`Buy Black' -- Black Dollar Days Part Of Effort To Fuel Community Business

Leon Smith stands on the corner of 23rd Avenue and East Union Street, surveying several blocks of a decaying business corridor.

"This area here is typical of a lot of places that won't motivate people to spend their dollars here or to stay here," said Smith, chief executive officer of Emerald City Bank, whose headquarters are just a block away. "You see spots like that one all over the place."

He points to a building that's been empty for several years. Litter and broken glass form a trail around the outside. Weeds choke away grass in the vacant lot next door. Down the block, a tattered sign in front of a building with bars over the windows and doors reads "Neal's Food, Beverage and Convenience."

Across the street is another large brick building. The upstairs apartment windows are covered with plastic. Valu-Rite, a ground-level convenience store is closed, and other shops - except for a beauty salon - have old, tired facades. Nearby is a liquor store that does a brisk business, along with soul-food restaurants.

"This is not a severely blighted area in comparison to others around the country, but significant opportunities have not been taken advantage of," Smith said. "But the way it is right now, it's underdeveloped."

Although Smith is referring to a neighborhood in Central Seattle, the description fits many other areas of the Puget Sound region where black-owned businesses predominate.

Some black-owned companies are thriving, such as Bill McIntosh's North Chrysler-Plymouth-Alfa Romeo Inc. dealership. With $29 million in sales in 1990, it was ranked as the 17th-largest black dealership in the country by Black Enterprise magazine, up from 19th during the previous year. Though impressive gains have been made, many more companies are struggling for existence.

The latest figures from the U.S. Census Bureau show the number of black-owned businesses in the Puget Sound area has remained relatively flat, with 2,176 recorded in 1987 compared with 2,053 in 1982. Annual average revenues grew to $50,000 from $30,000 over the same period. Nearly 80 percent of the businesses reported having no employees.

Slow progress like this, during a time of booming growth in Seattle, forced the Black Dollar Days Task Force four years ago into action.

One of the group's main efforts is organizing Black Dollar Days, which is held each year during the first week of February. Its goal: to encourage people to patronize black-owned businesses.

The Task Force believes its message is spreading. At the annual membership drive two weeks ago, 375 people arrived at a reception and signed the group's register. Last year, only 175 people came.

"I think people are getting a clearer sense that the challenge for African Americans is an economic one," said the Rev. Robert Jeffrey Sr., the Task Force's leader and minister of Seattle's New Hope Missionary Baptist Church. "The civil-rights movement was a struggle that can only be complete when African Americans have a fair share of the economic opportunities in this country.

"That's why we've organized the Task Force. We want our share."

Similar "buy black" campaigns have existed nationwide for more than 50 years. They are rooted in the belief that if African Americans are to achieve economic parity, they must help one another instead of relying on government aid.

Calls for action have taken on a greater sense of urgency since integration in the 1960s. Stores that previously were not options for black people suddenly opened their doors, and the dollars began flowing out of traditional black neighborhoods. Many black-owned businesses that couldn't afford to move to more affluent areas were left in declining neighborhoods, where businesses have a tough time surviving.

Deciding whether to support those companies is often a personal one for middle-class black consumers, who may feel torn between the convenience of companies with well-known services and loyalty toward black-owned companies. Collectively, last year, black consumers spent more than $270 billion - but little of it with each other.

In the more insular Asian and Hispanic communities, a dollar turns over four or five times before it goes elsewhere, but studies suggest that most dollars earned by blacks aren't passed on to other blacks even once.

"The real value of a `buy black' campaign is how it increases the consciousness of people about the power their money has," said Ken Smikle, president of the African-American Marketing and Media Association in Chicago, who also publishes a newsletter on marketing to black consumers.

"Unfortunately, it's far more difficult to impress them with the notion that they can collectively wield their power in many ways. That will likely always be the case because of all the freedoms we have," he said.

In year's past, Black Dollar Days has led to incremental sales increases for Henrietta's Hat and Accessory Boutique in Madison Valley, but Henrietta Price is convinced "buy black" campaigns help.

Despite a mention of her shop in a Modern Bride article for innovative designs, Price battles the perception that companies such as hers carry lower quality goods. This stereotype can be changed through marketing efforts such as `buy black' campaigns, she said.

"What Black Dollar Days does is make people mindful that they can find the services they need in the black community," she said, standing behind the counter of her 8-year-old shop. Price also is trying to convince other nearby black-owned companies to share costs through joint advertising. "We have to find the magic word to get the clients into our stores to have a chance to serve them," she said.

Her experience helps illustrate why black-owned businesses face a steep climb in Seattle. Unlike East Coast metropolitan areas, there is no heavy concentration of black consumers - or businesses - to support each other.

Seattle's 52,000 black residents, who comprise only 10 percent of the city's population, are widely dispersed in the area. Thus, black-owned businesses usually must broaden their customer base. That often adds to startup costs and makes beginning a business more difficult.

One retailer who crossed that bridge is Tony Ferguson, a cheesecake wholesaler in Seattle's Capitol Hill. Against numerous competitors, he strives to provide good quality, service and prices - essential elements for surviving in a wider marketplace, he says.

"The only way to grow is to diversify and adjust to the needs of the community. It's a case of supply and demand," said Ferguson, who also sharpened his accounting skills to survive. Despite closing a retail outlet in Pioneer Square because of diminishing capital, he expects to turn his first profit in two-and-a-half years in business as a result of new accounts.

Although black-owned companies find themselves competing with shopping malls, franchises and chain stores, markets they once claimed as their own are being chipped away. Many chain retailers now distribute black hair-care products, for instance, undercutting the prices of black-owned suppliers with dwindling resources.

The effects have been telling. The market has become saturated, profit margins have shrunk and more black-owned supply stores are failing, said Brenda Velasquez, owner of B.J.'s Beauty Supply Inc., who has a free-standing store on South Jackson Street, across the street from a strip shopping center.

She has responded aggressively. "I'm running ads on the radio, matching competitors' prices and holding meetings with my employees to make sure we continue offering high customer service," said Velasquez, who after being in business for a decade considers herself fortunate to have such resources.

Finding financial backing for African-American entrepreneurs can be a tall order.

Some such as Price, the hat boutique owner, have family members who offer support. After working out of her home for four years, she borrowed several thousand dollars from her mother and daughters and tapped her own savings to open a store. Others scramble for public-private loans or roll the dice with banks.

Partly because of its lending record to minority-owned businesses, regulators and community groups are questioning the proposed takeover of Security Pacific Bank by BankAmerica, parent company of Seafirst Bank. The Washington Reinvestment Alliance, of which Jeffrey is a member, is trying to force the banks into making improvements if the takeover gains approval.

But charges of racial bias isn't the only reason black business people have problems finding seed money. Emerald City Bank, the city's only black-controlled bank, has been ineffective largely because of its own internal problems.

Smith has come to the helm of the bank, which was seized by regulators two years ago when it was Liberty Bank, with the task of turning things around. If successful, he said the bank again will serve as a key lender in the area. "We should be at the forefront of development in this community," he said.

Back on 23rd Avenue and East Union Street, Smith dreams of the area becoming an avenue of shops - like those in the nearby Madison Valley - that will even lure shoppers in affluent areas such as Leschi and Madrona, who now go elsewhere.

He paused, taking a long look down 23rd Avenue where pockets of homes have been turned into condominiums. Smith sees it as the kind of investment he hopes will continue to the corner where he is standing.

"Just because a community is void of economic vibrancy doesn't mean it can't be restored," Smith said of the area around him. "It can happen."