IN THE
COMMUNITY
VOLUME 10 , ISSUE 4
COMMUNITY DEVELOPMENT GROUP
SUMMER 2003
Keeping 50 jobs
in the community:
A bakery gets
a second life
(See page 5 for full story)
© J.P. Morgan Chase & Co. All rights reserved.
JPMorgan Chase
Community Development Group:
Community Development Group:
Listening to our customers in 2003 and beyond
Offering superior customer service in 2003 and beyond . . . 2
Listening to our customers
. . . . . . . . . . . . ..... . . 3
Customer service at work
Helping homebuyers obtain that first mortgage . . . . . . . . . . 4
Keeping 50 jobs in the community:
A bakery gets a second life . . . . . . . . . . . . . . . . . . . . . . . . . 5
A blueprint for affordable housing:
11
8
Therefore, we in CDG seek each day to meet
the needs of our customers as part of our goal
of being a best-in-class organization.
Personal commentary by David M. Scheck, Executive Director
of the New Jersey Community Loan Fund . . . . . . . . . . . . . . 7
Lending to faith-based institutions is
“business as usual”
at JPMorgan Chase Community Development Group . . . . . 8
Mark Willis, Executive Vice President,
Community Development Group
What happens when CDG Texas listens
to its community partners?
Streetbankers
Specializing in client service . . . . . . . . . . . . . . . . . . . . . . . . 14
5
“Revitalizing a community entails helping to
build affordable housing, financing supermarkets and retail
stores, helping to ensure that quality public schools flourish,
and encouraging a thriving mix of arts and culture. Community
Development Group at JPMorgan Chase is dedicated to providing more than capital to strengthen communities. In addition
to investments and loans, we provide expertise and human
resources. Our dedicated staff of CDG professionals is committed to solving problems and working with community organizations. CDG leads seminars on affordable mortgages, works with
faith-based organizations, collaborates with arts groups, and has
many individuals who serve on the boards of directors of
nonprofits. To accomplish CDG’s mission, we partner with
community groups, local chambers of commerce, churches,
arts groups and schools to create thriving communities.”
1
– Mark Willis, Executive Vice President,
Community Development Group
COVER: Jose Mendoza applies the final frosted
touch at Plaza Sweets Bakery in Mamaroneck,
NY. Above from top to bottom: (page 11)
Restaurateur Graciela Evans stirs things up in
El Paso with employee Fernando Diaz. (page
8) (from left) Elliot Hobbs, VP, Community
Development Real Estate Lending & Investing;
Diane Coleman, Branch Manager; Pastor
Clarence Keaton; Cathy L. Quarles, VP,
Community Development Commercial Lending
& Investing, in Brooklyn’s True Worship Church.
(page 5) Petite Lemon Charlotte Royale in the
capable hands of a Plaza Sweets Bakery
employee. (page 4) First-time homebuyer
LoriAnne Radgowski (right) looks over mortgage
papers with CDG Loan Officer Raquel Colon.
istening to our customers
is critical to our ability to
strengthen our communities.
Our customers and partners in
our communities deserve no
less. Therefore, we in CDG seek each
day to meet the needs of our customers
as part of our goal of being a best-inclass organization.
To accomplish that goal, we’ve
recently introduced an initiative called
Blue Sky. Anne Diedrick, CDG’s
Director of CRA, Fair Lending and
Public Policy, who is managing the
effort, noted that its purpose is “to create a community development vision
for the future and a multi-year plan to
achieve it. Just as Fortune 100 companies alter their business models to
meet customer needs, we want to
ensure that our resources are aligned
properly to meet the changing credit
L
Loan programs and grant programs flourish in Dallas, El Paso
and Houston . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4
and investment needs of low-to-moderate-income communities.”
The Blue Sky initiative will help
CDG stop and ask: Are we the best community development organization we can
be? Assisted by our Community Advisory
Board, Blue Sky will devise strategies that
strengthen our commitment to low-tomoderate-income communities. We’ll
keep you posted on its progress in
upcoming issues of In the Community.
In this issue, you’ll read how Lewis
Jones, our Director of Lending/Investing
Business Management, already is making
inroads into speeding up loan applications
and payment of loans.
Also in this issue, read about
numerous CDG success stories resulting
from listening to our customers. When
a first-time homebuyer on Long Island
expressed doubt about her ability to
secure a mortgage, Loan Officer Raquel
Colon visited her at work, answered
numerous questions and went the extra
mile to assist her. The result was a
homebuyer turned into a homeowner.
At a business function, Jean Smith
of Real Estate Lending and Investing
met Rodney Holder, a Harvard MBA
who was looking to acquire an existing
wholesale bakery in Westchester County.
She sought to help him succeed by
connecting him with the right people at
JPMorgan Chase. He was able to gain a
one-million-dollar-plus loan from Small
Business Financial Services. Fifty jobs,
held mostly by minority workers, were
saved, and the bakery is prospering.
