Community Needs
Building Resources for Tomorrow II
Best Practices
Revitalizing the Urban Core of Kansas City
The Historic President Hotel
Central Bank of Kansas City helped spur the redevelopment of this centrally
located historic hotel in downtown Kansas City. The project experienced
significant difficulty in overcoming barriers to its redevelopment which
stemmed from its location in a “blighted” area and the condition of the
property itself.
Once a grand hotel, opening its doors in 1926 and providing the setting for
the 1928 Republican Convention, this once proud historic building fell into
disrepair after it closed in 1980. It sat vacant until local initiative and private
enterprise brought the vision to bring it back to life. Central Bank
participated in a financial structure that brought over $45 million in capital
to the transaction, transforming the derelict property into one of the first
downtown revitalization success stories.
The President Hotel re-opened on January 5, 2006 offering 213 rooms of
comfort in what is now a bustling hub of construction activity. The property
is conveniently located within walking distance of the Kansas City
Convention Center, theatre district, financial district and the ongoing activity
that now surrounds this anchor of revitalization in a once blighted area of the
City.
Solae
Project Description:
On the site of a former paper warehouse, Solae, LLC, is building a 162,000
square foot headquarters. Last year, the city of St. Louis blighted 246 acres in
order to build space for biotechnology companies. This area was split up into
173 acres in the Central West End called CORTEX (Center of Research,
Technology, and Entrepreneurial Expertise) West, and 73 acres called CORTEX
East adjacent to the St. Louis University Medical School.
CORTEX West, the location of the Solae building, is currently dominated by
industrial businesses and intersected by MetroLink, St. Louis’ mass transit train.
The proposal for this area calls for hotels and retail space to serve the scientists
and associates at the research businesses and organizations. The activity in this
area has already spurred residential and retail activity. It is also anticipated that
the Solae headquarters development will provide enough critical mass to develop
a parking structure and a MetroLink stop.
CORTEX, a non-profit organization whose goal is developing St. Louis into a
biotechnology leader, represents collaboration between Washington University,
Saint Louis University, the Barnes-Jewish Hospital Foundation, the University of
Missouri-St. Louis, and the Missouri Botanical Garden. CORTEX has a
geographical area of about 180 acres for which it has redevelopment rights that
will link the sponsoring institutions.
CRG – CS, LLC, a single-asset entity of Clayco Realty Group (a division of
Clayco, Inc.) has signed a lease and design-build agreement with Solae.
Construction is underway with an expected completion in mid-2007.
St. Louis Development Corporation (“SLDC”) and The Valued Advisor Fund, LLC
(“VAF”) each committed part of their NMTC allocation to the project. SLDC’s
allocation of $6,000,000 was combined with a $6,000,000 allocation from VAF to
provide a direct rent subsidy to Solae to entice them to locate in the CORTEX
area. In addition, CORTEX is providing TIF financing of $3,720,000 to finance
site acquisition, building demolition, and fill costs.
The SLDC received an allocation of NMTC from the second round in 2004, (the
fourth round was recently announced) but had been unable to complete any
transactions up until this point. The Solae transaction was one of the first NMTC
transactions in which the SLDC has participated.
Community Impact:
x 162,000 square feet of office and research & development space
x 400 permanent jobs created and/or retained and an estimated 125
temporary construction jobs. Indirect effects are estimated at 49 jobs and
$185,000 in additional taxes
x Greater than $1 million added in annual business taxes
x The project, which is located in a highly distressed low-income
neighborhood, will be the second building in the CORTEX redevelopment
area and will likely induce the construction of a parking ramp and
inter-modal transportation center for public transportation.
Developer:
Clayco, located in St. Louis, MO, is one of the nation’s largest, privately owned
real estate, architecture, engineering, and construction firms. The Solae building
is the second building in the CORTEX development and Clayco constructed the
first one as well. The developer is committed to the redevelopment of this
blighted area bringing catalytic projects like Solae to the area to spur residential
and retail development as well as better access to the mass transit systems
needed to make the entire redevelopment thrive.
Why this is a Best Practice:
The development of Solae’s headquarters is a best practice example for a variety
of reasons: It combines the NMTC allocations of multiple awardees to one
project, and provides the SLDC with momentum to deploy the remainder of its
allocation. It also combines NMTC with TIF financing and other sources of capital
to create a catalytic project that will spur development of additional infrastructure
as well as residential and retail development. SLDC continued to leverage their
relationship with VAF by hosting a seminar for minority and distressed business
owners focused on capacity building and growing mentor relationships. Best
practices result when industry forces and communities focus on the needs of the
community and strive for results. This is clearly an excellent example.
Dial Realty Corp
50M Gallon Ethanol Plant – Elwood, NE
Project Description:
50 Million Gallon
Ethanol Plant
Project Type:
Real Estate and
Plant
Total Development
cost:
$110,000,000
Project Financing:
Bank Loan $60M
TIF Loan $12M
NMTC Equity $15M
Equity $23M
Developer:
Rick Kiolbasa The Project:
The ethanol plant located near Elwood, NE will be 50 million gallons
Construction Jobs: in capacity. The project will take advantage of short line rail service,
30 nearby gas line and adjacent highway. There are nearby cattle feed
operations which will be utilized to handle the distillers wet grains.
Permanent Jobs:
40 Area Impact:
The mid western part of the state of Nebraska has been hit by several
Annual contribution years of poor corn prices and low employment possibilities. The
to the local direct purchases from area farms will exceed 70 million dollars
economy: annually and the new employment will help to revitalize the region.
$70M
Ethanol as an investment:
Ethanol is proving to be an economic catalyst for the rural areas.
There has been much said about the use of “green” fuels and the
saving of the environment, the other side of the story is the saving of
the region that this new economic engine provides.
For more information contact:
Rick Kiolbasa Dial Realty Corp
Telephone 402.493.2800 cell 402.598.4240
rkiolbasa@dialrealtycorp.com
Pradera – Philadelphia, PA
The Homeownership Construction Initiative was the first of the Homeownership Choice
Program initiatives, beginning in 2000. The initiative has helped many Pennsylvania
municipalities transform blighted neighborhoods into attractive places to live and viable
alternatives to suburban home ownership.
The HCI is designed to encourage and promote the development and construction of new single
family homes, for purchase, in urban neighborhoods and core communities. It targets
disinvested urban neighborhoods and requires that developments are to be of a scale to create an
impact, encouraging additional investment. The product mix is to be based upon the overall
needs of the community.
This initiative requires a sponsoring partnership of a municipal entity, a for-profit
builder/developer and a non-profit builder/developer. Funding must be matched by the
sponsoring entity on at least a one-to-one basis, with 50% of the matching requirement being
provided by the municipality.
In 2000, Asociación de Puertorriqueños en Marcha, Inc. (APM) partnered with Leon N. Weiner
& Associates, Inc. and the City of Philadelphia to submit an application to the Pennsylvania
Housing Finance Agency for funding under the Homeownership Choice Program for the new
construction of fifty for-sale homes in the Pradera development. Their proposal was awarded
$1.7 million toward a total development budget of over $8.7 million for the first phase of 125
homes.
The Pradera neighborhood is referred to as Eastern North Philadelphia. It is more specifically
described as being bounded on the north by Dauphin Street, on the east by 5th street, on the south
by Oxford Street and on the west by 8th street. The neighborhood has undergone enormous
changes during the past quarter century. The collapse of the manufacturing base of North
Philadelphia’s economy in the 1960’s, 1970’s and 1980’s led to a withdrawal of nearly a third of
the community’s population between 1970 and 1990. The residents left behind were among the
poorest in the city. Today, 60% of the population receives public assistance and 40% of the
adults lack a high school education. The subject neighborhood is estimated to be 55% African
American and 35% Hispanic, primarily of Puerto Rican descent.
This depopulation has been devastating to the housing stock. The housing stock consists
primarily of one- and two-family row homes, over 50% of which were constructed before 1940.
A 1998 land survey of land use found that 41% of the lots were vacant, 28% contained buildings
in poor condition, 21% of the lots contained abandoned buildings, and only 10% of the lots
contained a residential building in fair to good condition. Despite the disinvestment and decline
that has occurred over the past 25 years, the neighborhood shows signs of reinvestment and
repopulation. Over the past six years, new development has included general rental housing
(predominantly townhouses), senior rental housing, rental housing for victims of AIDS and/or
substance abuse, for-sale affordable housing and a 190,000 square foot shopping center.
PENNSYLVANIA HOUSING FINANCE AGENCY
717.780.3800
This development sparked much hope throughout this community; so much hope that over one
half of the homes were sold before construction began and all 50 of the homes were sold prior to
construction completion. The sales prices began at $55,000. Only two years after sales began
these homes were appraised at $99,000. Prior to development, home values in this neighborhood
averaged $17,000.
In 2004, Pradera Phase II was awarded $2,700,000 in Homeownership Construction Initiative
funding in order to capitalize on the success of Pradera I, the high demand exhibited by this
initial phase, and to help stabilize its surrounding area. The Pradera II development consisted of
fifty-three (53) single-family dwellings that were constructed adjacent to Pradera Phase I. The
homes will be marketed to persons with incomes at or below 115% of the area median income –
affordable to the existing neighbors. The prices of these homes ranged from $70,000 to
$100,000. Phase II construction is almost complete with all homes sold.
Pradera III, which was awarded an additional $1,075,000 in 2006, consists of twenty-two (22)
single family homes. Sales prices for the twin and accessible homes will be $98,000 and the
single homes will be $100,000.
Pradera I, II and III provide a homeownership market that did not exist before 2002 since there
had been no new construction of single family dwellings since the early 1900’s.
The Homeownership Choice Programs demonstrate how housing finance agencies can use their
resources to stimulate single family housing production in older urban areas, providing an
attractive alternative to "suburbia." Because it helps increase homeownership rates in areas with
significant minority and immigrant populations, the program supports a national housing
priority. It offers an unprecedented opportunity for HFAs to gain considerable leveraging of
their funds, offering a perfect arena in which public and private, federal, state and local
organizations can cooperate to produce a measurable good.
To date, the Pennsylvania Housing Finance Agency has invested over $63.7 million through the
Homeownership Choice Programs, while leveraging an additional $399 million throughout fifty-
five communities across the Commonwealth.
Spin-off Development:
The Pradera community stands as an indication not only of the community need for affordable
homeownership opportunities, but also of the belief that this once blighted area can be a
desirable location to reside, as well as a location private investment is willing to invest in. Since
Pradera I, major activities have taken place nearby and adjacent to the target area including:
Pradera II and III, the creation of a 28,000 square foot independent middle school called the
Hope Partnership, as well as several factory buildings being converted into market-rate loft
apartments by private investors.
PENNSYLVANIA HOUSING FINANCE AGENCY
717.780.3800
As a direct result of this PHFA-funded housing development, APM has entered into an
agreement with the BOSTON FUND USA to develop the Temple Train Station site into a
Transit Oriented Development Project that will house mixed income housing, commercial and
office space. The site was approved as one of two TRID districts by the Commonwealth of
Pennsylvania in August of 2006, and the Philadelphia Neighborhood Development Collaborative
is providing pre-development and organization capital to pursue this initiative. The development
of an Economic Mobility Center directly adjacent to the new Pradera homes was formalized in
July of 2006 as APM entered into an agreement with Truemark Credit Union to develop a 3,000
to 5,000 square foot credit union/economic mobility center. This center is a comprehensive
community development asset and wealth building tool to link low-income families to financial
tools and products that will increase the asset accumulation and the overall financial well being
of low-income families.
PENNSYLVANIA HOUSING FINANCE AGENCY
717.780.3800
Mexicantown Welcome Center &
Mercado Detroit, MI
The Project
The Mexicantown
Project Description: project is designed to
Construction of a Welcome spur business and
Center, Mercado and Plaza economic
development in
Project Type: southwest Detroit’s
Real Estate – Office, Retail, Mexicantown
Welcome Center & Public neighborhood, near Mexicantown Project Rendering
Plaza the base of the Ambassador Bridge to Windsor, Ontario – one of North America’s busiest
border crossings.
LISC Program:
Detroit It will include a 5,000-square-foot welcome center, a 13,000-square-foot mercado, a 30,000-
Investor: square-foot retail/office building, and a public plaza. The area has experienced substantial
revitalization over the past five years, mostly due to the work of local community development
National City CDC
corporations.
Lender:
City of Detroit Mexicantown Community Development Corporation, the nonprofit developer, was established
in 1989 to foster economic development in the Mexicantown neighborhood. It has been
Developer: advocating this project for nearly a decade.
Mexicantown CDC
The project is within a Federal Empowerment Zone in a census tract in which more than 32
percent of residents live below the poverty line. It represents a major development that will
COMMUNITY IMPACT create a permanent venue for economic and cultural activity. The total project cost is
BY THE NUMBERS approximately $16.2 million.
NMTC Investment: The Mexicantown project is intended to transform the image of the state of Michigan, the city
$5.0 million of Detroit, and Mexicantown as visitors encounter the cultural offerings and retail collections
available in the Bagley Avenue district. It will optimize Mexicantown's identity as a tourist and
Commercial Space: entertainment destination, increase tourism expenditures in Detroit and southeastern
48,000 sq. ft. Michigan, and provide cultural and arts programming within the Mexicantown mercado and in
the public plaza. The project is anticipated to be the future "heart" of the Latino community
Construction Jobs: where its welcome center, mercado, and plaza will honor the rich history of Latinos in the city
75 and the state, creating a more prosperous future for this vibrant, diverse and historical
neighborhood.
