By Cheryl Ross
On a spring morning in 1998 Ron Carter walks into a small office at Rockwell Gardens where several members of the management staff and about a dozen young men representing some of the city's most notorious gangs are gathered. Carter, the 41-year-old head of a Chicago Housing Authority program that helps public-housing residents find work and start their own businesses, met the young men for the first time the previous week, when he told them about business opportunities within the CHA. Afterward the gangs got together and decided to sign up for his business program, agreeing to concentrate on different enterprises so they wouldn't compete with one another. They were most interested in starting companies that did landscaping, exterminating, recycling, and moving; one gang wanted to start a laundromat.
Carter, sliding easily into street talk, leans against a desk and tells them that before they can open a business, they have to file for corporate status in Springfield. He doesn't tell them that they can file in the city, because he wants them to experience something new. "Part of what keeps people from succeeding is the fear of the unknown," he likes to say. He wants a CHA staffer to drive them to the state capital in a CHA van. "If they see ten brothers rolling to Springfield, anything might happen, y'know what I mean?" The men burst into laughter. "So we just go down as a group, with that big logo on the side, and they'll think we a basketball team."
Carter tells the gang members that the CHA has two procedures for handing out work contracts. Under federal procurement, any business can bid on a project. Under alternative procurement, only businesses owned by public-housing residents can get the work. Carter cautions that there are plenty of established resident-owned companies in other developments that could bid on work at Rockwell. "I'm not allowed to say whether they should or shouldn't bid, or discourage them or encourage them," he says. "But so far the brothers and sisters have respected other people's communities. If I live in Taylor I don't build on something in Rockwell. So far that's not happened. So when I explain to them what's going on here, then I think they'll probably respect that."
Competitors for CHA contracts are assessed on a 100-point scale, Carter explains. For instance, a company can get 20 points if the owner is a public-housing resident and 20 points for business experience. If companies don't have experience they can team up with businesses that do. Carter says he knows two men who already own laundry businesses who might be willing to cut a deal. They could supply the machines, or the new businessmen could buy or lease their own.
"I got an African friend," Carter tells them. "When this dude came over from Nigeria he was broke. He made himself a millionaire in like nine years. He said something I'll never forget. He said he loves this country because there's money falling out of the sky. The only rule is, you have to build a basket. You cain't catch it with your hands. He was talking about a corporation or a partnership," Carter's voice rises. "You talk to guys who run those big Fortune 500 companies, they've been broke two or three times. Made the money, lost it. Made the money, lost it. Then finally hit and stuck. So you cain't get discouraged, and you cain't let the bureaucracy get you so frustrated that you give up. Because there are going to be some people that try to stop you, for sure--and they ain't gonna all be white.
"We gettin' ready to tear those buildings down on the lakefront. We want to build 250 new houses, town houses, just like we're building over at Horner. Y'know who's stopping us? The brothers and sisters who live in Kenwood-Oak. Say they don't want 'them people' in they community. They had us in court--middle-class black people. I'm like, what do you mean, 'them people?' I don't get it! Shit, it ain't nothin' but luck! Five minutes from now, you lose your job, your ass will be across the street in [Ida B.] Wells. But they don't see it like that. There are going to be people who try to block it, there will be obstacles. But just keep pushing, man. We can do this."
In May 1995 the U.S. Department of Housing and Urban Development took over management of the CHA, which many considered the nation's worst public-housing authority. Finances had been mismanaged, the apartments were run-down, and violent crime was rampant. Ron Carter was one of the officials HUD sent to Chicago to oversee the authority's resident programs. Among his tasks were finding jobs for residents and promoting resident-owned businesses.
At that time the CHA had some resident-management corporations, which allowed residents to manage their properties, and it had some job-placement and trade-skills-training programs. But it didn't have a comprehensive economic-development program to help residents get broader training and employment or to start up their own businesses.
The unrelentingly enthusiastic Carter sees potential jobs and businesses everywhere. He says the demolition of thousands of public-housing units over the next several years, for instance, could mean lots of opportunity for residents. "Every time we tear down one of these high-rises, there's $200,000 worth of scrap materials in the building. When an apartment vacates, the first thing that should happen is housing management should call a resident-owned business. They should go in that vacant apartment and take out the sinks, toilets, bathtubs, take out all the fixtures, all the plumbing--strip the apartment down bare. Then another resident business should come in and board it up. Now everybody in the community knows ain't nothing in there--don't even break in there because there ain't nothing to steal. The brothers already took it out legally. They can take that stuff to the scrap yard today and get a check on the spot. It's just like the drug business--you make your money every day with this.
"When the building is empty and we tear it down, then the brothers come back and get the bricks, all the steel, stuff that's in there and take that to the scrap yard. The other thing is, we're talking about moving 300 families a month. That's ten a day, so that's at least ten moving trucks with what, five, six guys. That's 50 jobs right there!"
Carter says, only half jokingly, that he acquired his entrepreneurial skills in the house where he grew up. He and his parents--Annie, a medical lab technician, and Ronald Sr., a department store clerk and custodian--lived with his mother's parents and three aunts and six cousins in a red brick row house on Pittsburgh's north side. He says his grandmother, Anna Mahaffey, helped raise money for the household by organizing weekend casino parties where family and friends jammed the house playing poker and other games. "There would be five or six poker games going on at one time," says Carter, "and I would sit there and just wait for people to want things from the store. 'Little Ronnie, go get me some cigarettes.' No problem. 'Little Ronnie, I want you to go and get me some Pepsi.' No problem. I made money running errands."
