BOAR0 OE UIAECTORS 

John Kotowski 

Chairperson 

Brew Manger 

President 

Anthony Andrews, Jr. 

Joseph A. Bechlold 

Seth Bornstein 

Sherman Brown 

Spencer Brown 

Carmen Cervino 

Luz Colon 

James Davis 

Norma Edwards 

Wilfred Greenway 

R. W. Hall 

Charles McMickens 

Sue Noreika 

gavid Quintas-Parquet 

Bail Aoseman 

Herman 8. Smith 

Meilin Tan 

Testimony of Marie S. Nahikian, Executive Director 

Queens Cow& Overall Economic Development Corporation 

Public Meeting of 

Federal Reserve Bank of New York 

Oil 

Proposal by Traveler’s Group Inc. to Acquire Citicorp 

June 26,1998 

The Queens Cottnty OEDC, created in 1978, has a central focus to increase economic 

opportunity for the residents of Queens County. This reqaires Qneens County to maintain 

mnltiple roles in the economic life of the an area that is home to probably the Nation’s 

most diverse population, that is equal in size to the fourth largest city in the United States. 

Our mission cannot be met without close working relationships with sonrces of national 

and intemational capital. QCOEDC works with over 75 financial institutions. How we 

work with these institmions can best be summed up in one word - selling. QCOEDC sells 

Queens locations, neighborhoods, business owners, entmprenems and residents as good 

investments. The interest in our “sales pitch” varies, but one important fact is critical. 

The Commnnity Reinvestment Act causes these institntions to listen. 

Citicorp and its aftihates, such as Citibank listens very closely to QCOEDC and our 

colleagnes who are economic developers. We have been fortnnate in having the direct 

participation of Citibank in OUT work for the past 10 years. Many Citibank employees are 

civic leaders and residents of Queens. Citibank and Citicorp have been visible and active 

corporate leaders in the Queens community. Queens County OEDC is a Citibank 

customer; however, we have not been a Citibank borrower. 

Citibank has directly participated in the Queens County OEDC in the following ways: 

l lending - to small business clients; 

l financial supporfer - since 1992, the Citibank Foundation has provided $92,500 in 

corporate philanthropic support for projects and programs; 

l providing technical support - Citibank corporate offtciafs have served as volunteer 

members of OUT Board of Directors, providing lending and technical advice to small 

business owners, many of whom are minority and women-owners. Citibank real estate 

lenders have assisted with the development of a commercial retail space in at-risk 

commnnities. 

Borough Hall. 120-55 Queens Boulevard Suite 309 n P.0. Box 356009, Briarwood, New York 11435BOO9 n (718) 263-0546 lax (718) X3-0594 = email - www.queensny.arg 
-2- 

The question that is posed by the proposed acquisition of Citicorp by The Travelers 

Group is harder, however. After listening to community developers, will there be action? 

Action is another wav of defining the ~umose of this public hearin& 

What actions have been taken or are proposed to meet the credit needs of the new 

corporate institution’s entire community that is consistent with the safe and sound 

operation of the institution. 

The fact that we have almost no experience. with The Travelers Group in Queens County 

is an important factor. The issues of the availability of insurance products and the 

cost/risk analysis that translates into higher premiums in a place like Queens County is 

well known. On a hopeful note, we believe The Travelers Group can learn f?om Citicorp: 

investing in our communities is good business and profit does not need to come from 

higher costs charged for a perception of higher risk. More information is needed about 

the potential for a bank holding company to conduct nonbanking activities.aaccess to 

affordable products is available, these “nonbanking activities” can produce significant 

benefits to our community. For example: 

. investment, health & retirement products for non-profits and specific groups of 

individuals, such as low and moderate income families who can rarely afford such 

SCNkS; 

l local recruitment for training & employment opportunities. 

Stratew to Invest $6 billion in Communitv Develomnent 

Citibank’s participation in Queens County has been significant. The commitment to 

increase lending and support for community economic development 6om the current level 

of $136 million to $6 billion over the next 10 years should mean that the impact of will 

be even larger. The commitment is a major challenge. 

l We believe that implementation strategies with community development partners 

must begin immediately. 

l In order to move $6 billion into community development, additional corporate 

resources, staff and support will be necessary. In Queens County, some of the $6 

billion commitment must be made in increments of $5000, a loan considered not 

cost-effective, but critical to the growth of entrepreneurs. 

l We urge the strategy to include use of community development intermediary and 

technical assistance providers which have a knowledge of local communities. This 

may be the only way that resources will get to Cambria Heights, Maspeth or Sutphin 

Boulevard. 