Read about Texas, where our CDG
staff initiated an innovative small-business
microlending loan fund for Asian-American
businesses and established a revolving
loan fund for small businesses in El Paso.
When the True Worship Church in
Brooklyn saw its congregation expand and
needed a new sanctuary to accommodate
them, it turned to Commercial Lending &
Investing’s Houses of Worship lending
program and Cathy Quarles, Manager of
the Not-For-Profit Team, for assistance.
If you have any thoughts you’d
like to share, send me a note at
[email protected]. CDG is devoted
to offering superior customer focus, and
we think we can deliver even better
solutions in the future.
Mark Willis was profiled in the April 25,
2003, American Banker discussing his
views on CRA. For a reprint, e-mail
[email protected].
JPMORGAN CHASE COMMUNITY DEVELOPMENT GROUP MISSION
Strengthening the communities in which we do business through ...
• Expanding access to capital • Leadership by example • The resources of JPMorgan Chase
2
Offering our best is
essential to our leadership position in the
marketplace and
provides CDG with
a strategic advantage.”
– Lewis Jones
W
hile many companies
talk about listening to
the customer, few do it
well. At JPMorgan
Chase’s Community Development
Group (CDG), we are determined to
raise the bar on customer focus even
higher. We already are offering faster
turnaround time in making loan decisions and financing those loans. CDG
has garnered a strong reputation for
focusing on the customer by finding
ways to solve client problems.
3
Listening to our
customers is a priority
Unwilling to rest on its laurels, CDG
wants to improve.
Lewis Jones, Director of
Lending/Investing Business Management,
compares CDG to a company that has
the number one market share but is looking to improve its business. “When a
company is on top, the time is ripe to
make changes to sustain its leadership
position. We’re striving to offer best-inclass customer focus, executed by the most
talented people, who understand customer
needs and deliver solutions,” he said.
Using metrics to measure CDG’s
success is the key. Focus groups, polls
and the resulting feedback are used so
CDG can hear from its customers.
Responding to customer feedback,
Real Estate Lending & Investing has
changed its approval process to inform
customers sooner, noted Joe Reilly,
Director of Real Estate Lending &
Investing. “We will let customers know
upfront whether we’re interested in
making the deal and, if so, update them
on the conditions of the deal,” he added.
Customers already are seeing faster
turnaround time on their term sheets.
“We are encouraging customer
focus in Commercial Lending &
Investing to move from great to greater,”
asserted Ruth Salzman, Director of the
group. “Our customer focus success
stems from our staff being trained to
‘own the problem’ and solve any issue
that arises,” Salzman added.
Account officers also are trained to
provide additional information to clients’
lawyers and accountants to expedite the
application process. “If a customer has to
provide cash flow projections, our staff
and lawyers will explain to the client’s
accountants and attorneys exactly what
the bank is looking for,” Salzman said.
Automated software tracks loan response
time, helping the department meet regulatory requirements and issue loans in a
timely fashion.
Total portfolio management introduced
in Lending/Investing Operations and
Administration
The more the customer service
providers in Lending/Investing Operations
and Administration know about their
portfolio of client loans, and have that
information readily available for sharing
with their team, the easier it is to solve
customer problems. In January 2003, the
department introduced total portfolio
management. This will enable the staff to
be fully informed on its portfolio of loans.
“We want customer service providers
to deliver responsive, consistent, high
quality service solutions to our internal
and external clients,” noted Enid Winn,
Director of Lending/Investing Operations
and Administration. “In order to deliver
on that, we need to ensure that facility
servicing information is complete, readily
available and offers team back-up coverage
when individuals are absent,” she said.
In addition, the unit is finding ways
to re-engineer its processes to improve
productivity and service quality levels.
Customer feedback will describe the specific kind of focus that CDG customers
require from loan officers.
“Offering our best is essential to
our leadership position in the marketplace
and provides CDG with a strategic
advantage,” Jones asserted. “All of our
businesses depend on excellent customer
focus for growth.”
Customer focus at work:
Helping first-time homebuyers obtain that
first mortgage
L
istening to customers’ needs is
nothing new to the loan officers
at the Community Development
Group (CDG). Since buying a
home is the largest purchase in one’s life,
loan officers know that going the extra
mile can ease the mortgage process for
every CDG customer, especially for firsttime homebuyers.
Such was the case with first-time
homebuyer LoriAnne Radgowski, a
bookkeeper at Novalex Contracting on
Long Island, who was looking to purchase
a home in Lake Ronkonkoma. She had a
host of questions about obtaining a
mortgage, and as a resource, relied on
Raquel Colon, a CDG loan officer.
In applying for a mortgage,
Radgowski, like many first-time homebuyers, wanted to know whether she had
enough money for the down payment.
