November 19–26, 1998
cover story
The Twilight Zone
Has the $79 million federal empowerment zone grant—awarded to the city four years ago—been a boon or a boondoggle? The answer is not one-dimensional.
by Gwen Shaffer
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At a press conference the day of the announcement, Mayor Rendell addressed community leaders from the three local zones. The anticipation in the City Hall reception room was intense. Rendell promised that the money, a grant from the U.S. Department of Housing and Urban Development (HUD), would be used directly by the citizens of Philadelphia to improve their neighborhoods and to create jobs. Residents could hardly contain their excitement over the prospect of acquiring desperately needed jobs, daycare centers, health clinics, playgrounds and education programs.
But there was even more on the line, the mayor said bluntly.
"I think the cities will be hurt for decades if this doesn't work," Rendell speculated the day Philadelphia learned it had won the grant.
That was nearly four years ago.
So is the grand Empowerment Zone experiment working?
Not surprisingly, the answer to that question depends on whom you ask. But there is no ambiguity about the fact that the last few months have been difficult. Director Carlos Acosta resigned in September after heading up the zone for more than three years. Deep frustration with excruciatingly slow progress played into his decision.
Acosta's replacement, Eva Gladstein, is seen as highly capable. She has already earned the trust of community members from her days as a housing rights advocate.
Now, Gladstein faces the difficult task of assuming responsibility for a massive effort nearly halfway through the process. It's a lot to ask of someone in exchange for $100,000.
Washington has also applied pressure to the city this fall. In mid-October, HUD Inspector General Susan Gassney released a scathing audit, charging Philadelphia with misreporting information and misspending $150,000 of Empowerment Zone funds.
Residents and community leaders also cite growing angst over the lack of visible improvements in the three zone communities. Projects slither off the drawing board at a snail's pace, complain people who live and work in the zone. Sure, they appreciate the graffiti-free buildings and mobile police stations. Millions of dollars have been earmarked for housing rehabilitation programs and retail construction, but those projects likely won't see bricks and mortar for another year. And the bottom line is that residents need jobs now.
The Empowerment Zone is also facing the major challenge of determining how it will fund—or learn to get by without—its administrative staff. Money to cover salaries of Gladstein and the 20 or so staff people under her dries up at the end of 1999. The three zone trust boards are kicking around ideas for alternative funding sources, but one year is not a lot of time to put a solid structure in place. Most people agree the zone needs a central staff to coordinate projects.
How all these issues are resolved over the next year will determine the ultimate success of Philadelphia's Empowerment Zone.
The Philadelphia Empowerment Zone is actually part of the only bi-state zone in the nation, sharing the designation with Camden. That city is spending 21 percent of a $100 million grant from HUD, to be distributed over the next 10 years, leaving Philadelphia with $79 million. While at least half the money must be invested in economic development projects, the rest may be spent on social services, such as literacy courses or drug rehabilitation programs.
Camden sputtered through the first couple years of the designation. Political wars between Gov. Christine Todd Whitman and then-Mayor Arnold Webster hampered efforts to hire zone staff and issue contracts. But the city has rebounded during 1998.
The underlying premise of the Empower-ment Zones is to allow residents—not bureaucrats in Washington or Harrisburg—to determine what is most needed in their hard-pressed communities. Previous massive urban renewal initiatives were widely considered to be flops, including the nationwide Model Cities program (run locally in North Philly from 1967 to 1976). The federal government vowed that strong grassroots involvement would distinguish Empowerment Zones from earlier programs.
Like the five other Empowerment Zones across the country, Philadelphia's was created to serve as a catalyst for private investment. Just as an anchor store in a shopping mall attracts lots of smaller shops, urban planners hoped the zone would serve as a magnet for outside investments. The feds would provide the seed money, but it was up to the city to leverage additional funds to sustain projects beyond 2004.
The original concept was to create partnerships for revitalization between government, non-profits, businesses and residents. Low interest rates, technical assistance and substantial tax and wage credits would provide the competitive edge distressed neighborhoods needed for long-term economic growth to soar. That was the theory, anyway.