Carter saw his grandmother as the person who solved problems and brought calm to the household. "It gave me a sense of security to know there was a person who had the answers," he says. He particularly loved to hear her tell stories about her brother Josh Gibson, who was known as the black Babe Ruth. In 1972 Gibson was elected to the Baseball Hall of Fame for hitting almost 800 home runs in his 17-year career, almost all of which had been spent in the Negro leagues. His pictures, trophies, bats, and other memorabilia filled the house when Carter was growing up, but Carter never knew him. He'd died of a stroke in 1947, the year Jackie Robinson broke the color barrier in the major leagues.
When Carter was about ten he, his parents, and a cousin moved about a mile away to a private apartment complex. When he went back to visit his grandmother he walked past a public-housing development and soon made friends with some of the boys who lived there. Eventually he joined them in committing petty crimes--stealing radios from trains, robbing stores, and selling the goods on the street. He says a lot of kids in the neighborhood did the same thing. "You want to make some money. You don't know how to make money, can't get a job. Other communities and other ethnic groups, you can go to your dad for a summer job. That wasn't an option in our community, so we would resort to stealing." Carter's family didn't know what he was doing. They told him to value his education and made sure he went with them every Sunday to church.
Not long after Carter started stealing he met John Nelson, a young man from a community-action group that was trying to turn around the lives of bright young men living in the projects. Every other weekend, Nelson and a coworker would drive about 20 kids, including Carter, to a Catholic college in a Pittsburgh suburb where they were tutored by nuns. Carter vividly recalls missing the bus one day and Nelson coming to his home on a motorcycle to give him a lift.
When he was 12 Carter began playing the cello at school and no longer had time for crime. He went on to Perry High School, where he played in the orchestra and joined the basketball team. He was one of only two African-American students in the college-prep program. He rode the bus to school with his neighborhood friends but wouldn't see them again until after school at basketball practice. But they didn't give him a hard time, because he played basketball. "Everybody loved the fact that I was a ballplayer," he says, "because I represented them."
When Carter was in tenth grade his family moved to a row house in a nicer neighborhood. That same year he started playing bass violin in a Pittsburgh Symphony Orchestra youth program. For two years he would rush from basketball practice, take public transportation across town, and usually arrive late for orchestra practice. "One day I walked in late with the ball under my arm and my bag, and the conductor said, 'Mr. Carter, you're going to have to make a choice between music and basketball.' I put my bass violin back in the rack, picked my ball up, and left. And that was the end of my training under the Pittsburgh Symphony."
During Carter's senior year, military academies made him offers and Dartmouth promised him a grant and loans. He couldn't make up his mind. "I sat down with my grandmother. I said, 'Anna, I need to make some decisions about my future. Should I go to these military schools? Should I take the grant?' In the infinite wisdom of an old, southern descendant of slaves and sharecroppers, my grandmother said very simply, 'Baby, look at those schools. Sit down and figure out at which one of those schools does the white man spend the most money educating his children, and that's the school you go to.'"
Carter chose the Virginia Military Institute, which he attended on a full basketball scholarship beginning in 1974. "Every time I see my grandmother I just hug her," he says. "I just hug her because VMI was the--oh God, it's hard to even explain it. Having successfully negotiated the experience, it's fantastic."
At VMI the vigorous physical training, including long runs with backpacks and rifles, built Carter up--he went from 156 to 215 pounds. The training also taught him discipline. During his senior year he achieved the highest rank, battalion commander, ever held by an African-American at the school up to that point.
On the basketball court Carter, now six foot five, set school records that still stand. In the 1978 season he played guard and forward, scoring the most points (736) on the team and achieving the best scoring average (26.3). During his years at VMI he also had the most points in a single game (42) and the best career scoring record, with 2,228 points (now the second-best record). He shares the record of 19 free throws in a single game. He also won numerous other sports awards, including twice being named Southern Conference player of the year.
In 1977, Carter's junior year, VMI played the University of Kentucky at the NCAA Eastern Regional basketball tournament. Carter scored 28 points, though Kentucky still won. After the game two African-American officers--one from the army, the other from the air force--went to the locker room and asked Carter about his grades and his plans after graduation. Carter told them he had close to a 3.0 and would love to play in the NBA, but he owed the air force four years. The officers talked to VMI's superintendent, and that summer the superintendent called Carter into his office and told him that he could have a shot at the NBA if he took air force and army ROTC during his senior year. He also said that if the NBA drafted Carter, he could do 120 days of active duty in the army and eight years in the reserves; if he didn't get drafted or was drafted low he could go into the air force.
Carter graduated in May 1978 with a degree in economics. That June he was back in Pittsburgh playing ball with some of his old buddies when his father drove up and told him he'd just seen on television that Carter was the Los Angeles Lakers' number-one draft pick. Carter and his friends started screaming. "Of all the teams I could have went to, that was the one," he says. "I got to play with Kareem Abdul-Jabbar."
