A COMMUNITY DEVELOPMENT MAGAZINE FROM THE FEDERAL RESERVE BANK OF RICHMOND 2001 • ISSUE ONE

Gatewayto

Unity

In any union...the right approach is critical. Regardless ofthe pairing – people, practices, or principles – a pathway must be followed for partnershipsto progress. LeDroit Park and Howard Univer-sity demonstrate their understanding of thisphenomenon, as the recent benchmarks oftheir “town and gown” partnership have ledthem to a better place. With the support ofFannie Mae, Howard University recently rede-veloped 45 of its residential properties to cre-ate homeownership opportunities in LeDroitPark along with over 100 other properties inadjacent communities. Future phases of thisinitiative will improve public infrastructure andcreate a cultural district. As a respected andrecognizable institution of higher learning,Howard University is a model for other FifthDistrict universities wanting to successfullyincorporate “town and gown” coursework intotheir curricula.

Patty L. FrostEditor

Cover Design by Geep SchurmanGate Entrance, Howard University; Renovated Housing, LeDroit Park

MARKETWISE is published three times a year by the Federal Reserve Bank of Richmond. Free subscriptions and additional copies are available upon request; address requests to the CAO,Federal Reserve Bank of Richmond, P.O. Box 27622, Richmond, VA, 23261; or call (804) 697-8447.Material may be reprinted or abstracted provided MARKETWISE is credited. Please provide to theCommunity Affairs Office a copy of any publication in which material is reprinted. The viewsexpressed are not necessarily those of the Federal Reserve Bank of Richmond or the FederalReserve System, nor are they meant to imply endorsement of specific investments or programs.

In this issue...of MARKETWISE we recognize the value ofunifying partners, ideas, efforts, and funding.LeDroit Park and Howard University in Wash-ington, D.C. form a “town and gown” partner-ship that strengthens both entities, a series ofconferences in West Virginia brings togethernational and local experts to explore thepotential of rural towns, and community devel-opment corporations (CDCs) in South Carolinaorganize to form a successful CDC associa-tion. On the financial front, a Richmond-basedfund unites entrepreneurs with needed dollars,and a North Carolina tax credit provider raisescapital to fuse funds with community projects.Rather than subscribing to the “divide andconquer” mentality, these individuals andorganizations are finding success through a“unite and prosper” philosophy.

Jackson L. BlantonVice President and Community Affairs Officer

MARKETWISEJackson L. BlantonVice President and Community Affairs OfficerPatty L. FrostEditorJennie W. BlizzardWriterGeep SchurmanSenior Graphics Specialist

Contents

1Town and Gown:LeDroit Park and Howard UniversityA university and its surrounding community learn valuable lessons from their successful “town and gown”partnership.by Frances Stanley

12Virginia’s Funding Treasure ChestVirginia Community Development Loan Fund A four-year old Richmond-based fund receives recogni-tion and awards for its ambitious and successful lending,entrepreneurial assistance, and job creation programs.by Michele Marshall

14Making Small Cities and Towns Work in West VirginiaCustomized programs in Canaan Valley and Cairo bringtogether national and local experts to address communitygrowth, vision creation, and infrastructure deficiencies.by Jennie Blizzard

20Initiating Something SpecialCommunity Affordable Housing Equity CorporationThe largest regional tax credit provider in the country raises capital through its equity funds to invest in communities and people in ten states and the District of Columbia.by Dan Tatar

28South Carolina Association of CommunityDevelopment CorporationsThis statewide association is gaining ground, experience,and support as it benefits from the history and expertiseof a neighboring North Carolina organization.by Harold Bego

Historically, animosity has emanated between universities and their neighbors. College studentsare commonly stereotyped as extreme “partyers” who drink too much, become disorderly, andleave empty bottles and trashed property in their wake. Likewise, college administrators havebeen characterized as being cavalier and insensitive toward residents in neighborhoods surround-ing college campuses who objected to institutional operations and expansion plans that they believed destabilized their communities. In general, universities frequently offend their neighbors on many levels, which causes friction between the college and the local communities that canescalate when the neighborhoods begin to deteriorate while the “elite” university continues toprosper.

