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THE WHITE HOUSE
WASHINGTON
Negember 3
LG:
Info report on SOUL CITY
I have been pressing HUD for months
to eupply Floyd with a specific letter,
telling him precisely and with no midunder-
standings just what he has to do to go to
closing on the Guarantees.
Finally, this is the letter. As you
will note, Floyd has a ways to go, but also
HUD is waiving some of thèir usual vondition
as a mark of confidence in Floyd. I think
this is a fair letter and well within
HUD's responsibilities under the law.
Floyd's initial set of financing
arrangements has fallen through, and he is
going to have to go out now and get new
ones. Also note his note tome with the
Wilkins' endorsement.
86 return
Boad
Reproduced at the Richard Nixon Presidential Library and Museum
Soul City Company
NOV 30 1973
Attention: Floyd B. McKissick
P. O. Box 188
Soul City, North Carolina 27553
Gentlemen:
As you know, on June 28, 1972, the Soul City Development Company
on behalf of the Soul City Company (Developer) was issued an offer
of commitment (Offer) to guarantee an amount not to exceed $14
million in principal amount of obligations of the Developer,
subject to certain terms and conditions of the Offer. After due
consideration of the materials submitted by you in satisfaction
of the Offer, we have determined that certain conditions precedent
to acceptance of the Offer have not been satisfied. In order for
you to accept the Offer and proceed with the issuance of Debenture
you must execute and return to us a copy of this letter and
provide such additional information and submit such additional
documents as set forth below.
1. Debt Restructure
With respect to the condition precedent to acceptance
dealing with debt restructure, condition (1), page 2, of
the Offer, the Board of Directors of the Community
Development Corporation (Board) found the condition was
not satisfied. Therefore, the Developer shall, before the
Offer may be accepted, submit evidence, satisfactory to
us, which demonstrates:
a. That capital in an amount of at least $1,500,000 will
be available before execution of the Project Agreement
(Execution) which shall be at least three days before
the First Closing Date, as defined in the Project
Agreement;
b. The identity of all persons who will directly or indirect
contribute capital to the Developer and who shall be
approved by us;
Reproduced at the Richard Nixon Presidential Library and Museum
2
C. The creditors of Floyd B. McKissick Enterprises, Inc.
will be paid or otherwise satisfied at such time and
in such manner as will be acceptable to the creditors
and to us;
d. To the extent debt/restructure involves a sale or
transfer of any direct or indirect interest in the
Developer or in any person owning or controlling an
interest in the Developer:
(1) That equity contributions to the Developer cannot
be withdrawn;
(2) That the terms and conditions of any loan agreement
letter of intent, guarantee, promissory note, or
security agreement are not adverse to the interests
of the Secretary; and
(3) That the identity of any person owning or controlli
such an interest in the Developer shall be approved
by us.
2. Development and Marketing Strategy
With respect to the condition precedent to acceptance dealir
with development and marketing strategy, condition (2),
page 2, of the Offer, the Board agrees the condition is
partially satisfied and waives further satisfaction before
acceptance of the Offer if the Developer agrees that as a
condition precedent to Execution:
a. The Developer shall enter into a contract with a major
industrial marketing firm approved by the New Communitie
Administration (NCA) which shall agree to advise the
Developer on specific industrial advertising and
promotion tactics and techniques; and
b. The Project Agreement and other project documents shall
contain a provision stating that the Developer shall
enter into a contract within the first year with a
major industrial real estate brokerage firm approved
by NCA which shall agree to assist the Developer in
negotiations with industrial companies after initial
contact has been made.
Reproduced at the Richard Nixon Presidential Library and Museum
3
3. Revised Cash Flow
With respect to the condition precedent to acceptance dealin
with cash flow, condition (3), page 2, of the Offer, the
Board finds the condition has not been met. The Developer
agrees that as a condition precedent to acceptance of the
Offer:
a. The Developer shall submit a Cash Flow Analysis
acceptable to NCA which reflects adequate working
capital, restricted Land Acquisition and Land
Development as described in paragraph 5, below; and
b. The Cash Flow Analysis submitted pursuant to paragraph
a, above, shall state explicitly the assumptions
concerning the computation of Security, as defined
in the Project Agreement, to enable projected
disbursements.
4. Management
With respect to condition (3), page 2, of the Offer, dealing
with organization and staff, the Board agrees that the
condition is partially satisfied and waives further
satisfaction before Execution if the Developer agrees that
as a condition precedent to Execution, the Developer shall
secure a general manager with industrial marketing capabilit
and be otherwise acceptable to NCA.
5. Job Base
With respect to condition (4), page 2, of the Offer, which
1s a condition precedent to Execution, the Board waives
further satisfaction before Execution if the Developer
agrees:
a. The Project Agreement and other project documents shall
contain performance criteria which shall be conditions
precedent to endorsement of guarantees on Subsequent
Series of Debentures, as defined in the Project Agreemen
including the criteria in the draft Project Agreement
dated November 9, 1973; and
b. The Project Agreement and other project documents shall
contain provisions which:
(1) Restrict Land Acquisition, as that term is defined
in the Project Agreement, to land shown as industria
land use on Schedule 2 of the Development Plan, drai
dated November 13, 1973, and no other land shall be
acquired without the prior approval of NCA; and
Reproduced at the Richard Nixon Presidential Library and Museum
4
(2) Restrict Land Development, as that term is defined
in the Project Agreement, to industrial or other
primary employment purposes; provided however, Land
Development for other land uses and purposes may
take place when there is evidence, satisfactory to
NCA (including but not limited to, letters of intent
purchase agreements and construction timetables),
which demonstrátes that industrial or other primary
employment will take place at Soul City.
6. Other Conditions
In addition to the foregoing, the Developer understands and
agrees:
a. That there shall be no material adverse change in the
facts and representations included in the Application,
or the business, properties, assets, liabilities or
conditions (financial or other) of the proposed partners
of the Developer before Execution.
b. That all other terms and conditions of the Offer dated
June 28, 1972, except as modified by this letter, shall
remain in full force and effect.
Following your return to us of an executed copy of this letter
and our determination you have satisfied the conditions precedent
to acceptance, you may accept the Offer. As you know, there are
certain conditions precedent to be satisfied before Execution.
We look forward to working with you in resolving these outstandi
matters.
Sincerely yours,
COMMUNITY DEVELOPMENT CORPORATION
/s/
By: Edward M. Lamont
Authorized Agent
ACCEPTANCE:
On behalf of the Soul City Company,
I hereby agree to the terms and conditions
set forth above.
By:
Floyd B. McKissick
On behalf of the National Housing Partnership,
I hereby agree to the terms and conditions
set forth above.
By
George DeFranceaux
Reproduced at the Richard Nixon Presidential Library and Museum
JUN 28
Soul City Development Company
P. O. Box 38
Soul City, Manson, North Carolina 27553
Gentlemen:
You have applied under the Urban Growth and New Community
Development Act of 1970 (The "Act") for a commitment to guarantee
up to $14,000,000 principal amount of obligations to be issued
by you in order to finance land acquisition and land development
in connection with creation of a new community in Warren County,
North Carolina.
Based upon the information contained in your application and
otherwise submitted by you to us, we have made the determinations
required under the Act for purposes of the commitment hereby
offered and are prepared, subject to the conditions specified
below, to enter into an agreement providing for the guarantee
under the Act of up to $14,000,000 principal amount of obligations
to be Issued by you for the purposes above mentioned. Our
commitment to enter into such an agreement will be conditioned
upon our approval of:
LA.
(1) the initial investors (in the case of a private sale of such
obligations) or the terms and conditions of the underwriting
(in the case of public sale of such obligations);
(1)
(2) the rate of interest to be borne by such obligations or the
formula by which such rate will be determined;
(3) the repayment and maturity provisions of such obligations;
(4) the provisions with respect to protection of the security
Interests of the United States, liens and releases of liens,
and payment of taxes; and
(5) all other terms and conditions of the financing arrangements
which might affect the interests of the United States.
Reproduced at the Richard Nixon Presidential Library and Museum
Such commitment 18 subject to the further conditions that:
(1) your application, at the time the above-mentioned agreement
is entered into, shall be determined by us to comply in all
respects with the relevant provisions of the Act and all
regulations and instructions then in effect thereunder;
(2) you shall have completed a statement of approved plans in a
form acceptable to us as providing a satisfactory basis for
supervision, monitoring and evaluation, together with all
supporting formal documents or exhibits, and an understanding
between us shall have been reached, consistent with the reg-
ulations and instructions then in effect, on the specific
provisions to be included in the agreement regarding such
plans, their implementations, and the related rights and
remedies of the Secretary; including (but not limited to)
provisions relating to value assigned to land before development,
equal opportunity and the broad participation of builders
including small builders, marketing strategy, phasing of
commercial facilities, and the availability of funds, other
than proceeds from the sale of obligations guaranteed by us,
to provide for changes in plans or projections which may be
required by the conditions herein contained;
(3) the organization and staff of Soul City Development Company
are acceptable to us; and
(4) satisfactory evidence is submitted and accepted by us that
industrial and other primary employers sufficient to provide
the initial three-year job base, as indicated in the UIG/SCDC
study, intend to locate at or near Soul City.
The Offer of Commitment contained herein shall not be accepted prior
to our determination that the following material has been submitted
in form and substance satisfactory to us:
(1) Evidence that the debt of Floyd B. McKissick Enterprises Inc.
has been structured to provide for repayment in a manner
appropriate to the anticipated income of that corporation.
(2) A detailed development and marketing strategy for achieving
CC:
your primary job base.
(3) Revised cost/revenue projections reflecting the extension of
the development period to 30 years. If your revised analysis
of industrial development and marketing strategy reveals
changes in development pace, initial development costs, revised
land sales, revenues or phasing changes, these factors should
also be incorporated into the revised cost/revenue projections.
Reproduced at the Richard Nixon Presidential Library and Museum
-3-
(4) Adoption by the Warren County Board of Commissioners of a
resolution which has as its primary purpose the approval
in principle of your new community program. Additional
expressions of approval should be obtained from Warren County
School Board, Warren County Board of Health, and the North
Carolina State Highway Cómmission.
(5) Evidence of adequate financing for Kerr Lake Utilities Company
or for any successor or assignee satisfactory to us. If
financing depends on Federal grants or loans, evidence of each
such grant or loan should be provided.
Subject to the foregoing paragraph, your acceptance of the offer of
commitment contained herein shall be effected by payment of a com-
mitment charge of $70,000. If such charge has not been paid within
120 days after the date hereof, such offer of commitment shall
expire and shall thereafter be of no force or effect, subject,
however, to the reopening and acceptance thereof upon payment by
you of such commitment charge and a reopening charge of $7,000
within 90 days after such expiration. Following acceptance, the
commitment shall remain effective for six months, at which time it
shall expire unless you have taken all steps determined by us
to be required as a pre-requisite to execution of the above-
mentioned agreement or unless such six-month period is extended
at our discretion.
Sincerely,
COMMUNITY DEVELOPMENT CORPORATION
/B/ Bamuel C. Jackson
By
Samuel C. Jackson
General Manager
KC: Jackson 7100
MN RF 7108
Graves 7100
MN Chron 7108
Mitchell 10260
Project 7150
CPM Files 7133
DeVito
4NR: DEVITO:gmc 6-26-72
Reproduced at the Richard Nixon Presidential Library and Museum
Floyd B. McKissick
and the Soul City Foundation, Inc.
cordially invite you to be present at the
Creation
(Historic Groundbreaking)
of
Soul City, North Carolina
Friday, November ninth, Nineteen hundred and seventy-three
Parade, Soul City to Industrial Park, 9:30 a. m.
Historic Groundbreaking Ceremonies, 11:00 a. m.
Keynote Speaker
The Honorable James Holshouser
Governor, North Carolina
Second Annual Banquet and Show, 7:30 p. m.
Soul City Session Featuring
Major Blues, Rock and Jazz Artists
Cameron Indoor Stadium
Duke University, Durham, North Carolina
R.S.V.P. October 26th, 1973
(Card Enclosed)
Dress Optional
Benefit Soul City Foundation, Inc.
(A Non-Profit Cax-Exempt Corporation)
Reproduced at the Richard Nixon Presidential Library and Museum
October 23, 1973
MEMORANDUM TO: Secretary Lynn
Undersecretary Simon
General Manager Trevino
Board Member Watson
FROM:
Floyd B. McKissick
George W. De Franceaux
SOUL CITY
We understand that, at the forthcoming review
of the Soul City Project by the Board of Directors of
the Community Development Corporation on October 24,
consideration will be given to imposing several unprecedented
restrictions on Soul City's development. In view of the
tight time schedule for the Soul City financing, we think
it appropriate to make our views plain in advance of the
meeting.
Specific proposals which we understand are now being
considered would curtail land acquisition, restrict development
activity to industrial facilities, and limit the developer's
ability to make cash draws from escrow. These conditions
would make development of a true new community impossible.
As such, they are unwise from the point of view of the security
interest of the United States and unacceptable to us as
developers.
1. Land Acquisition.
Soul City has been planned as a city of 5,200
" head
Reproduced at the Richard Nixon Presidential Library and Museum
- 2 I
acres. Today, approximately 2,200 acres are owned. It
will be a free-standing new community located in what is
now a relatively poor and predominantly rural area.
Because of these facts, special development planning is
of course needed. For example, our plans and commitments
to HUD have always included far greater emphasis on
industrial development in the early years than in a
"satellite" new community with, accordingly, a proportion-
ately smaller emphasis on residential development. Notwith-
standing this cautious approach, consideration is apparently
being given to restricting the Developer for a substantial
period from even acquiring additional land.
Looking only to the financial interest of the
United States, for which the project land provides security,
such an inflexible restriction would be folly. The land is now
farmland, appraised by HUD at less than $400 an acre and pur-
chasable today in that general price range. But it is
attractive land located less than ten minutes from an inter-
change on an interstate highway connecting Raleigh-Durham
and Richmond and bordering a main rail line serving the
South. Sources of water are abundant, and Federal, State
and local governments are about to spend $9,000,000 on a
regional water system, partially conditioned on a Title VII
guarantee for Soul City. The Piedmont region where Soul City
is located is generally industrializing rapidly, and our
Reproduced at the Richard Nixon Presidential Library and Museum
- 3 -
economists (Hammer-Greene-Siler Associates) and others
have projected rapid growth in the immediate area. In sum,
from the standpoint of the security interest of the United
States, it is undesirable to prevent the Developer from
buying and pledging land at the beginning of the development
period, land that is low in cost but certain to appreciate.
From the Developer's point of view, failure to
buy additional land now would be not merely unwise but
disastrous. Even if price increases resulting from
industrialization are conservatively estimated, it will be
impossible, as cash flow analyses conducted by the New
Communities Administration demonstrate, for the Developer
to buy the remaining land unless it makes substantial
additional purchases while the land is still being farmed.
Although the project may not encompass ultimately the full
5,200 acres, the imposition of an inflexible and arbitrary
prohibition on the acquisition of additional land at this
time could mean the creation of an industrial center community
surrounded by acres of unplanned sprawl, the very antithesis
of what the Act was intended to promote.
2. Amenities.
Our first objective at Soul City is to bring
in new industry in the early years. Bringing new industry
to a poor, rural area requires not only industrial space,
transportation, water and labor but also attractive homes,
Reproduced at the Richard Nixon Presidential Library and Museum
- 4 -
recreation facilities, social services and other amenities
for executives, professionals, managers and craftsmen and
their families. Of course attention will be focused on
industrial development; but in a free-standing new community,
industrial development must go hand-in-hand with better schools,
with medical facilities and with recreational development.
Middle class salaries require middle class amenities.
Despite this obvious fact, consideration is apparently
being given within HUD to restricting all development activity
in the early years to that development directly connected with
industrial facilities, thereby eliminating those very amenities
that are essential to make Soul City attractive to executives
and professional employees. This restriction will simply force
new industry to locate not at Soul City but at nearby Henderson,
an established city with amenities that will share in the new
regional water system.
Although we intend at Soul City to limit residential
and recreational development in the early years to the minimum
necessary to attract industrial employers and to meet the
demand created thereby, we will not eliminate those facilities
that are essential if Soul City is to attract industry at all.
Our aim, in the spirit of the Act, is to create a balanced new
community, not a company town filled with unskilled people,
satisfied with the minimum necessities of life, while the
executives and professionals live elsewhere.
Reproduced at the Richard Nixon Presidential Library and Museum
- 5 -
3. Escrow Draws.
In order to protect the security of the
United States and in accordance with the Act, all
Developers, including the Soul City Developer, agree to
certain restrictions on their ability to draw their own
money - the Debenture proceeds --- from escrow. The
two primary restrictions are that a certain level of
total security must be maintained and that funds can be
drawn only for certified "Actual Costs."
We are informed that in this case -- and in no
other - the Board may consider a further restriction,
that is, to limit cash draws on a line-by-line basis to
amounts projected in advance. Although we object to such
discriminatory treatment, we recognize that a free-standing
community presents some additional risk to the United States
since the demand is not fully tested. Accordingly, we
would, if necessary, accept minimum contractual restrictions
limiting the amount of our expenditures, but only for a
test period not to exceed two years.
We will not agree to a longer period. A new
town must be built by the Developer. The New Communities
Administration has neither the authority nor the capacity
to build Soul City or to direct the development process on
a continuous and detailed basis. If Soul City is to be
Reproduced at the Richard Nixon Presidential Library and Museum
- 6 -
built at all, we must be free to make our own plans and
choices, consistent with the purposes of the Act and
the protection of the United States.
On June 28, 1972, we received an Offer of
Commitment to guarantee $14,000,000 of Debentures. The
Offer was and is a clear-cut obligation of HUD, upon
which we have relied for the past year. It is subject
only to the conditions enumerated in it, all of which have
been satisfied. It reflected a determination by the Board,
made after detailed analysis, that Soul City should go
forward. We now expect the Department to honor this obli-
gation in substance, not to impose new and arbitrary restriction
on the development process that are totally at variance, not
only with the Offer itself, but with the basic concept of a
new community.
We can further advise you that the National Corporatic
for Housing Partnerships cannot, due to charter limitations,
participate as an investor in Soul City unless provision is
made from the inception of the Project for the housing for
Soul City residents.
Reproduced at the Richard Nixon Presidential Library and Museum
FLOYD B.
McKISSICK ENTERPRISES, INC.
P. O. BOX 188
SOUL CITY, NORTH CAROLINA 27553
(919) 456-5811
Oct 18,73
Dear Brad,
11:30AM
Enclased please frid copy of letter
with a Mewo prepared by over
which is being seat to See. Lyona aloug
which is being hand delivered to See
Lyna by George Defraucoux of our The
National Housing Partnership -
Partner. This should basing you
up to date,
Your theely
Dedicated to the Building of Black Economic Power"
Reproduced at the Richard Nixon Presidential Library and Museum
FLOYD B.
McKISSICK ENTERPRISES, INC.
P. O. BOX 188
SOUL CITY, NORTH CAROLINA 27553
(919) 456-5811
November 28, 1973
Mr. Brad Patterson
Assistant to Mr. Leonard Garment
The White House
Washington, D. C.
Dear Brad:
Enclosed please find copy of letter which I received from
Roy Wilkins relating to the Soul City project. I thought
the same might interest you.
With very kind regards, I am
Yours very truly,
Floyd B. McKissick BMC/Gsiik
Enclosure
Dedicated to the Building of Black Economic Power"
Reproduced at the Richard Nixon Presidential Library and Museum
A.A.C
N
over
NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COLORED PEOPLE
6
SEVENTEEN NINETY BROADWAY
NEW YORK, N. Y. 10019
212-245-2100
i
November 5, 1973
NOV 1215
Enterprises,
Dear Floyd McKissick:
Upon my return to the office after a delayed (and
brief) vacation I find your cordial invitation to the
groundbreaking ceremonies at Soul City, North Carolina.
As my secretary, Mrs. Earlene Bollin, has written
you, nothing would please me more than to be present at the
groundbreaking ceremonies. As you know, however, our com-
tments in this business are necessarily made several
months in advance, and it happens that I will be at the
Pennsylvania State Conference Convention of the NAACP on
that week end.
I want you to know that you have my heartiest con-
gratulations on the very concrete contribution you are
making. Your Soul City project, after many ups and downs,
emerges as about the only definite accomplishment of the
Nixon Administration for black people. I am constrained
to believe that nobody in the Administration intended it
to be that way because I can't imagine this administration
doing anything as positive as Soul City. There must have
been an injection of your own personality into the situa-
tion and Soul City comes out a monument to your belief and
perseverance.
Again, my congratulations.
Very sincerely yours,
Roy Wilkins
Executive Director
Mr. Floyd B. McKissick
Soul City Foundation, Inc.
P. 0. Box 38
Soul City, North Carolina 27553
RW:erb
Reproduced at the Richard Nixon Presidential Library and Museum
FLOYD B.
McKISSICK ENTERPRISES, INC.
P. O. BOX 188
SOUL CITY, NORTH CAROLINA 27553
(919) 456-5811
October 18, 1973
Honorable James T. Lynn
Secretary
Department of Housing and Urban
Development
451 Seventh Street, S.W.
Washington, D.C. 20410
Dear Mr. Secretary:
We understand that the meeting of the Board of
Directors of Community Development Corporation adjourned
on Wednesday the 17th of October without considering
Soul City.
As we have previously advised your staff, the
Soul City new community will be in jeopardy unless the
Board approves the Project within the next week: unless
all arrangements to sell our Debentures are completed
by November 14, our equity arrangements are subject to
collapse, and we cannot complete these arrangements without
Board action.
I am therefore writing now to request that the
Board reconvene no later than Wednesday, October 24, to
consider our Project. We see no reason for further delay
on this Project.
(1) We have already received an Offer of
Commitment dated June 28, 1972.
(2) We understand that the staff of the New
Communities Administration has concluded that all conditions
to the Commitment have been satisfied and that no major
pre-closing problems remain unresolved.
Dedicated to the Building of Black Economic Power"
Reproduced at the Richard Nixon Presidential Library and Museum
Honorable James T. Lynn
October 18, 1973
Page Two
(3) Soul City is located in a rural area and is
eligible for assistance under the housing programs of the
Farmers Home Administration.
(4) Soul City has been in preparation and before
HUD now for five long years.
We would greatly appreciate your informing us of
your decision to reconvene the Board. Please call if you
have any questions.
Very truly yours,
a/F.BMcK.
Floyd B. McKissick
President
CC: Alberto F. Trevino, Jr.
Edward M. Lamont
Reproduced at the Richard Nixon Presidential Library and Museum
WILMER, CUTLER & PICKERING
i666 K STREET, N.W.
WASHINGTON, D.C. 20006
October 18, 1973
MEMORANDUM FOR
FLOYD B. McKISSICK ENTERPRISES, INC.
AND THE NATIONAL HOUSING PARTNERSHIP
Re: Soul City; Closing Schedule
The purpose of this Memorandum is to summarize
the reasons why it is essential to the success of the
Soul City Project that the Board of Directors of Community
Development Corporation take action in the next week to
authorize acceptance of the Offer of Commitment already
made to this Project and to delegate authority to the CDC
General Manager to approve Debenture terms and conditions.
The following dates (in reverse order) are
critical:
(a) November 30, 1973 is the last feasible date
for financial closing. The syndication transaction needed
to provide equity financing for the Project will not be
consummated unless financial closing occurs on or before
that date.
Reproduced at the Richard Nixon Presidential Library and Museum
- 2 -
(b) November 14, 1973 is the last feasible date
for final determination of the Debenture terms, including
interest rate. The attached letter from the designated
investment banker, A. G. Becker & Co., Inc. states that
fifteen days is the "minimally acceptable" time required
between approval of Debenture terms and financial closing.
(c) November 7, 1973 is the last date on which
the investment bankers and their nominee for purchasers'
counsel, Messrs. Sullivan and Cromwell, can begin their
review of the virtually final Project documents and the
preparation of a Purchase Agreement. See attached letter.
(d) If the Placement Memorandum to be used by
the investment banker must be approved by HUD, a question
not finally determined by the General Counsel's office,
November 1, 1973 is the last date on which preparation can
begin.
(e) October 24, 1973 is the last feasible date
for acceptance of the Offer of Commitment. There are
simply too many things to be done between acceptance of
the Offer and the beginning of the Debenture placement
process to be accomplished in less than three weeks.
At the moment, you have a conditional Offer of
Commitment made by HUD on June 28, 1972. Although both
you and the HUD staff believe that the conditions to
Reproduced at the Richard Nixon Presidential Library and Museum
- 3 -
acceptance have been satisfied, several steps cannot be
taken on the basis of a year-old offer without further
assurance that the Project will close in November. They
include (1) full-scale preparations by the investment
bankers and its counsel; (2) hiring certain key personnel;
(3) negotiating contracts to purchase additional land;
(4) numerous miscellaneous items involving third parties,
including contracts for title insurance, letters of credit;
(5) scheduling of board meetings of your partners to give
final approval of project terms; and (6) more generally,
all-out efforts by the various parties and their counsel
and advisors to put numerous documents in final form.
(f) October 24, 1973 is not necessarily a
critical date for delegation of authority to approve Deben-
ture terms, but November 15 is too late to allow the 15
day period for placement and two days for closing.
You indicated the urgency of Board action to
Mr. Trevino on September 21, on which date we submitted
revised drafts of all Project Documents to HUD. Since
that date, the New Communities Administration staff has
worked extremely hard with us to resolve all open issues.
We believe that all such issues have been resolved and
that the Project is now ready for Board approval and closing.
Wilmer, Cutler & Pickering
Reproduced at the Richard Nixon Presidential Library and Museum
2
the
Laura Kuitunen
new communi ties
755 755-6092
Reproduced at the Richard 612 Nixon Presidential 338 Library and 8801 Museum
4845350
Loats Cahen
WCP
872-6061
HUD
Dave Berardo
755-6987
755-7100
Reproduced at the Richard Nixon Presidential Library and Museum
Board met Tues AM
SC's commitment to
industry dried up
Mouse Industries
A- - Conditions vat met
Have of cards falls dow
1 Wavie 1 debr that
conditions- - for wou -
reals Aa conditions of
serond M- draw-down cestrubed of 2nd
Baaed dougle B. development
Reproduced call
at the Richard Nixon Presidential Library and Museum
COB Wed
3 year
to law 300
working L
george commitment for vul
phase for avother
300.
Reproduced at the Richard Nixon Presidential Library and Museum
L6
FYI
THE WHITE HOUSE
BHD
wASHINGTON
October 16, 1973
MEMORANDUM FOR THE RECORD
FROM:
MICHAEL RAOUL-DUVAL
J
SUBJECT:
SOUL CITY MEETING
We met today in Dana Mead's office, attending were:
Dana Mead
Mike Duval
Tod Hullin
Brad Patterson
HUD:
Al Trevino
755-5435
LAURA
Rick Fore - 755-6047
755-609
4
6176
Trevino advised us that McKissick must meet financial closure on
6174
November 30, 1973, and several pre-conditions include debt restructur-
ing and an acceptable industrial marketing plan. He stated that the New
Communities Board would be meeting tomorrow for the purpose of con-
sidering Soul City project. Without a commitment from the Board,
favorable to Soul City, it will be impossible for McKissick to get debt
restructuring and thus, he will be in trouble for the November 30th
closure.
Trevino advised that McKissick has been ambiguous on certain financial
matters including a syndication deal in California. HUD has not received
the specifics of who was involved, level of commitment, etc.
We advised Trevino that there was no White House commitment which
in any way pre-empted the prerogatives of HUD and the New Communities
Board of Directors. Our commitment was simply that the White House
supports the concept of Soul City and would provide whatever help it was
able to in order to get McKissick moving on this project. It has been
made clear, in all meetings between White House personnel and McKissick,
that he would have to satisfy all the criteria set forth by the various
departments he was dealing with as each specific commitment and grant
was considered.
Reproduced at the Richard Nixon Presidential Library and Museum
- 2 -
Accordingly, Trevino advised us that the Board will meet tomorrow
and will probably issue a letter of commitment with conditions. There
will be an attempt to meet these conditions through negotiations with
McKissick on the information he will have to provide in time to meet
their November 30th closing. However, it was made clear that if the
conditions established by HUD and by the Board are not met, then the
Board will not stand behind the Soul City project until some satisfactory
arrangement is worked out with McKissick directly.
CC: Dana Mead
Brad Patterson
Tod Hullin
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE HOUSE
WASHINGTON
SOUL CITY
Meeting with Mead, DuVal, Scott, Patterson, Trevino, Fore
9:3 0 October 16, 1973
Problem: Trevino pointed out that New Community Developers
Board (Lynnk Simon, himself) was meeting tomorrow and Soul City was
on agenda. McKissick's financing gnaranbors' package expires
December 1 and he needs HUD closing before that time -- and in
time to have all papers drawn.