As a Laker, Carter made what he considered big money, about $100,000 a year. He says he was an "adequate" player, one of the guys you'd call off the bench in a pinch. One day at practice he was on the bench watching his teammates. "I was sitting there thinking, you know, this ain't me. I'm wasting my life. This is great, playing ball, but I didn't have these dreams of being an NBA star. I wrote my senior thesis at VMI on being an impact player. An impact player is a player that you put in the game and something happens. Michael Jordan is clearly an impact player. I wanted to do something with my life that helped my country, that made a difference. One of my professors, he gave me a B on the paper, and then he wrote a note that I should lower my sights. Well, that's all I needed. I never forgot that."
One night in 1979 Carter and teammate Norm Nixon sneaked out of practice to go to a nightclub. When they spotted Jerry Buss, the Lakers' owner, they tried to hide, but Buss had seen them. He invited them to have a drink. Conversation turned to Buss's real estate business, and before the night was over Carter had agreed to work for the firm that coming summer.
That same year Carter became a free agent and signed with the Indiana Pacers, for whom he played until the end of the 1980 season. By then he was spending about a weekend each month and two to three weeks every summer as an officer in the army reserves. Over the next couple of years he went on working for Buss, earned an MBA from Pepperdine University, and kept his NBA affiliation as a contract player. He ended his basketball career in 1982, when he was 26, though he still regularly plays pickup games.
Carter also got married, but he doesn't recall exactly when. He and his wife raised her sister's young son and had a son of their own. By the late 80s they were divorced and Carter had married again. He and his second wife would also have a son.
During the early 80s Carter managed basketball summer camps for kids in California set up by him, Nixon, and Magic Johnson, and he ran his own free camp for kids in Pittsburgh. He also started a small real estate firm in California to handle low-income properties. When he heard about plans to build housing in Compton for several thousand low-income residents who were being displaced by the construction of a freeway, his company bid on the management job and got the contract. Just before the development opened he drove out to the site and saw one family excitedly walking toward the building and two others arriving in beat-up cars. "The mom was just in tears, and it was just a beautiful thing to see," he says. "I kept thinking, I've never seen this in Beverly Hills. I said then, I'm much more appreciated in these communities. I'm much more needed in these communities. I'm not going to make as much money, but I really don't need to. So I decided that I would stay in the low-income-housing business."
In the mid-1980s Carter quit his job with Buss, closed down his own business, and became an employee of a national property- management firm specializing in low-income housing. He managed troubled properties across the country, including Chicago's Saint Stephen Terrace Apartments, across the street from Rockwell Gardens. He laughs when he recalls that he authorized putting a wrought-iron fence around the property and installing a bulletproof guard booth. "In my mind at that time I was protecting our property from Rockwell Gardens--from the Chicago Housing Authority."
In 1990 Carter got a call from John Nelson, who'd once taken him to be tutored by the nuns and was now an employee of the Los Angeles housing authority. Nelson asked if he wanted to work for the authority, but Carter didn't want to take such a big pay cut--he was then making about $80,000 a year as senior vice president of his firm. But two years later he was passed over for the presidency and felt he'd hit a glass ceiling. He called up Nelson and was soon offered a post setting up a resident-patrol program to deal with the projects' serious gang problem.
One morning in 1994 Carter was awakened by a phone call from Ed Moses, who'd been deputy director of the resident programs at the LA housing authority and now worked for HUD. He wanted Carter to come to Washington, D.C., for several months to help the agency administer drug-intervention grants and to provide technical assistance to the youth sports programs of the nation's housing authorities. Three months later Moses hired him permanently.
After about a year as youth sports director, Carter told Moses that he was ready for a new assignment, that he didn't see sports as the answer to the problems in public housing. In May 1995 Moses sent Carter to Chicago, where HUD was in the process of taking over the CHA. Only after Carter arrived in Chicago and started meeting with CHA residents did he finally feel he was in a position to make real changes.
That December Moses, now also in Chicago, made Carter director of the authority's new economic-development division. He was given three tasks: create jobs for public-housing residents, help them start their own businesses, and find new ways to make money for the CHA. Moses says, "I told him I wanted community-service centers. I wanted a credit union. I wanted joint ventures. He took what I asked him to do and expanded it--I mean, just took it to a whole new direction."
Within a month Carter came up with the Resident Employment Development Initiative, which incorporated and expanded the CHA's resident-management, job-placement, and trade-skills-training programs. Since then, the CHA has trained or helped find jobs for nearly 5,000 tenants; the figure had been only several hundred a year. But REDI would also include Safe Summer, an independent nonprofit fund-raising arm Carter created to support youth and seniors programs, and a new resident-enterprise program that allowed individuals to take a six-month business course given by local university professors and become CHA-certified business owners. Where there was once only a handful of resident-owned businesses, most of them resident-management corporations, there are now around 110 such companies, including water-bottling, printing, jitney, and record-production businesses. Around 60 of these enterprises have or have had CHA contracts, taking in about $64 million. Residents own at least 51 percent of each company, and some companies are owned outright by residents.
Residents who want to participate in REDI go through a two-week process that begins with an orientation and math and reading tests. They're then asked to develop an academic-studies plan and to identify personal barriers that keep them from working and strategies to overcome them. They also put together a five-year plan that lists goals such as owning a home, starting a business, or going to college. "The biggest hurdle that we have is ignorance, that our people cannot read and write," Carter says. Studies he's seen show that the average adult resident reads and does math at a fifth-grade level. As a result, the new CHA has put in 12 learning centers with computers and instructors to help residents improve their academic and job skills, and it hopes to eventually have one in every development.
