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41–727 PDF 2008

THE USE OF FEDERAL HOUSING

AND ECONOMIC DEVELOPMENT

FUNDS IN ST. LOUIS: FROM

‘‘TEAM 4’’ INTO THE FUTURE

FIELD HEARING

BEFORE THE

SUBCOMMITTEE ON 

HOUSING AND COMMUNITY OPPORTUNITY

OF THE

COMMITTEE ON FINANCIAL SERVICES

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

SECOND SESSION

MARCH 8, 2008

Printed for the use of the Committee on Financial Services

Serial No. 110–96

(

(II)

HOUSE COMMITTEE ON FINANCIAL SERVICES 

BARNEY FRANK, Massachusetts, Chairman

PAUL E. KANJORSKI, Pennsylvania 

MAXINE WATERS, California 

CAROLYN B. MALONEY, New York 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

DENNIS MOORE, Kansas 

MICHAEL E. CAPUANO, Massachusetts 

RUBE ́ N HINOJOSA, Texas 

WM. LACY CLAY, Missouri 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

MELISSA L. BEAN, Illinois 

GWEN MOORE, Wisconsin, 

LINCOLN DAVIS, Tennessee 

PAUL W. HODES, New Hampshire 

KEITH ELLISON, Minnesota 

RON KLEIN, Florida 

TIM MAHONEY, Florida 

CHARLES A. WILSON, Ohio 

ED PERLMUTTER, Colorado 

CHRISTOPHER S. MURPHY, Connecticut 

JOE DONNELLY, Indiana 

ROBERT WEXLER, Florida 

JIM MARSHALL, Georgia 

DAN BOREN, Oklahoma 

SPENCER BACHUS, Alabama 

DEBORAH PRYCE, Ohio 

MICHAEL N. CASTLE, Delaware 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

RON PAUL, Texas 

STEVEN C. LATOURETTE, Ohio 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, JR., North Carolina 

JUDY BIGGERT, Illinois 

CHRISTOPHER SHAYS, Connecticut 

GARY G. MILLER, California 

SHELLEY MOORE CAPITO, West Virginia 

TOM FEENEY, Florida 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

GINNY BROWN-WAITE, Florida 

J. GRESHAM BARRETT, South Carolina 

JIM GERLACH, Pennsylvania 

STEVAN PEARCE, New Mexico 

RANDY NEUGEBAUER, Texas 

TOM PRICE, Georgia 

GEOFF DAVIS, Kentucky 

PATRICK T. MCHENRY, North Carolina 

JOHN CAMPBELL, California 

ADAM PUTNAM, Florida 

MICHELE BACHMANN, Minnesota 

PETER J. ROSKAM, Illinois 

THADDEUS G. McCOTTER, Michigan 

KEVIN McCARTHY, California 

DEAN HELLER, Nevada

JEANNE M. ROSLANOWICK, Staff Director and Chief Counsel 

(III)

SUBCOMMITTEE ON HOUSING AND COMMUNITY OPPORTUNITY

MAXINE WATERS, California, Chairwoman

NYDIA M. VELA ́ ZQUEZ, New York 

STEPHEN F. LYNCH, Massachusetts 

EMANUEL CLEAVER, Missouri 

AL GREEN, Texas 

WM. LACY CLAY, Missouri 

CAROLYN B. MALONEY, New York 

GWEN MOORE, Wisconsin, 

KEITH ELLISON, Minnesota 

CHARLES A. WILSON, Ohio 

CHRISTOPHER S. MURPHY, Connecticut 

JOE DONNELLY, Indiana 

SHELLEY MOORE CAPITO, West Virginia 

STEVAN PEARCE, New Mexico 

PETER T. KING, New York 

JUDY BIGGERT, Illinois 

CHRISTOPHER SHAYS, Connecticut 

GARY G. MILLER, California 

SCOTT GARRETT, New Jersey 

RANDY NEUGEBAUER, Texas 

GEOFF DAVIS, Kentucky 

JOHN CAMPBELL, California 

THADDEUS G. McCOTTER, Michigan 

KEVIN McCARTHY, California 

(V)

C O N T E N T S 

Page 

Hearing held on: 

March 8, 2008 ................................................................................................... 1

Appendix: 

March 8, 2008 ................................................................................................... 43

WITNESSES 

SATURDAY, MARCH 8, 2008

Geisman, Barbara A., Executive Director for Community Development, City 

of St. Louis, Missouri ........................................................................................... 7

Gimont, Stanley, Acting Director, Office of Block Grant Assistance, U.S. Department of Housing and Urban Development .................................................. 6

Jones, Michael, Senior Pastor, Friendly Temple Missionary Baptist Church .... 24

Kennedy, Hon. Terry, Alderman, 18th Ward, St. Louis Board of Aldermen ...... 10

Mallory, Hon. Mark, Mayor of Cincinnati, Ohio ................................................... 30

Rogers, Jamala, Chairperson, Organization for Black Struggle .......................... 23

Talmage, John, President and Chief Executive Officer, Social Compact, Inc. ... 26

Zuniga, Tom, Managing Director, DSG Community Marketing Services LLC .. 28

APPENDIX 

Prepared statements: 

Geisman, Barbara A. ........................................................................................ 44

Gimont, Stanley ................................................................................................ 63

Jones, Michael .................................................................................................. 65

Kennedy, Hon. Terry ........................................................................................ 69

Mallory, Hon. Mark .......................................................................................... 73

Rogers, Jamala ................................................................................................. 77

Talmage, John .................................................................................................. 82

Zuniga, Tom ...................................................................................................... 92

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Waters, Hon. Maxine: 

Written statement of Matt Fellowes, The Brookings Institution ................. 97

(1)

THE USE OF FEDERAL HOUSING 

AND ECONOMIC DEVELOPMENT 

FUNDS IN ST. LOUIS: FROM 

‘‘TEAM 4’’ INTO THE FUTURE 

Saturday, March 8, 2008

U.S. HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON HOUSING AND

COMMUNITY OPPORTUNITY, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, D.C. 

The subcommittee met, pursuant to notice, at 12 p.m., at the St. 

Louis City Hall, 1200 Market Street, St. Louis, Missouri, Hon. 

Maxine Waters [chairwoman of the subcommittee] presiding. 

Members present: Representatives Waters, Green, and Clay. 

Chairwoman WATERS. This hearing of the Subcommittee on 

Housing and Community Opportunity will come to order. Good 

afternoon, ladies and gentlemen. I am Congresswoman Maxine Waters, the Chairwoman of the Subcommittee on Housing and Community Opportunity. I would like to start by thanking the City of 

St. Louis for allowing us the use of this beautiful and historic 

building, the St. Louis City Hall. 

Today’s hearing is titled, ‘‘The Use of Federal Housing and Economic Development Funds in St. Louis: From ‘Team 4’ Into the Future.’’ And I would especially like to thank my friend and colleague, 

Representative Clay, who is a dedicated member of the subcommittee, for requesting and arranging for this hearing here 

today. I am very, very honored to serve on the overall Financial 

Services Committee and on this subcommittee with Mr. Clay. He 

has been not only a valuable member, but I depend on him to help 

us plan and organize all of the activities of this committee, not simply for St. Louis or Missouri, but for the entire United States of 

America. Thank you, Congressman Clay. 

Mr. CLAY. Thank you. 

Chairwoman WATERS. And, of course, I’m always pleased to be 

in the city of my birth and have the opportunity to visit with 

friends and family and just reminisce about old times, of which we 

did a lot last evening. I would also like to thank Mr. Cleaver who 

had wanted to be here today, had signed up to be here today, but 

found he could not come because he had an emergency. But he certainly wanted to be here to share with us in the learning curve 

that we have been afforded. 

He is not here, but we have with us Mr. Al Green. Representative Green is from Houston, Texas, and he took time from his busy 

2

schedule to come serve on the subcommittee today because he is interested not only in what is happening in the planning process and 

with housing and economic development here in St. Louis, but in 

his own city, and he, too, is one of the treasured members of the 

subcommittee. 

I worked very closely with him and Mr. Clay as we planned the 

activities of this subcommittee, and I have to tell you—and I don’t 

want to brag—that we’re one of the hardest working committees in 

the Congress of the United States of America. We have passed out 

more legislation than any other committee, and we have many 

more bills in the hopper that we intend to get to the Floor of the 

House. Our bills always make it to the Senate side. They are a little slow over on that side of Congress, but we are putting the bills 

before them because we recognize so much work had not been done 

prior to us taking over the leadership of these committees. 

So I know that some of the circumstances and challenges that 

you have here in the City of St. Louis are the same ones that I 

have in the City of Los Angeles, and Mr. Green has in the City of 

Houston. We think that by being here today we can not only hear 

more and learn more about these opportunities and these challenges, but we can apply what we are learning to those problems 

and opportunities that we have in our own cities. I am from a city where the median price of a home is $529,000. 

The housing costs in Houston, where Mr. Green comes from, seem 

downright reasonable at nearly $400,000 median. And, of course, 

here in St. Louis, it is less than that to purchase a median priced 

home. On the other hand, reasonable does not necessarily mean affordable; 40 percent of owners with mortgages, 21 percent of owners without mortgages, and 51 percent of renters in St. Louis City 

spend 30 percent or more of household income on housing, making 

them housing cost-burdened, as defined by the Department of 

Housing and Urban Development. 

Almost a quarter of St. Louis City renters are severely housing 

cost burdened, meaning they pay more than 50 percent of their income in housing costs. As in every community in the country, work 

no longer guarantees being able to afford housing in St. Louis. The 

National Low Income Housing Coalition estimates that in order to 

afford a reasonable two-bedroom apartment here, a renter would 

have to earn at least $12.88 an hour, which is 21⁄2 times the minimum wage. The affordability crisis is most pronounced among St. 

Louis’ poor and disabled neighborhoods. Well over half of St. Louis 

City’s poor households are severely cost burdened, including over 

1,200 households in the North St. Louis area. 

We’re going to be talking a lot about that today. Disabled persons 

receiving supplemental security income, that is, SSI benefits, are 

particularly vulnerable to affordability concerns. 

The HUD fair market rent for a one-bedroom apartment in St. Louis, $711, was 118 percent of the monthly SSI benefit of $603. 

In addition, St. Louis has been hit hard by the foreclosure crisis, 

ranking 36th among American cities in foreclosure rates in 2007 

with over 15,000 filings, a 58 percent increase over 2006. 

And like most communities in the Nation, the Federal housing 

resources available in St. Louis don’t come close to meeting the 

need. Thanks to 8 years of this Administration, and an assault on 

3

the HUD budget, only one out of four households eligible for Federal housing assistance actually receives it. Here this means that 

there are over 4,000 eligible families on the waiting list for public 

housing and over 5,000 eligible families await housing choice 

vouchers. 

Similarly, the City has had to make due with less in terms of 

CDBG and HOME dollars over the past few fiscal years, again due 

to this Administration’s concerted efforts to cut these programs, efforts we in Congress manage largely, but not entirely, to defeat. As 

a consequence, the City’s home allocation in Fiscal Year 2008 of 

$4.1 million is nearly $600,000 less than it received in Fiscal Year 

2004, and the City’s CDBG allocation of $19.6 million is nearly $5.5 

million below its funding level 4 years ago. 

That is why it is especially critical for the City to spend these 

monies wisely, and it is equally important for us as Members of 

Congress to fight to maintain, and perhaps one day under new a 

situation we will actually increase, appropriations for these programs to really understand and influence how the City is targeting 

funds to help sustain and revitalize neighborhoods like those we 

toured this morning in North St. Louis. 

It is also essential that we acknowledge and learn from the often 

troubling history of prior initiatives to energize the urban core of 

America’s great cities. I can tell you that even though I hail from 

here, I confess to not knowing a lot about the Team 4 plan before 

Mr. Clay approached me about holding this hearing. Indeed, I 

think the title of this hearing may have set a record of inquiries 

to my subcommittee staff from other offices, some wondering if 

they had missed some hearings in the past on Teams 1 through 3. 

But in learning about it from Mr. Clay, and through the materials his able staff provided, it became clear to me that this was 

another instance of the song titled, ‘‘Been a little bit different,’’ but 

the tune remained the same. When it comes to locating the bad 

stuff like pollution-generating factories or clearing out housing and 

breaking apart communities to make room for a highway, poor and 

predominantly minority neighborhoods have always seemed to get 

more than our share, but when it comes to resources like good 

transportation, affordable housing, and access to credit and key 

public services, somehow it has been historically difficult to get 

what is needed and what is deserved. Indeed, too often we are intentionally ignored and locked out. 

I want to know more about Team 4 and I want to know whether 

or not there has been an informal implementation of Team 4, because we hear that has not been a formal implementation, but I 

am very interested to know whether or not the kind of thinking 

that went into Team 4, in fact, is seen in what we saw on the tour 

today in North St. Louis. 

I look forward today to hearing about better ways to go about our 

oversight. That has certainly been a priority for me in my own district, but it brings a new set of challenges. Right now, for example, 

I face daily the question of how to bring in large scale businesses 

that want to explore the underserved markets and poor sections of 

South Los Angeles while ensuring that those businesses bring us 

good jobs as well as low prices and do not crowd out our local small 

businessowners. 

4

I know we have two panels of real experts on such questions, and 

I look forward to hearing from both panels. And with that, I will 

recognize now St. Louis’ own, my colleague and good friend, Congressman Clay, for his opening statement. 

Mr. CLAY. Thank you so much, Chairwoman Waters, and let me 

thank you for bringing the Subcommittee on Housing and Community Opportunity to St. Louis today to consider this important 

issue. Thank you for coming to my hometown, and welcome back 

to your hometown. 

I want to also thank my colleague from Texas, Al Green, for his 

attendance at today’s hearing. And he is a star. If you ever—for 

you C–SPAN junkies, you will find him at every hearing before the 

Financial Services Committee, and we appreciate his diligence. We 

appreciate his commitment to helping turn this country around. So 

thank you, Mr. Green, for being here. 

Mr. GREEN. Thank you. 

Mr. CLAY. Good morning and greetings to all of the witnesses 

and the members of the St. Louis community who are here today. 

