Table Of Content¥ ECONOMIC RECOVERY, GROWTH AND DEFENSE
CONVERSION ACTIVITIES IN DADE COUNH
y I
^Y 4. B 22/1: 103-108
^Econonic Recoveryi Grouth and Defen. . .
FIELD HEARING
BEFORE THE
SUBCOMMITTEE ON
ECONOMIC GROWTH AND CREDIT FORMATION
OF THE
COMMITTEE ON BANKING, FINANCE AND
URBAN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRD CONGRESS
FIRST SESSION
DECEMBER 17, 1993
Printed for the use of the Committee on Banking, Finance and Urban Affairs
Serial No. 103-108
U.S. GOVERNMENT PRINTING OFFICE
74-989CC WASHINGTON : 1994
ForsalebytheU.S.GovernmentPrintingOffice
SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402
ISBN 0-16-044428-4
74-9890-94-1
' ECONOMIC RECOVERY, GROWTH AND DEFENSE
CONVERSION ACTIVITIES IN DADE COUNTY
V^
Y 4, B 22/1: 103-108
I
Econonic Recovery^ Crouth and Defen.
. .
FIELD HEARING
BEFORE THE
SUBCOMMITTEE ON
ECONOMIC GROWTH AND CREDIT FORMATION
OF THE
COMMITTEE ON BANKING, FINANCE AND
URBAN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRD CONGRESS
FIRST SESSION
DECEMBER 17, 1993
Printed for the use of the Committee on Banking, Finance and Urban Affairs
Serial No. 103-108
U.S. GOVERNMENT PRINTING OFFICE
74-989CC WASHINGTON : 1994
ForsalebytheU.S.GovernmentPrintingOffice
SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402
ISBN 0-16-044428-4
74-9890-94-1
HOUSE COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS
HENRY B. GONZALEZ, Texas, Chairman
STEPHEN L. NEAL, North Carolina JAMES A. LEACH, Iowa
JOHN J. LaFALCE, New York BILL MCCOLLUM, Florida
BRUCE F. VENTO, MinnesoU MARGE ROUKEMA, New Jereey
CHARLES E. SCHUMER. New York DOUG BEREUTER, Nebraska
BARNEY FRANK. Massachusetts THOMAS J. RIDGE, Pennsylvania
PAUL E. KANJORSKI, Pennsylvania TOBY ROTH. Wisconsin
JOSEPH P. KENNEDY II, MassachusetU ALFRED A. (AL) McCANDLESS, California
FLOYD H. FLAKE, New York RICHARD H. BAKER, Louisiana
KWEISI MFUME, Maryland JIM NUSSLE, Iowa
MAXINE WATERS, California CRAIG THOMAS, Wyoming
LARRY LaROCCO, Idaho SAM JOHNSON, Texas
BILL ORTON, Utah DEBORAH PRYCE, Ohio
JIM BACCHUS, Florida JOHN LINDER, Georgia
HERBERT C. KLEIN, New Jersey JOE KNOLLENBERG, Michigan
CAROLYN B. MALONEY, New York RICK LAZIO, New York
PETER DEUTSCH, Florida ROD GRAMS, Minnesota
LUIS V. GUTIERREZ, Hlinois SPENCER BACHUS, Alabama
BOBBY L. RUSH, Illinois MIKE HUFFINGTON, California
LUCILLE ROYBAL-ALLARD, California MICHAEL CASTLE, Delaware
THOMAS M. BARRETT, Wisconsin PETER KING, New York
ELIZABETH FURSE, Oregon
NYDIA M. VELAZQUEZ, New York BERNARD SANDERS. Vermont
ALBERT R. WYNN, Maryland
CLEO FIELDS, Louisiana
MELVIN WATT, North Carolina
MAURICE HINCHEY, New York
CALVIN M. DOOLEY, California
RON KLINK, Pennsylvania
ERIC FINGERHUT, Ohio
Subcommittee on Economic Growth and Credit Formation
PAUL E. KANJORSKI, Pennsylvania, Chairman
STEPHEN L. NEAL, North Carolina THOMAS J. RIDGE, Pennsylvania
JOHN J. LaFALCE, New York BILL McCOLLUM, Florida
BILL ORTON, Utah TOBY ROTH, Wisconsin
HERBERT C. KLEIN, New Jersey JIM NUSSLE, Iowa
NYDIA M. VELAZQUEZ, New York MARGE ROUKEMA, New Jersey
CALVIN M. DOOLEY, California PETER KING, New York
RON KLINK, Pennsylvania
ERIC FINGERHUT, Ohio
(II)
CONTENTS
Page
Hearingheldon:
December 17, 1993 1
Appendix:
December 17, 1993 69
WITNESSES
Friday, December 17, 1993
Baker, Dorothy R., President and CEO, Miami-Dade County Chamber of
Commerce 51
Curtin, Deborah, Director, Project Chart, Dade County; accompanied by Greg-
ory Owens, Director, Department of Business and Economic Development,
Dade County 20
DeMilly, J.W., III,Mayor, cityofHomestead, FL 29
Epling, Robert, President, Community Bank ofHomestead 55
