Soul City

by Thomas Healy

  Then, once the board did meet, its main focus was deciding which of the new towns to shut down. White had prepared a report recommending the closure of seven of the thirteen towns. Soul City was not on the list, but some board members suggested it should be. Victor Palmieri, a California lawyer who had made his fortune overseeing corporate restructurings, argued that McKissick’s application had been approved not because it made sense economically, but because of reasons having to do with “equal opportunity.” Now, he believed, the agency was “nursing it along,” knowing full well it had little chance of success. White pushed back, pointing out that Soul City had provided many benefits to the surrounding area, including the regional water system and HealthCo. But he agreed that the board needed to decide whether it would continue to treat Soul City as a “special experiment” or insist that it “fly on its own.” Harris, who was under continuing pressure from Helms to provide an update on Soul City, attempted to mediate. She asked White and his staff to study the project further and report back to the board in January.

  When McKissick got wind of the board’s discussion, he instructed his own staff to prepare a memo for White, hoping to influence his report. Because White was new to HUD, the memo began by educating him about Soul City’s distinctive nature. Besides being the only new town built by a Black developer, Soul City was the only project true to the original intent of the New Communities Act, which sought to encourage freestanding towns, not mere bedroom communities. This distinctiveness had created difficulties not faced by other new towns—difficulties that HUD had exacerbated with foot-dragging and red tape. The eighteen-month delay between the offer of commitment and the sale of the first bonds had cost Soul City a commitment of 350 jobs from Morse Electric. (Morse’s latest commitment had also fallen through, this time because of financial problems at the company.) And the ban on housing had hurt Soul City’s ability to attract residents and demonstrate progress to the media and industry. Yet in spite of such obstacles—not to mention the recession, the attacks by the N&O and Jesse Helms, and the GAO audit—Soul City was better positioned than almost any other new town, with much of its critical infrastructure in place, $2.8 million in the bank, and another $4 million still available from the loan guarantee. The only thing needed now was industry, and the key to attracting industry was HUD support. As a consultant from Arthur D. Little had recently explained, “the single greatest barrier to industrial jobs was the lack of clear, long-term commitments from HUD.” Soul City’s fate was thus in HUD’s hands, the memo asserted. By signaling its support in clear, unequivocal terms, HUD could give industry the assurance it needed to build in Soul City. And once industry came, the rest of the pieces would fall naturally into place.

  The memo worked. When White submitted his report to the board in January 1978, he recommended it support Soul City “to the fullest.” He acknowledged that the project was ambitious and that Soul City had struggled to create jobs. But he praised McKissick for bringing needed infrastructure and services to an impoverished region. He also pointed out that Soul City was consistent with “the President’s determined effort to advance the cause of minority groups.” The question was how HUD could maximize the project’s chances of success. According to an analysis by his staff, Soul City’s long-term prospects depended not just on attracting industry but on securing grants from federal agencies. Over the next twenty-five years, McKissick would need anywhere from $29 million to $46 million in grants to remain solvent. HUD could provide some of that money, but much of it would have to come from other agencies. And like industry, those agencies would support Soul City only if they believed HUD was fully behind the project. Thus, White concluded, the board should reaffirm its commitment to Soul City and communicate that message clearly to the rest of the federal bureaucracy.

  The board remained skeptical. At its January meeting, some members pointed out that Soul City had been approved by the Nixon administration, so Republicans would take the blame if it failed. Others argued that the amount of money needed to sustain Soul City was “unbelievable.” Palmieri, who confessed to not reading the report, described the project as a “disaster.” “This is Viet Nam. It really is,” he told his colleagues. “It’s harder each day to get out.”

  Much of the debate focused on solutions. Neva Kaiser, the daughter of Chase Manhattan chairman David Rockefeller, wondered whether HUD might persuade NASA or another agency to build a research facility in Soul City. Palmieri dismissed that idea, arguing that the government couldn’t locate a federal facility “out in nowheresville in a rural black community.” Instead, he suggested using federal money to lure a European firm to Soul City. Perhaps Harris could talk to one of the big German chemical companies that was struggling to meet environmental standards back home. Now it was Kaiser’s turn to object. “Is this going to look like a Tongsun Park activity if we pay them $20 million to locate there?” she asked, referring to a South Korean lobbyist who had recently been charged with bribing members of Congress to keep troops in his country. “I wish you hadn’t put it exactly in those terms,” Palmieri responded. “I’m not even going to answer it.”

  The most logical solution, board members agreed, was to recruit an American company. White reported that General Motors was seriously considering Soul City for a manufacturing plant that would provide five hundred jobs. A site evaluation team was scheduled to visit soon, and White had recently spoken with Thomas Murphy, the company’s CEO. The problem was, Murphy wanted a letter from HUD stating that it was committed to Soul City for the long haul, a promise White was not in a position to make.