She also was concerned about a 1995
bankruptcy that she thought might
prevent her from obtaining a mortgage.
Sensing Radgowski’s anxiety on the
phone, Colon arranged a person-to-person
meeting at Radgowski’s workplace to discuss
the mortgage application. “I thought she
needed some extra attention,” Colon said.
“When someone’s applying for a loan for
the first time, a loan officer has to go the
extra mile to help,” she added. Colon
explained the loan process to her and
answered questions about the down
payment, credit ratings, closing costs
and homeowner’s insurance.
Colon reassured her that her savings
and money from an inheritance would
cover the down payment. She also
informed her that her timely payment
(left to right) Raquel Colon and LoriAnne Radgowski
“When a company
is on top, the time
is ripe to make
changes to sustain its
leadership position.
We’re striving to offer
best-in-class customer
focus, executed by the
most talented people,
who understand
customer needs and
deliver solutions ...
“Raquel Colon
gave me the
confidence to
proceed with my
application.”
– LoriAnne Radgowski
of recent bills would offset the credit
history related to her bankruptcy of eight
years ago. “Raquel Colon gave me the
confidence to proceed with my application.
She also advised me that I could pay the
mortgage with my current income,”
Radgowski said.
Going the extra mile again, Colon
contacted Radgowski’s real estate broker
and attorney and explained what paperwork
was necessary for the application.
Radgowski furnished recent pay stubs, two
years of income tax forms and credit card
statements, proving that she had resolved
her credit problems of the past.
Radgowski applied for and was
granted the CDG home mortgage and
moved into her new home on Oct. 18,
2002. “I go home each night to my own
home. It’s a very satisfying feeling,” she said.
What role did Colon play in helping Radgowski obtain her mortgage?
“I had a million and one questions, and
Raquel answered all of them. I left messages on her beeper and she returned calls
almost immediately. She was my calming
voice and the key from beginning to
end,” Radgowski said.
At CDG, focusing on the customer
is part of our loan officers’ job. “We concentrate on helping first-time homebuyers
in low-to-moderate-income neighborhoods.
We educate first-time homebuyers about
buying the home, saving money and
obtaining a good credit rating. We focus
on the customer’s individual needs and
answer a host of questions, but it’s all in
a day’s work,” Colon said.
4
At a follow-up meeting, Smith
performed preliminary due diligence on
Holder’s business and growth plans. “The
bakery had been in business for almost
20 years and was succeeding, but its
current owners wanted to sell it. Helping
Mr. Holder acquire the company could lead
to saving many manufacturing jobs and
expanding the business,” Smith said. She
liked his ideas on how to grow the business
by the introduction of fundamental modern
management practices, which would
include electronic mail. Moreover, Smith
recognized the significant role that small
businesses like Plaza Sweets Bakery play in
generating jobs in the community.
The Plaza Sweets baking team takes the cake with owner Rodney Holder.
“As a CDG member, I focus on
making things happen by offering customer
service, which can mean introducing the
entrepreneur to the full resources of
JPMorgan Chase,” she added. Smith
suggested he meet with Amie Dorman.
Dorman studied Holder’s business
plan and thought that the best opportunity
for a loan at JPMorgan Chase would be
through its SBA 7 program with Small
Business Financial Services (SBFS).
Like many Community
ntrepreneur Rodney Holder has an
“If we couldn’t do it, we wanted to find
Development Group (CDG) staff
impressive business background,
other areas of JPMorgan Chase that could.
including an MBA from Harvard, members, Jean Smith, a Marketing and
Asking how we could make this deal
Communications Officer for CDG’s Real happen and help the customer reach his
Internet management and private
Estate Lending & Investing, and Amie
equity experience. Scouting for business
outcomes guided us along,” Dorman said.
opportunities, he learned that the owners of Dorman, a Lending Officer in CDG’s
She suggested Holder contact SBFS.
Commercial Lending & Investing departPlaza Sweets, a successful wholesale bakery
Taking Dorman’s advice, Holder
ment, are always on the lookout to initiin Mamaroneck, NY, wanted to sell.
contacted Kevin Ferryman and Tien
“I was attracted to the quality of the ate deals that can help sustain low-toHuynh of SBFS. Huynh said, “This was
product, tenure of the existing management moderate-income neighborhoods.
an unusual deal because Mr. Holder had
While attending a gathering at the
team and reputation within the industry.
no previous experience in owning a
In addition, I believed that I could apply New School for Social Research, a college bakery business, but offered many
in New York, for a seminar that CDG
high-tech industry practices to a fundastrengths, including his Harvard MBA
co-sponsored, Smith met Holder, who
mental business,” Holder said. He raised
education, excellent background in
private capital from investors, but required explained that he was looking for a loan to working for others and a fine credit rating.
complete the Plaza Sweets Bakery purchase.
bank financing. Holder spoke to several
He also provided most of the required
Smith learned that 75 percent of the bakery’s equity, while successfully raising equity
financial institutions, which expressed
50 employees were Hispanic, and its clients
preliminary interest but did not respond
capital from others. We decided to underincluded Neiman Marcus, the Kennedy
in a timely fashion. Then he met two
write the loan, which was guaranteed by the
enterprising CDG employees who helped Center, country clubs and restaurants in the
Small Business Administration,” she said.
