How James Rouse shapes cities

Millionaire Maryland real estate developer James Wilson Rouse is credited by many with changing the face of America's urban landscape. He's best known as the father of such glittering downtown marketplaces as that at Boston's Faneuil Hall and Baltimore's Harborplace.

So what are he and his wife Patty doing climbing the stone steps of an old apartment building in a blighted black neighborhood on Chicago's West Side?

For the moment, they're stepping around the wet mops of several women washing down the steps as their ''sweat equity'' contribution to ownership in the cooperative, a rehabiliated apartment complex called Douglas Villa.

In a sense, Mr. Rouse, with shirt sleeves rolled up to beat the August heat, is checking on yet another of his many investments. But it is one with a distinctly long-term, indirect payoff. In his new second career, as chairman of the board of the Enterprise Foundation, which he founded in 1981, he oversees the dispensing of considerable sums in the form of loans, grants, and technical assistance to neighborhood groups working to improve housing opportunities for America's poor in 15 cities.

One of those recipients is Bethel Housing in Chicago's West Garfield area, which recently bought and spruced up Douglas Villa's 24 units, at a cost of $17, 000 per apartment. Leading the Rouses up the steps today is Bethel construction manager Kate Lane. Running a hand over a Villa bannister, she pronounces it ''scrubbed down and sanded,'' and asks if any of the mop-wielding women, clearly not expecting visitors, would be willing to show her apartment.

Janice Jones quickly props her mop against the wall and opens the door to the two-bedroom, first-floor apartment she shares with her two children for $195 a month. It is spotless - from the well-scrubbed kitchen floor to the carefully made beds. Janice beams with visible pride as the compliments pour in. She then tells how she carried her belongings down 15 flights of stairs to move here last December from a South Side public housing project where the elevator wasn't working.

As she loads the visitors back into Bethel's van, Mary Nelson, executive director of Bethel New Life Inc. (the housing group's Lutheran-affiliated parent organization), says has a waiting list of 500 more like Janice ''just desperate for a decent apartment.''

Over a cool glass of apple-grape juice back at Bethel's brick headquarters, a former YMCA, Rouse explains to a reporter what he really hopes to do in some of the nation's seediest neighborhoods and why he thinks it can be done.

He explains that the Enterprise Foundation's aim is to build, with the help of a field-officer team, a national network of neighborhood agencies. These agencies would not only inspire one another by example but also share techniques of finding low-cost financing and ways to reduce housing construction and rehabilitation costs. Much of the sharing takes place at an annual network conference in Maryland. ''There's no trade association for helping the poor, and many of these groups have felt they were all alone,'' says Rouse.

Such groups must not only be working to improve housing for poverty-level poor but also be actively trying to get the poor get back into the economic mainstream. Bethel, for instance, runs both an industrial sewing cooperative and a job placement service.

''We've got to help these organizations build their capacity as units of strength in the community,'' says Rouse, who frequently uses his hands for emphasis as he talks. ''Thinking in terms of supporting the poor is really insulting. Good compassion is helping find ways that the poor can climb out of poverty.''

The ''money factory'' for his foundation, he explains, is the Enterprise Development Company. Mr. Rouse is founder and chairman of the board. Like the Rouse Company, from which he resigned as chief executive officer in 1979, the new company develops real estate. But its office and retail projects tend to be in smaller cities such as Waterside in Norfolk, Va., and Portside in Toledo, Ohio. The company's profits, expected to reach $10 million a year by the 1990s, will be siphoned into the foundation's coffers. During the wait, Rouse has raised $15 million toward a $25 million goal from charitable sources and businesses.

''My going around and talking to the heads of companies in this field is not something they're accustomed to,'' he notes. ''There's a real corporate awareness gap when it comes to the poor and low-income housing.''

Rouse is eager to see neighborhood groups get funding from as many sources as possible. During a late lunch featuring chicken salad and home-grown Bethel vegetables, he urges executive director Mary Nelson to challenge the recent cancelation of a promised grant from another foundation. ''You give me the courage to be a little pushier than I was - I just cried,'' she says.

In many ways, the Rouses' joint interest in upgrading housing and neighborhoods has deep roots. Patty Rouse, who serves as secretary-treasurer of the foundation, was once a housing commissioner in Norfolk. She met her husband through mutual friends during a tennis match there 11 years ago.

Rouse, who considers his new career an extension rather than a switch, was a member of President Eisenhower's task force on housing programs and policies. He helped draft the urban renewal plan embraced in the Housing Act of 1954. He was an early supporter of open-housing and public-accommodation laws and has insisted in his real estate work that minorities play key roles both in construction and as tenants.

But the spark for the Rouses' more active current involvement with decaying neighborhoods took place a decade ago. Leaders of the ecumenical Church of the Savior in Washington, D.C., who wanted to buy and rehabilitate low-income housing in the city's run-down Adams-Morgan district, asked for Mr. Rouse's advice.

''I told them they were too little, and it would take a big government program,'' he recalls. ''It was standard advice in those days. Happily, they ignored it.''

Indeed, the group formed Jubilee Housing Inc., and finally convinced Mr. and Mrs. Rouse to serve on the group's advisory board and finance the purchase of two buildings. ''Their zeal and conviction and sense of mission were so compelling,'' he recalls. Jubilee's success in the years since, and Mr. Rouse's desire to see it serve as a model for other cities, were key factors in his decision to start the foundation and the new development company. The Enterprise Foundation's goal - to be in 50 cities by 1986 - is admittedly ambitious. Some would argue that even at best this effort can make only a small dent in an overwhelming national problem. But don't expect James Rouse to buy such reasoning. Supporters of cities simply do not come any more ebullient, committed, and optimistic.