Create an Investor Environment 

Over the last 15 years, an entirely new “investment” strategy has increased the production 

of affordable housing in this counhy. In New York City, alone, thousands of families 

ROAR0 OF BIAECTORS 

John Katnwski 

Chairperson 

Drew Manr$r 

President 

Anthony Andrews. Jr. 

Joseph A. Bechtald 

Seth Bornstein 

Sherman Brown 

Spencer Brown 

Carmen Cervino 

Luz Colon 

James Davis 

Norma Edwards 

Wilfred Greenway 

A. W. Hall 

Charles McMickens 

Sue Noreika 

Oavid Q&s-Parquet 

Gail Roseman 

Herman 0. Smith 

Maitin Tan 

Borough Hall, 120-55 Queens Boulevard Suite 309 = P.0. Box 356009, Briarwood, New York 11435-6009 n (718) 263-0546 fax (718) 263-0594. email - www.quaansny.nrg 
BOAR0 OF OIRECTOA~ 

John Kotuwski 

Chairperson 

0rew Manger 

President 

Anthony Andrews. Jr. 

Joseph R. Eechtold 

Seth Bornstein 

Sherman Brown 

Spencer Brown 

Carmen Cervino 

1112 Colon 

James Davis 

Norma Edwards 

Wilfred Greenway 

R. W. Hall 

Charles McMickens 

Sue Nnreika 

David Quintas-Parquet 

Gail Aoseman 

Herman 0. Smith 

Meilin Tan 

how live in housing built, in part, because of corporate investment. The economic 

concept of “creating value” in the market place, where none previously existed by 

coupling investment to tax credits is a strategic way of rebuilding and revitalizing 

commlmities. 

This allowed investors to analyze a return differently and mitigated the traditional 

discussion of underwriting “risk.” I can fondly recall structuring a North Philadelphia 

non-profit housing development in 1986 to include one of the fust investments in 

affordable housing ever made by Fannie Mae. None of us at the table were absolutely 

sure what this investment should look like on paper. 

The same economic concept must be used in economic development. Small business 

owners, and in particular minority and women-owners rarely have the luxury of 

considering an “investment.” Most fmancial institutions cannot mitigate the risk of “startup” businesses or an operation that needs to expand and grow, but cannot show the 

appropriately-defined “equity.” 

The combination of The Travelers Group, with its investment history, and Citicorp can 

meet this need. Some suggestions include: 

. risk analysis that includes non-traditional equity, such as labor, family co-signers or 

intellectual property; 

l developing a secondary market for small business loans, using a pooled risk concept; 

l Federal, state and local tax credits for corporate investors in businesses or commercial 

real estate development in low and moderate income communities; 

creating a relationship between insurance premium volume and community 

investment products. 

Is a $6 billion commitment enough? 

In a word, no. Is it significant? Yes. A quick case in point: QCOEDC is a 60% limited 

par&r that owns a commercial shopping plaza that provided some of the earliest “chain 

store” services (Walgreens, Domino Pizza, Blockbuster) to the Ho&s neighborhood near 

Jamaica, Queens. Last year, QCOEDC set aside $25,000 of the income corn this project 

to create the Queens Neighborhood Access Fond. The stated purpose of the food is to 

take some risks by investing in new projects that may not yet have all of the bells and 

whistles. Is the $25,000 enough? No, but it is significant, equal to almost 15% of the 

total net income we have received and significant because of the manner in which it can 

be used. 

We will be glad to advise The Travelers Group and Citicorp on the how we the Board of 

Directors deliberated on making this commitment. Fifteen percent of their net income 

invested, not just loaned, could alter the economic future of several Queens Counties. 

