Jobs, Incentives and a Mix-up
In a mix-up by NC state Economic Development officials, a non-profit expanding in Charlotte may be in line to get a less lucrative incentive package than it expected, though the amount is more than previously specified.
N.C. Commerce Secretary Keith Crisco told the Observer on Thursday the state is able to give the Neighborhood Assistance Corporation of America up to $1 million in on-the-job training assistance. That's on top of a $1 million state grant tied to its plans to hire 1,014 new workers. NACA helps low-income homeowners prevent foreclosures and get new loans.
NACA Chief Executive Bruce Marks, however, had been expecting as much as $3.5 million – including up to $2.5 million in on-the-job training assistance as part of his agreement with the state. E-mails and documents obtained by the Observer show Marks had been promised that amount during tense negotiations that resulted in an announcement in June of a much-needed job infusion for Charlotte's financial sector.
Crisco said he mistakenly extrapolated an estimate by state officials further than he should have. After queries by the Observer, he called Marks to apologize and said he wants to “do everything we can to work with him.”
Marks on Thursday said he's still counting on the $2.5 million for on-the-job training.
“We're working this through with them to see where we are,” he said, declining to elaborate on his plans.
The mix-up highlights the fast-moving, secretive nature of economic development negotiations, which can leave details of incentive packages unclear to the public – and even the players involved.
Bob Orr, a prominent opponent of incentives to lure businesses, said the NACA project was another example of a deal with “big giveaways” crafted without public input.
“The public doesn't have the opportunity to voice complaints or support,” said Orr, executive director of the N.C. Institute for Constitutional Law and a former N.C. Supreme Court Justice.
Crisco noted the NACA Project came together quickly, with some negotiations taking place while he was on an economic development trip in Europe. But he added: “I have to take responsibility.”
Commerce spokeswoman Kathy Neal said she believed the issue would be resolved to everyone's satisfaction, but said she couldn't confirm an amount.
$1 million over 5 years
When NACA's expansion was announced June 11, the news release said the nonprofit could receive $1 million over five years from the One North Carolina Fund. That's a program controlled by the governor that requires companies to meet certain job creation requirements before receiving any money. The grant was “contingent upon local matches,” the news release said without providing any dollar amount.
A day later an official with the Charlotte-Mecklenburg Workforce Development Board told the Observer the organization was likely to provide NACA with $256,000 in on-the job training covering 100 workers.
But the figure turned out to be higher – $1 million, due to a 100 percent match of the governor's $1 million award. The money is considered “local” because it's distributed by the Charlotte-Mecklenburg board but it's actually federal dollars distributed by the state.
The $256,000 figure for 100 workers started out as an estimate produced by state officials in March and was sent in a letter from Crisco to NACA in April. Later, a Charlotte Chamber official and Crisco totaled the amount for 1,000 workers at $2.5 million. Now, however, the state says $1 million was supposed to be the limit.
Going forward, Commerce will be clearer in its announcements, and will note that the One North Carolina Fund typically requires at least a 100 percent local match, said Neal, the Commerce spokeswoman.
“We certainly want to be as clear as we are able to be,” she said.
Confusion is latest twist
The confusion over the on-the-job training money is the latest twist in a drama that unfolded over more than six months.
Boston-based NACA, founded by Marks in 1988, is known for aggressively protesting banks that it deems to be making predatory loans. But it also partners with lenders, including Charlotte's Bank of America, to make low-interest loans to low-income homebuyers.
In its latest effort, NACA is organizing “Save the Dream” events around the country, where it modifies loans of struggling borrowers on the spot.
According to the documents, NACA appeared ready late last year to add at least 400 jobs in Charlotte without incentives. But on Feb. 6, National Public Radio ran a feature on NACA that was followed by other news outlets. That led to a “stream of incentives offers” from several communities, according to a project summary prepared by Charlotte Chamber official Justin Hunt.
Marks now wanted incentive money for the Charlotte project.
Because NACA was a nonprofit that doesn't pay taxes, the state couldn't offer incentives based on rebates of local property taxes, Hunt wrote in the February summary for Commerce officials. But he raised the possibility of a Job Development Incentive Grant, a type of grant based on the payroll taxes paid for new hires.