Permanent Jobs:
195 The Mexicantown project is expected to create 84 new businesses, 195 new jobs, 75
construction jobs, and $16 million in annual retail revenues. Additionally, tourism
Community Details
expenditures by visitors to the State of Michigan Welcome Center are expected to generate
Median Income: $19 million.
73% of Area Median
NMTC Financing
Poverty Rate: LISC used $5 million of its New Markets Tax Credit award to obtain equity capital from
32% National City CDC which, when combined with a loan from the city of Detroit using the
proceeds of a HUD Section 108 Loan, allowed it to fund reserves and make loans to the
MI State Empowerment Zone project that will help to close a financing gap and provide working capital that the project
SBA HUB Zone needs to succeed. Other financial support is being provided by Wayne County and state of
Michigan, which recognize the huge impact the project will make, as well as through an EDI
grant, Economic Development Administration grant, an Office of Community Services grant
(obtained through a small recoverable grant funded by LISC), CDBG, and
individual/foundation capital campaign donations.
New Markets Support Company, LLC 501 Seventh Avenue, 7th Floor New York, NY 10018 Tel: (212) 455-9385
Capmark CDF
18th Street Project
Capmark CDF made a $1.5 million investment in a small, less capitalized housing
development company. This private company has committed to use the financing to
construct approximately 15 high quality for-sale homes in an area where income is 49%
of AMI and 40% of the residents are at or below the poverty line. 90% of the residents
are minorities. In addition, all 15 homes will be affordable to families at 70% of the area
median income ("AMI"). The new homeowners will receive financial counseling and
down payment assistance.
Community leaders in the GO Zone almost universally agree that housing must be
rehabilitated in order for the local economy to recover. Even local commercial
developers acknowledge that the gulf region redevelopment strategy must first “get the
people back home” as quickly as possible and therefore federal subsidy should prioritize
the housing effort.
Thus far, the pace of the housing recovery effort has been slow, and it is clear that New
Orleans in particular does not have the resources to provide services to residents across
the entire footprint of the City. Based on observation and experience, Capmark believes
that small development companies, not driven by institutional rates of return, are willing
to engage in neighborhood redevelopment today. Furthermore, we have the ability with
the NMTC program to implement a more focused “one neighborhood at a time” strategy
in the private sector by concentrating our funding in a particular area
Recognizing the need to stimulate neighborhood redevelopment, Capmark has
developed NMTC subsidized products that support smaller scale efforts to rebuild
housing. As the loans are repaid, the NMTCs will revolve, and we will reinvest the
subsidy into another focused geographical area.
The 18th Street Project in Old South Baton Rouge is a pilot investment intended to
provide a proof-of-concept for a program designed to utilize NMTC subsidy in support of
small, under capitalized developers of affordable housing in the GO Zone. We believe
that the small developers, if properly organized, are capable of achieving significant
impact with respect to the housing recovery effort. The site in Baton Rouge was chosen
for the pilot because the market, relative to New Orleans, is able to withstand
unexpected problems in deploying this new technology. Also, the Baton Rouge market
has a large number of displaced low income families. The concept is currently being
deployed in the New Orleans market on a larger scale.
The development is based on the Katrina Cottage, a Lowe’s Home Improvement
product. The Katrina Cottage housing kit includes pre-made architectural and
engineering drawings. Additionally, it includes delivery of all the materials, down to the
individual screws and nails, to the building site. The pre-made designs recently won an
international design award and the kits currently available have been deemed by the
National Trust for Historic Preservation to fit the historic architecture of many areas in
the GO Zone. Additionally, FEMA has identified this concept as a strong potential
solution for rebuilding housing after major disasters. Perhaps most importantly, these
high quality permanent homes are not prefabricated or mobile and they can be built by
any contractor in about 2 weeks.
COMMUNITY NEED
x Affordable housing is generally accepted as the most critical need in the GO
Zone, especially in New Orleans. Hurricane Katrina destroyed over 200,000
homes in Louisiana alone.
x The economy does not have an adequate supply of housing for displaced low
income residents and construction workers.
x Thus far, the housing recovery effort has been slow and market rate institutional
capital is not providing effective support for the neighborhood redevelopment
effort.
x New housing development has focused almost exclusively on homes priced over
$200,000.
x The rates of return on affordable housing development in the GO Zone are not
sufficient to attract large scale single family development. Small developers,
however, are beginning to invest private capital and Road Home funds.
THE PROJECT
x The developer is constructing 100% affordable for-sale housing units in a high
poverty area in the Louisiana GO Zone. This may be the first 100% affordable
housing project using NMTCs. It will provide 15 quality affordable single family
homes.
x The Capmark CDF financing demonstrates that NMTCs can be efficiently
deployed into small transactions and in support of small developers. Capmark
believes that the industry must continue to demonstrate the ability to implement
large and small scale transactions, especially in the GO Zone.
x Capmark CDF was able to develop this product due to its experience with shorter
term investments under the NMTC program. Most NMTC transactions leave the
subsidy with the developer. Capmark CDF created a product to decrease the
equity requirements of the developer using the value of the NMTCs in exchange
for an increase in the affordability of the new units. The financing product is well
suited for smaller, equity constrained developers that are willing to take lower
returns per unit in exchange for access to capital that allows them to take on
larger projects they could not otherwise control.
x Small developers in the GO Zone are using non-institutional equity that is willing
to take on much more risk but in much smaller chunks. Capmark deployed the
NMTC subsidy to help a small developer penetrate a “harder to develop”
neighborhood and get displaced people back into homes.
x Capmark CDF has committed a portion of its Community Benefit Pool to help
ensure that this project is affordable to displaced low-income potential
homeowners. Capmark will help the developer to target former “renter families”
with the subsidy. Many low-income areas of Louisiana and Mississippi have
somewhat large populations of credit worthy (often elderly) individuals who lack
the cash required for homeownership. Some of these individuals have been
paying rent in sub standard apartments for 15 to 20 years.
x This project represents a pilot “proof of concept” program for the Katrina Cottage,
a Lowe’s Home Improvement pre fabricated house specifically designed for
hurricane victims.
x The developer has subsequently been selected by FEMA to serve as the initial
participant in the federal Alternative Housing Pilot Program.
“BUT FOR”
x The project was rejected by regional and national lenders, including two CDEs
using NMTCs. The developers did not have alternative sources of financing.
x This investment absolutely would not have been considered for funding “but-for”
the ability of Capmark CDF to use NMTCs to overcome credit, risk and pricing
concerns.
x With the exception of pure grant funds, existing housing programs have been
unable to create products to serve small developers and stimulate small scale
development. Other tax exempt and taxable programs require a much larger
scale.
Drury Hotel
Project Description:
The Alamo Bank Building opened its doors in 1929, located along one of San
Antonio’s most vital tourist attractions, the River Walk. It housed a series of
banks throughout the years, finally falling into disrepair and a largely vacant
space until it attracted the interest of the Drury family. Covering an entire city
block facing St. Mary's Street in downtown San Antonio, the 24-story Alamo Bank
Building has been beautifully restored and comes to new life as the Drury Plaza
Hotel San Antonio River Walk (“Drury Plaza”). As a historic landmark, the
building retains its original elegance and style, maintains a bank as a tenant, yet
also houses hotel, retail and restaurant space and over 16,000 square feet of
newly renovated office space. The renovations also included a major boon to the
River Walk itself, bridging the gap which once required tourists to leave the
river’s edge, traverse back to the city streets and then find their way back to the
walkway. The 850 foot extension allows a continuous circuit of the River’s path
through the City; a gift from Drury to the City of San Antonio. Connecting the
River Walk has made this well known Texas attraction even more appealing to
residents and tourists alike.
The City of San Antonio was very involved with this initiative from the onset.
Located in an empowerment zone, an area with poverty greater than 30% and
incomes well below 60% of the area median, in addition to three other distress
criteria, reclamation of this historic property was a centerpiece for stabilization
and catalytic of renewal in this downtown corridor. Drury Plaza utilized roughly $7
million in net NMTC equity funds. These were provided through allocations from
both the Valued Advisor Fund, LLC (“VAF”) and Enterprise. VAF and Enterprise
played vital roles in leveraging the capital necessary to bring it this project to
fruition.
The Valued Advisor Fund works in coordination with local and regional CDE
partners in order to provide additional, lasting capacity beyond the project
funding. In this instance, VAF worked with the Texas Mezzanine Fund, (“TMF”)
to structure the financing for the project, consistent with its strategy to utilize its
NMTC allocation to make investments in worthy projects directly through local
CDE partners. In addition, VAF consulted with TMF on strategic planning related
to fund capitalization, program compliance, and utilization of the NMTC and other
program resources, consistent with its mission to encourage local CDEs to
access many tools and enhance their internal effectiveness. TMF is a statewide
community development financial institution and certified CDE based in Dallas.
TMF provides financing for businesses located in distressed areas, minority-
owned businesses, and small businesses that create jobs for low and moderate-
income people. Established in 1998, TMF has attracted $14.5 million in equity
from 12 financial institutional investors since its founding, which it has utilized to
fund its primary business products. TMF provides numerous services to its
statewide constituency including financial literacy training, and community
development seminars. According to TMF President and Chief Executive Officer
Victor Elmore, “This is an outstanding example of collaboration with the
community and strategic use of capital in a project that will be a boon for
downtown San Antonio.”
Community Impact:
This project is projected to create well over 240 aggregate permanent and 600
construction jobs and will involve a total investment of in excess of $55 million,
encouraging the revitalization of a low-income area of San Antonio. In addition,
the project is expected to generate indirect and direct taxes annually of in excess
of $1.5 million.
Developer:
The new hotel is owned and developed by Drury Southwest Corporation (DSW) -
a development company based in San Antonio, TX and Cape Girardeau, MO. It
is operated by Drury Inns, Inc., which is a Missouri-based, family-owned and
operated hotel system with more than 117 hotels in 17 states from Colorado to
North Carolina and from New Mexico to Michigan. Brands include Drury Inn &
Suites, Drury Inn, Drury Suites, Drury Plaza, Pear Tree Inn by Drury as well as
other hotels in the mid-price hotel segment. For over 30 years, DSW and its
affiliated entities have been developing and managing hotels. Drury is different
than most big franchise chains. It builds, owns and operates all of its hotels.
Why this is a Best Practice:
The Drury restoration project is a best practice because it’s a strong example of
multiple allocatees; CDCs, investors and the community, coming together to
develop a catalytic project that will spur additional revitalization efforts. In
addition, TMF received valuable experience that it can leverage throughout the
state as it works within the low-income communities that it serves and capital to
help it grow as it does so.
American Tobacco Phase I – An Urban Solution
Struever Bros., Eccles & Rouse, Inc.
The Project: The American Tobacco Campus is a historic sprawling area that once housed the
enterprises of a Durham, North Carolina tobacco company. Its 13 buildings served as a manufacturing
facility from 1874 to 1987. Capital Broadcasting Company and Struever Brothers, Eccles and Rouse
have worked together to bring the vision necessary to revitalize this once desolate spot in the city’s
landscape into a bustling landscape of activity.
Capital Broadcasting acquired the property and completed Phase I of the project, which involved the
redevelopment of seven of the buildings into 614,000 square feet of class “A” office and retail space.
Struever Bros. Eccles & Rouse, Inc. acquired and initiated Phase II which includes the adaptive re-use
of four existing historic structures into 50 apartments, 12 condominiums and 170,000 square feet of
commercial space. A marquee element of the project includes the conversion of the coal shed into a
glassed-in, high-end restaurant offering unique architectural amenities to the site. Additional phases
include a performing arts theatre, 450 new residential units and additional commercial office and retail
space.
The property is 92% leased to quality tenants such as GlaxoSmithKline, Duke University and other
tenants including advertising and software firms, while still offering lease rates affordable to smaller
business owners. This project represents North Carolina’s largest historic rehabilitation project to date.
Financing: The project involved the use of historic tax credits, new markets tax credits, public funds,
owner equity and conventional debt. The NMTC allocation and principal financial structuring streamed
various Lenders and NMTC Allocatees, involving Wachovia, SunTrust, Capmark, US Bank, Self-Help
Ventures Fund, National Trust and Bank of America.
Community Impact: Located across from the multi-modal transit hub, the site offers flexible amenities
for employees and employers alike. Over 2,200 permanent jobs will be generated by this phase of the
development in addition to the residential growth opportunities, the refurbishment of the community’s
tax base and the removal of the blight and stabilization of this corridor within the community.
Additional phases will spark even more catalytic opportunity from this once abandoned and derelict site.
National Trust
Community Investment Fund
PROJECT DESCRIPTION Telegram Building, Portland, Oregon
Project Goal:
Rehabilitation of former
BACKGROUND
newspaper headquarters The Telegram Building in Portland, Oregon was
into offices and retail built in 1922 to house the city’s evening news-
space paper. Handsome with its red brick exterior and
grand clock tower, the property was troubled by
Total Development vacancy in recent decades once newspaper
Cost: operations ceased. The building was rescued
$11 million (MM) from disrepair when a local doctor partnered
with a Portland developer to convert it to office
Square Footage:
and retail space.