The top priority for the Empowerment Zone is to create jobs. However, its actual mandate is broader—to expand the supply of affordable housing, improve public safety, clean up environmental pollution, upgrade infrastructure, and provide affordable health care and child care.
A Herculean task by any measure.
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Zone Sweet Zone: New housing developments in North Philadelphia
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Critics need to be patient, says Beverly Woods, organizer for the West Philadelphia section of the zone.
"The process is like a relationship," she says. "You can't tell how long it's gonna take you to fall in love, or even if it's gonna happen."
Like love, the zone's success depends heavily on timing and luck. But even more imperative to the zone's prosperity are skilled leadership and vision. Interviews with dozens of community activists, city and federal officials and urban planners raise questions about whether these elements actually exist.
The Empowerment Zone operates in many different worlds. It includes 105 individual project goals, implemented by three different trust boards, overseen by a separate staff, accountable to the federal government.
"What does it all add up to? What is the sum of all these various parts?" questions former City Councilman and activist Ed Schwartz.
An enormous amount of dedication goes into all these projects, he acknowledges, but they lack cohesion. He views this as a core problem for the zone.
"This broad vision of community is important, but there is no collective effort to tie everything together and make the city a better place," he asserts. "Once no collective leadership is provided, everyone ends up scrambling for a piece of the pie, which may or may not benefit the city."
Carlos Acosta became the first zone director in September 1995. He originally accepted the directorship as a favor to the mayor when nobody was willing to tackle it. The position was only meant to be temporary.
Dan Gunderson, head of economic development for all three zones and co-author of the original zone plan, cautioned Acosta. "I told him it was an impossible job," he says. "It had never been done before, the expectations were extraordinarily high…. Just trying to get half-way there is difficult, particularly when people want to see results immediately."
Acosta's official reason for resigning two months ago was that he received a job offer too good to pass up. He now heads up United Bank of Philadelphia's business development section.
But Acosta acknowledges deep frustrations with the length of time it takes to make decisions within the Empowerment Zone structure. "There are too many departments involved, too many layers," he says.
In the private sector, if an entrepreneur is serious about starting a business, the owner is not going to wait around for board members to vote, Acosta says.
"I personally talked to a few dozen companies who couldn't wait. Time is money," he says. "We definitely lost some opportunities."
It has been suggested that Acosta was forced out by the powers-that-be in Washington. Nobody was willing to go on the record to substantiate this claim.
Donna Cooper, deputy mayor for policy and planning and co-author of the Empowerment Zone grant proposal, would only acknowledge that it was time for change.
"It is true that Carlos never intended to stay in that job for three and a half years," she says. "But it is also true we needed better leadership across the three zones."
Acosta worked hard and wanted to please everyone, says Pedro Rodriguez, who served as assistant director of the Empowerment Zone from January 1995 through the middle of 1996.
"He would promise things and never come through with them. Not because he was deceitful, he just wouldn't follow up," Rodriguez says. "He started to lose the confidence of the staff and the residents."
A top federal Empowerment Zone official is critical of management in Philadelphia, but does not name Acosta directly.
"Management of the effort is the number one thing the city needs to improve," says Dennis Kane, HUD's Empowerment Zone coordinator.
Kane says he is happy to see Gladstein taking over as director. "The reporting was inadequate. In order to measure achievement, the city needs to tell us how it's spending the money. You need a feedback mechanism, and the management wasn't paying attention to what was there."
Gladstein, 46, is well aware that she is fighting an uphill battle.
Gladstein's no-frills style is evident in her preference for sensible shoes and zero-maintenance haircut. Long work days have her exhausted but not grumpy. Gladstein is out meeting as many businesses and residents as she can to really understand what's happening in the zone, she says with a slight New York accent.
One thing Gladstein can't be accused of is inexperience. Her five-page resume lays out more than two decades of community involvement—in both her personal and professional lives. She earned a bachelor's degree in urban studies from Temple University in 1973, and began organizing low-income renters that same year. In 1976, she played a pivotal role in the local tenants' rights movement when she co-founded the Tenants' Action Group of Philadelphia. She served as director of that group until 1992.