I want to acknowledge the staff from the Subcommittee on Housing 

and Community Opportunity, as well as staffers from my office 

here in the District, as well as those who came here from Washington D.C. Thank you all for preparing for this hearing and for all 

of the hard work you have put in today. 

We completed a bus tour this morning around parts of the First 

Congressional District, and that long suffering—this part of the 

District has long suffered from many development-related errors. 

Large sites like the abandoned Pruitt-Igoe housing projects and the 

old Carter Carburetor site on North Grand have not received the 

proper attention from either the government or the private sector. 

And, you know, growing up in this community, I remember this 

site. I remember Dr. King Drive being such a robust retail and 

commerce section. So that’s—you know, you can never go back to 

the past, but you certainly can reflect on that and remember what 

the potential is for this community. Neighborhoods have experienced major economic development and housing decay steadily over 

the past 30 years and in some instances even longer than that. 

In the hearing this afternoon, we cannot place blame on a single 

person or government agency or even groups or individuals in government and government agencies. I mean, we are not here to play 

‘‘gotcha’’ or the blame game today. What we can do today is listen 

to how we are supposed to attack these problems. We can listen to 

how citizens feel underserved by past policies, but most importantly, I hope we listen to new ideas and solutions and really try 

and figure out not so much what has gone wrong but figure out our 

respective roles in being part of real conclusions that benefit our 

constituents and fellow citizens’ needs. And I hope that everyone 

is looking forward to today’s hearing and this discussion with that 

perspective. 

Madam Chairwoman, I thank you very much again for conducting this hearing and I yield back. 

Chairwoman WATERS. Thank you very much. Now we will hear 

from Representative Al Green for his opening statement. 

Mr. GREEN. Thank you, Madam Chairwoman. And I thank Representative Clay whom I will say more about in just a moment, but 

5

I especially thank the chairwoman. It was stated that she is one 

of the hardest working persons in Congress, and I am proud to tell 

you that it is said that the Congressional Black Caucus is the conscience of the Congress. And if this is true, the chairwoman is the 

conscience of the conscience. She really deserves an expression of 

appreciation for what she does for people all over the country. 

I am so honored to be here with my very good friend and colleague, Representative Clay, which is an appropriate name for him 

because he is somewhat of a sculptor of ideas. He is very creative. 

He doesn’t think out of the box because he has never been in the 

box. See, he comes to us open-minded and always available to help 

a colleague with a new idea. I think that this area is indeed 

blessed to have him as a representative and I think he deserves a 

special thanks. 

I’m honored to be in this historic building on what I perceive to 

be an historic occasion. I think it’s historic because this may be the 

first time that Congress has looked into Team 4. It seems to me 

that this is long overdue, and if not for Congressman Clay and a 

committee chairwoman who saw the need, we might not be here 

today. So I’m honored to be in this historic building on this historic 

occasion, and I trust that our results will be historic as well, because while plans are not always codified and put into motion, we 

have to find out whether there’s an informal process of putting into 

motion policies that can work to the detriment of communities. 

We want to make sure tax dollars are fairly allocated and that 

taxpayers get a fair amount of their tax dollars returned to their 

community. It is my belief that we sleep in houses and we live in 

neighborhoods. I went through your neighborhoods on the north 

side today, and I’m concerned about where you live. And I’m honored to be here with my colleagues to hear from this august panel 

and another so that we can do what we can in the United States 

Congress to make a difference. I yield back the balance of my time. 

Chairwoman WATERS. Thank you very much. Now we will hear 

from our panel. We have a panel of witnesses, the first of which 

is Mr. Stanley Gimont, Acting Director, Office of Block Grant Assistance, U.S. Department of Housing and Urban Development. 

And I would ask Congressman Clay to introduce the other witnesses on this panel. 

Mr. CLAY. Thank you, Madam Chairwoman. Also on the first 

panel, we are joined by a person whom I have known for over 20 

years. She has been a fixture in city government, and she is now 

the executive director for community development for the City of 

St. Louis, Ms. Barbara Geisman. Thank you for being here today. 

Ms. GEISMAN. Thank you. 

Mr. CLAY. Also on this list is someone else whom I have known 

for 25 years, whose father has been honored with the naming of 

this room by—of his father, and he is the Alderman of the 18th 

Ward, Alderman Terry Kennedy. Thank you also for being here. 

Mr. KENNEDY. Thank you. 

Mr. CLAY. Thank you very much. I would like to thank all of you 

for appearing before the subcommittee today. Without objection, 

your written statements will be made a part of the record, and you 

will now be recognized for a 5-minute summary of your testimony, 

starting with Mr. Gimont. 

6

STATEMENT OF STANLEY GIMONT, ACTING DIRECTOR, OFFICE OF BLOCK GRANT ASSISTANCE, U.S. DEPARTMENT OF 

HOUSING AND URBAN DEVELOPMENT 

Mr. GIMONT. Good morning. My name is Stan Gimont, and I am 

pleased to be here in St. Louis on behalf of Secretary Alphonso 

Jackson. Thank you, Chairwoman Waters, for scheduling this field 

hearing to discuss the Community Development Block Grant program and the HOME Investment Partnership Program. 

Within the Office of Community Planning and Development at 

HUD, the Office of Block Grant Assistance is responsible for administration of the CDBG Program, while the Office of Affordable 

Housing Programs manages the HOME Program. 

The CDBG Program has been the Federal Government’s primary 

vehicle for assisting State and local governments in undertaking 

the wide range of community development activities aimed at improving the lives of low- and moderate-income families. Since its inception in 1974, more than $123 billion has been appropriated for 

the CDBG Program. These funds provide a ready source of funding 

for housing rehabilitation, public services, infrastructure, and economic development activities. 

The President’s Fiscal Year 2009 budget proposes a State fund- ing level of $3 billion for CDBG with the recognition that the Program’s impact has become diffused over time. An additional $1.9 

billion is proposed for the HOME Program in FY 2009. Concurrently, the Administration is again proposing CDBG reform legislation that would improve CDBG’s ability to target funding to community development needs and demonstrate results. 

These revisions address the CDBG formula, implementation of 

the CDBG challenge grant, consolidation of duplicative programs. 

and improved performance measurement requirements that will 

enable HUD and its grantees to demonstrate the benefits of the 

CDBG program. 

One of the distinguishing features of both the CDBG and HOME 

Programs is the importance of local decisionmaking. The CDBG authorizing statute requires citizen participation in the development 

of plans for the use of CDBG funds and enables local officials to 

make the final funding decisions. HUD’s focus is on the question 

of whether the activities funded by the local government meet applicable requirements with the particular focus on whether they 

are eligible for CDBG funding and meet a CDBG national objective. 

HUD’s monitoring processes are intended to ensure that the requirements are met by grantees in the course of administering 

their CDBG and HOME Programs. 

HUD collects extensive data on the use of CDBG, HOME and 

other formula program funds through its Integrated Disbursement 

and Information System (IDIS). HUD provides detailed disbursement information from each CDBG and HOME grantee on its Web 

site and aggregates the data to provide a nationwide snapshot on 

the uses of the CDBG and HOME funds. 

Looking over the past 7 years, we see little change in the percentage of CDBG funds disbursed nationwide on a year-to-year 

basis for activities such as public improvements, housing, public 

services, and economic development. Public improvements represent the largest use of CDBG funds nationally, accounting for apVerDate 0ct 09 2002 11:30 May 05, 2008 Jkt 041727 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 K:\DOCS\41727.TXT TERRIE
7

proximately 32 percent of annual disbursements in each of the past 

7 years. The dollar amount associated with these disbursements is 

in excess of $1.5 billion annually, and through IDIS, HUD tracks 

disbursements for 24 different categories of public facilities. 

With regard to housing, the single largest use of CDBG funds nationally is for rehabilitation of single residential units. In FY 2007, 

more than $582 million or 12.75 percent of all CDBG funds were 

disbursed for single family rehab purposes. This resulted in assistance to more than 117,000 units nationwide. Since the inception of 

the HOME Program in 1992, 53 percent of the HOME funds have 

been spent on rental housing development, 27 percent to assist new 

home buyers, and 20 percent for single family rehabilitation. In FY 

2007, 28,000 rental units were produced using HOME funds, 

29,000 new home buyers were assisted, and over 11,000 single family homes were rehabbed to Code. 

Economic development is another focus of this hearing, and over 

the past several years, CDBG grantees have spent between 8 and 

9 percent of their funds annually for economic development activities, such as financial assistance to for-profit entities and commercial and industrial infrastructure development. It should be noted 

that most economic development activities funded with CDBG dollars are carried out through the State CDBG Program. Over the 

past several years, the CDBG disbursement pattern for St. Louis 

is approximately 20 percent on housing activities, 20 percent for repayment of Section 108 loans, 17 percent for administrative and 

planning expenses, 15 percent for economic development activities, 

and 13 percent for public services. 

Chairwoman WATERS. I’m sorry. What did you say the percentage was for administrative? 

Mr. GIMONT. 17 percent. Annually, pursuant to the Appropriations legislation, there is a 20 percent cap. 

HUD is pleased with the initial results of the new performance 

measurement framework that establishes clear measurable goals 

and community progress indicators for our formula programs. The 

collaborative effort to develop the framework stretched over 2 years 

and involved grantees, public interest groups and the Office of 

Management and Budget. Grantees were requested to begin entering data for all activities open in IDIS as of October 1, 2006. Fiscal 

Year 2007 represented the first full year of data from the framework, and HUD has been reviewing those data with an eye towards 

improving our reporting guidance and ultimately enhancing the 

data that we receive from our grantees. 

I thank you for this opportunity to speak with you about the 

CDBG and HOME Programs and I look forward to answering any 

questions that you might have. 

[The prepared statement of Mr. Gimont can be found on page 63 

of the appendix.] 

Chairwoman WATERS. Thank you very much. Ms. Geisman. 

STATEMENT OF BARBARA A. GEISMAN, EXECUTIVE DIRECTOR 

FOR COMMUNITY DEVELOPMENT, CITY OF ST. LOUIS, MISSOURI 

Ms. GEISMAN. Thank you. I’m going to turn my computer on, and 

would it be a terrible thing if I talked from over there? 

8

Chairwoman WATERS. No. Go ahead. 

Ms. GEISMAN. Thank you. Congresswoman and Congressmen, 

thank you very, very much for this opportunity to be present today. 

As Congressman Clay said, I am Mayor Slay’s director for community development, and I am in charge of monitoring the agencies 

that work with the Community Development Projects. 

First, I want to say that I am extremely pleased that you have 

given me the opportunity to talk today, and also I hope to learn 

something from all you other panelists, and I hope that if I ever 

get my computer working, you will learn from me. 

The first thing I want to say is that the Team 4 report is 3 decades old and that I was in college when it was written. I have 

never read it and I don’t know anybody else who has ever read it, 

and it really isn’t relevant to anything that we have been doing for 

the past 7 years. 

First of all, Mayor Slay has been in office since 2001, and what 

I’d like to do is just take a little bit to tell you about where we were 

in 2001 and where we are today. St. Louis is a city not within a 

county. It is landlocked by its 1876 boundaries of 62 square miles, 

and we have no way to annex other geographic areas, as some 

other cities do. 

We were continuing to lose jobs and businesses, continuing to 

lose people, and we have lost more than 60 percent of our population since 1950. In 1950, we had 850,000 people, and over the 

last 5 decades, that has shrunk to approximately 350,000 people, 

or 60 percent of the population. And, as you might imagine, the 

fleeing population left behind wholesale abandonment of residences 

and business property, particularly in North St. Louis, and when 

property came up for sale, there was no one who wanted to buy it. 

There was no internal or external confidence in the City’s ability 

to make progress and very little help. 

In 2001, we established a series of goals. Those involved making 

the City a place where people affirmatively choose to live, choose 

to work, value physical diversity and, most importantly, value cultural diversity. We are working to rebuild the market for real estate throughout the City so that when a property comes up for sale, 

there is someone there to buy it and it does not get abandoned. We 

are working to retain and attract businesses, to rebuild our tax 

base, and to improve housing quality for our low- and moderate-income residents and our special needs residents all across the City. 

Some of the strategies that we employed—and I could give more 

detail if there was more time—were to provide clear direction. One 

of the first things we did when Mayor Slay took office was to do 

the City’s first land use plan since 1947. We did this in partnership 

with each of our 28 Aldermen and identified throughout the City 

areas where we wanted to encourage new development, areas 

where we wanted to preserve the physical assets that were there, 

and areas where we did not quite know yet what we wanted to do 

but there were opportunities for new stuff. 

We wanted to capitalize on the City’s unique historic properties, 

and to that end, we have been making more historic districts all 

across the City. We wanted to identify and build critical mass from 

neighborhood and City anchors, preserve and grow the City’s revenue base, provide a wide variety of housing opportunities—affordVerDate 0ct 09 2002 11:30 May 05, 2008 Jkt 041727 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 K:\DOCS\41727.TXT TERRIE
9

able, luxury, rental, homeownership, historic, new construction, 

and single and multi-family. 

We also—and this is a very important part of our strategy—as 

Chairwoman Waters mentioned, the block grant money has been 

strengthening, so we needed to expand the pool of incentives that 

we could use to augment scarce block grant and HOME funds. Federal and State historic tax credits, State Brownfields tax credits, 

tax increment financing, special Federal grants, low-income housing tax credits, and the City’s own Affordable Housing Trust Fund 

are the tools that we have been using to make progress. 

We also want to make more neighborhoods eligible for these incentives, like historic districts, so that we can save the scarce block 

grant and HOME funds for neighborhoods where they are necessary because the market does not exist anymore. We want to leverage private dollars, and a key component of our strategy is 

teamwork with the City’s 28 aldermen whom we consider our very 

important partners in Mayor Slay’s drive to make St. Louis a great 

city again. 

Now, after 7 years, the City’s population is growing again for the 

first time in 50 years. We have produced, in partnership with our 

aldermen, 26,000 new and substantially rehabilitated housing 

units, and that is approximately 15 percent of the housing stock, 

176,000 units that existed at the time of the Census. We have stabilized our job base at 220,000. Our revenues are growing. Vacant 

buildings are declining, and development is occurring throughout 

the City. 

