Success

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SUCCESS/22 inches/1stjc/mark2nd

By TOM GRAY

Contributing Reporter

In hindsight, September 1991 may not have been the most auspicious time to set up shop near the corner of Florence and Compton avenues. But that’s when Dr. Francisco J. Recalde opened up his family medical practice just a few months before the area was engulfed by riots and looting.

Recalde, 54, remembers watching television on the afternoon of Wednesday, April 29 as rioting broke out at Florence and Normandie avenues, just two miles from his office. Before long, the chaos was all around him. The parking lot outside his office was turned into a firefighting command post. The pharmacy serving his practice burned down.

But Recalde didn’t cut and run. “By Tuesday, we were back at the office working,” he said. He has stuck with his part of South Central ever since.

Now he sees the area recovering. And his own fortunes seem to be rising as well. Late last year, he left his rented office space and moved across Florence into his own building, which he bought and remodeled with a loan from Sumitomo Bank.

Recalde’s story is not just about banks investing in the inner city, but about his own financial recovery. Recalde filed for bankruptcy protection nine years ago and has been rebuilding his credit ever since. The financing of his new medical office didn’t just happen overnight.

It represents the work of several years, in which Recalde built up his credit and his business relationship with Sumitomo.

Recalde, a U.S. citizen born in Nicaragua, went to medical school in his native country and came to the United States in 1970, where he trained for several years in New York. After that, he went to practice in Roswell, N.M., a town, he said, “that was supposed to grow, and didn’t.”

The energy bust of the ’80s took the air out of Roswell’s economy, and Recalde looked elsewhere for a future. He decided on Los Angeles, where much of his family lived as part of the city’s large Nicaraguan community.

He came to Los Angeles in 1988 and worked at clinics for two years until he could set up a practice. Back in Roswell, he could find no buyers for any of his properties, which included a home, a medical office and oil investments. He was forced into bankruptcy to get out from under his debts.

Starting over took time. Recalde had rebuilt his credit enough in 1992 to buy a house (with financing and a large down payment) in inexpensive Albuquerque.

Two years later he managed through a broker, not a bank to finance the purchase of a house in Downey, where he now lives.

Then it was a matter of making the payments and establishing a good record. In 1996, he heard about Sumitomo’s “ProActive” unsecured lines of credit to physicians, lawyers and other professionals, and he applied for one.

Recalde said he needed the money to help set up an employee retirement plan and to pay taxes. The credit line was originally established at $20,000 after bank officials reviewed his books and determined the company was stable. The amount was later increased to $50,000.

Achyuta P. Chaudhuri, Recalde’s account officer at Sumitomo, said Recalde had several elements working in his favor. His medical practice produced enough cash flow to service the credit line, and his credit history by then was clear. Seven years had passed since his New Mexico bankruptcy, and Chaudhuri said he was satisfied with Recalde’s explanation of it.

Also, Sumitomo was trying to help businesses serving low- to middle-income communities, and Recalde’s practice fit that bill. “We liked him,” Chaudhuri said, “And his profession was another thing that was very attractive to the bank at that time.”

The connection with Sumitomo and Chaudhuri served Recalde well when, last year, the building across the street that had been used by a check-cashing business came on the market in a probate sale.

The 2,400-square-foot, one-story structure “was an empty shell, just roof, walls and floor,” Recalde said, and the cost of turning it into a medical office $84,000 was almost as much as the $90,000 purchase price. But Sumitomo financed most of the sale and remodeling. The original construction and real estate loan package has since been rolled over into a 15-year trust deed with a principal of about $150,000.

The remodeling was finished last October. Recalde, a sole practitioner, now can provide x-rays, ultrasound and laboratory services in an area that “definitely needs medical doctors, especially for the Spanish-speaking population.”

His practice grosses about $300,000 a year and has six full-time employees (along with Recalde’s wife, Lourdes, who acts as office manager). As part of a MediCal managed-care group affiliated with the University of Southern California, he sees the potential to operate a 24-hour urgent-care center at his new location.

As for his neighborhood, the pharmacy that burned down in the riots has long since re-opened, he said. So has the local Ace Hardware store. He says another pharmacy destroyed in the 1992 riots and in the Watts riots of 1965 has been rebuilt for the second time. “We see there is a very significant number of people who are interested in the improvement of the community,” Recalde said.

Signs of the riots, such as vacant lots, still can be seen but are vanishing. Two blocks from his office, he says, a building is going up to fill in one of the largest empty lots left over from the riots. “That’s another indication the area is coming back,” he said.

In short, Recalde is glad he stayed. “Pretty much everybody left the area after the riots,” he said, “but we decided to stay and serve this community which has, I think, been very rewarding.”

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