Dr. Gloria Rodriguez
Meet Dr. Gloria Rodriguez. She is the founder and former CEO of AVANCE, a San Antonio-based nonprofit with a thirty-year track record of providing parent education to needy, low-income families in the poorest Latino communities of Texas and Los Angeles. It should go without saying that Dr. Rodriguez has long had a knack for seeing hope where others have not.
For example, in the early 1970s when she was just out of college, she took to knocking on doors in San Antonio's Mirasol housing project, a violent neighborhood ruled by Mexican gangs. She was concerned about school dropout rates and was searching for the mothers of infants to find a solution. Starting with her opening question ("Do you love your child?"), Rodriguez recruited dozens of moms – most of them high school drop outs – to join her weekly parenting classes. From her they not only learned the basics of brain development and early-childhood learning, but discovered community safety nets such as free health clinics. Though it took years for the statistics to prove it, her approach was a sound one; 91 percent of the women in her first class had never finished high school, yet 94 percent of their children graduated, with more than half going on to college.
It was that same ability to see potential amid despair that eventually led Dr. Rodriguez to a derelict building, again in one of San Antonio's worst neighborhoods. Her board chair had gone searching for a suitable home for AVANCE – one that would enable it to expand its programs and services while simultaneously eliminating hefty rental payments - and found and purchased the Heimann property, a shell of a building littered with mattresses from homeless squatters, graffiti, and missing floorboards. Built in 1907, the former hotel bespoke of the boom times in Cattleman Square when the railroad depot kept the area buzzing with travelers and commerce. The building was once the pride of the community with its wide balconies and modern construction, but the area declined quickly after World War II. An expressway cut the neighborhood off from downtown, an urban renewal program created vast empty lots, and by 1973, rail traffic at the nearby depot diminished to nothing.
The building was offered to AVANCE free of charge, and when Rodriguez saw it, she was filled with the same sense of purpose as when she had first met those young mothers in Mirasol in the 1970s. She adamantly believed that reinventing the building was the first step in reimagining this blighted neighborhood, just as empowering Latino women to advocate for their children was and still is the first step in breaking the chains of poverty.
"This building will always symbolize to me what AVANCE is about," Rodriguez said. "We go into the poorest neighborhoods where people are neglected and abandoned, and we see that there is potential there."
However, the task ahead was truly daunting. As a nonprofit with a mission of providing services to people, AVANCE's fundraising approaches revolved around compelling images of infants in graduation gowns. This was an entirely new challenge that led Rodriguez to different allies and partners, including the San Antonio Conservation Society, which put some of the first money into the project with a $100,000 donation. This kicked off an extensive fundraising campaign that engaged large foundations like The M.B & Edna Zale Foundation, The J.E. and L.E. Mabee Foundation, and The Kresge Foundation, as well as passersby on nearby street corners.
However, despite the success of the fundraising campaign, the project's rehabilitation costs kept rising, pushing the initial price tag of $1.8 million to more than $5 million. At the advisement of a colleague, Rodriguez explored yet another strange new world: Federal historic rehabilitation tax credits. This federal incentive for historic rehabilitation is worth 20 percent of the total rehab cost. It's considerable sum, butthe legal and accounting costs associated with its use are also significant. This leads many developers to forego the credits unless they are doing large projects with development costs exceeding $10 million. For nonprofits like AVANCE, the credits pose another complication: Because they don't pay taxes, the credit is useless to them.
This reality took AVANCE into a partnership with a subsidiary of the National Trust for Historic Preservation, a so-called tax credit syndicator. The National Trust Community Investment Corporation (NTCIC) partners with corporate investors like Bank of America and US Bank that do pay taxes, and thus can use the credits to lower their tax liability. NTCIC has access to capital from these investors that it uses to essentially buy credits from entities that either can't use them or that prefer the equity infusion during construction rather than at the time that taxes are filed.
The result is a win-win-win scenario that promised Rodriguez essential equity in the project if the rehabilitation plan conformed to the Secretary of the Interior's Standards. This meant changing the construction plans to retain historic elements of the building. The heavy wood beams in the ceiling that had been headed for the salvage yard, for example, needed to stay. These changes to the blueprints added to the building's costs, as did the lawyers and the CPA who reviewed all the closing documents. But the work was rewarded with an $825,000 equity investment from NTCIC that included New Markets Tax Credit (NMTC) equity. This federal incentive is available to real estate development projects in qualifying low-income census tracts. The additional equity from the NMTC was truly critical, and Rodriguez speculates that her project simply would not have been feasible without it.
The result of this effort? For starters, the rehabilitation of the Heinmann property into a hub for AVANCE's operations and parent/child programs created or retained 170 construction jobs, 37 permanent jobs, and generated an estimated $265,520 in local and state tax revenue.
It is through projects like this that we see firsthand how historic rehab projects produce more jobs and have a greater economic impact on the local economy than new construction. This fact cannot be overstated, given the current state of our nation's economy. Facilitating the use of credits like the New Market Tax Credit will ensure not only that developers can manage the higher costs of historic rehabs, but that the essential fabric of our nation's older and historic communities will remain intact.
One need only to look at Cattleman Square and the example set by Dr. Rodriguez to see why that fabric is so important.