Northeast, as well as customers as far away as
him overcome the obstacles and gain
“SBFS performed due diligence,
Hawaii, Canada and the Caribbean.
access to capital.
worked with the underwriter and helped
Keeping 50 jobs
in the community:
“As a CDG
member, I focus
on making things
happen by offering
customer service,
which can mean
introducing
the entrepreneur to
the full resources of
JPMorgan Chase.”
– Jean Smith
A bakery gets a second life
E
5
(from left) Rodney Holder, owner; CDG Commercial
Lending & Investing Lending Officer Amie Dorman; Small
Business Financial Services’ Lending Officer Kevin
Ferryman; and CDG Real Estate Lending & Investing
Marketing and Communications Officer Jean M. Smith at
Plaza Sweets Bakery.
me negotiate certain critical terms with
the seller,” Holder said. JPMorgan Chase
issued a loan in excess of a million dollars,
which enabled him to purchase Plaza
Sweets Bakery.
After Holder took ownership of
Plaza Sweets Bakery in November 2002,
he introduced strategies to expand its
revenue. He raised employee productivity
by improving existing systems and introducing new techniques and technology,
namely real-time management reporting
tools. He also developed an elaborate
website that enabled online ordering.
New management goals and incentive
plans also were implemented to raise
‘Out of the box’ thinking? It’s standard operating procedure for a Plaza Sweets employee.
employee productivity. Customer buying
habits and payment procedures were
studied and researched to heighten revenue. “In the future, we’ll be introducing
new products and pursuing corporate
accounts to drive sales,” Holder said.
Other banks may not have been
responsive to an entrepreneur with no
bakery experience, however “At CDG
we pride ourselves in thinking outside
the box and maintaining a can-do attitude,”
Smith asserted. “We knew that Rodney
Holder possessed the right business background, an entrepreneurial spirit and a
savvy business plan. Maintaining close to
50 manufacturing jobs for a mostly
minority staff was a key goal for us,”
Dorman added.
Small Business Financial
Services brought the deal to
fruition. “We in SBFS worked
with CDG to help the customer
and keep an existing small
business operating,” noted
Huynh. “We reached
across lines of business
to make this happen,”
Smith said. “We brought
the whole face of
JPMorgan Chase to the customer. Meeting customer needs is
what JPMorgan Chase and its businesses
are about,” she added.
“CDG’s Jean Smith and Amie
Dorman played major roles in helping
us acquire Plaza Sweets Bakery,”
revealed Holder.
Their efforts have enabled Rodney
Holder to keep Plaza Sweets Bakery
thriving, and producing luscious
desserts such as Cognac Cheesecake and
American Beauty cakes, two of its flagship products. Holder has indicated that
he has ambitious plans for expansion in
the near future, and is looking forward to
expanding his existing relationship with
JPMorgan Chase.
Mama’s
Apple Cake
6
A blueprint for
affordable housing
A personal commentary
by David M. Scheck, Executive Director of the New Jersey Community Loan Fund
affordable housing developers were rarely
considered creditworthy and typically did
not fit a bank’s profile of a borrower.
Financial institutions, such as JPMorgan
Chase, entrusted permanent capital to
the Fund, which then provided financial
resources to non-profit organizations to
develop affordable housing. The Fund’s
low cost and flexible financing enabled
developers to create more than 4,300
quality housing units for close to 2,000
low-income families.
David M. Scheck
T
he need for affordable housing
has never been greater in this
country. Throughout New
Jersey, where the non-profit
New Jersey Community Loan Fund
operates, large numbers of low-andmoderate-income families are desperately
in need of housing. A family of four
earning minimum wage would have to
work more than 140 hours a week to
afford the cost. The Fund has learned
some valuable lessons on what it takes to
build affordable housing in the Garden
State and has some suggestions on
encouraging more low-cost funding.
Identify a dependable banking partner
When the Fund began in 1987,
the development of affordable housing
was difficult and time-consuming.
Government subsidiary programs were
not standardized and low-income housing
tax credits were just evolving. Non-profit
7
Identify community development
partners
As a certified community development financial institution, the Fund
operates like a community bank.
JPMorgan Chase lends money to the
Fund, which in turn partners with reliable
community developers that have demonstrated success in creating affordable
housing. For example, we partnered
with Debkon Housing Corporation,
which rehabilitated six foreclosed HUD
houses into affordable housing in Atlantic
County, and with Community Hope,
which acquired a vacant boarding house
in Morristown and rehabilitated it into
12 units of housing for adults with
mental illness.
