Private-sector renewal: 'no' in Minneapolis, 'yes' in Toledo

A Minnesota consulting firm has found itself to be a prophet without honor in its own community. City Venture Corporation, which contracts with local governments to help revitalize decaying neighborhoods, ran into highly organized opposition last year when it attempted to rejuvenate the Elliot Park neighborhood in its hometown, Minneapolis.

In other cities, City Venture has had more success.

City Venture is the first company of its kind in the United States. Its 40 -member staff advises city governments on the wide range of federal programs and grants available for urban development, and helps obtain job commitments from the private sector. The firm then attempts to coordinate the tripod of city, private, and neighborhood interests into a partnership aimed at countering neighborhood blight.

But in Elliot Park, neighborhood groups were suspicious of City Venture's motives and eventually mustered the political support to defeat the project.

Nonetheless, the two-year-old company is proceeding optimistically with projects in Toledo, Ohio; Philadelphia; Baltimore; Charleston, S.C.; Miami; and Benton Harbor, Mich., and City Venture spokesmen say they are also working closely with New York Congressmen Robert Garcia (D) and Jack Kemp (R) in revising the proposed Urban Jobs and Enterprise Zone Act.

City Venture's president, Herb Trader, is also a vice-president of Control Data Corporation, which holds 35 percent of City Venture's stock. The next-largest stockholder is the Minneapolis Star & Tribune Company, with 171/2 percent. Other investors are the Dayton-Hudson Corporation, Honeywell Inc., Reynolds Metals Corporation, the United Church of Christ, and the American Lutheran Church, among others.

This unusual conglomerate of business and religious interests, Initially capitalized at $3 million, was the brainchild of Control Data's chief executive officer, William Norris. Mr. Norris has repeatedly stressed that society's ills should be addressed by the private sector as potentially profitable business opportunities.

The notion that a consortium of business interests could ease the plight of inner Minneapolis came from Otto Silha, chairman of the Star & Tribune Company. He found in Mr. Norris the philosophical agreement and practical wherewithal necessary to carry out such a project.

The two Minnesota executives had already taken part in another cooperative undertaking. With some of the other investors in City Venture Corporation, but under the title Industry Square Development Company, they bought and donated land for a new domed stadium in downtown Minneapolis, a few blocks from the Star & Tribune Company's publishing headquarters.

The inner-city location of the new stadium generated considerable controversy. But City Venture investors expected little resistance to a plan to redevelop the Elliot Park neighborhood, next to the proposed sports center.

They were wrong.''Several things went wrong,'' says the Rev. Keith Olstad, pastor of Our Savior's Lutheran Church and an outspoken leader of neighborhood opposition. ''City Venture did not take seriously citizen participation. In Toledo, neighborhood representatives were involved in the Warren-Sherman urban renewal project long before City Venture's help was enlisted. But Wayman Palmer, director of Community Development for the City of Toledo, says that City Venture brought an extra ingredient into the plans for the Warren-Sherman neighborhood.''It was City Venture's idea to have a job-creating base right in the neighborhood,'' he says, noting that Toledo is now well on its way to creating just such an industrial park.Altogether, $52 million has been committed to the Warren-Sherman project, $43 million from the private sector, and $9 million from the city and federal government. In a letter to President Reagan, Ohio Gov. James A. Rhodes has called Warren-Sherman a prime example of the potential for returning an inner city to the economic mainstream.Low incomes, high unemployment, a high crime rate, and a low rate of home ownership once marked the lives of some 3,500 residents within this 300-acre area on the west side of downtown Toledo.Then the Toledo Trust Company decided to build a new four-story, $15 million administrative office building nearby.Unlike the domed stadium case in Minneapolis, Toledo Trust and the city's planning agencies immediately brought in representatives of the Warren-Sherman neighborhood for the urban renewal process. In fact, the president of the Warren-Sherman neighborhood council works directly with City Venture officials in temporary offices at the neighborhood recreation center.Also unlike Minneapolis, Toledo's Warren-Sherman area is being rebuilt, with a shopping center, park, law office complex, neighborhood center, and industrial park.''The Reagan administration would have to look long and hard to find another urban renewal project that is working out as well,'' says Mr. Palmer. And Governor Rhodes has suggested to President Reagan that Warren-Sherman be considered a national model in efforts to pass enterprise zone legislation.First introduced in Congress in 1980, the Urban Jobs and Enterprise Zone Act is expected by City Venture officials to be high on the list of national priorities when the next Congress convenes, although not without certain revisions.''The legislation should address the need for a comprehensive holistic plan,'' says Mr. Trader of Control Data, which draws upon City Venture's experiences. ''There must be investment security, a stable work force, a job base, and housing options.''Moreover, the legislation must provide incentive for the patient investor who expects no immediate return on capital, tax advantages for minority-owned businesses, and assistance for creating jobs, and job training, Trader says.He is consulting with the staffs of Mr. Kemp, Mr. Garcia, and Minnesota Sen. Rudy Boschwitz (R) in their efforts to revamp the proposed legislation. In the meantime, other City Venture officials now privately admit that they learned a broader lesson from the Minneapolis experience, a lesson that cannot be legislated.