Borough Hall, 120-55 Queens Boulevard. Suite 309 n P.0. Box 356009, Briarwood, New York 11435-6009 n (718) 263-0546 fax (718) 263-0594 n email - www.queensnY.oq 
July 1,1997 - June 30,199s: Program Activity 

Outreach: Services, Information, Technical Assistance 

Direct Technical Assistance and/or Information 8 Data Provided: 56 Groups 

Hon. Jeff Aubv Jackson Heights CDC SE Queens Clergy 

Cambria Heights Merchants EDC of St. Albans College Point Bd. of Trade 

Richmond Hill South Civic Assoc. Rego Park Merchants BCD Day Care 

Langston Hughes Librav Neighborhood Housing Services 

Greater Jamaica Devlop. Carp Ridgewood LDC 

Sunnyside Community Services Maspeth Merchants Elmcor Youth & Adolt Services 

Pomonoc Neighborhood House Rockaway Merchants Astoria Restoration 

Muslim Economic Develop. Inc. Friends of Sutphin Merchants Sutphio LDC 

Bellerose Merchants Kew Gardens Merchants Hollis LDC 

Community Boards 3,9, 10, 12, 14 Unisowce, Inc. FOB Transport 

National Envelope St. John’s University Bell Atlantic 

Corona Bus. Carp (Merchants) College Point Residents RamadaInn 

Fleet Bank-SE Queens branches Queens Library:Menick Blvd & Far Rockaway 

Metropolitan Ave. Chamber Flushing Merchants 

Forest Hills Chamber of Commerce Business Links, NYC 

St. Albans Chamber of Commerce Catholic Charities-SE Queens Queens Urben League 

SE Queens Coalition for Children Venture 2000 Grp-Liberty Ave. Gujarati Samaj 

Laurelton Ave. Merchants Pan Macedoniao LI-Qxeas SCORE 

Auto Repar Shop Association-Queens & Long Island 

Black Women Enterprise Caribbean Amercian Chamber of Commerce 

Events: 9 

Gettina Down to Business Conference - April 1997 & April 1998 

EAP &aduation -March 1997, April 1948 

Neighbvrhcod Development Initiative Breakfag - June, 1997 

Businesss Start-Up Breakfast (with Queens Business TA providers)- October 1996 

Hispanic Business Congress of Queens - October, 1997 

Queens Neighborhood Development Initiative - announcement - November, 1997 

EAP Registration, Open Howe -January, 1998 

Queens Hospital Center Contractor Fair -March , 1998 

Congressman Meeks & SE Queens Communi~ Development Grps Priority Briefing - April, 

1998 

Publications: Queens Access-Business information Service of Queens 

County: 7 

QCOEDC Brochure, including Business Services Insert 

“h4imling Your Own Business” (English & Spanish) 

Loans for Queens Business 

Guide to Incentives for Business 

QUEENS COUNTY, USA - marketing newsletter 

Queens Quarterly - newsletter for local development corporations 

Borough Hall. M-55 Queens Boulevard Suite 309 n P.0. Box 356009. Briarwood. New York 11435-6009 n (718) ‘M-0546 lax (718) 263-0594 H email - www.queensny.org 
Anthony Andrews, Jr. 

Joseph R Be&told 

Seth Bornstein’ 

Sherman Brown * 

Co-Treasurer 

Spencer Brown’ 

CO-TWWUWr 

Carmen Cenino” 

Ece President 

Luz Colon 

James Davis 

Norma Edwards* 

secretary 

Wilfred Gmcnway 

R W. Hall 

John Kotowski” 

Chairperson 

Drew Manger” 

President 

Charles McMickcas* 

l&x President 

Sue Norcika 

David Quintas-Parquet 

Gail Roseman 

Herman D. Smith 

Meilin Tan 

Director-Government Relations, York College 

Business Agent, Local #3, International 

Brotherhood of Electrical Workers 

Director, Economic Development 

Queens Borough President 

Business Owner: MCAP Agency & Brown Travel 

Community Development Manager, Fleet Bank 

VP, Chase Manhattan (retired) 

Community Conciliation Network 

Chairperson, Community Board 12 

Business Owner, WECO, Inc. 

Airport Consulting Group 

R W. Hall General Contractors, Inc. 

