Lynwood’s Turn : Operation Hope Aims to Deliver Post-Riot Help

Like most of Southern California’s riot-torn neighborhoods, the 4-square-mile municipality of Lynwood is feeling grumpy and neglected in the aftermath of last spring’s violence.

“They talk about rebuilding L.A., but what about us? No one is helping us,” complains Deborah Jackson, assistant to the city manager of Lynwood, the once-thriving subdivision north of Long Beach.

So when young financier John Bryant swept into town promising help from the consortium of banks and community leaders he calls Operation Hope, Lynwood officials perked up. Today, Operation Hope will announce a joint venture with Lynwood and the community’s tiny First State Bank to bring badly needed financing to the city’s small businesses, many of which were destroyed during the riots.

This Rebuild Lynwood effort is one of more than a dozen deals in the pipeline for the 5-month-old Operation Hope, born in the wake of the riots to assist inner-city businesses.

Organizers say that during the next 18 months they will log as many as 100 deals throughout the Los Angeles area, ranging from the rebuilding of convenience stores and take-out stands to the construction of small manufacturing plants--all financed by a consortium of 30 banks and thrifts, often with the aid of government funds.

With Los Angeles Mayor Tom Bradley’s blessing, the group also is negotiating the sale of $6 million worth of properties from the Resolution Trust Corp.--the federal agency charged with mopping up the nation’s troubled thrifts--to local business operators.

Like Peter V. Ueberroth’s ambitious Rebuild L.A. effort, Operation Hope’s focus is bringing commerce back to the inner city. Unlike Rebuild L.A., Operation Hope has set its sights low and works from the inside out--financing small enterprises, as opposed to luring large corporations, and emphasizing local minority ownership, even if the jobs they provide are few.

“The goal wherever possible is to eventually transfer ownership to the business operator,” says Christopher Blaxland, former president of Universal Savings Bank who is now Bryant’s business partner and a legal adviser to Operation Hope. “This is not just a well-intentioned mortgage broker. We’re on a specific mission to increase (minority) ownership.”

Eventually, the group also plans to build an equity pool to invest in existing and start-up enterprises.

Billed by Bryant as a “nonprofit investment bank,” Operation Hope stands with the businesses it finances with technical advice on everything from applying for federal aid and obtaining permits to balancing the books. “There are some very dumb people in this building who are very rich because they have good advisers,” says Bryant, sitting in his eighth-floor office in an imposing Westwood high-rise.

Gary Wehrle, president of Foothill Thrift & Loan in Agoura Hills, a lead lender in Operation Hope, says that while social consciousness plays a role in the participation of many lenders, “the biggest driving force” is stepped-up regulatory enforcement of the Community Reinvestment Act, designed to prod banks to extend credit to low-income communities. Operation Hope, he said, gives lenders an opportunity to comply with the investment act, while reducing their risk by carving up loans among several lenders.

Other participating lenders include Bank of America, First Los Angeles Bank, City National Bank, Wells Fargo Bank, Brentwood Thrift & Loan, Capital Resource Group and two local black-owned institutions, Founders National Bank and Family Savings Bank.

Similar efforts to finance inner-city businesses across the country are attracting attention. In Chicago, for example, the South Shore Bank--owned by foundations, churches and corporations--has demonstrated that personalized banking to inner-city businesses can actually be profitable.

But it is too early to tell whether Operation Hope--with an expected annual budget of $500,000--will succeed. An effort two years ago, in which Bryant organized independent banks to lend in South-Central Los Angeles, has all but fizzled. Bankers involved in that project blame the recession’s toll on member banks.

The riots lend Bryant’s latest effort a sense of urgency, but the going has been slow. Operation Hope officials declined to give exact figures, but they acknowledge that they still haven’t raised the full budget. In addition, says Brentwood Chairman Jeffrey Hobbs, finding qualifying projects can be a problem. “When you get down into the details of some of these deals, it’s not so easy,” he says.

The 26-year-old Bryant--a former actor who spent only a year in college--is a master networker and promoter who has persuaded such high-profile figures as Lt. Gov. Leo T. McCarthy, Los Angeles City Atty. James K. Hahn, Rebuild L.A. Co-Chairman Bernard Kinsey, retired Laker guard Norm Nixon and First AME Church Pastor Cecil Murray to lend their names to Operation Hope.

“John is one of the best public speakers I’ve ever met,” says Salvador Lavina, the O’Melveny & Meyers attorney who will run Operation Hope’s day-to-day business. “He can sell ice to Eskimos--and convince them to order it in advance.”

In politics, Bryant’s connections cross party lines. He wears Ronald Reagan cuff links while raising money for Democrat Dianne Feinstein’s U.S. Senate campaign and not-so-subtly alluding to his friendship with Housing and Urban Development Secretary Jack Kemp.

“I’m a capitalist,” Bryant says when asked about his political affiliation.

Operation Hope takes its cue from Bryant’s own firm, Bryant Group Cos., which brokers loans for hard-to-finance companies and individuals and provides consulting services to small businesses.

The 2-year-old firm, with annual revenue of less than $500,000, has had its own troubles getting off the ground. Blaxland, the Australian-born lawyer who serves as president of Bryant’s firm, notes that because of the recession, “our mortgage banking business did well, but not as well as we hoped.”

But Bryant, who was raised in Compton and South-Central, has an eye for profitable business niches. After running with a fast crowd during his acting days, Bryant says he learned that “just because you drove a Ferrari didn’t necessarily mean you owned it.” He invoked that lesson at local mortgage brokerage Wade Cotter & Co., starting a division catering to wealthy but cash-strapped clients that, within three years, was brokering $24 million worth of loans.

Among his other enterprises was a mail-order catalogue--started under an arrangement with a Baja California manufacturer--that gave teen-agers cheap access to popular designer sportswear, and an unsuccessful attempt to revive the 1950s musical group the Platters.

“My ego said, ‘Fine, if you won’t hire them, I will,’ ” Bryant recalls of the Platters ordeal. So he underwrote two of the group’s concerts, losing so much money that he was forced to live out of his Jeep for three months.

It wasn’t the first time Bryant tripped over his ego, and it may not be the last. But in the meantime, his boosters say that youthful conceit--combined with a healthy dash of raw idealism--are propelling one of L.A.’s most ambitious grass-roots efforts to revitalize the inner city.