We have 12 wards that are led by African Americans. These 

wards include approximately 41 percent of the City’s population, 47 

percent of the City’s land area, 55 percent of the City’s low- and 

moderate-income population, and 54 percent of the City’s population in poverty. It’s also important to note that the City’s AfricanAmerican population is now scattered throughout the City and, according to a study by the University of Wisconsin, we are one of 

the most integrated cities in the country on a block-by-block basis. 

We have focused in this presentation on the wards that are led by 

African Americans because there was a short timeframe to do this 

and because we have been working closely with them to make 

progress. 

An average of 59.3 percent of the combined HOME and block 

grant funds used in specific geographic areas was used in wards 

led by African-American aldermen, then that percentage was 69.4 

percent in 2007. I have some more stats here, but I won’t take the 

time to go through them. 

I will tell you, however, that an average of 64.3 percent of our 

dollars that are allocated for housing production went to wards led 

by African Americans, and that grew to 68.6 percent in what we 

budgeted for 2008. In these wards, there has been $1.7 billion in 

physical investment, according to the City’s building permit 

records, over the last 7 years, and 8,200 new and substantially rehabilitated homes. That investment is throughout—there is investment throughout the north side in the City, and it’s growing north 

and south from the central corridor because the central corridor is 

the anchor—the primary anchor from which we grow. 

10

I also want to point out that less than half of 1 percent of our 

block grant funds were spent downtown in the last 7 years. It was 

approximately a half-a-million dollars, and these went for loans to 

start up new businesses. We have, you know, almost exclusively reserved our block grant funds for use in neighborhoods. 

And in the top ten wards for investment in the last 7 years, 6 

of those 10 wards are led by African Americans. We believe that 

those facts and figures show that we have made a lot of progress, 

both in North St. Louis and throughout the City, but as you saw 

on your tour this morning, we know we have a long way to go, particularly in the most distressed parts of North St. Louis. That is 

why we have been working closely in partnership with the City’s 

African-American aldermen to identify major residential development initiatives, to develop a 5-year plan to fund those initiatives 

and to focus our block grant and HOME money and other limited 

cash incentives on projects of sufficient scale to engender long-term 

revitalization. 

These projects involve $141 million in residential development to produce 350 homes, using $54 million from a variety of incentive 

mechanisms, HOME and block grants certainly, but also the Affordable Housing Trust Fund, capital improvement sales tax 

money, City demolition and parks money and a variety of other incentives. And our goal is to produce a major project in each of the 

City’s wards. 

We also have—and I have a list of them in my handout that the 

Congressmen have—a number of other initiatives. 

And the final point that I want to make is that all of this revitalization, particularly in the most distressed neighborhoods, is expensive, and if we had more block grant and HOME funds, we could 

certainly do a lot more. As Congresswoman Waters pointed out, our 

block grant funding since 2001 has dropped 30 percent and we lost 

$2.2 million— 

Chairwoman WATERS. Your time is up. Thank you very much. 

Ms. GEISMAN. Thank you. 

[The prepared statement of Ms. Geisman can be found on page 

44 of the appendix.] 

Chairwoman WATERS. We will move on. Alderman Kennedy.

STATEMENT OF THE HONORABLE TERRY KENNEDY, 

ALDERMAN, 18th WARD, ST. LOUIS BOARD OF ALDERMEN 

Mr. KENNEDY. Thank you, Madam Chairwoman, and members of 

the subcommittee. You know, I’m also the chairman of the AfricanAmerican caucus, and on behalf of that caucus, we welcome you 

here. This is an historic occasion, and we are happy to be here. We 

have a number of our members also out in the audience. 

It is difficult to talk about the expenditures of money without 

talking about the culture from which it emanates. The story is that 

St. Louis is in the Midwest. We must keep in mind that if it is, 

it is one of the few Midwestern cities that had slavery. That gives 

you some notion of the culture that is here, my point being that 

St. Louis has a history of the illness that has also affected other 

portions of this country that, in my opinion, has yet to be either 

fully diagnosed or remedied, this illness that says one person is 

11

less than another or that one person deserves less than another 

and the same illness that causes people to oppress one and not the 

other. Frederick Douglas said if you put a chain on one person, the 

other side of that chain is on the person who chained them. Ultimately this kind of oppression and discrimination hurts everyone, 

those who are the victims as well as the ones who are applying the 

victimization. 

In that context grew the Team 4 plan. We are taught that this 

plan developed around 1974. For me it is history. For some of the 

other aldermen who are here it is memory. They were in office at 

the time that the plan was created. You must recognize the context. At that particular time St. Louis was losing population. Its 

height of population around 1950 was around 900,000 people; by 

1970, it was around 700,000. Its African-American community was 

growing. Its poor underclass was also growing. That population primarily resided in North St. Louis, the white population primarily 

in South St. Louis. The central corridor itself primarily held the 

major institutions, businesses, and factories throughout the City. 

This is a corridor that runs straight through the middle of the City. 

You’ll find your major universities there; Washington University, 

St. Louis University; your major hospitals; downtown St. Louis; the 

Central West End, and it extends all the way out to Clayton to the 

county. They call it the east/west corridor, the central corridor. 

The Team 4 plan grew out of that time period of the change in 

population, as well as the context of the Civil Rights movement, 

the growing black cultural movement, the women’s movement, and 

the anti-war movement. Out of all of that, grew this Team 4 plan 

in 1974. It basically put forth that the City, in terms of its development, should categorize itself in three major portions: conservation; 

redevelopment; and in transition. 

The conservation area was to receive a significant amount of 

Federal dollars for development, as well as concentrated City services. The areas that they say were for redevelopment were areas 

that were essential not only to the City but possibly to the region, 

and that area also deserved, in the opinion of public Team 4 plan, 

to be—to receive a significant amount of dollars and concentrated 

City services. The area that was called conservation itself was a 

relatively stable area from good to, in some cases, very excellent 

housing. The area that was considered for redevelopment, primarily the central corridor, did require some work, but it still had 

good housing stock. 

And then the area in transition was primarily the area where African Americans found themselves, and that was in North St. 

Louis. The notion for that area is that the land would be able to—

the area basically would be allowed to die. 

City services would be somewhat relaxed, and the response time 

would not be as great as other parts of the City. And then ultimately the notion would be that people would move and the land 

would be banked for future endeavors or future development. 

Though the City—now, you can imagine that in 1974 with the activity and all the kinds of movements that were going on at that 

time that when people heard this, it created a fire storm, certainly 

it did. Elected officials, people in the community all raised up 

against it. The City at that time did not officially adopt this plan; 

12

however, if you put it in the context of the culture of the mentality 

of the City, then of course you can recognize that it became a natural step for many to continue in that direction. 

Recognizing that is not an indictment on any one individual, I’m 

trying to put it in the context so that we recognize that even the 

ones who may be implementing this are also suffering. They suffer 

in that this kind of discrimination, in my opinion, limits everybody. 

To think about discriminating against another is a limiting act. 

You carry that and you limit yourself. We all suffer from it. And 

I believe that St. Louis is suffering from that. 

Ultimately, it has seen what we see today, large tracts of land 

that are in North St. Louis. 

The central corridor down through the years has received significant amount of monies for development. The north side has not 

seen that. And South St. Louis for the greater part has seen the 

stabilizing kinds of actions. 

Now, even if you could statistically prove that was not the case, 

the negotiation of Team 4 itself is still this specter in the minds 

of people, and that itself can cause the kind of distrust that you 

can presently feel in the City of St. Louis. I have to put it also in 

this context, because St. Louis, though it was a city in a State, Missouri State, that had slavery, it did not, in my opinion, benefit from 

the reconstruction that other parts of the United States in the 

South received when the North occupied and reconstructed the economic and political systems. So the South did have its problems. 

I mean, even the St. Louis Police Department has been controlled 

by the State since 1861 when the war broke out. Again I’m just trying to put it in the context of understanding how these dollars have 

been spent and why they have gone in those directions, and therefore when you traveled in those areas, you saw the result of that. 

That is not an indictment of this particular Administration; it is 

the culture, in my opinion, that also it emanates out of that we also 

must address. That is more difficult, but certainly legislation, very 

solid legislation, can begin to address it. 

There are certainly more monies that are needed. We’re beginning a dialogue in a way that we have not had a dialogue before, 

even with the present Administration, that we’re feeling is moving 

to some benefit, but if we’re going to ultimately end this specter, 

then the whole thing, in your opinion, needs to be reorganized and 

significant amounts of dollars, not just portions of the block grant 

but major portions, if not the entire piece, comes into the areas of 

the greatest in need. These are the areas that generate the dollars. 

These are where the dollars should be directed. Thank you. 

[The prepared statement of Mr. Kennedy can be found on page 

69 of the appendix.] 

Chairwoman WATERS. Thank you very much. I would like to now 

begin our question and answer period. I had organized a few questions based on the voluminous material that I had reviewed, but 

since hearing your testimony, I think I’m going to reduce these 

rather academic questions to some very pointed ones, recognizing 

that our colleague here, Mr. Clay, has set the tone by saying we’re 

not out to blame anybody, that we’re here to see what we can do 

about finding out how resources are allocated and how we can better plan, if that’s a need. 

13

Let me ask Ms. Geisman, why has the Pruitt-Igoe site been left 

undeveloped and basically in the middle of the City in ruins and, 

as I understand it, become a dumping site and even have animals 

that are there? Why hasn’t something been done with that? 

Ms. GEISMAN. The Pruitt-Igoe site—I believe Pruitt-Igoe was demolished in the late 1960’s, early 1970’s, and through the years—

and, again, you know, this has gone on for a really long time—it 

has become a repository for people in the middle of the night 

dumping— 

Chairwoman WATERS. We know all of that. What is the plan? 

Ms. GEISMAN. The environmental clean-up cost is in the neigh- borhood of $15- to $30 million. So the St. Louis Development Corporation, Otis Williams and Rodney Crim, whom I believe some of 

you met, have been working over the last 5 or 6 years on getting 

a handle on what the environmental conditions on that site are, because it’s 33 acres, there is a whole bunch of different stuff scattered all over it, and once that characterization is complete, we 

could begin to figure out what we can do to reuse it. 

Chairwoman WATERS. So you don’t have any real concrete plans? 

Ms. GEISMAN. No. 

Chairwoman WATERS. At this time? 

Ms. GEISMAN. No. 

Chairwoman WATERS. No identification of resources or dollars, 

not even an assessment of the property to talk about what the 

clean-up really, really should be? It’s just sitting there, as it has 

been for the past 30 years or so. 

Ms. GEISMAN. Yes. And I’m sure you all know, there are different 

clean-up standards for different uses. That’s why I gave the range 

of $15- to $30 million. I think we believe that the best use of the 

site would be a commercial use that would produce jobs and not require the— 

Chairwoman WATERS. What about the Carter Carburetor site? 

Ms. GEISMAN. Carter Carburetor is another problem, and let me 

take a second to explain that. Carter Carburetor was a building 

that was sold to a private, quote, ‘‘re-developer’’ probably about 15 

years ago. That private re-developer took a backhoe and broke up 

all the electrical transformers, which were PCB transformers at the 

time. He dragged that stuff all over not just the building but over 

the acreage adjacent to it, and Otis and Rodney have been working 

again diligently for 5 years with the EPA and with the previous 

owner of that property, ACF, Carl Icahn’s company, to clean up the 

site. 

Chairwoman WATERS. Did anybody file a lawsuit? 

Ms. GEISMAN. I think the—it’s a Superfund site, so it’s in the 

EPA’s hands, and we are just attempting to cooperate with the 

EPA. The problem is—and I think finally he might be ready to do 

so—the guy who owns it won’t let the EPA and the, you know, ACF 

people who do have money on the site to clean it up. So— 

Chairwoman WATERS. Am I left to believe that the City of St. 

Louis does not have the ability, the authority, the wherewithal to 

confront that kind of resistance? 

Ms. GEISMAN. One thing that has changed recently is that the 

gentleman was way behind in his property taxes, and we had been 

encouraging the former collector of revenue to file a tax suit on him 

14

for a number of years. The new collector of revenue, when he got 

elected, was ready to jump on that, but then the guy magically 

came up with the tax payment. So— 

Chairwoman WATERS. So someone who has been sitting on such 

a property in the middle of the City has been able to outfox, outsmart, and elude all of the smart people in the City? 

Ms. GEISMAN. Unfortunately, that is correct. 

Chairwoman WATERS. Mr. Gimont, I know that you attempted to 

describe HUD’s responsibility and you attempted to make it clear 

that the decisions are made locally and that you have only limited 

authority to put the money out there, etc., but I want to make sure 

that we understand what you’re saying, because this oversight 

committee is taking a look at CDBG management and the relationship to the Feds, to the cities, to see what we may be able to do 

in the future. Would you quickly tell me what you think is your responsibility for the management of CDBG funds in the City? 

Mr. GIMONT. First off, HUD’s primary responsibility on the front 

end is to ensure the equitable distribution of money to the local 

governments pursuant to the statutory formula, so the distributions to the local government are driven by that formula which is 

written into the law. Once we notify the grantees as to what their 

allocations are, they go through their annual planning processes to 

identify on a 3- to 5-year period the broad uses that they would like 

to achieve with those funds and then they file an annual update 

to that, an action plan, which gives a little bit more specificity with 

regard to the activities— 

Chairwoman WATERS. Are you familiar with St. Louis’ plan? 

Mr. GIMONT. Personally I am not, but I do have with me Ms. 

Deanne Ducote, who is our CPD director here in our St. Louis office, and I would like to direct any question to her, if I might, with 

regard to specifics on the St. Louis plan. 

Chairwoman WATERS. All right. I’m going to hold off on that, because I want my colleagues to have an opportunity to get their 

questions in, but I’m going to go to Mr. Kennedy. 

I thank you for the historical background and for putting it in 

a context that may help us to understand that it just may be in 

some instances benign neglect. Knowing what you know and us 

having seen what we have seen and understanding what some of 

the problems are as they have been identified; diminishing population, of course never enough resources, etc., do you think that the 

resources of CDBG and HOME, Section 108 and other kinds of 

Federal programs have been spent adequately and equitably? 

