The Struggle Over Who Will Rebuild L.A.

By SYLVESTER MONROE LOS ANGELES

As dozens of mostly black and Latino students at the Maxine Waters Employment Preparation Center gathered for an open-air press conference in the school parking lot last month, Peter Ueberroth, the chairman of Rebuild L.A., lavished praise on executives of Japan's Pioneer Electronics (U.S.A.), who had just donated $600,000 to the Watts vocational school, created after the 1965 riots. "This company did this on their own," Ueberroth said, "because it should be good business for them to recognize the importance of the inner city."

Earlier the same week in another part of South Central Los Angeles, black activist and entrepreneur Danny Bakewell, president of L.A.'s Brotherhood Crusade, led a coalition of minority contractors who were protesting their exclusion from riot-related demolition and construction by shutting down work sites that employed no African Americans. After one South Central site that had not a single black on a 10-man crew was shut down on a Friday, it was reopened the following Monday with newfound black workers. "Miraculously, black people were born and gained five years' experience," says Bakewell sarcastically.

Ueberroth, the high-profile former Olympresario and baseball commissioner, and Bakewell, a real estate developer turned community organizer, are on opposite ends of the daunting effort to rebuild South Central Los Angeles, torn apart three months ago in the most expensive riots in U.S. history. From his end, Ueberroth recognizes the need to break three decades of redlining, whereby big corporations, banks and insurance companies have systematically shunned South Central L.A. as an unprofitable business venue. From theirs, Bakewell and other black community leaders are struggling to ensure minority inclusion in the rebuilding process -- and ultimately in the renaissance of South Central. "We need a cheerleader like Ueberroth," says black businessman John Bryant. "But while he's working from the top down, there needs to be a lot of people working from the bottom up to meet him halfway."

The going has been tough so far on both ends. The greatest impediment to success, naturally, is money -- where it comes from, how it is spent. The April riots led to more than 6,000 insurance claims totaling $775 million, mostly on commercial property. Now, with more damage in the area from the two major earthquakes on June 28 heaping new claims on insurers and frightening already skittish tourists, funds will be scarcer still.

Last month Ueberroth moved his Rebuild L.A. staff into donated offices downtown and appointed to a still growing 50-member board community, corporate and government representatives, reflecting his "tripod" approach to the task. He says he is committed to breaking down the barriers that have sealed wealth out of the city's minority communities. "It's important that this neighborhood gets greenlined instead of redlined," he proclaims. But in the two months since he became Los Angeles' designated rebuilder, his critics say he has made little progress toward that goal, and they are skeptical that his efforts will be enough to overcome years of discriminatory practices.

The immediate concern is that minorities are not being included in enough of what rebuilding is taking place. "What people want is an active voice at the table," says Janet Clark, a staff coordinator at the Maxine Waters center. "They want inclusion. They want their needs to be discussed so it's not something shoved down their throats." With black-male unemployment over 40% in South Central, they also want a fair share of riot-related rebuilding contracts and jobs in inner-city areas. "I don't have a problem with other people working," says Bakewell. "But the bottom line is if black people can't work, nobody can. We are no longer going to allow people to do business in this community if they don't include us."

Shortly after black contractors and community activists closed two construction sites, Mayor Tom Bradley put together a consortium of five companies, including two owned by Latinos, one by blacks, one by Koreans and one by whites. He awarded the group $10 million worth of contracts to demolish nearly 500 fire-damaged buildings, and ordered that 80% of the subcontracts let by the consortium go to minority companies located in riot-affected areas.

"It's a good step, a bold step, but it can't be the only step," says Bakewell. "The issue is more than demolition. It's financing. And insurance companies do most of the financing in this world." Increased access to credit and capital is critical for rebuilding and empowering inner cities, says Brentwood Thrift & Loan Association president Jeffrey Hobbs. "Because of the way we do things in the 1990s, insurance companies are an essential ingredient. They have to come to the table."

Lack of access to a range of other financial products, from basic bank loans for businesses to automobile and student loans, also hinders the economic development of inner cities. "The problem is access to the kind of financial dollars that create a sense of self-worth in community stakeholders," says Carlton Jenkins, managing dirctor of Founders National Bank in South Central, California's only black commercial bank. "Not only do people here now not have supermarkets or liquor stores or cleaners, they never have had somewhere they can go and talk with someone about a financial plan."

As an owner of one of only three black financial institutions in California, Jenkins believes his 18-month-old bank has a unique opportunity to take advantage of the riots by attracting new deposits and filling some of the financial void in inner-city L.A. But the combined assets of Founders bank and the other two black-owned institutions are only $300 million, compared with the $1 billion or more in assets of some of the state's larger banks.

Jenkins' scheme is to make his bank a conduit for big Establishment banks that have been unwilling to do business in South Central or do not know how. "Founders National Bank can be the major banks' ears and arms into this marketplace," Jenkins says. With help from the black community, he hopes to grow his fledgling bank into an even greater financial asset for South Central. Late in May a coalition of more than 600 black ministers launched a campaign to persuade black residents to shift up to $15 million in deposits from mainstream banks to black institutions. "The larger we can become vis-a- vis deposits and things like that," says Jenkins, "the easier it will be for us to become a significant part of the rebuilding effort."

In the meantime, creative black entrepreneurs like John Bryant are filling the gap. Just days after the riots, Bryant formed Operation Hope, a nonprofit community-development organization. The next day he secured the $370,000 needed to rebuild a South Central landmark, a pharmacy owned by Gilbert Mathieu, destroyed in the riots. Bryant's goal for the next year is to finance similar deals for 100 businesses with average loans of $200,000. "If we don't create other Gil Mathieus, then we shouldn't be around," he says. Jenkins, for one, is confident they will. "In the '60s," he says, "we were worried about getting on the bus. This group of people is worried about owning the bus line."

Though Ueberroth has taped the Rebuild L.A. name to a dozen private initiatives since May, he knows the "rebirth" of South Central Los Angeles will not happen without some pushing and pain. Ultimately, it depends on whether the government decides to provide incentives for long-term investment in inner cities. "It has to be for good business reasons so it will last," he says. "If you do it for charitable reasons, it goes away as soon as the money runs out." He sees the prompt creation of enterprise zones as critical to the long-term success of his efforts. "If they don't want to do it for the whole country, then they should experiment with the center of L.A.," he argues. "Make it a blueprint for other cities."

Ueberroth believes that his Rebuild L.A. program will be able to prove itself in five years. That is an ambitious goal. But an even more ambitious ! task will be to ensure that the effort remains successful five years -- and 25 years -- after that. To achieve such lasting improvements will require more than a spurt of money and a flurry of energy; it will require engaging the people of South Central L.A. and giving them a stake in the outcome.