Develop products linked with flexible
financing
A major obstacle to a nonprofit’s
ability to develop affordable housing are
the up-front, pre-development costs.
Before a project has been approved by
a municipality and prior to any funding
being committed, significant costs, including site control, architectural renderings,
feasibility studies, engineering and environmental reports and professional fees,
are incurred. The Fund, in partnership
with JPMorgan Chase, the State of New
Jersey, and other mainstream financial
institutions, developed the Neighborhood
Development Initiative Predevelopment
program. The program provides financing
at a zero percent interest rate to non-profit
borrowers to cover these critical predevelopment costs. Since the inception
of the program, JPMorgan Chase has
provided more than $250,000 to support
it, stimulating the development of 1,400
affordable housing units.
Based on the Fund’s track record of
providing financing for viable community
development projects, JPMorgan Chase’s
Community Development Group provided
the Fund with a revolving line of credit.
This provides the Fund additional financial
flexibility, to help it meet the needs of its
clients by offering flexible terms and
financing for larger and more complex
affordable housing projects.
Create mixed income neighborhoods
Studies have shown concentration
of poverty is detrimental to neighborhood
viability. Efforts must be made to develop
affordable housing in suburban as well as
urban communities. Additionally, private
and government-sector resources should
be committed to spur affordable housing
in these areas.
The Fund maintains a constant
dialogue with its partners at JPMorgan
Chase, including Streetbanker Etta Denk
and Commercial Lending & Investing’s
Dudley Benoit, a Relationship Manager,
to ensure affordable housing products
are made available to develop healthy,
vibrant and stable communities.
“We needed to have all
the financing in place.
Many churches start their
construction without proper
financing and never complete
the project. CDG understood how churches are
financed and how churches
raise money.”
Pastor Clarence Keaton, True Worship Church.
Lending to faith-based
institutions is “business as usual”
P
astor Clarence Keaton, the
founder and spiritual leader
of the True Worship Church
located in East New York,
Brooklyn, said that by 1999 his congregation of 700 members had outgrown its
5,000-square-foot sanctuary and needed
to build a new church and expand its
community outreach program.
After his local bank rejected True
Worship’s loan application, Keaton
turned to the local Chase branch on
Linden Boulevard for help. The branch
manager, Diane Coleman, suggested that
he apply to the Community Development
Group’s (CDG) Commercial Lending &
Investing, which offered an innovative
Faith-Based Initiative.
Since faith-based institutions can
play a key role in addressing community
problems, CDG’s Commercial Lending
& Investing established its Houses of
Worship Lending program in 1996.
Commercial Lending & Investing is
dedicated to expanding access to capital
in low-to-moderate-income neighborhoods, and this program demonstrates
that helping houses of worship grow and
expand helps boost neighborhoods.
“If we in community development
are interested in working with the
bedrock institutions in the community,
then nothing is more bedrock than
houses of worship,” noted Ruth Salzman,
the director of CDG’s Commercial
Lending & Investing unit. The Houses of
Worship Lending program specializes in
providing loans to religious institutions
that need capital to renovate or construct
sacred space. Traditionally, loans begin at
about $150,000 and rise to $2 million to
$2.5 million.
“The program is focused on houses
of worship in low-and-moderate-income
communities that have a strong community development agenda that goes beyond
their immediate congregations and
strengthens the neighborhood,” Salzman
said. Loans made under the program are
specifically for the sacred space, not for
commercial projects.
Salzman recalled when the program
was first under consideration, objections
were raised as to whether faith-based
lending made good business sense. Were
houses of worship financially viable? The
fact that many of these houses of worship
had long-term depository relationships
with the firm demonstrated their stability
in the community. Moreover, CDG created
8
a strong business model, stipulating that
houses of worship must use an outside
accountant to be eligible; submit proper
financial documents over several years;
meet minimum standards for longevity
and membership; and promote community
development in the neighborhood. “We saw
a need in the community to help houses of
worship and met that need,” Salzman said.
When the True Worship Church
applied for its $1.7 million loan from
Hard at work on holy ground.
9
CDG’s Commercial Lending & Investing
unit in 2000, the church had to demonstrate that it was creditworthy. “Our
accountants and lawyers had to present
our books to CDG to ensure that we were
producing enough revenue to repay the
debt,” noted Keaton. CDG analyzed the
church’s track record in generating revenue
through collections and other fund-raising
sources, noted Cathy Quarles, Manager of
the Not-For-Profit Team within
Commercial Lending & Investing. CDG
focused on whether “the church could
repay the loan, and whether it could support the debt load without creating too
much burden
on its membership,” said Quarles. After
the church increased is equity stake and
explained how it would meet its debt
service, CDG issued the $1.7 million loan,
which combined a construction loan with
a permanent commercial mortgage loan.