These strained conditions have long been portrayed in movies, covered in newspaper articles,and studied in reports and journals. Increasingly, universities are realizing the need to become in-volved in their city or town for their own self-preservation, as the college’s health and vitality are

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Town and Gown: LeDroit Park and Howard University

(continued)

Maybelle Taylor Bennett of Howard University and Alvin Nichols of Fannie Mae discuss the next plan of action ofthe Howard University LeDroit Park Initiative.

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directly linked to the health and vitality of thesurrounding neighborhoods. If the communitytakes a turn for the worse, it affects enrollment,and unlike most companies, relocation is not anoption for a university. Reciprocally, universityphilosophies and expansion plans can dramati-cally affect the residents of nearby communities.

Some universities understand the complexity of“town and gown” issues and are becoming cata-lysts for cooperation and redevelopment in theircommunities. The Howard University LeDroitPark Neighborhood Initiative in Washington, D.C.is one example of what can be achieved when“town and gown” unite.

The Town - LeDroit ParkLeDroit Park, developed in 1873, was one ofWashington, D.C.’s first suburban residentialcommunities. Initially an all white communitywith a fence separating it from African-AmericanHoward Town, LeDroit Park became a predomi-nantly African-American community by the end of World War I. Throughout the racial transition,LeDroit Park maintained its middle-class characterand became home to many prominent African-Americans, including the poet Paul Lawrence

Dunbar, Congressman Oscar DePriest, suffragistand educator Mary Church Terrell, and jazz greatDuke Ellington.

Of late, however, the area had not kept pace withthe economic growth of other District areas.LeDroit Park had endured decades of blight, inad-equate government services, deteriorated infra-structure, drugs and crime, overall decline, andgeneral disinvestment by the community, localgovernment, and Howard University.

The Gown - Howard UniversityIn the early 1970s, Howard University (Howard),a 133-year old preeminent African-Americanuniversity, began discussing plans for hospitalexpansion. In order to accommodate this expan-sion, Howard began purchasing properties incontiguous city blocks, as real estate becameavailable. Once purchased, Howard boarded upthe existing structures (most of which were rowhouses), and over 25 years, eventually acquired 45properties adjacent to the hospital.

Tempted by these neglected structures, homelesspeople and local drug dealers moved into these

The HowardUniversityLeDroit ParkNeighborhoodInitiative...is one example ofwhat can beachieved when“town andgown” unite.

McMillan Park Reservoir, which closed decades ago, will undergo massive renovations to createrecreational and open space for residents.

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abandoned properties. The properties remainedunused and boarded, though plans for their insti-tutional use appeared in the university’s campusplan. Citizens, increasingly concerned about thegrowing deterioration of their community and theprospect of rampant institutionalization of theirresidential neighborhood, sought and obtainedlocal and national historic district designation forthe area.

They wanted to stop the leveling of houses, cele-brate the lives of the illustrious African-Americanresidents who formerly lived there, and restorethe area to its former grandeur as a handsomeresidential neighborhood. Over the years, resi-dents met with many Howard representatives tovoice their concerns, since Howard was the ownerof the largest number of vacant properties in thecommunity.

In 1990, newly hired Dr. Hassan Minor, then spe-cial assistant to the president, listened closelywhen the community told him and others thatHoward University was “elitist,” insensitive, anundesirable neighbor, and a poor steward of itsproperties. Dr. Minor decided to restore univer-sity-neighborhood relations and pledged that hisefforts would focus on bringing about tangiblechange because the past had brought too manypromises and too few results.

The Howard UniversityCommunity Association began in 1996, andMaybelle Taylor Bennett,......became its director.

Dr. Minor restructured the university’s communityrelations functions and established a CommunityAssociation Office that provided the much-neededpublic accessibility, information, and assistance tothe community. He assembled a staff completewith the planning, international relations, youthprogramming, and fund-raising skills to providethe services and technical assistance needed torespond effectively to community challenges. TheHoward University Community Association wasopened in 1996, and Maybelle Taylor Bennett,

The face of LeDroit Park continues to change since its beginning as a suburban

neighborhood over 100 years ago.

