How A Small Bank Plays A Big Part In Inclusive Economic Development In The Mississippi Delta
This post was originally produced for Forbes.
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Bubba O’Keefe stands on the stage of the Paramount Theater, backed by the banker who financed his acquisition, Darrin Williams, CEO of Southern Bancorp, appraising the damage, as if conjuring a poorly formed vision of what could be.
Shortly after acquiring the old vaudeville theater which had been sitting empty in the center of Clarksdale, Mississippi, the roof collapsed, filling the theater with debris and opening it to the sky.
O’Keefe is a big deal in this small town in the heart of the Mississippi Delta. Once home to millionaire cotton farmers, Clarksdale is, like the rest of the Delta, about 80% African American. Its population of about 16,000 to 18,000 people, has been declining for decades.
Bubba O’Keefe, backed by Southern Bancorp CEO Darrin Williams, assesses damage in Paramount Theater from the stage. CREDIT: DEVIN THORPE
A white man in a largely black town, O’Keefe is the town’s official, paid director of tourism and seems to know everyone in town, including most of the overnight guests. As we sit and chat on the sidewalk outside the small bistro in one of his buildings, an old Woolworth’s store that had sat empty for decades, he greets everyone who passes by.
While he’s at no risk of being added to the Forbes 400 list anytime soon, O’Keefe is prosperous by the standards of the town. He owns more buildings than he can count here. He keeps the keys to his numerous buildings in an old bank deposit bag; there are dozens of sets of keys. He says he has ten or twelve loans with Southern Bancorp, including the one on the Paramount.
O’Keefe sees the town in much the same way as he sees the theater with the roof timbers now seated in a pile where an audience should be. He is confident that the roof can be repaired, and the theater can be restored—or if not restored, repurposed.
The Paramount Theater roof seated in the audience CREDIT: DEVIN THORPE
“I would love to think that it is a performing arts center.” He’d like to name it for playwright Tennessee Williams who saw his first movie at the Paramount. Still, he’s not married to that vision. He seems confident that the right strategy or opportunity will eventually come to him.
There is some evidence of serendipity in the visible economic recovery well underway here in Clarksdale, one of several places that lay claim to being the home of the blues.
In 2002, Roger Stolle, an experienced marketer from Chicago, decided after visiting Clarksdale regularly for years to move here permanently. He opened the Cat Head music store downtown and immediately began promoting the town and its music.
When he arrived, no one seemed to know, he says, when live blues music would be playing in town. Most nights, there wasn’t any. Over the course of years, he organized all the venues in town with a simple quid pro quo. If they would commit to a schedule of live music, he would promote it. Today, you can experience live music in one of several venues in town 365 nights a year.
More recently, Ben Lewis came to town from Seattle to take a community development role on a one-year state contract and fell in love with the town, despite the fact that his wife said before learning where the new opportunity was that she could live anywhere in the country except Mississippi. Her parents have purchased a second home in Clarksdale and his parents are shopping for a permanent home in town.
Lewis, who now earns a modest salary running a nonprofit called Meraki Roasting that helps youth in Clarksdale develop job skills and a resume by employing them to roast coffee, was only able to buy a home because Southern Bancorp underwrites mortgage loans that it doesn’t sell on the secondary market, giving the bank the flexibility to make loans others can’t.
Roger Stolle , owner of Cat Head. CREDIT: DEVIN THORP[E
The bank is an important thread in this economic development tapestry. Another is the Walton Family Foundation; 350 miles from Clarksdale, the Foundation has made economic development in the Delta a focus area. The two institutions often work together, sometimes by accident. For instance, the Foundation is a significant source of funding for Maraki Roasting, meaning that it indirectly made the mortgage Southern Bancorp offered its executive director, Ben Lewis, possible.
O’Keefe, and a lifelong friend, Chuck Rutledge, organized a complex community development project in Clarksdale that received funding from both the Walton Family Foundation and Southern Bancorp. The Travelers Hotel, (where I stayed for about $100 for one night) which is operated by an artists’ cooperative led by Rutledge and his partner Ann Williams, is owned by a nonprofit. The $2.4 million project was funded by a combination of tax credits for historic restoration, a grant from the Walton Family Foundation and a mortgage from Southern Bancorp.
The bank plays an important role in the community for consumers as well. Jennifer Williams, no relation to Ann or Darrin, is a teacher in Clarksdale with three degrees. She is also a survivor of a thriving storefront payday lending industry in Mississippi.
Williams says she got into a tight spot years ago and borrowed $400 from a payday lending company. Every 30 days, she was required to present herself in person to pay $87.50 to roll the loan over for another 30 days—with none of that amount serving to reduce the balance. By comparison, it would not be unusual for a balance of ten times that amount on a credit card to have a minimum payment of about $87.50 each month—that would include at least some principal.
Not surprisingly, Williams found herself slowly going under. Her economic situation just continued to get worse as she began taking out more payday loans. In the end, she had taken out nine such loans from various storefront payday lenders in three towns. Just driving around to make the payments was like having a part-time job.
Chuck Rutledge and Ann Williams outside the Travelers Hotel in Clarksdale, Mississippi CREDIT: DEVIN THORPE
Then she saw an advertisement for a course hosted by Southern Bancorp, taught by Charlestien Harris, that would teach people how to get out of debt. The bank even promised a small loan to any participant that completed the course.
Williams says that when she and her classmates began their sessions with “Miss Harris” they were all reluctant to talk about their personal financial problems but Harris insisted. Over time, says, everyone got comfortable sharing because everyone was in bad shape.
She completed the course and identified ways she could begin paying off the payday loans. The small loan from Southern Bancorp accelerated that process, by dropping her interest rate more than 200 percentage points.
She has since paid off all the payday loans—and the loan to Southern Bancorp. She thinks of Harris as a friend but doesn’t bank with Southern Bancorp. She recently purchased a Ford Escape, borrowing the money from State Farm.
Southern Bancorp’s Williams, notes that Jennifer Williams’ story is not altogether unusual. He says, “There are more storefront payday lending businesses in Mississippi that McDonald’s, Burger King and Starbucks combined.” He repeats this during our visit almost like a mantra, noting that Arkansas has outlawed the practice—there are no storefront payday lenders in the entire state.
It is difficult to write about economic development issues in Clarksdale without looking at issues of race. Payday lenders appear to be exploiting their mostly African American customers. Darrin Williams notes that the payday lending business only works when their customers are caught in a debt trap from which they cannot extricate themselves. If customers borrowed $400 and paid it off, even with the high-interest rates charged on short-term loans, when due, the industry would collapse.
The Travelers Hotel is operated by a group of four partners. Two black, two white. Two men, two women. Still, Rutledge says when asked to explain race relations to an outsider, “We’re insiders and we don’t get it,” adding more hopefully, “When people are this proximate those prejudices–those things–go away.”
Jennifer Williams and Charlestien Harris CREDIT: DEVIN THORPE
Williams offered this, “There are a number of people who may have very strong racial beliefs but for their friend who’s black or their friend that’s white. It’s different. The thing about Clarksdale is that when you can break down that divide between black and white and people get to know each other then, often, you can find common ground and a common bond.”
So, I leave Clarksdale thinking about the Paramount Theater, its missing roof and its potential to become a regional performing arts center where local kids can perform their dance recitals, a community theater company can perform a The Glass Menagerie or Robert Plant might come to play. And I leave thinking about how a bank plays a role in ending racial prejudice here.
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