“This is a far cry from the CDC West Bankers formed many years ago,” says Joan Scully, a vocal critic of the West Bank Community Development Corporation. “The CDC is no longer a community organization. They’re here to fleece the poor … again.”

Scully’s comments emerge from a dispute around the WBCDC’s Transitions Homes Program, the latest skirmish in a larger conflict related to the WBCDC’s housing interests. The program, initiated after a neighborhood survey found home ownership to be a top priority among co-op renters, offers Scully and 17 other housing co-op residents the chance to purchase the homes or duplex units they currently rent.
Scully and other program participants’ complaint that the program’s guidelines—especially those related to the unit’s resale or transfer by will to a relative—are too restrictive. “We have no clear title to the property,” says Scully, citing circumstances under which the CDC could claim their homes. “This is not really home-ownership at all.”

WBCDC staff maintain that the restrictions will keep homeowners from becoming absentee landlords, and ensure that the homes will go to community residents if the homes are resold. Deb Wolking, the Transitions Homes Program Coordinator, doesn’t think purchaser’s home ownership status is compromised under the guidelines, and says the conveyance guidelines are as straightforward as they are well-founded. “If the inheritor wants to live there the CDCs would get right of first refusal,” she explains, “and the relative would get the full purchase price.”

Critics of the program like Scully are crying “bait-and-switch,” and are quick to connect the stringent guidelines and their approval process to a larger effort by the CDC to consolidate power. They view the 1999 refinancing of five Cedar Riverside housing co-ops as the culminating gambit, which they argue has been an attempt to manipulate, and profit from, the financially vulnerable co-ops.

The deal, which encompassed five housing co-ops and more than 200 units of housing, consolidated co-op management, retired existing debt and provided for moderate rehab of the units. According to the WBCDC, the refinancing was intended to save member run co-ops from default, the result of extremely low rent, coupled with high management and deferred maintenance costs.

While the WBCDC proclaimed it a victory for the community, co-op representatives feel they’re being bullied into submission by the CDC, and point to the fact that a viable budget prepared by the five co-ops was ignored by the WBCDC to put the co-ops in default.

Frustrated participants say the Transition Homes Program (which the 1999 co-op refinancing made possible) has also been characterized by misleading spin. “If you read the public relations and the newsletters you would think the people who are buying the homes are getting a really good deal. But we’re not signing the guidelines.” She alleges the legal papers as drafted go far beyond the guidelines the advisory group voted on, and that several lawyers and real estate agents have called the restrictions “unconscionable.” Pederson and other complainants are convinced that even the WBCDC’s own legal and real estate experts haven’t seen all the restrictions. “All the problems with this program flow from this main fact,” she says.

The WBCDC has reviewed the prospective home-buyers legal complaints, and agreed to delay any court actions that resulted from disputes over the transfer of the homes, however they’ve declined to change the program guidelines.

Not all prospective Transition Homes participants share Scully and Pederson’s alarm over the restrictions. Al Haug, who is purchasing a home through the program, concedes that the restrictions seemed stringent—even unorthodox—initially. “The appraisal seemed high and a lot of people had questions at first,” he says. But he says in the end he and most others understood the reasons for the restrictions and were satisfied with the terms of the program. “Consider the flip side,” he says. “If the bottom falls out of the housing market you automatically have a buyer.”

Haug attributes the fracas over the restrictions to cold feet. “It’s quite a step to buy a house,” he says, “People have just got the willies, so they’re playing out all kinds of scenarios of how things could go wrong.”

Weary of the confrontation and partisanship, some are retreating into the silence of self-imposed gag rules, making it harder to discern who speaks for whom in the dispute. WBCDC staff and board members say critics of the CDC generally, and of the Transition Homes Program specifically, represent a disgruntled minority. The CDC charges some longtime residents with simply protecting their interests from Cedar-Riverside’s vulnerable populations: poor people and immigrants. CDC critics and frustrated Transitions Homes participants maintain the opposite, saying that the CDC has hardballed or confused the same vulnerable residents into signing on to its housing strategies.