Mr. KENNEDY. No. In the City of St. Louis, no. 

Chairwoman WATERS. In the City of St. Louis? 

Mr. KENNEDY. No. No. It primarily went—as I said, again, 

though the Team 4 plan was not adopted, the money still followed 

that kind of pattern. 

Chairwoman WATERS. Does that have anything to do with the socalled initiatives of my past colleague, Mr. Gephardt? 

Mr. KENNEDY. Yes. 

Chairwoman WATERS. And his colleague at the time, as they 

talked about, development of the south side. 

Mr. KENNEDY. Yes. 

15

Chairwoman WATERS. Would we be able to track that, the resources of these programs being directed— 

Mr. KENNEDY. Yes. 

Chairwoman WATERS. —to the south side over a period of time 

over— 

Mr. KENNEDY. Yes, you should be able to. Now, that is not to say 

that according to the guidelines that they did not all qualify, my 

point being that those were not the areas of the greatest need. And 

that can be a significant difference. They might have qualified, but 

were they areas that needed the greatest input of dollars? No. 

Chairwoman WATERS. Then in your estimation, is the input of 

the aldermen such that between the aldermen and the public do 

you have the opportunity to take a look at and be a part of the plan 

for the expenditure, for example, of CDBG and to make sure that 

the plan that emerges is paying attention to all parts of the City? 

How does that work here? 

Mr. KENNEDY. Well, here primarily we generally—the process is 

that we propose projects. And, of course, to have a project, you need 

to have a developer. And that’s part of the problem in our areas, 

having those with the capacity to be able to do the projects. And 

when you’ve had a—a community of years of disenfranchisement, 

you have to build that capacity. So that’s one problem. 

So we basically go in and we propose projects and we negotiate 

whether or not we can get those funded. That has been since I’ve 

been in office since 1989. 

Chairwoman WATERS. Whom do you negotiate with? 

Mr. KENNEDY. We negotiate with the Mayor’s office and their 

representatives. 

Chairwoman WATERS. So does the process go through the Board 

of Aldermen and subcommittees hear it and the community proposes projects that could end up before some committee or subcommittee? Does the Mayor have the ultimate say on these? I 

mean, how does it work? 

Mr. KENNEDY. Well, you have—in anything here, you have to 

have 15 votes to get it passed. It does have to come through the 

Board of Alderman. And so then it’s a matter of garnering those 

votes. Now, we are, in terms of the African-American community, 

out of 28 alderpeople and a president, 29 individuals, we are 12, 

so we do not have the majority. And that has been the case down 

through the years. There have been even less aldermen in earlier 

years. 

Chairwoman WATERS. The votes go on racial lines. 

Mr. KENNEDY. Oftentimes, yes. Because, again, if you keep it in 

the context of the history and the culture, then you can understand 

that usually being the case. We go in, we propose projects if we 

have them. That means we have to have a developer with the capacity to do it. If you’re able to do that and garner that, then you 

go in and negotiate on those particular projects in relationship to 

the other projects and then we try to get that passed. It is a relatively very politicized process. Depending upon who is in office at 

a given time, they may or may not want to hear what you have 

to say, whether you have someone there or not. And unfortunately 

the way the guidelines are written it does allow for that, you know, 

16

at this kind of level. So there may be some other things to be proposed at that point. 

Which brings me to the point that, again, these other projects 

may have qualified, but they are not the areas with the greatest 

need. 

Chairwoman WATERS. Thank you very much. Mr. Clay. 

Mr. CLAY. Thank you so much, Madam Chairwoman. Let me 

start with Mr. Gimont and Ms. Geisman, and Mr. Kennedy can respond also. We understand that St. Louis is presently under investigation from HUD because a recent audit showed that the City 

has misspent CDBG funds. The allegation is that the City lent 

block grant funds to businesses that should in turn hire low- and 

moderate-income residents. These businesses did not hire the lowand moderate-income residents. This is an example of the types of 

local decisionmaking that is so disturbing to so many residents. 

Can you explain how this can happen and what are you going to 

do to turn that around? Let’s start with you, Mr. Gimont. 

Mr. GIMONT. Certainly. The audit that you speak of was done by 

the Department’s Office of Inspector General, I believe, and they 

went out and did their audit and turned that back over to the Office of Community Planning and Development here in our St. Louis 

office for further resolution. CPD goes out and monitors grantees 

periodically with regard to the activities that they have carried out. 

Again, on the front end we are looking to see that what they are 

proposing is permissible, then we go out on the back end and monitor for compliance. And the Inspector General steps in wherever 

they feel that they have a role to play or that there’s an issue for 

them to investigate. I know that our CPD staff here in St. Louis 

have been reviewing these issues with the City in an effort to try 

and resolve the outstanding findings on the City’s economic development program. We give the grantee the opportunity to present 

information which would explain the findings of the audit, and 

then we work with the Inspector General to resolve the issues. 

If we find that what the Inspector General has come up with is 

sustainable and that there is no support for the activity in the 

sense of the national objectives, that the jobs were not created, 

then we are in a position to take a range of sanctions against the 

City for that shortcoming. 

Mr. CLAY. And in this case, how do you remedy this? I mean, do 

you do it in the next cycle of CDBG funding where they have to 

also offset what damage was done initially. 

Mr. GIMONT. Again, we have a range of sanctions that we can go 

to, depending on the nature of the infraction. In some cases, we require the grantee to put in place better processes and procedures. 

In other cases, we would require the grantee to reimburse its line 

of credit for the cost of activities that did not meet the programatic 

requirements. We have not reached the point yet with that audit 

as to what we are going to do. 

Mr. CLAY. Okay. Ms. Geisman, what’s going to happen? 

Ms. GEISMAN. First of all, I believe that the audit—I’m not quite 

sure what the exact language was, but the issue was that the St. 

Louis Development Corporation did not have adequate records to 

document the job creation, or job retention as the case may be. 

Since the time of the audit, SLDC’s staff has gone back and colVerDate 0ct 09 2002 11:30 May 05, 2008 Jkt 041727 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 K:\DOCS\41727.TXT TERRIE
17

lected all of the records from all of the businesses that are still in 

business. 

Several of the businesses actually went out of business, and so 

there may be one or two where the records could not be collected. 

So I think that then the other thing we did immediately, even 

while the audit was going on, is put a new system in place and hire 

new staff to make sure that the records were maintained in the future, because I for one was thoroughly disgusted that, you know, 

maybe you can’t make a business stay in business, but you can certainly keep the records that you’re supposed to keep. So we now 

have a whole new system, whole new people monitoring it, and we 

collected all the records that we could from the previous businesses. And I think that we have responded through HUD’s— 

Mr. CLAY. Well, wait a minute, now. You understand that there 

has been some damage caused here because the jobs were not created? 

Ms. GEISMAN. Yes, they were. 

Mr. CLAY. The lower- and moderate-income people did not receive that employment opportunity— 

Ms. GEISMAN. They were created in accordance with HUD’s regulations. 

Mr. CLAY. Wait a minute, now. That’s not what happened here. 

You said the companies went out of business, so there weren’t jobs 

created there. You said that your recordkeeping was not good, so 

you cannot document the creation of those jobs. Now, understand 

that there has been damage done here. 

People did not get those economic opportunities like the law required and like we assumed, we the Federal Government and HUD 

assumed, so going forward, the City should make the extra effort 

to actually create those economic opportunities, create those jobs 

based on every $50,000 of CDBG funding that you give in the form 

of a loan to a company. Would you all go forward and do that and 

make up for the jobs you didn’t create in the previous cycle. 

Ms. GEISMAN. I think we did document that we created at least 

one job for every— 

Mr. CLAY. Well, wait a minute, now. Hold on. That’s not what 

happened. I know you have your local person here, but it didn’t 

happen. It didn’t happen like that, Ms. Geisman. 

Ms. GEISMAN. We documented it after the fact, though, which 

was a problem— 

Mr. CLAY. But you didn’t create the jobs. If the company closed, 

you didn’t get the job anyway. 

You know? It didn’t happen like that. You have to realize that 

you have to move forward and you have to be sincere about what 

these dollars are for, that they are there to create economic opportunities for the low- and moderate-income citizens that we all represent. And we have to move forward and you have to tie that 

funding to actually creating those jobs. If you’re going to have this 

loan program, it has to be done this way. 

Ms. GEISMAN. And we understand that and are doing it. 

Mr. CLAY. Let me go to Alderman Kennedy. According to Ms. 

Geisman, the issues raised by the team for the plan are not relevant. Can you give the subcommittee another perspective? Have 

development policies treated all sections of the City equally and 

18

does North St. Louis receive the same attention as other sections 

of the City? 

Mr. KENNEDY. That’s your question? 

Mr. CLAY. That is the question. 

Mr. KENNEDY. Again the answer is no, from our opinion. My 

comments also included some of the thoughts and ideas from other 

members of our caucus, so I was not just speaking from my 

thoughts. No, we do not feel that those dollars have been spent 

adequately. We feel that North St. Louis is the area of the greatest 

need. Now, that has been since the Team 4 plan and before, and 

it is—the Team 4 plan did not create the notion of moving blocks 

and blocks of people of color. I mean, the City—that had been done 

before then with Mill Creek. That was before Team 4. So this notion existed before Team 4. Team 4 simply put it in more modern 

terms in 1974, a document that was created by a group of consultants that spelled out those specific three areas. No. In our opinion, 

the dollars have followed the intent of that plan, and therefore the 

bulk of that money went in the central corridor and south. 

Mr. CLAY. I have another question, Madam Chairwoman, for Ms. 

Geisman. You say that the Carter Carburetor site would cost $15- 

to $30 million in clean-up cost. When you look at that site in the 

City, I cannot find a similar site in any other part of the City. I 

wouldn’t find it in the Skinker-DeBaliviere neighborhood. I 

wouldn’t find it on the Gravois Boulevard. I wouldn’t find it in any 

other part of the City. And if it were in another part of the City, 

it would be a major undertaking by the City Government, and I 

think that the Carter Carburetor site should be a major undertaking by this government and by this community. Do you agree 

with that? 

Ms. GEISMAN. I do. 

Mr. CLAY. Okay. And then we will now direct your resources to 

tackle that issue, like Ms. Waters said, that we may need to consider a lawsuit. 

Ms. GEISMAN. Well, let’s see. On Carter Carburetor, I do not 

know what the cost to clean that up is. Pruitt-Igoe was the one— 

Mr. CLAY. Well, you said $15- to $30 million. 

Ms. GEISMAN. Yes. 

Mr. CLAY. Okay. Let me ask you one other thing about the LRA 

property. You talk about access to property and how easy it is for 

residents to buy or lease this property. When we rode through 

North St. Louis—you have been there, too, and you have seen these 

huge squabs of vacant lots and boarded-up buildings. You know 

that LRA owns quite a bit of that property. 

Ms. GEISMAN. Yes, they do. 

Mr. CLAY. How easy is it for residents of the surrounding community to actually purchase those lots, to purchase that property, 

or even to lease it? I know you do long-term leases, too. How easy 

is it for my constituents to actually come down to your office and 

to say, I want to purchase this lot? What happens? What is the 

process? 

Ms. GEISMAN. It is very easy for any owner to purchase a side 

lot next to their home where they live that is not part of something 

that we consider a development site. Ideally what we want is for 

the abandoned areas of North St. Louis to be rebuilt with new 

19

homes. In those instances where it is part of a development site, 

then we will give the owner/occupant who lives next door a garden 

lease on a year-to-year basis so they have total control of the property until and unless there’s a development that comes along. 

Mr. CLAY. What is the timespan— 

Ms. GEISMAN. The timespan of that should be 45 days. 

Mr. CLAY. 45 days, all right. Madam Chairwoman, I yield back. 

Chairwoman WATERS. Thank you very much. Mr. Green. 

Mr. GREEN. Thank you, Madam Chairwoman. And I thank the 

witnesses for the testimony. Let me start with a commentary. We 

live in a world where it is not enough for things to be right; they 

must also look right. 

And it doesn’t look right—even if it is right, it doesn’t look right 

for a Team 4 plan to surface and for us to say that it has not been 

adopted but to see all of the evidence of its adoption. There’s something wrong. I have some grave concerns that I cannot go into because I’m going to honor the spirit of this hearing, but we’re talking about lives that have been impacted adversely. Team 4 may not 

have been adopted, but it appears that the spirit lives on. It may 

have died, but that spirit lives on. 

Now, let’s talk about Carter Carburetor first. Is it true that 

there’s a school near this site? 

Ms. GEISMAN. What there is, as far as I know, is the Herbert 

Hoover Boys Club. 

Mr. GREEN. Is it true that it is near the site? 

Ms. GEISMAN. That club is across the street from the site. 

Mr. GREEN. Is it true that it is within 100 yards of the site? 

Ms. GEISMAN. I believe it is. 

Mr. GREEN. Now, is it true that the City has a legal department? 

Ms. GEISMAN. It is true. 

Mr. GREEN. Is it true that the City’s legal department files lawsuits? 

Ms. GEISMAN. That is true also. 

Mr. GREEN. Is it true or not true that the City’s legal department 

has filed a lawsuit against Carter Carburetor, given its juxtaposition to children? 

Ms. GEISMAN. I do not believe that the City has filed a lawsuit 

against the owner of the property. Carter Carburetor has not 

owned that property for many, many years. 

Mr. GREEN. Is it also true that the City has not petitioned the 

Federal Government for clean-up funds? 

Ms. GEISMAN. That is not true. We have been working for at 

least 5 years that I know of. 

Mr. GREEN. You mentioned the Superfund. 

Ms. GEISMAN. I’m sorry. 

Mr. GREEN. You mentioned the Superfund. 

Ms. GEISMAN. Yes. The EPA meets with— 

Mr. GREEN. Let me mention another type of petition. What about 

something called an earmark? Have you requested an earmark to 

help you with this? 

Ms. GEISMAN. I do not believe that we have. 