Trevino's problem is that McKissick has really not come
through with all the specific answess
would would be needed by a group like the Board before they
decided on such a n important commitment.
The real problem, as I see it, is that HUD, in the months
previous to this, has not ever provided McKissickzz and his
people with an ultra-specific list of all the bits and pieces of
information which are still needed: e.g. names and credit checks
on the financial backers, specific rechecks with local and state
highway departments tobe sure no new road plans are being made
inconsistent with Soul City plans, etc etc.
Evidently HUD's staff below Trevino have been so pro-Soul-City
(they themselves have been helping McKissick with
computer work and other staff work, àltho now McKissick has hired
Wilmer, Cutler and Pickering to help him) that neither they nor
HUD's General Counsel has ever sat down and written McKissick a
long letter spelling out verything he had to produce.
XXZXX And of CO urse McKissiek has been operating with
tremendous faith, energy and initiaigte, but with slim staff
work himself.
So now more information is needed, more data to be checked
or re-checked -- and Trevino finds his staff has not insisted on
it, and his Board is faced with having to vote or not -- and having
the decision needed by December Trevino brings this problem to
the White House.
We all advised him: (a) we had reviewed this last June and
had decided that we could and should go ahead with the former commitment
to McKissick (b) the above demision was predicated on McKissick's
satisfying all HUD's criteria and (c) nothing any of us had said
to Floyd MsK. on the phone altered point (b) just enumerated.
Trevino was told that these 3 points still held and he was
to go and work the rest out with Lynn and with his own staff. I also
advised him to get a copy of our June 21 memo (which went to Hyde)
but which he evidently has never seen.
BD
Reproduced at the Richard Nixon Presidential Library and Museum
I mentioned the groundbreaking ceeemnny, and in view of the
fact that nothing will be legally completed by that date, we
all agreed thatt government representation should probabby be handled
at the local HUD level -- none from Washington.
No Presidential messagek either - at this time.
BPQ
Reproduced at the Richard Nixon Presidential Library and Museum
The WHITE House
WASHINGTON
Bood: ba messrge the
going a from
10/16
President?
Elear
10/13
Reproduced at the Richard Nixon Presidential Library and Museum
FLOYD B.
McKISSICK ENTERPRISES, INC.
P. O. BOX 188
SOUL CITY, NORTH CAROLINA 27553
(919) 456-5811
October 10, 1973
Mr. Alberto F. Trevino, Jr.
General Manager
New Communities Administration
Department of Housing and Urban Development
451 - 7th Street, S.W.
Washington, D. C. 20410
Dear Mr. Trevino:
The purpose of this letter is to underscore
the urgency of prompt action by the Board of Community
Development Corporation to permit Soul City to reach
financial closing no later than November 30, 1973.
As described in our letter to you and our
submissions to your staff on September 21, 1973, we
will raise a substantial part of the needed Project
equity through funds to be unconditionally provided
to the venture at financial closing by Associated
Mortgage Companies ("AMC"). These funds in turn will
be a charge against the proceeds of syndication to a
group headed by John Kusmiersky of limited partnership
interests in a partner in the Developer. Our syndication
arrangements provide explicitly that the Kusmiersky
group is not obligated to participate unless closing is
achieved by December 1 (a Saturday). This is no mere
formality: the proposed limited partners are investing
in part to obtain tax losses, and for this purpose they
Dedicated to the Building of Black Economic Power"
Reproduced at the Richard Nixon Presidential Library and Museum
Mr. Alberto F. Trevino, Jr.
Page Two
October 10, 1973
insist that the Debentures be outstanding (so that
interest will run) for at least one month of the calendar
year 1973. After November 30, if closing has not occurred,
we would have to start our search for equity again at the
beginning.
We assume that the Soul City Project can now
be brought promptly before the Board, since we understand
that all major problems have been resolved and the
Project is ready for a Board presentation.
We recognize, of course, that a substantial
amount of work remains to be done before closing. We
agree, however, that what is now required is simply hard
work by all parties: there does not appear to be any
major unresolved issue or problem that presents an
obstacle to closing.
November 30 is seven weeks away. Much of the
work that remains, particularly our work to fill in the
detail blanks in our arrangements, cannot be accomplished,
we understand, until after a closing is approved by the
Board. Sale of the Debentures will also take time. This
means that at least three weeks and, if possible, more
time must elapse between Board approval and financial
closing. In sum, if we are to close before December 1
and avoid losing an essential equity commitment, the Soul
City Project must be taken up by the Board within the
next three to four weeks.
I would be happy to discuss this with you further
if you wish.
Very truly yours,
Floyd B. McKissick
President
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE HOUSE
WASHINGTON
October 9
LG:
Floyd McKissick called
today and will be in town tomorrow.
Groundbreaking at Soul City
is set for November 9. He knows the
President can't make it, but wants
you, Stan and me to come. de also
wanss a Presidential letter of greetings
and I am checking this with HUD
and T Eliska.
Road
Not
L-G
11/70
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE HOUSE
2:30
WASHINGTON
Lower K
6092
755-176
11/9
Letter from TT2 auto
puture. Deadlui 10/16
LG come
Trevino 755-3314
Reproduced at the Richard Nixon Presidential Library and Museum
alb Treving 755-3314
THE WHITE HOUSE
WASHINGTON
Prased agreement
AA
Dev- - plan for 55
Cash flow plan
Equity - LK WCP
due - pollus Due
- HOD require this
Once a month
reter maturings
10/1- impainable
11/1
Reproduced at the Richard Nixon Presidential Library and Museum
683-6299
THE WHITE HOUSE
WASHINGTON
all Trevino
should Star in session
Oct 1
Than 9- dedication
deadline
groundbushing
Saul City documents
bondar AM
profeeding
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE House
WASHINGTON
8/7
To:
Brad Patterson
From: Helen Donaldson
We sent the invitation on Soul City
to Mr. Garment to handle - regret
for the President. This should
go with it.
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE HOUSE
WASHINGTON
8/15
Craig:
Libby in John Guthrie's office wants
us to turn down the invitation for the
President. Could you prepare a letter
for Mr. Garment's signature with a copy
to Guthrie. After McKissick receives
this letter, Guthrie's office will follow up
with a phone call and determine whether
to send someone else down there at that
time.
jr
Reproduced at the Richard Nixon Presidential Library and Museum
Brand
THE WHITE HOUSE
wASHINGTON
August 3, 1973
MEMORANDUM FOR:
LEONARD GARMENT
FROM:
TERRENCE DONNELL
SUBJECT:
Groundbreaking ceremonies at Soul City,
North Carolina in September, 1973
The Schedule Proposal you submitted July 11 for the President
to participate in the groundbreaking ceremonies at Soul City
has been disapproved. Will you SO notify Floyd McKissick.
By copy of this memorandum, John Guthrie has been requested
to arrange for an appropriate person to represent the President.
Thank you.
Leu - we would be a lad to write Mr. Mc Kissich
and inform lia that the President will be inable
to attend if you prefer.
C.
cc: John Guthrie
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE HOUSE
WASHINGTON
1973 AUG I AM II 29
July 30, 1973
MEMORANDUM FOR DAVID PARKER
VIA:
DANA G. MEAD
you
FROM:
MICHAEL RAOUL-DUVAL
D
SUBJECT:
Ground Breaking Ceremonies for
Soul City, North Carolina
We recommend against Presidential participation in the ground
breaking ceremonies described in the Schedule Proposal submitted
by Len Garment.
Although this project clearly has merit, it does contain considerable
risk as referred to by Len and there is a chance that because of
budgetary problems, federal participation might have to be limited
in the future. To commit the President at this time personally,
could lock us in on budgetary decisions which might have to be made
in the future involving very substantial sums of money.
Furthermore, the housing study will be released in early September
and clearly the President would have to make reference to it if he par-
ticipated in this kind of an event. This study is bound to be highly
controversial and it is by no means certain at this time that the
President should be personally involved in defending it.
Also, from a physical standpoint, this does not appear to be the best
area for a housing or community development type event. It might
be better to utilize this kind of an event in an urbanized area where
the setting would be more appropriate and the crowd situation likely
to be improved.
Reproduced at the Richard Nixon Presidential Library and Museum
To Bill Baroody: For appropuate
response:
Bill - DANA hAs been
THE WHITE HOUSE working on soul City -
WASHINGTON
you may want to check with
him before mel responds -
Date:
July 17, 1973
FROM:
MEMORANDUM FOR:
KENNETH COLE
BRYCE HARLOW
IMELVIN LAIRD
VIA:
TERRENCE DONNELL
FROM:
To:
DAVID PARKER
RE:
Groundbreaking Ceremonies at
Soul City, N. Carolina
The attached is being sent to you for your advice and
recommendation.
Would you advise as soon as possible.
Thank you.
COMMENTS:
August 3, 1973
I concur in the attached recommendation, forwarded to you
through Dana Mead, against the President's participation
in the ground breaking ceremonies at Soul City, North
Carolina.
as
Melvin R. Laird
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE HOUSE
WASHINGTON
July 30, 1973
MEMORANDUM FOR
DAVID PARKER
VIA:
DANA G. MEAD
FROM:
MICHAEL RAOUL-DUVAL
A
SUBJECT:
Ground Breaking Ceremonies for
Soul City, North Carolina
We recommend against Presidential participation in the ground
breaking ceremonies described in the Schedule Proposal submitted
by Len Garment.
Although this project clearly has merit, it does contain considerable
risk as referred to by Len and there is a chance that because of
budgetary problems, federal participation might have to be limited
in the future. To commit the President at this time personally,
could lock us in on budgetary decisions which might have to be made
in the future involving very substantial sums of money.
Furthermore, the housing study will be released in early September
and clearly the President would have to make reference to it if he par-
ticipated in this kind of an event. This study is bound to be highly
controversial and it is by no means certain at this time that the
President should be personally involved in defending it.
Also, from a physical standpoint, this does not appear to be the best
area for a housing or community development type event. It might
be better to utilize this kind of an event in an urbanized area where
the setting would be more appropriate and the crowd situation likely
to be improved.
Chron DM
Chron MD
Subject DM
DUVAL:SC
Reproduced at the Richard Nixon Presidential Library and Museum
SCHEDULE PROPOSAL
Date: July 11, 1973
FROM: Leonard Garment
VIA: General Haig
MEETING:
Groundbreaking ceremonies at Soul City, North
Carolina
DATE:
A convenient date in September, 1973
PURPOSE:
To dedicate the beginning of Soul City, the first
(and only free-standing one) of the 15 New Com-
munities now being aided by the Federal
Government; to compliment the entrepreneurship
of Floyd McKissick, the national black leader who
was formerly the President of CORE and who is
developing Soul City; to call attention to the promise
of this program as a concrete example of Adminis-
tration accomplishments.
FORMAT:
Groundbreaking, and a Presidential speech. Soul
City is 12 miles south of the Virginia/North Carolina
border. The entire occasion including flying time
by helicopter could be as short as two hours.
approve
disapprove
PRESS COVERAGE:
Full press coverage
PRESS FOLLOW - UP:
Through normal press channels
STAFF:
Recommended would be Laird, Cole, Garment, Scott,
Mead and Patterson, plus senior officers from HUD,
and Commerce.
RECOMMEND:
Garment, Scott, Under Secretary Hyde
BACKGROUND:
Soul City will be a 5200 acre New Town with
eventually 13, 000 residences, 45, 000 people and
businesses and industries.
In a series of steps we are making a federal investment
of some $32.6 millions in grants, loans and guarantees
(out of the $76,000,000 total development investment).
Reproduced at the Richard Nixon Presidential Library and Museum
The neighboring towns (Oxford and Henderson) have
voted new bond issues, and Governor Holzhouser is
a strong backer of Soul City.
The Project has some risks but a decision has
recently been made that the risks are worth taking
and we have told McKissick that we will follow
through with our commitments to his project.
Soul City is now empty land with a few old houses and
barns. Groundbreaking will be for the Health Center
(an OEO grant), an industrial facility which will
"incubate" new industries (also an OEO grant), two
miles of roads and the first housing project. (See
McKissick's letter attached).
We are long overdue for projects with the President's
participation; this is an excellent time and place and
would be a dramatic change of pace.
Reproduced at the Richard Nixon Presidential Library and Museum
FLOYD B.
McKISSICK ENTERPRISES, INC.
P. O. BOX 188
SOUL CITY, NORTH CAROLINA 27553
(919) 456-5811
July 2, 1973
Mr. Leonard Garment
Special Consultant to the President
The White House
1700 Pennsylvania Avenue, N.W.
Washington, D. C.
Dear Len:
I advised sometime ago that after closing of the HUD bonds, we would
have groundbreaking ceremonies at Soul City. These ceremonies will
be for the purpose of breaking ground for the Health Center; our first
industrial facility to be known as Soultech I; two miles of roads, and
our first housing project.
We are at this time cordially extending an invitation for President Nixon
to be the speaker on this occasion. A more formal invitation will be
issued directly to the President once a firm date is established, which
we now anticipate to be sometime in September. We are seeking a tentative
commitment on the part of President Nixon. Once we have this commitment,
then our program will be coordinated around the President's message.
This occasion could be used for the purpose of any major domestic
announcement by the President, the reaffirmation of Civil Rights goals
and as an example of the new federalism as exemplified by the Soul City
project.
As you know, Soul City is located just 12 miles south of the North Carolina-
Virginia State Line. Assuming a busy schedule on the part of the President,
he could fly here by helicopter, make his speech and return to Washington
within a two hour time period. These details can, of course, be worked out
after I hear from you.
Reproduced at the Richard Nixon Presidential Library and Museum
eonard Garment
- 2 -
July 2, 1973
our early reply will be greatly appreciated. In the meantime, I thank you.
again support. for your past cooperation and you may rest assured of my continued
With very kind regards, I am
Yours very truly,
Gilayd Floyd B. McKissick
Reproduced at the Richard Nixon Presidential Library and Museum
August 22, 1973
Dear Floyd:
The President has asked me to inform you that, regretfully,
he will be unable to attend the proposed groundbreaking
ceremonies at Soul City in the fall.
If you so desire, I'm sure that arrangements for an Administration
representative to take part in your ceremonies can be handled
through the White House.
Best,
Leonard Garment
Mr. Floyd B. McKissick
McKissick Enterprises, Inc.
Post Office Box 188
Soul City, North Carolina 27553
Reproduced at the Richard Nixon Presidential Library and Museum
August 22, 1973
Dear Floyd:
The President has asked me to inform you that, regretfully,
he will be unable to attend the proposed groundbreaking
ceremonies at Soul City in the fall.
If you so desire, I'm sure that arrangements for an Administration
representative to take part in your ceremonies can be handled
through the White House.
Best,
Leonard Garment
Mr. Floyd B. McKissick
McKissick Enterprises, Inc.
Post Office Box 188
Soul City, North Carolina 27553
Reproduced at the Richard Nixon Presidential Library and Museum
August 22, 1973
Dear Floyd:
The President has asked me to inform you that, regretfully,
he will be unable to attend the proposed groundbreaking
ceremonies at Soul City in the fall.
If you so desire, I'm sure that arrangements for an Administration
representative to take part in your ceremonies can be handled
through the White House.
Best,
Leonard Garment
Mr. Floyd B. McKissick
McKissick Enterprises, Inc.
Post Office Box 188
Soul City, North Carolina 27553
Reproduced at the Richard Nixon Presidential Library and Museum
August 22, 1973
Dear Floyd:
The President has asked me to inform you that, regretfully,
he will be unable to attend the proposed groundbreaking
ceremonies at Soul City in the fall.
If you so desire, I'm sure that arrangements for an Administration
representative to take part in your ceremonies can be handled
through the White House.
Best,
Leonard Garment
Mr. Floyd B. McKissick
McKissick Enterprises, Inc.
Post Office Box 188
Soul City, North Carolina 27553
Reproduced at the Richard Nixon Presidential Library and Museum
B.P.
FLOYD B.
McKISSICK ENTERPRISES, INC.
P. O. BOX 188
SOUL CITY, NORTH CAROLINA 27553
(919) 456-5811
July 2, 1973
Mr. Leonard Garment
Special Consultant to the President
The White House
1700 Pennsylvania Avenue, N.W.
Washington, D. C.
Dear Len:
I advised sometime ago that after closing of the HUD bonds, we would
have groundbreaking ceremonies at Soul City. These ceremonies will
be for the purpose of breaking ground for the Health Center; our first
industrial facility to be known as Soultech I; two miles of roads, and
our first housing project.
We are at this time cordially extending an invitation for President Nixon
to be the speaker on this occasion. A more formal invitation will be
issued directly to the President once a firm date is established, which
we now anticipate to be sometime in September. We are seeking a tentative
commitment on the part of President Nixon. Once we have this commitment,
then our program will be coordinated around the President's message.
This occasion could be used for the purpose of any major domestic
announcement by the President, the reaffirmation of Civil Rights goals
and as an example of the new federalism as exemplified by the Soul City
project.
As you know, Soul City is located just 12 miles south of the North Carolina-
Virginia State Line. Assuming a busy schedule on the part of the President,
he could fly here by helicopter, make his speech and return to Washington
within a two hour time period. These details can, of course, be worked out
after I hear from you.
Reproduced at the Richard Nixon Presidential Library and MuSedinated to the Building of Black Economic Power"
Mr. Leonard Garment
- 2 -
July 2, 1973
Your early reply will be greatly appreciated. In the meantime, I thank you
again for your past cooperation and you may rest assured of my continued
support.
With very kind regards, I am
Yours very truly,
Flayd Floyd B. McKissick
Reproduced at the Richard Nixon Presidential Library and Museum
MEMORANDUM
OF CALL
TO:
BP
YOU WERE CALLED BY-
YOU WERE VISITED BY-
meredith Potter
OF (Organization)
HUD
PLEASE CALL
PHONE NO.
CODE/EXT.
755-6950
WILL CALL AGAIN
IS WAITING TO see YOU
RETURNED YOUR CALL
WISHES AN APPOINTMENT
MESSAGE
Beturning your call
to Mr. Hyde -he will
not be in today.
RECEIVED BY
dls
DATE
TIME
7/11
10:10
STANDARD FORM 63
GPO : 1969-c48-16-80341-1 332-389
63-108
REVISED AUGUST 1967
GSA FPMR (41 CFR) 101-11.6
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE HOUSE
WASHINGTON
June 29, 1973
NOTE FOR THE FILES
Subject: Soul City
Mike Duval, at Dana Mead's request,
told me at 11:35 this morning that the
decision has been made:
a) To OK the EDA $1.5 million for
water and wewer grant for FY 1973.
b) To stand behind Bob Brown's original
general assurances given to Floyd
McKissick last year about Soul City.
c) To authorize Lynn to go ahead with
the water and sewer grants if he
thinks it wise in view of ourinabiltity
to make any housing subsidy commitments
until after the overall housing
study is done ink the Fall. This means
that if he considers the whole ente r-
prise a viable risk under these circum-
standes (and he does ) he can go
ahead with the water and sewer grants
now
Reproduced at the Richard Nixon Presidential Library and Museum
over
d) The decision will really be cast
as a HUD-EDA decision, not S O much
as "White House" itself.
e) OMB and HUD have been notified of the
above; Lynn will get in touch with
McKissick.
Boad
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE HOUSE
WASHINGTON
June 20, 1973
Leonard -
This is now ready to go to
Laird -- in final formX after your OK.
I talked with Floyd Hyde yester-
day alnd the memo reflects his views;
he thinks we should "go" with Soul City,
even though it is "marginal".
Informally, Dana agrees, altho
he would prefer the memo go in without
a formal concurrence; if Ken asks for
one from him, he will concur.
I invited comment from Stan Scott
2 weeks ago but never got anything.
H.
Floyd asle d me to check with Chase
Manhattan, and I did today by phone; they
are still "go" for Soul City.
OK
Reproduced at the Richard Nixon Presidential Library and Museum
Paul O'Neill has gone over the
memo in its several previous drafts;
doesn't want to be formally included
as "concurring" or as making any
recommendation, but agrees that our
depiction of him as considering the
project "marginal" is correct.
Informally, Paul tells me that
we may be able to get the water and dewer
money -- all of it -- from EDA (in its
newly extended existence) rather than from
HUD at all, but that is a tactical
detail referred to briefly here - - but
this paper is for a strategic decision.
Your OK recommended.
Bowl
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE HOUSE
WASHINGTON
June 21, 1973
MEMORANDUM FOR MEL LAIRD
SUBJECT:
SOUL CITY
Soul City is a prospective New Community in North Carolina, the
first (and only) free-standing new community among the fifteen which
HUD is now assisting pursuant to the Urban Growth and New Community
Development Act of 1970. It is 5, 200 acres, will represent a land
acquisition and development investment alone of $76,000,000 and will
eventually have 13, 000 residences and a population of almost 45, 000.
It would be located just south of the Virginia border, within an hour's
commuting time of Raleigh, Durham, Wake Forest and Rocky Mount.
The developer of Soul City is Floyd McKissick, one of the nation's
best known black leaders.
Last June, the Board of Directors of the New Community Development
Corporation approved a conditional offer of commitment to Soul City
of $14,000,000 in guarantees. McKissick then sent in applications for
water and sewer grants to both HUD and EDA and the processing of these
applications began.
During 1972, Bob Brown of the White House gave McKissick general
assurances that we supported his enterprise.
Reproduced at the Richard Nixon Presidential Library and Museum
-2-
Last January, we announced that HUD would approve no more
applications for water and sewer grants (no matter how far along they
were) and we also announced that HUD was suspending its subsidy program
for low and moderate income housing. Both of these actions affected
the plans for Soul City, and McKissick came to see me in February,
asking me the question: were we going to go ahead with our support of
Soul City?
Brad Patterson and I have been in touch with OMB, EDA, HUD and
McKissick and especially have requested that McKissick list on one
chart all his present and proposed federal subsidies. This chart appears
as Attachment A.
As of now, Soul City is empty land, with a few old houses and barns.
But extensive plans (and commitments) have been made. Four agencies
of the Federal Government have already invested $1. 628 million in Soul
City planning (Attachment A, items 2, 6, 10, 11 and 22) and have now com-
mitted $.7 million more (items 7 and 13) SO our federal investment is
$2. 3 million at present.
The developers of Soul City have requests either pending or envisaged
for (a) at least $15. 8 million in additional federal grants, (b) $.5 in
additional loans, (c) $14. 0 in guarantees and (d) a large, but unknown
amount for housing subsidy payments (see below). Thus, at least
$16. 370 millions in added federal subsidization would be needed with the
Reproduced at the Richard Nixon Presidential Library and Museum
-3-
further risk of $14 millions in guarantee exposure. (This is not unusual for
the "new communities"; typically they have comprehensive shopping lists
for federal assistance.) Of Soul City's total requirements, however, close
to $4 million has been requested under HUD's water and sewer grant and
loan programs which were terminated on January 5, 1973. If an exception
is to be made for Soul City from these HUD funds, it must be made before
the end of this month. (A preliminary commitment for the water and sewer
grant was made within HUD a year ago this month.)
The policy question is: should the U.S. Government go ahead, this
month and in the months to come, finally committing more than $16
million on top of the $2. 3 million we have already invested to help new
community Soul City get built, and committing the guarantee?
One difficulty in answering this question as it applies to Soul City
(See item #4 in Attachment A) is that not only Soul City but every other
one of the 15 New Communities is in effect required by Section 712 of the
New Community Development Act to include "an appropriate portion'' of
low and moderate income housing. In Soul City, the total is expected to
reach at least 3, 700 units over 25 years -- 200 in the next 3 years.
The Administration's suspension of new commitments under its
erstwhile subsidy programs for low and moderate income housing will
stay in effect pending a comprehensive study now in progress with HUD
but not due for presentation to the President until September. On
March 20, 1973 in Congressional testimony, Secretary Lynn stated that
Reproduced at the Richard Nixon Presidential Library and Museum
-4-
"instructions will be issued shortly to honor the bona fide commitments
as promised by Secretary Romney. The areas in which these commitments
fall include:
New Communities
"
Secretary Lynn thus has authority to meet FY 1974 needs for sub-
sidized low and moderate income housing in Soul City (depending on
how he sets his internal priorities) but Soul City's FY 1974 subsidized
housing requirement is only five units.
The Secretary obviously cannot make any longer-range commitment
for assistance to low and moderate income housing -- in Soul City or
anywhere else -- - until he and the President have reviewed the September
study, have decided on what direction to take and until the Congress has
approved it. If it should eventually be decided that there will be no
further such subsidy program, Soul City and the other New Communities
will be very different places from what was originally conceived --
they will not have the balance in types of housing which the New Com-
munity Development Act intended. In Soul City's case such a lack may
be very harmful. (Attachment B is an OMB memorandum on this subject).
But at least the next increment of our commitment to Soul City
(the $5. 892 million) must be decided on before this June 30; we cannot
wait until next September to make this decision.
Before making a recommendation, here is an analysis of what might
be called the assets and risks:
Reproduced at the Richard Nixon Presidential Library and Museum
-5-
Soul City's Assets
1. A Presidential policy favoring (a) minority enterprise development
and (b) concrete results instead of rhetoric about it.
2. A very committed and capable developer, (and a political friend --
see attachment C) who wants to make this project one of the best of the
President's concrete accomplishments. Floyd Hyde believes McKissick
is going to stay with this project for a long time.
3. The State (and the Governor) of North Carolina, which has already
committed $125, 000 in a planning grant, $75,000 in road work, and
$1. 3 million for the required 3-county regional water system, and which
will commit another $.4 next year. Governor Holzhauser (and I have
reconfirmed this just now) is a strong proponent of Soul City.
4. The neighboring cities of Henderson and Oxford, N. C. which just
June 2 approved referenda committing themselves to put up $2. 8 million
of bonds for that regional water system.
5. The four Federal Agencies (HUD, OEO, Commerce and the National
Endowment on the Arts) which have put up the $2.30 3 up to now. Secretaries
Lynn's and Dent's memoranda and the very recent one of Acting Assistant
Secretary Blunt are attached (Attachment D).
6. HUD's conviction, as expressed by Ted Lamont, Director of its
Office of New Communities Development, that Soul City will become an
important growth center in the northern North Carolina area and will
Reproduced at the Richard Nixon Presidential Library and Museum
-6-
significantly help to stem the out-migration from this area which up to
now has been one of the highest in the State.
7. Private lenders and investors who have made the following com-
mitments to Soul City:
a) $1. 5 million in equity from McKissick Enterprises, the National
Corporation for Housing Partnerships and the black architectural firm
Madison-Madison International.
b) $1. 5 million in a combination of secured and unsecured loans
from Chase Manhattan, North Carolina National Bank, the National
Corporation for Housing Partnerships, the Mechanics and Farmers
Bank of Charlotte and a dozen miscellaneous lenders.
c) $1. 15 million in mortgage promises from various sources.
8. Soul City's economic geography, which has I-85 and the Seaboard
Railway abutting it.
9. The Board of Directors of the New Community Development
Corporation which on June 28, 1972 after the most careful analysis and
consideration approved making a conditional offer of commitment to
Soul City (the $14, 000, 000 guarantee), having officially confirmed the
eight determinations, (pursuant to statute) set forth in Attachment E,
and made the finding that the Soul City enterprise is "an acceptable
financial risk to the United States".
Reproduced at the Richard Nixon Presidential Library and Museum
-7-
10. McKissick's promise (which HUD insists upon as a condition of the
guarantee) to install a competent General Manager for the whole Soul
City enterprise.
Soul City's Risks
1. Soul City is located in a low-income area which may not be as attractive
to prospective homeowners/businesses as alternative opportunities.
(This is why assistance for the "incubation" of industries, for manpower
training grants, and for low-income housing are necessary).
2. A principal "unknown" is whether, once he has his land watered and
sewered and otherwise developed, McKissick will really be able to sell
parcels of it to residential and commerical customers.
3. Under Secretary Hyde and other members of the Board of the New
Community Development Corporation, even while making their positive
findings, did it with their fingers crossed, recognizing that a new, free-
standing community is a much more chancey enterprise than the other
14 new communities being assisted by HUD, in that the other 14 are located
in or very near suburbs or other existing growth areas. Floyd Hyde
still characterizes the Soul City enterprise as "marginal" and as requiring
significant amounts of grant assistance in order to succeed. Paul O'Neill
of OMB concurs with this description.
Reproduced at the Richard Nixon Presidential Library and Museum
-8-
4. The project is right now dependent on Federal support for its water
and sewer system. One of the programs from which the developers are
seeking funds -- HUD's water and sewer program -- has already been
terminated. Should this program be opened up for Soul City, the
Administration will be subject to pressure to make further exceptions
in special cases. If we should make further exceptions, this could
jeopardize our budgetary strategy. (Alternatively it would be possible
to have EDA pick up the full cost of the project in FY 1974; this would
probably require our direct intervention, since EDA has only $150 million
nationwide, and Soul City needs nearly $6 million.)