Kane and others believe it is politics, as opposed to poor management, that motivated Gassney to release a harshly critical audit of Philadelphia's zone in October.
The audit charges the city with spending $83,000 to remove lead paint from homes outside the zone. Auditors found that Philadelphia lacked documentation confirming zone residents benefited from more than $30,000 spent on child care and smoke detectors.
A high-level HUD official says that while Philadelphia did make reporting errors, Gassney sensationalized the audit by repeating the same three findings 12 times. "It could have been useful by pointing out what works and what doesn't. Instead, it was biased," the source says.
Others charge the audit was politically motivated. Cooper says Gassney has a vendetta against HUD Secretary Andrew Cuomo.
"Did you notice the timing of it?" she asks, pointing out that the report was released just as Congress was considering whether to nearly triple the number of Empowerment Zone designations across the nation.
Nothing could be more democratic than granting residents the power to make decisions regarding how to invest $79 million. But in reality, the money would be better spent if directed towards ongoing local government redevelopment plans, according to some urban planners.
"So much of the money is being spent on services that are going to be temporarily offered, and are never going to fulfill the mandate of creating jobs," says Dick Cowden, director of the National Association of Enterprise Zones, based in Washington. "Things may look and feel good. But the premise of the Empowerment Zone is to fundamentally restructure the economic base."
And Cowden is not the only skeptic.
The design of the zone governance is to blame, some charge. The multiple layers of bureaucracy—grassroots committees, local government staff, and federal oversight—create a cobweb of red tape.
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Each board was allocated funds in direct proportion to the population of its community. American Street received $29 million; North Philadelphia $21 million; and West Philadelphia $19 million. The boards developed detailed spending plans with timelines and a list of projects, known as "benchmarks."
To date, money has been allotted for 105 benchmarks across all three zones. Each individual zone includes 30 "designated" benchmarks. That means the money for these projects is already mapped out, or the project has been completed.
All three CTBs are in the process of "re-benchmarking," as some of the plans envisioned four years ago are now obsolete.
Each of the three CTBs are divided into "issue committees." Although their exact titles vary, each board has committees focusing on public safety, housing, economic development, arts, and health care.
At the same time that these various boards are voting on how to spend the money, the Empowerment Zone has a paid staff of about 22 employees who also make decisions.
An inherent tension exists between the grassroots governance bodies and the administrative staff. The structure is designed like a game of tug-of-war, with administrators yanking on one end of the rope and residents pulling on the other.
The relationship between staff members and the communities has been strained from day one, recalls Rodriguez.
The city initially promised residents they would control the Empowerment Zone process. "But it is the mayor who is ultimately responsible for the money" and he vetoed a substantial number of projects at the beginning of benchmarking, Rodriguez says.
Secondly, CTB members wanted to control who would be hired to work under Carlos Acosta and Rodriguez. That would have eroded the system of checks and balances put in place, Rodriguez says, especially since people were coming to the table with their own agendas.
Ultimately, Rendell made hiring decisions.
Establishing "equal power" among the CTBs and the staff is impossible, others say.
"You can't have it both ways," agrees Blane Stoddart, director of the Partnership Community Development Corporation in West Philadelphia.
The CTBs should assume an "advisory" role, while Gladstein and her staff call the shots, Stoddart asserts. The alternative, he says, is to scrap the administrative staff altogether, with the exception of a few people who would work directly for each CTB.
"There is a constant struggle between city administrators and the CTBs," Stoddart alleges. "Even if they come to agreement on a project, there is a struggle on how to implement it."
Woods, staff organizer for West Philadelphia, disagrees. The residents steer the boat, while the Empowerment Zone staff simply shine the lights and give weather updates.
"We don't do it for them," Woods stresses. "We pass on technical expertise."
In the final analysis, Rodriguez asserts, the CTBs have fallen victim to their own demands. "Because they want to maintain control, they've been forced to create a giant bureaucracy."
The end result is stagnation.
"A lot more projects should be up and running. Banks should be making more loans," he says. "There are no-brainer projects that aren't complete, like replacing stop signs."
