Vice President Al Gore and Mayor Richard Riordan, announcing $450 million in funding for a new community development bank at ceremonies Wednesday, promised a strong community say in the operations of the new financial institution.
The funding announcement was made at a festive, open-air event at the Vermont Slauson Shopping Center attended by public officials and several hundred community leaders and residents.
"This is by all measures the largest and most extensive community development banking operation in the United States of America or anywhere else," Gore told the audience.
By leveraging its resources through partnerships with existing lending institutions, including nonprofit economic development corporations, the new bank--set to go into operation later this year--should have working capital of $1 billion to lend in low-income areas ranging from Watts to Pacoima and Inglewood to East Los Angeles.
For the Record
Los Angeles Times Friday May 12, 1995 Home Edition Metro Part B Page 3 Metro Desk 1 inches; 31 words Type of Material: Correction
Urban aid--In Thursday's Times, a photo caption accompanying a story on federal aid for Los Angeles misidentified Paulette Sherman and Elizabeth Estes as owners of Jasiri Show Off. They are employees of the women's store.
The bank will pump tens of millions of dollars of working capital into job-creating businesses, Gore said. "Jobs represent the key to the future of this community," he said.
No mention was made of the strained relations between City Hall and the Clinton Administration in December, 1994, when Riordan was stunned to learn that Los Angeles had been passed over in its bid to participate in a federal empowerment zone program.
That caused headaches for Riordan as some black leaders complained that the city's failure to win the designation showed that the Republican mayor was not committed to their community. Afterward, the Clinton Administration cobbled together a new set of funds as a consolation prize for the city. It is this money that will initially capitalize the Los Angeles Community Development Bank.
Hanging over Wednesday's proceedings were concerns that the bank would be run by outsiders and ignore community institutions. Riordan emphasized that the program was "designed for the community, by the community."
The new bank, Gore added, will be "independent and non-governmental," with its decisions made by a board of directors that will have a 25% representation of residents from the disadvantaged areas targeted by the bank.
Gore also reassured the audience that the new bank will use its financial clout to help community financial institutions make more loans, and will focus on helping small entrepreneurs.