Restarting NYC’s Economic Engine: Tapping the Economic Potential of the City’s Immigrant Entrepreneurs

A Forum Presented by the Center for an Urban Future

With Support From Citibank Community Development

Thursday, March 11, 2004, 8:30 am – 10:30 am

Moderator: Jonathan Bowles, Research Director, Center for an Urban Future

Panelists:

Nathalie Bernal, Vice President of Lending and Marketing, ACCIÓN New York

Hon. Adolfo Carrión, Jr., Bronx Borough President

Ali Hirji, Vice President and Senior Business Development Officer, Citibank’s Commercial Markets Group

Joyce Moy, Director, LaGuardia Community College Small Business Development Center

Gary Pierre-Pierre, Publisher, The Haitian Times

Dolly Williams, Co-owner, A. Williams Construction; NYC Planning Commissioner

Andrew White, Director, Center for NYC Affairs, Milano Graduate School, New York University: The Center for NYC Affairs is part of the Milano Graduate School of Management and Urban Policy, and I think of it in many ways as a sibling organization to the Center for an Urban Future. What they’re doing around economic development, we’re trying to do around social policy. The shared strain here is that this is about paying attention to policies that emerge from the grassroots and from people in practice in the field throughout the city. And in many ways, that’s also what Milano is about. I wanted to quickly mention that we too have been working a great deal on immigrant policy and we have some forums coming up – there’s cards out there, including one next week that Diana Lam was supposed to speak at, but we’ll have her replacement – this is a hazardous business. Again, thank you so much for coming and thanks to CUF for putting this program together. I want to introduce the new dean of the Milano Graduate School, Fred Hochberg, who came on board about two months ago. He’s former Deputy Administrator of the Small Business Administration in Washington, so his expertise is just perfect for this forum. Fred?

Fred Hochberg, Dean, Milano Graduate School, New School University: Well, good morning. Thank you, Andrew. I wanted to come today because I wanted to stay for as long as I can – I have a seat in the back – it has nothing to do with the content of the program, I just have another commitment I have to run to. But I think this is a really important topic and that’s why I wanted to stop in this morning to add my welcome. But when I worked in Washington, and actually in the back of the room, there’s a man named Tom Bettridge – you want to raise your hand, Tom? – Tom ran the SBA office in New York and did a terrific job, and he’s here today. We made a lot of efforts to reach women, people of color and immigrant communities, and that became an important part of the Clinton administration’s view on small businesses and small business formation. And it wasn’t just because it was nice to do or good to do, it’s because it was very clear in the ‘90s – and has continued – that new immigrants and immigrants in this country are forming businesses at a very rapid rate, and need the kind of resources to help them grow.

So, hopefully today the panel will find out what’s being done on the good side and also what should be done better. And I took also a personal interest in this because my family actually came to this country as immigrants. My mother left, with her family, Nazi Germany in 1933 and got here in ’37, and she formed a business that over the years became known as the Lillian Vernon catalog. So I sort of have watched immigrant businesses and small businesses grow right at the kitchen table, so I was anxious to hear as much as I can of today’s panel. So, I wanted to just add my welcome. I think this is just the kind of cooperative efforts that we want to do at the Milano School – the work that Andrew has done at the Center for NYC Affairs, and working with the Center for an Urban Future. So I want to just add my welcome and turn this back over to Andrew.

Andrew White: Immigrants in New York – clearly, we all know the basic data, you know, 34+% of the city is immigrant. Something I’ve been saying for years and many others have been saying for years is that immigrant business was one of the primary, if not the primary engine for the recovery of many of our neighborhoods in this city in the 1990s. And it’s been along time coming to see this document – I’m very much looking forward to what Jonathan is going to present from the report they’re about to publish. It’s overdue to note this, but it’s also overdue to build the support structure underneath further expansion of small business in general, but also immigrant entrepreneurship. Our next speaker is Marc Jahr, who is former head of the LISC office here in New York and is now at Citibank and has been a long supporter of Center for an Urban Future and City Limits. Marc?

Marc Jahr, Vice President, Citibank Community Development: Andrew, thank you. Good morning. How are you? As Andrew said, I’m with Citibank. I’m Citibank’s director of community development and real estate finance for the metropolitan New York area, and I’m a member of the Center for an Urban Future’s board of directors. On behalf of my colleagues who are here today – Ali, and Kathleen Parisi, and Terri Thomson, who’s our director, Citigroup’s director of state and civic affairs – I want to welcome you to this great forum. Citibank and Citigroup are pleased to sponsor this series on the future of the city’s economy. I was told that Citigroup is the New York metropolitan area’s third largest employer. Apparently we have something like 50,000 employees in this metropolitan New York area, and so as an institution, as a corporate citizen, we have an enormous stake in the future of New York and its growth and its prosperity. And as a global institution, an extraordinarily diverse institution, we have an enormous commitment to the future and the well-being of immigrant communities, not only here, but throughout the United States and in other countries throughout the world.

This forum, on the role of immigrant entrepreneurs in New York’s economy is, like previous speakers said, of particular interest to me. Like many of you, my autobiography is one of immigrant families coming to New York. On my father’s side, his parents – my grandparents – came from central Europe and on my mother’s side, my grandfather came from a little village in Turkey and my grandmother came from Greece and then they went to Buenos Aires. And from Buenos Aires, they came to New York City, first to the Lower East Side and then they migrated out to Brownsville – a classic kind of trajectory and arc that led them to the city and then out into the neighborhoods in New York City. And they brought with them, like all immigrants, tremendous hopes and dreams and aspirations and energy and intelligence.