5. There is a real possibility that if Federal housing production sub-
sidies are unavailable for the long term, this lack will undermine the
entire Soul City project.
Conclusion
In reviewing all of the points here, balancing the assets and risks,
I am impressed with the firm and specific commitments which have so
far been made by so many different individuals and institutions: the
State of North Carolina, the towns of Henderson and Oxford, the many
government professionals who have evaluated the promise of this enter-
prise, the private banks, organizations and individuals who have put
not only their faith but their money on the line, convinced that Soul City
Reproduced at the Richard Nixon Presidential Library and Museum
-9-
is an enterprise with promise. In my four years here, I have seen few
projects in the minority development field which have put together as
much as this one has.
Under Secretary Hyde and I share an additional conviction: the whole
New Communities program is and was expected to be an experimental
venture, with inherent risks. We should not now argue that because one
of these new communities is "marginal", it should be scrubbed. Unless
we go ahead with this, how are we ever going to find out whether a new
town, beginning from scratch in an entirely rural area, can be made to
succeed?
If we now say "no" to McKissick, we will stand accused not only of
reneging on specific commitments to him, but of reneging on the
President's commitment to the whole minority enterprise concept. How-
ever unfair or inaccurate those accusations may be in a narrow sense,
in the broader context they will be persuasive to the public and damaging
to all of us on the domestic side of the Administration.
Recommendations
1. We should give Soul City the green light and inform the interested
agencies that we have done so. For FY 1973 this means specifically
a green light for the water and sewer grants. In the field of housing policy
in the short term, this means that Secretary Lynn will have our support
in regarding Soul City's immediate requests for subsidized low and
Reproduced at the Richard Nixon Presidential Library and Museum
-10-
moderate income housing as among the "bona fide commitments" which
he can and will handle under his existing authority and funds. In the
long term, this means that McKissick and all the other New Community
developers will have to continue to take their chances as to whether
federal government will have an on-going subsidy program for low and
moderate income housing.
2. We should ask HUD to designate an implementation monitorship
officer to work with the various federal agencies to ensure the coordinated
handling of the applications from Soul City (and from the other New
Communities); we should notify the other agencies of our support of this
designation.
Leonard Garment
attachment
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE House
WASHINGTON
Carbon copies sent to:
Floyd Hyde w/attachments
Dana Mead
Paul O'Neill
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE HOUSE
WASHINGTON
June 21, 1973
MEMORANDUM FOR MEL LAIRD
SUBJECT:
SOUL CITY
Soul City is a prospective New Community in North Carolina, the
first (and only) free-standing new community among the fifteen which
HUD is now assisting pursuant to the Urban Growth and New Community
Development Act of 1970. It is 5, 200 acres, will represent a land
acquisition and development investment alone of $76,000,000 and will
eventually have 13, 000 residences and a population of almost 45, 000.
It would be located just south of the Virginia border, within an hour's
commuting time of Raleigh, Durham, Wake Forest and Rocky Mount.
The developer of Soul City is Floyd McKissick, one of the nation's
best known black leaders.
Last June, the Board of Directors of the New Community Development
Corporation approved a conditional offer of commitment to Soul City
of $14, 000, 000 in guarantees. McKissick then sent in applications for
water and sewer grants to both HUD and EDA and the processing of these
applications began.
During 1972, Bob Brown of the White House gave McKissick general
assurances that we supported his enterprise.
Reproduced at the Richard Nixon Presidential Library and Museum
-2-
Last January, we announced that HUD would approve no more
applications for water and sewer grants (no matter how far along they
were) and we also announced that HUD was suspending its subsidy program
for low and moderate income housing. Both of these actions affected
the plans for Soul City, and McKissick came to see me in February,
asking me the question: were we going to go ahead with our support of
Soul City?
Brad Patterson and I have been in touch with OMB, EDA, HUD and
McKissick and especially have requested that McKissick list on one
chart all his present and proposed federal subsidies. This chart appears
as Attachment A.
As of now, Soul City is empty land, with a few old houses and barns.
But extensive plans (and commitments) have been made. Four agencies
of the Federal Government have already invested $1. 628 million in Soul
City planning (Attachment A, items 2, 6, 10, 11 and 22) and have now com-
mitted $.7 million more (items 7 and 13) so our federal investment is
$2. 3 million at present.
The developers of Soul City have requests either pending or envisaged
for (a) at least $15. 8 million in additional federal grants, (b) $.5 in
additional loans, (c) $14. 0 in guarantees and (d) a large, but unknown
amount for housing subsidy payments (see below). Thus, at least
$16. 370 millions in added federal subsidization would be needed with the
Reproduced at the Richard Nixon Presidential Library and Museum
-3-
further risk of $14 millions in guarantee exposure. (This is not unusual for
the "new communities"; typically they have comprehensive shopping lists
for federal assistance.) Of Soul City's total requirements, however, close
to $4 million has been requested under HUD's water and sewer grant and
loan programs which were terminated on January 5, 1973. If an exception
is to be made for Soul City from these HUD funds, it must be made before
the end of this month. (A preliminary commitment for the water and sewer
grant was made within HUD a year ago this month.)
The policy question is: should the U.S. Government go ahead, this
month and in the months to come, finally committing more than $16
million on top of the $2. 3 million we have already invested to help new
community Soul City get built, and committing the guarantee?
One difficulty in answering this question as it applies to Soul City
(See item #4 in Attachment A) is that not only Soul City but every other
one of the 15 New Communities is in effect required by Section 712 of the
New Community Development Act to include "an appropriate portion'' of
low and moderate income housing. In Soul City, the total is expected to
reach at least 3, 700 units over 25 years -- 200 in the next 3 years.
The Administration's suspension of new commitments under its
erstwhile subsidy programs for low and moderate income housing will
stay in effect pending a comprehensive study now in progress with HUD
but not due for presentation to the President until September. On
March 20, 1973 in Congressional testimony, Secretary Lynn stated that
Reproduced at the Richard Nixon Presidential Library and Museum
-4-
"instructions will be issued shortly to honor the bona fide commitments
as promised by Secretary Romney. The areas in which these commitments
fall include:
New Communities
"
Secretary Lynn thus has authority to meet FY 1974 needs for sub-
sidized low and moderate income housing in Soul City (depending on
how he sets his internal priorities) but Soul City's FY 1974 subsidized
housing requirement is only five units.
The Secretary obviously cannot make any longer-range commitment
for assistance to low and moderate income housing -- in Soul City or
anywhere else -- until he and the President have reviewed the September
study, have decided on what direction to take and until the Congress has
approved it. If it should eventually be decided that there will be no
further such subsidy program, Soul City and the other New Communities
will be very different places from what was originally conceived --
they will not have the balance in types of housing which the New Com-
munity Development Act intended. In Soul City's case such a lack may
be very harmful. (Attachment B is an OMB memorandum on this subject).
But at least the next increment of our commitment to Soul City
(the $5. 892 million) must be decided on before this June 30; we cannot
wait until next September to make this decision.
Before making a recommendation, here is an analysis of what might
be called the assets and risks:
Reproduced at the Richard Nixon Presidential Library and Museum
-5-
Soul City's Assets
1. A Presidential policy favoring (a) minority enterprise development
and (b) concrete results instead of rhetoric about it.
2. A very committed and capable developer, (and a political friend --
see attachment C) who wants to make this project one of the best of the
President's concrete accomplishments. Floyd Hyde believes McKissick
is going to stay with this project for a long time.
3. The State (and the Governor) of North Carolina, which has already
committed $125, 000 in a planning grant, $75,000 in road work, and
$1. 3 million for the required county regional water system, and which
will commit another $.4 next year. Governor Holzhauser (and I have
reconfirmed this just now) is a strong proponent of Soul City.
4. The neighboring cities of Henderson and Oxford, N. C. which just
June 2 approved referenda committing themselves to put up $2. 8 million
of bonds for that regional water system.
5. The four Federal Agencies (HUD, OEO, Commerce and the National
Endowment on the Arts) which have put up the $2. 3 up to now. Secretaries
Lynn's and Dent's memoranda and the very recent one of Acting Assistant
Secretary Blunt are attached (Attachment D).
6. HUD's conviction, as expressed by Ted Lamont, Director of its
Office of New Communities Development, that Soul City will become an
important growth center in the northern North Carolina area and will
Reproduced at the Richard Nixon Presidential Library and Museum
-6-
significantly help to stein the out-migration from this area which up to
now has been one of the highest in the State.
7. Private lenders and investors who have made the following com-
mitments to Soul City:
a) $1. 5 million in equity from McKissick Enterprises, the National
Corporation for Housing Partnerships and the black architectural firm
Madison-Madison International.
b) $1. 5 million in a combination of secured and unsecured loans
from Chase Manhattan, North Carolina National Bank, the National
Corporation for Housing Partnerships, the Mechanics and Farmers
Bank of Charlotte and a dozen miscellaneous lenders.
c) $1. 15 million in mortgage promises from various sources.
8. Soul City's economic geography, which has I-85 and the Seaboard
Railway abutting it.
9. The Board of Directors of the New Community Development
Corporation which on June 28, 1972 after the most careful analysis and
consideration approved making a conditional offer of commitment to
Soul City (the $14, 000, 000 guarantee), having officially confirmed the
eight determinations, (pursuant to statute) set forth in Attachment E,
and made the finding that the Soul City enterprise is "an acceptable
financial risk to the United States".
Reproduced at the Richard Nixon Presidential Library and Museum
-7-
10. McKissick's promise (which HUD insists upon as a condition of the
guarantee) to install a competent General Manager for the whole Soul
City enterprise.
Soul City's Risks
1. Soul City is located in a low-income area which may not be as attractive
to prospective homeowners/businesses as alternative opportunities.
(This is why assistance for the "incubation" of industries, for manpower
training grants, and for low-income housing are necessary).
2. A principal "unknown" is whether, once he has his land watered and
sewered and otherwise developed, McKissick will really be able to sell
parcels of it to residential and commerical customers.
3. Under Secretary Hyde and other members of the Board of the New
Community Development Corporation, even while making their positive
findings, did it with their fingers crossed, recognizing that a new, free-
standing community is a much more chancey enterprise than the other
14 new communities being assisted by HUD, in that the other 14 are located
in or very near suburbs or other existing growth areas. Floyd Hyde
still characterizes the Soul City enterprise as "marginal" and as requiring
significant amounts of grant assistance in order to succeed. Paul O'Neill
of OMB concurs with this description.
Reproduced at the Richard Nixon Presidential Library and Museum
-8-
4. The project is right now dependent on Federal support for its water
and sewer system. One of the programs from which the developers are
seeking funds -- HUD's water and sewer program. -- has already been
terminated. Should this program be opened up for Soul City, the
Administration will be subject to pressure to make further exceptions
in special cases. If we should make further exceptions, this could
jeopardize our budgetary strategy. (Alternatively it would be possible
to have EDA pick up the full cost of the project in FY 1974; this would
probably require our direct intervention, since EDA has only $150 million
nationwide, and Soul City needs nearly $6 million.)
5. There is a real possibility that if Federal housing production sub-
sidies are unavailable for the long term, this lack will undermine the
entire Soul City project.
Conclusion
In reviewing all of the points here, balancing the assets and risks,
I am impressed with the firm and specific commitments which have so
far been made by so many different individuals and institutions: the
State of North Carolina, the towns of Henderson and Oxford, the many
government professionals who have evaluated the promise of this enter-
prise, the private banks, organizations and individuals who have put
not only their faith but their money on the line, convinced that Soul City
Reproduced at the Richard Nixon Presidential Library and Museum
-9-
is an enterprise with promise. In my four years here, I have seen few
projects in the minority development field which have put together as
much as this one has.
Under Secretary Hyde and I share an additional conviction: the whole
New Communities program is and was expected to be an experimental
venture, with inherent risks. We should not now argue that because one
of these new communities is "marginal", it should be scrubbed. Unless
we go ahead with this, how are we ever going to find out whether a new
town, beginning from scratch in an entirely rural area, can be made to
succeed?
If we now say "no" to McKissick, we will stand accused not only of
reneging on specific commitments to him, but of reneging on the
President's commitment to the whole minority enterprise concept. How-
ever unfair or inaccurate those accusations may be in a narrow sense,
in the broader context they will be persuasive to the public and damaging
to all of us on the domestic side of the Administration.
Recommendations
1. We should give Soul City the green light and inform the interested
agencies that we have done so. For FY 1973 this means specifically
a green light for the water and sewer grants. In the field of housing policy
in the short term, this means that Secretary Lynn will have our support
in regarding Soul City's immediate requests for subsidized low and
Reproduced at the Richard Nixon Presidential Library and Museum
-10-
moderate income housing as among the "bona fide commitments" which
he can and will handle under his existing authority and funds. In the
long term, this means that McKissick and all the other New Community
developers will have to continue to take their chances as to whether
federal government will have an on-going subsidy program for low and
moderate income housing.
2. We should ask HUD to designate an implementation monitorship
officer to work with the various federal agencies to ensure the coordinated
handling of the applications from Soul City (and from the other New
Communities); we should notify the other agencies of our support of this
designation.
Leonard Garment
attachment
Reproduced at the Richard Nixon Presidential Library and Museum
DRAFT
6/5/73
FEDERAL ASSISTANCE TO SOUL CITY, NORTH CAROLINA, AND ITS REGION
The following table summarizes the various forms of
Federal assistance now being provided, and formally requested,
and expected to be required by Soul City and its Region.
Soul City will be the first free-standing new town
to be developed under Title VII of the Housing and Urban
Development Act of 1970. It will require a unique combination
of private, Federal, State and local action over the thirty
year span of the Development Plan. In that time, problems
that now seem large will disappear, and problems now invisible
will present themselves. The table below is therefore only an
outline on the basis of information now available.
There is one other essential preliminary point. The
Federal support listed below is quite varied not only in form
and budgetary impact but also in its recipients and bene-
ficiaries. Some of the Federal actions will benefit The Soul
City Company, the Developer of Soul City, in accordance with
statutory policies of assisting both new town development and
minority business enterprise. Other Federal actions will be
directed toward the entire Region, including its existing
communities as well as Soul City. Still other actions will
be aimed directly at the new residents of Soul City, persons who
are not now identified.
Reproduced at the Richard Nixon Presidential Library and Museum
Finally, to place the Federal support described
below in context, it is important to note that it is only
a fraction of the overall cost of developing Soul City.
Private, State and local sources have already made
substantial commitments, and in later years their contri-
butions can be expected to predominate. Approximately
$1,500,000 has been provided to date by banks and other
lenders, and an additional approximately $1,500,000
will be contributed by the partners in The Soul City Company
as equity capital when the debentures are issued. The State
of North Carolina has already spent or committed nearly
$2,000,000, and neighboring local governments have committed
$2,800,000. The essential Federal role is to provide the
seed money, leverage and long-term security essential to
enable others to undertake a project of this magnitude.
- 2 -
Reproduced at the Richard Nixon Presidential Library and Museum
FEDERAL SUPPORT FOR SOUL CITY
AND
STATE PLANNING REGION K
AGENCY
PROGRAM
NUMBER
CONTACT PERSON
STATUS
FORM OF SUPPORT
RECIPIENT
AMOUNT
PURPOSE/REMARKS
* 1.
HUD
Offer of
Debenture
$14,000,000
This is the basic
New Communities
commitment
guarantees
SCC
Laura Kuitunen
HUD guarantee
made June 28,
Reproduced at the Richard Nixon Presidential Library and Museum
under Title VII
1972
of the HUD Act of
1970 to support a
new community.
2.
HUD
Funded;
Grant
State of
$
128,000
701 Planning
Physical planning
expires
North
Malachi Knowles
for region and
6/30/73
Carolina;
new community.
subcontracted
to WRPC
* 3.
HUD
OMB approval
a.Basic water
Soul City
a. $ 500,000
Interim water and
Water and Sewer
requested by
and sewer
Sanitary
Donald Patch
sewer systems for
HUD and
grant
District
Soul City. SCC is
pending
b. ONCD supple-
b.$ 302,000
contributing an
mental grant
additional
C. Public facil-
C. $ 500,000
$514,000.
ities loan
* 4.
HUD r Home ad.
To be applied
Various
Dollar amount
Low and
SCC will be re-
for
Housing subsidies;
housing
Moderate
unknown; see
quired by HUD to
rent supplements;
developers
remarks
Income Housing
provide 116-174
public housing
units of subsidi-
Programs
(unknown)
zed housing between
1974 and 1978.
*Indicates Federal activities of primary importance.
AGENCY
PROGRAM
NUMBER
CONTACT PERSON
STATUS
FORM OF SUPPORT
RECIPIENT
AMOUNT
PURPOSE/REMARKS
* 5.
Commerce/HUD
OMB approval
a.EDA grant
City of
EDA
a.$1,500,000
This is part of
requested
b. HUD basic water
Henderson,
George Karras
b.$2,640,000
$9,000,000 program
grant.
North
for new regional
C. ONCD supple-
Carolina
c.$ 360,000
water system serv-
mental grant.
ing three
counties. Remain-
ing funds
($4,500,000) being
contributed by
state and local
Reproduced at the Richard Nixon Presidential Library and Museum
sources.
6.
Commerce
Funded;
Federal
WRPC
$
OMBE
257,500
Industrial
expires
contract
Harold McClendon
Promotion
6/30/73
* 7.
do
Pending
Federal
WRPC
$
274,000
Technical assis-
before
contract
tance to SCC. This
OMBE
is an amendment
to item 6 to pro-
vide additional
funding through
August 31,1973.
*8.
do
Under
Federal
negotiation
contract
WRPC
$
760,000
Minority business
development (re-
quest is for
$760,000 for
fiscal 1974;
additional re-
quests for $500,00
in fiscal 1975 and
$250,000 in fiscal
1976 are antici-
pated.)
page 2
AGENCY
PROGRAM
NUMBER
CONTACT PERSON
STATUS
FORM OF SUPPORT
RECIPIENT
AMOUNT
PURPOSE/REMARKS
* 9.
EPA
Application
Grant
Soul City
$ 3,000,000
Waste Water
Permanent Sewage
tentatively
Sanitary
Treatment Facil-
Treatment
submitted;
District
ities. An addi-
(State of North
formal appli-
tional $1,000,000
Carolina)
cation in
to be supplied by
process
State and Local
sources.
10.
OEO
Funded
Grant
Soul City
$
90,000
Special Programs
Planning to in-
Foundation
Michael Thompson
sure participation
Reproduced at the Richard Nixon Presidential Library and Museum
of the poor in Sod
City.
11.
OEO
Funded;
Grant
HealthCo.
$ 1,140,117
Office of Health
Comprehensive
expires
Health Services
Affairs
12/31/73
for Warren and
William White
Vance Counties
(including medical
personnel and
health facilities).
*12.
do
To be
Grant
HealthCo. $1,500,000 ('74) Extension of No. 11
applied for
$1,000,000 ('75)
to calendar 1974
and 1975.
*13.
OEO
Pending
Grant
Soul City
$ 502,875
Planning, con-
Community Action
before
Foundation
struction and
Program
OEO
Michael Thompson
development of
industrial
incubator plant.
Page 3
AGENCY
PROGRAM
NUMBER
CONTACT PERSON
STATUS
FORM OF SUPPORT
RECIPIENT
AMOUNT
PURPOSE/REMARKS
14.
OEO
Pending
Grant
Soul City
$
90,000
Legal Services for
Legal Services
before
Foundation
the poor of Warren
Mr. Hurwitz
OEO
and Vance Counties
15.
HEW
Pending
Grant
Soul City
$
98,220
Provide Remedial
Office of
before
Foundation
Education to
Education
HEW
Warren County High
John Lovegrove
School Students.
* 16.
HEW
To be
Grant
Soul City
$ 200,000
Planning expansion
National
applied for
Foundation
for fiscal
and improvement
Reproduced at the Richard Nixon Presidential Library and Museum
Institute of
1974;$200,000
of Warren County
Education
for fiscal
public schools.
(unknown)
1975.
17.
HEW
To be
Grant
Soul City
(unknown)
applied for
Foundation $ 250,000
Planning and
(unknown)
demonstration of
child care and
day care program
and facilities.
18.
HEW
To be
Grant
Soul City
$
500,000
Construction and
Office of
applied for
Foundation
development of
Education
or Region K
regional public
(unknown)
library to serve
five counties.
* 19.
Department of
To be
Grant
Soul City
$
683,000
Planning and
Labor
applied for
Foundation
demonstration pro-
Manpower Training
ject to develop
(unknown)
regional con-
struction trades
training program.
page 4
AGENCY
PERSON
NUMBER
CONTACT PERSON
STATUS
FORM OF SUPPORT
RECIPIENT
AMOUNT
PURPOSE/REMARKS
20.
Department of
To be
Grant
Soul City
$ 400,000
Planning and
Justice
applied for
Foundation;
Development of
LEAA
Soul City
public safety pro-
(unknown)
Sanitary
gram and purchase
District
of equipment.
21.
Department of
To be
Grant
Warren
$1,000,000
Preservation
Interior
applied for
County
and restoration
Historic
of historic sites
Preservation
and development
(unknown)
of recreational
Reproduced at the Richard Nixon Presidential Library and Museum
areas.
22.
National
Funded
Grant
Soul City
$
12,500
Planning
Endowment for
Foundation
Cultural Develop-
the Arts
ment.
Expansion Arts
Division
Vantile Whitfield
23.
DOT
Pending
Grant
WRPC
$ 137,000
Plan road system
Urban Mass Transit
before
and public
Calvin Banks
DOT
transportation.
24.
It is anticipated that there will be developed an African-American Trade Center
at Soul City. Planning is in preliminary stages. Some Federal support will be required.
Notes: SCC - The Soul City Company
WRPC - Warran Regional Planning Corporation
ONCD - HUD Office of New Communities Development
OMBE - Office of Minority Business Enterprise
page 5
EXECUTIVE OFFICE OF THE PRESIDENT
DATE:
June 5, 1973
OFFICE OF management AND budget
WASHINGTON, D.C. 20503
REPLY TO
ATTN OF:
SUBJECT:
Soul City New Community Project
Mr. O'Neill
I attended a meeting with Brad Patterson and Gordon Carey and Lewis
Cohen, two representatives from Soul City. The discussion centered
around Federal assistance critical to getting the project off the
ground, and the prognosis for successful completion of the project.
The Federal Government has already invested $1.6 million in Soul City
via a HUD planning grant, OMBE industrial promotion grant, OEO health
and planning grants and a National Endowment grant. Two other Federal
grants totalling $777 thousand are in the final contract stage. (OMBE,
$274 K and OEO, $503 K.) For practical purposes, then, the total
Federal investment today would be over $2 million.
In addition, the State of North Carolina and local governments around
Soul City have together invested or made firm commitments of about
$5.5 million. The private sector (primarily large New York financial
institutions) has also invested over $1 million in the project.
In short, almost $8 million in various forms of governmental assistance
has already been pumped into the project. Still Soul City needs at
least $5.8 million in assistance in FY 1973 from Federal sources before
the project can fly.
These are needed to undertake a regional and internal water system:
HUD
$4,302 million
New Community guarantee
-
(14,000)
Water and sewer
3,140
PFL
500
Supplementary grants
662
EDA
$1,500 million
In addition, the developers are seeking approval for another $9.7 million
in Federal grants over the next 3 years from a variety of Federal agencies.
Finally, the availability of Federal housing subsidies is also an important
condition for meeting the objectives of the project. The need for this
immediate assistance, coupled with the future needs, demonstrates the
thin margin on which the success of the project hinges over at least the
next ten years.
Reproduced at the Richard Nixon Presidential Library and Museum
2
The immediate issue is whether the past investment argues sufficiently
for the commitment of an additional $15.5 million in Federal funds over
the next several years and exposure on $14 million in guarantees.
Although the current request is for HUD water and sewer and public
facility loan assistance, the need for Federal housing subsidies over
the life of the project is really the more serious issue. The developer's
representatives acknowledged that plans to attract and support a pre-
dominantly low and moderate-income population are dependent on the
availability of Federal housing subsidies. Approval of the current
request will only invite additional pressures for Federal housing sub-
sidies.
In view of this critical linkage with the Federal housing subsidies, we
would recommend against approving the current request unless the
Administration is prepared to make the decision to provide housing
subsidy support. It may be that the project is worthy of special support,
perhaps in the context of a research demonstration. Housing subsidies
could then be provided by some special arrangement.
Adele D. Jackson
COPY FOR MR. BRAD PATTERSON - THE WHITE HOUSE
Reproduced at the Richard Nixon Presidential Library and Museum
BOARD OF DIRECTORS
NORTH CAROLINA CHAPTER OF THE NATIONAL
COMMITTEE FOR A TWO-PARTY SYSTEM
Ron Barbee
Carlton Fellers
Floyd McKissick
Alexander Barnes
Marion Goodson
Odell Payne
Philosophy
Delilah Blanks
J.P. Green
Donald Pollock
The North Carolina Chapter of the National Committee for
Robert Brown
Tommy Harrelson
Emory Rann
a Two-Party System grew out of the belief that a viable two-party
Robert Browning
Rex Harris
Asa Spaulding, Jr.
system creates a healthier political climate in North Carolina to
the benefit of all the people, including minorities.
Harold J. Cobb
John Hawkins
William Stevens
Larry Cobb
Larnie G. Horton
Marquis Street
The North Carolina Chapter of the National Committee for
Lawrence Crockett
F. W. Jackson
Charles Taylor
a Two-Party System also came into being out of necessity, recog-
nizing minorities had received meager benefits from a one-party
Grady Davis
Charles Jonas, Jr.
A. J. Turner
system.
Harold Davis
Buford Kidd
Walter Twitty
Helen Edmonds
Kenneth Lee
Mary A. Warren
Whereas the Republican Party is the minority party in North
Carolina and in order to build an effective two-party system it is
Floretta Fagin
C. C. Malone, Jr.
necessary that we encourage a broader participation by minority
groups to affiliate with the Republican Party to effectuate a two-
party system in fact.
If minorities are to exercise their franchise in the most effective
OFFICERS
manner in a way that really counts - they must have a true two-
party choice. Minorities must be important to, and needed by, both
President
Larnie G. Horton
Vice President
Mary Warren
parties. Therefore it is necessary to encourage minority registration
Telephone (919) 829-5811
Telephone (919) 748-7557
and participation in the Republican Party.
Vice President
Don Pollock
Vice President
Ron Barbee
The Republican Party needs us and we need the Republican
Telephone (919) 527-1116
Telephone (919) 274-8463
Party.
Vice President
Rex Harris
Vice President
William Stevenson
Telephone (919) 867-9217
Telephone (919) 829-5904
Eligibility
Vice President
Lawrence Crockett
Secretary
Marion Goodson
All American voters of all groups who feel that the political
Telephone (919 755-7484
Telephone (919) 828-0678
party of their choice is not being responsive to the needs and
objectives of the masses in securing and recognizing their inherent
Treasurer
Floyd McKissick
Parliamentarian
Helen Edmonds
right in a meaningful participation in a government of, by and for
Telephone (919) 456-3111
Telephone (919) 682-2171
the people.
DEPARTMENT
OF
HOUSING
THE SECRETARY OF HOUSING AND URBAN DEVELOPMENT
MOURDAN DEVELOPMENT
and
WASHINGTON, D. C.. 20410
APR 1 01973
Mr. Leonard Garment
Special Consultant to the President
The White House
Washington, D. C. 20050
Dear Len:
In your memorandum of February 5, 1973, you request information as to
the status of the Soul City New Community project and as to the next
steps which should be taken by our office and the Developer to move the
project along.
On June 28, 1972, the Developer was made an offer of commitment for a
loan guarantee of $14 million. There are a number of conditions which
must be satisfied before the Developer can accept the offer.
The main conditions involve the negotiation of various debt financing
agreements, as well as the equity investment of a proposed new partner,
the attraction of the initial job base, and obtaining the necessary
utility financing, all of which the Developer has to resolve to the
satisfaction of HUD.
The Office of New Communities staff is working with the Developer on these
matters. Progress is being made, especially in satisfying the utility
financing condition. On February 14, a contract was signed between the
Cities of Henderson, Oxford, and Soul City to construct a regional water
system which will provide these towns, as well as other communities in the
region, with abundant good water that is urgently needed. Additionally,
the Economic Development Administration has agreed to take the lead in
coordinating Federal assistance with HUD and has accepted an application
to construct the water system. In the application, the proposed financing
of the system, estimated to cost $9 million, includes a $1.5 million grant
from the Economic Development Administration, a $2.64 million water and
sewer grant from HUD, a $360,000 supplementary grant from HUD, $2.8 million
in general obligation bonds from Henderson and Oxford, and $1.7 million in
State of North Carolina Pure Water bonds. The water system will move
forward when the proposed financing becomes available.
