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Public Meeting Transcripts

Public Meeting Regarding Citicorp and Travelers Group

Thursday, June 25, 1998

Transcript of Panel Sixteen

 
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  11               MR. LONEY:  Thank you, Mr. Warns.

  12               We are going to have to do a little

  13     adjusting on the schedule so if you can bear

  14     with us.  Do we have any questions?

  15               We thank you very much for coming.

  16               As I understand it the panel that was

  17     scheduled to be here at 5:15, an ACORN panel,

  18     has decided not to appear.  We have a couple of

  19     folks from -- Mr. Warns was actually scheduled

  20     on the 16 panel -- we have a couple of other

  21     folks Maria Rosado and Donna Panton, who are

  22     here from the panel 16, so using the

  23     prerogative of the chair I guess I will ask

  24     that those two come forward.

  25               We can hear from them now, and then



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   2     maybe there is only one other person from that

   3     panel, and we can see if he arrived later.

   4     Ms. Rosado and Panton, if you would come

   5     forward.

   6               MR. LONEY:  Ms. Rosado are you ready?

   7               MS. ROSADO:  Yes. My name is Maria

   8     Rosado and I am the president of MHR

   9     Management, a real estate management company

  10     based in Williamsburg, Brooklyn.  I'm here to

  11     speak on behalf of the proposed merger of

  12     Citicorp and Travelers Group.

  13               My testimony is based on my

  14     experience with Citibank's community

  15     development and their commitment to the

  16     neighborhoods where we manage low and moderate

  17     income properties.

  18               Through the NEP program we were able

  19     to borrow $10 million from Citibank to renovate

  20     12 buildings in Bedford-Stuyvesant.  We have

  21     already completed seven buildings, and are

  22     preparing to initiate phase two of this

  23     restoration work.

  24               Although the venture is modest, it is

  25     one of many projects that are necessary to



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   2     revitalize the well being of an important

   3     community.

   4               Many families for the first time see

   5     the reality of investment in the metamorphosis

   6     of their apartments, their homes and their

   7     neighborhood.

   8               It is tangible evidence of the

   9     commitment already made, and suggests a

  10     grander, more stable future for communities

  11     already following this dynamic duo.

  12               Everyone benefits from an enlightened

  13     acquaintance.  Investment, loans, insurance,

  14     and financial reeducation will follow a natural

  15     progression from those already persuaded.  And,

  16     just as surely, as a new home engenders real

  17     hope, conservation, and commitment, an educated

  18     partner will see the need for savings,

  19     insurance, and reinvestment in and beyond their

  20     self interests.

  21               This merger I believe will put all

  22     the needed tools for financial establishment

  23     within the reach of communities previously

  24     undernourished in this area.  It is only right

  25     that we have an opportunity to learn from the



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   2     biggest and the best.  Thank you.

   3               MR. LONEY:  Thank you, Ms. Rosado.

   4   Ms. Panton.

   5               MS. PANTON:  I am Donna Panton,

   6     executive director of the Nonprofit Connection.

   7     The Nonprofit Connection provides management

   8     assistance to nonprofit, community based

   9     organizations throughout New York.

  10               For the past 21 years we have worked

  11     with these nonprofits to improve their

  12     administration and operations in order to

  13     enhance the effectiveness of their services.

  14     Citibank has supported our work since 1997 with

  15     grants totalling $125,000.

  16               Since our clients are the human

  17     service, arts and communities development

  18     organizations that build and strengthen the

  19     communities and neighborhoods of New York City,

  20     the goal of my statement today is to present

  21     three partnership initiatives that the

  22     Nonprofit Connection has undertaken with

  23     Citibank's support, and to urge that these

  24     programs be strengthened should the merger be

  25     approved.



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   2               First:  Citibank has helped the

   3     Nonprofit Connection to expand the services we

   4     provide in the boroughs of Queens and Staten

   5     Island, boroughs that historically have been

   6     underserved by foundations and corporate

   7     funders.

   8               Citibank funded us directly to

   9     provide workshops and technical assistance and

  10     also gave grants to the organizations

  11     themselves to pay for technical assistance, and

  12     gave grants to the organizations themselves to

  13     pay for technical assistance services to

  14     improve fund raising, board development,

  15     financial management, strategic planning,

  16     programs and other area of operation.

  17               Second:  In 1993 and 1995, Citibank

  18     funded two series of planning workshops for

  19     senior managers of community-based

  20     organizations funded by the bank.

  21               Many of these groups had never

  22     planned their programs and operations and these

  23     workshops helped them to understand the process

  24     and to apply strategy to increase effectiveness

  25     of their programs and strengthen their



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   2     positions vis-a-vis the funding community.