Carter and his staff try to place residents who are ready for full- or part-time employment with the CHA or with companies such as Walgreens, UPS, and Federal Express that have an agreement to provide jobs. Residents who aren't ready are supposed to be given entry-level part-time work and training that helps them build a work ethic and a resume. They're then eligible to move into entry-level full-time jobs, most of which are in resident-owned businesses.
One of Carter's favorite resident-business success stories is that of Martha Marshall, a resident of Albany Terrace Apartments who worked with Carter when he first came to Chicago on starting an inventory company staffed completely with CHA residents. When HUD took over the CHA it didn't know what kind of property it had, so Marshall's firm put bar codes on everything. "We went into every apartment, into every office, every garage, every stockroom," she says. Marshall also has janitorial and laundromat companies, and her businesses have brought in $1.5 million in work, about 95 percent of it through CHA contracts. Around 70 percent of her employees are public-housing tenants; the others are low-income residents who live elsewhere in the city.
Marshall, who is now also president of the central division of the CHA's Senior Housing Advisory Council, is quick to praise REDI and Carter. "He is a visionary. His focus and thrust have been moving residents--sometimes he would say kicking and screaming--from welfare to work, from jobs to businesses. He's continued to really inspire me and advise me of the opportunities available to residents. There is no 'can't' in him. It's always, 'We can--we just have to figure out how.'"
Dorthea McNulty, who lives in Dearborn Homes, is another success story. She went through REDI last year and then was hired as a member of its outreach team to go door-to-door encouraging residents to join REDI. By this fall she'd been hired as an administrative assistant for her development's resident-management corporation.
And then there's gospel singer Kim Stratton, who'd been living in homeless shelters when an apartment opened up for her in LeClaire Courts in 1990. She says she barely managed to swing the rent and utility bills on her $484 monthly welfare check, her only income. About a year later she landed a spot with a local singing group. It didn't make her any money, but when the group performed at an outdoor event in Jackson, Mississippi, the one solo line Stratton sang caught the interest of a record producer. In 1992 she landed a recording deal with his company and eventually put out two records. In 1997 the record company phased out its gospel division, and she bought out the rest of her contract. She was still living in LeClaire Courts.
That summer Ed Moses approached Stratton about starting her own record-production company through the Resident-Owned Business Organization, an arm of REDI. Stratton agreed. Her Jehovah Jireh Music now produces records, manages musicians, and promotes Stratton's music--its first CD will be a live recording of Stratton singing with the CHA Mass Recording Choir. Forty-nine percent of proceeds from the sale of the CD, cassette, and video will go to REDI's Safe Summer program.
Not everyone is quick to praise Carter and his staff's economic-development efforts. Some residents don't believe REDI has trained and found jobs for 5,000 people. "I have staff and they do data entry," says Carter. "They give me reports. If they tell me it's 5,000, then that's what it is. I don't inflate numbers." Others speculate that REDI hasn't really spawned 110 or so businesses. But Phil Fairweather, who manages the resident-enterprise portion of REDI, insists the figure is accurate. He says there were once 140 resident businesses on record, but about 30 were dropped because they'd closed or couldn't be contacted.
Some residents who've participated in REDI complain that the CHA has made promises it hasn't fulfilled and that it hasn't offered enough technical assistance. Cheryl Johnson, who lives in Altgeld Gardens and is project manager for the nonprofit People for Community Recovery, says her business wound up with a whopping $29,000 in cost overruns after rehabbing a four-bedroom unit for the CHA in 1997. She says the CHA had allotted $25,000 for the job, but PCR hadn't counted on doing such things as covering exposed pipes and repairing bullet holes. Johnson claims a CHA inspector came to the apartment and told PCR it would be paid for the extra work, but when PCR submitted the final bill the CHA paid only the portion it had originally agreed to.
Johnson eventually met with CHA officials, and she says Carter said that the CHA would pay whatever his staff and her company agreed to. Carter insists he never told PCR that the CHA would pay the extra money. He says the purpose of the meeting was to find out exactly what additional work the firm had performed and whether it had been authorized. The CHA inspector PCR claimed gave them authorization told Carter that he hadn't authorized payment, and Carter says the inspector wouldn't have had the authority to make such a decision anyway. Johnson says Carter later suggested in a phone call that PCR take $25,000 from the CHA's revolving loan fund and not pay it back. Carter says he did suggest that PCR borrow money from the revolving loan but never said it didn't have to be paid back.
Johnson wrote to CHA and HUD officials to complain; she also asked for a "full-scale" investigation of Carter. The inspector general's office made inquiries and reported that Carter had done nothing wrong.
Johnson is still angry with Carter. She admits that the problem has made her a better businessperson, but she believes it could have been avoided if the authority had provided adequate technical assistance. She says, "It was a $30,000 crash business course that we paid for." Carter responds, "Cheryl hit a bump in the road and is disgruntled. That's part of being an entrepreneur--you have to have perseverance. She appears to be recovering, so I'm real happy that she's sticking to her guns--and we'll continue to be there for her."
In October Johnson became treasurer of ROBO, because, she says, she sees problems with the management of the resident-enterprise program. "I ran for treasurer because I didn't want to see another business make the same mistakes," she says, though she still thinks the program offers residents a good opportunity.