Reproduced at the Richard Nixon Presidential Library and Museum
- 2
EDA is committed to assisting the project. It is exploring specific
methods by which its participation can be effected, but has no doubt
that a satisfactory method will be developed. EDA's commitment is,
of course, contingent upon the completion of a satisfactory environ-
mental impact analysis.
Approval of the HUD water and sewer grant is currently pending further
negotiations between HUD and the Office of Management and Budget.
Recently, the OMB has indicated it will postpone a decision on some
categories of projects, which include the Soul City project, pending
receipt of proposals from HUD as to its plans for subsidized housing
in new communities. HUD will continue to pursue the completion of the
Soul City project and keep you advised of our progress when we have
something more definite to report.
Finally, we also will need to complete with the Developer our negoti-
ations of a project agreement and trust indenture and present these
documents to the Board of Directors of the New Community Development
Corporation for their views and final approval.
Sincerely yours,
James James T. Lynn L. Lynn
Reproduced at the Richard Nixon Presidential Library and Museum
DEPARTMENT ENT OF CONNERCE
THE SECRETARY OF COMMERCE
Washington, D.C. 20230
UNITED STATES OF AMERICA
MAR 2 - 1973
Honorable Leonard Garment
Special Consultant to the President
The White House
Washington, D. C. 20500
Dear Mr. Garment:
This is in response to your inquiry of February 5, 1973,
concerning the status of a proposed project to construct
a regional water system to serve Henderson, Oxford and
Soul City, North Carolina.
The Director of the Economic Development Administration's
Southeastern Regional Office in Atlanta has just concluded
a series of meetings with the three communities involved
in the regional system and the other governmental agencies
participating in the financing of this project. I am also
informed that the EDA portion of the financing is already
in application form and is being processed expeditiously.
You may be assured of the complete cooperation of the EDA
staff with all local authorities concerned in this matter,
in providing all possible assistance to achieve a viable
project.
Sincerely,
Secretary of Commerce
Reproduced at the Richard Nixon Presidential Library and Museum
DEPARTMENT OF COMMERCE
THE ASSISTANT SECRETARY OF COMMERCE
Washington, D.C. 20230
UNITED STATES OF AMERICA
June 13, 1973
MEMORANDUM FOR: Leonard Garment
Counsel to the President
SUBJECT : Soul City, North Carolina
Attached, for your information, is a copy of our
notification to Mr. Floyd McKissick of the designa-
tion of the area which includes Soul City. This
action makes the area eligible for projects funded
by this agency. Similar notification letters were
sent to the local officials, who have been working
with Mr. McKissick on a regional water system.
We are in the final stages of processing grant
assistance for the water system which will serve
Soul City and other area communities. The cities
of Oxford and Henderson both passed bond referendums
on Saturday, June 2, 1973, authorizing the local
funds for these projects.
We have also been in contact with the Department
of Housing and Urban Development and hope that
their assistance to this project can be completed
before the end of the fiscal year, since our grant
funds will not be obligated unless the HUD funds
are committed.
William Bluen.
William W. Blunt, Jr.
Acting Assistant Secretary
for Economic Development
Attachment
Reproduced at the Richard Nixon Presidential Library and Museum
ANNEX F:
DETERMINATIONS REGARDING STATUTORY REQUIREMENTS
NEW COMMUNITY PROGRAM
(Urban Growth and New Community Development Act of 1970, Title VII
of the Housing Act of 1970)
Project:
Soul City New Community
Action:
Offer of Commitment
Determinations: On the basis of a review of the application made in
support of the aforementioned project, I hereby determine with respect
to such project that the proposed new community--
(1) will provide an alternative to disorderly urban growth, helping
preserve or enhance desirable aspects of the natural and urban
environment or so improving economic and general conditions in
established communities as to help reverse migration for
existing cities or rural areas;
(2) will be economically feasible in terms of economic base or
potential for economic growth;
(3) will contribute to the welfare of the entire area which will
be substantially affected by the program and of which the land
to be developed is a part;
(4) is consistent with comprehensive planning, physical and social
determined by the Secretary to provide an adequate basis for
evaluating the new community development program in relation to
other plans (including State, local and private plans) and
activities involving area population, housing and development
trends, and transportation, water, sewerage, open space,
recreation, and other relevant facilities;
(5) has received all governmental reviews and approvals required
by State or local law, or by the Secretary;
(6) will contribute to good living conditions in the community and
that such community will be characterized by well balanced and
diversified land use patterns and will include or be served by
adequate public, community, and commercial facilities (including
facilities needed for education, health and social services,
recreation, and transportation) deemed satisfactory by the
Secretary;
Reproduced at the Richard Nixon Presidential Library and Museum
(7) makes substantial provision for housing within the means of
persons of low and moderate income and that such housing will
constitute an appropriate proportion of the community's housing
supply; and
(8) will make significant use of advances in design and technology
with respect to land utilization, materials and methods of
construction, and the provision of community facilities and
services.
Community Development Corporation
By
Samuel C. Jackson
General Manager
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE HOUSE
WASHINGTON
June 15, 1973
MEMORANDUM FOR FLOYD HYDE
SUBJECT:
Soul City
The attached draft memorandum is the matter which I wish
to discuss with you next Tuesday at 4:30.
In preparing it, I have consulted Paul O'Neill and Ted Lamont
and their staffs and Dana Mead: Bill Hamm may be joining
me Monday plus whoever you would wish from HUD. My purpose
as I explained to Jim Lynn is to get your and his own views into
this memorandum and then send it forward to Mr. Laird promptly.
Bradley Back H. Patterson, Jr.
CC: Paul O'Neill
Dana Mead
attachment
Reproduced at the Richard Nixon Presidential Library and Museum
DRAFT
MEMORANDUM FOR MEL LAIRD
SUBJECT:
Soul City
Soul City is a prospective New Community in North Carolina, the
first (and only) free-standing new community among the fifteen which
HUD is now assisting pursuant to the Urban Growth and New Community
Development Act of 1970. It is 5, 200 acres, will represent a land
acquisition and development investment alone of $76,000,000 and will
eventually have 13, 000 residences and a population of almost 45, 000.
It would be located just south of the Virginia border, within an hour's
commuting time of Raleigh, Durham, Wake Forest and Rocky Mount.
The developer of Soul City is Floyd McKissick, one of the nation's
best known black leaders.
Last June, the Board of Directors of the New Community Development
Corporation approved a conditional offer of commitment to Soul City
of $14,000,000 in guarantees. McKissick then sent in applications for
water and sewer grants to both HUD and EDA and the processing of these
applications began.
During 1972, Bob Brown of the White House gave McKissick general
assurances that we supported his enterprise.
Last January, we announced that HUD would approve no more applications
for water and sewer grants (no matter how far along they were) and we
also announced that HUD was suspending its subsidy program for low and
Reproduced at the Richard Nixon Presidential Library and Museum
-2-
moderate income housing. Both of these actions affected the plans for
Soul City, and McKissick came to see me in February, asking me the
question: were we going to go ahead with our support of Soul City?
Brad Patterson and I have been in touch with OMB, EDA, HUD and
McKissick and especially have requested that McKissick list on one
chart all his present and proposed federal subsidies. This chart appears
as Attachment A.
As of now, Soul City is empty land, with a few old houses and barns.
But extensive plans (and commitments) have been made. Four agencies
of the Federal Government have already invested $1. 628 million in Soul
City planning (Attachment A, items 2, 6, 10, 11 and 22) and have now
committed $.7 million more (items 7 and 13) so our federal investment
is $2. 3 million at present.
The developers of Soul City have requests either pending or envisaged
for (a) at least $15. 8 million in additional federal grants, (b) $.5 in
additional loans, (c) $14. 0 in guarantees and (d) a large, but unknown
amount for housing subsidy payments (see below). Thus, at least
$16.370 millions in added federal subsidization would be needed with the
further risk of $14 millions in guarantee exposure. (This is not unusual
for the "new communities"; typically they have comprehensive shopping
lists for federal assistance.) Of Soul City's total requirements, however,
close to $5. 892, almost all of it water and sewer grants from HUD and
EDA, is FY 1973 money, requiring decision before the end of this month.
Reproduced at the Richard Nixon Presidential Library and Museum
-3-
The policy question is: should the U.S. Government go ahead, this
month and in the months to come, committing more than $16 million on
top of the $2. 3 million we have already invested to help new community
Soul City get built, and committing the guarantee?
One difficulty in answering this question as it applies to Soul City
(See item #4 in Attachment A) is that not only Soul City but every other
one of the 15 New Communities is in effect required by Section 712 of
the New Community Development Act to include "an appropriate portion¹¹
of low and moderate income housing. In Soul City, the total is expected
to reach at least 3, 700 units over 25 years - - 200 in the next 3 years.
The Administration's suspension of new commitments under its
erstwhile subsidy programs for low and moderate income housing will
stay in effect pending a comprehensive study now in progress with HUD
but not due for presentation to the President until September. On
March 20, 1973 in Congressional testimony, Secretary Lynn stated that
"instructions will be issued shortly to honor the bona fide commitments
as promised by Secretary Romney. The areas in which these commitments
fall include:
New Communities
11
Secretary Lynn thus has authority to meet immediate needs for
subsidized low and moderate income housing in Soul City (depending on
how he sets his internal priorities but in Soul City for FY 1974 this need
amounts to only five units.
Reproduced at the Richard Nixon Presidential Library and Museum
-4-
The Secretary obviously cannot make any longer-range commitment
for assistance to low and moderate income housing -- in Soul City or
anywhere else -- until he and the President have reviewed the September
study, have decided on what direction to take and until the Congress has
approved it. If it should eventually be decided that there will be no
further such subsidy program, Soul City and the other New Communities
will be very different places from what was originally conceived - -
they will not have the balance in types of housing which the New Com-
munity Development Act intended. In Soul City's case such a lack may
be very harmful. (Attachment B is an OMB memorandum on this subject).
But at least the next increment of our commitment to Soul City
(the $5. 892 million) must be decided on before this June 30; we cannot
wait until next September to make this decision.
Before making a recommendation, here is an analysis of what might
be called the assets and risks:
Soul City's Assets
1. A Presidential policy favoring (a) minority enterprise development
and (b) concrete results instead of rhetoric about it.
2. A committed and capable developer, (and a political friend -- see
attachment C) who wants to make this project one of the best of the
President's concrete accomplishments.
Reproduced at the Richard Nixon Presidential Library and Museum
-5-
3. The State (and the Governor) of North Carolina, which has already
committed $125, 000 in a planning grant, $75, 000 in road work, and
$1. 3 million for the required 3- county regional water system, and which
will commit another $.4 next year. Governor Holzhauser (and I have
reconfirmed this just now) is a strong proponent of Soul City.
4. The neighboring cities of Henderson and Oxford, N. C. which just
June 2 approved referenda committing themselves to put up $2. 8 million
of bonds for that regional water system.
5. The four Federal Agencies (HUD, OEO, Commerce and the National
Endowment on the Arts) which have put up the $2.3 up to now. Secretaries
Lynn's and Dent's memoranda and the very recent one of Acting Assistant
Secretary Blunt are attached (Attachment D).
6. HUD's conviction, as expressed by Ted Lamont, Director of its
Office of New Communities Development, that Soul City will become an
important growth center in the northern North Carolina area and will
significantly help to stem the out-migration from this area which up to
now has been one of the highest in the State.
7. Private lenders and investors who have made the following com-
mitments to Soul City:
a) $1. 5 million in equity from McKissick Enterprises, the National
Corporation for Housing Partnerships and the black architectural firm
Madison-Madison International.
Reproduced at the Richard Nixon Presidential Library and Museum
b) $1. 5 million in a combination of secured and unsecured loans
from Chase Manhattan, North Carolina National Bank, the National
Corporation for Housing Partnerships, the Mechanics and Farmers
Bank of Charlotte and a dozen miscellaneous lenders.
c) $1.15 million in mortgage promises from various sources.
8. Soul City's economic geography, which has I-85 and the Seaboard
Railway abutting it.
9. The Board of Directors of the New Community Development
Corporation which on June 28, 1972 after the most careful analysis and
consideration approved making a conditional offer of commitment to
Soul City (the $14,000,000 guarantee), having officially confirmed the
eight determinations, (pursuant to statute) set forth in Attachment E,
and made the finding that the Soul City enterprise is "an acceptable
financial risk to the United States".
10. McKissick's promise (which HUD insists upon as a condition of the
guarantee) to install a competent General Manager for the whole Soul
City enterprise.
Soul City's Risks
1. Soul City is located in a low-income area which may not be as attractive
to prospective homeowners/businesses as alternative opportunities.
Reproduced at the Richard Nixon Presidential Library and Museum
-7-
(This is why assistance for the "incubation" of industries, for manpower
training grants, and for low-income housing are necessary).
2. A principal "unknown" is whether, once he has his land watered and
sewered and otherwise developed, McKissick will really be able to
sell parcels of it to residential and commercial customers.
3. HUD officials and the New Community Development Corporation
Board recognize that a new, free-standing community is a more chancey
enterprise than the other 14 new communities being assisted by HUD,
in that the other 14 are located in or very near suburbs or other existing
growth areas. (One HUD officer has informally characterized the Soul
City enterprise as "a poverty case marginal at best" Paul O'Neill
in OMB considers this description as accurate: Mr. Ted Lamont, Director
of HUD's Office of New Communities Development disputes it).
4. The project appears to be dependent upon suppor from HUD water
and sewer grant and loan programs which have already been terminated.
Should these programs be opened up for Soul City, the Administration will
be subject to pressure to make further exceptions in special cases. If
we should make such further exceptions, this could jeopardize our
budgetary strategy.
5. There is a real possibility that if Federal housing production subsidies
are unavailable for the long term, this lack will undermine the entire
Soul City project.
Reproduced at the Richard Nixon Presidential Library and Museum
-8- -
Conclusion
In reviewing all of the points here, balancing the assets and risks,
I am impressed above all with firm and specific commitments which
have so far been made by so many different individuals and institutions:
the State of North Carolina, the towns of Henderson and Oxford, the many
government professionals who have evaluated the promise of this enter-
prise, the private banks, organizations and individuals who have put
not only their faith but their money on the line, convinced of Soul City's
eventual success. In my four years here, I have seen few projects in
the minority development field which have put together as much as this
one has.
Recommendations
1. We should give Soul City the green light and inform the interested
agencies that we have done so. For FY 1973 this means specifically
a green light for the water and sewer grants. In the field of housing policy
in the short term, this means that Secretary Lynn will have our support
in regarding Soul City's immediate requests for subsidized low and
moderate income housing as among the "bona fide commitments" which
he can and will handle under his existing authority and funds. In the
long term, this means that McKissick and all the other New Community
along with
his
developers will have to continue to take their chances as to whether
federal government will have an on-going subsidy program for low and
moderate income housing.
Reproduced at the Richard Nixon Presidential Library and Museum
-9-
2. We should ask HUD to designate an implementation monitorship
officer to work with the various federal agencies to ensure the coordinated
handling of the applications from Soul City (and from the other New
Communities); we should notify the other agencies of our support of this
designation.
Leonard Garment
attachment
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE HOUSE
WASHINGTON
June 15, 1973
MEMORANDUM FOR FLOYD HYDE
SUBJECT:
Soul City
The attached draft memorandum is the matter which I wish
to discuss with you next Tuesday at 4:30.
In preparing it, I have consulted Paul O'Neill and Ted Lamont
and their staffs and Dana Mead: Bill Hamm may be joining
me Monday plus whoever you would wish from HUD. My purpose
as I explained to Jim Lynn is to get your and his own views into
this memorandum and then send it forward to Mr. Laird promptly.
Bradley Brad H. Patterson, Jr.
CC: Paul O'Neill
Dana Mead
attachment
Reproduced at the Richard Nixon Presidential Library and Museum
DRAFT
MEMORANDUM FOR MEL LAIRD
SUBJECT:
Soul City
Soul City is a prospective New Community in North Carolina, the
first (and only) free-standing new community among the fifteen which
HUD is now assisting pursuant to the Urban Growth and New Community
Development Act of 1970. It is 5, 200 acres, will represent a land
acquisition and development investment alone of $76,000,000 and will
eventually have 13, 000 residences and a population of almost 45, 000.
It would be located just south of the Virginia border, within an hour's
commuting time of Raleigh, Durham, Wake Forest and Rocky Mount.
The developer of Soul City is Floyd McKissick, one of the nation's
best known black leaders.
Last June, the Board of Directors of the New Community Development
Corporation approved a conditional offer of commitment to Soul City
of $14,000,000 in guarantees. McKissick then sent in applications for
water and sewer grants to both HUD and EDA and the processing of these
applications began.
During 1972, Bob Brown of the White House gave McKissick general
assurances that we supported his enterprise.
Last January, we announced that HUD would approve no more applications
for water and sewer grants (no matter how far along they were) and we
also announced that HUD was suspending its subsidy program for low and
Reproduced at the Richard Nixon Presidential Library and Museum
-2-
moderate income housing. Both of these actions affected the plans for
Soul City, and McKissick came to see me in February, asking me the
question: were we going to go ahead with our support of Soul City?
Brad Patterson and I have been in touch with OMB, EDA, HUD and
McKissick and especially have requested that McKissick list on one
chart all his present and proposed federal subsidies. This chart appears
as Attachment A.
As of now, Soul City is empty land, with a few old houses and barns.
But extensive plans (and commitments) have been made. Four agencies
of the Federal Government have already invested $1. 628 million in Soul
City planning (Attachment A, items 2, 6, 10, 11 and 22) and have now
committed $.7 million more (items 7 and 13) so our federal investment
is $2. 3 million at present.
The developers of Soul City have requests either pending or envisaged
for (a) at least $15. 8 million in additional federal grants, (b) $.5 in
additional loans, (c) $14. 0 in guarantees and (d) a large, but unknown
amount for housing subsidy payments (see below). Thus, at least
then HUD
$16. 370 millions in added federal subsidization would be needed with the
further risk of $14 millions in guarantee exposure. (This is not unusual
for the "new communities"; typically they have comprehensive shopping
lists for federal assistance.) Of Soul City's total requirements, however
4 million has been requested under HUD's) and loan programs which terminated were
close to $5.892, almost all of it water and sewer grants from HUD and
on fanuary 5,
(final)
1973 an
exception is
EDA, is FY 1973 money, requiring decision before the end of this month.
to be made
(a preliming connitional for the water and such groul was
made within HUD a year ago this wouth.)
& R she
sam
must be made
Reproduced at the Richard Nixon Presidential Library and Museum
-3-
The policy question is: should the U.S. Government go ahead, this
month and in the months to come, finally committing more than $16 million on
top of the $2. 3 million we have already invested to help new community
Soul City get built, and committing the guarantee?
One difficulty in answering this question as it applies to Soul City
(See item #4 in Attachment A) is that not only Soul City but every other
one of the 15 New Communities is in effect required by Section 712 of
the New Community Development Act to include "an appropriate portion"
of low and moderate income housing. In Soul City, the total is expected
to reach at least 3, 700 units over 25 years -- 200 in the next 3 years.
The Administration's suspension of new commitments under its
erstwhile subsidy programs for low and moderate income housing will
stay in effect pending a comprehensive study now in progress with HUD
but not due for presentation to the President until September. On
March 20, 1973 in Congressional testimony, Secretary Lynn stated that
"instructions will be issued shortly to honor the bona fide commitments
as promised by Secretary Romney. The areas in which these commitments
fall include:
New Communities
"
FY 1974
Secretary Lynn thus has authority to meet immediate needs for
subsidized low and moderate income housing in Soul City (depending on
how he sets his internal priorities but
Soul
City>
FY 1974 this Subsidezed need
housing is)
amounts to only five units.
Reproduced at the Richard Nixon Presidential Library and Museum
-4-
The Secretary obviously cannot make any longer-range commitment
for assistance to low and moderate income housing in Soul City or
anywhere else -- until he and the President have reviewed the September
study, have decided on what direction to take and until the Congress has
approved it. If it should eventually be decided that there will be no
further such subsidy program, Soul City and the other New Communities
will be very different places from what was originally conceived
they will not have the balance in types of housing which the New Com-
munity Development Act intended. In Soul City's case such a lack may
be very harmful. (Attachment B is an OMB memorandum on this subject).
But at least the next increment of our commitment to Soul City
(the $5.892 million) must be decided on before this June 30; we cannot
wait until next September to make this decision.
Before making a recommendation, here is an analysis of what might
be called the assets and risks:
Soul City's Assets
1. A Presidential policy favoring (a) minority enterprise development
and (b) concrete results instead of rhetoric about it.
very
2. Ancommitted
developer, (and a political friend see
attachment C) who wants to make this project one of the best of the
President's concrete accomplishments.
Back
Floyd Hyde
believes Kerrick is going a stay with this project for a
long time.
Reproduced at the Richard Nixon Presidential Library and Museum
-5-
3. The State (and the Governor) of North Carolina, which has already
committed $125, 000 in a planning grant, $75, 000 in road work, and
$1. 3 million for the required 3- county regional water system, and which
will commit another $.4 next year. Governor Holzhauser (and I have
reconfirmed this just now) is a strong proponent of Soul City.
4. The neighboring cities of Henderson and Oxford, N. C. which just
June 2 approved referenda committing themselves to put up $2. 8 million
of bonds for that regional water system.
5. The four Federal Agencies (HUD, OEO, Commerce and the National
Endowment on the Arts) which have put up the $2.3 up to now. Secretaries
Lynn's and Dent's memoranda and the very recent one of Acting Assistant
Secretary Blunt are attached (Attachment D).
6. HUD's conviction, as expressed by Ted Lamont, Director of its
Office of New Communities Development, that Soul City will become an
important growth center in the northern North Carolina area and will
significantly help to stem the out-migration from this area which up to
now has been one of the highest in the State.
7. Private lénders and investors who have made the following com-
mitments to Soul City:
a) $1. 5 million in equity from McKissick Enterprises, the National
Corporation for Housing Partnerships and the black architectural firm
Madison-Madison International.
Reproduced at the Richard Nixon Presidential Library and Museum
-
b) $1. 5 million in a combination of secured and unsecured loans
from Chase Manhattan, North Carolina National Bank, the National
Corporation for Housing Partnerships, the Mechanics and Farmers
Bank of Charlotte and a dozen miscellaneous lenders.
c) $1. 15 million in mortgage promises from various sources.
8. Soul City's economic geography, which has I-85 and the Seaboard
Railway abutting it.
9. The Board of Directors of the New Community Development
Corporation which on June 28, 1972 after the most careful analysis and
consideration approved making a conditional offer of commitment to
Soul City (the $14, 000, 000 guarantee), having officially confirmed the
eight determinations, (pursuant to statute) set forth in Attachment E,
and made the finding that the Soul City enterprise is "an acceptable
financial risk to the United States".
10. McKissick's promise (which HUD insists upon as a condition of the
guarantee) to install a competent General Manager for the whole Soul
City enterprise.
Soul City's Risks
1. Soul City is located in a low-income area which may not be as attractive
to prospective homeowners/businesses as alternative opportunities.
Reproduced at the Richard Nixon Presidential Library and Museum
-7-
(This is why assistance for the "incubation" of industries, for manpower
training grants, and for low-income housing are necessary).
2. A principal "unknown" is whether, once he has his land watered and
sewered and otherwise developed, McKissick will really be able to
while pasitive making funduis there
sell parcels of it to residential and commercial customers
did & with their fingers crassed, recognizing
Board recognize) that a new, free-standing community much is amore chancey
3. HUD officials and the New Community Development Corporation Revin
Under Secretary Hyde and other members of the Board of the)
enterprise than the other 14 new communities being assisted by HUD,
in that the other 14 are located in or very near suburbs or other existing
growth areas. (One HUD officer has informally characterized the Soul
Floyd Hyde still
City enterprise as Na poverty case. "marginal" at best" Paul O'Neill
(courairs with
of OMB considers this description as-accurate Mr. Ted Lamont, Director
of HUD Office of New Communities Development disputes it)
IS right now)
the
4.
The project appears to be dependent upon suppor from HUD water
TIVS ERT
C-hub the officially there programs
and sewer grant and loan programs which have already been terminated.
4
Should these this programs be opened up for Soul City, the Administration will
be subject to pressure to make further exceptions in special cases. If
we should make such further exceptions, this could jeopardize our
budgetary strategy. - CONTINUE WITH INSERT
5. There is a real possibility that if Federal housing production subsidies
are unavailable for the long term, this lack will undermine the entire
and Soul City as project. requiring aquipical amounts of grant
assistance in order to succeed.
Reproduced at the Richard Nixon Presidential Library and Museum
-8-
PRESERVATION COPY
Conclusion
In reviewing all of the points here, balancing the assets and risks,
the
I am impressed above all with A firm and specific commitments which
have so far been made by so many different individuals and institutions:
the State of North Carolina, the towns of Henderson and Oxford, the many
government professionals who have evaluated the promise of this enter-
prise, the private banks, organizations and individuals who have put
not only their faith but their money on the line, convinced that OF Soul City
is
an interprese with promise.)
sussess. In my four years here, I have seen few projects in
the minority development field which have put together as much as this
one has.
Under Secretary Hyde and I share an additional conviction:
the whole New Communities program is and was expected to be an experimental
venture, with inherent risks. We should not now argue that because
(is "marginal'
one of these new communities has it should be scrubbed. Unless we
go ahead with this, how are (entirely we ever going to
find out whether a new town, beginning from scratch in avrural area,
can be made to succeed?
If we now say "no" to McKissick, we will stand accused not only
(specific)
of reneging on commitments to him, but of reneging on the President's
commitment to the whole minority enterprise concept. However unfair or
inaccurate those accusations may be in a narrow sense, in the broader
context they will be:
persuasive to the public and damaging to
all of us on the domestic side of the Administration.
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE HOUSE
WASHINGTON
June 15, 1973
MEMORANDUM FOR FLOYD HYDE
SUBJECT:
Soul City
The attached draft memorandum is the matter which I wish
to discuss with you next Tuesday at 4:30.
In preparing it, I have consulted Paul O'Neill and Ted Lamont
and their staffs and Dana Mead: Bill Hamm may be joining
me Monday plus whoever you would wish from HUD. My purpose
as I explained to Jim Lynn is to get your and his own views into
this memorandum and then send it forward to Mr. Laird promptly.
Bradley Brad H. Patterson, Jr.
CC: Paul O'Neill
Dana Mead
attachment
Reproduced at the Richard Nixon Presidential Library and Museum
DEPARTMENT OF COMMERCE
THE ASSISTANT SECRETARY OF COMMERCE
UNITED STATES OF AMERICA
Washington, D.C. 20230
JUN 1 0 1973
MEMORANDUM FOR: Leonard Garment
Counsel to the President
SUBJECT
:
Soul City, North Carolina
Attached, for your information, is a copy of our
notification to Mr. Floyd McKissick of the designa-
tion of the area which includes Soul City. This
action makes the area eligible for projects funded
by this agency. Similar notification letters were
sent to the local officials, who have been working
with Mr. McKissick on a regional water system.
We are in the final stages of processing grant
assistance for the water system which will serve
Soul City and other area communities. The cities
of Oxford and Henderson both passed bond referendums
on Saturday, June 2, 1973, authorizing the local
funds for these projects.
We have also been in contact with the Department
of Housing and Urban Development and hope that
their assistance to this project can be completed
before the end of the fiscal year, since our grant
funds will not be obligated unless the HUD funds
are committed.
(Signed) William W. Blunt, Jr.
William W. Blunt, Jr.
Acting Assistant Secretary
for Economic Development
Attachment
Reproduced at the Richard Nixon Presidential Library and Museum
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND budget
DATE:
June 12, 1973
WASHINGTON, D.C. 20503
REPLY TO
ATTN OF:
SUBJECT:
Soul City
Mr. O'Neill
A couple of points should be brought to Brad Patterson's attention
about the subsidized housing problem.
1. The President's budget only authorizes the use of
commitment authority for immediate needs (FY 1973 and 1974).
Though commitment authority could be made available beyond
1974 through administrative action, its availability will
depend upon the outcome of the housing study. Needless to
say, this may mean an end to the production type subsidy
programs.
2. Soul City does not now have an application on file at HUD
for any subsidized housing projects. While covered by our
current agreement with HUD, the soliciting of new applica-
tions would go counter to the general public's impression
that HUD activity during the suspension is limited to
applications submitted to HUD as of January 5.
