Public Meeting Regarding Citicorp and Travelers Group
Thursday, June 25, 1998
Transcript of Panel Sixteen
413
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
.
414
1
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
.
415
1
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
.
416
1
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.
.
417
1
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
.
418
1
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
.
419
1
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
.
420
1
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
.
421
1
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
.
422
1
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
.
423
1
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
.
424
1
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
.
425
1
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
.
426
1
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
.
427
1
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
.
428
1
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
.
429
1
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
.
430
1
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
.
431
1
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.
.
432
1
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)