And the drama that they played out in their lives, along with hundreds of thousands of others in New York City, is a drama that’s being reenacted over and over again in New York – and in particular over the last decade, I think, has been reenacted with particular vigor and energy. And it’s brought to the city a drive, an ambition in the sense of possibility that’s made the city a great, great global city – one that it couldn’t be without the immigrant energies that animate it. So, I am personally pleased to be a part of it. I think the bank – Citigroup, Citibank – is enormously pleased to sponsor this forum. I think, like the prior forum on the future of the city’s economy, this is going to be really a stimulating discussion on the part of the panelists and in terms of the questions that you’ll be able to ask them. I don’t have the honor of introducing these panelists, I’m going to leave that honor to Jonathan Bowles, who’s the Research Director of the Center for an Urban Future. And I’ll hand it over to Jonathan. Thank you for coming this morning.

Jonathan Bowles, Research Director, Center for an Urban Future: Thanks, Marc. And thanks to Fred and Andrew for hosting this event, and obviously to Citibank for sponsoring this. I’m Jonathan Bowles from the Center for an Urban Future, and this is actually the second in a series of four forums that Citibank is sponsoring, that the Center has been having, all about looking at opportunities for economic growth in New York City. We had one a couple months ago that was really a great discussion about overall trends and I’m really thrilled about this forum today that’s really looking at a specific topic as something that we really view as a potential asset that has opportunity to be tapped for future economic growth in this city. These four forums that we’re having all build on a report that the Center did, titled “Engine Failure.” If you haven’t seen it, we included a one-page introduction to that report in the packets that you picked up today, and you can certainly go to our website – www.nycfuture.org – to actually read the complete report or to download any of the Center’s reports.

One last thing before I introduce all these esteemed panelists is tell you that, like Andrew said, the Center for an Urban Future is doing a lot of research on the immigrant economy, the growing immigrant population in this city as an economic engine. We’re really just beginning to explore this – I know I’ve talked to a bunch of you in the room already. We’re definitely looking forward to get input from a lot more of you and so many other people throughout the five boroughs, so if anybody has any suggestions or feels like they could have something that they could lend to our work, please definitely contact us in the future. So, without further ado, let me introduce these great panelists we have today.

Sitting right next to me is Nathalie Bernal. She is the Vice President for Lending and Marketing at ACCIÓN New York, which is an organization that provides loans and other support services to micro-entrepreneurs in all five boroughs. In 2003 alone, ACCIÓN New York made 683 loans totaling $6.1 million. Nathalie previously served as a loan consultant for ACCIÓN in Harlem and the Bronx, working closely with small business owners, most of them immigrants. Bernal’s parents are immigrants to this country who both ran small businesses to provide for their family. Her father drove a taxi in New York and her mother owned a pizzeria in Queens.

Right next to her is Ali Hirji, who is Vice President and Senior Business Development Officer at Citibank’s Commercial Market Group. He is credit-trained, licensed as a registered representative for NASDAQ and serves as a trusted adviser and consultant to small business owners and entrepreneurs in NYC that are looking for guidance and resources in taking their businesses to the next level. He has served as a volunteer and past council member for the Agakhan Economic Planning Board for the USA, which services the needs of a self-reliant community-based immigrant group that seeks to improve the quality of life for new arrivals in this country and assist them in providing a fast-track transition to their new homeland.

Next to him is the Honorable Adolfo Carrión, Jr., who is the Borough President of the Bronx, and one of the city’s most capable elected officials on economic development and urban planning issues. I guess that’s not too surprising since he has a Master’s degree in urban planning and he worked in the Bronx office of the NYC Department of City Planning before being elected to the City Council in 1997. While serving on the Council, he sat on the Economic Development, Land Use, Education, Higher Education and some other important committees and was also the chairman of the special subcommittee on the 2000 Census. As Borough President, he’s made economic revitalization and workforce development among his top priorities. At his State of the Borough address two weeks ago, which I was fortunate enough to attend, he unveiled an aggressive campaign to boost the Bronx economy called “The Bronx At Work” campaign, and hopefully he’ll talk a little bit about that today.

Next to him is Dolly Williams, who is Vice President and Chief Financial Officer of A. Williams Construction. She and her husband Carl co-founded the company with money they had saved for a down payment on a house. The house had to wait, but they turned that $5000 investment into what is now a multi-million-dollar business and one of the most recognized and successful construction firms in the city. She has received numerous awards for her company’s excellence in the field, including the Crain’s Small Business Award and the U.S. Small Business Administration’s Contractor of the Year Award. Last October, she was appointed to the NYC Planning Commission by Brooklyn Borough President Marty Markowitz. Previously, she served as chair of the Caribbean American Center of New York, and also sat on the boards of the New York State Association of Minority Contractors and the Red Hook/Gowanus Chamber of Commerce.

Next to her is Joyce Moy, who is the Director of the LaGuardia Small Business Development Center, a not-for-profit organization that provides free one-on-one business counseling to start-ups and existing businesses. Based in Long Island City, the Center provides services in English, Spanish, Korean and three dialects of Chinese. Joyce has extensive experience in entrepreneurship and micro-enterprise, and has presented widely on cross cultural marketing and small business development. She is a member of the Board of Directors of Asian Women In Business, the U.S. Women’s Chamber of Commerce, the Queens Borough President’s General Assembly and the Flushing Hospital Medical Center Community Advisory Board. 

Finally, at the far end of the table is Gary Pierre-Pierre, who is the Founder, Editor and Publisher of The Haitian Times. You’re probably familiar with his name after seeing his byline on numerous stories in the New York Times. In fact, he spent six years on the staff of the Times, covering stories such as the World Trade Center bombings, which won that paper a Pulitzer Prize for spot news. Overall, he has more than 15 years experience as a journalist, first gaining national attention with his innovative coverage of Haiti during the early 1990s as a reporter with the Fort Lauderdale Sun-Sentinel. In 1999, he left the New York Times and became an entrepreneur, starting The Haitian Times, an English language weekly paper based in Brooklyn.  