Rdele D. Jockson Jackson
Attachment
Reproduced at the Richard Nixon Presidential Library and Museum
June 12, 1973
Soul City
Mr. O'Neill
A couple of points should be brought to Brad Patterson's attention
about the subsidized housing problem.
1. The President's budget only authorizes the use of
commitment authority for immediate needs (FY 1973 and 1974).
Though commitment authority could be made available beyond
1974 through administrative action, its availability will
depend upon the outcome of the housing study. Needless to
say, this may mean an end to the production type subsidy
programs.
2. Soul City does not now have an application on file at HUD
for any subsidized housing projects. While covered by our
current agreement with HUD, the soliciting of new applica-
tions would go counter to the general public's impression
that HUD activity during the suspension is limited to
applications submitted to HUD as of January 5.
Adele D. Jackson
Attachment
Reproduced at the Richard Nixon Presidential Library and Museum
OFFICE OF MANAGEMENT AND BUDGET
ROUTE SLIP
Hamm
Take necessary action
Mr. Hamm
TO
Approval or signature
Mr. Derman MAY
Comment
Mr. O'Neill
Prepare reply
Discuss with me
For your information
See remarks below
Adele D. Jackson aog
6-12-73
FROM
DATE
REMARKS
Paul-
see our mark-up of the X Harment
memo, attached.
We are presently trying to track
down a new option in this area:
Having EDA (with its new lease on
life) provide all of the water and
sewer money for Soul City. This
way, we avoid opening up HUD's
program.
This, of course, want solve our
housing problem,
OMB FORM
Humm REV AUG 1
Reproduced at the Richard Nixon Presidential Library and Museum
BP
THE WHITE HOUSE
WASHINGTON
June 8
LG:
This has taken several weeks
of work, conferences, phone calls,
exchanges of drafts, etc.
I have today given copies of this
completed draft to Paul O'Neill, Stan
Scott and Dana Mead, inviting their
comments before I send it to you for
final OK. So this version is somewhat
tentative, but almost in final form.
Bad
Brod OK more areat
mar this.
L.
6/9
Reproduced at the Richard Nixon Presidential Library and Museum
FEDERAL SUPPORT FOR SOUL CITY
AND
STATE PLANNING REGION K
AGENCY
PROGRAM
NUMBER
CONTACT PERSON
STATUS
FORM OF SUPPORT
RECIPIENT
AMOUNT
PURPOSE/REMARKS
* 1.
HUD
Offer of
Debenture
$14,000,000
This is the basic
New Communities
commitment
guarantees
SCC
HUD guarantee
Laura Kuitunen
made June 28,
under Title VII
1972
of the HUD Act of
1970 to support a
new community.
2.
HUD
Funded;
Grant
State of
$ 128,000
Physical planning
701 Planning
expires
North
for region and
Malachi Knowles
6/30/73
Carolina;
new community.
subcontracted
to WRPC
* 3.
HUD
OMB approval
a.Basic water
Soul City
a. $ 500,000
Interim water and
Water and Sewer
requested by
and sewer
Sanitary
sewer systems for
Donald Patch
HUD and
grant
District
Soul City. SCC is
pending
b. ONCD supple-
b. $ 302,000
contributing an
mental grant
additional
C. Public facil-
C. $ 500,000
$514,000.
ities loan
* 4.
HUD
To be applied
Various
Dollar amount
SCC will be re-
Low and
for
Housing subsidies;
housing
unknown; see
quired by HUD to
Moderate
rent supplements;
developers
remarks
provide 116-174
Income Housing
public housing
units of subsidi-
Programs
zed housing between
(unknown)
1974 and 1978.
*Indicates Federal activities of primary importance.
Reproduced at the Richard Nixon Presidential Library and Museum
AGENCY
PROGRAM
NUMBER
CONTACT PERSON
STATUS
FORM OF SUPPORT
RECIPIENT
AMOUNT
PURPOSE/REMARKS
* 5.
Commerce/HUD
OMB approval
a. EDA grant
City of
a.$1,500,000
This is part of
EDA
requested
b. HUD basic water
Henderson,
b.$2,640,000
$9,000,000 program
George Karras
grant.
North
for new regional
c.ONCD supple-
Carolina
c.$ 360,000
water system serv-
mental grant.
ing three
counties. Remain-
ing funds
($4,500,000) being
contributed by
state and local
sources.
6.
Commerce
Funded;
Federal
WRPC
$
257,500
Industrial
OMBE
expires
contract
Promotion
Harold McClendon
6/30/73
* 7.
do
Pending
Federal
WRPC
$
274,000
Technical assis-
before
contract
tance to SCC. This
OMBE
is an amendment
to item 6 to pro-
vide additional
funding through
August 31,1973.
*8.
do
Under
Federal
negotiation
contract
WRPC
$
760,000
Minority business
development (re-
quest is for
$760,000 for
fiscal 1974;
additional re-
quests for $500,00
in fiscal 1975 and
$250,000 in fiscal
1976 are antici-
pated.)
page 2
Reproduced at the Richard Nixon Presidential Library and Museum
AGENCY
PROGRAM
NUMBER CONTACT PERSON
STATUS
FORM OF SUPPORT
RECIPIENT
AMOUNT
PURPOSE/REMARKS
* 9.
EPA
Application
Grant
Soul City
$ 3,000,000
Permanent Sewage
Waste Water
tentatively
Sanitary
Treatment Facil-
Treatment
submitted;
District
ities. An addi-
(State of North
formal appli-
tional $1,000,000
Carolina)
cation in
to be supplied by
process
State and Local
sources.
10.
OEO
Funded
Grant
Soul City
$
90,000
Planning to in-
Special Programs
Foundation
sure participation
Michael Thompson
of the poor in Sou
City.
11.
OEO
Funded;
Grant
HealthCo.
$ 1,140,117
Comprehensive
Office of Health
expires
Health Services
Affairs
12/31/73
for Warren and
William White
Vance Counties
(including medical
personnel and
health facilities).
*12.
do
To be
Grant
HealthCo. $1,500,000 ('74)
Extension of No. 11
applied for
$1,000,000 ('75)
to calendar 1974
and 1975.
*13.
OEO
Pending
Grant
Soul City
$ 502,875
Planning, con-
Community Action
before
Foundation
struction and
Program
OEO
development of
Michael Thompson
industrial
incubator plant.
page 3
Reproduced at the Richard Nixon Presidential Library and Museum
AGENCY
PROGRAM
NUMBER CONTACT PERSON
STATUS
FORM OF SUPPORT
RECIPIENT
AMOUNT
PURPOSE/REMARKS
14.
OEO
Pending
Grant
Soul City
$
90,000
Legal Services for
Legal Services
before
Foundation
the poor of Warren
Mr. Hurwitz
OEO
and Vance Counties
15.
HEW
Pending
Grant
Soul City
$
98,220
Provide Remedial
Office of
before
Foundation
Education to
Education
HEW
Warren County High
John Lovegrove
School Students.
* 16.
HEW
To be
Grant
Soul City
$ 200,000
Planning expansion
National
applied for
Foundation
for fiscal
and improvement
Institute of
1974;$200,000
of Warren County
Education
for fiscal
public schools.
1975.
(unknown)
17.
HEW
To be
Grant
Soul City
(unknown)
applied for
Foundation
$
250,000
Planning and
(unknown)
demonstration of
child care and
day care program
and facilities.
18.
HEW
To be
Grant
Soul City
$
500,000
Construction and
Office of
applied for
Foundation
development of
Education
or Region K
regional public
(unknown)
library to serve
five counties.
* 19.
Department of
To be
Grant
Soul City
$
683,000
Planning and
Labor
applied for
Foundation
demonstration pro-
Manpower Training
ject to develop
(unknown)
regional con-
struction trades
training program.
page 4
Reproduced at the Richard Nixon Presidential Library and Museum
AGENCY
PERSON
NUMBER
CONTACT PERSON
STATUS
FORM OF SUPPORT
RECIPIENT
AMOUNT
PURPOSE/REMARKS
20.
Department of
To be
Grant
Soul City
$ 400,000
Planning and
Justice
applied for
Foundation;
Development of
LEAA
Soul City
public safety pro-
(unknown)
Sanitary
gram and purchase
District
of equipment.
21.
Department of
To be
Grant
Warren
$1,000,000
Preservation
Interior
applied for
County
and restoration
Historic
of historic sites
Preservation
and development
(unknown)
of recreational
areas.
22.
National
Funded
Grant
Soul City
$
12,500
Planning
Endowment for
Foundation
Cultural Develop-
the Arts
ment.
Expansion Arts
Division
Vantile Whitfield
23.
DOT
Pending
Grant
WRPC
$ 137,000
Plan road system
Urban Mass Transit
before
and public
Calvin Banks
DOT
transportation.
24.
It is anticipated that there will be developed an African-American Trade Center
at Soul City. Planning is in preliminary stages. Some Federal support will be required.
Notes:
SCC
- The Soul City Company
WRPC - Warran Regional Planning Corporation
ONCD - HUD Office of New Communities Development
OMBE - Office of Minority Business Enterprise
page 5
Reproduced at the Richard Nixon Presidential Library and Museum
Finally, to place the Federal support described
below in context, it is important to note that it is only
a fraction of the overall cost of developing Soul City.
Private, State and local sources have already made
substantial commitments, and in later years their contri-
butions can be expected to predominate. Approximately
$1,500,000 has been provided to date by banks and other
lenders, and an additional approximately $1,500,000
will be contributed by the partners in The Soul City Company
as equity capital when the debentures are issued. The State
of North Carolina has already spent or committed nearly
$2,000,000, and neighboring local governments have committed
$2,800,000. The essential Federal role is to provide the
seed money, leverage and long-term security essential to
enable others to undertake a project of this magnitude.
- 2 -
Reproduced at the Richard Nixon Presidential Library and Museum
adele Jackson
DRAFT
6/5/73
FEDERAL ASSISTANCE TO SOUL CITY, NORTH CAROLINA, AND ITS REGION
The following table summarizes the various forms of
Federal assistance now being provided, and formally requested,
and expected to be required by Soul City and its Region.
Soul City will be the first free-standing new town
to be developed under Title VII of the Housing and Urban
Development Act of 1970. It will require a unique combination
of private, Federal, State and local action over the thirty
year span of the Development Plan. In that time, problems
that now seem large will disappear, and problems now invisible
will present themselves. The table below is therefore only an
outline on the basis of information now available.
There is one other essential preliminary point. The
Federal support listed below is quite varied not only in form
and budgetary impact but also in its recipients and bene-
ficiaries. Some of the Federal actions will benefit The Soul
City Company, the Developer of Soul City, in accordance with
statutory policies of assisting both new town development and
minority business enterprise. Other Federal actions will be
directed toward the entire Region, including its existing
communities as well as Soul City. Still other actions will
be aimed directly at the new residents of Soul City, persons who
are not now identified.
Reproduced at the Richard Nixon Presidential Library and Museum
June 5, 1973
Soul City New Community Project
Mr. O'Neill
I attended a meeting with Brad Patterson and Gordon Carey and Lewis
Cohen, two representatives from Soul City. The discussion centered
around Federal assistance critical to getting the project off the
ground, and the prognosis for successful completion of the project.
The Federal Government has already invested $1.6 million in Soul City
via a HUD planning grant, OMBE industrial promotion grant, OEO health
and planning grants and a National Endowment grant. Two other Federal
grants totalling $777 thousand are in the final contract stage. (OMBE,
$274 K and OEO, $503 K.) For practical purposes, then, the total
Federal investment today would be over $2 million.
In addition, the State of North Carolina and local governments around
Soul City have together invested or made firm commitments of about
$5.5 million. The private sector (primarily large New York financial
institutions) has also invested over $1 million in the project.
In short, almost $8 million in various forms of governmental assistance
has already been pumped into the project. Still Soul City needs at
least $5.8 million in assistance in FY 1973 from Federal sources before
the project can fly.
These are needed to undertake a, regional and internal water system:
(000)
HUD
$4,302
1
New Community guarantee - (14,000)
Water and sewer
3,140
PFL
500
Supplementary grants
662
EDA
$1,500
In addition, the developers are seeking approval for another $9.7 million
in Federal grants over the next 3 years from a variety of Federal agencies.
Finally, the availability of Federal housing subsidies is also an important
condition for meeting the objectives of the project. The need for this
immediate assistance, coupled with the future needs, demonstrates the
thin margin on which the success of the project hinges over at least the
next ten years.
Reproduced at the Richard Nixon Presidential Library and Museum
2
The immediate issue is whether the past investment argues sufficiently
for the commitment of an additional $15.5 million in Federal funds over
the next several years and exposure on $14 million in guarantees.
Although the current request is for HUD water and sewer and public
facility loan assistance, the need for Federal housing subsidies over
the life of the project is really the more serious issue. The developer's
representatives acknowledged that plans to attract and support a pre-
dominantly low and moderate-income population are dependent on the
availability of Federal housing subsidies. Approval of the current
request will only invite additional pressures for Federal housing sub-
sidies.
In view of this critical linkage with the Federal housing subsidies, we
would recommend against approving the current request unless the
Administration is prepared to make the decision to provide housing
subsidy support. It may be that the project is worthy of special support,
perhaps in the context of a research demonstration. Housing subsidies
could then be provided by some special arrangement.
Adele D. Jackson
Reproduced at the Richard Nixon Presidential Library and Museum
The North Carolina Chapter
of
The National Committee for a Two=Party System
in Cooperation with
The Republican Party of North Carolina
and the
Minority Republican Caucus
invite you to attend a dinner
to be held in the Ballroom of the
Hilton Inn
Hillsborough Street, Raleigh, North Carolina
Friday evening, May 25, 1973
at eight o'clock
Cocktails will be served promptly at seven p. m.
Subscription: $100.00
(EACH Subscriber IS ENTITLED TO BRING ONE GUEST)
R.S.V.P.
DRESS FORMAL
BY MAY 15
RESERVED SEATING
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE House
WASHINGTON
May 25
Paul -
Len has just gone down
to Key Biscayne with the
President; I would like your
opinion as to whether this is
an OK draft tokput before
KZZZ LG for signature to Ken.
Pls. return file.
Tab A will be Adele's memo.
Reproduced at the Richard Nixon Presidential Library and Museum
Brad
MAY 24 1973
Mr. Floyd B. McKissick
President, Floyd McKissick
Enterprises, Inc.
P. O. Box 188
Soul City, North Carolina 27553
Dear Mr. McKissick:
U
The Northern North Carolina Rural Special Impact Area in
Vance, Warren and Granville counties is designated by the
L
enclosed official order as a redevelopment area under
Section 401 (a) (6) of the Public Works and Economic
Development Act of 1965, as amended. Public Works and
other projects within the designated area are now eligible
for financial assistance as provided by the Act.
As you know, the programs of EDA will be terminated on
June 30, 1973. The President's proposed Fiscal Year 1974
budget provides for other agencies and programs to serve
some of EDA's objectives. These include the rural
development programs of the Department of Agriculture.
We are presently processing the application for financial
assistance with existing funds for the regional water
system for the area which is now designated. We expect
to be able to notify you about the disposition of the
application in the next few weeks.
We wish you success in carrying out your programs to
improve employment and economic conditions in your area.
If you have any questions, our Southeastern Regional
Office, Suite 555, 1401 Peachtree Street, NE, Atlanta,
Georgia, 30309 (Phone 404-526-6407) will be glad to
assist you.
(Signed) Sincerely, William W. Blunt, Jr.
William W. Blunt, Jr.
Acting Assistant Secretary
for Economic Development
Enclosure
Reproduced at the Richard Nixon Presidential Library and Museum
$ 90, 000 rec'd - - OEO
Dave Jones
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nike Heouper
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$ 150,000
OFG Reangover Trainer will - for
people course city ava
Trade traven. for
m builders
$ 5-011- form FY'73
Reproduced at the Richard Nixon Presidential Library and Museum
OMBE 275,000
HEW Tith I of ESEA
Improve of
duestion
$200,000
EDA
atlasta office
Reproduced at the Richard Nixon Presidential Library and Museum
EDA
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3.0 HUD
Henduron 2 ᵗʰ foud
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Reproduced at the Richard Nixon Presidential Library and Museum
EPA
Sautery District
Created Fri
Henderson Boud
election sat 6/2
Saul lity Samtay
Distruct
Jones HUD Regional September to Water a declabor Dest.
from paint SC for
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Reproduced at the Richard Nixon Presidential Library and Museum
456-3490
FLOYD B.
McKISSICK ENTERPRISES, INC.
P. O. BOX 188
SOUL CITY, NORTH CAROLINA 27553
(919) 456-5811-
3111
May 22, 1973
Mr. Leonard Garment
Special Assistant to the President
The White House
Washington, D. C.
Dear Leonard:
We are moving along toward the closing of the Soul City project. We
have, however, been faced with a lack of coordination among various
federal agencies; possibly because of a single governmental agency not
being charged with the responsibility for that coordination. The
building of Soul City, a free-standing new community, will, of course,
require the efforts and resources of all federal agencies, if not now,
in the near future. We are extremely desirous of having a Federal
Coordinator appointed who can stay abreast of this project at all
times and whose responsibilities will be to see that the project
is built by developing an effective means of communication among
all federal agencies, along with a timing of their particpation,
the collection of all data and documents regarding the development
of the project and who could serve as our direct communications liasion
with the various federal agencies on a permanent or regular basis.
I need your assistance in helping us solve this problem. It might
be that you could name an agency or individual who might assume this
responsibility and under whose direction and supervision this person
would function. Presently we are dealing with the following
governmental agencies:
Dedicated to the Building of Black Economic Power"
Reproduced at the Richard Nixon Presidential Library and Museum
Mr. Leonard Garment
May 22, 1973
In the future not only will there be continuing on-going relationships
with the aforementioned agencies; the private foundation sector and
the private industrial sector; but as the project develops additional
contacts will be made with the Department of the Interior, the
Department of Labor, the Department of Health, Education and Welfare,
the U. S. Department of Agriculture, the Office of the Small Business,
Administration, the Economic Development Administration, the U. S.
Department of Justice,
and many others that relate to new town
development.
The Soul City project is being and will continue to be carefully
scrutinized by American society. It is for this reason that the
successful execution of our objectives can more easily be accomplished
if perfect coordination is achieved now. Secondly, a tremendous
amount of staff time is required on our part in carrying out on-going
negotiations with each separate federal agency. Thus, if a Federal
Coordinator were established; our needs could be conveyed to the
coordinator who would in turn evaluate those needs and then pass our
requests to the appropriate agency for action.
Let me hear from you after you have had the opportunity to think about
this suggestion. With very kind regards, I remain;
Very truly yours,
Flay & Floyd B. McKissick
President
FBM:jg
Reproduced at the Richard Nixon Presidential Library and Museum
Mr. Leonard Garment
May 22, 1973
U. S. Department of Housing and Urban Development
Office of New Communities Development
$14 Million Dollar Guarantee
Office of Public Works
Regional Water System
Office of Public Facilities
Regional Water System
Sanitary District
701 Grant
Contract for Physical
Planning (WRPC)
U. S. Office of Economic Opportunity
Comprehensive Health Planning
HealthCo, Inc.
Social Advocacy Planning - Graut - FY 73
Soul City Foundation, Inc. 90,000
DOL
Manpower & Training
Soul City Foundation, Inc.
U. S. Environmental Protection Agency
Sewage Disposal Grants
U. S. Postal Service
Soul City Official Designation
U. S. Department of Commerce
Office of Minority Business Enterprise
Contract for Industrial
Development (WRPC)
U. S. Department of Health, Education & Welfare
Career Learning Lab Proposal
Soul City Foundation, Inc.
U. S. Department of Transportation
Study on Road Development in Soul City; interim five year period.
1 1 2
Reproduced at the Richard Nixon Presidential Library and Museum
FLOYD B.
McKISSICK ENTERPRISES, INC.
P. O. BOX 188
SOUL CITY, NORTH CAROLINA 27553
(919) 456-5811
May 22, 1973
Mr. George Bush
Chairman
Republican National Committee
Dwight D. Eisenhower Republican Center
310 First Street, S.E.
Washington, D. C. 20003
Dear George:
Thanks for your note of April 12, 1973. I, too, enjoyed meeting with you
and Ed Sexton. In fact, I suggest that we meet again in the very near future.
While my concerns remain the same as I indicated to you on my recent visit,
they have been intensified by recent events. In the meantime, I continue to
have the utmost confidence in President Nixon and the Republican Party.
As you were advised, The National Committee for a Two-Party System, Inc.
is moving along in the accomplishment of its objectives. Attached hereto
please find copy of article from The Montgomery Advertiser, dated May 13, 1973,
regarding The National Committee for a Two-Party System, Inc.
The recent loss of key, well-known Blacks in the Administration such as,
Robert J. Brown, Samuel C. Jackson, Samuel Simmons, John Jenkins; and, Edwin
Sexton, who I understand is leaving the Republican National Committee, opened
the Republican Party to additional attacks from the Black community. Moreover,
no substitute Black appointees have been made, to fill the leaders' shoes.
The implications growing out of the Watergate case make it imperative that the
Republican Party assume the initiative on the domestic front. The focal point
should now be on minorities. This could offset some of the readings that I am
now getting from the Black community. (See attached NAACP Housing Bulletin,)
Could we not get together and develop a program to deal with these matters at a
very early date.
Dedicated to the Building of Black Economic Power"
Reproduced at the Richard Nixon Presidential Library and Museum
Mr. George Bush
- 2 -
May 22, 1973
The National Committee for a Two-Party System, Inc. will be setting up chapters
in Pensacola, Florida; Mobile, Alabama; Fayette, Mississippi; Pittsburgh,
Pennsylvania; Chicago, Illinois; Brooklyn, Queens, New York and New York City
within the next few months in addition to those two chapters that we have set
up in Tuskegee, Alabama and North Carolina, completing our goal for May, 1973.
We have raised and used our own funds in this effort. There is a need for
better organization and coordination between The National Committee for a Two-
Party System, Inc. and the National Republican Party; and, it is for this reason
we feel that a meeting, profitable to both organizations, be called in the very
near future.
With very kind regards, I am
Yours very truly,
Floyd B. McKissick
CC: Mr. Leonard Garment
The Honorable John Connally
Enclosures: (1) Article from The Montgomery Advertiser, dated May 13, 1973,
entitled: "Blacks Urged to Find New Community Funding"
(2) NAACP Housing Bulletin, April, 1973.
(3) Conference Notes for Meeting, Friday, March 30, 1973
(4) "What The National Committee for a Two-Party System, Inc.
Does Not Believe" dated May 16, 1973
(5) Three (3) Invitations to The North Carolina Chapter of
The National Committee for a Two-Party System, Inc.
Dinner, scheduled for Friday, May 25, 1973, Hilton Inn,
Raleigh, North Carolina.
Reproduced at the Richard Nixon Presidential Library and Museum
MR. FLOYD B. MCKISSICK
MAYOR JOHNNY FORD
DR. CHARLES G. HURST
CHAIRMAN
CO-CHAIRMAN
EXECUTIVE DIRECTOR
WHAT THE NATIONAL COMMITTEE FOR A TWO-PARTY SYSTEM, INC.
DOES NOT BELIEVE
May 16, 1973
1. WE DO NOT BELIEVE THAT BLACKS OR OTHER MINORITIES SHOULD FORM A SEPARATE POLITICAL
PARTY.
2. WE DO NOT BELIEVE THAT BLACKS AND OTHER MINORITIES HAVE THE POWER TO NEGOTIATE
IN THEIR BEST INTEREST WHEN THEIR VOTE IS A PREDICTABLE FACT.
3. WE DO NOT BELIEVE THAT BLACKS OR MINORITIES CAN BY THEMSELVES SOLVE THEIR PROBLEMS.
4. WE DO NOT BELIEVE THAT WHITE PEOPLE CAN BY THEMSELVES SOLVE THEIR PROBLEMS.
5. WE DO NOT BELIEVE THAT A CONSERVATIVE VIEW IS NECESSARILY A RACIST VIEW.
6. WE DO NOT BELIEVE THAT ALL WHITE PEOPLE ARE THE SAME IN THEIR ACTS OR PHILOSOPHY.
7. WE DO NOT BELIEVE THAT CONSOLIDATION IS NECESSARILY UNITY.
8. WE DO NOT BELIEVE IN CREATING AN ALL-WHITE POLITICAL PARTY BY OUR INACTION.
9. WE DO NOT BELIEVE THAT FREEDOM CAN BE ACHIEVED WITHOUT THE ACCEPTANCE OF
RESPONSIBILITY.
10. WE DO NOT BELIEVE THAT THE ACCEPTANCE OF HANDOUTS OR DOLES BY BLACKS AND MINORITIES
CREATE RESPECT IN THE MINDS OF THOSE WHO PASS OUT DOLES.
11. WE DO NOT BELIEVE THAT "BLACK ECONOMIC POWER" IS CONTRARY TO THE AMERICAN ETHIC.
12. WE DO NOT BELIEVE THAT ALL BLACK OR ALL WHITE IS ALWAYS BEAUTIFUL. BOTH CAN BE
UGLY AT TIMES.
BUSINESS OFFICE: POST OFFICE BOX 128, SOUL CITY, N.C. 27553 (919) 456-3111
Reproduced at the Richard: Nixon Presidential ibrarv and Museum:
WHAT THE NATIONAL COMMITTEE FOR A TWO-PARTY SYSTEM, INC.
DOES NOT BELIEVE continued--
May 16, 1973
Page 2
13. WE DO NOT BELIEVE THAT POWER CAN EVER BE ACQUIRED WITHOUT AN ACCEPTANCE OF
RESPONSIBILITY.
14. WE DO NOT BELIEVE THAT THE AMERICAN CAPITALIST SYSTEM IS INHERENTLY EVIL AND
CANNOT CHANGE BY LAWFUL MEANS.
15. WE DO NOT BELIEVE THAT BLACKS AND OTHER MINORITIES SHOULD DENY THEIR SELF
INTEREST AND AMBITION. MOTIVATION SHOULD BE ENCOURAGED AND REWARDED.
16. WE DO NOT BELIEVE THAT ANY PERSON SHOULD BE DENIED ADMISSION IN THE NATIONAL
COMMITTEE FOR A TWO-PARTY SYSTEM, INC.
17. WE DO NOT BELIEVE THAT BLACKS SHOULD DEPEND UPON ONE FEDERAL AGENCY TO
SUPPORT THEIR ADVANCEMENT, BUT SHOULD SEEK, AS OTHER CITIZENS, FULL
UTILIZATION OF ALL FEDERAL AGENCIES.
Reproduced at the Richard Nixon Presidential Library and Museum
The Montgomery Advertiser
And
ALABAMA
JOURNAL
Montgomery, Ala.
Sunday Morning May 13, 1973
Blacks Urged to Find
Blacks
He said the time for mass, Democrats, black Republicans,
action by blacks is over. "I
and blacks of whatever political
New Community Funding
went to jail 26 times," said the
persuasion, along with whites
who want to tackle common
Mississippi civil rights leader.
problems through the political
"But now I've got the key."
process."
Ed Sexton, of the minority
He said that today's SO-
By RAY JENKINS
Republican co-chairman of the
Editor, Journal Editorial Page
are bad, that we've got to have
affairs staff of the National
phisticated politics leaves no
organization and Mayor Johnny
take of the whites, who served
TUSKEGEE Top elected
collectivism."
only one segment of the com-
Republican Committee, cau-
place for "the nonsense of
black officials declared here
Ford of Tuskegee is Democratic
"Up to now, whites have been
tioned that in every com-
marching and demonstrating
co-chairman.
munity. Of course," he added,
Saturday that blacks should
making all the profits and now
"we do have some catching-up
munity, blacks should exert
and burning."
stop bemoaning the impending
McKissick said one goal of
to do first."
political pressure to "make sure
"The name of the game," he
dismantling of the a
the bi-partisan organization
they tell us it is bad. They're
telling us now to live by the
that revenue sharing is not used
said, "is money."
But he said black officials
poverty program and look to
would be to prepare a research
New Testament when they've
ultimately should be measured
exclusively to improve the
McKissick echoed these sen-
other governmental sources to
paper which would enable
been living by the Old Testa-
quality of life in the suburbs,
timents, saying that "rhetorical
newly elected black public offi-
by their accomplishments. "We
fund essential community pro-
ment.
which is where the whites live."
addresses on black W r,
jects.
cials to tap "the many pockets
were elected for one thing -- to
"Politics and economics are
Mayor Ford said the bi-
separatism, pan-Africanism and
"The OEO (Office of Econ-
of funds available in the various
serve our community and make
it better, and if we don't do
partisan organization is design-
the like don't mean anything to
one and the same," he said.
omic Opportunity) is a dead
agencies in Washington."