Mr. Green. We have bridges going to nowhere with earmark 

backing. It just seems to me that the City would request that we 

20

spend some Federal dollars. And we want the request to come from 

you on this type of project. 

Let’s talk about now the Pruitt-Igoe matter. I hope I’m pronouncing this correctly, Pruitt-Igoe? 

Ms. GEISMAN. Yes. 

Mr. GREEN. Have you asked the Federal Government to provide 

clean-up funds for that project? 

Ms. GEISMAN. I believe that we have received money from the 

Federal Government to do the environmental characterization, 

which is a process of testing each area of the site and analyzing 

what the contaminants are. 

Mr. GREEN. And without a long statement, what is the timeline 

on this process? 

Ms. GEISMAN. I would have to check. I don’t think that it should 

be too long before that’s completed, but I don’t know. 

Mr. GREEN. Has the City developed a plan for the north side, a 

revitalization plan for the north side? 

Ms. GEISMAN. What we have done is develop a plan working with 

the aldermen that identifies where we want to keep and revitalize 

the existing housing stock and businesses, where we want to attract new construction of both residential and retail to support the 

residential, where we want to do large scale commercial development to serve the people that live on the City’s north side and 

where we want to seek opportunities or seek, you know, creative 

ideas for what to do with particular locations that we think have 

a lot of potential but don’t have any, I guess, directive vision for 

them yet. 

Mr. GREEN. Does that mean in some other language, perhaps, 

that you’re kind of working on it? 

Ms. GEISMAN. No. 90 percent of the north side is in a definitive 

area where we are working diligently to make progress. Now, that 

does not mean that we’re going to fix everything overnight. For example, the North Riverfront area, I think, provides jobs for a lot 

of north side residents. There are many businesses in that area. 

We are working closely with the aldermen and alderwomen to revitalize that business area. Similarly, we are working with Alderman 

Bosley in the third ward to revitalize and rehabilitate and use historic tax credits to redo— 

Mr. GREEN. Permit me to move to Mr. Kennedy before my time 

is up. I appreciate your response. 

Mr. Kennedy, from your perch, does there appear to be a revitalization plan for the north side? 

Mr. KENNEDY. It is in progress. As I said earlier in my opening 

remarks, that is a new dialogue that we have begun with the Mayor’s office, that we have worked on for the past several months. 

That does not, of course, answer all the decades of problems before 

then. So in answer to your question, no, there is no overall plan 

for North St. Louis. 

Mr. GREEN. No disrespect to anyone. Let me say this: I love all 

of you, not in a romantic sense, but in a sense that I have a deep 

abiding affection for you and I care about you as human beings, so 

having said that, I think I can make this comment: 

In Texas, what you have just said is what we call, ‘‘fixin’ to do.’’ 

Sounds like you fixin’ to do something for the last few months, 

21

which is not a long period of time to fix to do, and it is my hope 

that we can continue to work with Congressman Clay, who really 

has done this community a favor today. I’ll give it back to you, 

Madam Chairwoman. 

Chairwoman WATERS. I want to make sure that I have my notes 

correct prior to leaving. Ms. Geisman, you have been in City development for quite some time, not just the past, what, 8 years? 

Ms. GEISMAN. I started out as an architect with the Public Works 

Department in 19— 

Chairwoman WATERS. How many years ago? 

Ms. GEISMAN. —1978. Then I was an architect for the Community Development Agency for 5 years after that. 

Chairwoman WATERS. So you know this City pretty well. 

Ms. GEISMAN. I hope so. 

Chairwoman WATERS. And in knowing the City pretty well, you 

are quite familiar with not only the sites we have identified today 

as problem sites but all the others. 

Ms. GEISMAN. Yes. 

Chairwoman WATERS. You know where all of them— 

Ms. GEISMAN. Well, I don’t know where all of them are. 

Chairwoman WATERS. You know and understand the vacant, 

boarded-up properties and what has happened over the years, you 

know these toxic sites and these abandoned sites, you know all of 

this as well as anybody, right? 

Ms. GEISMAN. Probably as well as anybody. 

Ms. Waters. Why is it this has only been a conversation for the 

past few months? 

Ms. GEISMAN. I don’t think it has only been a conversation for 

the past 2 months. I think we have been having conversations with 

individual aldermen for the past 7 years. It is only recently that 

we have been meeting with the African-American aldermen as a 

group. Every year before we do our block grant budget that goes 

to the Board of Aldermen, I have met personally with each of the 

City’s 28 aldermen to discuss what is in that budget for their 

wards and to discuss initiatives that they might be pursuing. 

Chairwoman WATERS. Is it safe to say that given the aggressiveness maybe of Mr. Gephardt and others and attention that they 

have paid to the south side that they have done a better job, they 

have gotten more resources, and they have been able to do the development much better on the south side? 

Ms. GEISMAN. I think that might be true for when the people 

were, you know, in office then and in charge of things then, that 

may have been true then, but for the past 7 years, it is certainly 

not true. 

Chairwoman WATERS. Certainly not true, meaning that you have 

demonstrable achievements that you can point to on the north side. 

Ms. GEISMAN. Yes. Definitely. 

Chairwoman WATERS. I’d like to thank you all for your testimony. Thank you for your patience. Thank you for attempting to 

answer our questions. And I’m going to dismiss this panel, but I’ll 

leave you with this: There are some new people in charge now, and 

we have new committee members who come from communities that 

were denied and we have the experiences to bring to Congress in 

ways that they have not been brought before. And you’ll find that 

22

there are children of slaves and grandchildren of slaves and great 

great-grandchildren of slaves who now are going to make some decisions. And so we would like to share that information with you 

because we want you to be in a cooperative mode as we try and 

work out these problems. Okay? Thank you very much. 

We would like to ask our second panel to come forward. Let’s see. 

The Chair notes that some Members may have additional questions 

for this panel which they may wish to submit in writing. Without 

objection, the hearing record will remain open for 30 days for Members to submit written questions to these witnesses and to place 

their responses in the record. Thank you very much, panel. 

I welcome the second panel. And Mr. Clay will be right back to 

introduce the second panel. Thank you very much. 

Okay. Mr. Clay will introduce our second panel. 

Mr. CLAY. Thank you, Madam Chairwoman. On our second distinguished panel, starting off, we have Ms. Jamala Rogers, who is 

the chairperson for the Organization of Black Struggle. She is also 

a noted journalist. Thank you for being here, Ms. Rogers. 

Second we have, whom you have also met, Mr. Michael Jones, 

the senior pastor of Friendly Temple Missionary Baptist Church, 

and we have seen some of his development today. Thank you so 

much for giving us your Saturday, Pastor Jones. We appreciate it. 

Third we have Mr. John Talmage. John is the president and 

CEO of Social Compact, Inc.; he is going on this journey with us 

as far as how we find solutions to some of the issues that impact 

this community. 

Fourth we have Mr. Tom Zuniga, the managing director of DSG 

Community Marketing Services, L.L.C., and he went on our bus 

tour today with us and he was just—I think he was totally amazed 

today. We thank you. Welcome to St. Louis. Thank you for being 

here. 

Mr. ZUNIGA. Thank you, Congressman. 

Mr. CLAY. We look forward to your testimony. 

And last, but not least, a young man whom I met a couple of 

years ago once he was elected as the Mayor of Cincinnati, Ohio, the 

Honorable Mark Mallory. Welcome to St. Louis, Mayor Mallory. 

Mr. MALLORY. Thank you. 

Mr. CLAY. He was also on the tour today. And we look forward 

to the entire panel’s testimony. 

Thank you. 

Chairwoman WATERS. Thank you very much. And without objection, your written statements will be made a part of the record. I’m 

going to call on each member of the panel for 5 minutes, and normally I would ask the Mayor to speak first—I think that would be 

the correct protocol—except, Mr. Mayor, I would like for you to 

really wrap it up and tell us about some of your positive experiences after we hear all of this. 

Mr. MALLORY. That sounds great. 

Chairwoman WATERS. So if you don’t mind, I would like to start 

with Ms. Rogers. 

Mr. MALLORY. Absolutely. 

23

STATEMENT OF JAMALA ROGERS, CHAIRPERSON, 

ORGANIZATION FOR BLACK STRUGGLE 

Ms. ROGERS. Thank you. Good afternoon. I’d like to thank the 

subcommittee for hosting this very, very important hearing and 

particularly the office of Congressman Clay for seeing the importance of it as well. I’d like to also acknowledge that today is International Women’s Day which I think is appropriate because as we 

look at the impact, the negative impact, of Team 4 and its policies, 

it has disproportionately affected women and children in the Team 

4 area. 

This has been an intergenerational struggle, in that when I hear 

somebody like a young Alderman Kennedy—I worked with his father around the Team 4. Kennedy was at Howard University in 

school, and now he’s here dealing with the same issue. The same 

holds true for the young Congressman whose father was working 

on this initiative at the time, and when I looked at some of our organizational archives, it was Congressman Clay who sort of led the 

charge against Team 4 during that era. So I think that you have 

an obligation, Congressman Clay, to continue that legacy and to 

really try to bring some remedies to the situation that the north 

side has been hemorrhaging since the Team 4 plan. 

And although I agree that some of this was going on prior to the 

Team 4, Team 4 certainly attempted to codify some of the racist 

and economically unjust housing and economic plans that we still 

see today. I find it interesting that the Mayor’s representative of, 

quote, ‘‘development’’ had not read the Team 4 plan, and not only 

had not read it but had already deemed it irrelevant. I think that 

is the kind of arrogance and insensitivity that we have seen from 

this administration for the years that the Mayor has served, and 

I think you would be—at least I’m offended by that kind of arrogance and insensibility. But it gives you a sense of what we have 

to deal with here in St. Louis. 

I want to add a little bit to what Alderman Kennedy talked 

about in terms of giving you some historical context, because, 

again, he was away at school; we were right here in the center of 

it. I will first start off and talk about the Kerner Report, which coincidentally celebrated its 40th anniversary last month. In the 

Kerner Report, many people thought that was also a way to acknowledge the kinds of conditions and life, quality of life, that African Americans had in this country in the urban cities across the 

country, and they included chronic poverty, police violence, high 

unemployment, poor schools, and the lack of access to health care, 

all of those things aggravated by racism, and true enough, that was 

also affirmed in the Kerner Report, but many of us also know that 

it was a clearing call for city fathers, particularly those cities where 

there was concern about what was going to happen to middle 

class—upper middle class white people, that they needed to understand what was about to happen. 

Because the Kerner report basically said that given the circumstances, and given the circumstances that there’s not going to 

be very much intervention into these particular factors, that we 

can expect more rebellions coming out of the 1960’s and they would 

be even more deadly so that there needed to some way of disbursing concentrations of black people so that that would never 

24

happen again. So the backdrop really is the Kerner Report. Several 

months after that, Dr. Martin Luther King was assassinated, and 

we saw the kind of rebellion that hit the country—the cities across 

the country. 

But the stage was set for Team 4 based on that in 1973 when 

you had Mayor Alfonzo Cervantes who was responsible for the creation of the Land Utilization Authority which later became one of 

the greatest and largest landowners in the City of St. Louis of 

abandoned buildings. You also had that same year Alderman Richard Gephardt, at the time alderperson, and John Roach passing 

bills that were to demolish several thousand buildings on the north 

side but preserve that same number of buildings on the south side. 

Ironically, John Roach then went on to become head of the City’s 

first community development ABT, and we know what happened to 

Congressman Gephardt. So things were pretty much buzzing 

around that time. And we also had that there was the Team 4 plan 

where a number of developers were asked to look at all that was 

going on and come up with a plan. 

You also had probably one of the biggest declines in the City’s 

population from 1970 to 1980, and what we would have seen if we 

had followed the trajectory was that the numbers of African Americans should have been increasing, if we were to look into the trajectories, at that time. And so we started to see that that was not 

going to be the case, and we didn’t see it in the 1980 Census, the 

1990 Census, and we certainly didn’t see it in the 2000 Census. 

And as we know, those kinds of housing patterns, that kind of population, has a lot to do with political power that’s going to be consolidated in terms of African Americans. 

One thing I would like to correct in terms of what Alderman 

Kennedy said is that the initial language for Team 4 was consecration, redevelopment, but the other piece was depletion. It wasn’t 

just in transition. And I think that word has some more negative 

connotation than ‘‘in transition,’’ because that means you’re really 

going from one place to another, as opposed to you’re going to be 

left to die. 

I have included in my written testimony some very specific proposals. One is that I think we need to have the Office of Community Development be a resource to the alderpeople in terms of actually planning and that there be transparency up and down through 

this so that the community knows how those funds are being spent 

and how it is going to affect their immediate community. There are 

a number of elder citizens who left this world thinking that somehow they didn’t do due diligence as homeowners when they couldn’t 

get home loans because of red lines and other kinds of obstacles. 

So I’d like to see those kinds of things addressed or given consideration as part of a continuing effort of this particular panel. 

[The prepared statement of Ms. Rogers can be found on page 77 

of the appendix.] 

Chairwoman WATERS. Thank you very much. Mr. Jones? 

STATEMENT OF MICHAEL JONES, SENIOR PASTOR, FRIENDLY 

TEMPLE MISSIONARY BAPTIST CHURCH 

Mr. JONES. Thank you, Chairwoman Waters, Congressman Clay, 

and Congressman Green, for this opportunity to discuss our comVerDate 0ct 09 2002 11:30 May 05, 2008 Jkt 041727 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 K:\DOCS\41727.TXT TERRIE
25

munity development accomplishments for the Temple Missionary 

Baptist Church with you. FTMBC is a faith-based organization 

committed to leveraging resources and building relationships to revitalize this community. With the establishment of nonprofit corporations, development of several properties, coordination of congregational members, and the collaboration with various community partners, FTMBC has been able to make a significant impact 

on the community it serves. 

FTMBC is located in the heart of the inner city of St. Louis, Missouri. Our surrounding area is characterized as one of the most deficient areas in the City of St. Louis. We’re located in an area 

which many of you are all too familiar with that represents America’s disinvested community. Some sobering statistics include 38 

percent unemployment, approximately 23 percent adults and children living below the poverty line, substandard housing, and many 

tracts of vacant, abandoned, and boarded-up homes. And it has 

been reported by the Census that there are 8,000 incidents of crime 

in our area. 