So, just quickly to frame the debate today and kind of open it up to questions. As the Center found in our recent “Engine Failure” report, New York City faces some significant structural challenges, significant economic challenges going forward. For instance, many economists predict that the city’s finance sector will show a net job loss over the next 30 years. And largely because of globalization and advances in telecommunications and technology, many of the city’s high-end service businesses in sectors like advertising and publishing and business services are also increasingly shifting units outside of the city, or opting to create most of their new jobs elsewhere. In this climate, it seems obvious that New York City needs to cultivate new sources of economic growth. With that in mind, we thought – could the city’s growing and highly entrepreneurial immigrant population be one potential engine of growth for the city’s economies in the year ahead? 

So let me start off by asking the panelists, and today we’re not going to have any opening statements, we’re going to go right into discussion and hopefully, our goal is really to keep this a good, free-flowing discussion. I’m just going to ask the first question and let everybody get a chance to respond, but for the rest of the day, I think anyone should feel free to chime in – we want to make this as casual as possible. For the last 40 minutes or so, we’re going to have questions from the audience. Until then, we’re going to keep the discussion on the panel.

So, let me ask – New York’s foreign-born population already makes a significant contribution to the economic life of the city and to neighborhoods all over the five boroughs. Yet one gets the sense that there is still a lot of untapped potential in this area. Do you think that this fast-growing and highly entrepreneurial population could be even more of an engine of growth for the city’s economy in the years ahead? If so, how do we get there? How do we get key economic players in the city to start seeing this as a growth area and providing the necessary support? And I guess if we could just start at the far end of the table – Gary, obviously you are an entrepreneur here, what do you think?

Gary Pierre-Pierre, Publisher, The Haitian Times: Well, certainly, I think not only the potential is there, but the reality is there. When you look at areas across the city, from the South Bronx to Central Brooklyn to Bushwick areas to Manhattan and Queens, just the city in general, part of the revitalization that’s been going on through business and housing has been directly related to the growth of immigrants in these particular areas. I think the challenge for city officials in the economic sector is to find the way to reach out to these communities, because immigrants groups by nature tend to be insular. Not because they want to keep to themselves, but because there’s a certain reticence about reaching out to public officials, and to resources that are available to them. And I think that’s an opportunity that’s there for not only the city but for the small businesses to grow and prosper.

And I think the question is: how do you go about that? You have to be a bit innovative to, first of all, identify these businesses and then find the ways you can help them. There are some Chambers of Commerce that are in existence, but I think, for the most part, you’re dealing with the mundane, the nitty-gritty and the big picture is lacking sometimes. The [Department of] Small Business, the city’s Economic Development [Corporation], they’re doing a good job. But I think unless you reach out to them, there’s no structure in place for the small businesses to really know as much about them as they could to get the best out of what exists.

Joyce Moy, Director, LaGuardia Small Business Development Center: I keep hearing the comment that the immigrant business community is an engine for the economic development of New York City. And I think Gary’s right when he says we need to look at the macro picture, and I’m going to do that by giving you a micro picture of one community, and that’s Flushing, Queens. That is an area in which there has been a huge influx of immigrants, largely from the Asian communities. But let me put this in concrete terms because if the city government and corporate sector has not seen the value of these communities, they are truly blind. In 1997, I took a group of people from a very prestigious investment firm through Flushing on a walking tour. Within a six-block radius of Main Street and Roosevelt Avenue, there were 36 financial institutions. At the time, I was told that the highest grossing retail branch of Citibank was in Flushing, Queens. Today, off the top of my head, after mergers, I can count 22 financial institutions. And in Flushing alone, TD Waterhouse Securities is there, Charles Schwab, MetLife Financial Services. What does that tell you? There was something like $4.2 billion in cash deposits in that community, okay? Now, this is money that’s being put into these institutions and invested through these institutions by the community. And a large part of those investments are coming from the small businesses that have revitalized that community. The question I would ask is: what are we getting in return?

Now, institutions like Citibank have done a great job in working with the community, they are in the community, they support organizations like ours and many of the others on this panel, and, of course, this particular forum. That’s terrific. But what I’d like to do is to dig deeper, get the data and say: this is our input, what are we getting in return? And just to give you a couple of more examples without going too far, the Queens shopping mall, and I believe these statistics are still true, produces the highest return per square foot on rental income of any mall in the United States. And they’ve expanded that mall, doubling it, because obviously there is money to be gotten from this particular enterprise. And who’s buying at the malls? It’s the immigrants, buying the American dream. And then how else do we put money into the community? We do it by being tourist attractions, that’s one way.

And then the other way is that these communities draw people back who have left the communities. The Asians, for example, who have moved out to Long Island, Westchester, or wherever, come back to the community on a weekly basis in order to buy food, to do their banking, etc. People like my mother-in-law – we moved out to Queens 30 years ago, we do her banking in Chinatown. And as a result of taking her to Chinatown, we buy food in Chinatown, we do all kinds of things, and we’re infusing money from another borough into Manhattan. People from Westchester, Long Island, New Jersey are infusing money into the Queens area by doing this. So we are very, very significant in terms of the economic development of New York City.

And just one more thing – many of the immigrant populations serve communities that are underserved. And by so doing, they risk their lives. Let me just give you the example of the young delivery boy who was killed delivering food. These small businesses exist on extremely small margins. They really put their lives on the line in order to keep businesses in communities and to service communities that are not otherwise services. Livery cabs – I’m sure Mr. Carrión can talk about these kinds of issues – again, provide services in neighborhoods that nobody else will touch. So just for a moment, I want you to focus on concrete things, and then from that, you ought to be able to get a lot of ideas about what you can do for us.

Dolly Williams, Co-Owner, A. Williams Construction; Member, NYC Planning Commission: Wow, Joyce, how do I follow this? Well, I know you said that I should not make an opening statement, Jonathan, but I do want to say that I want to really thank America and Americans for having such an open-door policy on immigration, for allowing people like us to come here, and for giving us an opportunity, which no other country does in the world. So, thank you, America.