Mayor Charles Evers of Fay-
ed "to serve as a mechanism to
the unemployed man in the
He warned blacks "not to get
that, then you ought to get us
horse," said Floyd McKissick,
ette, Miss., warned black of-
out of office."
bring together black streets He wants a job."
former national director of the
hung up on the idea that profits
ficials "not to make the mis-
(See Blacks, Page 2A)
Congress of Racial Equality and
an organizer of Soul City in
North Carolina. "So We might
as well stop whipping it and
look for alternative sources of
federal money."
McKissick made his observa-
tions at ceremonies establishing
the first local chapter of the
National Committee for a Two-
Party System. McKissick is
Reproduced at the Richard Nixon Presidential Library and Museum
NAACD
HOUSING
DEPARTMENT
NATIONAL ASSOCIATION FOR THE ADVANCEMENT
OF COLORED PEOPLE
HOUSING
BULLETIN
SEVENTEEN NINETY BROAD
YORK, NEW YORK 10019
(212) 245-2100
Executive
RECEIVED MAY 21 1973
WILLIAM R. MORRIS
Director of Housing Programs
F.B. McKissick Enterprises, Inc,
April 1973
THE IMPACT OF THE HOUSING FREEZE UPON BLACK AMERICA
ON JANUARY 5, 1973 MR. NIXON INDEFINITELY SUSPENDED ALL FINANCIAL AS-
SISTANCE TO URBAN HOUSING FOR THE POOR (SECTIONS 235 AND 236). HE TERMINATED
PROGRAMS FOR OPEN SPACE, WATER AN SEWER AND NONPROFIT SPONSOR ASSISTANCE. ON
JANUARY 8TH RURAL HOUSING PROGRAMS FOR FARM LABOR HOUSING, RENTAL AND COOPERATIVE
HOUSING LOANS, WATER AND SEWER GRANTS AND ALL SUBSIDIZED RURAL HOUSING PROGRAMS
EXCEPT SELF-HELP HOUSING WERE TERMINATED. THESE CUTBACKS WILL BE COMPLETED ON
JUNE 30 WITH THE TERMINATION OR SUSPENSION OF PUBLIC HOUSING MODERNIZATION, MODEL
CITIES, URBAN RENEWAL, NEIGHBORHOOD FACILITIES AND REHABILITATION LOANS.
THIS PAPER ADDRESSES ITSELF TO THE IMPACT THESE ACTIONS WILL HAVE UPON
BLACK AMERICANS, THE POOR, AND OTHERS WHOSE RIGHT TO A DECENT HOME IN A SUITABLE
ENVIRONMENT IS AT STAKE.
President Nixon's June 1971 "Statement of Federal Policies To Achieve
Equal Housing Opportunities," stated that his administration is committed to
"correct for the effects of past discrimination" and that "denial of equal housing
opportunity to a person because of race is wrong, and will not be tolerated,
whether practiced directly and overtly, or under cover of subterfuges, or through
such practices as price and credit discrimination."
The subsidized housing programs, reinforced by HUD's Project Selection
Criteria and other recently-issued equal opportunity regulations, have served to
expand housing choices to lower-income families, increase business and job oppor-
tunities, and provide more economic benefits to black people than any other
program more blacks have managed to escape the confines of the ghettos than ever
in the history of federal housing activities. Through subsidized housing before!
New black businesses have also been created and sustained as a result of these
programs. A better quality of life, the nearness to better jobs in the suburbs,
and improvements in our inner cities have taken place despite government misman-
opportunity efforts by the housing industry (builders, lenders, brokers, etc.),
agement and exploitive use of these programs by speculators. Affirmative equal
though slow to start, have begun to take hold.
Subsidized housing starts hit an all-time high in 1971 with 388,526
units. Optimistic estimates for 1973 forecast a drop in production to 275,900 units
and less than 240,000 units in 1974. The Nixon Administration's boastful prediction
of 300,000 units for this year is far short of the nation's need for 600,000 subsi-
dized homes per year as established in the 1968 Housing Act.
Further, the cutback of nearly 2,000 HUD personnel, nearly 1,500 in
housing production jobs alone, does not indicate that the Nixon projections can be
achieved. Of greater importance is, because of civil service rules, the reassignment
of older, insensitive and sometimes bigoted FHA officials to equal opportunity
jobs - bumping HUD's young crop of recently hired and dedicated blacks and whites
(last hired - first fired).
What happens to the black lawyer, the architect, the mortgage banker,
the consultant and black sponsors? Few are equipped to compete in the unsubsidized
housing field; few have the financial staying power to hold on during a moratorium,
no matter how brief; few will survive! The public commitments of HUD Secretary Lynn
and the President to promote minority-enterprise do not square with the permanent
damage the freeze will cause to black business. The sudden cutback of funds without
a concurrent replacement with new programs is a civil rights oversight of the first
order. Where the housing and economic needs of poor blacks are concerned and where
the growth and development of minority enterprise is at stake, equal opportunities
in housing has largely been ignored.
Reproduced at the Richard Nixon Presidential Library and Museum
-more-
2
UNEQUAL SOCIETIES
report ontitled "Blacks Pay More" confirms what we have always
known;
pay a higher price for their housing than do whites. The 1970
Census statistics reveal that blacks occupy a disproportionate amount of housing
classified as substandard, deteriorating or dilapidated. Nationally, black income
is 61% of white income.
During the period 1960-1970 the black population in urban centers increased
by 2.7 million while the white count decreased 2.1 million. At the same time nearly
85% of new industrial plant locations took place in predominantly white suburban
areas, far removed from the inner city. The percentage of the nation's population
in the cities dropped to 30% while the suburbs rose to 33% thus shifting the
nation's balance of wealth and power, and thering racial separation. One-half
of the nation's blacks are now concentrated in fifty metropolitan areas, and
third in just 15 cities; two-thirds of all blacks now live in predominantly black
census tracts. Sixteen cities over 25,000 contain black majorities.
THE ECONOMIC LOSS
The potential loss in Section 235 and 236 housing could conceivably reach
660,000 units in urban areas and 100,000 subsidized homes in rural areas - a loss
estimated at $28.5 billion in expenditures and 3 million man years of employment.
The Nixon budget for fiscal year 1974 (July 1, 1973 to June 30, 1974)
proposes to eliminate over 50% of the present funds for manpower training; it
would terminate public employment programs so that there will be 180,000 fewer
jobs for those in need(including Vietnam veterans); it proposes no monies for
summer youth programs which provided 740,000 jobs in 1972.
All of this is in addition to the countless jobs which will be lost because
of cutbacks on new housing and community development programs. The shortage of low-
income housing means that blacks pay even more of their less-than-equal income as
demand exceeds the supply and building costs continue to rise.
To the nation's 22.3 million blacks who account for about 11% of the popu-
lation, their 1% share of the economic benefits now derived from housing production
is a crushing blow - the loss of which we cannot afford, nor is it likely that it
will ever be recovered.
THE NEW FEDERALISM?
The incidence of housing segregation continues to increase. Predictably
the flight of whites to the suburbs and migration of blacks to the cities is greatly
adding to residential segregation. The effect upon blacks is further ağgravated by
the Nixon Administration's "New Federalism" drive to transfer more federal funds
and authority to state and local governments through general and special revenue
sharing programs; programs that do not require the expansion of housing choice and
opportunity; programs that lessen (rather than increase) citizen participation and
minority prepresentation in the decision-making process. State governments have, in
past history, failed to discharge their lawful responsibilities of protecting black
rights and furthering racial progress. There is little reason to believe they will
do any better now.
Few would agree that this "New Federalism" is aimed at helping the nation's
poor and minorities. All evidence today supports the fact that a great percentage
of crime is bred in slums and blight, in poverty and unemployment and poor edu-
cation. It is bred in inner cities and rural areas where blacks are losing faith
in the system; where opportunity no longer exists. If they really want better
communities with safe streets and secure homes, the best way to do it is to
improve our homes and home life, and our neighborhoods - to provide quality
education and jobs.
WHERE DO WE GO FROM HERE
The proposed Nixon Administration strategy to fold urban renewal, model
cities and other programs (they're being cut-off June 30, 1973) into special
revenue sharing for community development (with no funding until July 1974),
leaves a one year halt in the momentum of these programs. It means the jobs
-more-
Reproduced at the Richard Nixon Presidential Library and Museum
3
blacks now hold will be lost, many never to be recaptured. It means minority-owned
business and entrepreneurs will have to find other employment in areas not subject
to the protection of equal opportunity requirements.
During this shuffle we also become faced with the President's recently
proposed legislative package containing "The Better Communities Act," "The
Responsive Governments Act," and a bill to create a broad-powered new federal
Department of Community Development - the passage of which is highly
speculative.
While the power-struggle between the Congress and the President continues,
we must never forget who the real victims are. Aside from the white-dominated
housing industry and the local redevelopment and housing officials, it is the
poor,. the black and other racial minorities who must wait, and wait, and wait,
for a chance to obtain decent housing at prices they can afford - or a chance
to move into America's mainstream as equals - to enjoy all the benefits of a
single society.
The termination, suspension and cancellation of the subsidized housing and
community development programs has caused incalculable harm to black America.
The cause of equal housing opportunity and minority economic growth has received
an irrecoverable setback by the cutback!
If this is the way Mr. Nixon is "correcting for the effects of past
discrimination" let us be spared more of the same. The question we must now
face is whether those who have so much to lose will exercise their rights and
demand a voice in shaping the new programs now being put together? If not we
will again be on the outside, looking in and reacting after the fact!
Reproduced at the Richard Nixon Presidential Library and Museum
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF management AND budget
DATE:
April 20, 1973
WASHINGTON, D.C. 20503
REPLY TO
ATTN OF:
SUBJECT:
Soul City - Status Report
Mr. O'Neill
Background
The Soul City Project received a conditional guarantee commitment for
$14 million in June 1972. This would be the first, and only, free-
standing new community (i.e., a completely new growth center outside
of any metropolitan area). At that time, HUD identified five con-
ditions for commitment:
1. Satisfactory debt restructure of McKissick Enterprises
2. Satisfactory industrial development marketing strategy
3. Revised phasing plan (from 20 years to 30 years project)
4. Requirement for approvals from all local government agencies
5. Evidence of satisfactory utility financing.
To date, McKissick Enterprises has satisfied two conditions--numbers 2
and 3, and partially satisfied 1, #4, and #5. HUD staff estimates
that it will take at least two months before the project could come to
closing (i.e., firm commitment).
Current Federal Assistance
It is significant to note that the two month estimate assumes the
availability of immediate Federal assistance from several agencies:
(a) a HUD Water and sewer grant in order to satisfy the requirement
for utility financing (this project is in Group C in HUD's earlier
appeal to OMB); (b) one or more grants from the Office of Minority
Business Enterprises (OMBE) to support the kinds of legal and techni-
cal staff needed to manage a project of this scale; and (c) a health
center grant from OEO. The project has already received Federal
assistance from the following, totalling over $1 million:
1. OEO - $1.1 million grant in FY 1971 to plan for a health
center. OEO has programmed an additional $1 million in 1974
for services.
2. OMBE - $257 thousand in FY 1973 (contract expires May 30,
1973) for technical assistance to develop an industrial
marketing strategy. Soul City is requesting an additional
$1 million in FY 1974 to continue these activities. OMBE
staff will probably recommend $190 thousand.
Reproduced at the Richard Nixon Presidential Library and Museum
2
3. HUD - A $420 thousand 701 Planning Assistance grant to the
local regional planning commission to carry out some of the
preliminary planning.
4. HUD New Communities staff - Development of the cash flow proj-
ections for the project.
In general, the project is dependent on the availability of Federal
assistance to come to the stage of firm commitment, as well as to
achieve the long term economic viability of the project. The Soul
City project is among the first six new community projects that had
Federal grants built into the cash flow projections. However, the
situation here is more severe due to the initial lack of financial and
management capability of the developer. In the words of a HUD staff
person, "this is a poverty case" which is marginal at best and would
require substantial assistance to be a success. A free-standing proj-
ect is inherently risky and would be so even under the best of
circumstances.
Considerations for a funding decision
The question of whether the project should receive a HUD water and
sewer grant is really a part of the broader question of whether there
is or should be a Federal commitment to carry out the project as a
special demonstration. If the answer is yes, then a wide variety of
funding is now and will be required. If not, neither the HUD grant
nor the other grants under consideration (OEO and OMBE) should be
provided. A decision to provide the assistance currently requested,
without the broader commitment, will probably lead to a default situa-
tion in the not too distant future.
adele Adele D. Jackson W. Jackson
4610
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE HOUSE
April 11, 1973
MEMORANDUM FOR PAUL O'NEILL
SUBJECT:
Soul City
Please "1/2 100 Jan jan
on
How soon will you be able to signal HUD that this project should
move?
Would you be willing to meet with McKissick and me and Tom Dunn
so we can get the whole thing squared away?
My only interest is to give McKissick a definite answer. It looks
up to now as though it has been "yes" all along -- but if FY 1973
funds run out because processing time is shrinking, then we have
done him a real disservice.
(en
Leonard Garment
attachment
Reproduced at the Richard Nixon Presidential Library and Museum
DEVELOPE
Brad Patterson
Mr. Leonard Carment
Special Consultant to the President
The White House
Washington, D. C. 20050
Dear Len:
In your memorandum of February 5, 1973, you request information as to
the status of the Soul City New Community project and as to the next
steps which should be taken by our office and the Developer to move the
project along.
On June 28, 1972, the Developer was made an offer of commitment for a
loan guarantee of $14 million. There are a number of conditions which
must be satisfied before the Developer can accept the offer.
The main conditions involve the negotiation of various debt financing
agreements, a.3 well as the equity investment of & proposed new partner,
the attraction of the initial job base, and obtaining the necessary
utility financing, all of which the Developer has to resolve to the
satisfaction of HUD.
The Office or New Communities staff is working with the Developer on these
matters. Progress is being made, especially in satisfying the utility
financing condition. On February 14, a contract was signed between the
Cities of Henderson, Oxford, and Soul City to construct a regional water
system which will provide these towns, as well as other communities in the
region, with abundant good water that is urgently needed. Additionally,
the Economic Development Administration has agreed to take the lead in
coordinating Federal assistance with HUD and has accepted an application
to construct the water system. In the application, the proposed financing
of the system, estimated to cost $9 million, includes a $1.5 million grant
from the Economic Development Administration, a $2.64 million water and
sever grant from HUD, a $360,000 supplementary grant from HUD, $2.8 million
in general obligation bonds from Henderson and Oxford, and $1.7 million in
State of North Carolina Pure Water bonds. The water system will move
forward when the proposed financing becomes available.
Reproduced at the Richard Nixon Presidential Library and Museum
- 2 -
EDA is committed to assisting the project. It is exploring specific
methods by which its participation can be effected, but has no doubt
that a satisfactory method will be developed. EDA's commitment is,
of course, contingent upon the completion of a satisfactory environ-
mental impact analysis.
Approval of the HUD water and sewer grant is currently pending further
negotiations between HUD and the Office of Management and Budget.
Recently, the OMB has indicated it will postpone a decision on some
categories- of projects, which include the Soul City project, pending
receipt of proposals from HUD as to its plans for subsidized housing
in new communities. HUD will continue to pursue the completion of the
Soul City project and keep you advised of our progress when we have
something more definite to report.
Finally, we also will need to complete with the Developer our negoti
ations of a project. agreement and trust indenture and present these
documents to the Board of Directors of the New Community Development
Corporation for their views and final approval.
Sincerely yours,
James T. Lynn
BCC: Honorable Frederick B. Dent
Department of Commerce
Reproduced at the Richard Nixon Presidential Library and Museum
April 20, 1973
Soul City - Status Report
Mr. O'Neill
Background
The Soul City Project received a conditional guarantee commitment for
$14 million in June 1972. This would be the first, and only, free-
standing new community (i.e., a completely new growth center outside
of any metropolitan area). At that time, HUD identified five con-
ditions for commitment:
1. Satisfactory debt restructure of McKissick Enterprises
2. Satisfactory industrial development marketing strategy
3. Revised phasing plan (from 20 years to 30 years project)
4. Requirement for approvals from all local government agencies
5. Evidence of satisfactory utility financing.
To date, McKissick Enterprises has satisfied two conditions--numbers 2
and 3, and partially satisfied #1, #4, and #5. HUD staff estimates
that it will take at least two months before the project could come to
closing (i.e., firm commitment).
Current Federal Assistance
It is significant to note that the two month estimate assumes the
availability of immediate Federal assistance from several agencies:
(a) a HUD Water and sewer grant in order to satisfy the requirement
for utility financing (this project is in Group C in HUD's earlier
appea1 to OMB); (b) one or more grants from the Office of Minority
Business Enterprises (OMBE) to support the kinds of legal and techni-
cal staff needed to manage a project of this scale; and (c) a health
center grant from OEO. The project has already received Federal
assistance from the following, totalling over $1 million:
1. OEO - $1.1 million grant in FY 1971 to plan for a health
center. OEO has programmed an additional $1 million in 1974
for services.
2. OMBE - $257 thousand in FY 1973 (contract expires May 30,
1973) for technical assistance to develop an industrial
marketing strategy. Soul City is requesting an additional
$1 million in FY 1974 to continue these activities. OMBE
staff will probably recommend $190 thousand.
Reproduced at the Richard Nixon Presidential Library and Museum
2
3. HUD - A $420 thousand 701 Planning Assistance grant to the
local regional planning commission to carry out some of the
preliminary planning.
4. HUD New Communities staff - Development of the cash flow proj-
ections for the project.
In general, the project is dependent on the availability of Federal
assistance to come to the stage of firm commitment, as well as to
achieve the long term economic viability of the project. The Soul
City project is among the first six new community projects that had
Federal grants built into the cash flow projections. However, the
situation here is more severe due to the initial lack of financial and
management capability of the developer. In the words of a HUD staff
person, "this is a poverty case" which is marginal at best and would
require substantial assistance to be a success. A free-standing proj-
ect is inherently risky and would be so even under the best of
circumstances.
Considerations for a funding decision
The question of whether the project should receive a HUD water and
sewer grant is really a part of the broader question of whether there
is or should be a Federal commitment to carry out the project as a
special demonstration. If the answer is yes, then a wide variety of
funding is now and will be required. If not, neither the HUD grant
nor the other grants under consideration (OEO and OMBE) should be
provided. A decision to provide the assistance currently requested,
without the broader commitment, will probably lead to a default situa-
tion in the not too distant future.
Adele D. Jackson
Reproduced at the Richard Nixon Presidential Library and Museum
5-74-76
1s
Acced A 13 quote
OMBE New 274 (all but sigur
+ 1.000
.500
(oll but signer)
OEO
1,000
HUD 1.100 wterval Serve wats L
451 was
6/30 .180 supp
.500 Put For book
Reproduced at the Richard Nixon Presidential Library and Museum
1.1
1.1
to
257
JO
190 .257 274 1.777 .420
420
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EDA 1.5
HOD 3.0
Reproduced at the Richard Nixon Presidential Library and Museum
The WHITE House
WASHINGTON
May 1
Paul -
As per our telephone
conversation.
This is the whole Garment/BHP
file on Soul City;pls keep intact.
Brad
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE HOUSE
WASHINGTON
Atlanta R.O.
404 526 5585
Bapter
Ted alexanda
Reproduced at the Richard Nixon Presidential Library and Museum
ASSISTANT DIRECTOR
OFFICE OF MANAGEMENT AND BUDGET
Len Carment
The attached staff per
gives a carrent states
reports on the Soul
city project W ould
you like to discuss? a-
I val Crein
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE HOUSE
WASHINGTON
Pir'm We should vat be in other
middle of this
& about W meeting.
Wath + Sever -
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EDA not
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE HOUSE
WASHINGTON
April 11, 1973
MEMORANDUM FOR PAUL O'NEILL
SUBJECT:
Soul City
How soon will you be able to signal HUD that this project should
move?
Would you be willing to meet with McKissick and me and Tom Dunn
so we can get the whole thing squared away?
My only interest is to give McKissick a definite answer. It looks
up to now as though it has been "yes" all along - - but if FY 1973
funds run out because processing time is shrinking, then we have
done him a real disservice.
Leonard Garment
attachment
Reproduced at the Richard Nixon Presidential Library and Museum
No.
Brad Patterson
Mr. Leonard Garment
Special Consultant to the President
The White House
Washington, D. C. 20050
Dear Len:
In your memorandum of February 5, 1973, you request information as to
the status of the Soul City New Community project and as to the next
steps which should be taken by our office and the Developer to move the
project along.
On June 28, 1972, the Developer was made an offer of commitment for a
loan guarantee of $14 million. There are at number of conditions which
must be satisfied before the Developer can accept the offer.
The main conditions involve the negotiation of various debt financing
agreements, as well as the equity investment of a proposed new partner,
the attraction of the initial job base, and obtaining the necessary
utility financing, all of which the Developer has to resolve to the
satisfaction of HUD.
The Office of New Communities staff is working with the Developer on these
matters. Progress is being made, especially in satisfying the utility
financing condition. On February 14, a contract was signed between the
Cities of Henderson, Oxford, and Soul City to construct a regional water
system which will provide these towns, as well as other communities in the
region, with abundant good water that is urgently needed. Additionally,
the Economic Development Administration has agreed to take the lead in
coordinating Federal assistance with HUD and has accepted an application
to construct the water system. In the application, the proposed financing
of the system, estimated to cost $9 million, includes a $1.5 million grant
from the Economic Development Administration, a $2.64 million water and
sewer grant from HUD, a $360,000 supplementary grant from HUD, $2.8 million
in general obligation bonds from Henderson and Oxford, and $1.7 million in
State of North Carolina Pure Water bonds. The water system will move
forward when the proposed financing becomes available.
Reproduced at the Richard Nixon Presidential Library and Museum
- 2 -
EDA is committed to assisting the project. It is exploring specific
methods by which its participation can be effected, but has no doubt
that a satisfactory method will be developed. EDA's commitment is,
of course, contingent upon the completion of a satisfactory environ-
mental impact analysis.
Approval of the HUD water and sewer grant is currently pending further
negotiations between HUD and the Office of Management and Budget.
Recently, the OMB has indicated it will postpone a decision on some
categories of projects, which include the Soul City project, pending
receipt of proposals from HUD as to its plans for subsidized housing
in new communities. HUD will continue to pursue the completion of the
Soul City project and keep you advised of our progress when we have
something more definite to report.
Finally, we also will need to complete with the Developer our negoti-
ations of a project agreement and trust indenture and present these
documents to the Board of Directors of the New Community Development
Corporation for their views and final approval.
Sincerely yours,
James T. Lynn
BCC: Honorable Frederick B. Dent
Department of Commerce
Reproduced at the Richard Nixon Presidential Library and Museum
Mr Kissick
3/26
HUD- moving very
slowly. Need direction
form the tap.
aplications how take
processed - - FY 73 money.
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Approved for guaranty.
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Reproduced at the Richard Nixon Presidential Library and Museum
DEPARTMENT
OF
U.S.
HOUSING
*
THE SECRETARY OF HOUSING AND URBAN DEVELOPMENT
AND
WASHINGTON, D. C.. 20410
URBAN
APR 1 01973
Mr. Leonard Garment
Special Consultant to the President
The White House
Washington, D. C. 20050
Dear Len:
In your memorandum of February 5, 1973, you request information as to
the status of the Soul City New Community project and as to the next
steps which should be taken by our office and the Developer to move the
project along.
On June 28, 1972, the Developer was made an offer of commitment for a
loan guarantee of $14 million. There are a number of conditions which
must be satisfied before the Developer can accept the offer.
The main conditions involve the negotiation of various debt financing
agreements, as well as the equity investment of a proposed new partner,
the attraction of the initial job base, and obtaining the necessary
utility financing, all of which the Developer has to resolve to the
satisfaction of HUD.
The Office of New Communities staff is working with the Developer on these
matters. Progress is being made, especially in satisfying the utility
financing condition. On February 14, a contract was signed between the
Cities of Henderson, Oxford, and Soul City to construct a regional water
system which will provide these towns, as well as other communities in the
region, with abundant good water that is urgently needed. Additionally,
the Economic Development Administration has agreed to take the lead in
coordinating Federal assistance with HUD and has accepted an application
to construct the water system. In the application, the proposed financing
of the system, estimated to cost $9 million, includes a $1.5 million grant
from the Economic Development Administration, a $2.64 million water and
sewer grant from HUD, a $360,000 supplementary grant from HUD, $2.8 million
in general obligation bonds from Henderson and Oxford, and $1.7 million in
State of North Carolina Pure Water bonds. The water system will move
forward when the proposed financing becomes available.
Reproduced at the Richard Nixon Presidential Library and Museum
- 2 -
EDA is committed to assisting the project. It is exploring specific
methods by which its participation can be effected, but has no doubt that
a satisfactory method will be developed. EDA's commitment is, of course,
contingent upon the completion of a satisfactory environmental impact
analysis.
Approval of the HUD water and sewer grant is currently pending further
negotiations between HUD and the Office of Management and Budget.
Recently, the OMB has indicated it will postpone a decision on some
categories of projects, which include the Soul City project, pending
receipt of proposals from HUD as to its plans for subsidized housing
in new communities. HUD will continue to pursue the completion of the
Soul City project and keep you advised of our progress when we have
something more definite to report.
Finally, we also will need to complete with the Developer our negotiations
of a project agreement and trust indenture and present these documents to
the Board of Directors of the New Community Development Corporation for
their views and final approval.
Sincerely yours,
James T. Lynn
James T. Lynn
Tom Damn 755-6238 ,HUD
Reproduced at the Richard Nixon Presidential Library and Museum
CONFERENCE NOTES FOR MEETING WITH:
Friday, March 30, 1973
11:45 a.m.
Mr. George Bush
Chairman
Republican National Committee
Dwight D. Eisenhower Republican Center
310. First Street, S.E.
Washington, D. C.
1. The establishment of a national program for bringing Blacks and
other minorities into the Republican Party.
a. developing a public relations program geared towards the
Black community.
b. the scheduling of major accomplishments as they relate
to minorities on a monthly basis.
2. Making better use of the FIRST MONDAY periodical as it relates
to minorities.
3. Developing position papers on the following:
a. major decisions being made by the President; for example,
the reasons for dismantling OEO -- the dismantling of OEO
affects far more poor whites than Blacks.
b. how the devaluation of the dollar helps poor people. No
rationale or editorial comments behind the devaluation
of the dollar have been presented as yet.
C. the impoundment of federal funds -- the right of the President
to impound funds, and how in its last stages, all, benefit
by the President carrying out a master program.
d. high cost of food and the poor farmer.
4. The National Committee for a Two-Party System, Inc.:
a. how it can be effectively used to reach the minority community.
b. developing a program and staffing.
C. the role it can play within the next two years in selective
areas of the country.
d. Chapters now in formation -- North Carolina, Alabama, New York
and Texas
Reproduced at the Richard Nixon Presidential Library and Museum
- 2 -
e. coordinating the activities of the Two-Party System with
the National and State Republican Parties as may be
decided upon.
5. The Soul City Project as it relates to a model of economic development
on a national scale and on an international scale.
a. The development of the African Exposition Trade and Industrial
Park through Public Facilities bonds.
Reproduced at the Richard Nixon Presidential Library and Museum
FOR YOUR INFORMATION
FLOYD B.
McKISSICK ENTERPRISES, INC.
P. O. BOX 188
SOUL CITY, NORTH CAROLINA 27553
(919) 456-5811
March 28, 1973
Mr. Robert Thompson
Director
Community Planning & Management
Regional Office
U. S. Department of Housing and Urban
Development
Atlanta, Georgia
Dear Bob:
I enjoyed talking with you this morning. The delay by the HUD Office
of New Communities Development in moving the Soul City project ahead
does give us much concern as it relates to the following areas.
1. Land Acquisition: There is a feeling in HUD that we
should not attempt to acquire the remainder of the
5,700 acres which we have not yet purchased. This is
dangerous. They do not understand how business decisions
are made. Land buying is not a unilateral matter. Land
must be brought when the seller is willing to sell and
at the price the buyer is willing to pay. Delays by
HUD have been costly to us in this regard as well as the
fact that our land acquisition program is at a standstill.
Values are going up almost daily and will continue to soar
after the sale of our bonds.
2. Financing: The HUD delay has caused us the inability to
secure financing by our private lenders for land
acquisition as they cannot anticipate (even after having
conferred with Mr. Lamont and his staff) the date of our
HUD closing. Their reluctance also limits us in staff
development as they do not want to put out additional
operating capital until there is a positive decision by
HUD indicating in written form when the project will close.
On February 15 we could have acquired an additional 1000
acres at a price of $300 per acre. That situation can now
be forgotten.
Reproduced at the Richard Nixon Presidential Library and Museum to the Builsling of Black Economic Power
Mr. Robert Thompson
March 29, 1973
3. Land Development Projects: There is now talk of
four land development project in and around Soul City.
