The East Los Angeles Community Union (TELACU), Los Angeles, CA
The acts of urban rebellion that took place throughout the ghettos of Los Angeles and other parts of the country in the 1960s stemmed from longstanding frustration among residents of inner-city barrios and ghettos about their social and economic isolation and lack of political power. In South Central and East Los Angeles, major auto-related manufacturers were closing their factories, leaving behind scores of unemployed workers, abandoned industrial plants, and a crippled local economy. Without a strong economic or political base, residents of Los Angeles's poorest neighborhoods seemed to have no means of improving these conditions. In the absence of hope for a positive future, many of them, particularly youth, felt compelled to express their discontent through dramatic and sometimes self-destructive means. In the predominantly Mexican-American neighborhoods of East Los Angeles, residents were greatly concerned about juvenile delinquency, a deficient education system, deteriorated physical conditions, inadequate police protection and a lack of employment opportunities. As in other Chicano communities throughout the Southwest, their desire was to exercise their right to self-determination.
Replicating a Successful Model for Change
After the famous Watts rebellion in 1965, the United Auto Workers (UAW) and other unions became very concerned about the need to channel frustration about these conditions towards positive ends. Their first effort to create a "community union" that would serve as a vehicle for the people of Watts to voice their grievances and take control of decisions that affect their lives turned out to be very promising. It was the growing political and economic strength of the Watts Labor Community Action Committee that prompted the UAW to ask one of its international representatives, Esteban Torres, to help create a similar community development corporation (CDC) in East Los Angeles. With the support of technical assistance providers such as the Southwest Council of La Raza and the Center for Community Change, as well as the UAW, The East Los Angeles Community Union (TELACU) was officially incorporated in 1968. Its mission was to help the low-income residents of East Los Angeles to build political and economic power.
Building Trust within the Community
When TELACU set out to organize area residents, it was initially met with resistance. The people of East Los Angeles had suffered so many disappointments that they were reluctant to put their faith into yet another promise of help from a group that had been created from the outside. As Torres reflects, "It was difficult to just simply parachute into a community to organize people who often had been manipulated by organizations, including labor, who would come into the barrios during election time, organize, get the votes out, and then not return." However, the fact that Torres had grown up in East Los Angeles helped build trust and confidence in the organization. Torres had gotten started as a labor organizer and had formed a close relationship with Cesar Chavez and the rural farm workers movement. He was therefore experienced in assisting poor, disenfranchised people to forge peaceful and effective strategies for negotiating their rights.
TELACU's method was to organize the barrios like labor organized plants. The CDC functioned as the international headquarters and the twelve barrios served by TELACU functioned as plants. Each barrio sent a union representative to sit on TELACU's board. "As an organized labor movement deals with the corporate community on questions of worker's rights and worker's benefits," Torres explains, "so too could poor people in an urban setting begin to negotiate and carry out collective bargaining with school administrators, the police force, and county officials." One of TELACU's first major organizing campaigns was a resident-led effort to pressure East Los Angeles's local housing authority to improve the appallingly dilapidated conditions of a public housing complex that had once been World War II army barracks. The effort resulted in the creation of over 500 units of new replacement housing for low-income residents of the area. What is more, 80% of the contractors hired for the project were Chicano, and half of them were residents of the complex. The tenants of the new town houses were provided with community-run social services, and some of them were employed in maintenance and management jobs.
The Quest for Political and Economic Power
Initially, TELACU's leaders had two main objectives - to prepare the way for the incorporation of East Los Angeles as a municipality independent of the City of Los Angeles, and for the election of a Chicano to the U.S. Congress. Their overall aim was to help Chicanos to build the kind of political power and autonomy needed to demand equitable services and exercise control over policy and budgetary matters affecting East Los Angeles. While incorporation was never achieved, TELACU did eventually see the realization of the goal of placing a Chicano in a position of decision-making power at the federal level. In 1982, Esteban Torres was elected to the U.S. Congress, where he continues to bring his community development experience to bear on domestic policy issues.
From the beginning, TELACU's leaders believed that power could not be achieved solely through advocacy and organizing for better physical conditions and services in East Los Angeles. In order to gain the kind of influence that leads to significant change, they reasoned, East Los Angeles needed to build an economic base. One of the area's greatest problems was its lack of capital. "For too long, external forces had taken capital out of East Los Angeles," Torres observes. "It was owned by outsiders and it was controlled by outsiders. We felt it important to work from within to begin to recoup our own posture as an economic entity and to build capital. Out of that would come the political power." Although the CDC's leaders decided to emphasize economic development, they hoped to maintain the organization's social development mission. Part of their strategy was to provide social services to the residents of East Los Angeles, particularly youth. The CDC's first director of social services was David Lizarraga, who came to the organization in 1971 with a background in community organizing and work with alienated, "marginal" youth and gang leaders.
Reversing the Effects of Disinvestment
Under the leadership of Lizarraga, who assumed TELACU's presidency in 1973, TELACU forged its economic development strategy. The organization began by assessing the value of what it viewed as East Los Angeles's two most underutilized resources - its real estate and its residents. The area was rife with vacant, deteriorating factories and unemployed workers desperate for economic opportunities. By transforming abandoned buildings into viable businesses, TELACU sought to bring capital into the area, to upgrade the physical environment, to provide local residents with decent-paying jobs, and to build the organization's financial base and political clout.