33,000 gross square feet
Developer: THE PROJECT
Venerable Properties This Georgian Revival structure, with its red brick exterior, clock tower, terra cotta
main entrance and Corinthian capitals cuts an imposing figure on the western
Building Owner/ Pro- edge of the Central Business District. It is a three-story building of approximately
ject Sponsor: 33,000 square feet. A fourth floor was constructed along with a bi-level under-
Dr. Peter Nathan ground parking garage. The first two floors are for retail space while upper floors
support office space and a day spa. The rehabilitation included substantial seismic
Tax Credit Investor:
Bank of America
upgrades and the restoration of the clock tower and other key architectural fea-
tures.
Key Project Financing:
$2.1 MM — NEW MARKETS TAX CREDIT SOLUTION
Federal historic/new The new markets tax credits provided approximately 31% additional equity to the
markets tax credit equity project, helping to reduce debt service costs.
investment by NTCIF
$5.4 MM — COMMUNITY IMPACT
West Coast Bank first
The adaptive reuse of the Telegram Building, coupled with the growth of the
mortgage
$1 MM — nearby Pearl District and its proximity to downtown Portland, spells better times
PDC seismic renovation for the surrounding neighborhood. This low income
"In hindsight, I don't think the
loan deal could have worked with-
community is a designated Federal Enterprise
out the National Trust Commu- Community, a SBA HUBZone and a medically un-
New Markets Tax Credit nity Investment Fund." derserved area. Its poverty rate is 50%, it averages
Allocation: 40% of the median family income and unemploy-
$1.028 million Art DeMuro ment is 3.2 times the national average. Currently,
Project Manager and Presi- the area has a mixture of well-maintained properties
Construction Jobs: dent Venerable Properties and those in need of repair. This is evidenced by
40
the building’s closest neighbors which include the
Permanent Jobs: thriving Mark Spencer Hotel, a vacant lot and a surface parking area. The revitali-
46 zation of the Telegram Building not only assists in further stabilizing the neighbor-
hood but also helps link the development of the Pearl District to downtown.
For more information on the Fund, please contact
Corinne Ingrassia Tel.: 202-588-6279; email: Corinne_Ingrassia@ntcicfunds.com;
www.ntcicfunds.com
National Trust Community Investment Corporation
Nelson & Associates, Inc. – Payment Options
Nelson & Associates, Inc. is a woman- and minority-owned professional property management
firm headquartered in Cincinnati, Ohio. Our expertise in the management of various types of
properties enables us to provide quality service through a thorough understanding of Federal
Housing Programs and a good working relationship with owners and various governmental
agencies. The Corporation is currently licensed to conduct business in Ohio, Georgia, Florida,
West Virginia, Indiana, and Illinois. Nelson & Associates, Inc. currently manages over 1,000
units of Low-Income Housing Tax Credit, market-rate, Section 8, and other affordable housing
units.
Nelson & Associates is an Accredited Management Organization (AMO) firm. The president of
the company is a Certified Property Manager, CPM, a designation awarded by the Institute of
Real Estate Management. Other professional memberships held by Nelson & Associates include:
x National Institute of Real Estate Management (IREM)
x National Associate of Realtors (NAR)
x National Associate of Housing and Redevelopment Officials (NAHRO)
x The National Associate of Housing Cooperatives (NAHC)
x The Midwest Association of Housing Cooperatives (MAHC)
x Midwest Associate of HUD Managing Agents (MAHMA)
Over the last few years, Management was often asked if other payment options were available,
e.g., credit card or check-by-phone payments. With these requests in mind, we have added a new
feature to our web site effective April 2007. Our residents will now be able to pay their monthly
rent via electronic check or credit card. They will have the option to login to the website and
make these payments monthly or to establish a recurring payment. This will enable our residents
to budget their monthly payments in advance and to avoid costly late fees for payments lost in
the mail. This will also free up administrative time for the office staff by reducing the foot-traffic
in the office during the first week of the month when residents typically hand-carry payments.
We have also added another feature to our website. Residents can login to the website and place
routine maintenance requests. These requests are then e-mailed to the appropriate person for each
property. This gives our residents the ability to place maintenance requests when they are away
from home, at work, or do not have access to telephone service. This also gives management the
opportunity to notify those residents with e-mail access of pending inspections and the status of
repairs. This will also free up administrative time for the office staff by reducing the amount of
traffic and calls in the office form residents placing maintenance requests or submitting requests
directly to the maintenance technicians.
These measures have resulted in hundreds of dollars in savings to each site in the form of
reduced administrative hours. The management is now able to better serve the residents by
spending their available time getting to know the residents’ needs.
Nelson & Associates, Inc.
Cincinnati, OH
513.961.6011
Rockford, Illinois – Global Trade Park
Lowes Distribution Center
Overview The Financing
Responding to the loss of over 1,800 The City worked collaboratively with
industrial jobs from plant closures and the state and local governments and in
layoffs at Torrington Plant, Pacific coordination with RAEDC to create
Scientific, Motorola, Textron, catalytic financing and infrastructure
Consolidated Freightways, and for this development. Over $25
Hamilton Sundstrand, in 2004, the City million in incentives were orchestrated
of Rockford created a 7,000-acre by the City and its partners – the
Global Trade Park (GTP). The city State of Illinois, Winnebago County,
established the Tax Increment and the Water Park Reclamation
Financing District to conserve or District. The City provided over $11
improve through public and private million in direct financing and over $4
sector investment an area neglected million in infrastructural
and negatively impacted by significant improvements, enhancements critical
industrial job loss. to Lowe’s location decision.
Public Sector Partners
Some of the City’s public sector
partners include the Illinois
Department of Commerce and
Economic Opportunity (DCEO) and the
Illinois Department of Transportation
(IDOT). The DCEO pledged to make
available Economic Development for a
Growing Economy (EDGE) corporate
income tax credits over a ten year
period based on job creation numbers;
a Large Business development
Program (LBDP) grant; Enterprise
Zone benefits, including sales tax
exemptions and tax credits for job
creation; and Employer Training
Investment Program (ETIP) job
training funds that will help enhance
the skills of its workforce. The IDOT
Lowes Distribution Center pledged $3 million for key roadway
In 2005 Lowe’s, a prominent home improvements needed to build the new
improvement retailer, was recruited to distribution center.
locate its new 1.4 million square foot
regional distribution center in the GTP. Community Impact
The dynamic new facility will have By attracting the world’s second
more than five miles of conveyors largest home improvement retailer in
moving 32,000 products through the the area, the city provided the catalyst
facility. The center, its first in Illinois, for over 1,800 direct and indirect
will serve more than 100 Lowe’s stores construction jobs and assured the
in Illinois, Wisconsin, Iowa, Indiana community of the creation of 500
and Michigan. permanent distribution center jobs.
The facility will provide an estimated
$15 to $17 million in annual payroll.
Dial Realty Corp
116 Room Residence Inn – Omaha, NE
Project Description:
116 Room
Residence Inn and
6,000 sf of retail
Project Type:
Real Estate and
Hotel
Total Development
cost:
$23,000,000
Project Financing:
Bank Loan $15M
TIF Loan $2M
NMTC Equity $4M
Equity $2M
Developer:
The Project:
This is a 116 bed Residence Inn that is being located in the Old
Rick Kiolbasa
Market area of downtown Omaha. There is an additional space for a
restaurant on the main floor. The franchise for a Residence Inn has
Construction Jobs: been secured.
30
Area Impact:
Permanent Jobs: The Old Market area is an upcoming portion of the original
40 downtown Omaha. This hotel will employ 40 individuals. This area
does not have an extended stay property available. The nearby Quest
Annual contribution Center has become one of the top ticket sales venues in the country.
to the local The City of Omaha has approved a $2,500,000 TIF for the project.
economy: We look to break ground on it in the summer of 2007.
$4M
Hotels as an investment:
The Residence Inn has been studied as a significant cornerstone to the
Old Market area. A market analysis was completed to verify the
proforma. The partners are experienced hotel operators and currently
own and operate 48 hotels.
For more information contact:
Rick Kiolbasa Dial Realty Corp
Telephone 402.493.2800 cell 402.598.4240
rkiolbasa@dialrealtycorp.com
Second East Hills—Pittsburgh, PA
In 2002, Telesis Corporation, based in Washington, D.C., submitted an application to the
Pennsylvania Housing Finance Agency for federal Low Income Housing Tax Credits and
PennHOMES funding so that it could begin a three-phased transformation of the Second East
Hills development, located on the eastern border of the City of Pittsburgh. This long
neglected neighborhood was a distressed 326-unit multifamily, very low-income housing
development that received Section 8 Project-based subsidy. Originally built in the 1960’s,
Second East Hills was once considered a model residential community, but by the 1970's, a
combination of increased crime rates, inconsistent management practices, a lack of physical
improvements to the property and the failure of the adjacent East Gate Shopping Center
contributed to this community’s decline in reputation and viability.
This neighborhood has long been plagued by crime, violence, and the use and sale of illegal
drugs. Tenants’ lives were disrupted by the sound of gunfire each and every day. Gang
members threatened the lives of site staff and continually vandalized the property. In the
summer of 2005, a gang-related murder was committed on the children’s playground midway
through the first phase of renovations. Due to the ever-present violence, there has been a lack
of community as tenants have been reluctant to fully utilize outdoor space or to report illegal
activity for fear of retaliation. Substantial social service needs were unmet, with most of the
tenants being very young female head-of-households with small children. A large vacant
parcel which was once a thriving shopping mall sits at the top of the hillside above the
property. Retail developers, however, were wary of investing in the neighborhood.
In August of 2005, representatives from Telesis, Pittsburgh HUD and FBI field offices met to
discuss a strategy to create partnerships with various law enforcement entities and social
service providers. As a result of this meeting, the East Hills Restoration Initiative was born.
Over the next four months, meetings were held to identify needs, to develop a mission
statement and assessment plan, and to identify the many partners who would be needed to
implement a restoration program. During the first meeting in December 2005,
representatives from more than seventy law enforcement, social service, and government
agencies gathered. Under the leadership of FBI agent, Lillie Leonardi, teams were identified
to address the following: facility safety and security issues; perception of community safety
and program needs; personal safety, after school and employment programs for youth; and
economic development. In February 2006, approximately 100 tenants attended a public
forum to explain the mission of the initiative. In addition, door-to-door surveys were
conducted to give every tenant an opportunity to voice their concerns. The results of the
survey showed a high concern for employment opportunity, drug- and crime-free
neighborhood, personal safety, police visibility, and traffic control.
The East Hills Restoration Initiative is currently in its implementation phase. This
implementation phase requires the cooperation of tenants, law enforcement organizations,
social services providers, and economic development partners.
PENNSYLVANIA HOUSING FINANCE AGENCY
717.780.3800
The law enforcement entities are provided furnished office space on the development, and
federal and Allegheny County probation officials will use this space as their base for meeting
with their clients in the East Hills neighborhood. FBI, ATF, Pittsburgh Police, development
security guards, and police from adjoining Penn Hills and Wilkinsburg will also use this
office to coordinate law enforcement activities. Additional law enforcement entities
providing assistance to the development include: Allegheny County Housing Authority
Police, Allegheny County Sheriff’s Office, Office of State Attorney General, Pennsylvania
Emergency Management Agency, Pennsylvania National Guard Counter Drug Program,
Pennsylvania State Police, Port Authority Police, PPG Industries, and Westmoreland County
Juvenile Court.
Social service providers already working in the neighborhood have been interviewed to
determine their level of participation and success. The Allegheny County Department of
Human Services recently funded the neighborhood with a grant for early childhood
education. Members of the community are being included on an advisory board to assure
that tenant needs are met. A book drive is underway to meet the literacy needs of children
and adults, and college interns are being invited to provide librarian services. Resource
directories are being compiled to identify resources for workforce development, educational
programs, children’s recreational programs, supportive services, and health and wellness
programs for adults and children. Social service partners include: Action-Housing, Inc.,
Alle-Kiski Area HOPE Center, Aspect Consulting, Bidwell Training Center, Boy Scouts of
America, Boys and Girls Club, Children’s Hospital, Manchester Craftmen’s Guild,
McKeesport YMCA, Mentoring Partnership of Southwestern Pennsylvania, Safety Kids,
Urban League of Pittsburgh, and Women in the House of the New Community Church in
Wexford.
Economic development partners (Pittsburgh Gateways, Community Research Corporation,
Pittsburgh Soccer in the Community, Bidwell Training Center, Biondi Motor and Blueroof
Technology) realized that without employment training or job opportunities there is no
opportunity for upward mobility. These partners worked diligently to form a collaborative to
assume ownership of the now vacant East Hills Elementary School, located adjacent to the
Second East Hills property, to provide a one-stop shop for social services, recreation, and job
training. They are also working towards the development of the former East Gate Shopping
Center site, with the construction of an indoor sports arena to complement the construction of
two big box retail stores. On February 20, 2007, Wal-Mart announced it would bring a
150,000 sq. ft. Wal-Mart Supercenter, about 350 jobs, and a new “Jobs and Opportunity
Zone” initiative to the once-thriving mall property. The initiative is designed to spur
economic development in surrounding neighborhoods. The program, one of only ten in the
nation, promises to spend thousands of dollars to help local businesses and surrounding
communities. The store is expected to open in early 2009. When employment opportunities
become available at the former shopping center site, tenants will have received appropriate
training and preparation to become employed.
