Rural Gateway Case Studies

Southern Bancorp Community Partners

Project Summary

  • Grant Award: $1,998,621
  • Grant Category: Comprehensive
  • Applicant Type: Nonprofit
  • Grant Activities:
    • Business development and assistance
    • Business incubator and entrepreneurial training
    • Homebuyer education
    • Individual Development Account (IDA) creation for home repair and purchase
  • Projected Impact:
    • 5 business loans
    • 30 individuals receiving entrepreneur training
    • 14 new businesses created
    • 150 individuals receiving fair housing training
    • 115 households establishing IDAs

Location

San Felipe map

Helena, Arkansas

Key Outcomes

  • Funding for 6 new start-up businesses
  • 73 new quality jobs
  • 21 down payment and home repair awards
  • Funding for 9 commercial and 7 residential spaces

Contact

Nancy Sullivan
(510) 372-4201
Nancy.Sullivan@southernpartners.org

Community Description

Southern Bancorp Community Partners (SBCP) is in Helena-West Helena, Arkansas, a small town of approximately 10,701 (2017 Census figures) residents on the Mississippi River that is experiencing significant poverty and major issues with vacant properties. The racial makeup of Helena-West Helena, composed of two recently merged towns, is 67 percent African-American and 32 percent White, with the remaining 1 percent primarily Hispanic/Latino. With a median household income of $19,896, according to the 2000 Census, the city is among one of the poorest in the United States. As a primarily agricultural (specifically cotton) economy, the city has seen a significant decline in the past 40 to 50 years.

The Organization

SBCP is a certified Community Development Financial Institution (CDFI) and works in partnership with Southern Bancorp, Inc. and Southern Bancorp Bank, with a shared mission to create economic opportunity including affordable housing, across the Mid-South. Helena-West Helena, AR is Southern Bancorp, Inc/Bank's hallmark development community. SBCP provides lending, financial development services, and public policy advocacy. Southern Bancorp Inc., a CDFI and bank holding company, and Southern Bancorp Bank, one of the largest rural development banks in the United States, are also CDFIs.

Project Overview

The SBCP funding was for economic development and housing that supported existing businesses and entrepreneurs and provided supportive services and incentives to homeowners. The program created new businesses and jobs and helped homeowners purchase or repair their homes. The SBCP project had several components:

The Helena Start-Up Challenge was an 8-week business start-up class designed to help area businesses start up or move to growth quickly. Participants were provided with $15,000 or $25,000 grants. The 2013 winner, Shel Wes, created a new product that allowed wood sanders to work on curved surfaces, rather than only on flat surfaces. The project included both the development of the intellectual property and manufacturing start-up. Six awards were made for start-up businesses. All awardees were required to provide matching funds totaling at least the amount of their awards prior to receiving these grants.

The Helena Jobs Incentive targeted existing local businesses by providing incentives for business expansion of $2,500 to $7,500 per job created. The jobs had to be of a certain quality, and a community stakeholder panel was used to evaluate applications, including a banker, an attorney an economic development leader, and an academic. Three businesses were provided $194,500 for the creation of 36 new full-time jobs. An additional $48,000 was added in early 2015 to create 10 more jobs, including at Norac Additives. A total of $412,000 was provided to 10 businesses for the creation of 73.5 new jobs. These businesses were also required to provide investment matches equivalent to their awards in order to receive these funds.

Norac Additives, Helena Jobs Incentive Recipient
Norac Additives – Helena Jobs Incentive Recipient

Riverside Renewal provided matching funds for the development of commercial and residential property in downtown Helena. There were many buildings available in downtown, but they needed significant rehabilitation. This program awarded grants of up to $100,000; nine awards were made, for a total of $706,877 in grants and nearly $2 million in investment toward the development of nine commercial and seven residential spaces. The HUD RIF program project also enabled SBCP to create a promotional video about Helena used by the Helena-West Helena Port Authority as they work to recruit additional new businesses.

Downtown Development Loans were provided as part of the HUD RIF program but through public and private funds leveraged by SBCP which included 17 loans in historic downtown Helena totaling $1,451,276. Some of the funds provided for these loans were from USDA's Rural Services programs such as the Rural Business Enterprise Grant and USDA Intermediary Relending Program funding.

Read more about how renovations add energy to the sluggish Helena-West Helena downtown.

Business Incubator and Entrepreneurial Scholarships. SBCP supported the Helena Entrepreneurship Center, a joint effort by Thrive, Inc. and the Phillips Community College. To provide education and technical assistance to over 130 entrepreneurs and small business owners.

The Community Champion Home Buyer Program enabled rural communities to attract and retain quality personnel in essential positions, such as teachers, fire fighters, and police, through awards of up to $8,000 for down-payment support and up to $4,000 for green home repairs/upgrades. The Community Champions program provided 21 awards totaling $103,646. In addition, Southern Bancorp Bank reserved $1 million for home loans for Community Champions, with five borrowers receiving loans totaling $170,830 in matching funds. The availability of these loans was not advertised and any borrowers who did not qualify for this program were directed to SBCP's credit counseling services to help make them more loan-ready.