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who joined Dr. Minor’s staff in 1991 as assistantfor community relations, became its director.

In 1995, H. Patrick Swygert, a Howard alumnusand the university’s newly hired president, touredthe areas where the central campus interfacedwith the community. As he rode through theneighborhood streets lined with boarded prop-erties, he was surprised and shocked to learn thatthe university owned so many of these structuresand resolved to address the issue. He was madeaware of the citizens’ frustrations with the univer-sity and their hope that Howard would become a better neighbor and a more active leader in re-building the surrounding community.

Later in the school year, President Swygert askedDr. Minor and his staff what it would take to rede-velop all of the Howard-owned properties at onetime. He indicated that this was the direction inwhich he wanted to move, and asked Dr. Minor to follow-up on a previous contact that had beenmade with Fannie Mae in the months prior tobecoming president.

In 1994, Fannie Mae beganopening Partnership Officesthroughout the nation, towork with partners...The contact that had been made before PresidentSwygert’s tenure was renewed for the purpose of exploring how Howard University and FannieMae might work together in the development ofaffordable housing. In 1994, Fannie Mae beganopening Partnership Offices throughout thenation, to work with partners (including univer-sities and other major employers) to expand theavailability of affordable housing. The first ofthese offices, the Washington, D.C. PartnershipOffice, had seen the potential for Howard Univer-sity to affect the revitalization of the entireLeDroit Park neighborhood.

A planning team was assembled. Alvin Nichols,Brenda Harrison, Patricia Siegrist, and Beryl Spar-row of Fannie Mae and Dr. Minor, Diane Kenney,and Maybelle Bennett of Howard University metfor nine months to define the initiative’s objec-tives and map out its strategy for implementation.

In September 1997, after hearing a presentationon the Initiative, the Executive Committee of

LeDroit Park’s close proximity to Howard UniversityHospital is one of the many conveniences of its location.

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Howard’s Board of Trustees and the chairman ofFannie Mae, James Johnson, gave their approval of the Initiative. In fact, Johnson was so enthusi-astic about the Initiative that he tabbed the cor-poration’s vice chair, Jamie Gorelick, to be FannieMae’s corporate sponsor of the project, and namedAlvin Nichols as a full-time loaned-executive toHoward University, in support of the execution ofthe project.

With this commitment and support in hand, workbegan on the expansion of the team, the arrange-ment of financing, and the garnering of politicalsupport needed to successfully redevelop the 45properties into homeownership opportunities.

In addition, the Fannie Mae Foundation partneredwith Howard University by supporting the devel-opment of three studies that produced a street-scape design for the upgrade of the open spacesand infrastructure, a cultural district study (tohighlight the feasibility and potential of revitali-zation of this once vibrant commercial and enter-tainment core of the community), and a land use plan for a 150-block area around the centralcampus.

These studies were to be used to propose im-provements and amenities that would enhancethe existing and proposed housing developmentin LeDroit Park, add value to the community as awhole, and augment the cultural and economicopportunities that would ensure the long-termsuccess of the overall redevelopment plan.

The onset of the Initiative, in particular the development of the 45 homes built by HowardUniversity, was the first step in rebuilding thecommunity’s trust and was an indication that theuniversity was committed to the community’sredevelopment over the long haul. The commu-nity celebrated the first of the university’s newcharter homeowners just fifteen months aftertaking the plan from paper (in September 1997)to pavement in December 1998.

Doing the HomeworkThe 150-block impact area of the Initiative isbounded on the east by North Capitol Street; onthe north by Michigan Avenue and Hobart Place;on the west by Sherman and Vermont Avenues;and on the south by S Street and Florida Avenue.The area includes six project zones: the long-established neighborhoods of LeDroit Park,Bloomingdale, and Pleasant Plains; Howard Uni-versity’s central campus; the Georgia Avenuecorridor; McMillan Park Reservoir; the cultural dis-

trict; and a town center, all of which will requireadditional consensus building and planning.

