Money Pit

Ten years, $200 million, and one heck of a political headache: Minneapolisís grand plan for neighborhood revitalization enters the home stretch.

Some have argued that given the way the program was set up, an emphasis on homeowner-friendly projects was inevitable. A 1994 study by Ed Goetz and Mara Sidney of the University of Minnesota's Center for Urban and Regional Affairs concluded that the NRP "exacerbates the bias in citizen participation toward middle class, white, property owner participation....The organizations that emerge from the NRP process are likely to be dominated by homeowners and land entrepreneurs--even in neighborhoods that are overwhelmingly renter and significantly low-income."

For some neighborhoods the strain of balancing competing interests--and of managing the sudden influx of NRP dollars--proved too much. In 1992 the Whittier Alliance almost collapsed after a contentious board election pitted homeowners against advocates of low-income housing. Six years later the People of Phillips organization was dissolved after several audits found widespread financial mismanagement.

Miller acknowledges that handing control to neighborhoods has not always produced spectacular results. But on balance, he maintains, grassroots groups have shown themselves better able to manage a buck than the average politician.

"I've had very few projects that haven't had cost overruns when they've been done by an agency," he notes. "But you know what? I haven't had a single neighborhood--not one--come to me and ask for more money than was in their plan allocation. Not a single neighborhood has come in here and asked for more money than they were originally approved for."

"When they get a contract for $20,000," says Miller with a touch of amazement, "they treat it like it's a contract for $10 million. They work within the level of resources that they already have. That's a level of discipline that the city and other agencies could benefit from."

 

Of course, compared with the city's big development deals, the NRP doesn't have all that much money to spend. The budget for the expansion now under way at the Minneapolis Convention Center, for instance, stands at $207.7 million, almost as much as the NRP allocated citywide in its first decade. And the recently approved Block E complex includes $39.1 million in public money--enough to fund two entire years of NRP operations and programs.

Some have argued that the comparatively limited funding set the program up to fail--or at least to be perceived to have failed. While the NRP had been sold as "a panacea for urban problems," noted a 1995 study by the Center for Urban Policy Research at Rutgers University, truly making a difference would require "more than handing out a relatively meager amount of money to the neighborhoods."

Still, some of the program's founders say they're disappointed with how the program has turned out. Tony Scallon, one of the primary architects of the NRP during his tenure on the city council in the Eighties, says he envisioned the endeavor as a way to fund substantial affordable-housing projects. "I didn't know the program stood for neighborhoods rehabbing their parks," says Scallon. "That isn't the program I voted for. It's positive in the sense that middle-class people get their parks; what's negative is that we have a housing crisis."

At the moment, no one seems to know for sure whether the NRP could be punished for missing numbers outlined in the state statute. With characteristic understatement, Miller says that "it is unclear whether there is a penalty for not complying."

Ann Berget, a former member of the Minneapolis Board of Education who spent seven years on the NRP Policy Board, says the recent discussion of affordable housing reminds her of a 1995 plan pushed by Cherryhomes that would have taken $5 million a year from the NRP and directed the money to economic development projects to be overseen by the Minneapolis Community Development Agency (MCDA). Than plan died, Berget recalls, when the city realized that such a change would require the consent of all five participating jurisdictions. "I think the whole experience kind of chastened everyone," she concludes.

Berget further argues that those who criticize the NRP for not meeting its original goals are forgetting the program's history. "NRP was not designed to address citywide priorities," says Berget. "Some people now assess the program as if there was a blueprint for this whole community-building effort. There wasn't a blueprint; there was the practical equivalent of a sketch on the back of a napkin."

Moir, the city finance officer, contends that anyone who hoped that the NRP would solve the city's low-income-housing crisis was dreaming. "When you talk about the billions of dollars--I'm talking billions--we need to invest in our housing stock, NRP isn't going to make a big impact there," says Moir. "I think [the program's effect] is more psychological. If a neighborhood looks sharper and cleaner and brighter, that goes a long way towards making people feel better about the neighborhood and wanting to invest in the neighborhood."

Scallon, however, isn't satisfied. When the city set up the program, he argues, it laid down some pretty clear goals. But in the decade since, someone managed to insulate the neighborhoods from any pressure to comply. And Scallon has a pretty good idea who that was: "Bob's a great manager," he offers, "but he needs to learn to be able to set standards for the folks who are going to be getting the money. The problem came when no standards were applied."

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