Patricia Pratt, another Altgeld Gardens resident, was on the ROBO list in October, though her landscaping company hadn't done any business. She called the resident-enterprise program "a sham." She said the CHA told residents it would give them money to start their businesses but didn't follow through. "After they got us all pumped up and we got through with the class we ask, where is the money? Now it done turned into a revolving loan. People done got disgusted. I kept telling them, how am I going to get this loan with bad credit and they done repossessed my car? What goin' to happen if my company don't get off the ground? My company is going to be liable for it."
Carter says he and his staff have always told residents they could receive seed money through the revolving loan but never as a gift. "I don't know Patricia Pratt," he says, "but I'm going to assume that she fits the profile of most of our resident entrepreneurs--this is the first time that she's actually going down this road, and she's learning about what it takes to run a business. If she had expectations of CHA giving her something, that would be consistent with the mind-sets of most people when they come into the program. But over the six-month entrepreneurs' class they learn about budgeting and feasibility studies, and she should have learned through that process that there are no giveaways, that borrowing to start a business is the traditional way that it happens, and that our loan fund is more cost-effective than any other money she can probably borrow out there. So all I would say to Patricia Pratt is, she still has more to learn. Hopefully she'll stay with the program long enough to get what she needs."
But Pratt wants nothing more to do with the program. She says she'll look elsewhere for help in getting her business off the ground.
Carter himself won't claim great success for his program, explaining that training 5,000 residents doesn't amount to much given that the CHA's unemployment rate approaches 90 percent. He wants to create a core of 5,000 permanent entry-level jobs within the CHA, in hopes that residents could hold the jobs for up to two and a half years, then move on to the private sector. But he worries that it's mostly women who are interested in jobs and in starting businesses--the men don't seem to want any part of his program.
Carter recalls about 20 men standing outside a room where he and his staff were talking to a group about joining REDI and getting jobs. Carter stuck his head out the door and implored the men to come in. Only three did. "To them I'm just a suit," he says, "just another brother coming from downtown making promises. That's part of it. Part of it is the gang culture. If you go talk to [suits] you're a punk and you might be subject to discipline. Part of it is competition--they might already be making more money than they could ever make in a job. The selling point of course is, if you go to work you ain't going to go to jail. But I can't even make that argument if you won't talk to me."
Most of the gang members who'd wanted to start a laundromat and other companies at Rockwell Gardens last spring didn't follow through, Carter says. After he talked to them there were several gang-related murders in the complex, and interest in starting up the businesses disappeared. Three of the men did wind up as members of ROBO, but the others opted for trade-skills training. "As a result of those homicides," Carter says, "the guys who were in the room were no longer interested in pursuing these entrepreneurial dreams and went back to defending turf."
In late March 1998 Carter is in his office talking to George Montgomery, a high school basketball coach who's thinking about switching fields and working for REDI. Carter wants more men in his division because he believes they attract men living in the projects to the program. He tells Montgomery about the the Charles A. Hayes Family Investment Center that will soon open on South Wabash in the middle of the Robert Taylor Homes. Carter helped find the building, which will have space for a health clinic for CHA residents, a theater, a broadcast studio where residents can train, a computer lab, a counseling center, the REDI and ROBO offices, and a credit union.
Suddenly Carter asks Montgomery if he's ever heard of Josh Gibson. Montgomery says he hasn't. Carter tells him he was the black Babe Ruth, then adds, "When he was playing for the Crawfords in Pittsburgh, it was a sold-out ticket every night. The ball field was built in a hill district. It was built by a black man and owned by a black man. The only way to get up there if you didn't have a car was to catch a black cab or a black bus. All the people who worked in the ballpark were black, the restaurants surrounding the ballpark were black. Then Jackie Robinson went to major league baseball. They started to take the black ballplayers out, and it all collapsed. Integration was not really integration--it was immersion. We immersed our culture into theirs, and we lost our identity. Now here we are in the 1990s, we have no banks. There were 37 black banks in this state in 1928. There are three now. So this credit union is the reemergence of that."
CHA residents get somewhere between $15 million and $20 million a month from welfare, Carter tells Montgomery. Their checks are usually cashed at currency exchanges, which charge a fee--a fee that could instead go into a credit union and earn interest, building capital that could be invested in the community.
Carter explains that he has even bigger dreams. More than 80 percent of the CHA's funding comes from the federal government, but between 1995 and 1997 those funds were cut by about 25 percent. Staff were cut from 4,600 to 2,600. The best way to make up the shortfall, he says, is to privatize REDI, making it a for-profit employment agency separate from the CHA. It would be managed by a nonprofit company, Chicago Resource Development Corporation, of which Carter would be president. The company would contract to provide the CHA with all the services REDI now offers.
The resident businesses now employ 1,100 people, Carter says, and last year other companies hired 914 people because of a CHA rule that requires all companies doing business with the CHA to hire and train residents or turn over a portion of their profits for training and placement. "Watch the math," says Carter, turning on his computer's calculator. "The Illinois Department of Human Services will pay you $3,500 per person for placement of a person on welfare. All right, 2,000 times $3,500 is $7 million." Carter's eyes are dancing. "There's something called Welfare-to-Work tax credits. It's a tax write-off for a corporation that hires." He calculates that each of the 2,000 employees could gain the company an $8,500 tax credit, for a total of $17 million. "If your company had a $17 million tax liability at the end of the year because of its profits, but it had hired 2,000 welfare recipients, you would pay zero taxes. OK? Or you could syndicate these tax credits, meaning I can sell them. So I'm looking at people like Oprah and Michael Jordan who have a serious tax issue, and I can say to them, 'Look Oprah, I have $17 million worth of tax credits. Why don't you write me a check for $10 million? I'll give you a $17 million write-off.' That's a good deal, all right? What I'm being told is, I can sell these tax credits for 60 percent of their face value, which is $10.2 million. So $7 million for welfare-to-work placement fees, $10.2 million for tax-credit syndication.