I think the question was how you can help – we have many, many very energetic, very enterprising entrepreneurs who are immigrants. And we historically have that, that’s why this country is such a great country. Now, the question was how could government help immigrants become better and move to the next level. I think that government has a lot of mechanisms and programs in place that, I think, that immigrants really sometimes fail to access. Some of us do access them, and we’re quite successful.

But I think that you have to become aware that every level of government in the United States has programs and opportunities for immigrants. The SBA, for instance, has the 8(a) program, which allows you to procure contracts, there are marketing programs, loan programs. The state government has programs and that stellar agency called DASNY allows, there are set-aside campuses where, of course many, many times you see immigrants are minorities, especially the new immigrants, there are minority set-aside programs for women and minorities to participate, which people should access. Then there is, on the city level, we have the Department of Small Businesses, and there are business solution centers in every borough that immigrants can access to grow their businesses. So there is help out there and I think that – should we have more help? Maybe. But I think that the first thing that we should do is try to access what we have here and try to help ourselves. I’ll come back later on, I have some more to say on this issue, but I’ll allow Adolfo to speak, because I think he has to leave.

Hon. Adolfo Carrión, Jr., Bronx Borough President: Thank you, thank you very much. Good morning everyone and thank you for the invitation. I’m really glad to be here, and I’m glad we’re having this conversation. Someone a long, long time ago said that there’s nothing new under the sun. I think his name was Solomon. He was the same wise guy who decided that in order to call the question on who was the real mom of these two women who were claiming motherhood of his child, said: why don’t I just cut the baby in half? And, obviously, the real mother, at the expense of her own comfort in raising the child, says: please, don’t sacrifice the child, give it to the other woman. And he found out that, in fact, that was the real mother.

The idea that immigrant issues and that the engine of this economy here in New York, in any other major city or in any place in America is a new idea is obviously not well-placed and foolish. The fact of the matter is that the American economy is a small business economy and is an economy that is driven by immigrants, I think that is a historical fact. So, this conversation really is an old conversation that has to be had more often about how is it that we integrate new Americans into the American economy in a meaningful way, and not make it, as other things that we do, seem to be that we’re doing some philanthropic or good thing, which I think people need to sort of brush off their shoulders. I know that we like the feel-good stuff. As Americans, we like it in our candy, we like it in our fast food, we’re now, obviously, you know, 64% of Americans are overweight or obese. It’s quickly becoming the second leading killer of people in these United States, so we do like to suck on bon-bons and get that pleasure of a good feeling. The fact is that I don’t think we need to feel good, we need to do right. 

And it means that we just need to build an economy by integrating people into the economy in an unsentimental way. So let me talk a little bit about unsentimentality. I think that our posture as a city should be much more aggressive. My parents came over from Puerto Rico in the 1950s – they’re not really immigrants, in a sense. I mean, they were immigrants from an American colony, I guess. They were teenagers that came over to New York City. They lived the West Side Story, and Pops went over to live on the West Side and worked at a couple of factories and did some interesting things. He ended up being a diamond setter on 47^th street in the Diamond District, and then somehow he became a pastor of a church on the Lower East Side, and the rest is history. We were able to do things in a very entrepreneurial way in a different setting.

So, the story is not new. I think what we need to do, in this economy, to keep job growth going, to keep incomes growing, to keep our economy running and healthy, to keep creating opportunity, is to be more aggressive about making sure that people have access to capital. One of the problems that we find in the Bronx and in similar communities around the city is that there is this cash economy that runs a lot of small businesses, and there is the napkin bookkeeping that takes place. And, finally, when the deli owner, the dry cleaners owner, the guy who runs a parking lot, the guy or gal who runs a beauty salon or whatever it is that they do at a very local level, decides that they need to grow or they need more capital to do something, they go to a bank and the bank says, you have no history.

So, obviously, I think that we can do something about that. There’s a huge cash economy. Joyce spoke about $4.2 billion of money, cash deposits moving into those banks in Queens. On Fordham Road, we have over $1 billion of retail activity on a retail strip in the middle of the Bronx. It’s the third highest generator of retail sales in the city. It’s got floor space rents of $125 a square foot, and you have a high unemployment rate on the books and you have relatively low incomes on the books, so there is this cash economy that’s not integrated into the formal economy, that’s not integrated into the capital economy and the banks and the lending. And so, we need to be more aggressive about reaching out, helping those businesses to prepare themselves to be marketable in a conventional sense.

I think that one of the things that government can do to help the immigrant business is to create one-stop regulatory agencies. I don’t have to say this story, and I’m going to stop soon, because there’s so much to talk about here, but one of the problems that we face is the Department of Buildings in this town. It keeps us from progressing in so many ways and I’ll tell the story later if you ask me a question. Over several administrations, mayors have tried to fix it. I think that this mayor finally is doing some interesting stuff to fix it, but we get complaints all the time. We also get them from other regulatory agencies on the business side saying: I can’t get through the morass and the bureaucracy quickly enough to get back to doing business, and they tie me up in these offices. So, we need to speed that up.

Government, this government, this $45 billion local government we have here, this multi-trillion dollar national government, this $100 billion state government, are all the largest purchasers of goods and services on the globe. They should be purchasing more from these businesses as well – that means making it easier to do business with government. That means partnering with immigrant or new businesses. And I think that government also has to, and we as a collective, have to make a more aggressive, take a more aggressive posture toward understanding these so-called immigrant marketplace, the new American marketplace – whether it’s in Flushing or in the hub on 149^th Street or East Harlem or wherever it’s manifesting itself, I just think we need to get to know this marketplace and understand the dynamics. And, in fact, there’s a lot of cash on the street, and there’s a lot of cash on the street because these guys are not being able to go through the traditional conventional methods, and a lot of it is an education curve, as well.