Hawluns, Hon. Wilbur F., Acting Assistant Secretary for Economic Develop-
ment, Economic Development Administration, U.S. Department of Com-
merce 7
Knox, George, Esq., Kubicki-Draper Law Firm 58
Muxo, Alex, CityManager, cityofHomestead, FL 33
Phillips, Dr. Rov, President, Tools for Change; accompanied by Elaine Black,
President and CEO, Miami-Dade County ChamberofCommerce 47
Pitts, Hon. Otis, Deputy Assistant Secretary for Hurricane Recovery, Depart-
ment ofHousing andUrban Development 11
Sandler, Gilbert Lee, Esq., Sandler, Travis &. Rosenberg 43
Scott, Gil, State Recovery Coordinating Office, Florida Department of
Commerce 19
Sovia, Kim, President and CEO, Greater Homestead/Florida City Chamber
ofCommerce 53
Walker, Nic, Vice President and CEO, Beacon Council 27
Wallace, Otis, Mayor, city ofFlorida, FL 32
Weaver, DavidR., President and CEO, Intercap Investments 23
APPENDIX
Prepared statements:
Kanjorski, Hon. Paul E 70
Deutsch, Hon. Peter 72
Diaz-Balart, Hon. Lincoln 83
Meek, Hon. CarrieP 79
Baker, DorothyR 215
Curtin, Deborah 101
DeMilly, J.W 183
Hawkins, Hon. WilburF 85
Knox, George 224
Phillips, Dr. Roy 210
Pitts, Otis 91
Sandler, Gilbert Lee 190
Scott, Gil 186
Sovia, Kim 219
Walker, Nic 177
Weaver, DavidR 171
(III)
IV
Page
Additional Material SuBMnrED for the Record
Broils, Kevin R., President, Princetoa/Naranja Community Council, re Eco-
nomicRedevelopmentofSouth Dade County, with enclosures 272
Deutsch, Hon. Peter, letters from C. Samuel Kissinger, Manager, Village
ofKey Biscayne, and Dennis Stewart, President, Florida Community Hous-
ingAssistance Corp 77
Curtin, Deborah:
Hurricane Andrew Economic Development Administration, U.S. Dept.
ofCommerce, Summary ofProject Funding and Status Report for Eco-
nomicDevelopment, November 24, 1993 112
Economic Recovery Strategies, Phase II: Long Term Strategies, Melro-
Dade County, FL, October 1993 124
Knox, George: "The New Old-Fashioned Banking," by Ronald Grzywinski,
HarvardBusiness Review 229
Rios, Bill andJohn Little, city ofMiami, Executive Summary 244
Sandler, Gilbert Lee: Supplement to prepared statement, dated January 25,
1994 203
ECONOMIC RECOVERY, GROWTH, AND
DEFENSE CONVERSION ACTIVITIES
IN DADE COUNTY
FRroAY, DECEMBER 17, 1993
House of Representatives,
Subcommittee on Economic Growth
AND Credit Formation,
Committee on Banking, Finance and Urban Affairs,
Washington, DC.
The subcommittee met, pursuant to notice, at 9:17 a.m., in the
city council chambers, 790 North Homestead Boulevard, Home-
stead, FL, Hon. Paul Kanjorski [chairman of the subcommittee]
presiding.
Present: Chairman Kanjorski.
Also present: Representatives Deutsch and Meek.
Chairman Kanjorski. The House Subcommittee on Economic
Growth and Credit Formation holds the sixth in its series of field
hearings on credit availability and economic growth. I would like
to thank my colleagues, Congressman Peter Deutsch and Congress-
woman Carrie Meelc, for inviting the subcommittee to Dade County
to hold this hearing, and for taking the time out from their busy
schedules to join us today. I also want to thank the people of Dade
County for their warm hospitality.
As most ofyou know, the 1992 election brought major change to
Washington. In addition to changing control of the executive
branch, the voters sent an unprecedented number of new Members
to the U.S. Congress, 110 to be exact. Peter Deutsch and Carrie
Meek are two excellent examples of the change that has taken
place in the Nation's Capitol. As a Member first elected in 1968,
I am here to tell you that that change has reinvigorated the House
ofRepresentatives.
