Clifford N. Rosenthal Community Center to Open in Early 2008
(June 6, 2007 – New Orleans, LA) ASI FCU and its non-profit affiliate A Shared Initiative Inc. (ASII) recently announced that their new community center in New Orleans’ devastated Upper Ninth Ward will be named “The Clifford N. Rosenthal Community Center” in honor of the current Executive Director of the National Federation of Community Development Credit Unions (the Federation).
|ASI FCU CEO, Mignhon Tourné, and ASII CEO, Sarah Taylor, announce the naming of the of St. Claude Community Center after Federation Executive Director, Clifford N. Rosenthal.
ASI FCU President Mignhon Tourné made the announcement during a ceremony held at the Center, which is expected to open early next year. The ceremony was part of a tour of reconstruction activities in the Ninth Ward for participants of the Federation’s 33rd Annual Conference on Serving the Underserved, held in New Orleans June 6–9. ASI FCU and ASII brought in a troop of Mardi Gras Indians to perform for the group and dressed up the raw space with displays of New Orleans’ vibrant culture, exhibits from the various non-profits that will operate out of the center, and even a snow-cone machine to ease the ninety-degree heat so common to summer in New Orleans. More than 100 people gathered to hear the news.
“We chose to name the center after Cliff as a symbol of all the Federation has done, not only for ASI and its non-profit affiliate, but for all community development credit unions,” said ASI FCU Senior Vice President Sarah Taylor. “If not for Cliff, ASI wouldn’t be where it is today, particularly after Hurricane Katrina.”
The property and building for the community center were purchased by the credit union’s non-profit arm, ASII, with help from a $100,000 challenge grant from the Federation’s Community Development Relief and Rebuilding Fund. That fund raised nearly $1-million from CDCUs, the broader credit union movement, and foundations to support rebuilding of low-income credit unions in the gulf region.
“What’s so remarkable is that ASI, in the midst of its own recovery, has been able to launch its own non-profit and build a community center in the Upper Ninth Ward,” said Rosenthal. “The center will serve as a magnet for rebuilding efforts in the community.”
He called the naming of the badly needed community center “very humbling.”
The future community center, a cavernous two-story oblong former warehouse, will be home to a new branch of the credit union, as well as various other organizations providing community services, including Total Community Action, Weed and Seed, and NeighborWorks. The center will also house a café to teach local youth about entrepreneurship.
It should be noted that the Upper Ninth Ward has been without a regulated financial institution since long before Hurricane Katrina struck in 2005, so the center will also serve as an alternative to the check cashers and payday lenders that continue to operate in the community.
The Timing Was Perfect
ASI FCU, which formed its nonprofit to help low-income members obtain affordable housing in early 2005, was waiting for ASII to receive its 501c (3) status from the Internal Revenue Service when the hurricane struck.
| ASI FCU/ASII's first completed home in the Musician's Village in the Ninth Ward.
“We formed ASII to expand the community work we had been doing as credit union,” said Tourné. “When Katrina hit, it became very obvious to us what we needed to do in order to assist our community at a time when the need was so great,” she explained. “It helped us to focus our efforts and realize what we needed to do first was get people back home.”
Since then, the nonprofit has received ten abandoned Ninth Ward properties from the city of New Orleans on which it plans to build modular homes for low-income residents.
The first home, located on the same street as Habitat for Humanity’s Musicians’ Village, has been completed and is for sale for $107,000. “We won’t make anything on it,” said Tourné, “But we would love to return someone back to that community. If we can do that, then we’re doing our job as a community development credit union.”
In the Aftermath of the Storms
In the wake of hurricanes Katrina and Rita, ASI’s capitalization plunged from 9 % to 4.6 % as accounts became bloated from insurance and FEMA monies temporarily pouring into the credit union’s coffers, causing NCUA to place the credit union under Prompt Corrective Action. Compounding the problem were the huge losses ASI suffered as a result of members overdrawing their accounts; the loss of 2 of their 16 branches; and the displacement of 15 % of the credit union’s staff.
“When you have a major disaster of this magnitude, you want to continue serving your members,” Tourné said in a speech to conference attendees. “We canceled bonuses and outsourced our check processing. We had to focus heavily on loan losses, so we allowed members to skip payments and waived late fees on all loans through 2005.”
The Federation also responded to ASI’s distress with high-risk secondary capital from its Community Development Relief and Rebuilding Fund, and by stretching out an existing loan for seven years, a total of some $300,000.
CDFI Fund Comes Through
During the Federation’s conference ASI FCU was presented with a check for a $585,000 Financial Assistance grant by Kimberly Reed, newly appointed Director of the CDFI Fund. That grant will cover part of the $4 million in loan losses associated with the hurricanes. The Fund’s award to ASI included a Technical Assistance grant of $100,000 to replace computers that were destroyed by the flooding.
|Owner Kevin Parker shows the bread that has made New Orleans Po' Boys famous.
“The very fact that our operations were so seriously affected by Katrina means that having $585,000 to offset those losses is just a tremendous amount of help to us,” said Tourné. “Receiving this type of support from the CDFI Fund is truly a godsend.”
In April 2007, the credit union achieved 7.05 percent capitalization and expects NCUA to lift PCA by year-end, “if all goes well,” she said. In addition to the Rosenthal Community Center branch, the credit union will soon open branches intended to serve the city’s Asian and growing Hispanic communities.
A Taste of “Nawlins”
The Ninth Ward tour also included a stop at a neighborhood eatery, Jazzy Po’ Boys, which was able to reopen for business with financial management technical assistance and a low interest loan from Federation-partner Seedco Financial Services. The loan allowed owner Kevin Parker to replace damaged furniture and equipment and to restructure and refinance portions of outstanding debt.
Before the Seedco loan, Parker explained, it was impossible to borrow the money he needed to rebuild his business. “Since reopening, I just try to give back to the community,” he said. “We’re still struggling in New Orleans, but the Ninth Ward is coming back.”
Po’ Boy sandwiches, a New Orleans specialty, were served to the CDCU visitors by Parker, who will be featured on the Food Network on July 12.
© 2007 National Federation of Community Development Credit Unions.