And let me just finish with this. When I was growing up in this town, we had – every school in every neighborhood had an English-acquisition type of program for adults. You could go learn English just about anywhere. I think we need to speed the process by which people learn the language of commerce here and the language of commerce globally, which is the English language – good, better, indifferent, it is what it is. It’s a good investment on our part to speed that process up.

Ali Hirji, Vice President and Senior Business Development Officer, Citibank’s Commercial Markets Group: Good morning everyone. You know, just hearing Adolfo’s comments clearly provide an interesting context for this dialogue and discussion we’re having today. And it reminds me of a quote from, I think it was either Nietzsche or Goethe, a European philosopher, who said: “To think is easy, to act is harder, but the hardest thing to do in the world is to act in accordance with your thinking.”

And I think these kind of forums and the fact that Jonathan’s involvement in creating that discussion is an important piece to try to dimension the opportunities clearly and the challenges that are ahead of us, and to creatively figure out a way of working not only with the private sector, but more importantly, the community business organizations as well as the public sector in reaching some solutions to what I consider is a very interesting time that we’re living. Post 9/11, clearly we’ve got an economy that is jumping through the hoops in the context of increased productivity. We’ve got a low inflation environment, but we’ve got a jobless recovery, and that’s a quagmire in the context of traditional economic theories that talk to how to grow the economic base in an urban environment such as the one that we are experiencing right now.

One of the things that I think we clearly need to do, and I want to use a broad frame of reference and call it – I think we’re lacking an enabling environment, if I can use that term, both in the private sector as well as the public sector. We’re missing that connection. Adolfo referred to issues relating to access to capital, the fact that we’ve got a cash-driven economy. Every day we walk the streets of New York. And how do we kind of leverage all of those elements of our economic life to impact in more meaningful ways and spur the economy as it relates to immigrant entrepreneurship and how they’ve been able to succeed? So that whole piece of the puzzle is clearly something that, you mentioned, Dolly, in the context of stuff being available. But we’re not doing a good job marketing it. We’re not doing a good enough job educating immigrant entrepreneurs about various programs – the SBA, the 504 lending programs, the 7(a) programs.

This is a little blurb on behalf of Citibank, but we’ve prepared a 77-page document that talks about how to access all of that stuff that’s in front of us. And the astonishing thing is, in all my conversations with a lot of my clients, they tend not to be aware of the context of these programs. Now, part of it, I think, has to do with the fact that they look at government programs and they feel that there's a bit of a disconnect, they have to do paperwork, they have to get their tax returns, they have to prepare business plans, but all of those processes and procedures are also something that the government and the city government, can help and do help. So, I think part of the solution here is to: (a) do a better job in the context of leveraging the current opportunities that exist. I think along the private sector side, we clearly have to be even more visible.

I mean, some of the things that I see in the context of Joyce’s area in Queens, you walk down 74^th Street and Roosevelt Avenue, and these are all neighborhoods that have been revitalized by the involvement of ethnic communities, whether it’s the Indians or the Latin Americans or the Chinese, they’re all there on the street, doing business. It’s an amazing phenomenon when you look at it in its action. You should take a trip on the 7 line and really see the kind of economic vibrancy that I’m recognizing. So, there are a couple of things that I have additional thoughts on that will talk to some specifics, but I just wanted to lay the land out there, in terms of where I think the opportunities may be.

Nathalie Bernal, Vice President of Lending and Marketing, ACCIÓN New York: Good morning everyone. I wanted to bring up the point of, we often have to ask ourselves: who is an immigrant, and what is the background really that they’re coming from? Because we’re talking about Africans, we’re talking about Latinos, we’re talking about Koreans, West Indians. They all face different challenges and come from cultures and communities that create different sense of barriers when they come to the States. And to give an example of that, for example, a lot of the Africans that come to New York and that start businesses in Brooklyn and the North Bronx and Harlem are illiterate – that’s a challenge particular to the African population. Latinos often times face language barriers, they face street lenders – in their communities, there’s individuals who will lend them money at exorbitant interest rates. And many times they’re called “prestamistas” – loan sharks. These individuals perhaps are not as prevalent as in other communities. And it’s important to not only distinguish between the communities and realize that each community needs individualized attention, but to talk about, as Adolfo said, about integrating these individuals into the economy.

And, taking into consideration what Gary said, about immigrant communities being very insular, it’s important to note that what happens is, they come from other countries where there’s no such thing as a credit bureau. There's no such thing as establishing credit. There is a fear of the banking institutions, there's a distrust of the government, and what is important about the integration is encouraging people, teaching people: how does America work? How do you become successful here in New York, in the United States? You have to establish credit. You have to report your taxes. You have to work with the government and with the banking institutions so that you can grow. You can’t put your money under the mattress. You can’t put the money in – many communities, what they do is, they pool money together within their communities into different types of groups and then they borrow from that pool of money. Now, that’s excellent because they are helping each other, but again, they're not establishing credit and they're not building assets which are necessary to continue growing and to fuel the economy, which is the conversation we’re having today. And, so, as I think all the panelists are stating, it really is about education, which comes to integrating individuals into how America works, and making the immigrant communities less and less insular by building trust and encouraging them of: how do you make America work for you? I think that’s really important.

Jonathan Bowles: Great. Well, thanks a lot for all that. And now I really want to make it more interactive from now on. So, everybody, feel free to jump in, and – there’s a lot of questions I have, but let me start it off with, I think that it’s never easy to do business in New York City. But some people say that there are particular obstacles to starting and growing a business if you’re an immigrant. I know that we've touched on this a little bit, but if people can just talk about – are there? Is that true? Are there particular barriers? I think Nathalie just mentioned a couple, but if you could just talk about that a little bit – are there specific barriers, and what exactly are they?