Special Assistant to President 

LaGunrdia Community College 

Director, Economic Development-Queens, Con Edison 

CDC, Chase Manhattan 

Chairperson, Community Board #13 

Director, Government Affairs, Bell Atlantic 

Executive VP, Shalom & Zuckerhmt Realty 

Regional Director, Queens Hospital Center 

President, Hem+Lynn Realty Inc. 
George McDonald 

The Doe Fund, Inc. 

Public Meeting Regarding Citicorp and Travelers Group 

Friday, June 26,199s 

Written Testimony for the Federal Reserve Bank of New York 

I gladly volunteered to testify before you today regarding the many years of support that 

Citibank has offered The Doe Fund and the confidence I have that Citibank will continue its 

commitment to our work well after the merger with Travelers. 

The mission of The Doe Fund is to empower formerly homeless individuals to work 

and to realize their potential to live as responsible, productive and self-sufficient 

individuals. In 1990 The Doe Fund launched ReacJ~~, WiNing & Able. an innovative 

work and job skills training program which provides homeless participants with 

meals, housing, social support services, basic educational training and above all, paid 

work opportunities. Since its inception, the program has helped over 500 individuals 

to secure full-time employment and permanent housing and to achieve lives of 

productivity and independence. 

The Doe Fund’s original Rem&: Willing&Able residence is located in BedfordStuyvesant, Brooklyn. In 1996 The Doe Fund expanded the program to the formerly 

city-operated Harlem Men’s Shelter and on May 41h of this year, The Doe Fund 

launced a Rea~&~. Willing & Able program in Jersey City, New Jersey. The Doe Fund 

also operates a Rea&, Willing & Able program in Washington, D.C. Today The Doe 

Fund serves over 800 formerly homeless men and women annually and Readv, 

Willing & Able stands as a model welfare to work program for homeless service 

providers nationwide. 

The success and expansion R&v, Willing &Able has experienced over the years 

would not be possible without the support and guidance of Citibank. In 1991, shortly 

after The Doe Fund opened the doors of its first Readv, Wi’llirzg & Able residence, 

Vice President and Director of Corporate Contributions Mr. Paul Ostergard and 

several Citibank colleagues visited the program. Impressed by the program’s workbased philosophy and recognizing the great need and potential among our city’s 

homeless population Citibank awarded The Doe Fund a grant of $5,000 and 

expressed a sincere interest in developing a relationship with what was then a 

fledgling organization. 

Since that first visit, Citibank has provided The Doe Fund with annual grants in 

support of Reaal,,. WiNing & Able, which in total exceed $50,000. Citibank 

employees also frequently make matching gifts to support our work and one 

employee, Ms. Peggy Cohen. a Vice President of Private Banking, has served on The 

Doe Fund’s Board of Directors since 1995. Ms. Cohen, who served as Chairperson 

of our Board from 1996-I 997 has tirelessly given of her time and energy in support of 

our work. 

1 
In addition to financial support. over the years Citibank has generously provided banquet 

rooms in its corporate headquarters for Community and Board of Directors meetings. Last 

spring. Citibank hosted a Community Breakfast for prospective individual and foundation 

donors which resulted in a grant in the amount of $75,000 from a local family foundation. 

Most recently. the Citicorp Foundation has awarded The Doe Fund a grant of S 10,000 in 

support ofa revenue-generating shoe making business, Harlem Shoemakers, Inc. With the 

help of internationally renowned shoe designer, Mr. Joseph Famolare, The Doe Fund is 

working to open a shoe factory in Harlem. Harlem Shoemakers will employ low-income 

Harlem residents. graduates and trainees ofReagr>. Willing & Able. The business will 

provide valuable work experience and generate revenue for The Doe Fund’s Reacj~~. Willing 

& :lble program. Citibank’s support of this innovative business endeavor demonstrates its 

insight into the current climate, which demands that non-profits must work to curtail reliance 

on public mnding sources. In addition to the recent grant award, Citibank is currently 

considering making a loan of S500.000 in support of this business endeavor. 

Given the relationship The Doe Fund has built with Citibank and its proven commitment to 

improving the community which they serve, I have every reason to believe the pledge they 

have made to me and my colleagues that their support of our work will continue after the 

merger with Travelers. 
Testimony of Fredy Espaillat, Academy of Finance Student 

Federal Reserve Board Hearing on Travelers/Citicorp Merger 

Good morning, ladies and gentlemen, my name is Fredy Espaillat and a am 

a graduate of the Academy of Finance at Brandeis High School in New 

York City. 

