Fixing Homes, Fixing Lives Community bank in Chicago revives neighborhood

August 29, 1993|By Kim Clark | Kim Clark,Staff Writer

Chicago -- Each dawn, before she opens her newsstand, Ann Young sweeps the broken Thunderbird bottles and cigarette butts from the sidewalk, rousts the young men hanging around the corner pay phones, and checks for the night's crime victims.

It is a ritual rooted in despair, one that could be seen in blighted neighborhoods from Los Angeles to Baltimore.

Except that Ms. Young has an unlikely island of hope across the street: a well-kept bank decorated with magenta and blue banners.

For the past 20 years, the South Shore Bank -- owned by charities and run by community activists -- has rounded up government grants to fix the most dilapidated buildings, then lent neighborhood residents money to repair their homes.

Now, a walk along the community's tree-lined streets reveals blocks of beautifully landscaped houses and crisply rehabbed three-story apartment buildings. And every few blocks, tradesmen on ladders repair yet more houses.

The bank's drive to reclaim the 60,000-person neighborhood on the southern shore of Lake Michigan has been praised by President Clinton as one of the nation's few urban redevelopment successes. The president last month introduced legislation to spend $382 million to create 100 new "community development banks" like South Shore Bank in troubled cities across the nation.

And the concept could come to Baltimore. The Morris Goldseker Foundation of Maryland has hired South Shore Bank to see whether some version of the bank could help turn around one of Baltimore's troubled neighborhoods. That report is due later this year.

Baltimore has many groups that are attempting to revive neighborhoods -- from the Enterprise Foundation's Sandtown project to the city's Community Development Financing Corp. But Goldseker President Timothy Armbruster says he and the local law firm of Venable, Baetjer & Howard funded the study because Baltimore's neighborhoods need more help.

"All you have to do is drive around . . ." he said. "There is terrible housing, no jobs."

On the streets of Chicago, however, residents view South Shore Bank's efforts to save their troubled neighborhood with a mixture of gratitude and skepticism. Fixing the neighborhood's broken windows hasn't always fixed the broken lives behind those windows.

Without the business generated by the bank and the renovators, "I might not be in this corner," says the 54-year-old Ms. Young.

Still, she's thinking of selling her gray plywood newsstand and moving to Florida. "The buildings are getting fixed up. But what is tearing the buildings down is still here. It is the people" that need repairs now.

'Terrific accomplishments'

Maybe so. But both the buildings and the people in nearby communities -- without a bank like South Shore Bank -- are in much worse shape, says Richard P. Taub, a University of Chicago sociologist who has studied the bank.

Considering the history of the neighborhood, the bank has "accomplished a terrific amount," he says.

From its construction in the 1920s through the 1960s, the neighborhood was an all-white upper class enclave that featured a private golf club, lakeside yacht harbor and tony shopping district. But white residents fled as blacks moved in.

By 1972, it was almost all black. The stores closed. Once-elegant apartment buildings were abandoned. Crime skyrocketed. And South Shore Bank, the last financial institution operating in the neighborhood, was threatened with failure as deposits plummeted by 50 percent, to about $40 million.

That's when a group of four community activists stepped in, including Milton Davis, then a vice president at another bank and director of the Chicago chapter of the Congress on Racial Equality (CORE).

"The tactics CORE used couldn't solve the problem of disinvestment," said Mr. Davis, now chairman of South Shore Bank. "How are you going to correct a real estate problem by sitting in? Or abandoned buildings?"

They rounded up $800,000 from charitable investors willing to accept lower dividend checks if their stake generated a social return. And the group borrowed another $2.4 million to buy the bank, pledging to use the institution to revitalize the community.

But the bankers soon realized the neighborhood would not be saved if the bank just waited for renovators and business people to walk in with proposals. So the bank started a nonprofit subsidiary to provide job training and other social services. And it created a for-profit development company to buy and renovate buildings.

Since South Shore Bank changed hands in 1973, the bank and its subsidiaries have received millions of dollars of government and foundation grants and low-interest loans to buy and repair the worst of the buildings in the neighborhood. For every unit the bank got a subsidy to fix, it has made market-rate loans to repair another 4.5 units, Mr. Davis said.

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