"Next is placement fees. CHA must have hired 200 temps over the course of 1997. We paid Kelly Services $19 an hour; they paid the temp $9. They made $10 per hour per person. Let's say that these people are only going to work part-time jobs. So 2,000 people times 20 hours a week, times 52 weeks a year, and let's just say we're making $5 an hour. That's $10.4 million. Now we already made $17.2, so we at $27.6. I got more. I got 27 ways to make money, but I'm just going to give you four so you can feel the love. You gotta feel the love!" Carter laughs.
"So that's why we need to privatize--because we've got to get this money. This is all precedent setting for housing authorities. Nobody's ever done this before, and I'm driving the lawyers crazy, because what lawyers do is tell you what you can't do. Then I go find another way, because there's always a way. When they can't find something to stop me, then they say, all right, well, let's find out. Then they try to help me get a strong position.
"I'd like to see that money go two places. One, in support of the program, to make sure all the services that we need are in place, because there are a lot of issues when people join this program. They've got substance-abuse issues, domestic-violence issues, education issues, health care. That's a big one--people who work in these part-time jobs don't have insurance. So I want to see the money reinvested in the people and the support services, many of which come from CHA. The other thing I'd like to see happen is for the wealth that comes from all this to be shared by the residents, because the true answer to welfare reform is wealth. If you show people how to make money, or help people make money, then you won't need welfare. What if we said a portion of the company's earnings will go back to the individual in a stock option? So if REDI made $10,000 off of George and 25 percent goes back to George, he has $2,500 in credit, which he could use to buy 250 shares of stock. Now you've got collateral. When you go to the bank to buy a car you've got the $2,500 in stock. Now there's a system to support poor people, built off of poor people."
Later Carter says that representatives of 26 cities, including Baltimore, Seattle, and New York, have come to Chicago to hear him explain the REDI program, and many have asked him to show them how to replicate it in their cities. He figures he could pull in up to $100,000 a year per city as a consultant.
Joseph Shuldiner, who worked with Carter in LA and Washington, D.C., and is now executive director of the CHA, wants to see some scenarios with all the pros and cons laid out before the CHA makes any kind of decision on privatizing REDI. He worries that the 5,000 people in the program could wind up as employees of the CHA, bringing with them the burden of having to pay for such things as workers' compensation. He also says that the CHA has been told it can use tax credits the way Carter proposes, but he wonders if there's a less messy way to get the money. "Why can't we go to the same employer and say, 'Look, here's the people. We'll train them, we'll send them to you. You're the legitimate employer, and all we ask from you is a percentage of the tax credits--which you didn't even know about to ask for in the first place.' The reward is not as great because you don't get 100 percent of it. But they're not your employees, you're not in the business, you don't have to perform the work, you don't have to be running out and getting contracts. I'm not saying which one is right and which one is wrong, but I'm saying those are the kinds of decisions that need to be made."
Shuldiner also worries that the company might not look legitimate to the public, which is already highly suspicious of government and the CHA. "Their immediate response would be, 'They created a new company so that the money would be unregulated. They created a private company because they don't want government restriction. Now prove to us that this wasn't all about so people could get higher salaries, so people could make undue profits, and so that people couldn't track where the money went.' So we still have to create it in a way that we can answer those questions. Because that company, even though it's private, will undergo the same scrutiny that we undergo. Here's what money came in, and here's what was done with the money, and here's how decisions would be made. There's still the question, can this company, when it's out on its own three years from now, say, 'Who cares about the CHA? We're going to go spend the money on something else'?"
Shuldiner says Carter hasn't yet produced the lists of pros and cons he wants, though he says that's understandable. "Ron and the people of his who have looked at this are doing a heck of a lot of other stuff, and they kind of work on this on the run."
Carter agrees that he needs to put together the pros and cons of his plans for Shuldiner, but he believes that whatever happens with his plans, resident companies should be getting more contracts from the CHA. "If we can do the job with a resident business," he says, "do it with a resident business first."
Shuldiner responds that he has to try to meet the demands of all the departments in the agency. "Housing management will say, 'If we don't run the buildings, what difference does it make that there are resident-owned businesses? People will be out in the street.' You talk to police and they'll say, 'If you pour all this money into the buildings but nobody's safe, what difference does it make?'" Besides, he thinks resident businesses already are a priority. He points out that the CHA has approved a request for more than $2 million for resident-owned businesses in 1999, and as a consequence the modernization department will be forced to cut some of its work crews--including employees who are CHA residents. Carter counters, "I would be willing to bet a buck that many of the people who are laid off are rehired by the people who are getting the contracts," because companies that work for the CHA are required to interview laid-off CHA employees.