Dolly Williams: I think there are many, many barriers, and as a product of all of this, I can go on talking for a whole year about all of these barriers. But before we go into that, I’d like to say something more about the government. I think that what immigrants are not doing, and they can't do, is participate in the political process and the decision-making process of this city. And this is because it takes so long for the immigration to allow people to become citizens of this country, become naturalized citizens, and I think that is an area where the immigration should help. You come to this country and you live as a permanent resident for five years, and you should automatically, after that, become a citizen. And that was the case, for instance, when I became a citizen, it took two or three months for me to file my papers and become a citizen. And I think now, and especially after September 11^th, it is taking four or five years for a person to become a citizen and therefore you can't vote and can't participate – you really don’t have a voice in the decision-making. So that is one aspect [where] I think the government can help immigrants.

Now, the barriers. The barriers of being a small business owner are tremendous. The challenges come every day. And it’s not different now for new immigrants, I believe, than it was for immigrants who came earlier. I mean, you work seven days a week, 24 hours a day, and you keep the grind going. But, the financial barriers, for instance. Banks don’t want to listen. And, you know, the immigrants are people of a different color, they speak different languages, and I think that there is some discrimination there also, with financial institutions in lending to minorities, and to women – especially in the construction business. Other barriers, I think, are cultural barriers, because we hope that people would come to the city and we would form a big melting pot.

But, as Adolfo was saying, and as everyone aptly pointed out here, we have communities of immigrants in Flushing, we have areas where we have the Koreans – you feel like you're in Korea. When we go to Jackson Heights, we feel we are in India. And when we come down to Brooklyn, Flatbush Avenue, you’d think we were in Trinidad or something. So, I think that people do not network enough, and they do not really tap into the other resources and the help that they can get from other immigrants. So, I think that that is one area where we do have, for instance, a Caribbean Chamber of Commerce where they try to get people from different islands to network and to meet and help each other. So, I think we need a little more of that.

Jonathan Bowles: Go ahead, Joyce.

Joyce Moy: I definitely agree with Dolly, in terms of the need for these communities to learn more about the resources that are available. I think, at this point, I think it can truly be said that the agencies who are out there with good intentions and the organizations that are out there with good intentions, lack internal cultural competence. You can't sit there and expect these people who are struggling for their survival to walk into your office in downtown Manhattan for help – you have to get into the communities. It’s really as simple as that. In terms of lack of cultural competence within the agencies, 9/11 brought all of this out. It was very clear that the government agencies had no soft infrastructure to reach into the communities. It took days for them to realize that Chinese people in Chinatown speak Chinese, we need to find people who speak Chinese. So they went out and they found a whole bunch of people that spoke Chinese. The only problem is that the questions that were being asked were questions being asked by bureaucracies who didn’t tell the translators what the significance was.

We came across a business owner who had gone to one of these offices, stood on line five times in the rain and the snow, and every time he was turned away. Why? Because the translator translated directly and said: we need the majority shareholder’s signature. Well, guess what? There were seven shareholders, there were no majority shareholders. So if the translator had understood the technical reason for this, that is, that we need the majority of the shareholders, the owners of the business, to assume this loan and guarantee this debt, then that translation would have been useful. But he went back five times. And the newspaper interviewed him and said that he had cried so hard that he had nothing but dry tears to cry. We read about that article, we called him, we found out what the issue was, and we got him a $75,000 loan. But that was the lack of ability of the bureaucracy to understand what it is that these folks don’t understand. But you have to get into the communities.

Dolly Williams: I just want to comment on the community thing. I know that, and you're quite correct, and I want to really say that the Mayor and the administration is really trying to reach out to small business and entrepreneurs. And the Department of Business Services has those offices, Joyce, in the five boroughs – the business solutions offices, so they are trying. At least the city is.

Jonathan Bowles: Let me follow that up and just say, and I guess I’ll let Adolfo kind of jump in on this. But, first, I do want to give credit to Rob Walsh and the Department of Small Business Services. I think that, you know, Rob was a panelist here and they really are trying to do more for small businesses in general. They have, as Dolly suggested, set up these satellite small business centers. But let me ask that, I can imagine, it can't be easy from City Hall, even from satellite small business offices, for the city of New York to really make a big help to an entrepreneur, to a business. It’s hard enough helping medium sized businesses in the city

[Tape cuts off briefly]… is part of the solution for government just working more with locally-based organizations that have more of the trust and respect of the local immigrant communities

Adolfo Carrión: You’re a mind-reader. Let me just point out that Glenis Henriquez, who heads up the Hispanic initiative for the Small Business Services is here, and she happens to be a Bronxite. Yes, we need to work on the ground in the neighborhoods with institutions that have trust in the community. That means that the Department of Small Business Services or the Economic Development Corporation or a bank or a major builder or whomever, should have a meeting in a church basement. And the pastor should be part of the conversation of calling people in and opening the doors of the local church in a neighborhood where that’s a place of refuge and trust. I mean, the issue of post-9/11 America, we know that with the Patriot Act and with all the other things that have come and the many deportations for minor offenses, people are fearful. And then, as was suggested earlier, people come from governments and countries and societies where there is a tremendous fear of uniforms and government officials who are corrupt, who overstep and abuse, etc. So, coming to a nation like ours and then having the fear that you're going to be sent back and sent away if you expose yourself, people will not, they’ll not engage. And so we need to create an environment of engagement and trust.

Let me just share with you a little story. We have the Bronx Overall Economic Development Corporation – every borough, almost every borough, has created some sort of economic development arm. And we’ve been able to engage with new businesses and create opportunities for people to come in with ideas off the street and walk them through how to put a business plan together. And we do it in partnership with the Small Business Services agency and some other government agencies and grants from government, but the posture from our perspective is that that’s the target population and that’s where we want to go.