The Howard University LeDroit Park Initiative hasthree themes: 1) celebrate the history of the area;2) redefine the community; and 3) enhance thequality of life and safety. The goal is to restoreLeDroit Park and surrounding communities bothculturally and economically through the creationof homeownership for moderate-income familiesand to spur renovation of abandoned housingarea-wide. Participants in the effort have alwaysenvisioned the Howard-sponsored redevelopmentas a catalyst for other private and publicly spon-sored revitalization activities in the neighbor-hoods and along the Georgia Avenue corridor.

Fortunately, the area has a range of assets that will retain existing residents and attract new-comers. The housing stock is architecturally inter-

How Howard and Partners Made It HappenHoward University engaged a number of otherpartners in the creation of a critical mass of rede-velopment in the LeDroit Park area. From 1995through 2000, the university received approximately$2.4 million in grants from the U.S. Department ofHousing and Urban Development’s Historically BlackColleges and Universities (HBCU) Community Devel-opment Program. HBCUs compete for funding tocarry out community development activities in theneighborhoods that surround them. Verizon, anothermajor partner, is pulling fiber optic cables into thearea to “wire” the community (see page 7). Howardhas also worked with Manna and the Peoples Involve-ment Corporation, two nonprofit community develop-ment corporations, to construct a new townhomedevelopment for low- and moderate-income homeown-ers; adaptively reuse an old school building to createapartments for seniors; develop a former multifamilyresidential structure into a social service center forpublic housing families; and provide the provision ofcase management services to families in the area’spublic housing development.

...the Fannie Mae Foundation partnered with Howard University by supporting the development of three studies...

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esting and located in a historic area. There is tran-sit accessibility with an entrance to the metro-railand three major arterial commuter routes. Thearea is part of the Washington, D.C. EnterpriseZone that has a significant number of developableparcels, and the area is convenient to both HowardUniversity and Howard University Hospital.

In order for the Initiative to be feasible, the planwas divided into three phases. Phase I consistedof converting 45 unoccupied, vacant Howard-owned properties into homeownership oppor-tunities. This phase also includes the redevelop-ment of 130 other non-Howard owned vacantand boarded properties in the LeDroit Park His-toric District and adjacent communities. Progresson this effort in this critical element of Phase Ican already be seen. Phase II consists of $25million in public infrastructure improvements in the area. Improvements will include roadway and alley repaving, and upgrades in lighting, plant-ings, and signage.

Over $10 million of this funding has already beenraised and construction of these improvementsbegan this winter. Another level of publicfacilities improvement will be the return ofMcMillan Park Reservoir to public accessibility.McMillan Park Reservoir was originally designedby Frederick Law Olmsted, Jr. (the designer ofCentral Park), but was fenced off since World WarII. Phase III consists of the development of a cultural district that anchors the east end of theU Street Festival area, once known as the oldBlack Broadway, and a Town Center that willprovide significant retail and entertainmentopportunities. Currently, the partners are work-ing on plans for the next two phases. Timelinesfor the remaining development phases have notbeen determined.

Fannie Mae and Howard University refer to theirrelationship as a strategic partnership, and to thatend Fannie Mae’s role in the Initiative has been substantial. At the outset of the Initiative, the

Georgia Avenue Business Resource CenterThe Georgia Avenue Business Resource Center is located at 7408 Georgia Avenue, NW in Washington, D.C.near Howard University. Its broad purpose is to facilitate access to capital and to provide technical assistance– and other business support services – to businesses located around the Georgia Avenue Corridor. TheCenter hopes to support existing business growth and expand and help budding entrepreneurs.

The concept for the Center came from several meetings held in D.C., hosted by Al Broaddus, President of theFederal Reserve Bank of Richmond, and Alice Rivlin, then Vice Chair of the Board of Governors of the FederalReserve System. The implementation of the Center became a collaborative effort coordinated by the D.C.Chamber of Commerce, the D.C. Department of Housing and Community Development, Riggs Bank, City FirstBank, the Small Business Administration, and several D.C. universities.