PENNSYLVANIA HOUSING FINANCE AGENCY
717.780.3800
Through the persistent efforts and leadership of the East Hills Restoration Initiative, the value
of the financing funds used to renovate and subsidize this neighborhood is held intact.
Residents now benefit from much more than just “bricks and mortar” programs in their
housing development. The missions of the FBI, ATF, and the Federal Probation Service are
enhanced by the ability to improve law enforcement programs and rid the East Hills
neighborhood of illegal activity and crime. The neighborhood will soon realize economic
opportunities that were absent for the past thirty years. The East Hills Restoration Initiative
was only possible due to creative partnering by the financiers, federal, state and local
government agencies, law enforcement entities and social services providers. The successful
redevelopment of this neighborhood is a model to be followed throughout the country.
To date, the Pennsylvania Housing Finance Agency has provided $3,714,948 in no interest
loans through its PennHOMES loan program and $4,085,273 in federal Low Income Housing
Tax Credit allocation, which generated approximately $34 million in tax credit equity.
PENNSYLVANIA HOUSING FINANCE AGENCY
717.780.3800
National Trust
Community Investment Fund
PROJECT DESCRIPTION Dia:Beacon, Beacon, New York
Project Goal:
Rehabilitation of former BACKGROUND
manufacturing facility into Andy Warhol, Joseph Beuys and Donald
art museum Judd are among the artists of the 60s and
70s who experimented with light, space,
Total Development dimension and shape in huge sculptures or
Cost: multi-painting series. Many works by these
$34.3 million (MM) masters had been warehoused by the Dia
Art Foundation due to insufficient exhibit
Square Footage:
space in its Manhattan facilities. The open-
292,000 gross square
feet ing of Dia:Beacon elegantly solved that
problem, as well as what to do with an ag-
Developer: ing industrial factory that had sat vacant
Dia Art Foundation, a since 1991.
nonprofit organization
based in Manhattan THE PROJECT
After receiving a donation of the former Nabisco carton-making and printing plant,
Tax Credit Investor: the Dia Art Foundation planned a dramatic reuse of this 292,000 square foot for-
Bank of America
mer industrial space. Built in 1929, the steel, concrete and glass structure is a su-
Key Project Financing:
perb example of early twentieth century industrial architecture and is the only one
$25.6 MM — of its kind in Beacon, NY. The finished rehab is an array of stunning single-artist
Foundations and galleries renovated specifically for each installation. The structure’s 34,000 square
Individuals; feet of skylights and wide expanses between columns provide an optimal setting
$5.9 MM -— for viewing the renowned yet rarely seen contemporary arts collection.
Federal historic/new
markets tax credit equity
NEW MARKETS TAX CREDIT SOLUTION
investment by the Na- Dia:Beacon received an infusion of both historic and new markets tax credit
tional Trust Community (NMTC) equity from the National Trust Community Investment Fund. The Dia Art
Investment Fund;
$2.8 MM —
Foundation used the NMTC equity to create an operating reserve that helped
State and local grants cover projected operating deficits of about 70% of the budget in the first five years
of operations (such deficits are typical of even the most highly visited and well-
New Markets Tax Credit managed art museums). This reserve offsets the amount of capital that Dia would
Allocation Amount: otherwise have to fundraise.
$2.46 million
COMMUNITY IMPACT
Construction Jobs: Dia:Beacon has had a significant impact on its economically-distressed surround-
15 ings (a CDFI-designated Hot Zone) as this formerly vacant property now draws
approximately 145,000 visitors each year and employs 44 workers. Its total eco-
Permanent Jobs:
44 nomic impact on the county is estimated at $10 million to date. It also has helped
transform the Beacon area into a vibrant artist community. For example, in the
wake of Dia;Beacon’s success, a former high school was adapted to house the
studios of over 50 major artists. Furthermore, education programs at Dia:Beacon
provide benefits to low-income and special-needs children in the area schools.
Visiting artists conduct a series of classroom and museum sessions for public
school and emotionally- and developmentally-challenged students in creating
group art projects.
For more information on the Fund, please contact
Corinne Ingrassia Tel.: 202-588-6279; email: Corinne_Ingrassia@ntcicfunds.com;
www.ntcicfunds.com
National Trust Community Investment Corporation
Murphy Lofts The Project
Murphy Lofts represents a $2 million rehabilitation of a historic building located at 2203-2209 Seventh
Submitted by Avenue, in the Broadway Historic District, Rock Island, Illinois. Four two-story condominiums were
Rock Island Economic developed ranging from 2,010 to 2,250 square feet with sales prices of $149,900-$154,900. The project is
Growth Corporation an affordable housing Live-Work project. GROWTH served the role of developer and sponsor. Funding
was provided by state, local government, foundation and private investment. GROWTH worked in
(GROWTH)
cooperation with Community Housing Solutions (CHS) to complete the project.
A non-profit, CDE, and
CHDO organization. The Anastasia Murphy house is a Second Empire double home built in the late 1870s. The Murphy
House is a local landmark and is on the National Register. It also sits along one of Rock Island's
Contact: Brian Hollenback, major east-west thoroughfares. This development will significantly add to the revitalization efforts
Executive Director of this area. The completion of the project celebrates the first residents in the building since 1984.
120 16 ½ Street
Rock Island, IL 61201
309.788.6311 The lofts are luxurious for the market, described as large open “Chicago-style” lofts. Each loft
www.LiveRI.com included a master suite with walk-in closet and master bath, a loft/office overlooking the living
brian@teamrockisland.com room, exposed brick and stone, new kitchen, new electrical, plumbing, HVAC, and central air, an
ornamental iron fenced yard with landscaping, and a 2-car carriage-style garage.
GROWTH and CHS purchased Murphy Lofts in July 2005 from the initial developers, Tuscan
Group LLC. GROWTH, as the non-profit community based developer, negotiated a forbearance
$2 million leveraged in
agreement, purchased a failed project out of foreclosure, completed the development, and made
public and private the four units affordable to buyers earning less than 120% AMI.
funding.
This local and national landmark ranks at the top of the list of the most architecturally interesting,
Saved historic landmark historically important, and highly visible neighborhood structures in the community. Residents of
project from foreclosure the Broadway Historic District, city officials, public and private sectors have expressed their
to create four loft-style support for the development.
condominiums near
downtown. Funding for the project was provided by the Illinois Housing Development Authority – Illinois
Affordable Housing Tax Credit Program, National City Bank’s Community Development
Corporation, the City of Rock Island, Wells Fargo, Bill Rowand, Jeff Dismer, and MWABank.
Reopened long-vacant
dwelling.
Results
Twenty jobs were created with this project, resulting in 4 new housing units. $635,250 was leveraged for
A Live – Work project. this project. As a Live-Work project, the units were available for buyers making up to 120% AMI, with as
little as $500 in out-of-pocket expenses. MWABank provided enhanced loan products below the current
Strong public and private market, providing additional savings for buyers.
community partnerships.
The for-profit developer was saved from declaring bankruptcy and just two years later went on to create
Located in the Broadway two new single-family houses in the same neighborhood, the first new construction in many years. One
Historic District, which of these houses will serve as the offices of the local Children’s Advocacy Center.
is listed on the National
Register of Historic In addition, the sale of the condominiums at this price point in the market proved the demand for loft-
style owner-occupied living. Based on the demand, two condo units downtown called Bowlby Condos,
Places.
quickly sold.
Sources Best Practices
Murphy Lofts started as a project ahead of its time. The for-profit developers were not able to make the
MWA Bank project work. The best demonstration of community support for the development is that GROWTH
$549,500 was able to negotiate a forbearance agreement and keep the project out of foreclosure. The for-profit
developers remain active and strong participants in the community. One individual owns a professional
City of Rock Island
$50.000
architectural firm in Rock Island and the second continues to run a construction and rehabilitation
company.
National City CDC
$20,250 Located between downtown and on the northern edge of the acclaimed Broadway Historic District, this
Deferred Developer Fee
property was built by one of the most prominent citizens in the community. For years, the structure was
$15,500 vacant, and surrounded by other vacant properties. Today, Murphy Lofts is home to four families.
To put it simply, GROWTH did what any community-based group should do for its community.
Coastal Enterprises, Inc.
River Valley Market
Project Description:
The Northampton Community Cooperative Market or “River Valley Market” (RVM) will be
a new community member-owned and operated food market located in Northampton,
MA that will also serve several of the surrounding Western Massachusetts Pioneer
Valley communities including Easthampton, Hadley, Amherst, Greenfield, and Holyoke.
This is an approximately $9.24 million project ($7.43 million NMTC financing portion) that
includes the construction of a new 17,000 square foot silver LEEDS certified green-
designed retail store on a 3-acre site.
The stated mission and purpose of Northampton Community Cooperative is to provide a
marketplace nurturing a local, living economy through cooperation. River Valley Market
will be a full-service, cooperatively owned, natural foods grocery business. The
cooperative will specialize in fresh local organic foods and exceptional customer service.
As a democratically owned organization, the co-op will serve to bring the community
together, empowering member-owners to meet their mutual needs utilizing cooperative
business values, principles and practices. Through the cooperative’s activities,
sustainable agricultural development will be strengthened in the region, building a more
secure locally based food system within the Connecticut River Valley.
Residents of the community of Northampton began meeting in early 1998 to determine
the feasibility of opening a community owned and controlled store in the area, that would
be profitable, support sustainable local agriculture growth and development, provide
livable wage jobs, model ethical business practices and environmental stewardship, and
control capital flight from the community. In 1999, Northampton Community Cooperative
Market, Inc. (NCCM) was incorporated under Chapter 157 in the Commonwealth of
Massachusetts as a cooperatively owned business.
This project has been in the planning stages for several years and the River Valley
Market Food Coop now has a salaried manager and core group of consultants who have
located a suitable building site and negotiated a long-term ground lease for the new
store; solicited and organized more than 2,000 new dues-paying members; planned and
documented the construction of the new retail facility and parking lot; created an
environmentally sustainable green-design plan for the new building and business
operations; raised over $1.5 million in membership equity and low-interest member loans
to provide initial capital to finance the project; closed on a highly-complicated New
Markets Tax Credit (NMTC) financing including eight loans and tax-credit equity from
seven for-profit, non-profit, and cooperative sources of capital; and committed
themselves to a community cooperative business structure that focuses on supporting
local agriculture, regional growers, and businesses.
Why is this a Best Practice?:
The River Valley Market project represents a project that was several years in the
making and would not have come to fruition without the tireless dedication of a
committed base of community participants, creative participation from several local, state
and national community development and financing organizations (CDCs and CDFIs), a
community-minded regional bank, and institutional tax credit investors. This disparate
group of people combined interests to create the setting, expertise, and financial base to
provide the ingredients to get a start-up venture with enormous promise of beneficial
community impacts the sound financial base it needs to construct its new LEEDs-
certified green grocery market and capitalize its business operations, particularly in its
initial years.
Residents of the community of Northampton began meeting in early 1998 to determine
the feasibility of opening a community owned and controlled store in the area, that would
be profitable, support sustainable local agriculture growth and development, provide
livable wage jobs, model ethical business practices and environmental stewardship, and
control capital flight from the community. In 1999, Northampton Community Cooperative
Market Inc. (NCCM) was incorporated under Chapter 157 in the Commonwealth of
Massachusetts as a cooperatively owned business. The Northampton Community
Cooperative Market was created to provide a just marketplace nurturing a local, living
economy through cooperation. The River Valley Market will be a full-service,
cooperatively owned, natural foods grocery business.
River Valley Market is also committed to building its facilities, operating its business, and
encouraging community activities based on principles of green design and
environmentally sustainability. For instance, green building design emerged as a core
value of the membership during the design stage of the project. A working subcommittee
collaborated with designers as part of a Green Design Charrette to identify core values,
priorities, and decision-making processes to allow for the development of an
environmentally sustainable store and operational business plan. RVM also was
successful in applying for and be awarded a $406,522 Green Building Grant from the
Massachusetts Technology Collaborative to help subsidize the cost of building its 17,000
sq. ft. store to silver level LEEDS green building certifiable standards.
Community Enhancements:
x Community organization at a grass-roots level through membership drives,
meetings and planning sessions. Over 2,000 new dues-paying members at $150
per membership have joined.
x Supporting local agriculture and local service providers
x Maximizes the share of the ultimate product costs that are paid to the local
growers.
x Partnering with area growers and producers to establish regional distribution
options to drive down expenses and help sustain family operated farms and food
businesses.
x Focusing on natural and organic products to encourage and support sustainable
farming practices.
x Offering high-quality fresh nutritious foods in a consumer-friendly format that will
be made accessible to a broad cross-section of the community particularly
including low-income and senior residents.
x Employing a full-time education and member-services manager to provide
educational programs and materials for customers.
x Making available space for free to local pre-order food coops, many of which are
organized by area low-income local residents, so they can more easily receive
deliveries from wholesale distributors and split the orders among members.
x Establishing a River Valley Market membership subsidy program to help low
income families with partial or full membership dues support.