And because the trust boards tend to be parochial, it's a struggle to accomplish even the least controversial benchmarks, Rodriguez charges. He cites a supermarket plaza currently under construction at Fifth and Berks in the American Street zone. The construction is financed by the community development corporation APM—Asociacion Puertorriquenos en Marcha.
"Some people didn't like them. The project was evaluated not on its merits but on a personal level," Rodriguez says.
Despite minor problems, Cooper insists that the CTBs are a resounding success.
"It is amazing where we are now," she says, an awed smile crossing her face. "Compared to the board meetings back in 1994, the level of sophistication is incredible."
Democratic State Rep. Ben Ramos, whose district includes part of the American Street Empowerment Zone, says he is guilty of failing to get involved in his local CTB. But he is unenthusiastic about participating in a process that entails "a lot of talk and a lot of paperwork, and too few results."
"I drive up and down American Street every day," he says. "I see the same thing I saw four years ago, with the exception of the ballpark. And the ballpark doesn't create jobs."
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Diamond Deal: Empowerment Zone director Eva Gladstein at a new ball park in the American Street zone.
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"From a community perspective, we just haven't seen the investments," he says.
But Empowerment Zone proponents are quick to point out the long-standing feud between themselves and the city's community development corporations.
These non-profit development organizations aid low-income residents in Philadelphia's disadvantaged neighborhoods by creating jobs and improving housing.
When the original grant for the Empowerment Zone was written, its authors made the decision to create the CTBs, rather than utilize existing neighborhood organizations. Because there were already several community development corporations within each of the three zones, some believe they could have played the role ultimately assigned to CTBs.
Deputy Mayor Cooper agrees that the community development corporations maintained strong working relationships with residents prior to the zone designation.
"But not with schools, with rec centers, with cops, with churches…. No place was taking a holistic view of the community," Cooper says. "That's why we needed the CTBs."
Critics are accurate in characterizing the zone structure as cumbersome, she adds. "But I'm not sure you can have democracy without bureaucracy."
Deciding how to spend $79 million should be an unhurried process, asserts Patricia DeCarlo, director of the Norris Square Civic Association and a member of the American Street CTB. Investments must be well-planned, she says.
"If I hit the Powerball jackpot and immediately built houses and brought in businesses, I'm not sure we'd be living in a better neighborhood—because the people who live here would not have been part of the planning," she says. "We need folks involved."
But at what point does bureaucracy defeat the purpose of democracy?
An Oct. 20 meeting of the American Street Empowerment Zone CTB may have come close to answering that question. A board member introduced a motion to perform a financial audit in the zone. Although there were more than enough members present to make quorum, the board's bylaws require 60 percent of those voting to live in the zone. That meant eight residents needed to vote. Unfortunately, only seven were present.
That exact scenario played itself out in the three previous meetings as well.
American Street activists insist that the problem is being addressed. Residents proven to be consistent no-shows are being booted from the board.
But what's happening to the American Street board is not unique.
"We are at a burnout factor now," Cooper notes. "It is time-consuming to make these incremental decisions."
A lot of folks are overworked and frustrated at the lack of movement, says Sister Carol Keck, director of the Norris Square Neighborhood Project and an American Street CTB member. The safety committee she chairs has been working on "one of the simplest" projects for three years.
In 1995, members benchmarked money to hire a new town watch coordinator. "We thought the city would say great."
Zone members made just two requests: they wanted the new hire to speak Spanish, and to live in the zone.
Instead, the city hired somebody with neither qualification. During the coordinator's first couple of months on the job, the city paid a police officer to accompany him and serve as a translator. "Duh!" exclaims Keck. "So they're paying two people to do the job."
The hire was ultimately transferred to another section of the city. "Three years later, we don't have a town watch coordinator," Keck laments.
In the end, the federal budget passed last month did include $45 million to establish 15 new urban Empowerment Zones. (Already, 119 applications from 44 states have been filed.) With the jury still out on whether residents in the original six zones are reaping the benefits of a massive cash infusion, one has to wonder if the feds are investing tax dollars wisely.
When asked about the success of the Empowerment Zone, city officials are likely to provide a uniform non-response. They say it is unfair to evaluate a 10-year project at mid-point.
