No Funds for You! Rudy Freezes Out Rev. Calvin Butts; Harlem Improvements in Jeopardy

With millions of dollars and the promise of a Harlem economic renaissance at stake, the Giuliani administration is attempting to freeze out one of the neighborhood’s most powerful clerics, the Rev. Calvin Butts, and a not-for-profit corporation controlled by his church, Abyssinian Baptist, from participation in government-aided development projects.

Sources told The Observer that City Hall officials have asked Deborah Wright, president of the Upper Manhattan Empowerment Zone Development Corporation, to withhold funds from projects in which Mr. Butts or the Abyssinian Development Corporation, the development arm of his church, is involved. Ms. Wright helps oversee the distribution of $300 million in economic development assistance for the New York Empowerment Zone in upper Manhattan as well as the South Bronx. (Ms. Wright, through an aide, declined to comment. City Hall did not return calls seeking comment.) Mr. Butts and Mayor Giuliani have had a stormy relationship, and it reached its nadir last year when the cleric called the Mayor a racist.

City Hall’s actions threaten to bring to a halt at least two major community development projects–the restoration of the Astor Row homes on West 130th Street and the construction of 80 units of lower- and middle-income housing nearby. The A.D.C. has played a role in both projects.

In addition, sources said that administration officials have suggested that City Hall will not approve Government grants and will not allow development of any city-owned land for any projects with ties to Mr. Butts or the A.D.C., which has attracted financial support for its work from private sources such as Chase Manhattan Corporation, General Electric Company and American Express Company. The A.D.C. is just completing work on a sprawling new supermarket in Harlem and was involved in a major renovation of an underused parking garage–a project that reportedly has been blocked by City Hall since Mr. Butts accused the Mayor of racism.

Mr. Butts and the A.D.C. are major players in the neighborhood’s economic revitalization effort, which began when Harlem and the South Bronx were designated as Federal “empowerment zones” in the mid-1990′s.

“We’ve just gone through a period of great tension–we’ve gone through a lot of misunderstanding and name-calling,” Mr. Butts said. “In the end, we’re going to find out that we can work these things through. If we can’t, it won’t be because I haven’t tried.”

The tension in Harlem comes at a time when City Hall is embroiled in racially charged complaints about police brutality, and when African-American leaders are complaining that the Mayor refuses to talk to them.

Critics charge that City Hall has been dragging its feet in general on zone matters. Mr. Giuliani’s representative on the New York Empowerment Zone Board of Directors, Deputy Mayor Rudy Washington, has twice canceled meetings of the zone board in the last month over what one insider deemed “non-economic-development issues.” And, sources said, the city’s procedural slowdowns on zone issues are now systemic. According to one, “the [Giuliani administration] just keeps coming up with these problems. When someone objects to four out of 10 of the Empowerment Zone’s initiatives, you can deal with it. But when they object to 10 out of 10 because somebody didn’t get a piece of paper on time, that’s a problem. It postpones everything.” The Empowerment Zone board includes Mr. Washington, Empire State Development Corporation chairman Charles Gargano, U.S. Representatives Charles Rangel of Harlem and Jose Serrano of the Bronx and Ms. Wright.

Mr. Rangel, a Democrat who helped write the Federal legislation for Empowerment Zones, complained that “there’s just no excuse” for Mr. Washington’s apparent snubs of his partners on the Empowerment Zone board. City Council member Bill Perkins of Harlem said that City Hall’s actions were “acts of revenge,” while State Senator David Paterson called Mr. Giuliani an “obstacle to the Empowerment Zone for a long time.”

The criticism of City Hall from Harlem’s community leaders contrasts with the kind words that many have for Gov. George Pataki and his allies for their work in the area’s rejuvenation. Mr. Pataki would seem to be an odd champion of Harlem development, but his economic development czar, Mr. Gargano, and Randy Daniels, a Harlem resident who is a senior official with the Empire State Development Corporation, have garnered high marks for their efforts in Harlem. Mr. Butts, himself an ally of Mr. Pataki, said he has only “high complimentary comments” for state officials, adding that the Pataki administration “is doing more to help Harlem than anyone in the last 25 years.”

A Local Hero?

Many sources placed much of the blame for the current difficulties on the very man who ostensibly acts as the Mayor’s ambassador to the city’s black constituencies, Mr. Washington. Several sources complained that Mr. Washington has been unresponsive to their needs and virtually inaccessible to representatives of the Harlem community. “It’s inexplicable,” said Mr. Perkins. “[Mr. Washington], the local kid, he should be our champion. But also you have to understand that our local champion is representing someone else: the Mayor. [Mr. Washington] won’t even meet with black leaders.”

Senator Paterson, who last year chastised Mr. Butts for “fan[ning] the flames of contempt” with his provocative criticism of the Mayor, said that he has never had a conversation with Mr. Washington about the Empowerment Zone, although he had talked with Mr. Daniels and Mr. Gargano. “To me, the state is fighting over a vision for the project [while] the city is fighting more over control of the process. Maybe the city has a vision I don’t know about.”

According to Mr. Daniels, the state has enjoyed some measure of success in the Empowerment Zone by maintaining a flexible attitude in dealing with its partners: “The Governor and Chairman Gargano are prepared to do whatever we have to do to make the Empowerment Zone work. At times we will have to compromise, and we will do so as long as our principles are not reduced in any way. It’s really important that we compromise politically when we have to.” Asked if Mr. Giuliani and Mr. Washington were attempting to freeze out political adversaries from the Empowerment Zone, Mr. Daniels said he would not “single anyone out and say that. But we will not accept that from anyone. I don’t know what motivates some of the decisions that are being made. But it’s really important to put politics aside. We will not support or exclude anyone because of political reasons. It’s inappropriate.”

Tensions are such that a source close to Ms. Wright speculated that she might step down as president of the development corporation because of strained relations with Mr. Washington and City Hall. That, said the source, would be “a disastrous blow to Harlem’s hopes of working successfully with the city.” But sources familiar with the zone said they’ve nearly resigned themselves to waiting for Mr. Giuliani to leave City Hall, either in January 2002, when his second term expires, or in January 2001, when he would leave office if he runs for and wins a Senate seat next year.

Apparent setbacks notwithstanding, there are some signs of progress. On 125th Street, ugly scaffolding covers what will soon be the gleaming new exterior of a long-awaited mall called Harlem USA. Nearby, on Lexington Avenue, a new Pathmark is set to open its doors, meaning that residents will no longer have to travel out of the neighborhood for routine grocery shopping. And Harlem will soon enter the company of some of Manhattan’s most yuppified neighborhoods when a Starbucks outlet opens on the corner of 125th Street and Lenox Avenue.

Mr. Perkins, the local Council member, remains upbeat about the New York Empowerment Zone’s potential, saying it could have a “ripple effect” not just in Harlem but throughout the city.