Job Creation & Retention:
x Initially creating approximately 70 new jobs with plans to expand employment to
100 jobs within five years.
x Implementing a livable wage program for all staff and starting entry-level wages
x Offering its employees full benefits including health, dental, & life insurance
plans; a section 125 cafeteria plan; a 15% discount on groceries; paid time off;
and a 401(k) retirement savings plan.
x Implementing a quarterly profit-sharing plan for all staff upon achieving
profitability of the overall business.
x Providing entry-level and continuing training programs
x Recruiting employees with Spanish language skills, particularly from the local
Hispanic community, so that the Coop can offer retail product information and
service in both English and Spanish
Environmental Sustainability:
x Using more than $400,000 in green building grant funds from the Massachusetts
Technology Collaborative
x Using green-building materials, sourced locally when possible
x Installing a 30 kw solar electricity generation system to supply at least 5% of the
Coop’s annual electric needs.
x Using additional reflective triple-glazed windows with R-20 insulation power for
increased natural day-lighting that will penetrate into 75% of the building.
x Increasing the buildings overall insulation envelope to achieve greater energy
efficiency and savings.
x Collecting rainwater for use in on-site landscape irrigation and toilets.
x Specializing in grocery products that are produced using sustainable agricultural
practices.
x Featuring a large bulk foods department enabling customers to reduce packaging
waste.
x Promoting the use of green electricity sources to its members through the
CoopPlus service.
HISTORIC NATIONAL PARK SEMINARY TO
BE GIVEN NEW LIFE
Overview Swiss Chalet, Dutch Windmill, and
The distinctive former women’s Italian Villa. The most prominent
finishing school that had been in the building on the campus, known as
hands of the Army since 1942 is “Main,” was originally built in 1887 as
undergoing extensive redevelopment. the Ye Forest Inne, an exclusive
The Alexander Company, a national vacation resort for Washington
leader in historic preservation, is residents. From 1893 to 1942, the
converting the unique historic campus site underwent an extensive building
into apartments, condominiums, boom and became the premier
single-family home, building a new women’s finishing school in the
transitional housing shelter for country, catering to the highest socio-
Montgomery County, and restoring a economic class and with tuition costs
historic Ballroom. higher than that of Harvard.
The site was used as a rehabilitative
facility for amputees during World War
II, The Korean War, and The Vietnam
War. Since being left mostly vacant in
1978, many of the unique historical
structures on the site have fallen into
various states of disrepair and decay.
Extensive water damage, frequent
vandalism, and theft have left much of
the site in dangerous and blighted
conditions. Much of the original
“National Park Seminary represents statuary found throughout the grounds
what can happen to our nation’s has been defaced, broken, or stolen;
treasures when they are neglected, floors and roofs have collapsed; and in
and it is by far not the only important 1993, the Odeon, one of the sites
site that has sat or currently sits on major treasures, was lost to arson.
the verge of destruction,” said Randall The campus, once linked by bridges,
Alexander, president of The Alexander well-tended gardens, and covered
Company. “Places like National Park walkways, is now overgrown.
Seminary are a part of our history and
culture, and it is of the utmost The Development Team
importance that we keep up and In May of 2001, after years of effort by
restore these treasures so they will not local preservation groups to keep the
be lost for future generations. site intact, the Army determined the
Through the joint efforts of private property to be surplus and began a
developers and the public sector, we process with the Federal General
can save more and more of these Services Administration (GSA) for
landmarks.” disposal. The total amount of land the
Army included was approximately 32
The Historic Campus acres, with 27 acres being within the
The historic campus consists of 27 historic district. In early 2003, the
buildings, 23 of which date from 1887 GSA and Montgomery County entered
to 1927. The historic buildings into an agreement for the negotiated
comprise a wide range of architectural sale of the property. In April of 2003,
styles and sizes, including two styles Montgomery County invited
of bungalows, a Japanese Pagoda, statements of interest from developers
English Garden Castle, Greek Temple, to reuse the property. In December of
that year, The Alexander Company transformed and becoming a jewel in
was selected to lead the development the community.”
team. Founded in 1981, The Alexander
Company specializes in urban infill The Redevelopment Plan
development, urban revitalization, and The Alexander Company’s
historic preservation. Nationwide, The development will include the
Alexander Company gives new life to production of 168 historic homes
historically significant buildings and including 89 condominium homes, 13
challenged downtown neighborhoods. single-family homes, and 66 multi-
EYA (formerly Eakin Youngentob family rental homes. EYA will
Associates), a Washington area firm, construct 90 new townhomes. Also
was selected by The Alexander included will be the renovation of the
Company to construct a variety of new historic ballroom for use as a
townhomes on the site, the community space, restoration and
architecture of which will remain in maintenance of the glen, which will
keeping with the historical aspects of include an interpretive trail, and
the site. improved pedestrian linkages to and
through the site and to Forest Glen
Speaking on the Alexander Company Metrorail Station.
when they were awarded the project,
Montgomery County Executive Douglas Located inside the beltway and
M. Duncan (D) stated, “They had the adjacent to Rock Creek Park, National
money, the people, and a plan to Park Seminary will have all the
make it happen.” U.S. Rep. Chris Van conveniences of urban living – public
Hollen (D. MD.) expressed hope for transportation, urban amenities, etc. –
the sight at a ceremony in which the while retaining a beautifully natural
property was transferred from the and historic character.
Army to Montgomery County: “I’m
looking forward to seeing the place
HISTORIC SIX POINTS/FARMER’S MARKET
REDEVELOPMENT AREA
Project Overview Encouraging the creation of
The Historic Six Points/Farmer’s Market is public/private development
a multi-phase redevelopment effort compatible with the high-density
initiated by the City of West Allis in 2001 residential and commercial land
to eliminate and reverse the trend of uses in the project's vicinity;
urban blight experienced in the years
following the closure of the Allis-Chalmers Repositioning the commercial
Manufacturing plant. neighborhood, created in the early
1900’s, to be competitive in the
This historic redevelopment area 21st Century;
encompasses 10-block, 60-acre area in
the northeastern portion of the City of
West Allis. Development Financing
Through debt issuance and direct
investment, the City delivered
approximately $20 million in development
capital.
The City’s investment strategically
targeted the removal of negative external
costs associated with extensive and vital
infrastructure needs, demolition, clean-up
and remediation, and other barriers to
private sector investment. In addition,
development capital raised by City funded
acquisition and relocation of existing
businesses, and other planning costs.
These efforts provided a strong catalyst
Tax Increment Financing District
for mobilizing the private capital market
To facilitate the Development the City
needed to fund residential and retail
established Tax Incremental District
investment, attracting additional initial
Number Five (“TIF 5”). In conformance
capital of $15 million to the development
with state law, this area was deemed
site.
blighted by virtue of the substantive
brownfield in the area, the income level of
Community Impact
the population which was on average
The site represented a significantly under
below 60% of the area gross median and
utilized community asset, which imposed
the unemployment rate which exceeded
significant lost opportunity costs. In
the national average by more than 1.5
addition, the presence of a deteriorated
times and was well over the state median.
retail commercial corridor, fringe
residential development and large
Overall Development Objectives
dilapidated industrial facilities represented
Some of the overall development goals of
a significant threat to the economic health
the district include:
of the community.
Increasing the economic vitality of
The City’s strategic development plan
the neighborhood;
mobilized the requisite human and
investment capital necessary to
proactively address the socio-economic
Eliminating blighted, and the
impact of a declining industrial base and
underutilization of community
sub-optimal land use, bringing a range of
resources;
homes, including affordable residences
and over 200 jobs to this corridor.
Nelson & Associates, Inc. – Improving Efficiency
Nelson & Associates, Inc. is a woman- and minority-owned professional property management
firm headquartered in Cincinnati, Ohio. Our expertise in the management of various types of
properties enables us to provide quality service through a thorough understanding of Federal
Housing Programs and a good working relationship with owners and various governmental
agencies. The Corporation is currently licensed to conduct business in Ohio, Georgia, Florida,
West Virginia, Indiana, and Illinois. Nelson & Associates, Inc. currently manages over 1,000
units of Low-Income Housing Tax Credit, market-rate, Section 8, and other affordable housing
units.
Nelson & Associates is an Accredited Management Organization (AMO) firm. The president of
the company is a Certified Property Manager, CPM, a designation awarded by the Institute of
Real Estate Management. Other professional memberships held by Nelson & Associates include:
x National Institute of Real Estate Management (IREM)
x National Associate of Realtors (NAR)
x National Associate of Housing and Redevelopment Officials (NAHRO)
x The National Associate of Housing Cooperatives (NAHC)
x The Midwest Association of Housing Cooperatives (MAHC)
x Midwest Associate of HUD Managing Agents (MAHMA)
We have recently added a service to improve the efficiency of our property managers. They are
able to remotely deposit the checks and money orders received from tenants on a daily basis.
Instead of driving to the bank frequently to make deposits, they now have access to software and
a check-processing machine that allows them to scan checks and deposits and electronically post
deposits into the operating accounts for their property. The deposits are posted to the account the
day they are entered onsite without further need to go to the banking center. This has saved the
property countless hours the management staff previously spent driving to and from the bank. It
has also saved the property from the potential liability resulting from checks or money orders
lost in transportation to and from the bank.
This measure will result in hundreds of dollars in savings to each site in the form of reduced
mileage, bank fees, and administrative hours. The management is now able to better serve the
residents by spending their available time visiting each site more frequently, inspecting the
grounds, and getting to know the residents’ needs.
Nelson & Associates, Inc.
Cincinnati, OH
913.961.6011
HOPE STREET
Woonsocket, RI
NMTC Program Background:
¹ The Hope Street School is a central landmark in the Constitution Hill neighborhood of
Project Description: Woonsocket. The red brick, Colonial Revival style building was designed by Willard Kent,
Historic Renovation of a a local architect and engineer, in 1899 and was built in response to late 19th century school
former school reform and demands for the education of the children of immigrant laborers.
¹ The school served as a focal point for the community until its closure in 1977. In 1994 the
Project Type: State Historic Preservation Commission identified the building as potentially eligible for the
Real Estate – community National Register of Historic Places.
facility ¹ The Hope Street School sits in the midst of the beautiful housing that has been developed
and rehabilitated by the Woonsocket Neighborhood Development Corporation (WNDC) and
LISC Program: has been on WNDC's drawing board since the second phase of its Constitution Hill
Rhode Island LISC neighborhood revitalization initiative started in 1998. Over the years, several private
developers have been unsuccessful in attempts to convert the building into condominiums.
Investor: ¸ In the early 90's, the vacant and deteriorating building was owned by a private developer,
Bank of America who was one of the catalysts for the failure of the city's largest credit union. The developer’s
speculative and highly leveraged real estate ventures ultimately forced the liquidation of the
Sponsor / Developer: credit union, and although the school building was one of the assets, the State refused to
Woonsocket foreclose on the developer to clear title to the building.
Neighborhood ¹ As WNDC slowly revitalized the surrounding neighborhood was slowly being revitalized,
people began returning to the area and asked WNDC to 'do something about the School.'
Development Corporation
The State assignee the original mortgage to WNDC, allowing it to foreclose on the developer
and gain legal tile to the School. The city, however, initiated a competing legal challenge in
COMMUNITY order to sell it to another private developer for condominiums. The community organized to
oppose the city plan and advocate for a use that would better meet community needs and
DISTRESS wishes -- a childcare center. The city relented and agreed to support WNDC's plan.
Poverty rate of 26%
The Project:
Family income is 60% of ¹ The developer is renovating the building for lease to Connecting for Children and Families
area median (“CCF”), a well-respected community non-profit organization.
¹ CCF will use the building for office space
Unemployment is 2.12 and to operate a high-quality child care center
with spaces for up to 110 children ages infant
times the national average to 12 years.
NMTC Financing:
COMMUNITY IMPACT
11,693 sq. ft. ¹ $4.4 million NMTC investment.
community space ¹ Involves state & federal historic tax credits.
¹ Augments a LISC loan.
50 construction jobs Community Impact:
¹ This highly visible landmark is being transformed from its former deteriorated state, which
35 permanent jobs exerted a blighting influence on this newly revitalized community.
¹ The child care center addresses the needs of under-served populations, namely the
infant/toddler and school age groups. More than 90% of children served in this facility are
expected to be low-income.
For more Bob Poznanski En Jung Kim
information 269-343-5472 x 3 212-455-9385
contact: rpoznanski@nefinc.org ekim@nefinc.org
National Trust
Community Investment Fund
PROJECT DESCRIPTION Masonic Temple, Baltimore, Maryland
Project Goal:
38,000 square feet of
BACKGROUND
banquet and meeting At the close of the Civil War, the architect
facilities in a former Ma- Edmund G. Lind was commissioned to de-
sonic Temple sign a new Masonic Temple in Baltimore. Its
first floor was partially used for retail pur-
Total Development poses and its upper floors were devoted en-
Cost: tirely to Masonic uses. The Grand Lodge
$22.3 MM (million) maintained its headquarters there until 1994,
when the lodge moved outside the city to ac-
Square Footage: commodate a shift of Masonic membership to
90,000 gross square
the suburbs. William C. Smith & Co. pur-
feet
chased the elegant building with the intention
Developer: of restoring it for use as a full-service banquet and conference facility in connection with
William C. Smith & Co. its two downtown hotels, the Tremont Park Hotel and the Tremont Plaza Hotel. The pro-
ject was delayed for several years while the Smith Company worked to save the building
Tax Credit Investor: from an unexpected plan to demolish the structure in order to build a large municipal
Bank of America parking garage.