''I think 10 years from now, the vitality of the American city will have taken a tremendous, measurable leap from what it is today,'' he says. After 30 to 40 years of decay, ''there's a new wheel of growth'' today.

A former elder in the Presbyterian church and a deeply religious man, he approaches urban problems with what appears to be a genuine sense of mission. But he insists his judgment is also practical. ''I'm motivated in this effort because there are poor people and there is bad housing and I think it's possible to do something about it. And as it is done ... it will occur to other people that other deep human needs can be similarly addressed.''

Rouse, after all, has spent much of his career bucking skepticism. His strong track record was built in the face of some considerable challenges.

He grew up as the youngest in a family of six in the shore town of Easton, Md. When he was only 16, his parents passed on within months of each other, and the local bank foreclosed on the family home. But in time - and he insists that he learned self-reliance from the experience - he enrolled in night classes at the University of Maryland law school. He worked by day for the Federal Housing Administration in Baltimore and as a car parker for a local garage to support his education. He was 25 when he and a friend borrowed $20,000 to begin the mortgage banking firm which evolved into the Rouse Company.

His willingness to take risks, but only after carefully calculating gain and loss possibilities, has largely paid off. He recalls now the extremely difficult time his company had in persuading banks to finance Boston's Faneuil Hall Marketplace and merchants to sign up for space. ''Everybody knew it would fail, '' he recalls. Convinced otherwise, Rouse and his colleagues pressed ahead. By the end of the first year, 10 million visitors had come. ''That experience,'' says Rouse, ''lit a lot of fires of hope around the country. Boston created a lot of believers.''

With Harborplace in Baltimore, the company faced opposition of another kind: There was widespread concern that it would destroy the city's inner harbor and undermine city neighborhoods. After a thorough airing of pros and cons, the issue was put to a referendum. Harborplace won. It is now widely regarded as a strong financial success.

''The day it opened, it became a place that was owned by the people of the city - you could feel it,'' says Rouse. ''It is just as much the center of the city for black people as for white people. ... Everybody feels comfortable.''

In Rouse's view, his business successes have stemmed in large part from a willingness to use corporate resources to try to meet human needs.

''If developers would try to discover what people in a city really need, they would make more money and do something important for the city at the same time, '' he says. ''When we went into Faneuil Hall and Harborplace, we felt there was a deep yearning among people for the center of the city to work, and that if we could find a way to recreate life and spirit and community - to make it work - people really wanted to be there.''

He says in a ''high-tech, cellophane-wrapper'' society, people are hungry for the kind of warmth, informality, color, texture, and fragrance they can find at such ''festival marketplaces.'' ''Our shopper surveys show that two-thirds of the people come to these places just to be there. Because they're there, they do shop and eat. But the fact that these kinds of places exist and succeed is because of the spirit rather than just the retailing function.''

It is the failure to recognize that social need and to embrace the city that Rouse says is responsible for the less-than-spectacular showing of Detroit's Renaissance Center:

''This is one of the most disastrous things that ever happened to the American city. To make a place of offices, hotels, and shops, and then create a virtual moat around it is really just saying, 'Come in here where you're safe, and stay away from the rest of the city.' ... Every one of these places should open its arms to the rest of the city, integrate with it, and add strength to it. The worst thing that can happen is to add to the disintegration of the center of the city.''

In many ways it is the ripple effect of his projects in both city hearts and neighborhoods that Rouse finds the most satisfying. Before Waterside, Norfolk, Va., was ''a very discouraged city with a ratty waterfront and not much of a downtown,'' he says. But the city has now built a new park, and the $14 million Rouse-built Waterside project is generally credited with spurring some $130 million in new construction in the area, he says.

''One activity has the power to reinforce another.'' And the effects can move from city to city, he says. ''People see other cities making progress and they wonder, 'Why can't we?' ''

Rouse, who speaks with a slight Southern accent, laughs easily and exudes warmth and easy enthusiasm.

''He's charismatic. And because he's been so successful in business, he brings a tremendous amount of credibility with him wherever he goes that helps us directly and indirectly,'' says Roslyn Block of the Cleveland Housing Network , one of the 25 groups in the Enterprise Foundation network.

The father of three grown children from a first marriage, Rouse says he and Patty spend much of their time on the road, looking in on Enterprise-connected projects or mapping new ones. They relax by taking in an occasional Baltimore Orioles game or heading for their cabin on the Eastern-shore island of Long Point, where Mr. Rouse may cook up anything from scrambled eggs to muskrat. ''It has a terrible name, but it's perfectly delicious.''

There are few signs that Rouse has been dazzled by his own business success. His home in Columbia, Md., a Rouse Company ''new town,'' is modest, and there is no chauffeured limousine. ''He drives me to the airport,'' says communications aide Caroline Miller. ''He's just a very low-key, unpretentious man.''

At the close of his day in Chicago, at a black-tie ceremony in a downtown hotel, Rouse is hailed as an ''urban visionary'' and ''entreprenurial genius'' by leaders of the American Society of Interior Designers, who present him with the group's Thomas Jefferson award. Clearly delighted but uncomfortable with too much personal praise (''my life never seemed to involve all those visionary attributes''), Rouse moves swiftly to tell the audience about the ''remarkable'' day he's just spent on the West Side.

''There's a new wave of awareness in American cities that they don't work the way they should, but that they can be made better,'' he concludes. ''We don't have to live with this national disgrace of poor people living in hovels all over our cities.''