Jan. 23 (Bloomberg) -- BB&T Corp., the ninth-largest U.S. bank, had been fighting with Higher Ground Empowerment Center over a bad loan for more than three years when Occupy Atlanta weighed in for the church this month.
In 24 hours on Jan. 11, the movement confronted BB&T, stopping it from evicting Higher Ground, which traces its roots in Georgia’s capital to 1904. Occupy helped broker what member Tim Franzen called a “sweet, sweet” deal for a church that didn’t pay its debts.
The rescue marked a concrete victory for a movement criticized as frivolous and vague as it agitated against the power of wealth. John A. Allison IV, a director and former chief executive of the Winston-Salem, North Carolina, bank, dismissed it last month as an “attack on the very productive.”
The protesters weren’t instrumental in saving the church, said David White, a BB&T spokesman, adding that eviction was never imminent.
“At all times, BB&T intended to engage in further discussions with the church prior to taking any steps toward eviction,” he said in an e-mailed statement.
The eviction process began in January 2011, court records show.
Higher Ground Empowerment Center, formerly Mount Gilead Missionary Baptist Church, sits in a neighborhood called Vine City where civil rights leader Martin Luther King Jr. lived before he was slain in 1968.
Census figures from 2006 through 2010 show a 69 percent poverty rate for families with children in the tract that includes the church, which sits in the shadow of downtown Atlanta’s Georgia Dome and World Congress Center. The area was 92 percent black.
Higher Ground’s financial difficulties stemmed from expansion ambitions, the economic downturn and natural disaster, Pastor Dexter Johnson said in an interview there.
The institution took out a $1.1 million loan from BB&T in October 2007, intending to renovate and expand, Johnson said.
Higher Ground already owned a barber shop and apartment house. The 48-year-old pastor planned a day-care center for the elderly, a home for battered women, a shelter for child prostitutes and a halfway house for felons on property nearby.
“We were going to give them a safe haven,” Johnson said.
Some parishioners had questions: “I had a couple of people say ‘How far should a church go?’” Johnson said. “I answered ‘How far does a church not go?’ It’s our responsibility to do what the community needs.”
In Too Deep
The plans soured. Court records indicate that the church and its lenders were already at odds by February 2008 over loan terms that included the church’s failure to obtain insurance on the building that was the loan collateral. In later court filings, the bank said the church also didn’t disclose $45,000 in new loans with finance companies.
The situation worsened when on March 14, a tornado damaged the church’s foundation and steeple -- and therefore its ability to attract parishioners and their offerings.
By December 2008, the church gave BB&T its property deed in order to avoid foreclosure, becoming a tenant with a $2,000 monthly lease through June 2010. BB&T began eviction procedures seven months after the lease expired.
The church was a “tenant holding over,” BB&T’s White said. “To resolve the hold-over status and all other issues, BB&T initiated legal proceedings to obtain the right of possession.”
On The Brink
Higher Ground appealed, and the fight was poised for resolution at hearing Jan. 12 in a Fulton County court on the bank’s request to allow the eviction to proceed.
Then, Occupy Atlanta stepped in.
The Occupy movement began in New York on Sept. 17, when several dozen protesters took up residence in Manhattan’s Zuccotti Park to highlight the plight of average Americans who have suffered from home foreclosures and soaring unemployment while the largest U.S. banks recovered from the 2008 financial crisis.
The protests spread to cities such as Chicago, Los Angeles and San Francisco, as well as overseas to London, Rome and Tokyo. The movement was leaderless, and without specific demands.
Atlanta’s offshoot faded from public view since being ejected from a park in October. In the church, the cause found a focus. Occupiers descended on Higher Ground with tents and signs the night before the eviction hearing. The encampment spread across its parking lot and took over a lawn.
Day of Rest
Members held a press conference Jan. 11 to say that the bank was set to destroy a 108-year-old black church on the eve of King’s Jan. 16 birthday holiday.
BB&T asked that the hearing be postponed.
After a meeting with the bank five days later, Higher Ground left with the deed to its properties in hand and a new, 30-year, 1 percent interest rate mortgage for an amount “far less” than the original defaulted loan, Johnson said.
BB&T’s White said the bank couldn’t discuss those details, because of client confidentiality.
“It took us six days to win that church,” said Franzen. “I’m not a religious guy, but it took us six days, and on the seventh, we rested.”
An eviction would have sullied BB&T, said John Sweeney, a professor of mass communications at the University of North Carolina-Chapel Hill.
The stand-off had at least three elements of a media firestorm, he said in a telephone interview. They included the church’s age, the involvement of Occupy protesters and the holiday weekend.
“It would have been a PR nightmare,” he said. “I think they probably saw that and said ‘Let’s see if we can tiptoe out of this.’”
The church and the bank now speak kindly of each other.
“BB&T is all right with us,” Johnson said. “They are a bank I would recommend to anyone.”
“We are pleased that all the parties were able to work together to achieve an outcome that benefits the church and its community,” said White of BB&T.
Fresh from victory, Occupy’s Franzen said the group would now focus on the rest of Vine City, which he called “the most underserved neighborhood in Atlanta.”
“What needs to happen, really, is that somebody needs to regulate the banks,” he said. “In this case, the people regulated the bank.”
--With assistance from Frank Bass in Washington. Editors: Stephen Merelman, Mark Schoifet
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