Demolition of the old church started
in October 2001 and was followed by
construction on the new church, which
was completed in May. True Worship
Church now has an 18,000-square-foot
sanctuary, more than three times its former
space, which will meet the church’s growing
spiritual needs. In addition, its daycare
center will offer enrollment for 125 neighborhood children, and additional space
will be used for career and counseling
services and a dance and drama program.
“The new church will impact all of East
New York, not just our 700 congregants,”
Keaton noted.
“Without that $1.7 million loan,
expansion would not have happened.
We needed to have all the financing in
place. Many churches start their construction without proper financing and never
complete the project. CDG understood
how churches are financed and how
churches raise money,” said Keaton.
The church raised additional funds to
finance the $3 million construction,
which included additional space for
community outreach.
Besides providing access to capital,
CDG offered technical assistance. Quarles
helped answer any questions that arose,
and Elliot Hobbs, a Client Executive with
CDG Real Estate Lending & Investing,
functioned like a construction consultant
to help the church analyze construction
costs and facilitate dealing with the contractor, suggested Keaton.
“Construction of a church could be
a nightmare. Because of the assistance
and expertise of CDG’s staff, our construction went smoothly,” he added.
“CDG brings the faith-based lending
experience to the table, and that provides more comfort for the borrower,”
Keaton asserted.
What impact has the Faith-Based
Initiative had on the community?
“We’ve demonstrated that there is a
viable market lending to houses of
worship,” Salzman said. In fact, since
its inception the Faith-Based Initiative
has made 45 transactions totaling more
than $28 million. Other banks have
modeled their faith-based lending on
CDG’s program. These loans help revitalize real estate, usually replacing vacant
property or churches in disrepair with
new construction, and lead to churches
expanding their infrastructure and
space to add more community outreach,
Quarles noted.
Commercial Lending & Investing
works with its internal CDG partners
to expand services to its Faith-Based
Initiative participants. “We’re working
with Residential Lending, which will
(top) Pastor Keaton with Branch Manager Diane Coleman on a tour of the church’s new kitchen facilities.
(bottom) The site construction superintendent joins Pastor Keaton on an equipment inspection.
introduce first-time homebuyers seminars
at affiliate houses of worship. These seminars provide critical information on
saving for the mortgage and avoiding
predatory lending,” Quarles noted.
The Faith-Based Lending program
has “inspired members of the community,”
said Hobbs. “Rebuilt churches help
beautify a community. Residents attend
church in a new building and see new
homes in their communities, yielding
a renewed sense of well-being in low-tomoderate-income neighborhoods,”
he noted.
10
What happens when
CDG Texas listens to its
community partners?
Loan programs and grant
programs flourish in
Dallas, El Paso and Houston
A shopping mall in Dallas’ Asian trade district.
“C
DG Texas listens to our smallbusiness partners in El Paso,
ethnic small businesses in
Dallas, and houses of worship
in low-to-moderate-income neighborhoods throughout Texas,” explained
Richard Celli, Director of CDG Texas.
When community partners talk, CDG
Texas listens.
Three programs launched by CDG
have been strengthening low-to-moderateincome neighborhoods in Texas: a
microlending program for Asian businesses
in Dallas; a grants program that is centered
in Houston for houses of worship to help
them meet critical pre-development costs;
and a revolving loan fund to enable El
Paso small businesses to qualify for
much-needed SBA loans.
“We partner with our customers,
including small businesses, chambers of
commerce, developers and houses of wor-
11
ship to achieve our mutual goals of
building strong communities,” Celli said.
“Staff members in CDG Texas are
out in the community listening, staying
one step ahead of customer needs,”
asserted Paula Sullivan, Marketing
Manager for CDG Texas. “That’s how
we knew there was a need to expand
small-business loans to ethnic businesses
in Dallas and meet pre-development
costs for houses of worship. Staying close
to the community leads to creative and
innovative programs,” she said.
Helping ethnic small businesses
obtain loans
For example, a start-up intermediary
lending program aimed at the Greater
Dallas Asian American Chamber of
Commerce, launched by CDG Texas in
November 2001, helps small businesses
that had been unable to gain access to
capital. CDG Small Business Lending
arranged a million-dollar line of credit
for the Greater Dallas Asian American
Chamber of Commerce Intermediary
Lending Corporation, which is a subsidiary of the chamber. The subsidiary
then makes loans of no greater than
$75,000 to Asian American Chamber
members, which must be repaid within
three years.
Why do Asian-American small businesses require a separate loan fund?