As both sides of the dispute both purport to speak for “the community,” both lob vague accusations of “advancing personal agendas” at the other. (The phrase is often used euphemistically to imply “extract personal profit.”) Some suspect that Transition Homes participants are balking at program restrictions because it jeopardizes their plans to use the homes as an investment. As one participant said, “I think some might have that in the back of their minds, but no one has admitted it.”

Joan Scully scoffs at the suggestion that she’s fighting for her rights as a home owner for profit motives. “I’m not a budding developer,” she says, “I just want my little hedge against inflation. You know, the American dream.”

But David Markle, a neighborhood resident who has been critical of the WBCDC’s housing enterprises thinks using a home as an investment is the home owner’s prerogative. “Why not let people be their own developers?” he asks. He says people should consider the alternatives: letting for-profit developers enrich themselves using long-subsidized housing stock, or, more hypocritically, allowing the CDC to make a killing on a booming housing market.

Markle suspects that this is already the case. “That’s the historic pattern for the CDC,” he says. “Their first rule has been to try to control things. Their second has been to make money.” He contends that finance mechanisms, like the co-op restructuring, essentially guarantee jobs to the CDC leadership that designed them. “Since they’re running things, they understand the details.” Thus positioned, CDC operatives can leverage their knowledge for a cut of the big money: speculative real estate development, which is exactly how Markle frames the 1999 co-op refinancing. “The CDC has been the minor partner to developers in these arrangements,” he says.

To some observers, Markle’s words smack of conspiracy. But war memories die hard, and Cedar-Riverside’s activists remember the legacy of one adversary—real estate developer Keith Heller—whose shadow falls over the Cedar-Riverside daily, literally. Some 30 years ago a swath of the neighborhood clear to the Mississippi River was slated for demolition to make room for a complex that would have dwarfed the cluster of high-rises known today as Riverside Plaza. West Bankers’ successful campaign to scrap Heller’s plan forged the neighborhood’s identity as a radical community that could also do development. Yet much of that clout went to a handful of key activists who are today part of both the nonprofit and for-profit real estate establishments.

Randy Stoecker, an authority on CDCs, who has documented the struggles of the WBCDC in his book, “Defending Democracy,” says that the community mechanisms that should have sustained the esprit de corps from the high-rise battle, “never really jelled.” That includes the last of these, the West Bank Community Coalition, the current iteration of these community mechanisms. “Now they really only have the CDC,” he explains, “and CDCs are not good community participation vehicles; they were never designed to be.”

Which means the old, once-predictable battle lines in the “capital vs. community” fight are strangely distorted. The reversal was manifest in a paid advertisement taken out by the WBCDC at the height of the refinance controversy. “People Over Profits,” proclaimed one heading, echoing street chants of the 1970s. Another, referring to community residents opposed to the refinance, announced “Critics Attack Democracy.”

As for accusations of personal gain leveled at WBCDC staff, Stoecker doesn’t think they hold up. “The staff of the CDC are skilled enough now that they could make a lot more money working somewhere else.” Moreover, he says the personal sacrifices staff have made—being publicly berated, working 16-hour days and seven-day weeks to package finance deals—would be hard to put a price on.
Despite popular notions to the contrary, Stoecker says co-op housing was never really under neighborhood controls. “To the extent that there are myths out there,” he says, “this is housing that is controlled by the bank, just as every other house is.” He says the potential for the problem of 30 years ago persists today, namely: “People using the homes not for shelter, but to gain a profit.”

But if Joan Scully and other Transition Homes participants trying to back out of purchase agreements can’t surmount the current dispute, she may have no shelter to speak of. “I’m already one paycheck away from homelessness,” she says.

Not that life in her home has been good in the interim. She says her house is piled with boxes of documents related to the Transition Homes dispute, and that the controversy has become like a full time job for her. “I mean, I have a life,” she said, adding after a pause, “Let me rephrase that: I had a life.”

The WBCDC housing disputes have brought more than private despair to the community. A diffuse atmosphere of persecution and paranoia has afflicted the co-ops since the refinance. Residents suspect the CDC of hiring maintenance workers to steal and destroy evidence of meetings, and police have been hired for annual meetings.

