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Promise Zone: What happened to all the money?

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SAN ANTONIO - It's been two years since the celebrated announcement at the White House: President Obama named the Eastside of San Antonio one of the nation's first "promise zones". The designation made the area eligible for millions in federal grants.

It's your tax money, that's supposed to be used to improve a long-neglected part of town.

But the News 4 Trouble Shooters have uncovered only a fraction of the money has gone to the Eastside and much of it will be spent elsewhere.

The document given to us by the city says almost $52-million has been awarded to the Eastside Promise Zone, but our investigation found only $4-million has been spent in the zone so far. Plus big chunks of that money are instead being spent in other parts of the state and the country.

Two years after it was announced there are no visible signs of that promise zone money on the streets of the Eastside. None of it was earmarked for infrastructure or construction.

Jessie Zaragoza, who has spina bifida, wonders why it's not being used for simple things like sidewalks.

Many streets in his eastside neighborhood don't have them. Zaragoza has to drive his motorized wheelchair in the street to pick his kids up from school.

"There are cars coming and going in both directions and I have to literally pull over so the cars can pass me up," Zaragoza told us.

Most of the promise zone money was awarded to non-profits and government agencies to use for education and job training.

One organization, San Antonio for Growth on the Eastside, or SAGE, received a $500-thousand grant in August of 2014 to develop a "strategic economic plan."

Executive Director Jackie Gorman says the plan still isn't finished, but we learned the grant money is already being used to pay SAGE employees, including Gorman.

"So your plan isn't done yet, but you're using part of the money already to pay your salary?" Jaie Avila asked Gorman.

"No we're using the money to pay the salaries of those involved in developing the plan. A plan does not come out of thin air, people have to work," said Gorman.

When Avila asked whether Gorman herself was part of the team being paid to develop the plan, she responded, "Yeah. People have to do the work, so we're doing the work to develop the plan."

Sage isn't the only group off to a slow start. Goodwill Industries received $1.3 million in promise zone funds to provide job training for ex-offenders. UT Health Science Center got $10 million for teen pregnancy prevention.

Both told us they are still in the planning stages on how to spend the money.

"It is a slow start because the partners started receiving the grants about a year, year-and-a-half ago. So it has taken them time to mobilize," said Mike Etienne, who is in charge of the promise zone project for the city.

He wanted to meet for our interview in front of the Wheatley Courts: a 412-unit apartment complex now under construction, which city officials often point to as a sign of progress on the Eastside.

"None of this though is paid for with promise zone money," Jaie Avila pointed out.

"That is correct, none of this is paid for with promise zone money," Etienne replied.

Much of the money from those grants will be spent outside the promise zone.

For example, $15 million was awarded to Idea Schools for charter school programs. But only $1.2 million of that will be spent on San Antonio's Eastside. The rest will go to charter schools in Austin and the Rio Grande Valley.

A group called NALCAB, which received a $250,000 promise zone grant to train entrepreneurs, is only spending $28,000 in San Antonio; the rest will go to train people in Minnesota, Illinois and Washington D.C.

"That's strange because the money was supposed to go to the promise zone," Avila remarked.

"That's correct, some of the applicants, they will use some, or a portion of the funds in the promise zone, so when they receive the funds for the promise zone they're not using the entire funding in the promise zone," Etienne said.

Etienne says organizations are allowed to do that under federal rules, a detail that wasn't mentioned when the promise zone was announced.

We were able to find someone on the Eastside who is directly benefiting from the promise zone money.

Remember the group called SAGE, run by Jackie Gorman.

They received a second grant for $740-thousand to invest in small businesses. SAGE gave $280,000 to Tony Gradney, who is opening a soul food restaurant in St. Paul's Square next month.

"It's going to be great for the community because we're going to be able to hire people that are inside the community," Gradney said.

SAGE says it hopes to create 44 jobs through its investments in the promise zone. So far they've created 4 of those positions.

The city says more organizations will start spending their grant money in 2016, and the program will start to live up to its promise.

Finally, we want to clarify that the promise zone grants in our story are different from the "promise neighborhood", which is a separate project coordinated by the United Way to bring money into the Eastside.

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