You know that the Fulton Fish Market is moving to the Bronx, and it’s going to be called the Hunts Point Fish Market, no longer the Fulton Street Fish Market. It’s 450,000 square feet, it’s being constructed, we just topped off the frame a couple of months ago with the mayor. But one thing I said to Turner Construction, when they came to make the presentation to me was – and anybody who’s going to build in the Bronx – and this is my posture, and it’s because I represent the Bronx. At some point, if I represent some other area, I’ll do that as well. But, I said that you need to buy Bronx first. If you're going to build in the Bronx, you need to buy Bronx first, buy New York City, buy New York State. Because we need to grow our businesses and grow our economy. That means that the businesses in the Bronx, especially small businesses, are getting dibs at a major, major – 450,000 square foot – construction project.

Now, we got about 100-and-some-odd businesses into this hall, they all registered as “I’m hungry to help, to participate.” And then we started a process of vetting them and having them engage with: what could they provide to this major construction project at a relatively competitive price? If they couldn’t compete, they're out the door, but at least they had a shot at competing and engaging in the process. And now they can become vendors with Turner Construction and other builders around the city – they're building a resume, they have a workforce, they build credit history, all the things that we need to do to build businesses.

Jonathan Bowles: Go ahead, Gary.

Gary Pierre-Pierre: Well, one of the reasons I think I’m on this panel is really not because of my journalistic achievement, it’s rather because I think I’m a poster child of what a small business person faces in this city. Jonathan called me, asked me to be on this panel because he got my name from the Brooklyn Economic Development [Corporation] people. I started this paper from scratch five years ago with money from friends and family. And that itself was a challenge. But about two years ago, the newspaper was doing well, we needed to grow, and just couldn’t. I went to the Brooklyn Economic Development [Corporation] – I mean, I think I am an immigrant, but at least, sort of steeped in America. And I knew the ropes and I went through all of them but at the end, nothing came of it, because I think we don’t invest in people in this country, believe it or not. I think we invest in things.

One of the things that shocked Joan Bartolomeo over at Brooklyn Economic Development is that we – The Haitian Times – couldn’t get one dime from any of the lending institutions, despite the fact that we had a solid business plan, besides the fact that I had impeccable credentials, despite the fact that the newspaper was still around and we were getting more and more advertising, but because we didn’t have any hard asset for them to seize in the event that I wasn’t around, we were not worth lending money to. And I think there are many, many more examples like that. The Small Business Administration has a policy that they're rethinking slowly, but it’s still pretty much part of the culture of that agency, of not lending money to media. And they don’t have a reason for it, it’s because I think, again, they don’t believe in people. I was told over and over: well, if you're going to buy a press, we can get money for you. But I’m not in the printing business, I’m in the publishing business. And I think these are real challenges. When we talk about challenges that we face, we can talk about a solid business plan, all the steps that you have to take, but at the end of the day, it’s very, very difficult. You have to really be willing 12 hours a day, if not more, like I do, and find a creative way to get people to work for you for free, and all these things. And, really, these are challenges that every immigrant entrepreneur faces until you meet the next level where you just are so tenacious that you do make it and then, all of a sudden, all this capital is just available to you.

Jonathan Bowles: Let me follow that up by asking, obviously, the two people on this end of the panel obviously know a lot about financing issues. We have Ali from Citibank and Nathalie from ACCIÓN – two very different types of financial institutions. Could both of you really talk about that, because obviously we do hear, not only from Gary, but from so many other immigrant entrepreneurs that they do have solid business plans, that often they end up being successful like Gary has, but they can't get in the door from financial institutions.

Nathalie Bernal: What Gary said doesn’t surprise me one bit. I’ve been with ACCIÓN New York for three years and we speak to about 400 new business owners every month. About 95% of them are immigrants and I would say about 99% of them have no idea that something called credit exists. Many of them think that because a credit card solicitation comes in the mail, that means that they have strong and good credit. Many of them don’t know that if you don’t pay on time, it is reported to a credit agency, that does lower your credit score. Many of them don’t know that it’s important to establish credit. Most of them have incredibly low levels of financial literacy. They don’t know how to create books, they don’t know what profit and loss statements are. They don’t realize the importance of taxes, that if you under-report, the bank has no way of proving that your business is as successful as it truly is. As I said earlier, they don’t know that borrowing from their friends and family, as Gary was saying, doesn’t help them build credit. But, you know what? Often times, that’s their only opportunity, it’s the only way that they can grow their business the way that they need to. And, it’s incredibly frustrating and challenging and really, again, it comes back to bringing it to education.

I think that something really interesting that is going on nationally is there's a new company that opened up, and it’s called “Pay Rent, Build Credit.” And I’ll tell you why I think this is really interesting. It’s a company that looks at immigrants, and how can we document credit? Immigrants pay rent, they pay electricity every month, they have a phone bill every month, they pay cell phones every month. But this is not tracked to the credit bureaus. The only thing that’s tracked are car loans, student loans, credit cards – things that often times if you first come to this country, you're not going to be able to obtain. Because in order for me to lend you money, a bank is going to want proof that you pay money back. So, it’s really a catch-22. How do I get that first loan? How do I start establishing that credit? Well, Pay Rent Build Credit, for example, is looking at trying to track the fact that someone pays their rent on time every month for the past 36 months to establish credit. You know, it’s something that will probably take a long time to develop, but I think it’s creative and innovative ideas like this that we need in order to really capture: where is that money?