Last summer, I had what I felt was the opportunity of a lifetime. I applied 

to Salomon Smith Barney for a summer internship they sponsor as part of 

the Academy of Finance program. I sent in my resume, was interviewed for 

the position and was placed in the high net worth department at Salomon 

Smith Barney. 

This was my first job in the real world and everyone at Salomon Smith 

Barney made me feel like I was a part of the organization. My supervisor, 

Tina Monahan, took me out to lunch at least once a week and gave me many 

responsibilities. 

I worked on the computer inputting data into the data base. I updated client 

portfolios and I was included in daily department meetings. 

My internship at Salomon Smith Barney taught me the value of teamwork, 

punctuality, and gave me the ability to network with coworkers 

I feel all of these things will help me + build a better future. 

In addition, I feel that my internship greatly advanced my computer skills 

which will help me when I go either to Baruch College or DeVry Institute 

where I plan to study computer programming and business management. 

I don’t believe that I would have had the opportunity to do any of these 

things if Sandy Weill and Travelers Group did not create these opportunities 

for the students in the Academy of Finance. 

In conclusion, I would like to say that I believe that the expansion of 

Travelers Group will make even more internships opportunities for many 

more students in the Academy of Finance program. Thank you very much 

for the chance to speak to you today. 
m g$ yJl111 A qz $$ gt 

ASIAN AMERICANS FOR EQUALITY 

111 Division Street, New York, New York 10002 40.34 Main Street Z/FL, Flushing, New York 11354 

Tel. (212) 964.2288 * Fax (212) 964-6003 Tel. (718) 539.7290 . Fax (718) 539-5706 

June 26, 1998 Public Meeting 

Good Morning, My name is Margaret Chin; I am the executive director of Asian Americans for 

Equality Fair Housing Center (FHC). I am also speaking on behalf of our affiliates, Asian 

Americans for Equality (AAFE) and Renaissance Economic Development Corporation (REDC). 

AAFE is a community-based, non-profit organization founded in 1974 to advocate for equal 

opportunities for minorities. We are located in the Chinatown, Lower East Side and Flushing 

Queens. Serving an estimated 20,000 people annually, AAFE’s programs and services include 

housing development, homeownership, housing rights, entitlement services counseling, 

citizenship counseling, civil rights, economic development and technical assistance. AAFE has 

been actively advocating for greater community reinvestment by banks since its inception in the 

70’s. 

Through our affiliate organization established in 1995, the Asian Americans for Equality Fair 

Housing Center, we conduct education and outreach, testing and assist in the filing of complaints 

in the areas of Fair Housing and Lending to Asian communities in all five boroughs. Another 

affiliate organization, the Renaissance Economic Development Corporation is a federally 

certified Community Development Financial Institution (CDFI), with a loan pool of 

approximately $1 Million to conduct lending through out the five boroughs in concentrated areas 

of Asian and Latin0 immigrant communities. 

I would like to make you more aware of the specific needs of the Asian community generated by 

cultural and linguistic differences, the impact of the Community Reinvestment Act on the Asian 

American community and about specific ways in which CRA can be strengthened to benefit low 

income and minority communities. 

Asian Americans are the fastest growing population in both the United States and New York 

City. The number of Asian Americans in New York City has doubled from 1980 to 1990 from 

3% to 7% of the City’s population, accounting for nearly half a million people. By the year 

2000, Asians are expected to compose over 10% of New York City’s population. 

Today, the diversity of the Asian Pacific American community is represented by over two dozen 

nationalities, each with its distinct language, religion and culture; its distinct challenges and 

potential. Two out of three of us were born in our native countries, and the majority of those 

who chose to come here, have some difficulties with language and its dominant cultures. 

The staggering four-fold growth, in the past 20 years, of the Asian Pacific American population, 

has spawned many challenges in its wake. The APA community live in one of the most densely 

populated areas in the nation. In New York City’s Chinatown, there are 189 persons per acre. 

Other areas of the city have only 37 per acre. This density is accurately reflected in the fact that 
in Chinatown, 2 or 3 families often live together in a single apartment. 95% of the housing stock 

in Chinatown predates 1939, exacerbating the lack of services and investment by the larger 

community. 

