Mention “Santa Monica,” and people think of the California beach town with its famous pier and symphony orchestra, low unemployment, a population that is more than 70 percent white, and the motto, “Fortunate people in a fortunate land.”

Few know about the little town in Southern Texas that shares the same name, if not much else. Located at the southernmost tip of the state on Farm Roads 1018 and 1420, at the end of the Missouri Pacific spur, Santa Monica, Texas, is just 30 miles north of the Mexican border. With fewer than half a dozen businesses, the agricultural community of 52 families boasts of cattle ranches that date back to the early 1800s and a population that is mostly of Latino origin. Unemployment often spikes into the double digits in the area, and the migration of skilled workers — referred to as the “brain drain” — has been a constant plague. So, too, have the floods, which wiped out crops year after year and left the town’s country store knee deep in water. At its worst, the floods spread across 1,900 acres and prevented buses from their routes, leaving kids home from school for days at a time. The town, located in one of the state’s poorest counties, never had the money to fix the problem.

Then something fortuitous happened. In 1994, with the help of Kennedy School alumni, the Rio Grande Valley, where Santa Monica is located, was one of three rural areas in the country designated as an “empowerment zone” by the Clinton administration. Recognizing the need to assist and revitalize distressed areas, the administration created a new type of federal program that gives seed money to selected areas, as well as a number of tax and financial benefits to businesses, in an effort to spur job creation, combat economic stagnation, and find new approaches to housing, health care, and education issues — all based on grassroots community input and effort. Of the $40 million that the valley initially received, less than $200,000 was used to build a floodgate in Santa Monica that helped solve the town’s longtime flooding issues. Kids got to school. Crops were harvested. Jobs saved.

“People in Santa Monica have since been able to stabilize their businesses and farms,” says Victor Vasquez MPA 1984, who is currently serving as a consultant to the Rio Grande Empowerment Zone and initially helped launch the overall zone program when he was working for the Department of Agriculture, the oversight agency for rural zones like the Rio Grande (the Department of Housing and Urban Development oversees urban zones). “This project has had a major impact on the town that’s visible as soon as you visit.”

The floodgate hasn’t been the only project to make an impact in the Rio Grande Valley, which is now considered
so successful that its strategy for using the seed money has become a model for other empowerment zones across the country and has been recognized by both the Clinton and Bush administrations.

“The needs in South Texas are phenomenal. Forty million is really just a drop in the bucket,” says Yvonne “Bonnie” Gonzalez MPA 1993, founding CEO of the corporation that was created to run the Rio Grande’s zone program, which is based in Mercedes, Texas. “We knew this when we first applied for the funding, so we’ve taken a position that we don’t fund any project 100 percent. We’ll provide seed money, but there has to be a partnership on the table. A project has to be sustainable.” The floodgate project, for example, leveraged an additional $38,000 in outside funds. A high-skills training center in Weslaco was started with a $1.5 million zone investment and pulled in more than $3 million from partnership money. New health centers in Brownsville and Rio Grande City, started with less than a million each, collected more than $3
million in combined outside funding. A literacy center in Mercedes used $360,000 in zone seed money and was able to raise an additional $6.5 million for the project.

“We have $38.5 million that is contracted out the door and $400 million leveraged with partnerships,” says Gonzalez, who turned down a job in the White House to “come home” to the valley to take the job, which was initially meant to be a two-year stint and is now going on seven. “We’ve created more than 3,000 jobs and invested in infrastructure, health care, literacy, and new housing. But equally as important is the fact that we’ve created a new way of doing business. This isn’t, ‘We’re poor, we’re Latino, and we don’t know what we’re doing.’ We have things that we can bring to the table in order to make our communities better places to work and live.”

Part of this new way of doing business is rethinking how things get done in a community, says Rolando Vela S&L 1996, chair of the zone’s corporation and government affairs manager of Time Warner Communications. “We don’t play politics. We have a genuine interest in the communities, we’re inclusive, and we have learned to see the big picture. This isn’t ‘welfarism.’ This is helping people in communities recognize that they need to get involved — that they will decide the future of their own communities.”

“South Texas has a reputation of ‘politicos’ — the political machines who typically use funds to pay political favors,” says Gonzalez. “Often federal money meant to help communities was not spent right. When I came in, I said that we needed to break the cycle. My interest was to set up a system that would make sure the original intention of the federal zone money went where it should go.”

A big part of that, she says, was to have community members — local businesses, parents, and students — talk about the needs in their towns and then decide where the money should be spent.

“It’s not the usual way of doing business,” says Gonzalez, a fifth generation valley resident.

Historically, says Vasquez, politicians at the federal level would hand down money to local politicians, often the county judge. “The project was then ‘blessed,’ or not, by the judge,” Vasquez says. “Now the way the empowerment zone is set up, money goes directly from the federal government to the communities without that extra government layer.”

“This is very grassroots driven,” says Vela, who also lives in the valley and heads up a subzone committee in one
of the four counties covered by the zone funding.

“This model is working because of the spirit and leadership of the people in the Rio Grande Valley communities. They want to change things on their own and not have others come in and do it for them,”Vasquez says. “All they’ve ever asked for is the opportunity to try.”

— Lory Hough

For more information about the Rio Grande Valley Empowerment Zone Corporation, go to www.rgvezc.org. For details about all of the rural empowerment zones, go to www.ezec.gov/.