d n POVERTY PROGRAM YOU CAN BANK ON Shorebankboosts a once troubledneighborhood Qu llou iz l l e h f t r a By David Osborne Art by Rod Massey Picture a black urban community of 80,000 in which crime, drug abuse, and unemployment have reached such levels that landlords are deserting their buildings rather than trying to sell them. Now picture the same neighborhood 15 years later, with $160 million in new investments, 350 large apartment buildings rehabilitated, and property values rising five to seven percent a year. Hundreds of businesses have started, and thousands of people have received adult education, job training, and job placement. The community is stable, crime is down, and the crack epidemic hasn’t taken root. Yet none of this has been accomplished through gentrification. The community is still 99 percent black. Rents are still fairly low. People on welfare can still afford to move in. Now imagine that all this is the ing. Government normally spends its result of an anti-poverty program that money in response to political clout. cost only $10-12 million. If this were a Shorebank seeks out those who can government program, we would have thrive in the marketplace, then gives implemented it in a thousand other them support. communities and declared victory in Shorebank’s one big weakness the war on poverty. But it isn’t, so we is that although it pays for itself, it is have virtually ignored it. not profitable enough to convince The “ program” is the Shorebank other entrepreneurs with capital to Corporation, in Chicago’s South imitate its success. After 15 years, it Shore neighborhood. Shorebank is a is clear that the Shorebank model will holding company that includes a not spread unless the public sector is bank, a real estate development corwilling to invest. poration, a small venture capital firm, Shorebank was the brainchild of and something called The NeighborRon Grzywinski, a graying 53-year-old hood Institu te , which does low- who looks and talks more like a income housing development, remescholar than an entrepreneur. In the dial education, vocational training, late 1960s Grzywinski owned a small Shorebankseeksout thosewhocanthrive inthe marketplace, thengivesthemsupport. and the like. Within a small circle of bank in Hyde Park, home of the Unianti-poverty activists, Shorebank is versity of Chicago. Adlai Stevenson legendary. In Washington it is almost III was state treasurer. Searching for unknown. Yet it is the perfect model a way to help the ghettos, Stevenson for the 1990s: inexpensive, market- decided to deposit state funds only in oriented, and entrepreneurial. banks that agreed to create units speBecause it is subsidized by philcializing in minority business lendanthropists, Shorebank does someing. Grzywinski asked Milton Davis, thing the private sector normally canformer Chicago chairman of the Connot do: it makes investments whose gress on Racial Equality (CORE), to returns are often slim to nonexistent. run his minority business program. Because it is a business that will go “We were getting tired of sitting in under if it makes too many bad and getting thrown out by the Chiinvestments, it does something govcago police, and we were discussing ernment normally cannot do: it inwhat else we could do,” Davis rememvests only in people who have the bers. “ But I must confess it had never savvy and commitment to succeed, occurred to me that a bank might be a whether by starting a business, vehicle.” acquiring a skill and a job, or buying Davis hired Jim Fletcher, a black and renovating an apartment buildassistant director in the federal Com12 Clinton St. Quarterly—Fall, 1989 Design by Jay M iller
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