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The Blooming of El
Cenizo
By Wendi White, Project Development Coordinator
of Texas C-BAR
The Texas
border between the U.S. and Mexico is many things:
a river, a crossing, a beginning, and an end.
It is a place where dreams can quickly blossom
and just as quickly wither in the harsh conditions
of life along this frontier. Shaped by these
conditions, unincorporated communities called
colonias have sprung up on the United States
side of the border as extremely low-income families
build their homes bit by bit. But like so much
along this border, dreams of home ownership
turn into nightmares when contract-for-deeds
from unscrupulous developers leave residents
with neither equity nor utility infrastructure
such as running water or sewer service.
This is the story of El Cenizo--a border colonia
named after a bush, which lies dormant in the
hot season, then quickly bursts into purple
blooms when it finally rains. El Cenizo was
a colonia headed down the path of endless poverty
that so many of its neighboring communities
have taken. After the colonia developer filed
for bankruptcy, the residents of El Cenizo began
to imagine a new life for themselves that led
them to a critical choice. In 2001, they decided
to collectively purchase the notes on their
land. In order to accomplish this, they called
upon many friends to help.
Central to their success was free legal assistance.
Veronica Rodriguez with Texas Rural Legal Aidâs
Colonias Project worked closely with the resident-based
organization of El Cenizo, La Gloria Development
Corporation (La Gloria). Texas Community Building
with Attorney Resources (Texas C-BAR), now a
special project of Texas Rural Legal Aid (TRLA),
also brought in a team of volunteer attorneys
from Baker Botts to assist with the negotiation
of the purchase of the notes.
Through the bankruptcy process, the Texas Affordable
Housing Corporation was charged with managing
the portfolio of 200 contracts-for-deed on the
residentsâ homes. The Corporation converted
the deeds into traditional mortgage loans and
began collecting payments from the homeowners.
But the residents still wanted to manage the
notes themselves. La Gloria persisted in its
decision to purchase and manage the notes, and
with the help of TRLA, Texas C-BAR, and Baker
Botts, they succeeded.
Texas C-BAR recruited a team of attorneys from
Baker Botts, a 300 attorney law firm with offices
in the stateâs major cities, to the table. Hard
working associate attorneys and one of the firmâs
partners, Bill Stutts, took the lead in guiding
the nonprofit through a feasibility study of
the purchase and negotiations for the actual
sale. AIt was a complex and challenging transaction,ä
recounts Mr. Stutts. ABut the La Gloria case
in particular struck several of us as being
an opportunity to really apply our expertise.
We knew with our legal skills in bankruptcy
and real estate law we could really help the
community accomplish something remarkable. And
they did. The terms of sale negotiated by La
Gloria and its attorneys required that only
50% of the collections on the loans be remitted
to the state for two years; after that the portfolio
would be theirs.
The resulting income now helps to fund a self-help
housing program administered by La Gloria. Through
this program, families contribute labor to build
their own homes. The program targets very low-income
individuals with incomes ranging from $9,000
to $14,000 a year and living in substandard
and overcrowded conditions. Seven families completed
the building of high quality homes in 2003 and
thirteen new families are slated to achieve
their dreams of homeownership in 2004. The costs
of the house are kept low-approximately $23,000
each.
Additional legal costs were cut through La Gloriaâs
collaboration with TRLAâs Colonias Project,
which prepared an Agreement for the Construction
Supervisor, Program Participation Agreements,
contracts for electricity and plumbing, and
numerous other real estate documents. Both the
Colonias Project and Texas C-BAR continue to
work with La Gloria handling their on-going
legal needs. La Gloria is a good example of
how legal services attorneys and the private
bar can work together to improve the lives of
the poor.
Juan Idrogo, President of La Gloria, describes
the change that has taken place in El Cenizo
since the community organized itself and began
the self-help housing program: ãOnce people
build a house for themselves and go through
the pain and sacrifice involved in learning
how to do it well, they really begin to value
what they have and the place where they live.
We are leaving something better for the next
generation than what we had when we arrived
in El Cenizoä. Living up to its name, with a
steady rain of self-reliance soaking into the
ground, a better life in El Cenizo has begun
to bloom. |
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