Shuldiner says that the commitment the CHA has made to resident businesses is unusual, that few public-housing authorities do much with such programs. Still, he doesn't believe the CHA should be a crutch for residents, but should provide them with some business basics so they'll learn to fend for themselves and find contracts in the world outside of the CHA. "These companies have to be independent," he says. "We don't run them, we don't profit from them. They are not joint ventures with us. What we have basically done is train people to be entrepreneurs. We've either taught them how to go out and access a private partner, or we've encouraged private companies to come in and become joint ventures with residents. We promote their well-being to the extent possible, trying to do set-asides of our activities so that money is channeled toward these companies, and we want to provide technical assistance if it's needed. But we've said from the very beginning, these companies will not stand or fall based on the business they do with us." He adds that the authority can't provide a contract to a business just because it's resident owned. The business must show that it can do quality work. "We have an obligation to the rest of our residents and the taxpayers," he says, "to insist on quality."
Carter agrees that quality has to be a top priority, but he believes that many of the start-up businesses have proved they can do the job. He would like to see a procurement policy that would ensure that a job worth $2,500 or less would automatically go to a resident business if one could provide the service, and a job worth $2,500 to $25,000 could be bid on only by resident businesses if there were at least three such companies that could compete to provide the service.
"Is that even legal?" asks Shuldiner. "The bigger resident companies already can't get set-asides because there is a cap. For example, one resident-janitor contract will exceed the million-dollar lifetime cap. They can't do anything through set-asides anymore--they must compete. So HUD always assumed that, yeah, you have to give them some advantage to get started, but once they get started they have to compete with everybody else." Shuldiner also points out that if resident businesses were guaranteed small contracts they might turn out to be the most expensive because they would have little incentive to keep costs down. Moreover, businesses that weren't resident owned but employed a lot of residents could be denied a contract.
Carter responds that he would still rather see profits in the hands of resident businesses, "because there is a higher likelihood that they will reinvest the profit within their community by patronizing local and resident-owned businesses."
Phil Fairweather, manager of REDI's resident-enterprise program, says this past year almost all of his department's funding went to pay rent at a recently acquired incubator building at 89th and Greenwood, where some of the resident businesses have set up offices. Money would not have been an issue if there'd been enough businesses in the 150,000-square-foot building to pay rent and make it self-sustaining. Fairweather was left with $38,000 to run the resident-enterprise program--to buy books and materials, to help residents repair bad credit histories, to help resident businesses get incorporated, and to manage the revolving loan fund--when he'd counted on having $470,000.
Because the program can't pay for some basic services, Fairweather and Carter have spent many weekend hours at the building cutting up fallen trees and picking up trash in the parking lot. Carter would like to be able to pay a resident business to do the work, but doesn't complain about having to do it himself. "I do whatever it takes to get the job done," he says. "If that means mopping floors and washing sinks and sweeping, then so be it. Just do the job." He says he believes in leadership by example. "I learned a long time ago from my VMI days that if you want people to do things, show them that you are both willing and able to do it yourself. When they see me out there digging a hole to build a playground, then when I ask them to do it they can't say, 'Well, you don't do it.' I don't want people to think that I am above anyone. The work we do is God's work, and every last one of us can roll our sleeves up and do what needs to be done."
On a May afternoon last year Carter and two other men are driving around to city and suburban gospel book and music stores collecting money from ticket sales for a concert Kim Stratton and the CHA Mass Recording Choir are doing as a benefit for seniors and youth programs at the CHA. During a stop in Maywood Carter spots some African-American teenage boys whose underwear shows several inches above their baggy pants. He shakes his head and asks, where did the sense of decency and pride go?
Carter starts reminiscing about two guys from his high school who would leave school at lunchtime to go downtown and rob white men. "Lee would grab [a white man] by the back of his pants leg and snatch his feet so he would fall forward. Lester would put him in a headlock and put a knife to his throat. Lee would go through his pockets. Then they would tell him, 'If you say anything, we'll kill you. We're goin' to get up, and we're goin' to walk away. And you're going to lay here and count to ten. If you get back up, we comin' back after you.' I saw Lee my last trip home, three weeks ago. I hadn't seen him in 25 years. He walks with a limp where he had his legs broken in prison. He was out for the fourth time in his life. We stood right on the corner where my church is, and he cried like a baby. He said, 'I'm as good as dead. I'm 42 years old. I have no marketable job skills. I've been to jail four times on felonies, and there's no way I can survive in this society. Eventually, I'm going to go back to jail. If I go to jail for a fifth time I'll just kill myself. I cain't go back there.' That was the extent of our 30-minute conversation. I hugged him, and it was like hugging a child, 'cause he cried and we just--I mean, I'll never forget that. His life is over. We grew up in the same community, went to the same high school. It's choices, choices you make as a teenager that make all the difference in the world."
Later at the concert hall Carter is counting ticket money and running around the auditorium trying to deal with last-minute problems. He stops briefly to talk with his wife, Darnella, and they agree that he'll sit next to her in an aisle seat. Then he disappears, and when the show begins he's nowhere to be seen. Later someone else takes the seat.
Carter met Darnella Wells, then director of an organization focused on raising the self-esteem of girls living in poor communities, in the early 1990s in Pittsburgh at a cookout. By then Carter was divorced for the second time. Darnella, still in her 20s, wasn't ready to give up her freedom, but Carter pursued her. She was impressed that he always followed through on his promises to call or write and on his obligations, and after Carter moved to Chicago they got married. Darnella wasn't prepared for her husband's schedule, but she says she's learned to share him. "I see what he does, and I see how people receive him," she says. "I'm very proud of him."
