WASHINGTON -- Seven private foundations joined with the Prudential Life Insurance Co. yesterday to announce plans to allocate $62.5 million in loans and grants over the next three years to help rebuild America's devastated inner-city neighborhoods.
The effort, called the National Community Development Initiative,marks one of the largest non-governmental investments in low-income neighborhood renewal in U.S. history. It is expected to result in more than $500 million worth of new housing and commercial-revitalization projects in some of the nation's poorest urban neighborhoods.
Baltimore will receive up to $1.35 million in loans and grants as one of 20 cities scheduled to benefit from the consortium's aid. The funds most likely will go to support the Schmoke administration's revitalization efforts in the Sandtown-Winchester community in West Baltimore.
According to information released by the consortium, the money earmarked for Baltimore will be used to launch a prototype "neighborhood transformation project" in which a newly created, non-profit housing developer will address an array of community needs -- social, economic and housing development -- as it attempts to rejuvenate "a large deteriorated city neighborhood that has experienced disinvestment, outmigration and other ills."
Consortium officials and others declined to identify the Baltimore neighborhood, but a Schmoke administration task force has been working to develop just such a program for the Sandtown-Winchester area.
The Sandtown Project, as it is called, would build on efforts that have already begun in that area, including a $24 million plan to build close to 300 town houses for low- and moderate-income residents with funding assistance from the federal government's Nehemiah program.
James Rouse's Enterprise Foundation and a Chicago-based counterpart, the Local Initiatives Support Corp., have been selected to help distribute $57.5 million to locally controlled community-development corporations.
Columbia-based Enterprise Foundation will be in charge of distributing loans and grants to partnerships in nine cities, including Baltimore, and Local Initiatives will distribute money to groups in 11 cities.
Each also will allocate $2.5 million to Federal Home Loan Mortgage Corp. (Freddie Mac), which announced a two-year, $100 million commitment to expand the availability of low-income rental housing as part of the initiative.
Under its commitment, Freddie Mac will purchase low-income rental housing mortgages from local lenders, with the understanding that the lenders will use the money they receive to make additional loans for affordable housing.
In announcing the effort at a news conference at the National Press Club, Robert C. Winters, Prudential's chairman and chief executive officer, said the goal was nothing less than "to rebuild urban America" and bring communities back to life.
"The Prudential is making this investment because it is sound," he said. "Healthy cities help our economy. . . . Housing is the cornerstone of any community."
Mr. Rouse said the infusion of capital was significant because it will help community-based non-profit groups, many of which have been in existence for more than a decade, to accelerate their programs and increase greatly the scope and scale of work they do.
"This unique initiative recognizes an important movement in this country -- the movement of non-profit community organizations determined to make a difference in the quality of life for themselves and their neighbors through the provision of decent, affordable housing," he said.
The seven foundations involved with Newark, N.J.-based Prudential are the Rockefeller Foundation; Lilly Endowment Inc.; the William and Flora Hewlett Foundation; Knight Foundation; the Pew Charitable Trusts; the John D. And Catherine T. MacArthur Foundation; and the Surdna Foundation.
The money they have committed will be available in three to six months and could be used for a variety of purposes, from land acquisition and "predevelopment costs" to construction and renovation work for rental and for-sale housing.
The initial funds are considered "seed money" that has the ability to generate an estimated $500 million in support from financial institutions, local foundations and corporations, and state and local governments.
Consortium officials estimate that more than 7,500 housing units will be built or renovated for low- and moderate-income residents with the help of the money -- including 200 to 500 units in Baltimore. They say money also might be used for commercial-revitalization work and other activities, depending on the priorities of the local groups that receive it.
Other cities in the program are Atlanta; Boston; Chattanooga, Tenn.; Chicago; Cleveland; Columbus, Ohio; Miami; Indianapolis; Kansas City, Mo.; Los Angeles; New York City; Newark, N.J.; Oakland/San Francisco Bay area; Philadelphia; Portland, Ore.; San Antonio; Seattle; St. Paul, Minn.; and Washington.