Individual Development Accounts (IDA) and Home Buyer Credit Counseling. Due to delays in being able to access HUD RIF funds, the amount of HUD support for the IDA program was reduced significantly. A total of 196 new IDAs were opened during the grant period and 123 asset purchases were made. A total savings of $179,184 was invested by IDA savers. IDA recipients are those with income under 200% of the poverty rate. They are also required to complete 12 hours of financial education. The RIF grant allowed SBCP to remove some restrictions from SBCP's existing IDA program, which used Temporary Assistance for Needy Families (TANF) funding that required dependents be in the home. The RIF-funded IDAs allowed payment for certain home repairs that the TANF-funded programs generally could not. U.S. Department of Health & Human Services' Assets for Independence funding was also used for IDA matching funds, as well as for education and home purchase. During the grant period, there were 416 participants (including all IDA and community champion recipients) who attended financial education and/or received housing or credit counseling. Housing counseling and education included fair housing information where appropriate. A total of 38 individuals focused on improving credit and 256 focused on housing.

 

 

Matt Inman from Southern Bancorp discusses his downtown project.

 

 

Vernetha Jackson benefitted from improvements to her property.


Project Resources

Ultimately the SBCP project leveraged more than $4.2 billion throughout the project, but the chart below shows the initially projected leverage and its sources.

Source Amount Details
Southern Bancorp Inc. $370,000 Lending capital for home renovation and mortgage loans
Phillips Community College-University of Arkansas $516,000 Incubator development and operations expenses; in-kind staff time
The Phillips County Chamber of Commerce $25,000 In-kind staff time
Main Street Helena $6,000 In-kind staff time
Southern Good Faith Fund (merged with Southern Bancorp Community Partners in 2012) $387,100 IDA matching savings, tax preparation services, and energy assistance
Initially Projected Leverage $1,304,100  

Program Outcomes

Over the course of the project, SBCP significantly expanded its operations in the area and increased its capacity. The specific project outcomes were:

  1. The Helena Start-up Challenge provided six awards of $15,000 to $25,000 to start-up businesses.
  2. The Helena Jobs Incentive created 73.5 new quality jobs.
  3. Riverside Renewal awarded nine grants, which included over $2 million in investment of HUD and matching funds and the development of nine commercial and seven residential spaces.
  4. Downtown Development Loans totaled 17 loans for a total of $1,451,276 in leveraged funding.
  5. The Community Champion Home Buyer Program provided 21 awards valued at $103,646 and five mortgage loans totaling $170,830.
  6. IDA and Home Buyer Credit Counseling opened 196 new IDAs and savers made 123 IDA-related purchases, with a total savings of $179,184. 415 participants received financial education and/or housing and credit counseling, including fair housing information.

SBCP instituted a comprehensive program targeting several major issues within the community, including retail leakage, jobs, credit access, economic development, and housing. SCBP also developed partnerships with a diverse set of organizations, including a local community garden, a chemical corporation, a local community college, the local Chamber of Commerce, the Helena Entrepreneurial Center, and Teach for America. This broad base of activities and partners allowed them to provide their clients with a wide-range of references and resources.

SBCP also capitalized on the power and benefit of Southern Bancorp Bank; the presence of the bank has had a major impact on the availability of capital and access to financial services in Helena-West Helena and surrounding areas.

Thrive
Thrive, Inc. assisted in providing education
and technical assistance to business owners.


Lessons Learned

One of the key barriers to implementation of this project was the extreme poverty and large vacant-property problems present in Helena-West Helena. While SBCP’s programs have created some jobs, the ability to attract businesses and qualified applicants has been extremely challenging.

The RIF grant was a much larger grant than SBCP had ever received, and as a result the staff had to significantly enhance their skills and knowledge. The grant helped them build that capacity, which in turn enabled them to apply for, win, and complete additional grants and funding opportunities. It also helped SBCP attract additional talented staff and community partners. In fact, SBCP helped the HUD create training on reducing review time, and it enhanced its own guidelines for managing Federal grants, including developing a rubric and scoring mechanism for awarding grants. The grant also made the organization more attractive to other funders, both public and private.

SBCP also learned that its public communications are critical to the success of its programs, particularly in a small rural community. The large grant and complex array of programs requires clear expectations and program requirements so that business applicants can be successful from the outset.

Safe at SBCP Offices

The combination of place-based development, multiple partnerships, layering of services, and participation of a major financial institution combined with skilled staff and a sophisticated organizational structure clearly led to the success of this project.

SBCP vault
Southern Bancorp Community Partners Bank Vault