“Asian-American businesses face specific
issues, such as cultural differences and
language problems, that can make it difficult to obtain a loan from a traditional
bank,” explained Carl Shields, a team
leader in CDG Small Business Lending,
based in Dallas. Many of the small
businesses are located in low-to-moderateincome communities such as Little Asia
or East Dallas and are owned by Laotian,
Vietnamese, Cambodian and Chinese
entrepreneurs. With the microlending
program, businesses can arrange a loan
through the Asian American Chamber,
which understands their language, cultural
and business needs. “Very few loan officers speak Cambodian,” Shields noted.
“Many of these Asian-American
businesses are opened by new immigrants
who don’t have the credit history that
mainstream lenders would like to see,”
noted Les Tanaka, the Executive Director
of the Greater Dallas Asian American
Chamber of Commerce. The businesses
often require smaller loans of several
thousand dollars.
The Asian-American business
community already is reaping benefits
from this lending subsidiary. The
Greater Dallas Asian American Chamber
of Commerce Intermediary Lending
Corporation has been named as a
Business Assistance Center (BAC)
for Dallas. BAC receives community
block grants from the City of Dallas
to provide technical assistance to its
members, which will enable businesses
to expand and hire more people. And
that builds stronger communities,
Shields noted.
Revolving Loan Fund helps
businesses grow
El Paso city government found
that many small businesses in low-tomoderate-income communities were
unable to obtain Small Business
Administration (SBA) loans because
of insufficient equity. CDG Texas in
2000 launched the El Paso Revolving
Loan Fund (RLF) that provided
funds to El Paso small businesses that
could be subordinated to a bank
loan. The maximum loan is for
$50,000, which must be repaid within
five years.
“These subordinated loans enable
small businesses to qualify for SBA
loans,” explained Shields. Loans made
by the RLF do not have to comply
with SBA eligibility, though most are
SBA guaranteed, he added. If a small
business asked for $100,000 in SBA
financing, which required 25 percent
in equity, it could use the loan to raise
its equity. For example, if it had only
$10,000 in equity, a $15,000 loan
from the Revolving Loan Fund would
raise its equity level to $25,000, or 25
percent, helping the small business
qualify for the SBA loan.
Since the program started, CDG
has issued 16 loans worth more than
$2.5 million total. Showing how
successful the program has been, three
“Staff members in CDG Texas are out in
the community listening, staying one step
ahead of customer needs. That’s how we
knew there was a need to expand smallbusiness loans to ethnic businesses in
Dallas and meet pre-development costs
for houses of worship. Staying close to
the community leads to creative and
innovative programs.”
– Paula Sullivan
Corinthian Pointe, a Pyramid Community Development Corporation neighborhood in Texas comprising 462 affordable houses.
other banks have launched similar
programs, noted Shields.
Most RLF loans are used either to
start new businesses or expand existing
ones. Benefiting from the fund was a
new business, Casa Vieja, a family
restaurant that opened in a former
home. In addition, it helped expand
existing businesses such as Spectrum
Paper Company and L&A Distributor,
a family-owned wholesale grocery
business. The Revolving Loan Fund
played a critical role in making
JPMorgan Chase number one in
issuing SBA loans in El Paso for the
last two years, noted Sullivan.
Faith-Based Grants and
Loan Initiatives: a program in
the forefront
The Faith-Based Community
Development Grants Initiative,
launched in 1997, serves as a catalyst
to promote affordable housing, noted
12
“Client service is what
Streetbankers specialize in.”
A chat with the Long Island Streetbanker
Casa Vieja owner Graciela Evans (center) and her restaurant team, (from left) Fernando Diaz, Carlos Luna, Ysela Prospero and Mariana Aguirre, are recipients of the El Paso Revolving Loan Fund.
Algenita Davis, a Community Affairs
Officer in CDG Texas who is based in
Houston. JPMorgan Chase’s Corporate
Social Responsibility (CSR) unit works
in partnership with CDG, said Nereida
Andino, who manages the national
faith-based grants program. Since 1997,
CSR has distributed 197 grants, totaling $4.7 million. Of that number, 67
have gone to Texas, the state that has
received the most grants.
Grants range from $5,000 to
$25,000 and enable houses of worship
to finance critical pre-development costs
that include paying for an architect,
consultants, feasibility and engineering
studies. Financing these pre-development
costs is the first step in launching
affordable housing, but without the
grants, many houses of worship would
be unable to get their projects off the
13
ground. The grants program operates
not just in Texas, but also in other states
where CDG operates.
“CDG also provides technical
assistance to help houses of worship
move from the grant to a line of credit
that can spur affordable housing projects.
We also introduce them to established
contractors or show them how to apply
for governmental assistance,” Davis said.
For example, CDG Texas gave
the Pyramid Community Development
Corporation, a non-profit builder associated with the Windsor Village United
Methodist Church in Houston, and its
pastor, Kirbyjon Caldwell, a CDG loan
to purchase a 200-acre site to build 462
houses. So far, 320 homes have been
constructed. “We also provided technical
assistance on putting the project together,”
Davis said.