The Federal Reserve’s role in this project has been one of facilitation. The Fed hosted meetings and activelyengaged the group in trying to understand what the community needed to increase small business de-velopment in the District. Active dialogue by all parties then determined that a “store front” resource centeron a major business corridor in D.C. would help small businesses access appropriate capital resources andobtain needed technical assistance.

Today the Georgia Avenue Business Resource Center is a reality. It has helped hundreds of small businessesneeding technical assistance. Several seminars on bookkeeping, the loan application process, and othertopics have been conducted. Recently, the Center started a storefront improvement program, and the SBAhas announced that the Center will become an SBA One Stop Capital Shop Satellite Office.

Currently, the partners are working on plans for the next two phases.

bonds. These bondssupport homeowner-ship in the focus area,including $5 million intargeted area builderbonds from the D.C.Housing FinanceAgency to make homeprices more affordablethrough lower interestrates for the homesbeing developed byHoward University.Additionally, FannieMae provided technicalassistance in struc-turing an employer-assisted housingprogram that was capitalized by a $500,000Fannie Mae loan; the provision of homeowner-ship education; assistance in developing a communications strategy; support for and coordi-nation of celebrations and related special events;

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corporation supported the University through aloaned executive, Alvin Nichols, to assure HowardUniversity and Fannie Mae that the project wouldhave at its disposal the corporation’s technicalexpertise and focus to manage the Initiative.Additionally, through partnerships with its vastnetwork of lenders, Fannie Mae has leveragednearly $25 million in financing in support ofhousing development in the Initiative focus area.Key lending partners in the Howard UniversityInitiative include Riggs Bank, SunTrust Mortgage,Industrial Bank, Bank of America, and the D.C.Housing Finance Agency.

Fannie Mae’s range of involvement and invest-ment has included the provision of technicalassistance in the conceptualization of the rede-velopment plan; the provision of $800,000 inpredevelopment loan funding; the assemblage of a syndicate of financial institutions that providedthe construction and mortgage financing; and thepurchase of $18 million in mortgage revenue

Venturing with Verizon Howard University and Fannie Mae partnered with Verizon ofWashington, D.C., to create an electronic village in LeDroit Park.This community is the first in the city – and perhaps the first urbancommunity in the nation – to become smart-technology ready.Through this unique partnership, every home developed by Howard University is completely wired for the 21st century and has the capability for in-home networks, high speed direct-connect to the Internet, the latest in home security, and virtually any other type of technology available for in-home use. In December at the LeDroit Park U Street celebration,Verizon announced the launching of ledroitpark.org, the community’s own web site.

Verizon–Washington, D.C. President Marie Johns and Ken Clark, Director of External Affairs, review a workstationmodel in a home.

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Alvin NicholsDirector of Neighborhood InitiativesFannie Mae

The Howard University LeDroit Park Initiative has dug the footing and laid the foundation upon

which the revitalization of this historic community is supported.

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assistance in obtaining $10 million to supportinfrastructure improvements from the D.C.Department of Public Works and the FinancialControl Board; assistance in obtaining $500,000 ina U.S. Department of Transportation grant tosupport infrastructure improvements for the area;and assistance in winning the support from localelected officials needed to make the Initiative asuccess.

Since the Initiative’s launch in 1997, 307 units of new housing are under construction or havebeen completed area-wide, and the community’shousing market has taken a positive turn. Housesimproved and offered by Howard range in pricefrom $90,000 for a two-bedroom row house tojust over $200,000 for three- and four-bedroomhomes. The condominiums in the area range in

price from $79,000 for a one-bedroom unit toover $300,000 for larger units. Overall, housingcosts fall in affordable to upper-income levels and are successfully providing a mixed-incomeenvironment.