In an early estimate by the Chamber, NACA could have received a “modified” JDIG worth up to $1.8 million over seven years if it met certain investment and salary requirements.
As the talks continued, NACA said it was likely to create more than 1,000 jobs, but Hunt said that grant was still unlikely, suggesting a One North Carolina Fund grant instead.
State officials also told NACA that it could be eligible for on-the-job training assistance, which helps companies pay the salaries for displaced workers they hire during a training period. In this case, the state could pay NACA $2,560 per eligible worker – half of their $16-per-hour wage over two months, or $256,000 for 100 workers.
NACA threatens to move
On June 2, Hunt and an N.C. Commerce Department official, Ron Leitch, tried to close the deal, but Leitch reported that Marks was still upset the project didn't warrant a bigger grant.
“He threatened to move the operation to SC or elsewhere,” Leitch wrote. “Says (U.S. Rep. James Clyburn, D-S.C.) would insure they received a more significant incentive package in SC.”
In another e-mail that day, Hunt told state officials that Marks complained that the offer of a $500,000 One North Carolina Fund grant was “unacceptably low.”
“That won't even cover our rent,” Marks said, according to Hunt's e-mail.
Hunt suggested the state increase the One North Carolina Fund grant to $1 million. Combined with about $2.5 million for on-the-job training that would bring the total package to $3.5 million, he wrote in an update to state officials.
He recommended that Perdue announce the project on Thursday June 11, noting that Marks was under “extreme pressure” to begin hiring because he needed more than his existing Charlotte workforce to pull off the Save the Dream events. Hunt emphasized the importance of Perdue's appearance at the event to Marks.
On Sunday June 7, while in Europe, Crisco sent an e-mail saying he had talked to Marks and he was agreeable – on the condition NACA receive the $1 million One North Carolina Fund grant and $2.5 million for on-the-job training.
By Monday, June 8, arrangements were being made for the news conference at NACA's east Charlotte office. Marks suggested 10 a.m. was better than 9 a.m. to give TV crews extra time to set up. Gov. Perdue and former Bank of America Corp. Chairman Hugh McColl Jr., Marks' unlikely ally over the years, confirmed their plans to attend.
Hunt, the Chamber official, said in an interview that the project was one of the most competitive he has worked on. Communities in South Carolina, Connecticut and Florida were interested in NACA's jobs, he said.
“We tried to come up with a creative, out-of-the-box way to support bringing 1,000 jobs to a community that desperately needs them,” he said.
Since its June 12-13 job fair, NACA has hired 452 people in Charlotte, Marks said, and he expects to hire all of the 1,014 workers by year end. Gov. Perdue's presence at the news conference gives him confidence that the state will keep its commitment.
“We're confident she's good to her word,” he said. “We've certainly held up our end.”
NACA's "Save the Dream Tour" Hits St. Louis Thursday to Offer Same Day Solutions for Homeowners With Unaffordable Mortgages
In a release issued earlier today by NACA, under the same headline, please note that the "Save the Dream Tour" will arrive in St. Louis at 2 PM and not 1 PM as previously stated. The updated release follows:
Several tour buses will hit St. Louis University's Chaifetz Arena Thursday, July 30th to kick off NACA's Save the Dream of Homeownership Event in Missouri. The buses, filled with hundreds of staff and volunteers, will hold a press conference outside Chaifetz Arena inviting struggling homeowners to take advantage of an historic opportunity to make their mortgage affordable. Hundreds of homeowners and volunteers will be on hand to welcome the tour to St. Louis. A number of elected officials will also be in attendance.
The tour buses will pull in front of Chaifetz on Thursday at 2 PM, July 30th.
The Neighborhood Assistance Corporation of America (NACA) was invited by St. Louis County Executive Charlie Dooley and St. Louis City Comptroller Darlene Green to bring its Save the Dream Tour here to speed up mortgage relief for thousands.