I understand that some of these developers are seeking
HUD financing. These projects could get off the ground
if HUD finances them.
The major criticisms of this project from the HUD Office of New Communities
Development have been
(a) Industrial commitment, which we now have;
(b) Water system, which we now have (we have
developed, certainly, one of the first
regional water systems in the South; and
(c) Debt restructure, which we now have done.
We received our Offer of Commitment in June of 1972. It appears that
it takes a year to close the Soul City project where others have been
closed in shorter periods of time. Presently the State of North Carolina
is giving us excellent cooperation and is proceeding with development
of the major roads through Soul City including the industrial boulevard
road. We have an industry waiting for us to build the industrial incubator
building which they would occupy. We have OEO approval to commence
construction of our health center. Yet, all these projects are delayed
because we have not officially received a HUD closing date and our
bonds have not been sold.
We would appreciate any assistance your good offices could give us in this
matter. Delays and further delays are costing us approximately $30,000
a month.
Very truly yours,
Floyd B. McKissick
President
FBM:jg
CC: Mr. Edward Lamont
Director HUD ONCD
Reproduced at the Richard Nixon Presidential Library and Museum
L6 FYI
BHP
FLOYD B.
McKISSICK ENTERPRISES, INC.
P. O. BOX 188
SOUL CITY, NORTH CAROLINA 27553
(919) 456-5811
March 26, 1973
Mr. Brad Patterson
Special Assistant to Mr. Leonard Garment
The White House
1700 Pennsylvania Avenue, N.W.
Washington, D. C.
Dear Brad:
It was good talking with you by phone this afternoon.
Enclosed please find copy of my letter to Secretary James Lynn,
dated February 20, 1973, to which I have not as yet received a
reply. I would appreciate your continuing efforts in regard to
HUD's slow and costly delays. My Assistant, Gordon R. Carey, is
in Washington, D. C. now and can probably give you an up-to-date
report on what is transpiring on a day to day basis. You may
reach him during the day at Madison-Madison International
(202) 785-1945; in the evening in Alexandria, Virginia -- (703)
683-6299.
It is my feeling that the staff is attempting to make policy for
HUD and a clear-cut decision by a policy maker is needed. The
administration is the duty of staff and not the policy.
Please call if I can be of any assistance. Give my very best
regards to Leonard Garment.
Yours very truly,
Floyd B. McKissick
Enclosure
Reproduced at the Richard Nixon Presidential Library and Musellicated to the Building of Black Economic Power"
FLOYD B.
McKISSICK ENTERPRISES, INC.
P. O. BOX 188
SOUL CITY, NORTH CAROLINA 27553
(919) 456-5811
February 20, 1973
The Honorable James Lynn
Secretary
U. S. Department of Housing & Urban
Development
Washington, D. C.
Dear Mr. Secretary:
I would like to request an appointment with you at your early convenience
to discuss the Soul City project. This project is destined to be
one of the most visible HUD projects in many years. I would like to
have the opportunity to apprise you personally of our plans and progress.
It is of vital importance to the Administration and to the future residents
of Soul City that this project be exceptionally successful in providing
a superior place to live for some 50,000 persons. Equally important
is the opportunity to utilize the new town approach in revitalizing an
entire region currently classified as an economically depressed area.
It is becoming increasingly clear that we will need your continued
cooperation to bring this project to fruition. There appears to be
lengthy and unnecessary delays in moving toward construction which are
both frustrating and costly. I am hopeful that with some effort by
your office we can begin to move the project forward again in a timely
fashion. I look forward to hearing from you.
Very truly yours,
Floyd B. McKissick
President
FBM:jg
Reproduced at the Richard Nixon Presidential Library and Museum of
THE WHITE House
WASHINGTON
Cal Callier
6550
Reproduced at the Richard Nixon Presidential Library and Museum
Gray
March 28, 1973
The Honorable James E. Lynn
Secretary
U. S. Department of Housing & Urban Development
Washington, D. C.
Re: Construction of Health Center in Soul City
Dear Mr. Secretary:
On July 1, 1972 HealthCo, Inc. received a grant from the Office of
Economic Opportunity in the amount of more than one million dollars
to construct a health center and initiate a comprehensive health
services program for all of the people of Warren and Vance counties,
including the new community of Soul City.
HealthCo was formed by the principals of Soul City but is an indepen-
dent non-profit organization. On October 31, 1972 HealthCo contracted
with Madison & McKissick Development Company to prepare a feasibility
study for the health center, including preliminary working drawings,
floor plans and so on. All of this work has now been completed and
is to be formally approved by OEO prior to the end of this month.
We have just been informed verbally that the official OEO letter
approving the feasibility study will prohibit us from beginning con-
struction of the center until after the clasing of the Soul City
Bond Issue with HUD. This restriction can seriously jeopardize our
program especially as our project will be transferred to HEW.
As we have proceeded in all good faith, assuming that the Soul City
project would have been funded long before now, I am writing now to
request that you suggest a date for the Soul City closing so that
we may proceed to plan the development of our building. This health
center will provide employment for more than fifty persons in our
region and will be the most modern health facility in Warren County
and the only ambulatory care center within the County.
Reproduced at the Richard Nixon Presidential Library and Museum
The Honorable James E. Lynn
-2-
March 28, 1973
The planning of the Health Care Delivery Program has been in process
for the last 20 months. We have reached that point in this process
where facility construction is the next immediate step. All other
elements of the program are now totally dependent upon completion
of the facility which, in turn, is contingent upon Soul City closing
the Bond Issue with HUD.
The Board of Directors, HealthCo staff, the Soul City community, and
the health consumers in Vance and Warren counties look forward to
your assistance at this critical developmental stage.
Very truly yours,
J.P.Green, M. D.
Chairman of the Board,
HealthCo, Inc.
JPG:gmg
CC Edward Lamont, HUD
Lorenzo Reid, Executive Director
Leonard Garment, White House
Reproduced at the Richard Nixon Presidential Library and Museum
PERSONAL
THE WHITE HOUSE
WASHINGTON
March 27, 1973
MEMORANDUM FOR COUNSELLOR JAMES T. LYNN
Reluctant as I am to bug my favorite Cabinet Member, I must
ask you to get one of your staff to do something about my memo-
randum of last February 5 about Soul City, one of the new
communities. Floyd McKissick maintains he has done everything
HUD has asked of him -- and now his bankers are beginning to
wonder if the government is ever going to deliver on a commitment
made to him last June 19. He must be assured of FY 1973 money
or a great deal goes down the tube.
Brad has needled Mr. Wilderoter but apparently without much
success.
Leonard Garment
Reproduced at the Richard Nixon Presidential Library and Museum
zämszingzandz
Subcommittee on Housing of the
March 20, 1973
House Banking and Currency ommittee
"In addition, instructions will be issued shortly to honor
the bona fide commitments as promised by Secretary Romney. The areas
in which these commitments fall include:
Project Rehab, Operati n Breakthrough, State and
Local Government Arrangements, Indian Housing, New Communities
(commitments to assist certain new communities in developing low and
moderate income housing), Disdster Areas, Urban Renewal, Housing for
the Eldeely."
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE House
WASHINGTON
March 26, 1973
LG:
After our meeting with McKissick
you wrote Dent and Lynn.zDewzxamdaz--on
February 5. Dent responded, but Lynn
just hasn't come through. Now Floyd is
getting qutte concerned - he
must get all those applications processed
by June 30. A note such as the attached
is now required.
Reproduced at the Richard Nixon Presidential Brad Library and Museum
PERSONAL
THE WHITE HOUSE
WASHINGTON
March 27, 1973
MEMORANDUM FOR COUNSELLOR JAMES T. LYNN
Reluctant as I am to bug my favorite Cabinet Member, I must
ask you to get one of your staff to do something about my memo-
randum of last February 5 about Soul City, one of the new
communities. Floyd McKissick maintains he has done everything
HUD has asked of him -- and now his bankers are beginning to
wonder if the government is ever going to deliver on a commitment
made to him last June 19. He must be assured of FY 1973 money
or a great deal goes down the tube.
Brad has needled Mr. Wilderoter but apparently without much
success.
Leonard Garment
Reproduced at the Richard Nixon Presidential Library and Museum
FLOYD B.
McKISSICK ENTERPRISES, INC.
P. O. BOX 188
SOUL CITY, NORTH CAROLINA 27553
(919) 456-5811
February 16, 1973
Mr. Leonard Garment
Special Consultant to the President
The White House
Washington, D. C.
Dear Mr. Garment:
It is with great pleasure that I am able to enclose a copy of the signed
agreement between ourselves and our neighboring communities of Henderson
and Oxford establishing our regional water system. This contract
and agreement is a direct result of the labors of your staff, particularly
Mr. Brad Patterson. Mr. Patterson has maintained contact with us almost
on a daily basis and has expedited the funding of this project through
HUD, EDA and the Governor's Office of the State of North Carolina.
All of the required applications and supporting documents needed to fund
this regional water system at the required level of 9 million dollars
(50% local participation and 50% federal) have been properly prepared and
submitted to the appropriate agencies. EDA has set aside its contribution
of $1,500,000. EDA serves as the lead federal agency and is prepared to
go into contract as soon as the necessary binding commitments are secured
from the Department of Housing and Urban Development.
As we understand the current situation, HUD has requested clearance from
the Office Management and Budget to make the three million dollar water
grant to the City of Henderson. The City of Henderson is the applicant
for all of the project funds, will hold title to all of the property and
will be responsible for operation and maintenance of the system. The
system will supply water to Henderson, Oxford and Soul City in sufficient
amounts to support our new community project and the entire region. The
project will move forward as soon as the grant funds become available from HUD.
Reproduced at the Richard Nixon Presidential Library and Museum
Dedicated to the Building of Black Economic Power"
February 16, 1973
Mr. Leonard Garment
I want to again extend my thanks to you and Mr. Patterson for your assistance.
This project will be the key to the continued industrial growth and
development of our region.
We will keep you apprised of progress in the development of this regional
water system and of the overall progress of the development of our new city.
It would appear that HUD could move much more rapidly in finalizing our
agreements for closing and thereby help to reduce our unnecessary and
mounting expenses.
Again let me say many thanks. If there is anything I can do, please let
me know.
Very truly yours,
Floyd B. McKissick
Enclosure
Reproduced at the Richard Nixon Presidential Library and Museum
THE WHITE House
WASHINGTON
Read
floyd Mc Kissick
919-456- 3111
Reproduced at the Richard Nixon Presidential Library and Museum
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Reproduced at the Richard Nixon Presidential Library and Museum
Museum pue UOX!N Richard the le Reportuced
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February 5, 1973
MEMORANDUM FOR
SECRETARY DENT
SECRETARY LYNN
SUBJECT:
Soul City, North Carolina
I would appreciate it if you can confirm for me that
this project is moving along. What are the next
steps as you see them, and which are up to us and
which to Mr. McKissick?
Leonard Garment
attachment
Reproduced at the Richard Nixon Presidential Library and Museum
FLOYD B.
McKISSICK ENTERPRISES, INC.
P. O. BOX 188
SOUL CITY, NORTH CAROLINA 27553
(919) 456-5811
February 1, 1973
Mr. Brad Patterson
Executive Assistant to
Mr. Garment
The White House
Room 188 1/2
Washington, D. C.
20500
Dear Mr. Patterson:
I am writing as a follow up to the conversations between you and
Floyd B. McKissick. Enclosed you will find copies of all of our recent
correspondence with EDA and HUD. Please note particularly the correspondence
from the Mayors of Henderson and Oxford endorsing Soul City's application
for grant funds from EDA.
I have today spoken with our State EDA representative Mr. Dale Jones
in regard to our application. I believe that the endorsement of the
Mayors has effectively removed any EDA objections to the project as we
have proposed it, providing, of course, that grant funds from HUD will
be available to the City of Henderson.
We will be pleased to discuss this project with you at greater length
as you so desire.
Very truly yours,
Gordon R. Carey
Vice President
GRC:jg
Enclosures
Reproduced at the Richard Nixon Presidential Library and Myseumated to the Building of Black Economic Power"
WARREN Regional PLANNING CORPORATION
P.O. Box 158
MANSON, NORTH CAROLINA 27553
(919) 456-5811
January 29, 1973
Mr. Pat Choate
Director
Southeastern Region
Economic Development Administration
U. S. Department of Commerce
1401 Peachtree Street, N. E.
Atlanta, Georgia
30309
Dear Pat:
As you know we are making the final arrangements now for closing our land
development loan guarantee with the HUD Office of New Communities
Development. The regional water system as proposed by Henderson, Oxford
and Soul City is a major component in our long range development plans.
Furthermore as the regional system is essential for the continued growth
and health of Henderson and Oxford you are no doubt aware that their
water situation is becoming critical indeed.
At this point we have arrived at firm arrangements with these two
neighboring municipalities as to how we can best proceed to pull together
the funding for this 8 million dollar project. The applicant entity
for the EDA portion of this regional project will be the Soul City
Sanitary District (Warren County). From the attached schedule you can
see clearly the way in which the funding of this project in conjunction
with the HUD sponsored project for Henderson will provide a consistent
regional plan.
On August 17, 1971 you wrote us indicating a commitment of 1.5 million
dollars subject to certain conditions. On September 15, 1972 we in turn
modified our proposal in such a fashion as to reduce the total amount of
the funding package for Soul City to 3.5 million dollars. We have
subsequently received all commitments from HUD necessary to fund this
aspect of the project in its entirety. We would like to make arrangements
now with your office to prepare the final application and other documents
necessary to enter into binding contracts during this fiscal year.
Reproduced at the Richard Nixon Presidential Library and Museum
Mr. Pat Choate
January 29, 1973
The City of Henderson on behalf of Oxford and the region is simultaneously
applying for a 2 million dollar grant from HUD to support its portion
of the regional system. In addition, Henderson is prepared to float
general obligation bonds in the amount of 2 million dollars and the
City of Oxford in the amount of $800,000. We can be assured of at least
$500,000 participation from the State of North Carolina.
As indicated, funding for our portion of the project will go to the
Sanitary District now being formed in Warren County by Soul City. The
Sanitary District can be completed within a period of 60 to 90 days.
It is our understanding from Mr. Oxley and from EDA officials in Washington
that the de-designation of Warren County will not constitute a problem
in the funding of this already commited project.
Following our last meeting with Mr. Oxley and your staff in Atlanta we
have been to Washington several times in conjunction with Henderson
and Oxford and have been greatly encouraged by Assistant Secretary
Floyd Hyde's office regarding the proposed grant to Henderson.
I look forward to hearing from you right away so that we can get moving
again. Thank you ever so much for your cooperation.
Very truly yours,
Floyd B. McKissick
President
FBM:jg
CC: George Karras
Washington, D. C.
W. W. Blount, Jr.
5081
Washington, D. C.
Secretary Frederick B. Dent
Washington, D. C.
Enclosure: Funding Schedule
Reproduced at the Richard Nixon Presidential Library and Museum
PROPOSED FUNDING FOR REGIONAL WATER SYSTEM
(in millions of $)
SOUL CITY SANITARY DISTRICT
THE CITY OF HENDERSON
REGIONAL UTILITY
(applicant)
(applicant)
(beneficiary)
$ 1.5 EDA Grant
.5 HUD Grant
.5 HUD Public Facilities
Loan
.7 ONCD Grant
.3 Soul City Company
3.5
Total Funding
- 1.0
Less Sewer Portion
$ 2.5
$ 2.5
$ 2.0 HUD Grant
2.0 Henderson GOB
.8 Oxford GOB
.5 State of N. C.
$ 5.3
Total Funding
5.3
$ 7.8
Reproduced at the Richard Nixon Presidential Library and Museum
OF
HENDERSON
CITY OF HENDERSON
NORTH CAROLINA
OFFICE OF
1841
January 29, 1973
CITY MANAGER
NORTH
CAROLINA
Mr. Don Patch
Special Assistant to
Assistant Secretary Floyd Hyde
U. S. Department of Housing & Urban Development
451 Seventh & D Streets, N. W.
Washington, D. C.
Dear Mr. Patch:
On behalf of Henderson, Oxford and Soul City I want to
express our appreciation for the kind reception we received from you
and members of your staff in Washington. At our meeting you indicated that
you would be back in touch with us shortly in regard to the extent of funding
that could be made available to the City of Henderson to support our
regional water system.
I am writing now to formally request and urge that the U. S.
Department of Housing and Urban Development make a grant to the City of
Henderson in the amount of two million five hundred thousand dollars. This
grant is desperately needed if we are to be in a position to begin our
regional system which is so important to the thousands of residents of
Henderson and Oxford and, of course, to the growth of the proposed new
community of Soul City located in neighboring Warren County.
I want to assure you that all three of the sponsoring communities
are in complete concurrence as to how we should proceed and that we have
developed a truly cooperative atmosphere.
Reproduced at the Richard Nixon Presidential Library and Museum
Mr. Don Patch
January 29, 1973
In addition to the requested two million five hundred thousand
dollar grant to Henderson and Oxford, a Sanitary District sponsored by
Soul City will, we understand, be receiving funding in the amount of
3.5 million dollars. 2.5 million dollars of this amount will be utilized
in its entirety to build Soul City's portion of the regional system. The
City of Henderson is prepared to float two million dollars in general
obligation bonds and the City of Oxford $800,000. We are assured of
State participation for at least $500,000 from the proceeds of the State-
wide Clean Water Bond Issue. A summary of the proposed funding arrangements
are indicated on the enclosed schedule.
The support indicated above will provide 8.3 million dollars to
support this first stage of our regional system. All of the other funding
components are belived to be quite secure at this time. The only portion
of the project which has not been commited is the subject grant from your
office. Before we can proceed further we must have some clarification as
to the amount and timing of HUD's support. It would be greatly appreciated
if we could hear from you at your earliest opportunity.
Yours very truly,
George V. Boyd
Mayor George V. Boyd
Henderson
cc: Greensboro Area HUD
Atlanta Regional Office
Assistant Secretary Samuel C. Jackson
Secretary of HUD, James Lynn
Reproduced at the Richard Nixon Presidential Library and Museum
PROPOSED FUNDING FOR REGIONAL WATER SYSTEM
(in millions of $)
SOUL CITY SANITARY DISTRICT
THE CITY OF HENDERSON
REGIONAL UTILITY
(applicant)
(applicant)
(beneficiary)
$ 1.5 EDA Grant
.5 HUD Grant
.5 HUD Public Facilities
Loan
.7 ONCD Grant
.3 Soul City Company
3.5
Total Funding
- 1.0
Less Sewer Portion
$ 2.5
$ 2.5
$ 2.5 HUD Grant
2.0 Henderson GOB
.8 Oxford GOB
.5 State of N. C.
$ 5.8
Total Funding
5.8
$ 8.3
Reproduced at the Richard Nixon Presidential Library and Museum
P.O. BOX 506
HUGH M. CURRIN, MAYOR
120 WILLIAMSBORO ST.
TELEPHONE 919 693-5172
CITY OF OXFORD
Oxford, North Carolina 27565
January 25, 1973
Mr. Don Patch
Special Assistant to
Assistant Secretary Floyd Hyde
U. S. Department of Housing & Urban Development
451 Seventh & D Streets
Washington, D. C.
Dear Mr. Patch:
By this letter we are indicating our strong endorsement
and support for the application to your office for a two mil-
lion dollar water grant to the City of Henderson. The pro-
ceeds of this grant are to be used to assist in building the
Henderson and Oxford portions of the regional water system
being planned and developed jointly with Soul City.
We would like to urge your action on this matter and
with Mayor Boyd stress the crucial importance of this action.
Our proposal is unique in the development of regional approaches
to water. It is fully consistent with State and regional
planning and can ultimately serve at least four counties, num-
erous municipalities and, of course, a HUD sponsored new
community.
Very truly yours,
Hugh M. Currin
Mayor of Oxford
Floyd B. McKissick
President, McKissick Enterprises, Inc.
CC: Greensboro Area HUD
Atlanta Regional Office
Assistant Secretary Samuel C. Jackson
Secretary of HUD, James Lynn
Reproduced at the Richard Nixon Presidential Library and Museum
HUGH M. CURRIN, MAYOR
120 WILLIAMSBORO ST.
TELEPHONE 919 693-5172
CITY OF OXFORD
Oxford, North Carolina 27565
January 25, 1973
Mr. Pat Choate, Director
Southeastern Region Economic
Development Administration
U. S. Department of Commerce
1401 Peachtree Street, N. E.
Atlanta, Georgia 30309
Dear Mr. Choate:
On behalf of our respective communities we want to take
this opportunity to let you know that we have reviewed Mr.
McKissick's letter of this same date addressed to you and
concur that this is the direction in which we should move.
By this letter we are indicating our full support and con-
currence with the application from the Sanitary District in
Warren County. The City of Henderson will make appropriate
arrangements with the Sanitary District to provide for an
orderly and coordinated construction program.
We are indeed encourged by the response from HUD and
we have been promised that we should be told the extent of
the HUD funding for this project very shortly.
This joint regional water system is of great importance
not only to our two cities but also to the entire region.
We hope and trust that it can now move forward with speed
and cooperation.
Very truly yours
George V. Boyl
George V. Boyd
Hugh M. Currin
Mayor of Henderson
Mayór of Oxford
HMC: kp
CC: George Karras, Robert Podesta, Secretary of Commerce
Reproduced at the Richard Nixon Presidential Library and Museum
STATE OF NORTH CAROLINA
)
AGREEMENT
COUNTY OF VANCE
THIS AGREEMENT, made and entered into this the 14th day
of February, 1973 by and among the City of Henderson (a municipal
corporation organized under the laws of the State of North Carolina
and situate in Vance County, North Carolina), hereinafter referred
to as "Henderson", the City of Oxford (a municipal corporation
organized under the laws of the State of North Carolina and situate
in Granville County, North Carolina), hereinafter referred to as
"Oxford", and Floyd B. McKissick Enterprises, Inc. ( a corporation
organized under the laws of the State of New York and domesticated
in the State of North Carolina with its principal office in Warren
County, North Carolina, the developer of the new community of "Soul
City" being developed under Title VII of the 1970 Housing and Urban
Development Act, and acting as Agent for "Soul City Sanitary District"
now being organized), hereinafter referred to as "Enterprises".
WITNESSETH:
WHEREAS, the Cities of Henderson and Oxford (and the areas
surrounding said cities in Vance and Granville Counties) and the area
in and near Warren County to be served by the Enterprises are all in
need of additional water supplies, and
WHEREAS, said areas are all in relativelyclose proximity
with each other, extending along Interstate Highway #85 and within
a short distance of John H. Kerr Reservior, and
WHEREAS, although John H. Kerr Reservior ("Kerr Lake") was
constructed approximately 20 years ago and has approximately 800
miles of shoreline, it is not used by any towns or cities in North
Carolina as a source of water and the supply of water available in
LAW OFFICES
ZOLLICOFFER & the lake in this area can easily fulfill all of the foreseeable water
HENDERSON, N. c.
Reproduced at the Richard Nixon Presidential Library and Museum
Agreement
Page 2
needs of the region in the future and can be readily treated for
drinking purposes, and
WHEREAS, it is in the best interest of the parties hereto
and of the persons residing in the aforesaid areas that a regional
water supply system be established, and
WHEREAS, said regional water supply system would consist of
a raw water intake structure located on Kerr Lake, a water treatment
plant, elevated water storage facilities, finished water pumping
facilities, and finished water transmission mains to Henderson,
Oxford, and the area served by the Enterprises. The total cost of
said regional water suply system is estimated at 9.0 million dollars,
and
WHEREAS, the regional water supply system is being financed
by grants of monies from the Economic Development Administration and
the Department of Housing and Urban Development, Agencies of the
United States Government, and grants of monies from the State of
North Carolina with the balance of the project being financed by
Henderson, Oxford and the Enterprises, and
WHEREAS, the grants of the above Agencies of the United
States Government is contemplated to be 50% of the total project
cost or approximately $4,500,000.00, a portion of which is through
the Office of New Communities Development, and
WHEREAS, the parties hereto desire to put into writing their
agreement, the same being conditioned upon the availability of all
funds before the acquisition of any land or rights of way or the
awarding of any contracts relative to the constructin of said system.
NOW, THEREFORE, for and in consideration of the mutual
promises and agreements herein set forth and the reliance to be
LAW by each party on the performance by the others, the parties
ZOLLICOFFER & ZOLLICOFFER
HENDERSON, N.C.
Reproduced at the Richard Nixon Presidential Library and Museum
Agreement
Page 3
hereto, each with each other, agree as follows:
(1) Although Henderson is to be the "guiding force" and lead
agency relative to the proposed regional water system,
Oxford and the Enterprises have and shall continue to
have certain vested rights and interests in the system
and its facilities, as set forth in this agreement, by
virtue of their investments in the same.
(2) The City of Henderson is to make applications "for Federal
grants from the Economic Development Administration and
the Department of Housing and Urban Development and
applications for grants from the State of North Carolina
and/or any other sources which may be suggested and feasible;
the other parties hereto agree to assist Henderson in any
feasible manner relative to said grants and the applications
for the same.
(3) Any funds received by any of the prties by reason of any
grant for the initial construction of the regional water
system, or through financing or other funding relative
thereto, shall be paid to Henderson to be held in separate
escrow accounts and to be spent only for said system.
(4) In the event that the applications for grants are received
with sufficient encouragement so that it appears likely
that sufficient funds will be derived from grant sources
to make the project feasible, Henderson and Oxford agree
to then initiate proceedings towards the issuance of any
bons which said parties may deem appropriate towards
financing their respective shares of the balance project
cost.
LAW OFFICE(5) In the event the project becomes economically unfeasible
ZOLLICOFFER & ZOLLICOFFER
HENDERSON, N. c.
Reproduced at the Richard Nixon Presidential Library and Museum
Agreement
Page 4
(because of insufficient grant funds, rising construction
costs, or the inability of any party to raise its share of
the balance project costs through no fault of said party
[e.g., a vote defeating its bond issue], etc.), so that
there is no award of any construction contract, then this
agreement shall terminate and the parties shall be under
no further obligation to each other; provided, however,
that Oxford and Enterprises shall each immediately reimburse
Henderson 1/5 of any engineering, legal, or extraordinary
expenses for items which have been approved by the parties,
which Henderson may have incurred under this contract prior
to its termínation.
(6) The proposed budget of 9 million dollars is contemplated to
be /financed by:
Economic Development Administration Grant $1,500,000.00
Housing and Urban Development (Office of
New Communities) Supplementary Grant
500,000.00
Housing and Urban Development (to support
the new community of Soul City)
2,500,000.00
N. C. State Grants ("Clean Water" bond
funds)
1,700,000.00
Henderson
2,000,000.00
Oxford
800,000.00
$9,000,000.00
In the event the total project costs exceed the monies
available from the above sources (including the amounts
indicated for Henderson and Oxford), then the overrun
shall be paid and deposited by the parties as follows:
(a) Henderson
60%
(b) Oxford
20%
(c) Enterprises
20%
LAW OFFICES
ZOLLICOFFER & ZOLLICOFFER
HENDERSON, N. c.
Reproduced at the Richard Nixon Presidential Library and Museum
Agreement
Page 5
In the event the total project costs shall be less
than the monies available from the sources above, then
the parties' shares set forth in the budget above shall
be reduced proportionately, in the total amount of the underrun.
Henderson and Oxford shall be responsible for all interim
financing needed on a prorata basis.
(7) The final plans, specifications and design of the project shall
be approved by all of the parties hereto. Thereafter, no
charges in the scope of the project can be made without full
concurrence of all the parties; provided that this does not
affect reasonable field change orders.
(8) After all of the project funds have been committed to the
satisfaction of Henderson, Henderson shall then proceed with
the authorization of the final design of the system and the
acquisition of any land and easements needed and with the
advertising and awarding of the construction contracts
relative to the project. The other parties agree to assist
Henderson in any feasible manner, and especially in the
acquisition and/or condemnation of land or rights of way.
(9) The title to any land or rights of way acquired and any
and all facilities located thereon shall thereafter be
vested in Henderson, and held by Henderson for the use and
benefit of the parties hereto and subject to the contractual
interests of the parties hereto. It is agreed that any party
may assign its interest to any successor water supplier to its
respective area only upon the condition that said assignee shall
assume all of the assignor's obligations hereunder and be bound
by the terms of this agreement. It is expressly agreed that
Enterprises is to actively seek the immediate formation of a
Sanitary District in the area in which it operates and to
LAW OFFICES
ZOLLICOFFER & ZOLLICOFFER
HENDERSON, N. c.
forthwith assign its interest to said Sanitary District which
Reproduced at the Richard Nixon Presidential Library and Museum
Agreement
Page 6
would assume the obligations of Enterprises hereunder.