  Neither, it turned out, was the board. Although Palmieri agreed it would be unfair to pull the plug prematurely, he refused to support an indefinite commitment to Soul City. Instead he asked the staff to make contingency plans in the event that HUD and McKissick could not turn things around. “You take definitive action to produce the strenuous economic event that has to happen,” he said. “You also take definitive action to gear up for the cutoff.”

  In the end, the board voted to foreclose on seven of the thirteen new towns, including Jonathan, Minnesota, the first development HUD had approved, and Park Forest South, one of the most expensive. But it would continue to support the remaining six towns: St. Charles, Maryland; Maumelle, Arkansas; The Woodlands, Texas; Harbison, South Carolina; Shenandoah, Georgia … and Soul City.

  In announcing the decision, Harris blamed her predecessors for the program’s problems. “There was a total lack of support from the Nixon administration,” she told reporters. “There was mismanagement and there were bad decisions. Not surprisingly, there were financial failures.” But not all the new towns were lost causes, she added, and HUD would “not close out those existing communities that are viable and are meeting national and local goals. We not only intend to support them, but to make them stronger.”

  When asked why Soul City was among the projects to be salvaged, Harris emphasized the social mission of the project. “It is an area where clearly there is a need for low and moderate-income housing,” she responded. “We are not prepared at this time to say that we should cease our efforts to make Soul City viable.”

  It was not a ringing endorsement. But it was enough to give McKissick hope, and to give his critics cause to snipe. In an editorial that read as though it could have been written by Jesse Helms, the N&O sneered that Soul City “seems to have more lives than a cat. Its longevity as a ‘new community’ can only be attributed to steady injections of political plasma in the form of U.S. dollars during the Nixon-Ford administrations. Now, the Carter administration appears ready to take over the doctoring with taxpayers’ dollars.” None of this was justified, the editorial argued, for Soul City had been a “spectacular failure.” Instead of the forty-four thousand people promised (nine hundred of whom were already supposed to be living there), “Soul City boasts a current population of 94, a job count of 129, and 14 single-family houses, with 11 occupied.” And while “all the interlocking companies and organiz
ations involved at Soul City” had created jobs for McKissick and his family, they had done “precious little for others.”

  The paper consoled itself with the fact that HUD had not pledged to throw any more money into the sinkhole that was Soul City. “But rest assured McKissick and his consultants will keep the lines hot to Washington,” it warned. “About all the taxpayers can do is salute in the direction of their investment as they zip by on I-85.”

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  GRANTED A TEMPORARY reprieve by HUD, McKissick renewed his efforts to recruit industry to Soul City, writing to every Fortune 500 company in the country and hiring an industrial marketing consultant named Walter Sorg. At fifty-one, Sorg had a long and impressive résumé in both the public and private sectors. From 1969 to 1976, he had been assistant director of the Office of Minority Business Enterprise, where he was responsible for helping minority firms raise capital. As part of that effort, he had created the National Minority Purchasing Council, an organization designed to connect minority businesses with large corporations that would buy their goods and services. In its short existence, the council had funneled more than $3 billion in sales to minority firms. Sorg left OMBE after Carter’s election and started his own consulting firm. When McKissick asked him to work for Soul City, he agreed without hesitation. Although white and conservative, he believed deeply in Soul City’s goal of Black economic empowerment. He also thought highly of McKissick and his staff, telling an executive at Honeywell that Soul City “has been exceptionally well-managed” and “has consistently met all its financial obligations.”

  Without the money for an extensive advertising campaign, Sorg spent the next year reaching out to personal contacts at dozens of companies, including General Motors, Standard Oil, Sears, Levi Strauss, Quaker Oats, Borden, Philip Morris, J. C. Penney, and Ford. Sorg was most optimistic about GM, which was considering Soul City for one of twelve expansion possibilities. “I think we’ll get one of them,” Sorg predicted. But he also had high hopes for several other companies. Standard Oil had expressed interest in purchasing limited partnership shares in the Soul City Company. And Sears had promised to “push” one of its affiliates to locate in the new town, perceiving “benefits in a ‘Soul City Connection’ which go somewhat beyond the economics involved.” “It just takes that first commitment—and everything else falls into place,” Sorg explained to the director of equal opportunity at Sears. “But oh, the agony of getting that first commitment.”

  In Soul City’s case, the agony was exacerbated by several factors, the most prominent of which was the lack of a sewage treatment plant. By 1978, the regional water system was fully operational, providing ten million gallons of water a day, including at least two million gallons for Soul City. But although workers had installed a network of sewer lines, there was still no system for treating the waste. Instead, Soul City was pumping its sewage through an eight-mile force main to Warrenton. That was only a temporary solution, however, since Warrenton’s plant could handle no more than 250,000 gallons a day from Soul City—about one-eighth of its water supply.

  For industry, this was a major problem. If a factory used 100,000 gallons of water a day, it had to dispose of almost an equal amount. Yet with a capacity of only 250,000 gallons, Soul City could barely handle one plant. Already, the lack of sewerage had hurt industrial recruiting. Miller Brewing Co. had been scouting sites for a plant that would consume five million gallons of water a day. Although Soul City’s engineers thought they could find enough water to handle the input, the lack of a treatment system meant there was no way to process the output. So Miller went elsewhere.