But we took the gavel by the hand and determined that we were 

not going to leave our community. We had an investment there and 

we were made to stay. So we developed our own outreach community development corporation and developed six components: Children and youth development; education; health services; counseling; food and clothing; and affordable housing. And we also have 

drug and alcohol programs, homework assistance, abstinence programs, clothing, financial literacy, and counseling. 

Of all of these, we get very few Federal dollars, if any, but yet 

we were determined from a volunteer base, a community base with 

partners, to forge a coalition to work. 

So we have people volunteering their time from the areas of 

counseling, education, law, accounting, carpentry, general maintenance, child care development, and we have pooled our resources 

to make sure that this community will be a viable community in 

the future. We serve about 4,000 or more families within this community. We have 21 affordable housing units that we have developed on our own. They were dilapidated buildings. We took our 

own dollars and renovated these communities, or these houses—

took a 40,000-square-foot building that was left abandoned and we 

used our resources, even when the bank did not want to give us 

a loan. They told us to demolish it. We took our resources, got our 

people in there together. We renovated it and slid the appraisal on 

the banker’s desk, and they wanted to give us as much money as 

we wanted. We told them we didn’t want their money. We renovated it, and at the time of completion it was worth $5 million, 

and now they’re really ready to give us the bank. We have done 

that. We have built a community center and office space in this 

building as well. 

One of the fortunate things that we did get from the Federal 

Government is at least $10 million on the 202 program that affords 

us the ability to serve senior citizens within this community, and 

we appreciate HUD for that, but in this disinvested area we have 

invested at least almost $40 million worth of value within this community. We want to do more. We have a plan to build houses. We 

26

have a plan to build a commercial development center, bring businesses back. 

We have about 4,000 members who are ready to relocate, bring 

their resources in. We have approached the City for housing. It’s 

on the Board now, if you will. They’re planning, they’re talking 

about it. You’ve heard some of that discussion here today. We want 

to build about 300 to 400 new homes in our community. We’re telling them that we have the members with the wherewithal to relocate. 

We’re starting our own school as well so that we can give some 

balance to the community. But what we need is we need acquisition dollars. We need that. We need monies to fill the gap, if you 

will, to make it affordable for these families to relocate. And I just 

hope that this kind of discussion here today will enable possibilities 

of us receiving those dollars, because who better can manage it 

than the people who are living in this community, who have been 

in this community for over 40-plus years or more and have shown 

the ability to develop and to manage it and have a stake within 

this community? I appreciate the opportunity to share and answer 

any questions that may follow. 

[The prepared statement of Pastor Jones can be found on page 

65 of the appendix.] 

Chairwoman WATERS. Thank you very much. Mr. Talmage. 

STATEMENT OF JOHN TALMAGE, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, SOCIAL COMPACT, INC. 

Mr. TALMAGE. Congresswoman Waters and members of the subcommittee, thank you very much for this opportunity today. Let me 

start with a horrible cliche, and that is that information is power. 

It’s a cliche we use all the time. We don’t necessarily know what 

it means all the time, but we use it. But the corollary of that also 

is that the lack of information leads to a void and misinformation 

can lead to absolute destruction. And so community developments 

we have known to today really have grown from a trajectory of 50 

years of planning that has captured the good and ill will of people, 

the prejudices and insights of people, but a lot of the programs as 

we know them today started 50 years ago and follow in this trajectory. So whether it’s the war on poverty and urban renewal where 

it started to today’s downtown development, there’s a continuum 

there that has to be acknowledged. And I think that’s part of the 

conversation we’re having today. 

This is—from a benign point of view, this has led to misunderstanding of neighborhoods. From a less benign point of view, if you 

look at New York City in 1970, the mid 1970’s, Los Angeles in the 

early 1970’s, Detroit, Philadelphia, there were many plans to decommission parts of cities. Mayor Koch advocated a plan in 1978 

to decommission the South Bronx, to take it out of commission. 

And so it wasn’t just post-Katrina New Orleans where we began 

to hear about decommissioning large parts of cities; this is something that has been in urban planning for the last 30 or 40 years. 

And so there’s a context in urban planning that has occurred 

that we have to address. 

We at Social Compact come at this from the point of view of how 

do we capture accurate information? How do we look for the missed 

27

population? Mayor Villaraigosa in Los Angeles estimates that the 

2000 Census undercounted Los Angeles by 180,000 people. Mayor 

Booker in Newark estimates that for the last 30 years the 

undercount of Newark has averaged 19 percent. And our work, by 

the time we finish, 30 cities that they did this year, beginning of 

next year, we will have expected to have found 31⁄2 million people 

missed in low- and moderate-income neighborhoods in only 30 cities in the United States. Those 31⁄2 million people and the people 

who have been counted represent almost $600 billion unrecognized 

and recognized economic income, but $120 billlion of that has just 

been unrecognized—$120 billion. That’s a market. 

In your own district and parts of your district in south central—

in south LA, we have found 52,000 people missed by the U.S. Census in 2000 and 2000 estimates. In Congressman Green’s district, 

we found 78,000. 

And maybe more importantly than the missed population is that 

the households in your district earn 30 percent more than the U.S. 

Census documented. That’s 40 percent that the site selectors in Los 

Angeles or in Charlotte, North Carolina, they aren’t capturing that. 

And so what maybe you’re seeing as a benign undercount is actually an informational barrier and an investment barrier to try and 

address and readdress some of the disinvestment that has happened over the last 40 years. 

To put this in a different way, we don’t have a public policy construction to support this kind of investment. And I will give you 

two examples before my 5 minutes runs out. 

First, downtown Detroit. No city has taken more body blows than 

Detroit. The greater downtown Detroit area has income that is 51 

percent higher than the Census has documented. Putting that into 

a market anomaly perspective, there are 22 stores that count themselves as grocery stores in the greater downtown Detroit area. 

None of them are larger than 5,000 square feet, but they are functioning at $855 a square foot. The International Council of Shopping Centers says that the average delta square foot nationwide is 

$355 a square foot. That’s a $500 spread in downtown Detroit. 

That’s a market. That’s a market for 120,000 square feet of grocery 

stores. But it’s not just, wouldn’t it be nice to have a grocery store, 

but the public policy imperatively correlates rates of obesity and diabetes to the saturation of fast food restaurants and the lack of access to full-service grocery. 

There is a public policy imperative based on research that states 

that African-American families live a mile-and-a-half further from 

grocery stores than their white counterparts, but 35 percent don’t 

have cars. We have condemned that portion of the community to 

poor public health output because we don’t support advanced—a 

correct type of incentive to build grocery stores in communities that 

are disinvested. 

In the case of the financial services as well, Santa Ana, California, a community of about 100,000 people off the downtown, the 

Census said the average household income was $47,000. It is actually $62,000. Not only that, the median home value is $420,000. 

Also, 52 percent of the homes are owner-occupied, but 69 percent 

of the homes don’t have credit records. How do you have 52 percent 

28

of the homes owner-occupied and 69 percent of the houses don’t 

have credit records. 

And it’s not that credit records are important just per se. Your 

utility deposit is determined often by your credit score. Your automobile insurance rate is often determined by your credit score. You 

can’t rent an apartment in Washington, D.C., without a credit 

score. So you’re paying a poverty tax for not having a credit score. 

So the fact of the matter is it shouldn’t surprise people this correlation between incidence of crime and alternative financial services, such as check cashers and payday lenders. So when we go 

through North St. Louis as we did today and we see so many check 

cashers, so many payday lenders, so few financial services, so few 

grocery stores, it’s not a matter of what is the next silver bullet to 

try to change the landscaping. Let’s just try to fix the numbers so 

that both public and private investment can find some way there 

appropriately. 

And just to conclude on one point—Congressman Clay made a 

very, very good point about a Home Depot they wanted to open 

there. They said that they told him that they weren’t going to come 

because of shrinkage. Now, it may surprise everyone here in the 

audience that there is no shrinkage in the suburbs. The fact of the 

matter is, there is no quantitative evidence that shows that shrinkage and crime is an investment competitor to a Home Depot or 

other big box retailers in communities. In fact, in our own surveys 

with the International Council of Shopping Centers, crime and 

shrinkage is not even a top indicator for the site in the community. 

It’s market. 

What we have to do with information that we have to be very 

careful with is that if you say, I want you in my neighborhood and 

I say, oh, you don’t have the market for my investment and you 

say, yes, I do, then what am I really saying is your customers don’t 

look like my residents or there are other sort of things that we 

have to—information to address. 

And so I’m just here to conclude that information is important. 

Information is available in U.S. cities and underserved cities in 

every one of your congressional districts, but we just had to create 

the tools, the adjustment bridges for investment, the adjustment 

bridges for information, to try to make sure that that’s not what 

the barrier to investment is. 

[The prepared statement of Mr. Talmage can be found on page 

82 of the appendix.] 

Chairwoman WATERS. Thank you very much. Mr. Zuniga.

STATEMENT OF TOM ZUNIGA, MANAGING DIRECTOR, DSG 

COMMUNITY MARKETING SERVICES LLC 

Mr. ZUNIGA. Madam Chairwoman, Congressman Clay, Congressman Green, and distinguished staff and members of the Subcommittee on Housing and Community Opportunity, thank you for 

this invitation to offer testimony about innovative strategies and 

programs that are needed to bring about important changes in 

community development. I would like at the outset to acknowledge 

the leadership in community economic development of this subcommittee’s chairperson. I admire and wish to congratulate you, 

29

Congresswoman Maxine Waters, on your commitment to improving 

the wellbeing of low-income and minority communities. Thank you 

for shining the spotlight on St. Louis. 

I am excited as a professor, as a student of community development, and as a real estate developer to be part of today’s historic 

proceedings. In my remarks today, I hope to encourage local communities to adopt economic development policies that engage in 

public/private partnerships that rely on market information, such 

as John Talmage has mentioned, to drive investment in low- to 

moderate-income communities. 

In that regard, I hope to identify strategies and approaches that 

seek to rectify mistakes in programs of the past. I am grateful, by 

the way, for the relationship that I have with John Talmage and 

his staff at Social Compact who have provided us new possibilities 

through information for understanding the incredible market potential and untapped purchasing power of inner city residents. Social Compact has truly been a catalyst in infusing new energy and 

significant investment to communities. As a former resident of 

Washington, D.C., I’d say a former public official who by the way 

at one point I had the responsibility for cleaning up Columbia 

Heights, I’m very familiar with what has now happened. I know 

what has been accomplished in Columbia Heights as a result of the 

work of Social Compact. 

Let me also, just to put things in perspective, acknowledge that 

some of the past practices that we’ve now kind of heard about, 

some of the legislative and regulatory actions that precede us that 

may appear wrong-handed, were not always, underline the word always, willful mistakes. Many of our predecessors in community development were problem solvers in search of solutions and answers 

to problems, in much the same way we are doing today. The older 

I get, the more willing I am to acknowledge that economic development is more art than science and that smart, well-meaning people 

in search of answers arrived at solutions that may have solved 

some immediate short-term problems but resulted in unintended 

consequences in long-term. 

And that’s part of what we’re dealing with today. 

The value of a forum, Madam Chairwoman, is that, like this that 

you’re having today, is that it enables us to think about what has 

gone before us and to reflect on what has worked, what has not 

worked, and why. Now, in the past we know we placed much emphasis on physical development. Oh, we remember the language; 

slum clearance, urban renewal, model cities. Solutions aimed at reversing decline of urban neighborhoods. The solution to the problem was to remove it. We adopted community development strategies that relied on top-down massive infusion of Federal dollars, 

and to a degree we still do. The unintended consequence, although 

some would argue otherwise, was the displacement of families as 

their homes were destroyed to make way for commercial redevelopment. 

In trying to signal community renewal, most of these commercial 

revitalization efforts were not enough to create the new vibrant 

neighborhoods that their creators envisioned, nor did they stem the 

flight of businesses and families from the inner city. Well, there are 

several paradigm shifts now in community development that sugVerDate 0ct 09 2002 11:30 May 05, 2008 Jkt 041727 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 K:\DOCS\41727.TXT TERRIE
30

gest a bottom-up kind of an approach, and to just summarize it, a 

significant change that you all see in community development is a 

new emphasis on opportunity. I hear John talking about it. 

Our language is changing from distressed communities to underserved neighborhoods to communities of opportunity. Language is 

an important signal of change. Community development strategies 

are evolving to focus on community assets rather than on community needs. In other words, instead of describing a neighborhood by 

its problems, we have begun to emphasize the hidden assets, the 

market potential. We look at things like historic architecture, etc. 

In a speech last year, Federal Reserve Chairman Ben Bernanke 

said that quantifying these assets and helping investors become 

aware of the opportunities in underserved neighborhoods can help 

enlist market forces in the service of community development. 

And I want to be clear when I say help investors. That’s my next 

point. The shift that we are experiencing by development by the 

numbers requires a concurrent change in the attitudes of indigenous community leaders who in the absence of market information 

have in the past and for a long time depended on ideology and a 

government grant driven focus which emphasizes neighborhood deficiencies and weaknesses rather than assets and market opportunities as a way to attract capital for their various projects. There 

is a culture of poverty that has become associated with people of 

color, particularly African Americans. Inner city residents are not 

only surrounded by crime and drugs and homelessness and poverty; they are blamed for it. 

Residents have come to believe that unless an initiative comes 

with a low-income tag, it is not intended for their community betterment. That has to change. There’s also an underlying assumption that residents of underserved neighborhoods are unwilling to 

or do not, even if given a chance, want to participate in the rebuilding and the revitalization of their communities. During a recent 

consulting assignment I had arranged for a supermarket located in 

inner city neighborhood Richmond, Virginia, I described how our 

consulting team had assembled a capital to build a supermarket, 

all outside capital, of course, and thankfully I was reprimanded by 

a long-term resident of the area that I had not presented residents 

of the community a chance to invest in the supermarket, which 

without a doubt promised to be a cabinet for further evaluation. 

