Discouraging a Do-Gooder

Many voices today insist that the businessman should turn the resources of his company toward solving social problems. H. Ladd Plumley, chairman of State Mutual Life Assurance Co. of America in Worcester, Mass., would add a qualifier: The public-spirited executive had better be prepared to face citizen suspicion and bureaucratic pettifoggery.

In 1968, the Worcester Redevelopment Authority asked State Mutual, the nation's 27th largest life insurance company (assets: $1.2 billion), to help rebuild the city's blighted Laurel-Clayton section. Plumley decided to erect 430 units of low-and middle-income housing and invested $11.8 million of company loan and equity money in the project. He hired Architect Benjamin Thompson of Cambridge and told him to design a complex that would be "more than just another public-housing project."

Adequate Expense. Right away, State Mutual found itself immersed in controversy. Since it was determined to plan something new, the company could not announce just what it would build, so, Plumley recalls, "there was only an announcement that something would be destroyed." Blacks in the racially mixed area feared that the undescribed project would be limited to white tenants; whites feared that it would be limited to blacks. Community leaders began to charge that State Mutual was interested in profit rather than public service, since the company stood to make an 8.2% return on its investment. That cry was echoed by radical college students who marched on company headquarters, forcing the Worcester police department to call out its riot squad.

Thompson eventually designed a tasteful 16-story tower surrounded by 3-story buildings that curve gracefully around old trees, lawns and playgrounds. Plumley thought it essential that the Federal Housing Administration certify the project for rental assistance to low-income tenants. The FHA, however, was nonplused by his insistence on building something other than a clump of high-rise boxes. First, the FHA objected that site costs were too low. The Worcester Redevelopment Authority proposed to sell 17 acres of land to State Mutual for $43,000, but FHA rules called for a minimum of $500 per dwelling unit, or $215,000. State Mutual managed to convince the bureaucrats that the costs of clearing the land would make the site adequately expensive. Architect Thompson wanted to preserve the natural beauty of the area's rolling hills, but FHA regulations specify walkways with grades no steeper than 8% to accommodate mothers pushing baby carriages. After weeks of haggling, the FHA finally assented to walkways with a 10% grade.

Five months ago, a workman on the site accidentally dug into a gas main, touching off an explosion that injured eleven people, none seriously, and caused further delay. Now State Mutual is fighting an antiquated provision in the state building code that would force the company to hang fire escapes over the facades of the low-rise buildings. The project complies with Worcester's more modern fire code.

Critical Exposure. State Mutual has finally accomplished its public service goals. Whites, blacks, and Spanish Americans are moving into the project, now called Plumley Village East--a year and a half behind schedule. Most of them live in more attractive apartments at lower cost than in the old houses that were torn down.

Chairman Plumley, however, is discouraged. The delays have pushed construction costs from the $11.8 million originally estimated to nearly $15 million. State Mutual will have to settle for a 5 3/4 annual return on its investment, v. the 9% to 10% that the company could earn financing a purely commercial housing venture. Plumley, who last month announced his retirement at age 69, is even more annoyed by "the cost of exposing yourself to criticism that you know is unjust." He adds: "I believe there were other companies in this community who would have been interested in helping, just as we did. I doubt that they would be interested now."

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