To get a true representation of the Asian Pacific American population, we must go beyond just 

the numbers. We represent the most “urban” of any sub-population group, with an 

overwhelming majority, in the low-income inner-city neighborhoods of metropolitan areas 

around, Los Angeles, San Francisco, Seattle, Chicago, San Antonio, and New York. 

The Asian community is a “savers’ community”, the increased population brought tremendous 

deposits into banks operating in Asian concentrated enclaves. In Chinatown alone the deposits 

total $4 billion. But most banks do not have mortgage officers who speak Asian languages. 

Also Chinatown landlords are unable to access affordable financing for building improvements. 

This lack of capital allows for extensive housing deterioration, causing dangerous conditions that 

lead to fires, deaths, and homelessness. Chinatown’s housing stock is among New York City’s 

oldest and has some of the most run down conditions. 

According to a letter published by Ming Pao Daily News in August of 1997, APAs exhibit the 

lowest rate of homeownership in the nation among all groups. The letter cites the national 

homeownership rate as 64.7%. Among Whites the rate is 70.8%; Women at 49.5%; African 

Americans at 44%; Latinos at 43.9%; and Asians at 42%. These national rates of 

homeownership are comparable to the trends in New York City and the metropolitan region. 

Despite this low percentage, recently, there has been an increasing movement in the APA 

community for low-income families to become homeowners. 

AAFE has found that homeownership is an important vehicle for APAs to enter mainstream 

society and to improve local communities. The lack of APA homeownership is caused by a dire 

lack of information about homeownership and access to credit and its related benefits available 

to the local communities. To overcome these obstacles, Asian Americans for Equality has led a 

multipronged effort to meet the challenges of the APA community. Our work to meet the 

challenges of the language and cultural barriers has resulted in unprecedented successes, 

accounting for more awareness and access to mainstream services. 

In 1986, AAFE developed the first ever, housing development project to utilize the federal Low 

Income Housing Tax Credit program, launching a public/private partnership that continues to 

gain steam today. In the past ten years AAFE has raised over $40 million to develop 400 units of 

affordable housing for senior citizens, homeless and low-income families throughout New York 

City. Working in partnership with HUD, Fannie mae, and major banks AAFE has been able to 

counsel and access over $50 million of affordable mortgages for over 500 families. AAFE’s 

community building efforts represent a multi-racial, multi-ethnic effort to build strong 

communities. 

ME has a long history of partnership with Citibank Citibank holds the largest proportion of 

AAFE’s financial businesses. AAFE is one of Citibank’s Partners in Progress, which contributes 

to AAFE’s housing development on the Lower East Side. We have seen Citibank take a 

leadership position in serving the Asian American community in the delivery of retail products, 
but we encourage Citibank to deepen its commitment to economic and community development 

to the Asian American community in the New York Metropolitan area and in Citibank’s other 

major service areas. AAFE looks to continue to work with Citibank to deepen their investments 

and activities with the Asian American and other immigrant and minority communities. 

Focusing on such initiatives as: 

Partnering to provide long term credit (30years terms -Vs- the typical IO-year term) for 

investment in New Construction; such as new in-fill housing throughout the Lower East Side. 

Today, AAFE alone needs over 10 million in long term equity to continue our rate of 

development. More would be needed to meet the needs, or to spur greater activity on a national 

level. 

Partnership to spur community development and homeownership initiatives with the Asian 

American community on a national level. Co-sponsoring national economic development 

summits for the Asian American community; or co-sponsoring technical assistance workshops to 

increase the development capacity of community groups. 

Partnership with other organizations and AAFE to create a Community Advisory Group to 

provide input directly to Citibank an local and national issues that affect low and moderate and 

minority communities. 

Provide more multi-year capacity building grants to stabilize and expand the work of non-profit 

partners who have been forced to till the void of shrinking government resources to spur 

economic growth in our communities. 

In this time of mega merger we expect Citibank to expand its role in providing financial services 

and spurring economic and community development within the communities they serve 

especially the low and moderate income, immigrant and minority communities. It will be a big 

challenge but continuing to work with community groups who understand the needs can make 

the difference. 

Thank you.