BOB ABERNETHY: One of the thorniest urban problems is the breakdown of communities plagued by crime and unemployment. But one such neighborhood has turned around. The process began with a church in an area that had been ravaged by riots. In that church was one determined woman. Judy Valente reports:

JUDY VALENTE: For more than a hundred years, Bethel Evangelical Lutheran Church has anchored this impoverished neighborhood on Chicago's West Side -- through riots, white flight, and economic decline.

Pastor MAXINE WASHINGTON (Bethel Evangelical Lutheran Church): Leading church at Bethel is really a special experience. It's a place where we know the Holy Spirit is here.

VALENTE: But Bethel Lutheran is more than a spiritual center. The church is rebuilding its community -- literally. The catalyst for change is this woman.

Mary Nelson came here in 1965 to join her brother David, who had taken over as Bethel's pastor. Three years later, race riots broke out following the assassination of Martin Luther King.

BERTHA DAVIS (Congregation member): I remember after the riot, there was a lot of fire going on. We were trying to dodge, you know, get out of the way of the smoke. Stores and things were being, you know, robbed, destroyed.

VALENTE: The neighborhood, already struggling, deteriorated steadily throughout the 1970s.

MARY NELSON (Bethel New Life): Streets weren't repaired; landlords virtually abandoned their buildings.

The church looked around outside of its building and saw all this abandonment and demolition and said, "Man, we've got to do something about housing or there won't be a neighborhood left to be the church of!"

VALENTE: In 1979, Nelson and her brother formed Bethel New Life, a community development arm of the church. Replacing destroyed or abandoned housing became Bethel's first priority.

Ms. NELSON: People put together $10 a week until we had the first $5,000 -- poor people themselves who put their little widow's mites in there. And we started with a determination that God would make a way.

VALENTE: With that initial $5,000 investment, congregation members renovated this abandoned three-unit apartment [building]. Other renovations followed. And Nelson was only getting started.

HAZEL NELSON (Mary Nelson's sister-in-law ): I remember one of the first houses that they went together and bought -- rat infested. We had to walk across a board to get in it. But she had a dream. The Lord put upon her heart a dream of this community. And we walked into that house and the rats came out.

VALENTE: Today, Bethel is a national model for what urban churches can do to revitalize neighborhoods.

Nelson proved adept at tapping into federal funds. Bethel's annual budget has grown to $11 million, reflecting Nelson's ability to identify needs and then doggedly seek out public and private money. Her method: start with small projects, then slowly build credibility with banks and government funders.

Besides developing nearly 1,000 housing units, Bethel operates a day-care center, a shelter for homeless families, an educational program for young mothers, and a job training and placement center.

Bethel New Life has succeeded in areas where the government is still seeking to find solutions. These buildings, for example, provide critical housing for low-income families. The secret to their success, they say, is glue, gasoline, and guts.

Ms. NELSON: The three Gs are: the glue that holds us together, the gasoline for the long haul, and the guts to make the risky decisions and be willing to try things.

VALENTE: One of Bethel New Life's most audacious moves was to raise $3.2 million in government funds and private donations to purchase and renovate a closed hospital. One newspaper at the time said it would "take a miracle" for the plan to succeed.

Bethel turned the hospital into apartments for senior citizens. Affordable housing is still so scarce in neighborhoods like this that seniors often wait years for a unit. Many seniors die waiting.

BETHEL WORKER (to Joe Harvey): So the move went okay?

VALENTE: Joe Harvey is one of the lucky ones. He was on a waiting list only two years.

Bethel converted a wing of the hospital complex into a day-care center for 70 children, who often visit with neighborhood seniors. Thirty percent of the elderly people who come here suffer some form of dementia.