"You can't turn around a neighborhood in four years," says Michael DiBerardinis, chairman of the Community Trust Board in the American Street Empowerment Zone and commissioner of the city's Recreation Department. "You just can't."
Most analysts will say that when compared to Empowerment Zones in other parts of the country—Detroit, Baltimore, Chicago, Atlanta and New York—Philadelphia falls right in the middle.
Based on statistics alone, things seem to be gliding along smoothly in Philly's zone:
Public financing for business-related zone activity exploded from less than $1 million in 1994 to $15 million annually.
Eighty new businesses and 400 jobs were created in the zone over the last three years.
Zone financial institutions handed out $4.8 million in loans.
More than 3,300 properties within the zone have been cleared of graffiti since 1997.
More than 125 blocks have been spruced up through clean-up campaigns.
American Street, West Philadelphia and North Central communities have purchased Police Mobile Mini-Stations with zone funds.
A few years ago, the only business taking place on the corner of Cecil B. Moore Avenue and 15th Street involved illegal drugs. Today, Larry Pittman's athletic apparel store, Foot Stop, occupies one of the most coveted spots in North Philadelphia. It is within a stone's throw of the Apollo, Temple University and a huge retail complex still in the planning phase.
"Three or four businesses have made it known they would like my spot," Pittman says, surrounded by racks of Nike jackets and Reebok sneakers.
When Pittman approached a traditional bank, his loan request was turned down. The neighborhood was depressed and no lenders were willing to take a chance. "They wanted everything but my first born for collateral," he jokes.
But the North Philadelphia Financial Partnership not only lent him money for standard operating costs, they took into consideration the need for security cameras and metal gates. Pittman loves the idea of a bank run by community members who understand local needs and are willing to work with business owners whose finances may not be in perfect order.
"Rather than put my store in a mall, I can help keep the tax base here … help clean-up the neighborhood," he says.
On Nov. 4, Mayor Rendell and Council President John Street held a press conference to announce plans by professional basketball player Rasheed Wallace to open a jazz bar in North Philly. Wallace, who grew up in the neighborhood and now plays for the Portland Trail Blazers, says he wants to "give back" to the community.
His "Hoops Cafe" will occupy 6,000 square feet of an office building that will eventually go up on Cecil B. Moore Avenue, between Sydenham and 16th Streets.
During the press conference, Street boasted that the restaurant is "one more link in the chain" strengthening North Philadelphia. The mayor touted the restaurant as a "dynamic and fun" addition to a neighborhood already bustling with new retail centers and homes.
But what both politicians neglected to mention was the history behind the building where the Hoops Cafe will be housed.
In the fall of 1997, construction crews broke ground for a high-profile Empowerment Zone project that was to be named in honor of blues singer Billie Holiday. To date, $1.2 million has been spent, and all there is to show for it is a big crater in the ground.
In addition to Wallace's restaurant and a post office, one floor will be occupied by the Cecil B. Moore Community Development Corporation—the lead developer for the project. The building's other main tenant will be the North Philadelphia Financial Partnership, the lending institution started with Empowerment Zone money. The partnership is financing $1.8 million of this particular project.
In keeping with the theme, it will include a "jazz plaza" with a statue of Holiday, a jazz bar on the first floor, and a "memorabilia center" in the basement, according to Jamal Cato, executive director of the North Philadelphia Financial Partnership.
The developer recently decided to drop the Billie Holiday name, rather than pay the late singer's estate $50,000 in copyright fees.
The developer has been criticized for breaking ground before all the financing was in place or finalizing leases. When construction crews began digging, they came across an underground stream, causing significant financial and schedule setbacks. The project's original estimated $1.6 million price tag has more than doubled to $3.4 million.
Cato refutes an Oct. 16 Daily News story alleging that the project faces a $1 million cash shortfall. There is no reason to doubt the building will open in the spring of 1999, as planned, he says.
"We're very excited," Cato adds. "It will be a strong complement to Jump Street USA," the $50 million entertainment and retail complex that will span an entire block of North Broad Street. Cato's institution is loaning funds for that site, as well.
