[TEXT OMITTED FROM SOURCE] industries and it's looking good," says Dausch. "But if another (recession) crunch hits, a cash shortfall could bring trouble."
Soul City, N.C., the only new town not being built as a satellite of some established city, is to receive more federal loan guarantees as it attempts to gain its feet.
Though neither has achieved financial stability, two of the subsidized new towns are described by HUD as success stories: St. Charles, Md., near Washington, and The Woodlands.
According to interviews with HUD officials, and the recent HUD study of the new towns fiasco, blame must be shared by:
Congress, whose legislation included an inadequate funding mechanism. Dausch says there were "basic flaws" in HUD's funding apparatus for the new towns, making it nearly impossible for developers to survive the huge start-up costs involved in building a city.
Developers, who built on sites without growth potential, usually because they owned the property already, and who rarely had the financial resources to carry out their designs;
HUD, which "administered the program a passive or reactive way, responding to enterpreneurs rather than identifying the areas or most rapid growth in the country and tryin to generate interest in new towns and growth management in those areas." For example, two new towns applications were accepted in the Rochester, N.Y., area - an area which is not growing at all.
The Nixon and Ford Administration, which were half-hearted, at best, in their support for the program;
State and local governments, which failed to use local zoning and planning strategies to channel growth toward the new towns.
Despite the mistakes, says Dausch, "Several of our communities have achieved quite a bit. They have achieved a good population base (five of the towns have attracted populations of 1,000 to 9,000), they have attracted jobs, and they have built amenities so that they look like new towns."
But they haven't made a profit. It is the measure of financial stability that makes St. Charles and The Woodlans stand out.
More than 150 new towns are privately funded, or have state support. Most face financial trouble, including Reston, Va., the largest and best known. A few are doing fine, most notably Irvine, Calif.
The Woodlands will work, where others have failed, for three reasons, according to George Mitchell:
"First of all, we're near Houston, and Houston is just taking off. There's going be another million people out here before too long.
"Second of all, we're spending the money. What's crucial is that we're able to ride the (real estate) cycles; that we can stay afloat when the housing market goes down like in 1974.
"And we have a vision. We have a plan. If it works out, we'll build a place where people want to live, a place that makes sense for the future and we'll make a profit."
He warns: "If we dont make money, no one else is going to try."
Mitchell, who runs one of the largest independeat oil nd natural gas operations in the nation, is pursing a "trickle down" strategy of growth at The Woodlands.
"Mitchell believes the town has to be attractive to the boss first," says Dausch. "We're interested in making sure there are opportunities for everyone. That's the whole point of our program."
Because Woodlands is 35 miles from Houston, Mitchell says it is hard to expect the town to attract low and moderate-income residents before there are jobs nearby.
The amenities here are may and impressive: A posh private country club; new public schools for all grade levels; an impressive public recreation complex with topgrade tennis courts and Olympic-quality swimming facilities; a series of man-made lakes; beefed-up and well equiped police protection, and nicely planned, attractive street designs which make maximum use of the natural woodland surroundings.
The next agenda item in Dausch's office at HUD is to salvage what's left of the other new towns.
"We're pumping whatever money we have into fewer and fewer projects. We hope to recapitalize the ones that have potential," says Dausch, who believes only Gananda and Newfields have absolutely no hope.
He said HUD is conducting a study of the seven bankrupt new towns to evaluate their potential, and then the analyses will be extended to the remaining six.
"If a project has nothing to offer, we'll get out as graciously as we can," he says.