Money for Nothing

Charles Black, the assistant city attorney charged with collecting this money, says at any given time he has five to 10 trust fund files on his desk; he only recently received Crayton's. Some wind up in court, including a case filed against Dianne Thomas, who borrowed $15,000 in July 1999 to open Lady Di's Restaurant and Catering and still owes almost $12,000. The city settled its suit with Thomas in September, but Black says, "I have no idea whether it will be paid...We'll see if it comes to fruition."

In the case of McFarland Gardens, a lawn care and landscaping business, Black claims the Dallas County Sheriff's Department has been unable to find owner Richard McFarland. When they do, he says, "I will continue to try and collect." McFarland borrowed $50,000 in August 2000 and owed, as of August 1, 2005, $41,500.

And then there's Spears Seafood, which borrowed $50,000 in July 2002 and now owes $52,870 the city isn't likely to collect, since owners Xavier and Verna Spears have filed for bankruptcy.

But here's the kicker: Crayton--and Ragsdale and Caraway and even Albert Black--all insist that $50,000 is just enough money to do one thing: get you in deep, deep trouble.

See, Black says, with $10,000 in grants, which you don't have to pay back, a business owner has to be careful, thoughtful about the investment. It's just enough to do something, but not everything. You can hire a couple of employees, pay for a few small renovations, invest in an important piece of equipment, maybe help secure a larger loan with a traditional lender. Better still, there's no threat of legal action hanging over your head if you screw it up. It's the ol' win-win: You make something of the cash, great; if not, well, hey, we tried.

"One of the reasons that people wanted to stop providing grants was because we needed a way to generate money," Ragsdale says. "When you got $10,000 and $15,000 grants, you could have seed money without wondering about how you were going to pay it back. It's small seed money, but it helped."

But $50,000 loans, well, they come with more than strings attached--3 percent interest over five years. As more than one person says, it comes with just enough rope with which a business owner can hang himself.

"Albert Black probably didn't need it, but if you look at some of the $10,000 grants that were given versus the $50,000 loans, goddamn, come on," Caraway says. "Which is better served? These people are still in business. Now, not all of them are. Not all of the grants were great. We probably had some shysters in there. But I would much rather help a person pull up their bootstraps with $10,000 and try to do better versus giving them just enough to hang themselves, which is what makes me different from the rest of those son-of-a-guns."

The top board members who approved most of the now-defaulted loans insist they were good loans at the time--risky, absolutely, but what could one expect from folks who came to the South Dallas/Fair Park Trust Fund after other institutions had turned them down? Not for nothing do the trust fund's opponents and supporters refer to it as "a lender of last resort."

"You had to look at the spirit the commercial loans were set up for," says architect Todd Howard, who resigned as the trust fund's co-chair in April 2003, as did co-chair Harold Woods, South Dallas business owner John Radovich and Delphine Ganious, who was in charge of overseeing the grant applications. The quartet left after a run-in with Chaney, who didn't approve of the grant recipients they'd chosen and wanted them to "start from scratch," according to one of the four former board members. This, coupled with a community forum at Charles Rice Elementary that spring that turned into a shouting match between some board members and community leaders, caused the foursome to walk out the door, believing their time had been wasted and efforts taken for granted. Chaney says only that they resigned because of a "misunderstanding," and that he was trying to fix the trust fund by eliminating red tape that, he says, held up the dispensing of loan and grant money.

"The loans were to encourage economic development within the census tract," Howard says. "You looked at that, at the application and you interviewed them. Were they running 700-plus credit scores? No. Most were 400 or so, but there was a story presented...and they worked. They worked to concur with the spirit and purpose of the loan committee and why it was there. If they were businesses that had been supported, they would have worked. I think part of the challenge was, could these businesses go into an area where it's challenging for businesses to grow and thrive and succeed?"

The answer, in most cases, was no.

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Which brings us back, for a moment, to Ronnie Crayton. When his loan came before the trust fund, no one on the board considered it a bad loan--far from it, in fact. He was a legit businessman wanting to make a go of it in a part of town that could only benefit from having a black-owned supper club, and not only that, but his restaurant is perched not in the bleakest parts of South Dallas, but on the bright and shiny corner of Exposition and Parry avenues, near bars and hangouts populated by urban hipsters and their wannabe suburban brethren. And it was a place where, on any given day, diners might bump into Dallas County Commissioner John Wiley Price or former Mayor Ron Kirk.