   3               Third:  Since 1996, the Nonprofit

   4     Connection has received funding to conduct the

   5     Citibank Community Development Institute, a

   6     five-month course aimed at helping community

   7     development corporations strengthening their

   8     sustainability by developing their internal

   9     capacity and putting together economic

  10     development projects.

  11               As you know CDCs play a crucial role

  12     in community revitalization and in the creation

  13     of opportunity for businesses and low income

  14     residents.

  15               Specifically, the institute helped

  16     these CDCs to review needs of their

  17     constituents, strengthen staffing and

  18     administrative procedures to refocus programs,

  19     utilize market analysis and create market and

  20     planning to maximize the potential of the

  21     success of new initiatives and to prepare and

  22     submit economic development projects for

  23     financing.

  24               Twenty-five CDCs have participated in

  25     three separate Institutes conducted for



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   2     organizations from Brooklyn, from Queens and

   3     Staten Island, and from the Bronx and upper

   4     Manhattan which is currently under way.

   5               As a direct result of this

   6     participation, eight CDCs have raised over 1.5

   7     million dollars from private and public sources

   8     to support new administrative and program

   9     initiatives.  We are discussing with Citibank

  10     the possibility of extending the program to

  11     Westchester County in the fall.

  12               Specific economic development

  13     projects created or refined through the

  14     Institute include merchant organizing,

  15     commercial and retail strip development, advice

  16     and incubator services for small businesses;

  17     increased access to credit and capital for

  18     local businesses and home buyers, and the

  19     development of for-profit ventures including, a

  20     funeral parlor, a book store, a residential

  21     weatherization business, thrift shops, home

  22     health care services and food service delivery.

  23               In addition, the CDCs were able to

  24     strengthen relationships with Citibank.  Four

  25     of the Brooklyn groups were awarded first round



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   2     grants in Citibank's Partners in Partners in

   3     Progress program which provide substantial

   4     funding for economic development projects.

   5               A number of other groups developed

   6     new relationships with community relations

   7     officers that helped them to access Citibank

   8     funding for the first time.  Benefits also

   9     accrued to Citibank itself.

  10               Staff from the foundation and the

  11     community development and loan departments

  12     served as speakers and advisers.  Branch

  13     managers, loan officers and mortgage analysts

  14     had an opportunity to meet with people involved

  15     in community building and learn about the work

  16     of the CDCs.

  17               In closing, let me say that Citibank

  18     has had considerable impact on community

  19     development initiatives in New York City

  20     through its support of CDCs, community

  21     development financial institutions; arts,

  22     educational and human service organizations;

  23     and of technical assistance providers like the

  24     Nonprofit Connection.

  25               We hope that the new corporate



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   2     entity, if it is realized, will expand this

   3     commitment to community building, particularly

   4     here in New York.  Thank you.

   5               MR. LONEY:  Thank you, Ms. Panton.

   6     Is there any question?

   7               Folks, if not, we will thank you very

   8     much for your participation today.

   9               Let me ask is Mr. Kiernan here?

  10               Mr. Kiernan is scheduled for 6 p.m.

  11     and he's the last person that I understand is

  12     to testify.  He is on his way.  We will wait

  13     for him to hear from Mr. Kiernan, and we'll be

  14     in recess until he arrives.

  15               (Recess)

  16

  17               MR. LONEY:  Mr. Kiernan.

  18               MR. KIERNAN:  Good evening and thank

  19     you for waiting.

  20               My name is Peter Kiernan and I'm

  21     chairman of the Brooklyn Sports Foundation.

  22     That's the capacity I have testified here

  23     tonight, and I'm very grateful for this

  24     opportunity.

  25               My testimony is about Citicorp and



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   2     the very positive and significant and generous

   3     contributions Citicorp has made in respect of

   4     the Brooklyn Sports Foundation.

   5               The foundation is duly organized

   6     501(c)(3) not-for-profit foundation.  It's

   7     fundamental purposes are to address and solve,

   8     the lamentable dearth of amateur sports

   9     facilities in Brooklyn.

  10               As you know, Brooklyn has more than

  11     2.3 million residents, a school-age population

  12     of nearly 500,00 kids, but its sports

  13     facilities are completely inadequate.

  14               For example, there are more than one

  15     hundred thousand kids per outdoor track in

  16     Brooklyn, and there is only one indoor track,

  17     and you have about 500,000 kids for that track.

  18     That doesn't leave a lot of room to run.

  19               I mean some of the other data is even

  20     more discouraging.  25,000 kids per ball field,

  21     nine thousand kids per gymnasium.