So many of these businesses make a lot of money. They don’t put it in the bank. So there's no proof of it. When I look at bank statements for a business, there will be $2,000 in deposits for the month and the client tells me that they make $15,000. Well, how can a bank believe that? There has to be proof. And what we find often times in working with the clients that we do is that most people don’t know that. They just don’t know. And if you explain it to them, then they want to open up bank accounts. We help so many people open up bank accounts and encourage them to put the deposits in the bank and encourage them to build credit, and if they open a line of credit with us, to also open up a credit card. And we do so much in terms of credit training. There's a lot of agencies out there doing a lot of work with business plans and challenges that start-ups might face, and I think it’s valuable work. But to me, I truly believe that at the end of the day, it’s about money. These small businesses often times support an entire family. As Joyce said, they run on very low margins.

They often times have very little or no savings, which means that when the oven in my bakery breaks, what am I going to do? I can't get a loan because I don’t have credit, I don’t have savings, so I have to shut down my doors. And then how am I going to start again if, again, I don’t have savings. And it’s the constant challenge that they face. So, again, it really comes to the point of education. We all – every agency needs to do a lot more work on credit, credit training – even in the high schools, starting early on: what is that? And I think that Ali definitely can speak a little bit about Citibank – how are we really different? You bring it back to: banks often times need three years of financial statements. Like I said, most people don’t even know what financial statements are. So many of the clients we deal with, we literally sit down at their business, and we say: “how many of those hats did you sell last month? How much did you buy them for?” That’s how we do financials with businesses and, really, it’s the only financials they can provide. And we teach them to move to the next step, to make them bankable, because that’s really the goal that ACCIÓN New York does, but it’s challenging when you're asking someone for three years of statements, taxes that show that you really are making a lot of money and credit that they don’t understand.

Ali Hirji: Nathalie’s comments, in the context of how do we bank businesses that don’t have the traditional, conventional requirements that we need to make a good loan and to make sure that the business is on the right track. And it’s a challenge, I think. We all recognize it. I think Winston Churchill once said that success is the ability to move from one failure to another with no loss of enthusiasm. And that’s the way immigrants tend to kind of keep going and keep the beat moving. And not to belittle it, but I think there's something to be said about the experience of successful entrepreneurs. And I’ll use the example of perhaps the other side of the country in the West Coast, in Silicon Valley, where, given the extraordinary technological developments and the success of Indian and Chinese entrepreneurs in the technology field, is reflective of something that they’ve been able to orchestrate internally, and that is the success that they’ve had with their own internal ethnic organizations, that tend to support one another in a very proactive method. One of the organizations that I’m somewhat familiar with is The Indus Entrepreneurs, T.I.E. is the abbreviation. And these are folks that have been in the business for a little while, they're leaders in their technological fields, but they serve to not only provide mentoring and provide the ability to have access to resources, provide capital in some instances.

But they also have this phenomenal transnational piece to it, which is: they're constantly migrating back or traveling to their homelands. The Taiwanese and the Israeli immigrant experience is similar to that, because there's this really interesting human capital flow, if I can call it that, between their presence here in the US, then they go back to their home companies, they do business there, they bring and recruit venture capital from those countries, and those are the ways that they’ve been able to tap into their own internal ethnic organizations and propel their entrepreneurial skills in the context of their businesses.

The point I’m making, and I want to circle back to the issue of what else needs to be done here – one of the ways that I think we’re lacking support in this discussion is where the city government can talk to financing that gap – when you’ve started a business, you’re incubating yourselves, you're getting your business and marketing strategies together, you're starting to see sales, you need to expand, you need to hire, and you don’t have the wherewithal to do it. And, of course, traditionally, we’ve done it through the benefit of the Small Business Administration guarantee programs, and I alluded to that earlier. And they tend to help out to some extent, but we’re still dealing with people that have no credit histories and that takes a little while to develop, in terms of the requirements to substantiate financial credibility.

I just wanted to kind of allude to the fact that, I think it was at the end of the Giuliani administration, that the city established an emerging markets fund. It was a pool of about $25 million that was created, and it was backed by venture capital companies that wanted to help with that seed capital part of the puzzle – the gap that existed between new businesses that weren’t in the position to borrow money or have access to capital and the traditional, conventional credits that we do at a bank like Citibank. That’s kind of lost its focus, and if there's ways in which we can make a proactive effort to have the city get re-involved in those kinds of schemes, where you are doing micro-lending, you're doing the phenomenal work that the folks at ACCIÓN, for example, are doing. Then you can start stimulating a dialogue that will create some solutions, at least, to match that gap that I think we are all clearly articulating here.

Jonathan Bowles: I think that Ali brought up some good points here, and one of them is that this whole discussion is not just about helping start-up businesses. We really framed this by talking about – this is an opportunity for growth in the city’s economy. As we see other sectors that are declining, we see this as a potential job engine. It’s not going to replace Wall Street or create anywhere near that kind of jobs, but when we’re talking about it that way, we need to think more about just start-ups, and also, how do we grow so many of these great businesses that are being started up? In our research so far, although it’s preliminary, we’ve heard on the street that people say that there aren’t that many businesses that get beyond the mom-and-pop level that are immigrant owned. And compared to other cities, like Los Angeles, the size of immigrant-owned businesses are much smaller in New York City. And so I know Adolfo was looking to get in here, and I guess I would just say this to you and particularly to Dolly and Joyce: what is it that we can do to really support the growth of these firms?

Adolfo Carrion: The impetus of my reaction was, I just want to make sure, I see Mr. McMahon here from the City Council, and my longtime friend. And I wanted to clarify the record – the Emerging Markets Fund – correct me if I’m wrong, Mr. McMahon – was created by the City Council under the leadership of Peter Vallone, and I was there in the City Council when we created it. Look, you know, Giuliani gets credit for a lot of stuff he didn’t do, okay? Just for the record.

We have something called the Bronx Initiative Corporation, which I think other counties have – I’m not sure any other county in New York City has it. But it’s an SBA 504 instrument that allows us to take a business that’s not marketable, if you will – bankable – with conventional financing, but is bankable somewhat. They have a track record, they’ve been a business for years, but for what the