  The staff pressed Warrenton to improve its sewerage. Carey even walked the sewer lines with local utility workers, discussing the problem and looking for a solution. But Warrenton’s system was overburdened, with untreated waste spilling into nearby creeks. And when Soul City suggested expanding Warrenton’s system by installing a new treatment plant upstream, local officials objected. As Lew Myers put it, “Warrenton didn’t want drinking water we were pissing and shitting in.”

  The obvious solution was to build a new sewage plant in Soul City. To pay for one, McKissick applied for a grant from the Environmental Protection Agency, which provided funding for local sewerage projects. But EPA’s formula for approving such grants was based on the number of residents who lived in a given area, and, at the moment, Soul City’s population was only around a hundred. McKissick explained that the sewage plant was needed for future residents, but the EPA had no formula for taking such a factor into account. Thus, as had happened at other stages in its development, Soul City confronted a catch-22. It needed a treatment plant to attract industry, which was needed to attract residents. But without residents, it couldn’t obtain funding for the plant. And without industry or residents, McKissick couldn’t sell land to pay off the loans that had been guaranteed by the same government that was declining to fund the sewer system.

  The lack of sewerage wasn’t the only problem. Soul City lacked its own schools, shopping centers, cultural institutions, and all the other amenities that make a community attractive to industry. Globe Union, a maker of automotive batteries, had cited “livability” as the main factor in its recent decision to build a plant in Winston-Salem rather than Soul City. To make matters worse, the economy had plunged back into a recession, with inflation once again hitting double digits. But the inability to provide sewerage was critical. “Without sewerage, you’re nothing,” Carey said in analyzing Soul City’s downfall years later. Myers put it more concretely: “If we had sewerage and were able to get Miller Brewing to put a plant in there, we might not be having this conversation.”

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  IF MCKISSICK HAD little control over the lack of sewerage, there was one problem he could address: the city’s name. Although he hoped questions about the name had been put to rest years earlier, they surfaced again as the staff made a renewed push to attract industry. In January 1978, an executive at Honeywell told Sorg there was a “disconnect” between the city’s name and its location, adding that his company didn’t want to get caught up in a “potentially volatile situation.” Around the same time, officials at General Motors informed McKissick that the name was a potential problem and that he should consider a change. It was the third time GM had flagged the issue, and senior staff decided it was time to act. They had already persuaded McKissick to change the name of the A. Philip Randolph Industrial Park to the Warren Industrial Park as a way of erasing any racial connotations. Now, in a series of memos, they proposed renaming the city itself.

  The first memo was written by marketing director John P. Stewart, who had joined the staff two years earlier and was a frequent target of McKissick’s temper. On January 23, he wrote to McKissick identifying four “changes that should be made immediately.” At the top of the list: renaming the town. “The times have changed,” Stewart wrote, “and I personally feel the name is currently becoming more of a disadvantage in attracting industry, as it was an advantage in the late ’60’s and early ’70’s.”

  A day later, McKissick received a similar memo from Billy Carmichael, an outside marketing consultant. The son of a prominent UNC official, Carmichael was well connected in the state’s political and business circles. And he left no doubt that the town’s name had become a liability. “In concept Soul City is an integrated community,” he wrote. “In the public’s mind, Soul City is a black city.” A new name would change that perception, giving McKissick a chance to “dramatize to the public the true concept and mission of the project.”

  Three weeks later, Carey added his voice to the chorus. In a memo to McKissick on February 14, he argued that it was time to make some “hard decisions.” The name Soul City had been “an important symbol during the years when we were dealing primarily with symbols,” he wrote. “The nature of our work, however, has changed from creating dreams to executing them.” And in the execution stage, it was important to listen to what others were telling them. In addition to Honey
well and GM, HUD had long advocated a name change. “Frankly, I think that part of the problem with HUD today is that they feel they are being asked to take extraordinary steps to support us, but that we are not willing to do those things necessary to insure our own success.” Carey insisted that changing the name would not mean surrender. To the contrary, failure to change the name might very well doom McKissick’s dream. “We talk of Soul City being an interracial project, but we sometimes appear to do those things which will preclude white participation,” he concluded. “Of the few dozen lots purchased in the subdivision, not one has been bought by a white homeowner except purchases by staff of our own Company.”

  Carey did not coordinate his effort with Stewart and Carmichael. But that is surely how it must have looked to McKissick. Moreover, he could not have failed to notice that the three men pushing him to change the name were white, once again raising questions about control and identity. So it was hardly surprising that he resented the effort. “Those who have problems with the name, I submit, also have problems with Black folks,” he responded in a memo of his own. “While I agree that it might be easier to sell land by changing the name, it would probably be easier to achieve our personal goals if we were white. Just as we cannot change from Black to white, I do not think we should change the name.” Then, in a personal jab at the three men, he added: “I think that the name change is a good excuse for people’s inability to accomplish specific objectives and job assignments.”