We need to challenge ourselves to create investment vehicles that 

are investments by residents, stakeholders who may only have 

$100 or $1,000 of their savings to invest, but would like to be and 

need to be a part of the community development fabric as investors. Madam Chairwoman, I thank you for the time. 

Chairwoman WATERS. Thank you. Thank you very much. 

[The prepared statement of Mr. Zuniga can be found on page 92 

of the appendix.] 

Chairwoman WATERS. Mr. Mayor, what’s happening in Cincinnati? 

STATEMENT OF THE HONORABLE MARK MALLORY, MAYOR OF 

CINCINNATI, OHIO 

Mr. MALLORY. Thank you. Thank you, Madam Chairwoman, 

Congressman Green, and Congressman Clay. Thank you for the opVerDate 0ct 09 2002 11:30 May 05, 2008 Jkt 041727 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 K:\DOCS\41727.TXT TERRIE
31

portunity to come here, not just to see St. Louis, but to share what 

we’re doing in the City of Cincinnati as it relates to the proper use 

of accurate data. You all know that demographic data is routinely 

used by the private sector, by the public sector, and even by private 

individuals to make decisions about where they want to locate 

something, about where they’re going to invest. In order to make 

certain that services are located where they are needed most, mayors in particular must have the most accurate data as it relates to 

their cities, and with the most accurate data in hand mayors can 

assess the most underserved part of their community and begin to 

drive investment to those areas. 

Let me tell you what we did in Cincinnati. In June of 2006, the 

Census Bureau released its 2005 population estimates, and those 

estimates claimed that Cincinnati had lost more population than 

any city in the United States, any major city in the United States, 

since the year 2000, making it the fastest shrinking city. The local 

media ran multiple high-profile stories about the population decline. They included a lot of speculation about the cause of the loss 

of population, and our civic pride was at an all-time low. 

Nobody in the media questioned the validity of the Census Bureau’s data. After all, you know, the Census data comes with a lot 

of credibility and believability. However, with all of the new development and housing starts and general energy that I witnessed in 

the City of Cincinnati since becoming Mayor, the data that we got 

from the Census just didn’t make sense to me, so I decided to challenge those figures. We did that using a statistical analysis of City 

records, including building permits, demolition permits and conversions of commercial and industrial buildings into new housing, and 

we were able to prove that Cincinnati was not losing population at 

all. In fact, we were able to prove that Cincinnati was gaining population for the first time in 50 years. And that Census challenge 

began changing the perceptions about the City itself. 

Shortly after that I became aware of the Social Compact organization, a national nonprofit, and John Talmage you just heard 

from. They came into Cincinnati and did a drill-down of our population using 27 different pieces of data as it relates to income and 

other things. They were able to find almost 47,000 additional people in the City of Cincinnati, and more importantly those additional people represented $2 billion in uncounted resources in the 

City of Cincinnati. 

So armed with this new information, I set out to change the way 

we look at our City. The first thing I did was I created Shop 52. 

There are 52 neighborhoods in the City of Cincinnati, so we have 

been using that data to help drive investment in those 52 neighborhoods. We’re trying to get financial institutions to pay closer attention to what’s going on, retailers, of course, and not long ago we 

held—I put together actually a retail attraction task force. 

I think John has mentioned this number a lot, but it’s a number 

that people, I don’t think, really cue into. 80 percent—80 percent 

of the commercial retail decisions that are made in this country are 

made using Census-derived data. So if that number is wrong, 

they’re making the wrong decisions about your city. So since I have 

this new information, we now go to the International Convention 

of Shopping Centers’ annual convention out in Las Vegas. We use 

32

that information in an effort to attract retailers to the City of Cincinnati. We’re selling the City armed with much more accurate information. 

In May of this year, I’m going to be working with the International Franchise Association, because one of the things we 

learned at that retailers convention is that they have trouble attracting people to buy franchises, so we’re going to put together an 

education seminar that will encourage minority, women, and veteran-owned franchises in the City of Cincinnati, and that seminar 

is going to help connect individuals with—not just with franchises, 

but we’re going to connect them with the financial resources to get 

those franchises going. 

In order to fill the need for increased services in under-served 

communities, Cincinnati can’t rely just on national retailers alone. 

Small businesses, small local-owned businesses, are actually vital 

to any city’s growth. So this past February we put together 100 

community leaders, community development experts, small business service providers, and banking professionals for an urban 

markets summit. Now, that discussion centered around barriers 

and opportunities in the local small business development environment, and the group looked at four specific underserved neighborhoods to discuss improvements in their individual business districts. 

I have always believed that any neighborhood development must 

be driven by community leaders with full input from the citizens 

of that neighborhood and the assistance from government. So with 

that in mind, I have been meeting with the representatives of all 

of the 52 communities in the City of Cincinnati. We have been 

sharing with them the Social Compact drill-down information that 

gives them a much clearer picture of the actual population and the 

buying power within each of those neighborhoods. They will now be 

better prepared to tell us what kinds of services they want and 

what kind of services they need in their communities. 

With the amount of emphasis that my administration has put on 

data-driven policy, the 2010 Census is going to be central for the 

development of the City of Cincinnati. Getting that number right 

is crucial. So the drill-down study taught us exactly how many people are in the City of Cincinnati. We’re taking a new approach to 

the Census. We’re not telling our Census takers to go out and 

count the people who are here. We know because Social Compact 

came to Cincinnati that there are 378,259 people in Cincinnati. The 

new paradigm is to go find those people. That is our baseline number; there are at least 378,000 people in our city. 

So this is an ongoing process for us. 

It’s an evolving process for us. This concept of the better utilization of accurate data to drive investment in underserved communities, to drive a new focus into areas that need services and need 

help is a new way of thinking for the City of Cincinnati but is our 

new method of operation. And I’ll tell you, I’m on a crusade. I’m 

telling everybody I can everywhere I can that this is the only way 

that you can intelligently and accurately redevelop cities throughout the United States of America. 

Thank you very much. 

33

[The prepared statement of Mayor Mallory can be found on page 

73 of the appendix.] 

Chairwoman WATERS. Thank you very much. I would like to 

thank you all for your testimony here today and I would like to just 

raise a few questions with some of you who have testified. Reverend Jones, I want to thank you for being on the tour with us this 

morning and showing us your tremendous accomplishments in the 

development of the much needed housing and the revitalization of 

that community. 

I’m now interested in how much support you have been given for 

the development of the infrastructure in and around the area, both 

a combination of services and other kind of infrastructure supports 

in order to keep that community going and vibrant and maintained. And because of this discussion about Team 4 and what I 

read, still not knowing whether or not it was implemented informally, tell me about police and crime. Do you get quick response? 

Do you meet with the captains? Do they interact with the residents? What kind of support do you have from the basic infrastructure that every community needs in order to be safe, secure and 

protected? 

Mr. JONES. We are blessed in our community to have an alderman who works with us. We are also blessed that he’s a member 

of our church. That helps. So we—our relationship with the community, with the government, the agencies, are improving. There’s 

a ways to go. The partnerships are there. We’re moving aggressively towards bridging relationships, but—and the alderman helps 

and others will provide assistance, and others do as well, but 

again, I must acknowledge and be frank, we have a ways to go. 

With relation to infrastructure and partnerships and services 

that we receive, we challenge these public servants whom we believe we help to pay their salaries that they ought to give our community a priority. We have seniors in our community. We have a 

health services center in our community. We have about 1,000 children who come into our church every week. And so we challenge 

them to be active and to be on-call and to respond aggressively and 

timely to our needs. 

Now, I will say that with that aggression that we have, the reality is it is a community that has a stigma of crime, of poverty, 

and there are occasions where they are not responding always as 

well as we would like, but I will say that when developing and 

building relationships to challenge them to do such— 

Chairwoman WATERS. That’s very important. When you complete 

development and you do your ribbon cuttings and all of that, are 

you blessed with the presence of the Mayor along with your alderman? 

Mr. JONES. The alderman certainly is there. The Mayor has been 

there in the past. He has been there. I think our most recent opening of our senior building, I’d have to recall whether he was 

present. 

I don’t think he was present, I must say, at that occasion, but 

in most occasions he has been. He has recognized the strength of 

our church and our community, and I think it’s incumbent upon 

him to show up on those occasions. 

34

Chairwoman WATERS. Have you been offered any assistance in 

your economic and business development from the Office of Development? The vice mayor of development was here today and was 

being questioned by Congressman Clay about monies that have 

been given to businesses that were supposed to develop jobs who 

do not appear to be able to document that they have done that. 

Were you offered assistance with monies coming from CDBG or 

anyplace else to do business development? 

Mr. JONES. Madam Chairwoman, if we were, I’m not familiar 

with it. I will say that we did sit with her recently with our public 

and private developers and we placed an initiative before that office, and we’re waiting a response now. And I hope and pray that 

it will be favorable, especially since this kind of setting is happening in the City. 

Chairwoman WATERS. If you were afforded the opportunity to get 

some of the City money to help create jobs, would you be able to 

use that money to create jobs for people who need employment? 

Mr. JONES. No question. We’re creating jobs without the City dollars now. What we tell them is that they will help accelerate our 

process. They will help us to maximize and do far better and far 

quicker with the resources we have. If they are to provide assistance, we can do far more, far better. 

Chairwoman WATERS. And you said the banks have been cooperative. Usually in order to develop communities not only do you 

need government assistance, but you need a commitment from the 

financial sector. You need banks. Banks can determine whether or 

not communities get the resources they need to develop. 

Do you have the cooperation of any of the financial institutions 

or banks that are willing to put money into a community where 

you have demonstrated success? 

Mr. JONES. Well, I can speak on behalf of our church. We have 

learned the art of leveraging. We leverage our people, we leverage 

the resources we have. And not only that; everything we own is 

debt-free. And so banks line up for us under these circumstances. 

And so we’re probably not typical, though, as I must say, but we 

haven’t had a problem yet with getting a loan. It’s just a matter 

of us negotiating what we want. But we challenge them. 

What we do, though, since we are favored in this position, we 

make sure that the next church, the next business, the next partner, we leverage our resources so they can also get a rate that they 

can also get the loan and also be blessed and benefited thereby. 

Chairwoman WATERS. Do the streets get swept and the potholes 

fixed in the areas where you’re doing all of this investment? 

Mr. JONES. Well, let me speak of snow. We have our own cleanup, snow removal. We—you know, it’s a business investment for us 

to do such. We don’t wait on the City. It’s strange, odd, peculiar, 

but we happen to be in an area of the City where maybe the resources are depleted by the time it’s time to enter into our section, 

so we have stopped waiting on them. We have our own snow removal because it’s incumbent upon us—we have thousands of people and so it’s an economic and a spiritual initiative for us to do 

it ourselves. 

Chairwoman WATERS. The reason I asked that, Reverend—and I 

hate to interrupt you—is that part of what we’re researching is 

35

whether or not the services are in these communities or whether 

or not there is a plan or just benign neglect of providing the support services, because you are not typical and others who would invest or develop need to have police and fire, they need to have the 

potholes fixed, they need to have the snow removed, they need to 

have the involvement of the Mayor, they need to have the fire department who will come out and let the kids climb up on the fire 

engines and trucks like they do in other neighborhoods; they need 

to have engagement. And without that, most development attempts 

will fail. 

And so this is what we’re looking at here. If somehow through 

the processes of the City and the City plan, those resources have 

not been available, communities die. They literally die. 

And in addition to that, in addition to what you’re doing—and 

you have been very, very fortunate and visionary to make these acquisitions, this property, long before this crunch and so you have 

property that’s valuable, that you’re able to—because most people 

can’t purchase this land, it’s just too costly, but in addition to your 

having done all of this, the properties adjacent to yours that people 

can’t afford to keep up, you have to have a program in the City 

that will allow people to rehab their homes with no or low-interest 

rate loans. 

So all of this—and that’s what we are kind of looking at. You are 

a model and you’re a leader and you’re unusual and you’re doing 

something for the City, not only for your members, but you’re providing services for yourself that the City really should be providing. 

And so we all love people like you who do this, I mean, we really 

do. Mr. Green loves everybody, but I don’t. I love doers. 

And so I just want you to know that, first of all, let me just underscore this, that we appreciate what you showed us today and 

what you are doing, and we are hopeful that your vision, your full 

vision, is realized with the support of your City and your Federal 

Government and everybody else that you really should have. 

I have used up more than my time, and I have to let Mr. Clay 

have a turn. 

Mr. CLAY. Just to follow up on what Chairwoman Waters was 

saying, Pastor Jones, if the faith community would get the collaboration, necessary funds they needed from the Government, as well 

as private entities, would they have the necessary resources and 

the will to actually create the schools that you talked about that 

would take us block by block in this process of rebuilding communities? Do you think the faith community would step up here in St. 

Louis and do that? 

Mr. JONES. Congressman, I believe that historically the faith 

community has shown the ability to build schools, businesses, to 

train individuals, to provide housing for people within the community as well. Our challenge again is an economic challenge. We 

have the management ability. We have the desire to do it, to accomplish it. Resources would help us tremendously. If we are afforded the opportunity to have the resources, I think there’s no 

question at all that we can accomplish that. 

Mr. CLAY. Thank you so much for that response. Mayor Mallory. 

Mr. MALLORY. Yes. 

36

Mr. CLAY. You talked about the additional $2 billion in Federal 

funds that you were able to capture because you found 47,000 additional Cincinnatians and you also talked about a collaboration with 

Social Compact as far as the drill-down, as you called it. And just 

to make you aware, I do have the responsibility of the oversight 

over the Census Bureau and up to the 2010 Census, and you mentioned a new kind of approach with the Census and a new type of 

partnership, and I think you have the model that the rest of urban 

America has to get with. So I look forward to working with you in 

that respect as far as how we actually count the traditionally 

undercounted and want to hear more about your experiences with 

the Census Bureau. 

Mr. MALLORY. Well, I appreciate that. You know, one of the 

things that I see that’s critical as we move to 2010 is that for any 

major city in the United States the low hanging fruit is getting the 

Census count number right. There are 170 Federal programs that 

distribute billions and billions of dollars based on the Census 

count. So the low hanging fruit, the best opportunity that I think 

mayors have to garner additional resources for their cities in the 

next few years is to ensure that that number is right. 