The office building on Cecil B. Moore Avenue is another example of poor management of zone projects, charges Terry Ealin, a housing coordinator for the Belmont Improvement Association in West Philly.
"It is already $2 million over budget and it's not even close to being in operation," he says. "More money is lost because the developer didn't have the foresight to consider it would be expensive to copyright [Billie Holiday's] name."
While the Empowerment Zone touts all the jobs created by new construction, Ealin says officials are not being forthright. Most of the jobs being provided by contractors are given to people outside the community, he asserts. "Most local carpenters, electricians and plumbers don't belong to unions," one of the terms of Empowerment Zone contract.
Ealin believes that many of the original players in the zone have lost focus. "They sat on the board and utilized positions for themselves, not for the communities."
Even those who strongly disagree with Ealin's assessment find it difficult to deny a pervasive sense of inaction throughout the three zones.
Four years into the Empowerment Zone designation, little physical evidence of change in West Philadelphia exists. And while the North Central zone is bustling with new development, including the Apollo and Jump Street USA, those projects were in the works prior to the designation. A number of new businesses have located in the American Street Corridor but, for the most part, they are small operations. Frozen foods distributor Honor Foods is the largest employer among all three zones, with 120 employees.
A $26 million HUD grant, announced over the weekend, will significantly boost retail projects in both West and North Philadelphia.
While more human services—such as job training and academic tutoring programs—are clearly available, people living in the zones say they want to see improvements. And even zone supporters acknowledge that social service programs are likely to vanish along with federal money at the end of 2004.
Deputy Mayor Cooper agrees that education and health programs are temporary. "None of those programs go on for free. A shopping center lasts. An after-school program doesn't."
Social services are admirable, "but what makes people feel like something is happening is when they see a house being rehabilitated," agrees Beverly Woods, West Philly organizer.
That zone contains the most undeveloped land—60 vacant acres at the edge of Fairmount Park, now overgrown with weeds and brush. Last year, new roads leading up to the vast lot were laid; water, sewer and electrical lines installed; and beautifully budding trees planted. The cost of the $7.2 million facelift was covered by a combination of local, state and federal dollars.
Yet that area, dubbed the West Philadelphia Business Park, is where the least amount of construction has taken place. Plans for a 12-acre shopping center are underway, but the paperwork needed to designate a developer has yet to be issued. Besides, a blueprint for a retail center existed long before the zone designation.
Woods says the Empowerment Zone deserves substantial credit for making plans for the retail center a reality.
"The resources and the access and the push to build it all came from residents in the zone," she says.
And then there is the looming question: Of the projects that have been initiated, how many are self-sustainable?
Of course $79 million counts for a lot more than spare change, but even a kitty this large isn't enough to recreate some of Philadelphia's most blighted neighborhoods. It is the responsibility of individual projects to leverage funding from other sources.
"It has to be a local partnership," stresses HUD's Dennis Kane.
And it is, insists DeCarlo, of the Norris Square Civic Association. "We are making a conscious effort to ensure this is the case."
If the zone chooses to purchase playground equipment, the neighborhood kids are thrilled to have a new swingset and slide. But when it gets rickety in a few years, who is going to pay to replace it? Can the city's Recreation Department be counted on to pick up the tab?
That question is not so easy to answer.
Eva Gladstein points out that the greatest strength of Philadelphia's Empowerment Zone is its democratic structure. This same characteristic, however, serves as its greatest weakness.
Corbitt Banks, who coordinates economic development and arts projects for the North Central zone, puts a slightly different—but significant—spin on the issue.
"Community involvement is the zone's strength and its challenge," he says. "Not a weakness, but a challenge."
As a result of so much residential input, Philadelphia's Empowerment Zone tends to meander. And if Acosta's assessment is accurate, it's causing potential new businesses to turn their backs.
Stephen Freedman was almost one of them.
He first explored the possibility of locating his bulk mail business, City Sort, in the Empowerment Zone back in 1995, when he caught wind of the tax breaks.
