wear comfortably.
Wallace, 36, who grew up in Long Beach and has been designing and making clothes for private clients for decades, formed her company with the help of an entrepreneurial development incubator in Lynwood.
“It gave me an office and telephone so I could concentrate on designing clothes and starting my business,” says Wallace, who will ship $750,000 worth of clothing through 85 outlets nationwide this year. But unfortunately, the Lynwood incubator effort ran out of funds and is no more.
Even the center’s $180,000 annual budget was dropped by the Los Angeles City Council this year until B of A’s Mullane intervened.
“You asked us to back these efforts,” Mullane told the council. “Don’t back out on your part.” The center’s funding was restored.
But the fight for every penny goes on, despite abundant evidence of the good that relatively small amounts of cooperative funding can do for the economy of South-Central and the entire region. The Los Angeles economy in April 1997 is a far cry from that of April 1992. This year you can almost see how good it can be--should be.
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Reassessment
It may seem counterintuitive, bout overall property values in South Central Los Angeles have risen since the riots in 1992. Yet values in Koreatown, also hit by the riots, have fallen. Total assessed value, in billions of dollars:
SOUTH CENTRAL
‘96-97: $12.5
*
KOREATOWN
‘96-97: $3.7
* Source: HdL, Coren & Cone