These new Members and their colleagues come to Congress with
a fresh perspective, a mandate for change, and an unwillingness to
put up with business as usual. I discovered very early on that most
also share my desire to promote economic growth and job creation.
For years, we have heard that American workers must retrain
themselves to be more productive and competitive in the inter-
national marketplace. This is true. But few people have fully
grasped the concept that retraining is not enough. There must be
jobs available for workers when they are trained.
This is a reality which my colleagues from Florida and I under-
stand, and that is why we come to Dade County today, to hear di-
rectly from men and women on the frontline of how the Federal
(1)
Grovemment can help areas like Dade County create new jobs and
new businesses.
The issue ofjob creation is particularly important in Dade Coun-
ty because in the last 2 years it has been hit by a triple blow of
economic problems. In addition to its longstanding economic prob-
lems, southern Dade County was devastated by the natural disas-
ter from Hurricane Andrew and a manmade disaster when the
closing ofHomestead Air Force Base was announced.
This unique confluence of economic problems allows us to use
Dade County as a case study to examine several areas under the
subcommittee's jurisdiction: Disaster assistance, particularly the
Disaster Assistance Programs administered by the Economic Devel-
opment Administration; defense conversion; and credit availability
and economic development assistance for business andjob creation.
We are honored to have with us today two major players from.
President Clinton's economic development team: The Honorable
Wilbur Hawkins, Acting Assistant Secretary for Economic Develop-
ment from the U.S. Department of Commerce, who is in charge of
several important Disaster Assistance, Defense Conversion, and
Economic Development Programs; and the Honorable Otis Pitts,
Deputy Assistant Secretary for Hurricane Recovery from the De-
partment of Housing and Urban Development, who has been
overseeing the Federal recovery efforts in Dade County in the wake
ofHurricane Andrew.
Our other expert witnesses today cover a broad spectrum oflocal
elected and appointed officials, business leaders, and community
activists. They will tell us which Federal programs have worked,
which ones have not, how existing programs can be improved and
how we can create new programs to more effectively meet the
needs ofDade County.
The advice we receive today will help us advise our colleagues in
the Congress on the steps we can take to expand credit availability
for economic growth and job creation.
Without objection, our witnesses' prepared statements will be
submitted in full for the record of the hearing. After Congressman
Deutsch and Congresswoman Meek make their opening state-
ments, I will ask each participant to identify themselves and then
summarize in 5 minutes or less, the main points of their written
statements so we may have some question and answer dialog
which will help the subcommittee extract out what we may not un-
derstand as a problem, or so that we can gain more insight from
your written statements as they will appear in the record.
So I thank you very much for being here today, I look forward
to a nice warm temperature outside and nice cool atmosphere in
the hearing room and with no further ado, I would like to have my
friend and colleague on the Banking Committee, Peter Deutsch of
Florida, have his opening statement.
Mr. Deutsch. Thank you very much, Mr. Chairman, and I really
appreciate very much you bringing the subcommittee down to
south Florida and the opportunity to hear from witnesses today. I
also want to thank my south Florida colleague in particular, Con-
gresswoman Carrie Meek, who is with me and serves on the Appro-
priations Committee in Congress, and I do not know if their rep-
resentatives are here, but I know that Lincoln Diaz-Balart is plan-
ning on coming as well.
Next year, the House Banking Committee, in cooperation with
the House Committee on Public Works and Transportation, begins
work on legislation to reauthorize, re-fund, and ifnecessary, reform
the Economic DevelopmentAdministration.
I can think of no better place to begin learning about the issues
presented by this legislation than Homestead, Florida.—The experi-
ence of Homestead in the wake of Hurr—icane Andrew the largest
natural disaster in our Nation's history gives us an excellent op-
portunity to examine three critical issues.
First, how does an economy recover after a natural disaster has
literally destroyed the infrastructure that ties its disparate parts
together? Second, how can we convert a cold war defense base to
perform useful services in the post cold war era? And finally, what
long-term and long-range strategies do we need to promote eco-
nomic growth in Homestead, Dade County, and other areas in need
ofeconomic revitalization?
Immediately after Hurricane Andrew struck in August 1992,
Congress and President Bush authorized EDA to spend $50 million
on disaster relief projects in Florida. In addition to Mr. Hawkins
and Mr. Pitts, the panel will hear testimony from 10 witnesses,
many of whom will explain to us their hands-on experience with
the expenditure of these funds. I want to tell people a few things
about several ofthe witnesses from my district.