I mean, we are lucky that we were able to find Social Compact 

and have them come in and do our drill-down analysis and discover 

those 47,000 extra people and discover that undercounted $2 billion 

in spending power. Our challenge now is going to be to ensure that 

we are counting absolutely as many people as possible in 2010 so 

that we can get not just the money that comes along with the Federal programs, but, again, all of these agencies, all these organizations, all of these businesses, all these financial institutions that 

use Census-derived data have to have the most accurate information. 

We’re in the middle of—in Cincinnati, we’re in the middle of a 

school building process where the public schools are building 20 

new buildings. Well, they’re using outdated Census information, so 

they’re putting the wrong schools in the wrong neighborhoods. It 

becomes very, very critical as you start to look at all of those decisions that are made around the use of that Census data that we 

get that number right. 

Mr. CLAY. And that whole piece about franchisees and the International Council of Shopping Centers, all of that plays into that 

data. How successful has Cincinnati been as far as being able to 

attract new retail or needed services to particular communities. 

Mr. MALLORY. Well, we went to the convention in Vegas in May 

of last year, May or June, and it was the first time that anybody 

from the City administration of Cincinnati had ever gone to that 

convention. It’s very disappointing that the previous administrations did not recognize the need for it. We met with probably 15 

or so different— 

Mr. TALMAGE. 22. 

Mr. MALLORY. —22 different retailers, and we actually have had 

a few successes from that. We did get a retailer on Fountain 

Square as a result of that. There are several others that are taking 

a second look at Cincinnati because they already looked at us using 

the wrong information. We gave them the right information, and 

they are now taking a second look at us. 

37

But we’re committing to going back to that year after year after 

year and making sure that retailers are paying attention to us. 

One of the pieces of feedback we did get is that we weren’t on the 

radar screen for a lot of these retailers, but because of this information that we had and because of our approach and our organization, they’re taking a second look at us and really seeing us as a 

possibility. 

Mr. CLAY. Thank you so much. Ms. Rogers, we have heard a lot 

of testimony today, especially in the first panel, from HUD, as well 

as from Ms. Geisman and Alderman Kennedy. Given what we 

know that has occurred over the last 35 or so years, what we’ve 

heard today about how it seems as though the City wants to turn 

over a new leaf, adopt a new policy, if this community is given the 

opportunity to actually purchase those vacant lots and actually 

purchase those abandoned buildings and property owned by the 

LRA, do you think this community will take charge of its own destiny and move forward? 

Ms. ROGERS. I think absolutely they will, but to me purchasing 

a lot is probably on the micro level. What I now think is even more 

important, and just hearing the panels discuss this, is a comprehensive long-range plan. And it’s not a planning that’s based on 

what your relationship—political relationship is to the Mayor or to 

the alderperson. I suspect that there is somebody like Reverend 

Jones in other communities, but because they don’t have access to 

those people who have power, then somehow they get locked out of 

the process. 

And so to me, even what Mayor Mallory was talking about, I 

mean, it seems so logical that you would be operating in that level, 

but here it’s very fragmented, it’s very politicized, and I think Alderman Kennedy acknowledged that it’s very racially motivated, 

and so when we look at who gets to be at the table—I mean, we 

have had empowerment zone planning where money specifically is 

supposed to go to the areas that we’ve talked about today, but yet 

year after year they continue to look the same. And I think we 

have to ask why is it that, why is it still looking the same or worse 

when dollars are supposed to be coming in. 

And so if we understand that there’s a plan and people were a 

part of that plan, we won’t have to ask those questions; we’ll know. 

We’ll have the understanding that it’s not just going to go to the 

conservation areas. And we know from looking at this place, downtown is one of them, another one is the Central West End, so the 

depletion areas are pretty quickly—you are able to quickly tell 

where those are. So they need to be brought into the plan, and it 

needs to be a comprehensive one where we’re not just looking at 

little pieces of property but we’re looking at overall what would the 

ward look like in 20 years, what will the City look like in 20 years. 

It shouldn’t be based on who has the money, or who is the closest 

to the Mayor or anybody else in political power. 

Mr. CLAY. Mr. Zuniga, your testimony brought out the fact that 

you have quite a bit of experience all around this country in attracting and revitalizing neighborhoods. In your brief stay here 

today, do you see the potential for St. Louis? Do you see how we 

can actually go about turning around this community, turning 

38

around, tapping into the economic potential of this community, and 

just how difficult or easy would that be? 

Mr. ZUNIGA. Congressman, thank you. Just to follow up, it’s one 

thing to have the numbers; it’s one thing to attract retailers; it’s 

one thing to attract investors. Part of my real concern is, how do 

we as disenfranchised residents of some of the communities we 

talked about participate in that revitalization process? 

There’s an impediment by the way that really has to do with the 

infrastructure of our economic system. At the point that we gather 

up investors, more than 35 people requires a public offering. And 

I have to tell you something. It’s strange, you know, you’re dealing 

with high level, you know, high net worth individuals, but it was 

never designed for folks who have $100 or $200. This lady in Richmond I told you about, she said that most of the time the only investment opportunity we have is we go on Friday evening to the 

liquor store, buy $50 worth of lottery tickets, and hope we get 

lucky. Well, it ought not to be that way. People like me need to 

start focusing on what do we do to create the new infrastructure 

for real indigenous community investment? It is $50 here, $100 

there. We don’t have that. 

But with that in mind, when we talk about acquiring available 

land—you know, the one who owns the land controls a lot of what 

happens. There was an earlier discussion today about bringing developers to the table as capacity. Being able to be an effective partner in community development has to do with being able to bring 

something. If we had a vehicle for investing in land and we can 

state a group of people who are, in fact, resident investors, you own 

this land, you can attract a development partner and it’s a different 

kind of footing at that point. Okay? Those are the kinds of observations I have. 

Mr. CLAY. Finally, let me just get to John. I don’t know if you 

have done your initial study on St. Louis yet. Just what have you 

found so far? What are our potentials? What is our untapped purchasing power? 

Mr. TALMAGE. We have not done the drill-down yet, but based on 

the information gathering, some of the preliminary information, research we conduct, there are some things that strike me, that the 

Census from 2000 to 2006 estimates that in North St. Louis the 

population—you have lost 2.3 percent of the population. Just look 

at Federal data such as the U.S. public housing and IRS returns. 

That number is inaccurate just on the face of it so that we expect 

now to find a positive number because we have—we were never 

granted the foundation. 

The first—the income, the average income of first-time home 

buyers who bought homes in North St. Louis between 1998 and 

2005 was 40 percent higher—I’m sorry—60 percent higher than the 

Census had documented in 2000 so that the trend of investment is 

a very positive trend. That’s not duplication trend. These are still 

middle income, you know, the cop and the teacher, but it’s a strong 

indicator of sustainability. 

And finally, the percentage of owner-occupied units in North St. 

Louis is almost 40 percent higher than the national average, that 

people own—in many parts they own their own homes, so they 

have invested ownership in their community. So when we do the 

39

study itself to find the missed population, the missed purchasing 

power, we can put that together with the numbers that are already 

there to make the case that North St. Louis is a good place for investment, especially because of the sites we saw today. Put aside 

the environmental problems which you can’t ignore, but there are 

large assemblages on wide streets adjacent to major highways with 

good utility access, and so in terms of a development site, you really can’t have things teed up any better than they are right here. 

Mr. CLAY. Thank you so much. 

Chairwoman WATERS. Thank you very much. Congressman 

Green. 

Mr. GREEN. Thank you. I will be terse and laconic. Mr. Talmage, 

your diction was superb, but I do ask that you be a bit more pedestrian in explaining shortage and shrinkage, because some people 

may have missed the point. 

Mr. TALMAGE. And I should say that in a non-terse and laconic 

way? 

Mr. GREEN. Just be precise. 

Mr. TALMAGE. Shrinkage is a term that retailers use to describe 

what they—what we might call pilfering or employee theft or shoplifting; the amount of product that disappears from the store for 

any number of reasons. 

Mr. GREEN. Would a person who is less sophisticated, such as I 

am, use the term stealing? 

Mr. TALMAGE. You might use stealing, yes, sir. The policemen 

who arrest you might use stealing. 

Mr. GREEN. And let me ask you this as well: Assuming that you 

have a plethora of empirical evidence supporting a need, as well as 

supporting the ability to sustain a given business, if you have a depletion mindset, will empirical evidence offset a depletion mindset? 

Mr. TALMAGE. That’s a very good point. One of the things we 

have been doing for the last year is working through the International Council Of Shopping Centers and other industry associations to make sure that the retail investors are prepared to use the 

information that we provide. And one of the reports where we are 

very interested in publishing in the very near future shows, using 

our national retailers’ own score performance data, that—and I’m 

sorry for the technicality—that the median income and the average 

income of a household is not correlatory to what households perform. It is the aggregated income that has the highest correlation 

of value. 

What that really means in simple English is that it’s not monies 

that the suburban household is making $80,000; it’s the aggregated 

neighborhood of—and so any neighborhood is the best indicator of 

performance. 

And so there’s a whole variety of national retailers that are waiting to— 

Mr. GREEN. Just one quick intervention, and I’m really going beyond the time that I thought I would, but I want to ask you this: 

You do recall that the plan that they had was one that was encouraging depletion? 

Mr. TALMAGE. Yes. 

Mr. GREEN. And I’m not sure that empirical evidence would offset that type of mindset. I’m just not sure. Sometimes you have to 

40

use the adverse of the Elizabeth Barrett Browning process. She 

said, how do I love thee? Let me count the ways. Sometimes it literally has to be, how can I hurt thee? Let me show you the ways, 

in the political world. I’m not talking about physically hurting anyone. But Bishop Jones? 

Mr. JONES. Thank you for the promotion. 

Mr. GREEN. Excuse me. I was tempted to say ‘‘prophet,’’ but I 

scaled back. I do want to compliment you on understanding that 

we are blessed, that we may be a blessing, and you apparently 

have done well in your community and I thank you for what you 

have done. 

And I know, Mayor, you wanted to give a comment, so—I saw 

you pull the microphone over, so I’ll give you the last word. 

Mr. MALLORY. Thank you. I just wanted to emphasize on this 

conversation about data and empirical data and analysis. It only 

makes a difference if the leadership is willing to embrace it and 

drive it. It has to be driven by the leadership. One of the first 

things I did when I got the data from Social Compact about our 

new population estimates, I rounded the entire administration, 

said the new population for the City of Cincinnati is 378,000. That 

had better be the number I hear you use publicly. That had better 

be the number I see in every city document. That number is actually on Wikipedia’s Web site. If you go and Google Cincinnati, it 

will show our population at 378,000. 

So it has to be driven by the leadership, it has to be pushed by 

the leadership, and it has to be embraced by every member of the 

administration. 

Mr. GREEN. If I may just close with this, Madam Chairwoman, 

I want to thank Congressman Clay for hosting this hearing. And 

I say that because I have learned a lot. 

Chairwoman WATERS. I want to thank the panels for coming 

here today and sharing this very important information. And I recognize that some of you have traveled from far away to be here 

today in the City, and we’re very appreciative for that. 

And let me just say to the residents and the leaders of St. Louis 

that we recognize some of this is complicated. We are very strong 

believers in the possibilities. We believe that these communities, 

not only in St. Louis, but across this country, can be redeveloped, 

can be saved, and that people can have involvement in doing that. 

We have adopted some principles in our public policy work, and 

this is what’s difficult for some of the redevelopment attempts. One 

of the principles that we have adopted is one-for-one replacement 

of all housing. 

That’s important because, Mr. Zuniga, you’re right, some of the 

developers who are coming along, big developers, have recognized 

that there is gold and then there are hills. And what they are looking at, for example, are public housing projects along certain transportation corridors that are very valuable, and they want them. 

But what they don’t talk about is what happens to the people who 

occupy those units. 

And now we’re in a situation where everybody’s talking about 

these terrible public housing projects and how they don’t, you 

know, meet the standards and how they need to be improved, when 

really the language is, get rid of them. That is the language that 

41

is underneath all of this. Those of us who are in these new leadership positions understand this language. 

And so we are saying that we support HOPE VI, but you cannot 

reduce the number of poor people with so-called market rate and 

ownership because not everybody wants to own a home. Some people just want to rent a decent place to live. 

And so we are trying to, in our public policy, embrace development, protect people and neighborhoods, and involve people in the 

decisionmaking to determine what’s going to happen in these 

neighborhoods. Now that’s a little bit different, but we can do this 

because, really, we came from these neighborhoods. You know what 

I’m saying? And we understand this. So we thank you for further 

educating us today. 

I’ll look forward, Mr. Talmage, to seeing you. And we had talked 

before when you first came into the Los Angeles area. There is 

work to be done there. 

And finally, let me just say on the commercial development side 

of this, every major development, whether it is in my area of 

Inglewood along Century Boulevard that leads to the airport or 

Western Avenue near Slauson where Magic Johnson put in money 

or La Tierra where Magic is over there with TGIF and all of that, 

every one of those businesses surpass their counterparts in other 

parts of the United States. Our Starbucks makes more money than 

any other Starbucks, I believe, in the country, and we can identify 

other black commercial entities that do that. 

We know that there is money in our neighborhoods, and we know 

there are people who are willing to spend money if you treat it 

right, and we have decent services and all of that. So we need to 

marry the need for the investment with the infrastructure development and protection from the City and the involvement of the people. That’s the formula. We get it. We know it. And we’re going to 

do it. Thank you so very much. 

The Chair notes that some Members may have additional questions for this panel, which they may wish to submit in writing. 

Without objection, the hearing record will remain open for 30 days 

for Members to submit written questions to these witnesses and to 

place their responses in the record. 

Without objection, the written statement of Dr. Matthew 

Fellowes of the Brookings Institution will be made a part of the 

hearing record. 

Chairwoman WATERS. This hearing is now adjourned. 

[Whereupon, at 2:40 p.m., the hearing was adjourned.] 

(43)

A P P E N D I X

March 8, 2008

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