The couple have two daughters, but when asked when the youngest was born, Carter can't remember. "Don't ask me those kinds of questions," he says, "because my wife gets mad that I don't know the children's birthdays. I can remember all kinds of numbers." He laughs. "I don't know why I block on dates--but that's why you have computers."
HUD has kept a list of the nation's troubled housing authorities since the late 70s, and last August it announced that the CHA was going to be taken off the list for the first time. Improved building inspections, maintenance and financial monitoring, and the success of REDI were among the things that helped turn the CHA into a "standard performer." As a result, control of the CHA is expected to pass from HUD back to Mayor Daley sometime this year.
Last September Carter got a phone call from the mayor's office asking him to consider taking over as director of the Chicago Empowerment Zone, a $137 million joint federal, state, and city program for poverty-stricken neighborhoods on the south and west sides and in Pilsen and Little Village. Carter's primary task would be to generate jobs, though he would also oversee the other parts of the program, which include youth programs and construction and rehabbing of commercial and residential buildings.
Carter says he and his wife prayed and fasted for four days, trying to decide what to do. "The Lord speaks in a soft, quiet voice," he says, "and you've got to sit still long enough to hear." In October he told his bosses that in a month he would be going to work for the mayor.
On November 13, the morning of his last day at the CHA, Carter meets with the executive director of a day-care center, a couple of CHA officials, and an independent consultant to talk about his new idea: he thinks the CHA and the Chicago Empowerment Zone can join forces to put residents through a program that will certify them as child-care providers. Carter says he figures about 40 percent of residents in the empowerment zone are CHA tenants. Under his plan, the CHA would pay for its tenants who don't live in the empowerment zone, and the EZ would pay for all other residents.
Everyone in the room seems enthusiastic. Before Carter leaves he asks, "Any other world problems we want to solve while we're here? What about the NBA strike? There ain't nothing we cain't fix in this room!"
Carter doesn't seem to want to drop REDI. He's met with two consulting groups that deal with tax-credit-processing issues. They helped him develop several REDI privatization scenarios, and he plans to go over them with Shuldiner and Moses after he leaves his post.
Around noon Carter is back in his office, which is already bare of plaques and photographs. His desk is still piled high with paperwork. He takes several phone calls, including one from Moses. They get in an argument about what role Carter will play in teaching other cities how to start their own REDI programs. Later Carter says Moses thought he was planning to compete against the CHA for the contracts, but Carter told him his hands would be full--though if he did any consulting work, he'd do it for the CHA at the going rate. Moses also wanted him to provide REDI technical assistance to other cities under the CHA's current contracts. "CHA gets 100 percent of the proceeds for the technical assistance," Carter says. "So if I don't work for the CHA anymore, why would I give the CHA 100 percent of the proceeds?"
When Carter announced that he was quitting, some people in the CHA speculated that it was because of growing tension between him and Moses. Carter smiles. "My budget just went from $5 million to $130 million. I get a raise. I get a bigger, new challenge. Are you kidding? This is a great career move for me." Then he adds, "Ed and I have been working together for a decade now, and we disagree on things from time to time. Our relationship is like two brothers--we fuss, we argue, we disagree. But he's the boss, so whatever he wants, ultimately he gets. The only way to get my point across is that I've got to be as tough as he is."
Carter points out that Moses is trying to make sure there will be a plaque presented to him at his going-away party tonight. "When people think Ed and I are fighting and feuding, we're arguing over some specific thing that in the big picture doesn't mean a whole lot. But we still love each other. We spend time together away from the office. People don't understand it."
That evening Carter and his wife walk into a large room at the Hayes Family Investment Center, where about 100 people--colleagues, CHA residents, friends--are waiting. Shuldiner and Moses are hard to miss at the front of the room. Carter's colleagues take turns at the microphone praising him for his vision, sincerity, and passion.
Carter finally gets up to make a speech of his own. He thanks God, his family, friends, CHA employees, and the residents for helping to make the CHA's economic-development efforts a success. He recounts how Shuldiner, Moses, and he worked together over the years. "All I did was what Ed and Joe made room for me to do. They bust a hole through, and when they break the hole I go in there and get busy."
Carter then tells the crowd that the CHA is already doing the work the EZ should have done, but the city will soon follow the CHA's lead. He says he wants to create an additional 200 to 300 businesses for residents of the empowerment zone. "I'm sitting on $130 million dollars of God's money," he says. "I didn't say the government's money, and I didn't say your money. I said God's money. I'm going to do all I can to use these resources to help our people so long as God will let me."
"Hallelujah!" someone shouts.
Months before, Carter had reflected on his job at the CHA. "It's kind of embarrassing when I hear people say that I'm a visionary," he said. "I don't know what that means. All I know is, I do see some things that other people don't see, and that's a gift from God. He has given me the ability to connect things that look to be disjointed, to weave them into a fabric. I'm taking the resources and the assets that seem to be disjointed, and I'm pulling them all together under a single vision called REDI. I'm weaving this fabric back together to hopefully make our community whole and safe again. That's God. I'm just an instrument."
Art accompanying story in printed newspaper (not available in this archive): photographs by Chip Williams.