His first obstacle was finding a 50,000-square-foot warehouse that could accommodate indoor loading. Without any help from the city, Freedman says, he stumbled upon a perfect building at Fifth and Oxford Streets, along the American Street Corridor.
Freedman thought the hard part was over. His business would be up and running within six months, he guessed.
Four years after approaching the city, Freedman finally opened his doors in July.
"And in our case, the financial advantages are not huge," he notes.
Freedman is critical of the "excruciatingly slow" process to obtain loans, despite having written what he characterizes as "the best business plan they ever saw." In the end, he received two $500,000 loans—one from the American Street Financial Services Center and one from the Private Industry Development Corporation.
"You've got both people from the neighborhood and bank executives making decisions. That's nice, but it slows down the process tremendously," he says. "It's like they're sitting on the money."
Freedman says he nearly backed out of the deal more than once. Now, he's glad he stuck it out.
His 15 employees earn between $7.50 and $11 an hour. He expects to hire 85 more within a year. All of his hires so far live in the zone. "I love these people!" he says.
But what he doesn't love is the lack of "follow-up" from the Empowerment Zone staff.
Freedman says he contacted the Private Industry Council, which runs the city's main welfare-to-work program, hoping to hire some of its clients. "They never followed up."
The Zone should be concerned with getting businesses on board, but also making sure they succeed, he asserts.
"They should at least be calling me to let me know about bids we can compete for." It would benefit the city to send mailing jobs his way, Freedman adds.
But is the city really responsible for helping businesses attract customers?
Not at all, says Gunderson, head of economic development for all three zones.
"Having government guarantee the prosperity of a private enterprise is unrealistic," he says.
Zone staff already go "far beyond" what most people expect, he adds. "We work with businesses every day, introducing them to people and addressing their concerns."
Frank Plescha is living proof. He moved his business—which he claims is the only one in North America that separates rubber from tires for reuse—to the American Street Corridor from Montgomery County in November 1996. Plescha was looking for cheap space and affordable labor.
He says he has found both. "The Empowerment Zone gives you tax breaks, but that was an afterthought."
Plescha obtained financing from both the zone financial institution and the Private Industry Development Corporation. "I received a much lower rate than I would have from a traditional bank," he says.
And there were no delays. "People made the loan happen quickly—they were very proactive."
Even people who don't like the idea of spending part of the $79 million to pay Empowerment Zone staff can't deny that the 22 or so administrators play a significant role. They help the CTBs implement benchmarks, provide technical assistance to businesses, and market the zone.
However, money to fund the positions has only been set aside until the end of 1999. That means policy makers are now scrambling to find alternative sources of revenue so the entire staff will not have to be let go. Nearly everyone involved in the zone agrees that volunteers alone, no matter how dedicated, will not be able to continue the projects started in the zone.
One of Gladstein's major charges is to float viable ideas for alternative funding. Other policy makers are already on top of it.
The trust boards have their own notions about how to handle the situation.
The American Street CTB, for instance, is looking into establishing a completely independent non-profit organization with money from that zone's budget to finance staff salaries. Another possibility would be to establish a trust fund through the American Street Financial Services Center.
"Even if it just got a 2-percent payback, the money earned could be used for operating costs," notes Sister Carol Keck.
Gladstein knows the Empowerment Zone needs to pick up the pace over the next year and start producing tangible results. "The challenge for the zone—and, therefore, for me—is dealing with the reality that these are public funds," she says. "They come attached to all sorts of hoops we have to jump through in order to spend them."
But zone leadership must find a way to ensure the money gets allocated quickly, despite federal restriction, she stresses. She hopes to spark enough energy to move projects along.
At the end of the 10 years, Gladstein believes Philadelphia will be a healthier place to live because of the zone.
"I think we will have created jobs, brought in businesses…. People will feel better about their neighborhoods because they will be cleaner and safer," she says.
And because of the zone process—even with all its tedious meetings, in-fighting, and political overtones—a valuable new infrastructure will exist in West and North Central Philadelphia, and along the American Street Corridor.
"Community groups learned to collaborate, share resources and work together like they never did in the past," Gladstein says. "There is more focus on the community and less on individual groups."