Part of CDG’s Mission:
Strengthening the communities
“CDG Texas is always seeking
innovative projects that respond to
community needs. When you help
houses of worship and small businesses
expand, you strengthen the community,”
Celli noted.
W
hen the recently launched
non-profit Korean
American Community
Foundation required
technical assistance developing its grants
program, it turned to Wingson Wong,
the Queens, Long Island, Streetbanker.
In a meeting with foundation
members, Wong explained the guidelines
for the J.P. Morgan Chase Foundation and
described the latest philanthropic trends
for foundations that focus on immigrants.
He also provided expertise on how to
review and evaluate grant proposals, as well
as prioritize and design program objectives,
and noted the importance of making site
visits to grantees. “I stressed that smaller
nonprofits need to develop flexible criteria
when issuing grants,” he said.
Wong spends much of his day and
often his nights meeting with community,
civic and political leaders, a host of non-
Streetbankers connect individuals
and organizations with the resources and
services of JPMorgan Chase, as well as
other resources in the community they
may not be aware of. Assistance can involve
obtaining sponsorship money, issuing a
grant, or offering technical resources.
profit organizations, chambers of
commerce and cultural associations.
Streetbankers connect individuals and
organizations with the resources and services of JPMorgan Chase, as well as other
resources in the community they may not
be aware of. Assistance can involve obtaining sponsorship money, issuing a grant, or
offering technical resources. “Offering
client service is what Streetbankers specialize
in,” Wong said.
Though the situation with the
Korean American Community
Foundation didn’t warrant a loan or
grant from CDG, Wong’s assistance was
consistent with CDG’s mission. “If CDG
can help a non-profit organization build
consensus with an important immigrant
14
community, that effort helps strengthen
the community. Strengthening the
community is at the core of what
Streetbankers do,” he said.
“Wong provided a wealth of background information on setting up an
application process, devising both
objective and subjective standards, and
streamlining the grant-issuing process,”
said Robin Moon, who handles funds
distribution at the Korean American
Community Foundation. “Wong’s advice
will help us set criteria for issuing
grants,” she added.
Technical assistance offered by
Wong and other JPMorgan Chase
Streetbankers includes helping nonprofits
with strategic planning, fund raising,
budget planning and grant writing. For
example, Wong recently met with the
New York City Council staff to discuss
launching a financial literacy program.
He later met with the Urban League of
Long Island regarding construction of its
new community center. Like the other
Streetbankers, Wong serves on the boards
of several organizations, including the
Queens Botanical Gardens, Queens
County Overall Economic Development
Corporation and Jamaica Center for Arts
& Learning.
What does it take for a Streetbanker
to offer customer service? “Bottom line is
we listen to our community partners.
Streetbankers listen to get a handle on what
the partner needs, and how we can connect
the partner to services at JPMorgan Chase
or other community resources to create
win/win situations,” he said.
For example, when the non-profit
Long Island City Business Development
Corporation was planning a Feb. 13
networking breakfast for 150 members at
the Tennisport Restaurant in Long Island
City, Dan Miner, its deputy director of
business services, asked Wong and Tom
Seery of Small Business Financial Services
for assistance. Wong immediately said,
“This is something that JPMorgan Chase
wants to be involved in.” He arranged for
funding and also arranged, through Tom
Seery, to have Rebecca Patterson, a
JPMorgan Chase Economist, as an expert
to discuss the outlook for the U.S. and
CONTACT US:
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jpmorganchase.com/CDG
In the Community is published by the
JPMorgan Chase Community Development Group
EDITORS
Courtney Brooke Smith
VP Communications
John M. Imperiale
SVP Community Relations
WRITER
Gary Stern
COPY EDITOR
Miller Communications Inc.
Peg’s Point
DESIGN & PRODUCTION
Ellie Cashman
Ruder Finn Printing Services
Questions and comments
can be directed to
[email protected]
© 2003 J.P. Morgan Chase & Co.
Photographers:
Gerald Grimes, Grimes, Photography;
Roger Salls Photography;
Noren Trotman, Trotman Group Inc.
global economy in 2003. “She was a
terrific speaker,” noted Miner.
“This was an opportunity to help
the LIC Business Development
Corporation assist its business partners,
and have local branch managers and staff
of Small Business Financial Services meet
key business leaders of Queens. It was
beneficial to all parties,” Wong said.
Wong understands the needs of his
divergent constituencies, businesses and
nonprofits. “He has been extraordinarily
proactive in making these events possible and understanding the needs of
small and large businesses. I also know
he has the educational background to
deal with non-profit organizations, so he
understands their needs as well. He
encourages businesses and nonprofits to
cooperate to support the community,”
Miner said.
“Everything that Streetbankers do
revolves around strengthening the community. Streetbankers are dedicated to
customer service that educates people
and brings the firm’s resources to the
community,” Wong said.