August 29, 2005 - From the August, 2005 issue

LISC Invests In Comprehensive Development The Goal: Creating Healthy Communities

Local Initiatives Support Corp. has put its efforts towards community development across the U.S. for a quarter-century. With projects in over 30 distressed areas, LISC helps finance projects and guides communities through the process of development. In this interview, Program Director Neelura Bell and Program Vice President Austin E. Penny share their thoughts on how agencies such as LISC can promote community health.

Austin Penny

LISC has been around for moe than twenty five years. Review for our readers its origins, mission, and continuing programs.

Austin Penny: LISC started back in 1979 or so with a $10 million investment from the Ford Foundation, and its mission was to make a difference in neighborhoods through the use of community development corporations, that were 501(c)3 organizations. The notion was to create this organization that would raise financing from the, banks, foundations, other corporate, government and philanthropic organizations and then, in turn, make investments – either a grant into the community development corporations, or loans for specific projects. The notion was that if you build the capacity and the capability of these community development corporations, they, by being neighborhood-based and community-based would, in turn, involve a whole group of residents in terms of improving their neighborhoods.

Twenty-six years later, Neelura, what is LISC doing in metropolitan Los Angeles?

Neelura Bell: In Los Angeles we are helping CDCs go beyond housing to engage in comprehensive development. An example is the expansion of our work to include charter schools as a way of providing residents with alternative educational opportunities for their children. Additionally, we engage in work with groups to do commercial development and other facilities development as well.

We are also trying to get the groups to be more comprehensive and really work on targeted neighborhoods, and to turn those neighborhoods around and not to work just as CDCs by themselves, but to connect their work with what the city and the community redevelopment agency's plans are to work to attract private investors and private businesses into the area.

We think that there is still an unmet demand in many of the communities for commercial uses. There are still people traveling very far to get their commercial goods and services. So, we are trying to not necessarily encourage the CDCs to meet this demand by themselves but to develop the kind of partnership that will bring those kinds of goods and services.

We'll return to the problems of accomplishing that goal, but elaborate on the role and function of an intermediary, a technical and financial intermediary, the role LISC usually plays.

AP: LISC has played the role of building capacity of CDCs. Building the capacity to be able to handle comprehensive real estate development projects, because most of our work is based in the development of real estate in these communities. So, we build the capacity – know-how to put together complex projects. And then we serve as a financial intermediary; we actually fund projects. We come in for the early funding for the architect, for the environmental analysis, for the design, for the appraisal, and acquisition financing, and we also provide construction financing, and in some cases we provide what we call mini-permanent financing, i.e. we will keep our money in a project for a period of up to seven years after completion of construction, before we get paid back.

On the one hand, we are a lender, an early lender, and a high-risk lender, and on the other hand, we have been a conduit for helping build the capacity and building the confidence of the private sector in the ability of CDCs to be able to handle complicated real estate projects and improve neighborhoods and communities.

NB: As an intermediary, LISC plays a role on the advocacy and policy level too. As a national organization if we are able to share best practices across the country about policy, programming and financing structures that make community development projects work, then we want to work with the local community development industry to talk about those things. We also want to encourage local policies and systems that support the work of CDCs.


This notion of holistic planning and neighborhood as a building block is not something one often ascribes to neighborhood housing developers. Too often, in the name of more units, amenities like parks schools, libraries and retail have been neglected. Do non-profit housing developers have the capacity to master plan their housing projects, and does LISC have the capacity to think holistically and make investments that result in healthy neighborhoods?

NB: I think we have the capacity to think about it and to integrate our work with what other entities are doing and what other people can bring to the table. I don't think that CDCs necessarily have the capacity to do all of these projects by themselves. The initial impetus for starting with housing only was to meet address the city's critical affordable housing shortage as identified by the Mayor's Blue Ribbon Housing Task Force Committee.

CDCs were the leading force in providing the lowest income residents with the basic shelter need of affordable, decent and safe housing. One of the challenges in expanding their efforts beyond housing is that CRA and other city resources have not been as available for commercial and facilities projects. To encourage more cooperation between CRA and the work of CDCs, one of the things I am trying to do now is go to the CRA and share with them that as an intermediary, LISC has invested $65 million in the project area called the downtown region, primarily for housing , but it has not been complemented and leveraged with CRA helping us to quickly get eminent domain to do a shopping center in a certain area of South L.A. Significant amounts of funding has been concentrated in more marginal areas such as Hollywood, and it is turning around. And my argument is that if you invest the same amount of money in some of these other communities where community-based groups have just been doing housing most successfully, and if you bring to them some of the planning tools, then we can achieve that kind of turn-around in some of those neighborhoods too.

You noted that LISC is a national intermediary. Are there regional differences in how your grantees/ partners develop? Is there an East Coast focus on housing and neighborhood that is different from the West Coast's focus on housing and neighborhood.

AP: That is an interesting question. The East Coast had a lot of organizations that grew up out of the anti-poverty movement and focused on community-based and neighborhood revitalization and redevelopment. Plus, you had great deal of agencies on the East Coast that were actively engaged in urban renewal and the acquirement of property so that you had cadres of cities with large chunks of land that they had control over. That never happened on the West Coast. Also, the community development corporations who grew up on the West Coast, and particularly in California, were more interested in how you deal with the notion of housing affordability. So, they were focused more on housing development than looking at the larger notion of community development.

I think you will find that more and more groups are looking at that now, and the issues of transportation, of smart growth, and jobs suddenly comes into play. On a national basis, LISC has spent 25 years looking at working with community development corporations, initially starting on housing because that is where many the community development corporations initially make their impacts, but a lot of the things that we are now funding, like commercial corridor revitalization, some economic development projects, charter schools, child care and health facilities, etc. have been because the CDCs in those neighborhoods have seen the need for additional kinds of facilities in their communities, and they have asked us if we are able to finance these types of real estate developments.

There is a new mayor in Los Angeles, and he has an interest in revitalizing the city's neighborhoods. He just spoke at the New Schools/Better Neighborhoods symposium re the value of schools becoming the centers of neighborhood vitality. If you were to write him a memo on this subject - of merging LISC's agenda with the mayor's agenda for the City of L.A. and its neighborhoods- what would you write?

NB: I think that the in the mayor's agenda for neighborhoods, he needs to bring together what I think in past years have been loosely coordinated efforts with two different parties, city agencies and CDCs, working somewhat in isolation by themselves and not coming together to achieve deeper impacts. So, I think he needs to convene residents and organizations at the community level, convene the CRA, convene the housing department, and convene the Community Development Department, and have a discussion about what the strategy is going to be and to deploy resources to do that kind of work. I think we need to take our money in big chunks to some of the most depressed areas of the city and put that level and that intensity of resources, people, planning, investments, and meetings to talk about what we can do to turn around our neighborhoods.


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