  22               Organized sports in our belief plays

  23     a key role in nurturing, in socialization, in

  24     education and in building healthy bodies and a

  25     healthy society.  Learning how to play by the



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   2     rules, learning how to set goals and how to

   3     measure progress against those goals and

   4     learning how to win, and learning how to lose

   5     are among life's most important lessons.

   6     Society has the obligation and the need to

   7     provide the opportunities for such lessons to

   8     be taught and experienced.

   9               The Foundation, predicated on the

  10     belief that sports can be an antidote to racism

  11     and crime began a sustained effort about 1987

  12     to maximize the opportunity for Brooklyn's

  13     youth and really the city's youths to

  14     participate in organized sports and I am

  15     pleased to report today that the final design

  16     is under way for a sport complex known as

  17     Sportsplex.

  18               It will be located in Coney Island.

  19     It will have several buildings, but it will

  20     feature an arena that will seat 12,500 and

  21     currently the largest public assembly space in

  22     Brooklyn is 2,500.  The Foundation will be the

  23     developer and operator of that and it is fully

  24     funded.

  25               In this effort to achieve what has



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   2     been achieved the Foundation has enjoyed the

   3     support and the participation of Brooklyn's

   4     business, academics, religious, athletic

   5     communities, but none of the foundation's

   6     support has exceeded that of the support

   7     provided by Citicorp, both in terms of

   8     financial contributions, personnel, time and

   9     talent, and its reputational stake.

  10               Sportsplex will be located in Coney

  11     Island, and there is a variety of reasons for

  12     that, not the least of which is that was once

  13     was a world famous location synonymous with New

  14     York City, and symbolizing an era of

  15     recreation, fun and harmony has become a dreary

  16     example of abandonment and decay and urban

  17     segregation.

  18               Citicorp in its role as providing

  19     members of our board and guidance and

  20     participating in all of our activities,

  21     Citicorp recognized that while Brooklyn

  22     desperately needs sports facilities, it also

  23     needs economic development.

  24               It was Citicorp that recognized that

  25     Coney Island is not simply a vestige of a



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   2     forgone economic era, an era made obsolete by

   3     air conditioning and interstate highways;

   4     rather, Coney Island is the choice repository

   5     of economic opportunity, because Coney Island

   6     has land, it has transportation, it has human

   7     resources and it has a tradition of

   8     entrepreneurship, and Citicorp prominently

   9     associated itself with the determined effort to

  10     demonstrate that public capital funding of a

  11     sports complex on public land in Coney Island

  12     will generate private economic development on

  13     ancillary private land.

  14               Citicorp prominently committed itself

  15     to the notion that development of what will be

  16     an adjunct to New York City's education

  17     infrastructure, because the primary users will

  18     be the Board of Education, board of higher

  19     education, that the development of an adjunct

  20     to the city's education infrastructure can be

  21     good economics and conversely that good

  22     economic development can be very wise education

  23     policy.

  24               Since 1997 the state and City of New

  25     York have pledged more than $70 million in cash



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   2     and land to Sportsplex.  Ancillary private

   3     commercial development of one hundred million

   4     dollars has been announced, and an additional

   5     $20 million for a minor league baseball stadium

   6     in what is now to be a revitalized Coney Island

   7     was just approved by the City Council.  It's

   8     part of the mayor's budget.

   9               More than 25 million dollars in

  10     direct tax revenue has been forecast to result

  11     from this economic activity, and that's not to

  12     mention the good that will be done for those

  13     who have the opportunity to participate.

  14     Hundreds of permanent jobs are going to be

  15     created.  A major expansion of the subway in

  16     Coney Island has now entered the final planning

  17     stage and you all this has been given impetus

  18     by Sportsplex.

  19               To Coney Island what this infusion of

  20     new activity will be, it will be to the early

  21     21st century what the amusement parks in Coney

  22     Island were to the early 20th century.  It's

  23     going to bring life and excitement back to a

  24     world famous place.

  25               Citicorp continues to assist this



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   2     effort broadly, and in so doing, in my view, it

   3     gives definition to the phrase corporate

   4     citizen.  The Citicorp gave and gives far more

   5     than just money, and a gave a lot of that,

   6     facilities, the use of its offices and

   7     equipment, it gives more than that.  It gave

   8     more than just the talent that it provided and

   9     the talent it provided in terms of individuals

  10     on our board and in our committees has been

  11     very considerable, but in addition it gave the

  12     weight of its credibility and its commitment to

  13     a proactive public policy.  And Citicorp has

  14     never asked for anything in return.

  15               If I could just add one last anecdote

  16     that I didn't write -- it's not in the written

  17     statement.  We were seeking for several years

  18     state legislation for the funding or the public

  19     funding of the capital cost of Sportsplex in

  20     1995, legislation permitting that passed both

  21     the Assembly and the Senate, but it didn't

  22     become a law because there was a single

  23     difference in the two versions.