TELACU's first big economic development venture was an ambitious project to convert the vacant, decaying B.F. Goodrich tire manufacturing plant into a large industrial park. Goodrich had once employed 2,000 people and had been a significant contributor to the local economy. In 1976, TELACU initiated its first multi-phased real estate development effort. The CDC has since proved to be a savvy master of the development process. TELACU Industrial Park now employs 2,200 people and houses over 60 diverse commercial tenants, including small businesses, industries, government agencies, and retail establishments. Adorning the park's main building is a huge, eye-catching mural depicting Mexican-American contributions to history. For TELACU, the mural serves as a symbol of hope for the renewal of economically distressed communities throughout the country. Over the years, TELACU has pursued the development of several other industrial parks and business centers in other parts of Los Angeles County, the Southwest, and areas along the Mexican border. For instance, in joint partnership with another CDC, TELACU has been developing a 90-acre business center in San Antonio, Texas. In cooperation with other minority developers, it has also been participating in a multi-million dollar development project along the Potomac River in Washington, D.C.
Achieving Growth and Self-Sufficiency
Today, TELACU is one of the largest CDCs in the country. Its asset base has reached over $300 million, and its annual revenues total $100 million. In 1994, TELACU ranked as the fourth largest Latino-owned business in the state of California and the 21st largest in the country. Its holding company, TELACU Industries, has spawned and acquired numerous highly profitable subsidiaries, including a public works and telecommunications company, a roofing and building supply firm, and a heating and air conditioning installation company. The CDC even owns and operates an upscale Mexican restaurant in a building considered a cultural landmark in Los Angeles. As a diversified conglomerate with profitable subsidiaries, TELACU is particularly proud that it has been able to reduce its dependence on government and private foundation sources of funding for its operations.
TELACU has also been successful in establishing a network of financial services for individuals and minority-owned businesses throughout California. Its Community Thrift and Loan Company counteracts bank "redlining" of low-income communities by offering affordable credit, investment and counseling services to individuals. With several branches in southern California, it is currently the most successful thrift and loan in the state, boasting one of the lowest default rates in the country. Since 1981, TELACU has also operated a Revolving Loan Fund that makes low-interest small business improvement loans to minority-owned enterprises.
Responding to the Critics
While TELACU's entrepreneurial spirit and financial success have won many admirers, the CDC has not lacked critics. Because of its focus on developing and operating for-profit enterprises, and because of its efforts to initiate development projects outside of its geographic base, these critics have wondered whether the organization has abandoned its mandate to serve the residents of East Los Angeles. CDCs are often evaluated on the basis of their commitment to enabling community residents to play an active and direct role in the development process. TELACU's corporate structure, self-sustaining board and sheer size have caused its critics to question whether the organization embraces this model of empowerment, and whether it has remained truly accountable to its constituents.
Lizarraga, who has served as TELACU's president since Torres left in 1974, argues that the organization should not be judged unfavorably because of its growth and financial success. "The concept of a CDC has very little to do with size," he asserts. "It has to do with impact. It has to do with where resources are directed, and what it is trying to do." According to him, TELACU fulfills its mandate as a CDC because it channels the majority of its profits into job creation, which directly benefits the residents of East Los Angeles. Lizarraga also points out that it has greatly improved the physical and economic environment of its neighborhood, and has thereby served as a catalyst for private sector reinvestment. TELACU measures its impact on East Los Angeles by way of the amount of capital and the number of jobs it has leveraged. In response to TELACU's critics, Lizarraga concludes, "The biggest problem that many CDCs have is not necessarily failures - often people expect you to fail. It's success that begins to attract interest from people. If you endure, that means that you are creating social, economic and political strength in your community - and that is threatening to some folks."
Providing Human Services
While TELACU is most well-known for its economic development ventures, Lizarraga points out that it has not abandoned its human service mission. The CDC channels a portion of the profits from its subsidiaries into its Community Services Division, which offers a range of programs to meet the needs of youth, families, the elderly and the disabled. For instance, the organization sponsors a senior citizens club that provides social, recreational, and educational services to East Los Angeles's large elderly population. Through a food cooperative, TELACU also provides high quality, low-cost food to senior citizens. TELACU's Youth Services Club is aimed at deterring young people from taking drugs, joining gangs, and dropping out of high school. Its Scholarship Program has provided over $1 million over the past eight years to area students who want to pursue higher education. TELACU's other community services include a weatherization program that helps residents to reduce their utility bills and a van system that provides mentally and physically disabled persons with low-cost transportation. To promote Latino culture and pride, TELACU sponsors an annual, summer-long concert series.
To address the desperate need for affordable housing in East Los Angeles, TELACU has been active in developing low-income and special needs housing. By making use of Section 202 funds from the U.S. Department of Housing and Urban Development, TELACU has been able to create twelve housing complexes with over 1,000 units for elderly and disabled people. Another six complexes are in the pipeline or under construction. TELACU has also recently developed a homeownership program for low and moderate-income first-time home buyers throughout Los Angeles County.
Maintaining Accountability to the Community
Twenty years after having left TELACU to work at the national level, Congressman Torres continues to reflect on the potential for CDCs to spur the revitalization of local communities across the country. He believes that TELACU's economic development strategy of building a tax base and creating decent-paying jobs in low-income communities is a means of redistributing wealth in U.S. society. A fundamental issue for all CDCs, however, is finding ways of enabling low-income residents to participate in decisions about how resources are used in their neighborhoods. Part of the task, as Lizarraga points out, is for CDCs to remain accountable to the communities they serve. "Building a strong financial base is a positive thing, not a negative thing," he states. "What you need to be careful of, is to continue to maintain contact with the community, to continue to be a catalyst in the community, and to continue to be responsive to the community."
The East Los Angeles Community Union (TELACU)
5400 Olympic Boulevard, Suite 300
Los Angeles, CA 90022
(213) 721-1655
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