Commercial redevelopment is also being gener-ated in the area. To date, more than $65 million incommercial and public benefit investments havebeen committed or invested in the community.This development includes bookstores, restau-rants, 33,000 square feet of retail commercialspace, a new visitor’s center, a modernized Emer-gency Trauma Center at the Howard UniversityHospital, and a joint Howard University/Metro-politan Police Department Security station. Underthe Initiative, LeDroit Park is developing into adiverse and fully sustainable vibrant community.

With commitment and extensive planning by Howard and Fannie Mae, new LeDroit Park residents (left) are beginning to enjoy the vitality that has been restored to the neighborhood.

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The Howard University LeDroit Park Initiative has dug the footing and laid the foundation uponwhich the revitalization of this historic commu-nity is supported. Howard University, LeDroitPark, and Fannie Mae are setting a standard for“town and gown” partnerships — a standard thatthey hope others will follow. While not everyonehas been enthusiastic about the redevelopment,Nichols of Fannie Mae realizes,“You have toaccept the criticism and continue to do the jobthat needs to be done,” especially if you want tograduate to the next level. ■ FRANCES STANLEY

The Fannie Mae Foundation University CommunityPartnership Initiative is designed to promote thedevelopment of housing-based community revital-ization by encouraging universities to take a moreactive role in rebuilding their communities withpartners. This program can be tailored to meet theneeds of specific markets and neighborhoods. Fundsprovide technical assistance, education, training,research, and evaluation. For further information,visit Fannie Mae’s web site at:www.fanniemaefoundation.org/ucpi/index.html

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A Community andCollegial CelebrationThe dream is well on its way to becoming a reality — acomprehensive and multifaceted initiative that will not onlyhelp Howard University attract students and faculty, but alsoprovide a quality residential environment in which area indi-viduals can live, work, and play. On December 14, 2000, theInitiative celebrated its Phase I successes by throwing a blockparty. Dignitaries, including D.C. Mayor Anthony Williams andCongresswoman Eleanor Holmes Norton, Howard Universityfaculty and staff, and new and old LeDroit Park residents,joined together to celebrate many accomplishments and focuson future aspirations.

In a recent interview, President Swygert talked about his firsttour of the area upon returning to Howard as president. As astudent at Howard during the sixties (undergraduate and lawdegrees), LeDroit Park was a vibrant community, different fromwhat he viewed on his tour. President Swygert had two con-cerns during his tour. The first concern focused on the deter-ioration of the neighborhood and possible ways to improvethis valuable area’s condition, while his second concern toldhim that universities typically do not undertake real estatedevelopment projects. As his concern for LeDroit Park contin-ued to surface, he accepted the fact that to be successful in aredevelopment initiative, Howard needed a partner who knewreal estate. Recognizing Howard’s lack of expertise in the realestate arena prompted President Swygert to contact an organi-zation that could make this project a reality — Fannie Mae.Integral to the success of the Initiative were Jim Johnson, FrankRaines, and Jamie Gorelick of Fannie Mae. “We are very fortu-nate to have Fannie Mae as a partner,” President Swygert says.

J. Patrick SwygertPresident, Howard University

Eleanor Holmes NortonCongresswoman, Washington, D.C.

Anthony WilliamsMayor, Washington, D.C.

Jamie GorelickVice Chair, Fannie Mae

Maybelle Taylor BennettDirector, Howard University Community Association

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The project has brought President Swygert great satisfaction,and he knows that Howard has been fortunate in the respectthat all of the project partners and long-time homeownerscommitted to stay in LeDroit Park through its worst times.President Swygert and those involved in the Initiative are mostpleased with the fact that no long-term residents of LeDroitPark were displaced in the process. President Swygert hopesto encourage the D.C. government to provide tax reliefassistance to those long-term homeowners so they will not bedisplaced as the future value of the area increases, as he creditsthe Civic Association and these homeowners with much of the project’s success. Today, President Swygert has otheruniversities inquiring about the lessons learned in thissuccessful “town and gown” endeavor.

Today, President Swygert has other universities inquiring about the lessonslearned in this successful “town andgown” endeavor.

Historic Howard (bottom right), and LeDroit Parklook forward to a long and successful association.