  24               The difference was that in the Senate

  25     the sponsor in the Senate had deleted the



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   2     affirmative action requirement.  Now we decided

   3     that, it was deliberately done to create a

   4     controversy and to call into question

   5     affirmative action, which was beginning to be

   6     the subject of a national debate, particularly

   7     with the Supreme Court decision that made

   8     headlines in every newspaper in the country,

   9     but affirmative action policy was the law of

  10     New York State, and we didn't think that it was

  11     right to try to change it in Brooklyn, on a

  12     single example of Brooklyn, probably the most

  13     diverse county in the United States, a county

  14     where 93 languages are spoken.

  15               So we decided to fight that, and

  16     every major corporation on our board to their

  17     credit stuck with us on that fight.  But I

  18     think I should salute Citicorp in this regard,

  19     because they never strayed from that fight,

  20     were very prominent in it, and it was simply a

  21     matter of social justice.

  22               But, like a lot of the other

  23     corporations, they had a legislative agenda.

  24     Banks are regulated and banks have laws they

  25     want to get passed all the time by the state



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                                                                429
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   2     legislature.  And they stood up in this case in

   3     the State Senate for what they believed was

   4     right and it had a happy ending and I think for

   5     that they should be saluted as well and I thank

   6     for your attention.

   7               MR. LONEY:  I'd like to ask you one

   8     thing, again, showing my ignorance.  Where is

   9     Coney Island exactly, and what is there now?

  10               (Laughter)

  11               MR. KIERNAN:  Coney Island is in

  12     Brooklyn.  It's on the eastern shore of

  13     Brooklyn obviously on the Atlantic Ocean.  It's

  14     on sort of a peninsula.  As you may know what

  15     used to be there were thriving amusement parks.

  16               MR. LONEY:  Right, I've heard of

  17     that.

  18               MR. KIERNAN:  Those amusement parks

  19     are still there, but most of them are closed.

  20     It has public housing and some very

  21     deteriorated housing stock.  It has a lot of

  22     vacant land.  It has fields that are growing

  23     weeds.  It has maybe in the summertime it still

  24     can have a taste of its past glory when maybe

  25     300,000 people will come to the beaches, but in



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   2     the wintertime it's a very dark and dreary

   3     place.

   4               MR. LONEY:  You're thinking there is

   5     a market here for minor league baseball?

   6               MR. KIERNAN:  Well, the Brooklyn

   7     Sports Foundation which I'm representing is not

   8     advocating professional sports.  It's

   9     advocating amateur sports, but because the

  10     commitment was made by both the state and the

  11     city, the city is putting 37 million dollars

  12     and the state is putting up 30 million dollars

  13     and the land and services worth much more than

  14     that, because they made the commitment to build

  15     the sports complex for amateur sports.

  16               The Mets in conjunction with the

  17     Mayor decided they would put a minor league

  18     baseball stadium there that they believe there

  19     is a market there and the point I was trying to

  20     make is the Sportsplex has given impetus to

  21     other economic development, and that includes a

  22     hundred million dollars of private development

  23     which is primarily going to feature

  24     entertainment, 21st century kind of

  25     entertainment, movie theater, virtually reality



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   2     centers and high tech feature entertainment and

   3     entertainment retail and the developers and the

   4     tenants of those developers that are putting

   5     up, making that commitment obviously were in

   6     the market and, again, that was given impetus

   7     by the fact that they were able to generate a

   8     public investment of more than $70 million and

   9     we had always looked at Sportsplex as an

  10     education project with economic development

  11     dimension, and Citibank in their participations

  12     with us urged us to look at it as an economic

  13     development project with very good education

  14     benefits and dimension and that's what turned

  15     the trick.

  16               That's what really got the public

  17     support.  And it was their leadership, in part

  18     with some other major corporations, their

  19     leadership that attracted the real business

  20     support of the Brooklyn business community

  21     which is considerable.

  22               MR. LONEY:  Are there any other

  23     questions?  If not, I will thank you for

  24     coming.

  25               MR. KIERNAN:  Thank you.



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   2               MR. LONEY:  I believe we are finished

   3     with the prepared agenda.  The only question is

   4     whether there is anybody going to make use of

   5     the open mic.

   6               So we go into recess until somebody

   7     comes and asks for the open mic or a decent

   8     interval passes without anybody asking for the

   9     mic.

  10               (Recess)

  11               MR. LONEY:  We are hereby adjourned

  12     for the evening.  We'll see you here at 8

  13     o'clock tomorrow.

  14               (Adjourned)
Last update: December 3, 2010