The color of funding


“Economic disparity by race is perhaps the most significant problem facing Minneapolis today,” the city’s 1998 Empowerment Zone application warns. “People of color living in Minneapolis are impoverished at rates higher than any other city in the country.”

To drive the point home, then-director Kim Havey told a March 2003 EZ Executive Committee that Empowerment Zone initiatives “pay special attention to the needs of people of color.”

This is the third in a series of four articles on the Minneapolis Empowerment Zones. The ten-year Empowerment Zone program began in 1999, with grants to 15 large cities to attack poverty in specific zones with in the cities. There are large zones in north and south Minneapolis, as well as a small one in northeast that has had only one project built.

A year later, Havey found himself appearing at North Minneapolis community forums sponsored by the Urban League, defending himself and the EZ board against charges that most of the funding had gone to white-led organizations. Since its inception, the program has caused bitterness among some neighborhood activists, who say it hasn’t directly benefited the African-American communities it was intended to serve. The 2003 HUD audit and a series of articles in the Minnesota Spokesman-Recorder detailing community dissatisfaction pushed many of those in communities of color, especially in north Minneapolis, to organize for their share of empowerment zone funds.

By 2004 the dissent had coalesced into a series of community forums. Zach Metoyer, who played a role in organizing the forums, says the Empowerment Zone dollars caused a ripple effect by drawing matching funds from foundations and non-profits away from the city’s black community.

“You see what the crunch is on African-American based businesses and non-profit organizations,” said Metoyer. “How come they’re not getting the money they were supposed to get? Those funds are now being funneled into Empowerment Zone projects.”

The community forums drew the attention of Larry Blackwell, at that time serving as a Minneapolis Civil Rights Commission member. Blackwell helped spearhead a Civil Rights Commission subcommittee to investigate charges of racial bias in the awarding of EZ funds. The subcommittee spent months trying to uncover basic information on how EZ board decisions were made and what ties board members had to the projects that received funding, but quickly ran into resistance at both the city and federal levels.

A Freedom of Information Act request filed by the subcommittee seeking details on how the Empowerment Zone had changed its data-gathering policies to comply with the federal audit got a response from HUD with large portions of text censored.

In Minneapolis, new Empowerment Zone director Jonathan Palmer told Blackwell that the Civil Rights Commission was free to sift through EZ documents, but that he wouldn’t be sending them the requested information. Blackwell and another committee member finally showed up at the EZ office themselves to find a mountain of files that took their volunteer staff several months to decode and condense into a report.

In October 2005 the subcommittee finally released a report on their investigation to the entire Civil Rights Commission. News of the results added more fuel to the mounting resentment against the Empowerment Zone. The subcommittee, using data garnered from the city’s planning department, broke down each EZ-funded project by race. The subcommittee report said that although the combined population of the north and south empowerment zones was 71.8% people of color, only 15.1% of the funds had gone towards organizations headed by a person of color. Mayor Rybak and council member Don Samuels (both of whom sit on the Empowerment Zone board) wrote a letter to the Civil Rights Commissioners, urging them to reject the subcommittee findings.

“The Empowerment Zone moved to reject the findings,” Blackwell recalls. “They lobbied the Civil Rights Commission and the Mayor not to accept the findings. Basically nothing has changed since then. Of course they’ve funded some organizations of color, but the extent that they have is so low that I’d call it discriminatory.”

Soon afterward, Blackwell’s term as an unpaid member of the Civil Rights Commission ended. Despite his years of experience as a civil rights attorney and willingness to continue to serve, he was not nominated for reappointment by Mayor Rybak. The experience has left a bitter taste in his mouth. He says there’s been talk of an anti-discrimination lawsuit against the city, but the cost of such an undertaking has kept efforts from getting off the ground. The Empowerment Zone, he concludes, is running on borrowed time.

“It’ll probably die a slow death from lack of funding,” he says.

After the investigation by the Civil Rights Commission, claims of discrimination continued to dog the Empowerment Zone. In 2005, a vacant lot reduction plan by a group called the African-American Alliance was rejected without ever reaching the EZ board for a vote. A 2005 letter by Charles Lutz, deputy CPED director and head of the Northside Redevelopment Initiative, says alliance members lacked the construction skills for the undertaking, and that their plan to provide preferential treatment to Black contractors and home-buyers “appears to conflict with federal and state anti-discrimination laws.”

In September 2007, Palmer requested that the board terminate its funding contract with Sabathani, a community center that supports the south Minneapolis black community, claiming that the organization failed to meet its contract agreements. Sabathani director Ernest Johnson declined to comment on the decision, saying only that “there had been some bad blood” between the two organizations.

The TC Daily Planet’s four-part series takes an in-depth look at the Minneapolis Empowerment Zone project. Next up: charges of cronyism.

Part 1 – Public money for private business: $78 million in bonding for a project that promises to employ seven Empowerment Zone residents.
Part 2 – Falling short—business development, housing, and job creation: Out of the money that has been awarded in the last nine years, the lion’s share has gone to development firms and large, established non-profits.
Part 3 – The color of funding: Since its inception, the program has caused bitterness among some neighborhood activists, who say it hasn’t directly benefited the African-American communities it was intended to serve.
Part 4 – All power to what people? Concerns over cronyism, accountability: While seven of the members selected by the City Council are required to be residents living inside the empowerment zone, many have questioned whether this truly amounts to community representation.