The first witness on the panel will be the mayor of the city of
Homestead, Tad DeMilly; and the city manager, Alex Muxo. The
city of Homestead, which I, Congresswoman Meek, and Congress-
woman Ros-Lehtinen represent, was literally in the eye of Hurri-
cane Andrew's landfall on August 24, 1992. As a result, much of
Homestead's physical and social infrastructure was destroyed.
Mayor DeMilly and City Manager Muxo will give us some construc-
tive criticisms regarding EDA's efforts in helping the citizens of
Homestead rebuild the decades worth of infrastructure that was
wiped out by Hurricane Andrew.
The first witness on panel 2 will be attorney Gilbert Lee Sandler,
who represents the Miami Free Trade Zone, one of the few foreign
trade zones anywhere in the United States which is profitable. Mr.
Sandler will echo in detail some of the concerns I have expressed
in public statements and directly to the Economic Development Ad-
EDA
ministration that is unwisely spending scarce hurricane relief
dollars outside the directly impacted areas of Homestead, Florida
City, and other areas south of Kendall Drive. In at least two in-
EDA
stances, has spent or is considering spending millions of dol-
lars in downtown Miami, whose experience during Hurricane An—-
drew can best be described as an unusually heavy rain shower
intense perhaps, but hardly devastating.
EDA
has already approved $2.5 million for refurbishing the
Omni International Mall in downtown Miami and is considering
spending $5.5 million on a grant to the Wynwood Free Trade Zone
which would enable the latter to compete with the Miami Free
Trade Zone, which is privately funded, financed, profitable, and has
a great deal ofunused capacity. It makes no sense to spend 10 per-
cent of the hurricane relief project on a single project which is not
even near the area impacted by the hurricane, especially where the
hurricane-impacted area of Homestead, Florida City, and Dade
County south of Kendall Drive remain littered with the shells of
destroyed or otherwise unusable buildings, shopping centers, and
storefronts.
Some of those devastated buildings were either owned or leased
by businesses represented by another witness on the second panel.
Ms. Kim Sovia is the president and chief executive officer of the
Greater Homestead/Florida City Chamber of Commerce, many of
whose members suffered devastating losses during Hurricane An-
drew. To give you an idea of the devastation Hurricane Andrew
wrought, the chamber lost three-quarters ofits members as well as
its headquarters in the old town hall in downtown Homestead. The
chamber was forced to move its headquarters into a trailer, where
it has operated for 16 months while it awaits reconstruction of its
old facility. The chamber has regained much ofits membership and
has been working actively with the city of Homestead, Dade Coun-
ty, the Beacon Council, and We Will Rebuild to get Homestead
back on its feet.
Immediately after Ms. Sovia, we will hear from Bob Epling, who
is president of the Community Bank of Homestead. In addition to
his role at Community Bank of making much needed credit avail-
able to numerous individuals and businesses who suffered losses in
the wake of the hurricane, Mr. Epling is cochairman, along with
Alvah Chapman, a senior executive at Knight-Ridder Newspapers,
of We Will Rebuild, which was established by another one of the
panel 1 witnesses, David Weaver, to coordinate the distribution of
public and private hurricane relieffunds.
I ask my colleagues to pay close attention to the experiences
these and other witnesses will relate to us, so that the reauthorized
Economic Development Administration will be a reinvented Eco-
nomic Development Administration that can more effectively pro-
mote economic growth and revitalization.
Thank you, Mr. Chairman.
Chairman Kanjorski. Thank you, Mr. Deutsch.
Ms. Meek.
Ms. Meek. Thank you very much, Mr. Chairman. Let me join my
colleagues in Dade County, particularly my colleague. Representa-
tive Deutsch, in welcoming you to our area. When I testified before
your subcommittee early on, right after the hurricane, you said to
me, "I will come to south Florida and I will conduct a hearing to
understand on site what is going on." And we thank you, Mr.
Chairman, for doing that, and bringing your subcommittee here.
The title and jurisdiction of your subcommittee, Economic
Growth and Credit Formation, are exactly what are of the greatest
interest to our community here. This community is aggressively
pushing forward to rebuild and enlarge our business and commer-
cial base and create new job opportunities for our citizens. And the
availability, Mr. Chairman, of working capital and investment is
very crucial in this effort.
As you will hear today, Dade County has had to bear up under
unbelievable burdens over a very brief period of time. Our citizens
have had to deal with the cost and logistics for the housing, feed-
ing, health care, education, and employment of tens of thousands