Key Project Financing: THE PROJECT
$6.3 MM —
Federal/state historic
The property is a 7-story, 90,000 gross square foot Renaissance Revival-style property in
tax credit and NMTC downtown Baltimore. Among its ten main meeting rooms is Edinburgh Hall, modeled
equity investment by after the Tudor-style Rosslyn Chapel in Scotland, and another which resembles an Egyp-
National Trust Commu- tian temple. The building features ornate plaster moldings, a marble staircase, stained-
nity Investment Fund; glass windows and rococo chandeliers. The project’s scope of work involved restoration
$7.1 MM — and cleaning of exterior and all interior finishes; a new addition providing elevator and
NMTC-enhanced loan; lobby access for floors 2 through 5; a connector to The Tremont Plaza Hotel, and state-of-
$7.5 MM — the-art-electronic systems. The project is particularly noteworthy in that it represents a
Bank of America con- very difficult-to-finance transaction because of the volatile nature of the hotel market.
struction loan Ultimately, the risk was mitigated by several factors, including Bank of America’s long-
standing relationship with the developer and the financial stability of the guarantor and
New Markets Tax
Credit Allocation
Tremont Plaza Hotel.
Amount:
$2.45 MM NEW MARKETS TAX CREDIT SOLUTION
As a large-scale inner-city project, the rehabilitation of the Masonic Temple could not
Construction Jobs: have been financed without new markets tax credit equity.
150
COMMUNITY IMPACT
Permanent Jobs: The Tremont Grand, as it is now known, provides Baltimore with a one-of-a-kind facility
108
for conference and social events. It also generates economic activity in a low-income cen-
sus tract. Seventy-seven percent of the jobs created by its operation are service sector jobs
targeted at local residents. Its rehabilitation contributes to the renaissance of historic
Charles Street (downtown Baltimore’s “Main Street”). A large shopping outlet recently
underwent a renovation of its own, enabling local residents to buy goods in their commu-
nity. This is a remarkable triumph for a historic jewel once slated for demolition in favor
of a parking garage.
For more information on the Fund, please contact
Corinne Ingrassia Tel.: 202-588-6279; email: Corinne_Ingrassia@ntcicfunds.com;
www.ntcicfunds.com
National Trust Community Investment Corporation
The Project
Douglas Park Douglas Park Place is a $2 million project that will serve as a catalyst in revitalizing the
Place neighborhood, as recommended in the New Old Chicago Plan. Located at 720 Ninth Street in
Rock Island, this eight-unit rental housing development will serve women, and their children,
Submitted by who are in early recovery and need support to remain drug and alcohol free.
Rock Island Economic
Growth Corporation Funding was provided by state, local government, foundation, and private support. The co-
(GROWTH) developers of the project are Rock Island Economic Growth Corporation (GROWTH) and
A non-profit, CDC, and Community Housing Solutions (CHS). Once the development is complete, CHS will own the
CHDO organization. property and the Rock Island Housing Authority (RIHA) will manage the apartments. The
development will be completed in the summer of 2007.
Contact: Brian Hollenback,
Executive Director Douglas Park Place arose when neighborhood activists and community leaders determined
120 16 ½ Street there was a need to tackle a challenging community problem. A gap in services existed for
Rock Island, IL 61201 mothers suffering from alcohol and drug addiction. After three years of hard work and
309.788.6311 diligence, Douglas Park Place is now a reality.
www.LiveRI.com
brian@teamrockisland.com Community support for the project is significant. The site was donated by Blackhawk State
Bank. The former Angel’s Salsa building was demolished. The City of Rock Island is providing
$115,000 as a grant and will rebate property taxes to keep project rents affordable. National
$2 million in leveraged City Bank Community Development Corporation is purchasing State Affordable Housing Tax
funds. Credits, producing cash equity of $70,125. The Doris and Victor Day Foundation will
contribute $50,000 to the project, and the Illinois Department of Commerce and Economic
Anchor in the New Old Opportunity awarded a $16,000 energy grant. The largest funding source is the Illinois Housing
Development Authority, who will award $1,761,245 from their Housing Trust Fund and an
Chicago Neighborhood,
allocation of State Donation Credits.
the site of a large-scale
community
redevelopment plan. The Results
An eight-unit project was deemed large enough to meet community needs of this type of at-
risk resident. With some roommate accommodations, the project will serve between 16 and
Strong partnerships with 20 households per year. $2.012.370 was leveraged for this project, creating 90 new jobs.
the community.
A key aspect of the project is counseling which will be provided to residents in an effort to
Unique best-practice return them to independent living. Workforce counseling will be provided by the Martin
opportunity for women Luther King Center through their Workforce Center to include: training on resumes,
undergoing treatment interviewing and basic computer skills, referrals, and ongoing job counseling. Robert Young
for addictions. Center through Riverside, its chemical dependency treatment center, will provide: an on-site
case manager, case management services, substance abuse treatment, parenting education, and
counseling.
Created to fill a need in
the community. This unique development will help to spur additional investments in an area known as New
Old Chicago, a 189-acre area is located west of downtown Rock Island in the oldest part of
Compliment to other the city. The New Old Chicago Neighborhood is the site for a large-scale redevelopment and
infill housing efforts in reinvestment plan that has been embraced by local government officials and the Rock Island
the area. community. Since the final plan was launched in July 2006, development has occurred including
seven infill residential units which GROWTH developed as a pilot project, and a new Habitat
Sources Park subdivision - restoring both real values and healthy perceptions of this formerly neglected
IHDA Housing Trust Fund area.
1,761,245
DCEO Grant
Best Practices
$16,000 Douglas Park Place is already considered an anchor development for this neighborhood,
stirring excitement in the residents. After three years of community discussions, enough
Doris & Victor Day funding was secured to make this dream come true.
Foundation
$50,000 GROWTH will serve as the developer for the New Old Chicago Neighborhood, and will play
an important part of ensuring that additional efforts are carried out responsibly and will
City of Rock Island
compliment existing efforts within the area.
$115,000
National CDC The best evidence to show why this development is so important is the statement from
$70,125 recovering addict and community advocate Ametra Carrol. "Douglas Park Place is a great thing
happening in Rock Island," Ms. Carrol said. "It goes a step further than a treatment center.”
Colonial Theatre
Massachusetts Housing Investment Corp
Description:
Closed for more than 70 years, this historic theater in downtown Pittsfield has undergone
a complete rehabilitation into an 850-seat theater and performing arts center, with the
help of a $18.6 million allocation from MHIC’s Round 2 allocation. This historic
landmark, one of the few surviving examples of the work of J.B. McElfatrick, America’s
leading theater architect in the late 19th and early 20th centuries, has a total of 70,000 sf
including a 45-foot stage, a 32-foot proscenium and an orchestra pit with space for a 40-
piece orchestra. The space adjacent to the theatre provides for concessions, a box office,
gift shop, the new home for the Pittsfield Visitors Bureau, plus audience, performer and
staff amenities. The restored and active Colonial Theatre is an anchor in the effort to
revitalize Pittsfield as a cultural and economic engine in the region. The City of
Pittsfield, with a population of 46,000, is the largest community in rural Berkshire
County. Once a “General Electric company town,” extensive layoffs at the plant forced
Pittsfield into economic decline in the 1970s and 1980s. Between 1980 and 2000,
Pittsfield lost nearly 14% of its population. The Census Tract median income is 39% of
the state median income and the site is located in a SBA HUB Zone and a CDFI Hot
Zone. 70% of the population lives in low-income census tracts.
The revitalization of the downtown--creating a vibrant destination with a variety of
restaurants, cinema, theatres, a visible arts community, specialty retail, and special
events—is the key component of the City’s strategy to attract new employers to the
business park under development on GE’s old campus. The state’s Department of
Economic Affairs (DEA) has focused attention and resources on Pittsfield after the
regional competitiveness council identified the economic health of Pittsfield as the major
determinant of the economic state of the Berkshires. The DEA organized a conference
on the challenges and opportunities facing Pittsfield, and determined in 2005 that
revitalization of the Colonial Theatre and the development of a downtown cinema center
(financing for the cinema center, including an allocation of $11.7 million of MHIC’s
Round 4 NMTC allocation, is expected to close in Spring 2007) were the most important
factors in the turnaround in Pittsfield’s downtown.
Programs Utilized:
Federal: The National Park Service awarded a $400,000 “Save our National
Treasures” grant to the project. The project also utilizes both the New
Markets Tax Credit and Federal Historic Tax Credit
State: State Historic Tax Credits, $2.5 million grant from Office of
Administration and Finance (part of sponsor loan)
Local: Creation of Arts Overlay District and Office of Cultural Development to
facilitate arts-based revitalization efforts, $1 million grant from City (part
of sponsor loan)
Foundation: Extensive fundraising from a variety of foundations, individuals and
corporate donors.
Collaboration/Creativity:
The City had an existing relationship with MHIC through two LIHTC projects that
MHIC financed in the same downtown census tract within the last 5 years. Therefore, it
was a natural fit for MHIC and Pittsfield to collaborate to rehabilitate the Colonial, which
is a centerpiece of the City’s downtown redevelopment plan. In order to facilitate
downtown redevelopment, the City created an Arts Overlay District, which, among other
things, revised zoning to allow residential uses on upper floors of commercial buildings.
In 2005, the City created an office of Cultural Development to allow Pittsfield to take
advantage of its position in the center of the culturally rich Berkshire region. Finally, the
City secured state and federal funds for streetscape improvements downtown, which
made it more pedestrian friendly by narrowing roadways, increasing the width of
sidewalks, and implementing aesthetically pleasing elements.
Results:
The opening of the Colonial was projected to create 168 new jobs (direct and spin-off).
Since theatre renovations started in the summer of 2005 and the announcement that
financing for the new cinema was secured last fall, the results are already evident in the
downtown: new restaurants, retail, and arts-related businesses have opened; over 50 artist
studios are now located there; and an award-winning theatre company purchased a
defunct music hall, one block from the Colonial, as its year-round performance space. A
local business leader was quoted in a New York Times article describing the newly
renovated Colonial as follows, “When new businesses come to town, every single one
cites the rebirth of the Colonial as a primary reason why they chose this location.” This
is a major shift compared to the feedback the City received from potential employers who
cited, in previous decisions not to locate in the City, that Pittsfield was a dismal place to
live for employees in their 20s to 40s. The measurable impacts that the City credits to
MHIC’s downtown investments include: a doubling of permits issued for new single
family homes in the last 2 years; permitting of 40 new downtown housing units since
June 2005; $50 million in private investment downtown in the past 3 years; and an
increase in property values in neighborhoods adjacent to downtown for the first time in
20 years.
Best Practices:
Efforts had been made to restore the Colonial for over 30 years, but the NMTC and
historic tax credit equity financing package finally made it possible, as it bridged the
difference between total development costs and the amount that could be raised
philanthropically and from state and local grants and loans. The City of Pittsfield
responded not only to their own community’s needs, but those identified by regional
development organizations and the Commonwealth as essential to the economic well-
being of all of Western Massachusetts. The revitalization of the Colonial is evidence that
MHIC’s business strategy, driven by input from low-income community organizations, as
well as local governments, ensures that its NMTC investments will have maximum
impact in the community. By financing projects that are the cornerstone to the larger
revitalization efforts for a particular area, the NMTC subsidy catalyzes spin-off
development and attracts private capital.
Summit Place Office Space Adaptive Reuse
West Allis, WI
The Project
Summit Place is an adaptive reuse of
Project Description: century old buildings near Milwaukee in
Rehabilitation and which the Allis Chalmers Manufacturing
Construction of High uality Company originally built tractors. Much
ffice Space of the plant was demolished in 1987, when
the manufacturing operation closed, but
Project Type: about 900,000 square feet of office space
Real Estate – ffice and industrial facilities remained. By the
1990s, much of the property was still
LISC Program:
vacant and undeveloped. In August
il aukee
1994, Whitnall Summit, LLC, the developer,
mmit ace i in
Investor: purchased some of these residual assets,
US Bancorp CDC which covered about 33 acres and included 350,000 square feet of office and 550,000 square
feet of industrial space. When purchased, approximately 45 percent of the office space and
Lender: 30 percent of the industrial space were vacant. During 1997-2003, Whitnall Summit
Whitnall Summit renovated the property, aggressively improving the leases and tenant occupancy rates, and
Development Corp. re-sold some parts of it. The current project involves redevelopment of the three remaining
buildings and a portion of a vacant land. The two major barriers which historically had made
Developer: this project a hard sell were a lack of parking and available financing.
Whitnall Summit, LLC
When completed, the renovated facility, which is on a former brownfield site, will offer more
than 390,000 square feet of office space which can be tailored to meet the needs of individual
COMMUNITY IMPACT tenants. The property’s early 20th century design includes 17-foot-tall window openings,
BY THE NUMBERS hundreds of linear feet of skylights, and an awe-inspiring superstructure. Amenities include
Rupena’s Café, Summit Place Fitness Center, free internet café, multiple conference rooms,
N C Investment heated parking and three first class conference centers which accommodate up to 175
.5 million participants. Anticipated construction in a new building will include an additional 250,000
square feet of office space. Among the anchor tenants are Alterra Healthcare, four
Commercial Space subsidiaries of Siemens, and Pitney Bowes. The total project cost is approximately $53.8
39 , 50 sq. ft. million.