For Deb Wolking, the saddest and most enduring result of conflict is that it threatens to overshadow the “wonderful possibilities” the WBCDC is now engaging; specifically its outreach work with members of the Somali community, and its work coordinating the Dania Hall Pillar Project.

This kind of organizing—which happens beyond the scope of material gain—may be the only way for residents to start rebuilding mutual trust, argues Randy Stoecker. Still, he notes that even in the near-mythic protest era of the 60s and 70s the question of how to share the commons was a source of friction among residents. “There have never been fences on the West Bank. People used to share everything—housing, sustenance, even relationships—and there was the possibility of developing not just real friendships, but real animosities.”

But today’s animosity, as it may play out in the coming court battle over co-op budget dispute, somehow seems different than the animosity Stoecker invokes from bygone days. Whereas community residents once struggled over how best to share the pie, today they speak in more pragmatic terms of “stabilizing housing” and “organizational solvency,” than of “building community.”

Maybe it’s growing pains; the part of an inexorable slide from the past into an era when so many institutions—from social service agencies to marriages—are being sold on the corporate model. Deb Wolking suggests that such growing pains can be especially hard to swallow for a neighborhood that struggled so hard to define a unique way of living together, and explains at least part of the anger the WBCDC incurred in the wake of the co-op restructuring, “People realized the co-ops weren’t meeting afterwards.” She notes, “This created a real sense of loss over their shared management.”

As many mourn the loss, those who embrace the corporate-community tension are gaining prominence. The new mayor is a corporate-community hybrid if ever there was one, and it comes as no surprise that Rybak brought two luminaries from the CDC world to help him. (His Deputy Mayor, David Fey, hails from Seward Redesign, a CDC that has won national recognition for its community-owned redevelopment initiatives. His affordable housing man, Eric Takeshita, comes from a financial intermediary that funds CDCs.)

Takeshita is all too familiar with community-capital disputes at the neighborhood level from his NRP days. “You will always have a multitude of voices, and the job of the CDC is to synthesize everything it’s hearing into one coherent development agenda.” While he declined to discuss the specifics of the budget and refinance disputes at the WBCDC, he did speak to the core issue of the dispute. “What distinguishes the CDC from a community organization is that it does development…it needs to make business decisions.” While those decisions are influenced and informed by community input, he says, “sometimes business decisions are at odds with what people in the community want.” At which point, he says, “The challenge is communication and education.”

It’s better communication, more perhaps then fairer guidelines, that critics of the Transition Homes are asking of the WBCDC. Cheryl Pederson disputes the notion that people were in on the process. “At some point, the communication just stopped,” she says. “We were left out in the dark with no representation.”

Program Coordinator Wolking says the Transition Homes Program has communicated with residents, circulating regular mailings to participants, and forming an advisory group to discuss the program’s sticking points. As to the refinancing that has set the stage for these disputes, WBCDC Executive Director Tim Mungavan has said throughout that residents had ample opportunity to provide input on the refinancing.

But in a paid advertisement the CDC staff concede “they could’ve done a better job communicating around the refinancing.” Now, poised for litigation, WBCDC has proposed a training on the co-ops, and on conflict resolution to avoid a legal battle. Riverside Homes representatives are saying it’s too little too late, and expect the court battle to begin in March.

But Cheryl Pederson says it’s not too late for Riverside Homes. “There are ways to change the legal documents without changing the program guidelines, says Cheryl Pederson. “I’m still hopeful that we can work it out.”

Both Transition Home participants as well as members of the larger co-op community can ill afford to not work it out. “These folks need to get out of legal land,” says Randy Stoecker, warning that deploying legal guns and weapons-grade words will have costs that can’t be accounted for by budgets.

As Cedar-Riverside readies for a costly battle against an enemy within, residents of other Twin Cities “transitional” neighborhoods will watch this little patch of the body politic from outside its borders. They’ll hope the festering lesion of mutual mistrust doesn’t grow into a full blown epidemic. Because they can’t quarantine a neighborhood, and they can’t call the CDC. pulse