It is the intent of the parties hereto that said system
shall in the future be transferred to a Regional Water
Authority, as provided in Articles 1 and 2 of Chapter 162A
or otherwise,
of the General Statutes of North Carolina/to be formed in
the future by all of the prties, with such duties, powers,
authorities, and functions as may be agreed upon between
the parties, subject to the conditions of the General Stautes
of North Carolina.
(10) Upon the completion of the construction of the water system,
the same shall be maintained and operated by the City of
Henderson; provided, however, that the costs of any maintenance
shall be added to the "cost of production" of the water;
provided further that the parties hereto shall assist Henderson
in the inspections of their respective transmission mains.
(11) It is agreed that all water being treated, the water entering
the transmission line to Enterprises, and the water entering
the transmission line to Oxford shall each be accurately
metered. Oxford and Enterprises ("Soul City") each agree to
purchase from Henderson all water metered into their respective
transmission lines. Although quantities may vary on a daily
basis, Oxford and Enterprises each agree to pay for a minimum
average of one million gallons per day each week, commencing
upon said treatment plant being placed in operation; provided,
however, that relative to any portion of said one million
gallons per day that does not pass through the respective meter,
the actual cost of production (as defined below) for said
respective party shall not include the expense of power,
chemicals, or other costs that vary with the amount of water
LAW OFFICES
ZOLLICOFFER & ZoLLicoFFeproduced.
HENDERSON, N. c.
Reproduced at the Richard Nixon Presidential Library and Museum
Agreement
Page 7
It is understood that Henderson is not engaging in the
sale of water to the other parties to this agreement for a
profit. The parties shall pay Henderson, within 15 days of
billing, for said water on the basis of the actual cost of
production (including chemicals, utilities, salaries of
personnel, audits, etc.). While "cost of production" shall
not include amortization of the initial cost of the system,
it shall include provisions for any reasonable reserves for
repairs to and maintenance of the system, and for other
reasonable contingencies relative to the system, and for
amortization or reasonable rental of any equipment, vehicles,
etc. purchased or used by Henderson, and reasonable payments
to personnel by Henderson, relative to performing any obliga-
tions for the joit benefit of the parties to this agreement.
For purposes of ascertaining "cost of production", Henderson
shall be charged with a minimum average of three million gallons
per day, and Oxford and Enterprises with a minimum average of
one million gallons per day (as set forth in the preceding
paragraph).
Nothing herein withstanding, Henderson shall have the right
to discontinue service to any party hereto who does not pay any
funds owing to Henderson under the terms of this contract and
fails to remedy said breach within 15 days after notice of intent
to discontinue said service.
(12) The respective parties hereto shall have the right at any time
to purchase without any cost other than set out herein, the
following percentages of the then total treated water capacity
of the original plant:
(a) Henderson
60%
LAW OFFICES
(b) Oxford
20%
ZOLLICOFFER & ZOLLICOFFER
HENDERSON, N. c.
(c) Enterprises
20%
Reproduced at the Richard Nixon Presidential Library and Museum
Agreement
Page 8
Provided, however, that in the event of any temporary
curtailment of capacity (that is one which is not expected
to exceed 30 days duration), each party shall have the right
to purchase the same percentage of the curtailed treated water
capacity of the original plant that said respective party
actually used during the 90 day period preceding said curtail-
ment.
The allocation of water relative to the original plant shall
not be changed except by mutual agreements reached by negotia-
tions with all the parties.
In the event any party wishes to transfer part of its
allocation, it shall offer the same to both of the other
parties on the same terms. The other parties shall each have
the right to purchase its prorata part (on the 60-20-20 basis
hereinbefore referred to) of said allocation offered; provided
that if either party does not so purchase its prorata share
within 30 days, the other purchaser may purchase said share
within 30 days thereafter upon the terms proposed. Nothing
herein shall prevent the withdrawal of any offer (or portion
of the same) prior. to its acceptance, however.
In the event any party needs water over and above its
original allocation, it shall have the right to expand the
treatment plant (and any other facilities necessary for the
delivery of such additional water) at its own expense, provided
it does not act to the detriment of any of the other parties;
its allocation of water available for purchase shall thereafter
be increased by the amount of additional treated water which
can be delivered to it by reason of said expansion.
(13) The water flowing through each main shall be controlled by
LAW OFFICES
ZOLLICOFFER & ZOLLICOFFER the party then being metered for the same and in all cases
HENDERSON, N. c.
Reproduced at the Richard Nixon Presidential Library and Museum
Agreement
Page 9
said party shall determine policies for allowing other
persons, firms, or corporations to tap said main for water
service at said place (provided that no party shall take
any action which would prevent any other party to this
agreement from obtaining its fair share of the water being
treated). The fact that the main may be situated in another
County or jurisdiction shall not affect the right of the
controlling party to make such policy and decisions as it
deems proper. It is understood that no party hereto has
any obligation to serve any persons, firms, or corporations
(except as otherwise may be provided by law and this agreement).
It is understood and agreed that the parties hereto each
have the right to resell the water allocated and delivered to
it at such rates, fees, charges, penalties, and/or varying
schedules as said party may individually determine.
(14) Henderson shall not be liable or accountable for any failure
to treat and/or deliver water, or otherwise perform this
H,M.C
contract in the event such failure is due to acts of God, strikes,
power failure, line breaks, system repairs, catastrophes, or
other causes beyond the control of the City of Henderson, its
agents and employees. Henderson shall give all parties
reasonable notice of any interruptions which might be reasonably
anticipated.
(15) Henderson shall maintain a separate regional water system
account and all revenues and disbursements relative to said
system (and no other revenue or disbursements) shall be deposited
to and disbursed from said account.. An independent auditing
firm, reasonably acceptable to all parties, will audit the
accounts and expenses of the operation of the regional water
LAW OFFICES
ZOLLICOFFER & ZOLLICOFFER system no less than once each year. Sufficient copies of the
HENDERSON, N. c.
Reproduced at the Richard Nixon Presidential Library and Museum
Agreement
Page 10
audit will be made available to provide one for each member
of the City Council, or other governing agency or board of
each of the parties hereto. Henderson shall further render
to each party an operating statement each month.
(16) The basic premise of this agreement is that all interpretations
hereof and decisions hereunder relative to the regional water
system shall be fair and equitable, with due regard being
given to each participating party according to their respective
vested rights that they have in the system in the following
ratio:
(a) Henderson
60
(b) Oxford
20
(c) Enterprises
20
(17) It is agreed that other governmental units or agencies shall
have the right to purchase water directly from the regimal
water system upon the consent of all of the parties hereto
and upon such terms and conditions as may be determined by
the parties.
(18) This agreement shall exist and continue for a period of 40
years from the date hereof, and thereafter may be renewed
or extended for such term, or terms, as may be mutually
agreeable; it shall be binding during its termand all
extensions and renewals hereof, on the parties hereto (and
their successors in title and assigns, pursuant to the terms
of paragraph 9). This agreement may be amended only with
the written consent of all the parties hereto (or their assigns).
(19) This contract shall be construed under the laws of the State
of North Carolina.
(20) The parties to this agreement have executed Forms #ED-503
LAW OFFICES
ZOLLICOFFER & ZOLLICOFFER and/or ED-503(a), forbidding the discrimination in the hiring
HENDERSON, N. c.
Reproduced at the Richard Nixon Presidential Library and Museum
Agreement
Page 11
or firing of employees, and the parties agree not to engage in
any discriminatory conduct prohibited by said Form or the
statutes set forth therein, and further bind their respective
grantees, assigns, and successors in interest to these assurances.
IN TESTIMONY WHEREOF, the City of Henderson and the City of
Oxford have each caused this agreement to be executed, all pursuant to
resolutions passed by their respective governing bodies, and Floyd B.
McKissick Enterprises, Inc. has caused this agreement to be duly
executed by its president, sealed with its corporate seal, and attested
by its secretary, all by authority of its board of directors duly given.
CITY OF HENDERSON.
BY: George V Brid
(CORPORATE SEAL)
George V. Boyd, Mayor
ATTEST:
J. Greeson, City Clerk
CITY
OF
OXFORD
(CORPORATE SEAL)
BY: Hugh High M Currin, Mayor
ATTEST:
Carlton Flowers
City Clerk
FLOYD B. MCKISSICK ENTERPRISES, INC.
(CORPORATE SEAL)
BY: President
ATTEST: GiRla Hut Secretary
LAW OFFICES
ZOLLICOFFER & ZOLLICOFFER
HENDERSON, N. c.
Reproduced at the Richard Nixon Presidential Library and Museum
ADMINISTRATIVE CONFERENCE OF THE UNITED STATES
INTERIOR DEPT.
726 JACKSON PLACE, N.W.
WASHINGTON, D.C. 20506
JUL 7 1972
(202) 395-3753
SOLICITOR
1565444.4169
July 5, 1972
The Honorable Rogers C. B. Morton
Secretary of the Interior
Department of the Interior
Washington, D.C. 20240
Dear Mr. Secretary:
On June 9, 1972, at its Seventh Plenary Session,
the Administrative Conference of the United States adopted
Recommendation 33: Conflict-of-Interest Problems in
Dealing with Natural Resources of Indian Tribes. I am
pleased to transmit this recommendation to you for
consideration by the Department of the Interior.
Recommendation 33 was based on extensive study by
a committee of the Conference. Government agencies,
including the Department of the Interior, and private
persons were afforded an opportunity to comment on the
recommendation in a tentative form. After revision in
light of these comments, the recommendation was carefully
considered by the Conference membership and was approved
by an overwhelming vote.
Part A of the recommendation calls for the
establishment by legislation of an Indian Trust Counsel
Authority with adequate powers to represent the interests
of Indians concerning natural resources. It is my hope
that the Department of the Interior will lend its vigorous
support to the enactment of such legislation.
Part B of the recommendation urges the Department
of the Interior and the Department of Justice to take
appropriate steps, prior to or in the absence of
legislation, to ameliorate existing conflict-of-interest
problems in the handling of matters involving natural
resources of Indians. I respectfully request that the
Department of the Interior give most careful consideration
to this portion of the recommendation.
Reproduced at the Richard Nixon Presidential Library and Museum
The Honorable Rogers C. B. Morton
Page 2
July 5, 1972
I am sending a copy of this letter to Mr. Mitchell
Melich, Solicitor, who is one of the two members of the
Administrative Conference designated by the Department.
I am asking Mr. Melich to report back to me by October 1,
1972, concerning the implementation of this recommendation
by the Department of the Interior.
Sincerely yours,
Rogar C. Craston
Roger C. Cramton
Chairman
cc: Mr. Mitchell Melich
Enclosure
CC to Mr Melich
Reproduced at the Richard Nixon Presidential Library and Museum
WILKINSON, CRAGUN & BARKER
LAW OFFICES
ERNEST L. WILKINSON
1616 H STREET, N.W.
JOHN W. CRAGUN (1906-1969)
WASHINGTON, D. C.2000
GLEN A. WILKINSON
ROBERT W. BARKER
CHARLES A. HOBBS
INTERIOR DEPT.
(202) 628-4400
ANGELO A. IADAROLA
CABLE ADDRESS
PAUL S. QUINN
THEODORE BARON
*
JUL 13 1972
"WILCBAR"
LEON T. KNAUER
RICHARD A. BAENEN
180
ROSEL H. HYDE
JERRY C. STRAUS
SOLICITOR
DONALD C. GORMLEY
HERBERT E. MARKS
Gounsel
PIERRE J. LAFORCE
July 11, 1972
FRANCES L. HORN
GORDON C. COFFMAN
R. ANTHONY ROGERS
PATRICIA L. BROWN
WILLIAM R. LOFTUS
STEPHEN R. BELL
THOMAS J. bacas
E. FOSTER DEREITZES
ALAN I. RUBINSTEIN
* Admitted in Missouri only
Honorable Rogers C. B. Morton
Secretary of the Interior
U. S. Department of the Interior
Washington, D.C. 20240
Dear Secretary Morton:
As you know the Administrative Conference of the
United States on June 9, 1972, adopted a recommendation of
its Committee on Claims Adjudication to the effect that,
pending the enactment of the proposed Indian Trust Counsel
proposal, the Department of the Interior and the Department
of Justice should take appropriate administrative steps to
"ameliorate existing conflict of interest problems with
respect to the handling of matters involving natural
resources of Indians.' In the case of the Department of
the Interior the recommendation was specific:
"The Department of the Interior should give
consideration to expanding to other types of
Indian matters the application of recent
measures which established a separate Indian
Water Rights Office."
We urge that this recommendation be implemented
without delay. President Nixon, in his historic message
to Congress of July 8, 1970, recognizing the conflict of
interest present in agencies charged with the responsibility
to protect Indian interests, recommended the creation of
an Indian Trust Counsel Authority to assure adequate pro-
tection of Indian natural resource rights. Whilc this
Reproduced at the Richard Nixon Presidential Library and Museum
Honorable Rogers C. B. Morton
July 11, 1972
Page Two
concept has received wide support in the Indian community
it has not made significant progress towards enactment
either in the Senate or the House of Representatives.
Given this situation, other solutions to the
conflict of interest problem must be examined. The proposal
of the Administrative Conference, we believe, offers great
hope of ameliorating the problem. Giving the Bureau of
Indian Affairs its own legal counsel apart from the Solicitor's
Office would not remove the conflict of interest problems
present when the Secretary of the Interior must make a
decision in which the duties of the United States as trustee
for Indians are weighed against the larger public interest.
But at least, as in the case of the Indian Water Rights
Office, conflicting legal points of view would be more
sharply defined under this kind of arrangement and the So-
licitor of the Department of the Interior would no longer
be faced with the problem of representing conflicting interests
in framing legal recommendationsto the Commissioner of Indian
Affairs or the Secretary of the Interior.
The proposal for establishment of a separate General
Counsel for Indian Affairs is a less drastic measure than
the President's proposal for creation of an Indian Trust
Counsel Authority. It seems clear to us that the adoption
of this modest proposal without delay is the only course
consistent with President Nixon's Indian program.
Yours sincerely,
WILKINSON, CRAGUN & BARKER
Hlin Ct Wilkmian
By: Glen A. Wilkinson
cc: Honorable Louis R. Bruce
Honorable Mitchell Melich
Reproduced at the Richard Nixon Presidential Library and Museum
DEPARTMENT OF TERIOR
United States Department of the Interior
OFFICE OF THE SOLICITOR
March
1849
WASHINGTON, D.C. 20240
3,
IN REPLY REFER TO:
JUL 1 8 1972
Memorandum
To:
Assistant Secretary, Public Land Management
From:
Associate Solicitor, Indian Affairs
Subject: Recommendation of the Administrative Conference
The Administrative Conference of the United States has adopted a
recommendation supporting the concept of an Indian Trust Counsel
Authority and requesting the adoption, by Interior, of administrative
measures to ameliorate existing conflict of interest problems in
connection with Indian natural resource interests. A copy of a letter
of July 5, 1972, from the Conference Chairman to the Secretary, together
with the adopted recommendation is attached.
Attached also is a copy of a letter dated July 11, 1972, from the law
firm of Wilkinson, Cragun and Barker, endorsing the action of the
Conference and specifically recommending, again, that BIA be given
separate legal counsel.
At the Conference sessions in June 1972, the Deputy Solicitor appeared
for the Secretary and pointed out that the Department already has taken
a number of significant administrative steps: (1) the creation of a
Deputy Assistant Secretary for Indian Affairs; (2) the establishment of
a Water Rights Office, reporting through the Commissioner directly to
the Secretary; and (3) an agreement with the Attorney General for the
filing, in Indian natural resource cases, of the separate views of the
Secretary when his views do not coincide with those about to be taken
by Justice. Mr. Coulter advised the Conference that the Department had
considered but rejected the concept of separate counsel for BIA reporting
directly to the Secretary.
The Conference specifically recommends that consideration be given to
the treatment of other Indian matters in a manner similar to the treat-
ment given water rights. This could take the form of an expansion of
the responsibility of the Water Rights Office to include all natural
resource interests, thus giving the office the same range of responsibility
which the Indian Trust Counsel Authority would have. In the alternative,
a separate, but similar office might be established.
Reproduced at the Richard Nixon Presidential Library and Museum
With regard to separate counsel for the Bureau, a number of alternatives
to a complete transfer of responsibility from the Solicitor's Office
might be consideredt (1) give the Water Rights Office (in its present or
expanded form) separate counsel; (2) reestablish for the Bureau the
concept of Chief Counsel, while retaining an Associate Solicitor in the
Solicitor's Office.
While the recommendations of the Conference are not binding on the
Secretary, it is essential, I believe, that their recommendation receive
serious consideration. The Chairman has asked that the Solicitor report
to him by October 1, 1972, concerning the implementation of this
recommendation.
Williams Jorshing
William A. Gershuny
Attachments
Blind
Copy to: Brad Patterson, The White House
Reproduced at the Richard Nixon Presidential Library and Museum
DEPARTMENT OF COMMERCE
U.S. DEPARTMENT OF COMMERCE
ECONOMIC DEVELOPMENT ADMINISTRATION
UNITED simins " AMERICA
MIDEASTERN REGIONAL OFFICE
517 NINTH STREET, CHAFIN BUILDING
HUNTINGTON, WEST VA. 25701
August 19, 1971
Mr. Floyd McKissick
Soul City
Manson, North Carolina 27553
Dear Mr. McKissick:
This is written to summarize the meeting held here on August 17, 1971,
with yourself and other principals of Soul City, Warren County, North
Carolina. The preliminary information you presented on your need for
the Economic Development Administration to judge whether an application
should be submitted to help construct water and sewer facilities and
access roads to an industrial park connected with Soul City has
enabled us to make the following observations:
1. Under the aegis of McKissick Enterprises, Inc., Soul City
would be incorporated under the laws of North Carolina and would provide
services to low income people. Soul City will incorporate, and a
legal entity will be established to administer, operate, and maintain
the above mentioned facilities.
2. This legal entity would become the applicant for EDA financial
assistance.
3. The total project cost of this project is approximately
$4,800,000. EDA participation, when averaged over a large number
of approved projects, is in the neighborhood of $600,000. However,
participation by EDA for the proposed Soul City project would be
considered at an approximate level of $1,500,000 with the condition
that the balance of funds for the project be available through a
Department of Housing and Urban Development new cities loan guarantee
or other financial means.
4. It should be further noted that your plans to obtain water
from Kerr Lake involve the location of water treatment and transmission
facilities in Vance County, which is not currently eligible for EDA
financial assistance. Expansion of the boundaries of eligible Warren
County in which Soul City would be located would be necessary as a
part of EDA consideration of an application. Expansion to include the
Reproduced at the Richard Nixon Presidential Library and Museum
Mr. Floyd McKissick
August 19, 1971
- 2 -
currently non-eligible areas would, in major degree, be dependent upon
the strength of economic justification. If it is merited, expansion
might be limited to the designation of a corridor to the treatment
plant only.
5. Your plans call for sale of water to the municipalities
of Henderson and Oxford in Vance County. Because this is a non-
eligible county, EDA will not participate in the cost of transmission
lines to these entities. Similarly, EDA would not fund additional
treatment capacity necessitated by service outside the area eligible
for assistance. However, if these cities become qualified growth
centers, this would alter the aforementioned situation.
6. The Economic Development Administration will need an expression
from the Department of Housing and Urban Development of its position
relative to funding the Soul City venture. It is our understanding
that DHUD may consider a loan in connection with the water and sewer
project and, in addition, a new communities guarantee.
7. Plans for water and sewer service to residential areas in
Soul City are not definite. Although EDA does not condone residential
service as such, by its nature the project would require a substantial
amount of this type of service. In any case, residential service might
need to be extensive in connection with loan funds that would be
necessary. We understood that the Department of Housing and Urban
Development will be asked to provide grant/loan funds. Every effort
to obtain these funds should be made.
To summarize, we believe that the project has possibilities that we
would like to discuss as plans are developed. Our basic requirements
are that facilities to be assisted must be located in an eligible area,
that there is a reasonable balance between the cost to EDA and economic
justification, and that the financing of the project, apart from EDA
participation, is complete and assures that the project can be success-
fully carried out.
Pleased keep us informed, through Mr. Ronald Ingle, of project developments.
We will be ready to meet again as necessary and are available to discuss
ideas with Department of Housing and Urban Development representatives
and all other parties.
Sincerely
PAT CHOATE
Director
Mideastern Regioneproduced
at the Richard Nixon Presidential Library and Museum
O,
DEVELOPMENT
(
7
WASHINGTON, D. C. 20410
F.B. McKissick Enterprises, Inc.
ASSISTANT SECRETARY FOR
COMMUNITY PLANNING AND MANAGEMENT
2261 ET AON
NOV 1 0 1972
Mr. Pat Choate
Regional Director, Southeastern Regional Office
Economic Development Administration
1401 Peachtree Street, N. E.
Atlanta, Georgia 30309
Dear Mr. Choate:
This is in reference to water and sewer facilities in connection
with Soul City new community project.
An offer was recently made to Soul City Development Company for a
loan guarantee of $14 million under Title VII, Housing and Urban
Development Act of 1970, to assist in financing the development of
Soul City new community. However, before the developer can accept
the offer, among other conditions, he must provide evidence satis-
factory to the Secretary of HUD that there is adequate financing
for the Soul City water and sewer facilities.
The water and sewer facilities currently proposed for Soul City
reflect a modest scaling down of the facilities considered by
your office in a letter to the developer dated August 19, 1971,
in which EDA committed $1.5 million to the project. The water
system aspect of the proposed water and sewer facilities is con-
sistent with the regional water system planned to serve the towns
of Henderson, Oxford and Soul City. It is planned to design the
water intake structure, the discharge header, force main and water
treatment plant in such a way that it may be merged with and become
part of the regional system when such a system is formed. In the
meantime, financing the proposed water and sewer facilities would
enable the developer to meet commitments and proceed with the
development of Soul City.
The estimated cost to construct the water and sewer facilities is
$3.5 million. The proposed sources of funds for financing the
construction includes $1.5 million EDA grant, $500,000 HUD water
and sower grant, $500,000 HUD public Encility loan, $700,000
Title VII Supplementary Grant and $300,000 from the Soul City
developer.
Coesting commitmed been for FY May 73 74 of his Sapkl. application read money comes would in la
Reproduced at the Richard Nixon Presidential Library
and Museum in FY tromB subject
2
Discussions with our office of General Counsel have indicated that a
letter from EDA in the form attached would be satisfactory evidence
(together with HUD's earmarking of funds) to satisfy that portion
of the offer of commitment from HUD to the developer relating to
the financing of facilities. Similar earmarkings of funds for a
$500,000 public facilities loan and a $500,000 water and sewer grant
are being concurrently obtained for Floyd H. Hyde, Assistant
Secretary for Community Development, and $700,000 is being earmarked
from Title VII supplementary grant funds.
Your cooperation in this matter is appreciated.
Sincerely;
Samuel C. Jackson
Enclosure
cc: McKissick
RECEIVED NOV 13 1972
E.B. McKissick Entorprises, Ino,
Reproduced at the Richard Nixon Presidential Library and Museum
COMMERCE
Economic Development Administration
UNITED STATES OF AMERICA
SOUTHEASTERN REGIONAL OFFICE
1401 Peachtree St. N.E.
Atlanta, Georgia 30303
July 12, 1972
8-404-526- 6401
Mr. Floyd B. McKissick
RECEIVED JUL 20 1972
80-6407
President
McKissick Enterprises, Inc.
360 West 125th Street
F.B. McKissick Enterprises, Inc.
New York, New York 10027
Dear Floyd:
This is in response to your letter of June 26, 1972, concerning
the Soul City Project.
As you are aware from our several meetings on this project, this
Agency has a strong interest in assisting Soul City in the pro-
vision of an adequate water source.
As you are also aware and as you mention in your letter, there
have been some very real financial problems associated with
finalizing the project around the Kerr Lake Utilities Company.
Further, even the Kerr Lake Utilities Company would be dependent
for some interim period in revenues from Henderson and Oxford
or the Soul City organization will have to assume long term
responsibility for amoritizing a large loan with little or
no revenues.
Following our last meeting, this office prepared a summary of
all possible alternatives for provision of water to Soul City
and distributed a copy of such to all participants to our last
Atlanta Conference. Included is another copy of this summary.
I understand from Dale Jones, our Economic Development Repre-
sentative for this project, that during the past week he has
conducted several meetings with you, members of your staff and
representatives from the cities of Henderson and Oxford on
these various project alternatives.
From his reports and from your letter, I sense that there is
still no common agreement from all interests in this matter as
to a workable solution. I also understand that there may be
some difficulty in securing certain state monies for this
project that were anticipated.
I have asked Dale Jones to continue to work with you and the
other parties to try to bring this matter to some resolution.
The only constraints at this time are the necessity to take
a long term look at EDA's potential investment requirements
for that economic development district's water works, the
limits necessarily placed on us with our limited budget, the
necessity for the project to have strong financial and economic
development integrity and the assurance that there be long
Reproduced at the Richard Nixon Presidential Library and Museum
-2-
Mr. Floyd B. McKissick
July 12, 1972
term operationally commitments to maintain the system by a
very solid administrative unit that has strong fiscal capa-
bilities.
It is hoped that you and the other participants can come to
some reasonable resolution of this matter soon. Mr. Jones
will continue to assist in any way that this Agency possibly
can.
If you need further help from this office, please don't hesitate
to contact me.
Sincerely,
Director
Southeastern Region - EDA
Encl: Summary of Soul City Project
Reproduced at the Richard Nixon Presidential Library and Museum
I. REGIONAL WATER AUTHORITY (10 Million GPD) Water Only
Will provide water for the Cities of Henderson, Oxford and Soul City.
EDA and DHUD grants to be 50% of costs with other funds coming from
the three Cities based upon usage, i. e., Henderson 60%, Oxford 20%
and Soul City 20% and secured by GO bonds. In event Soul City could
not use GO bonds it would be necessary for it to come up with cash or
another source to finance that portion.
Kerr Lake is the source of water (intake) and treatment facility will
be designed in a manner to allow for future expansions. Transmission
lines will be constructed to each City, however, no distribution of
water will be undertaken. Each City must provide for distribution.
Under this plan Henderson would abandon present treatment facilities.
The Regional Water Authority would be organized as a public body under
the laws of North Carolina.
It is possible for that portion of project lying within Warren County
to receive 60% plus 10% EDD Bonus.
II. REGIONAL WATER AUTHORITY (10 Million GPD) Water Only)
Same as Option I, except Federal participation would be as shown, which
is less than 50%.
III. KERR LAKE UTILITIES COMPANY Water Only
Will provide water system for Soul City and treatment facility will
have capability to insure an adequate water supply for both Henderson
and Oxford. Henderson and Oxford would provide own transmission lines
and purchase water from KLUC.
It is possible for that portion of project lying within Warren County
to receive 60% plus 10% EDD Bonus.
IV. HENDERSON--Transmission Line
Proposal to be built concurrently with KLUC (III above). City to pay
50% of cost with DHUD providing a 50% grant.
V. OXFORD--Transmission Line
Proposal to be built concurrently with KLUC and Henderson (III and IV
above). City to pay 50% of cost with DHUD providing a 50% grant.
NOTE: Options IV and V are dependent upon Option III.
VI. HENDERSON (10 Million GPD) Water Only
Water source from Kerr Lake, treatment facilities and transmission lines
to Oxford and Soul City. Oxford and Soul City to pay 50% of cost of
transmission lines to their respective City and purchase water from
Henderson.
Reproduced at the Richard Nixon Presidential Library and Museum
2
VII. KERR LAKE UTILITIES COMPANY-Soul City (Sewer System)
Will provide a sewer system for Soul City. Financing- EPA Grant
55%, State Grant 25%, Other Funds 20% to be furnished by the
applicant (DHUD Loan, cash, etc.). This option is dependent upon
passage of legislation now pending in the North Carolina legislature,
and Option III.
VIII. KERR LAKE UTILITIES COMPANY Soul City (Industrial Site Access)
Will provide access road to an industrial site. Proposal is
dependent upon Options III and VII.
III, VII AND VIII. KERR LAKE UTILITIES COMPANY--Water, Sewer and Access
The combination of these three options will provide Soul City with
water and sewer systems, plus an industrial site access road. It
would also provide Henderson and Oxford an adequate water supply,
which they would purchase from KLUC at a price approximating $.18
to $.20 per 1,000 gallons. Transmission line costs to Henderson
and Oxford would be financed by each community--possibly as shown
in Options IV and V.
NOTE: Dollar amounts shown for each option are not necessarily correct
in each instance since specific figures were not available in all
cases. The options do, however, reflect practical schemes of
financing.
Reproduced at the Richard Nixon Presidential Library and Museum