Permanent obs This project, which generates high-quality, family-supporting jobs, is critical to metropolitan
2,502 Milwaukee. It is expected to create more than 2,500 permanent and 1,000 construction jobs
and produce an estimated $1.4 million in annual tax base. Although many older, urban,
Construction obs manufacturing cities are attempting to re-invent themselves as tourist destinations, the quality
1000 of jobs associated with tourism and entertainment are often of poor quality and pay low
wages. The Summit Place development will provide well-paying jobs through a diversified
Community Details
mix of employment opportunities. That diversification is expected to prevent the
edian Income disadvantages of being overly dependent on one economic sector.
% of Area edian
NMTC Financing
Bro nfield Site LISC used $7.5 million of its New Markets Tax Credit award to obtain equity capital from US
Bancorp Community Development Corporation which, when combined with loans from City of
West Allis and Lincoln State Bank, allowed it to make loans to the project on advantageous
terms that positioned this reclaimed industrial complex to compete with comparable office
space developments in non-NMTC areas farther from Milwaukee’s urban core.
New Markets Support Company, LLC 501 Seventh Avenue, 7th Floor New York, NY 10018 Tel: (212) 455-9385
Dial Realty Corp
Catalyst One Residence Inn– Lincoln, NE
Project Description:
112 Room
Residence Inn, 600
stall parking garage,
12,000 sq ft office
space and 30,000 sq
ft retail and 14
condos
Project Type:
Real Estate and
Hotel
Total Development
cost:
$45,000,000
Project Financing:
Bank Loan $17M
City $17M The Project:
NMTC Equity $4M The City of Lincoln, NE has a desire to develop a block adjacent to
Equity $3M the University of Nebraska. They also need additional parking in this
Condo Sales $4M area. The City would like to use this project as the “catalyst” for the
redevelopment of the downtown area. This project contains a 112 unit
Developer: Residence Inn hotel, 600 stall parking garage, 12,000 sq ft of office
Rick Kiolbasa space and 30,000 sq ft of retail.
Construction Jobs: Area Impact:
60 This block formerly contained a dollar theater. The new facility will
contain a new civic plaza which will give people an opportunity to
Permanent Jobs: work, live and play in the downtown area. Job creation from the new
70 facilities will play an important role in the revitalization of the area.
Annual contribution The Project as an investment:
to the local The Residence Inn will be co-owned and managed by our hotel
economy: partner who currently has 48 hotels within their portfolio. The office
$7M space is preleased and 80% of the retail space is preleased. The
condominium market is strong enough to support a small condo
project located within the development.
For more information contact:
Rick Kiolbasa Dial Realty Corp
Telephone 402.493.2800 cell 402.598.4240
rkiolbasa@dialrealtycorp.com
IMPACT SEVEN, INC.
S&S CYCLE BUSINESS EXPANSION
Project Overview and rural and minor-urban
Impact Seven (I-7) is a CDFI communities.
serving the needs of rural and
minor-urban communities S&S cycle
throughout Wisconsin. In 2004, (I- S&S Cycle has been a leading
7) responded to the needs of a manufacturer of Proven
rural manufacturing company Performance V-Twin motorcycle
whose growth was stymied based components and engines for over
on its inability to efficiently store 45 years. In 1969, S&S established
and ship product. its base in Viola. S&S supplies
components and/or engines to
I-7 worked with S&S cycle to several large custom OEMs
expand its operations in a town including: American Ironhorse,
with a population under 700 and Arlen Ness, Big Dog, BMC, Bourget
create a more efficient platform for Bike Works, Hellbound Steel,
shipping and storage. At the time Rucker Performance, Swift, Titan,
of initial discussions, management Ultra, Vengeance, & Victory
was considering relocating its
operations to the southeast region The Expansion Effort
of the U.S., a move that would The project involved a $5.5 million
have been devastating. business expansion that allowed
for the purchase of city owned real
estate in La Crosse and expansion
of manufacturing operations in
Viola. I-7 facilitated the
transaction, helping to bring an
allocation from LISC and
leveraging its relationships with US
Bank to fund the project that
helped maintain and expand the
employment base in this rural and
minor-urban project.
Working with I-7, S&S Cycle
decided to expand its storage and
Impact
shipping operations to La Crosse,
The expansion produced 50 new
Wisconsin, a city of about 50,000
shipping and manufacturing jobs
located on the Mississippi river,
and generated approximately
about 50 miles northwest of Viola.
$100,000 in annual real estate tax
The manufacturing base was
revenues for the minor-urban
retained and expanded in Viola.
community. S&S also expanded its
Instrumental to this successful
facilities in the rural community,
business retention and expansion
engendering the retention of 310
strategy was the financing
jobs and the creation of 35
facilitated through a NMTC
additional manufacturing jobs.
structure as well as I-7’s keen
understanding of the synergistic
linkages between business, CDE’s,
ALLCO NMTC EQUITY PARTNERS
CLEAN RENEWAL ENERGY BONDS
Project Overview
Allco has worked directly with the rural community of McCook, Nebraska to help
bring jobs and renewed vigor through the enticement of S.W. Energy, LLC (SWE) to
site their project there.
SWE will build and operate a 53 million-gallon-per-year ethanol plant in McCook,
Nebraska. McCook was chosen as the site for the project for several reasons: its
excellent proximity to corn supplies and the users of the agricultural by-products
produced by ethanol plants, the infrastructure, and perhaps most importantly given
the competitive drive for the project, state and local economic incentives.
Financing
In 2006, Allco accessed $2.25 million in convertible debt to help leverage a
significant amount of additional financing for this $100 million project, as will federal
loan guarantees obtained by Allco for the project. The USDA provided a $10 million
9006 Renewable Energy Systems Guaranteed loan and a $25 million Business and
Industry Guaranteed loan as additional financing for the ethanol facility.
USDA Guarantee Loans
To foster rural economic development and growth, Congress passed the Renewable
Energy Systems and Energy Efficiency Improvements Guarantee Program as part of
Section 9006 of the 2002 Farm Bill. This program provides financial assistance in the
form of a guaranteed loan to agricultural producers and rural small businesses to
purchase renewable energy systems or make energy efficiency improvements.
Utilizing this program will help bring lower rate debt to the project. Allco also
accessed another USDA source of funds, the Business and Industry Loan Guarantee
Program providing additional reduction in cash flow costs.
Local Impact
The SWE facility will have a positive economic effect on the entire community. The
facility will create 45 permanent, direct jobs, generating an annual payroll of
approximately $2 million. In addition, due to the increased value of corn among
other factors, the facility is anticipated to create 150 indirect jobs.
Unlike other renewable energy development projects in the market place, this
project is being structured in a way that is tax efficient for local owners/cooperative
members. This means that local participants in the project should be able to realize
the value in their investment and not bear an inequitable tax burden that jeopardizes
their ongoing participation in the future. Because the SWE plan will provide a strong
market for corn from farmers throughout the region, its impact will extend well
beyond the small community in which the facility is located, providing economic
benefits to other communities.
Federal Energy Bonding Program
Allco has provided energy and transit related support to communities throughout its
domestic trade practice. It was a natural fit for Allco to help communities apply to
access the federal program, called CREBS (Clean Renewable Energy Bonds). This
program was written into law on Aug. 8, 2005, allowing electric cooperatives, public
power systems and municipal utilities to issue or benefit from the issuance of tax
credit bonds to finance clean renewable energy projects. The program is run on a
competitive basis and Allco secured roughly 40% of the available resource for its
community clients. While not used on this particular project, the CREBs resource
promises to be a significant tool in attracting and developing clean, renewable
energy businesses into many rural communities.
Chinatown Community Education Center
Massachusetts Housing Investment Corp
Project Description:
New construction of 33,783 square foot, 6-story education and community center in
Boston’s Chinatown on vacant land purchased from the City to house the offices and
program space for the two sponsoring organizations. The sponsor organizations, Asian
American Civic Association (AACA) and Kwong Kow Chinese School (KKCS) are not-
for-profit organizations that provide charitable and educational services to the greater
Boston Asian-American Community. The mission of AACA is to assist Asian
immigrants and refugees to achieve social and economic self-sufficiency and become
responsible citizens and productive members of their community. AACA was founded in
1967 by Chinatown Community leaders and now provides a full spectrum of social and
educational services including ESL, workforce development, immigrant counseling, and
publication of the Sampan, New England’s only bilingual English and Chinese
newspaper. AACA’s services reach more than 6,000 low-income individuals annually.
Founded in 1916, the mission of KKCS is to provide Chinese culture and language
education to children. KKCS has provided high quality and affordable after school,
weekend, and summer academic programs and recreational activities for over 20,000
children of Chinese immigrants in the Greater Boston area. More than 600 low-income
children take part in KKCS’s programs annually. Both sponsor organizations have
struggled with inadequate and impermanent space, and joined together to create a new
center for community education in Boston’s Chinatown. The Chinatown neighborhood is
one of the poorest neighborhoods in Boston, with this project’s census tract having a
median household income 30.9%% of area median income, and a poverty rate of 35.1%.
As of 3/31/07, the project is 50% complete and is expected to reach substantial
completion by 9/1/07, ahead of schedule and on budget.
Programs Utilized:
Both sponsor organizations conducted successful capital campaigns, collectively raising
over $6 million from corporate, foundation and individual donors, including the
Chinatown Charitable Trust, a community development fund capitalized with proceeds
from local large-scale commercial developments. The sponsor organizations could
support $3 million in permanent debt, which left them with a $3 million financing gap.
By leveraging the senior debt and fundraising through the New Markets Tax Credit
(NMTC) structure, MHIC was able to fill that gap with NMTC investor equity, which is
structured as a loan to CCEC, LLC, at 1% interest only with a 30-year term. The project
is located in Chinatown, one of the City of Boston’s Main Streets Districts. The Main
Streets program is designed to revitalized commercial areas that have suffered from
disinvestment. The program approach focuses on community organization, promotion,
design and economic restructuring. Not only did the City of Boston sell the parcel to the
project for below market price, but they deferred $250,000 (75%) of the acquisition cost
for 8 years. In addition, they’ve committed $50,000 to each sponsors capital campaign.
Collaboration/Creativity:
Project is a joint venture between two nonprofit organizations who decided to collaborate
to create a permanent home for their organizations. The sponsors participated in
significant community planning beginning in 2000, and received official support from the
Chinatown Neighborhood Council in February 2001. The project is located in the
Chinatown Main Streets district; it is an ideal Main Streets project, in that it will improve
the streetscape and bring increased foot traffic to the neighborhood, enhancing the profile
of this commercial district. The Boston Redevelopment Authority (BRA) designated the
sponsors as developers of this City-owned parcel in October 2001. The sponsors then
began the predevelopment process and capital campaigns in earnest. It became clear that
there would be a significant financing gap that would prevent the project from going
forward. MHIC’s NMTC program was an ideal solution. MHIC’s investors provided $3
million in gap financing. CCEC’s neighbor, Tufts University Medical Center, is also an
essential partner. Tufts allowed the general contractor to utilize an adjacent parking lot
for staging and crane set-up, as well as allowing the contractor to tap into their electrical
panel for power during construction, free of charge.
Results:
Jobs: 57 on-site FTE construction jobs plus an estimated 63 FTE spin-off jobs in
construction industry. 62 direct FTE permanent jobs retained, 66 created, and 83 spinoff.
In addition, one of AACA’s main programs is job training in industries ranging from
business and finance to construction, automotive repair and hospitality. All of AACA’s
job training programs achieve jobs placement rates that exceed 80% and they serve more
than 1,000 participants a year.
Expansion of services: AACA anticipates a 38% increase in clients served in the first full
year of operations in their new home. AACA will also expand their program to include
an early education and childcare center with space to care for 51 infant to pre-school aged
children; 50% of the children are expected to be recipients of child care vouchers
available to low-income families. KKCS, which has been forced to operate with a
significant waiting list for its after school, weekend and summer programs due to space
constraints, anticipates doubling the number of children served by the end of the third
year in their new home.
Best Practices:
The collaborative efforts of the two sponsor organization, the City of Boston, the
leveraged lender, a multitude of individual, corporate and foundation donors, the MHIC
CDE, a skilled development consultant and general contractor brought to fruition a
project 10 years in the making. Early efforts to gain community support opened up
communication between Tufts and the sponsors, facilitating Tufts efforts to help the
construction of the project on an extremely tight urban site. Open lines of
communication between parties allowed quick understanding of the complex NMTC
financing package.
Reprinted from the issue of February 26th, 2007
BANKER & TRADESMAN
THE REAL ESTATE, BANKING AND COMMERCIAL WEEKLY FOR MASSACHUSETTS ESTABLISHED 1872
Community Education Center
Will Serve Hub’s Asian Residents
By Kay Metcalfe
A
NEW PROJECT CURRENTLY UNDER WAY IN
Boston will provide both education and
a source of pride for one of the city’s
best-known ethnic neighborhoods.