"We offer unprecedented solutions for homeowners caught up in the current mortgage and economic crisis," said NACA CEO Bruce Marks. "During the Save the Dream Events, borrowers can get mortgages restructured the same day. We will have our staff, as well as lenders and servicers on site and in their home offices working to make this the most comprehensive mobile servicing operation in the country."
The Save the Dream Tour comes at a perfect time for homeowners as the Obama administration just finished its meeting with mortgage servicers this week to get them to modify hundreds of thousands of home loans for Americans so borrowers can avoid foreclosure. NACA has been the exception in that it has secured legally binding agreements with all the major servicers to restructure loans to what homeowners can afford based on a documented affordability analysis. On the tour, thousands of borrowers receive modifications at once, thanks to NACA's advocacy, state of the art underwriting capability and legal contracts it has with all the major lenders.
St. Louis is the third stop on NACA's ten city tour to help homeowners. Fifty-thousand homeowners attended the last event in Chicago.
About the Neighborhood Assistance Corporation of America (www.naca.com):
Founded in 1988, NACA is a national non-profit community advocacy and homeownership organization headquartered in Boston. Through its 38 offices nationwide and two call centers, NACA has set the national standard in restructuring thousands of mortgages to what the homeowners can afford as well as providing the best mortgage in America for homebuyers.
News of NACA's program and advocacy has been featured in national and local media. The Boston Globe chose Bruce Marks, founder and CEO of the Neighborhood Assistance Corporation of America (NACA), as its 2007 Bostonian of the Year. There is tremendous recognition for the effectiveness of NACA's advocacy and for providing real, affordable homeownership solutions for working people. Bostonian of the Year.
CONTACT: NACA
Darren Duarte, Director of Communications & Public Affairs
617-947-2632
dduarte@naca.com
Thousands in Atlanta turn out for immediate Mortgage help
Thousands lined up outside the Georgia World Congress Center Tuesday hoping to get relief from unaffordable mortgages during the last day of the Neighborhood Assistance Corporation of America’s “Save the Dream” mortgage restructuring tour.
The tour was originally set to end in Atlanta on Monday, but Darren Duarte, spokesman for NACA, said the Atlanta stop was extended an extra day to meet the enormous demand.
“We’ve had huge lines every day,” Duarte said. “This is definitely the largest day.”
Duarte estimated that 2,000 to 3,000 people were waiting in line Tuesday morning. By comparison, on Friday, the first day of the tour’s Atlanta stop, about 3,500 attended for the whole day.
The tour stopped in Cleveland, Chicago and St. Louis before it came to Atlanta, the only city where it was extended an extra day. Duarte said Atlanta showed the largest last-day attendance of any of the tour’s cities so far.
“The need is great wherever you go,” Duarte said. “I think people feel helpless that they can’t get their mortgages down. A lot of people here have been telling us they can’t sleep at night because of their mortgage.”
The “Save the Dream” tour provides free same-day mortgage modifications for many of those who attend.
Homeowners meet with counselors and answer detailed questions about their finances and mortgages. The counselor then makes a recommendation to the bank. NACA has legal agreements from the country’s largest mortgage holders that requires them, in most cases, to restructure the mortgage based on that recommendation.
One of Atlanta’s biggest success stories was a $50,000 drop in one homeowner’s principal, Duarte said.
Lane Hammond, who works as a family services counselor for Kennedy Memorial Gardens, said his monthly payment dropped from $805 to $385.19.
Hammond arrived at the World Congress Center at 6:30 a.m. and received his solution later in the morning.
“I was elated,” Hammond said. “I’m walking on a cloud.”
The tour’s next stops include Phoenix, Los Angeles, San Francisco and New York.
The Atlanta event lasts until 8 p.m. Tuesday. Homeowners who cannot be seen today can access NACA’s free service online at www.naca.com. Results will take between 30 and 60 days.
Nonprofit to hire 500 in Charlotte within 4 weeks
(NACA to add 1,014 jobs over next 5 years)
In the unfolding economic crisis, helping borrowers with troubled mortgages has become a growth business, landing Charlotte's beleaguered financial sector a dose of good news Thursday.
