“When things are not great in the best place, they’re worse in the worst place,” explained Michael Banner, president of the Los Angeles Local Development Corporation, a non-profit dedicated to financially enriching the county’s poor and distressed communities.
“Distressed communities have the baggage of trying to compete with [more affluent] communities for attention and resources. That’s a very difficult thing to do…”
But, not impossible as Banner and LAEDC members point out in their four-year economic development plans for L.A. County. The plan includes strategies for creating a more educated work force and a business friendly environment. These and other issues such as, up-to-date infrastructure, smart land use and attractive quality of life are how communities increase their cash flow.
The problem he said, lies in a term he coined called LIFO, that is “last in, first out.”
“Low income communities are the last places money shows up and they are the first places it leaves,” Banner explained.
“In the 90s there weren’t a lot of financial resources. As money became more abundant (in the 2000s) more money started to show up in these low -income communities. There was more money to be put to use and my organization benefited from that.
“Now that we’re in an [economic] downturn that’s the first place the money left. So, it was like a faucet being on and now it’s turned off. And, not only is it turned off, they put locks on the knobs so you can’t turn it.”
What LAEDC wants potential investors to understand, is that putting their money in low-income communities will give them a return, it will just take a little bit longer. It’s about what he calls having “patient capital.” It’s also about long-term goals.
One of those goals is preventing something like the Watts riots in the 60s and the L.A. riots in the 90s (Banner having experienced both) from ever happening again.
“I know what the outcomes are like after that. I know what happens when the communities are burned down. They never come back,” He said.
When communities don’t come back, the consequences can permeate surrounding areas.
Those consequences include reduced quality of life, disinvestment and a corroding economic environment that undermines job growth, said LAEDC.
A native of Watts, Banner has been involved in finance his entire professional life. He started in banking where he learned everything from opening a checking account to approving multi-million dollar loans. From there he became a consultant for the City of Los Angeles Community Development Department.
“During that five- year period I helped train their staff to underwrite and analyze financial transactions. I helped to design a public finance bond program. I was targeted to help manufacturers expand and create jobs,” Banner said.
In 1992 Banner decided to return to banking.
“I had accepted a job to go to work in Home Savings and Loan,” he recalled.
Banner turned on his car radio that Friday after leaving the job interview and listened to the news of a man being beaten and dragged out of his truck on the corner of Florence and Normandie. It was the beginning of an escalating “civil disturbance.” It took him back to Watts, age 11, where he saw people rioting and destroying his neighborhood as police looked on.
“The [interviewer] called me on Sunday and asked, ‘Did you get home okay?’ I said, ‘Yeah I made it home okay but I got some bad news for you.’ He said, ‘What do you mean?’
“I said, ‘I think that I’m going to turn down the job and I’m going to see if I can do something that helps with changing the kind of environment that causes people to feel like they have to take these kinds of actions.’”
In 1995 then L.A. Mayor Richard Riordan asked Banner to head up LAEDC, which was actually started in 1980 but was not active and not being run by anyone. He was the first.
Banner used everything he learned from banking to help LAEDC make major improvements in some of the city’s poorest areas. Some of his major accomplishments include: the Social Security Building on Crenshaw and Coliseum, the Employment Development Department on 54th and Crenshaw and the Asian American Drug Abuse Headquarters on 28th and Crenshaw. He has also helped numerous minority- owned small businesses get off the ground.
Visit www.laedc.org to read the L.A. County Strategic Plan for Economic Development and for more information about LAEDC.