At an office park in east Charlotte, North Carolina Gov. Bev Perdue and other area officials gathered to announce an expansion by a nonprofit organization that aims to add 1,014 jobs to Charlotte over the next five years. Boston-based Neighborhood Assistance Corp. of America, a nonprofit community advocacy and homeownership organization, plans to hire customer service specialists, mortgage counselors and others to help low-income and minority borrowers.
NACA, as the organization is known, said it plans to hire about 500 of those workers in the next two to four weeks. It will hold a job fair today and Saturday from 8 a.m. to 8 p.m. both days at its location at 5855 Executive Center Drive. Job seekers also can find information at www.naca.com.
The bolt of new jobs comes as Charlotte wrestles with layoffs at Wachovia, Bank of America and other financial firms. The metro area had 55,200 finance and insurance jobs in April, down 100 from March and 3,900 from December, according to preliminary data from the U.S. Labor Department.
NACA plans to invest $4.5 million in Charlotte as part of an expansion over the next five years, although NACA chief executive Bruce Marks said the total is really much higher when the salaries that will be paid in coming years are tallied. The jobs will have an average annual salary of $35,982 but some will pay as high as $80,000, he said.
The nonprofit is receiving a $1 million grant from the One North Carolina Fund, which provides financial assistance through local governments to create new jobs. The companies receive no money upfront and must meet job creation requirements, the governor's office said. NACA could also be in line to receive job training assistance from the Charlotte-Mecklenburg Workforce Development Consortium, said Justin Hunt, vice president of economic development and European development with the Charlotte Chamber.
Marks said the incentives, which came after wooing by the governor, the chamber and other officials, sealed the expansion in Charlotte. Other locations also were interested in the new jobs, he said.
NACA has two main thrusts: helping borrowers get affordable home loans and, increasingly, helping people who can't afford loans they received from other lenders. The group is holding “Save the Dream” events around the country where counselors aim to provide same-day loan modifications, reducing interest rates to as low as 2 percent and in some cases trimming the principal owed.
The next event is July 10 through July 14 in Atlanta. Some of the new hires at the Charlotte office will be part of the team that travels from city to city running these gatherings, which can draw 25,000 or more homeowners, Marks said. In three earlier stops, NACA has helped 30,000 homeowners, and Marks said he expects to aid hundreds of thousands more in the coming tour. As part of the expansion in Charlotte, Marks has agreed to hold an event in North Carolina at a yet to be determined time.
NACA has reached agreements with major mortgage servicers allowing them to make these immediate modifications, said Marks, wearing his trademark black shirt emblazoned with the slogan: “Financial Predators Beware!”
“We are doing a mobile servicing operation,” he said. “We're doing their job for them.”
Marks said he hopes his organization will set an example for how to modify loans.
NACA likely to receive $256,000 in Training Assistance
The national housing nonprofit that plans to hire 1,014 workers in Charlotte over the next five years is likely to receive $256,000 for on-the-job training assistance, a Charlotte/Mecklenburg Workforce Development Board official said Friday.
Gov. Perdue announced Thursday that Boston-based Neighborhood Assistance Corp. of America, a community advocacy and homeownership group, is also in line to receive a $1 million state grant if it meets its job creation commitment.
The on-the-job training assistance would subsidize the pay of 100 unemployed or displaced workers hired by NACA, paying half of their $16 per hour wages for two months, said Deborah Gibson, executive director of the Charlotte/Mecklenburg Workforce Development Board. The contract with NACA hasn't been finalized, but Gibson said she expects an agreement to be reached.
The training program is administered by the N.C. Department of Commerce and the Division of Workforce Development through local workforce development boards, Gibson said.
The program was popular during the last economic downturn in 2001 but hasn't been used much lately, she said. Typically, companies that are interested approach the workforce development board, she said.
City of Charlotte and Mecklenburg County officials were not asked to provide incentives to NACA because it's a nonprofit that doesn't pay taxes, making it ineligible for local assistance programs, officials said. Staff writers Julia Oliver and April Bethea contributed.
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Sources: Charlotte Observer, NACA, Charmeck.org, Newsobserver, Heraldonline, NY Post, AJC.com, Washington Post, MSNBC, Newsbusters, Google Maps
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