Construction for the Chinatown Commu-
nity Education Center is in full swing, with
progress on the site hovering around 50 per-
cent. The new structure – which will be
home to the Asian American Civic Associa-
tion and the Kwong Kow Chinese School,
the two joint owners – will offer teaching
and training to the local Asian population.
The commercial condominium building
located at 87 Tyler St. in the Hub’s China-
town neighborhood was originally a Boston
Redevelopment Authority-owned vacant lot.
The city sold the plot of land to sponsors
AACA and KKCS – who joined forces as a
limited liability company to purchase the
site – and is deferring all costs for the first
eight years of the development.
The 6-story, 41,650-square-foot, concrete
and brick- and zinc-shingled building has an
The Chinatown Community Education Center, currently under construction at 87 Tyler St.
estimated total project cost of $12.6 million.
in Boston, is expected to be completed by the end this summer.
The project, which broke ground in August
of last year, received $11.9 million in New impermanent locations and inadequate fa- with English language classes, job training
Market Tax Credit financing, which was cilities throughout their time in Boston, and social services. KKCS provides Chinese
crucial to the project. The remaining noted McGilvray. culture and language education to children,
$600,000 was received in direct investments “Both are longstanding community organ- as well as recreational activities and Chi-
from the deferred acquisition from the BRA izations in Chinatown and both serve low- nese language classes.
and the sponsors. income communities and the Asian-Ameri- “We recessed the first floor slightly to
“New Market Tax Credits are essential in can community of Boston … they decided it allow for two reception areas, one for each
filling the gap where needs couldn’t be met was time to pull together and create the organization … each organization is taking
[by the sponsors]; otherwise the organiza- CCEC,” she said. Currently KKCS is located three floors apiece… and there are two ele-
tions would’ve had to increase their own at 90 Tyler St., across the street from the vators going in with work beginning …
fund-raising by 50 percent,” explained Kathy new building, and the AACA is at 200 April 2,” said Edmund L. Whelan, construc-
McGilvray, investment officer at the Boston- Tremont St. tion manager of A.J. Martini Inc., the Win-
based Massachusetts Housing Investment chester-based general contractor. “We’ve re-
Corp. The architect for the project is Cam- A Good Neighbor ally benefited from the weather. We were
bridge-based Bruner/Cott & Assoc. and the The new building will house the two non- able to get the structure of the building up
owner’s representative is Tim McHale of profit organizations, which serve different before the weather changed for the worse
McHale & Co. segments of the local community. AACA and are currently on schedule.”
AACA and KKCS both have experienced provides Asian immigrants and refugees Continued on Next Page
2 B A N K E R & T R A D E S M A N FEBRUARY 26, 2007
Continued from Previous Page an empty lot to A.J. Martini that lies directly floor has high ceilings, which will accom-
The initial stages taken before construc- behind 90 Tyler St., allowing for materials to modate for the multifunction room. It will
tion of the site presented the team with be stored there and also for machinery to have the ability to be broken up into class-
some early obstacles. do its work. rooms by movable partitions, or could be
“The tightness of the site was a chal- “Initially we encountered some old parts used for larger gatherings,” said Whelan.
lenge,” noted Whelan. Tyler Street is a nar- of wharfs when we were clearing the site to “Since they are community-based organiza-
row one-way street with permit parking that put in the new foundations, which were tions, they [weren’t required] to have on-
limits space even more, he added, and A.J. about 200 years old. Back in the 1800s this street parking; most users are local and will
Martini was only able to get the materials area would’ve been waterfront. So that be on foot.
and machinery it needed into the site area added a little time onto our total amount “We’re hoping for completion by the end
through the generosity of the Tufts-New early on,” said Whelan. of the summer so they can begin the new
England Medical Center. The building will consist of classroom, of- school year in their new building. The local
“Tufts has been a very accommodating fice, function and daycare space upon its community has been very helpful in general
neighbor … they’ve been very helpful for completion, with classrooms on all six because the neighborhood is excited for the
our daily operations and they’ve been very floors. “The sixth floor has more office project to be done they have been very ac-
cooperative,” said Whelan. Tufts leased out space than the other floors and the second commodating.” ■
Reprinted with permission of Banker & Tradesman.
This document may constitute advertising under the rules of the Supreme Judicial Court of Massachusetts.
The Project
Voss Brothers Voss Brothers Lofts represents a substantial $5.6 million rehabilitation of a historic building located at
Lofts 2123 3rd Avenue in downtown Rock Island, Illinois. The project is a mixed-use and affordable housing
project. GROWTH served the role of general partner, developer, and sponsor. Funding was provided by
federal, state, local government, and private investment. GROWTH worked in cooperation with the
Submitted by
Rock Island Housing Authority (RIHA) to complete the project. RIHA sold this building to the project for
Rock Island Economic $700,000 less than their investment, in exchange for a 30-year lease for $1 for their offices and a
Growth Corporation revenue-generating 3,000 square foot retail storefront.
(GROWTH)
A non-profit, CDC, and This formerly underutilized 60,000 square foot warehouse was transformed into 35 uniquely designed
CHDO organization. loft apartments, with the upper units enjoying a view of the Mississippi River. The project also includes
one commercial retail space and the offices for RIHA.
Contact: Brian Hollenback,
Executive Director Voss Brothers Lofts, completed in August 2006, offers 2 studios, 11 one-bedroom, 15 two-bedroom, and
120 16 ½ Street 7 three-bedroom units, featuring approximately twenty unique floor plans. Unit mix includes 1 unit for
Rock Island, IL 61201 individuals under 30% AMI, 13 units under 40% AMI, 12 units under 50% AMI, and 9 market-rate units.
309.788.6311 Amenities include new appliances, energy efficient air conditioning and heat, laundry hook-ups in each
www.LiveRI.com
unit, and on-site storage and laundry.
brian@teamrockisland.com
Redevelopment of the Voss Brother Lofts was designed in response to many indicators of community
need including a lack of quality affordable rental housing, the desire to bring life back to blighted
$5.6 million leveraged in downtown corridors, and the need to determine the best use for existing underutilized structures.
public and private
funding. Affordable Housing: The Voss Brothers Lofts are a continuation of GROWTH’s mission to develop and
preserve housing that is affordable within the City of Rock Island. Local data asserts that there has been
Conversion of a a steady decline in the number of units available at lower rent ranges and a majority of vacant rental units
previously vacant within the city were built prior to 1950. A testament to the need for unique, affordable, quality rental
warehouse into 35 units units is the quick occupancy which took place upon the buildings completion - and now the maintenance
of livable space for of a waiting list for new tenants seeking the Voss living experience.
mixed incomes.
Redevelopment Areas: Local planning documents and downtown revitalization efforts have continually
called for the need to revitalize downtown structures and bring life back to areas experiencing blight and
Strong public and private disinvestment.
community partnerships.
Restoring Buildings: The Rock Island community is nationally acclaimed as a “Preserve America”
Unique and affordable community for its work in restoring historic buildings. The Voss Brothers Loft project is a prime
downtown living example of identifying the best use of this previously underutilized structure, originally built in 1924.
opportunities. Restoring this building into useable living and office space has not only added real value back to physical
structure but provides a unique experience for tenants to live just steps away to coffee shops, nightclubs,
A Live – Work project. restaurants, artist galleries, unique shops, bike trails, and the Mississippi River.
Creative mixed-use of Results
One hundred jobs were created with this project, resulting in 35 new housing units. $5,586,117 was
an underutilized building. leveraged for this project. Common areas include a computer room, exercise room, and large
community room. In addition, GROWTH’s homebuyer program services are made available for residents
Addresses Illinois Smart who want to take the step to home ownership.
Growth Initiatives.
Voss Brothers Lofts is situated in the Third Avenue corridor of Rock Island, a formerly abandoned area
Sources that has welcomed at least twelve different projects including a newly constructed regional insurance
IHDA (HOME) headquarters, a new mental health outpatient center, and various façade improvements. Over $70 million
$2,500,000 has been invested into the downtown area in the past five years. The creation and occupancy of the Voss
U.S.A. Institutional Tax Credit Brothers Lofts brings furthers this investment by bringing a true sense of community to downtown Rock
Fund, LP $2,185,695 Island. Additional spin-off projects in the works include the creation of eight units of live/work space for
State Donation Credit Equity
artists, owner-occupied housing downtown, and the creation of a downtown neighborhood association.
$447,525
City of Rock Island
$265,000 Best Practices
Deferred Developer Fee In summary, Voss Brothers Lofts represents a “best practice” in community development and affordable
$122,897 housing creation because the project revitalized a vacant warehouse near the edge of downtown to
DECO Energy Grant create 35 mixed-income urban living units. By working with local, state, regional, and federal funding
$65,000 agencies, the project utilized diverse sources of income to make the project feasible. It fulfilled the need
of creating more living downtown, bringing the total units created in the last five years to over 140 units.
Community Needs-
Building Resources
for Tomorrow
Best Practices
Hosts:orNMSC
LLISC or NEF Sponsors:
Best Practices
Alabama Housing Finance Authority
For many years, there has been a tremendous, unmet need in the State of
Alabama for affordable housing for persons with mental disabilities who are
capable of living independently with the assistance of limited supportive services.
These citizens traditionally have been required to be admitted unnecessarily to
hospitals, group homes or other mental health institutions in order to obtain the
necessary support.
A landmark class-action lawsuit, filed in 1970 and settled in 2000, challenged that
practice. Wyatt v. Sawyer established a constitutional right to treatment for
people in mental institutions and then defined the meaning of “treatment” with
minimum standards covering every aspect of institutional life and a requirement
that treatment be provided in the least restrictive setting consistent with an
individual’s need. The litigation focused on programs to enable Alabamians with
mental disabilities to live in the community. The settlement, announced in
January 2000, mandated that the Alabama Department of Mental Health/Mental
Retardation (DMH/MR) move approximately 600 mentally disabled persons from
existing institutions to private housing by September 30, 2003.
Former Alabama Governor Don Siegelman, anxious to move forward with the
settlement provisions, requested AHFA’s assistance in developing a plan to use
HOME Investment Partnerships Program funds for this purpose. The AHFA
Board of Directors unanimously approved the request at its September 13, 2000,
meeting. Over the next several months, AHFA worked in concert with DMH/MR
to design a HOME Action Plan that would best meet their needs and enable the
State to utilize its existing community programs more efficiently.
When the preparation was complete and public comments collected and
analyzed, the 2001 HOME Action Plan stated that AHFA would allocate half of its
HOME allocation for that year—$7,077,148—for the construction of residential
rental units for persons with mental illness and mental retardation. The
developments can be single-family homes, duplexes or low-density
developments, must be located in counties selected by DMH/MR has having the
greatest need, and must offer supportive services.
In HOME-financed residential rental projects of 5 or more units, 20 percent of the
units must be occupied by households with incomes at or below 50 percent of the
median family income. The remaining units must be occupied with households
with incomes at or below 60 percent of the median family income. In projects
with four or fewer units, 100 percent of the units must be occupied by households
with incomes at or below 60 percent of the median family income.
Alabama Housing Finance Authority; Montgomery, AL 36123-0909
Barbara Wallace; 334/244-9200; bwallace@ahfa.com
To ensure that the units would be affordable to individuals with minimal income, a
minimum rent limit was established. Initially, the minimum net tenant-paid rent is
$210 per month for a one-bedroom unit and $260 per month (total combined rent
if unit is shared by more than one person) for two-or-more bedroom units. The
project may charge higher than the minimum rent if the tenant’s income can
support an increase. Development owners are encouraged to established
project-based rental assistance and/or seek sources of public and private rental
assistance such as Section 8.
DMH/MR provides directly or contracts with local service providers to provide
mental health treatment, habilitation services, and supportive services.
Supportive services are provided under a planned program of services designed
to enable special needs residents of a residential rental property to remain
independent and avoid placement in a hospital, nursing home, group home or
intermediate care facility for the mentally or physically handicapped.
To make the idea of supportive housing units more marketable to the
development community, AHFA’s HOME Action Plan included additional points
for rental assistance, additional subsidies, supportive services, extra amenities,
and proximity to grocery stores or pharmacies. In addition, the supportive
housing units can be rented to an otherwise income-eligible tenant if a mentally
disabled resident is not available. However, special needs tenants must be given
priority on any waiting lists.
In 2001, 11 housing developments were awarded $6,957,390 in HOME funds for
the construction of 97 supportive housing units. By leveraging AHFA’s remaining
HOME allocation with Low-Income Housing Tax Credits for set-aside units,
AHFA’s agreement with DMH/MR created 210 units of affordable housing for
individuals with mental illness and retardation in 2001. Continuing the program’s
success, AHFA funded an additional 290 units in the 2002 cycle. Of those, eight
housing developments received $6,586,348 in HOME funds for the construction
of 88 supportive housing units.
Utilizing the inherent flexibility of the HOME program, AHFA, in cooperation with
private development professionals and community-based health service
providers, has been able to more than meet a desperate need in Alabama
through the construction of affordable rental housing for persons with mental
disabilities.
Angela Meadows Apartments in Albertville, Ala., became the first complex to be
completed and placed-in-service under the supportive housing initiative. Angela
Meadows is a mixed development, with eight of its 48 units set aside for special
needs residents.
Alabama Housing Finance Authority; Montgomery, AL 36123-0909
Barbara Wallace; 334/244-9200; bwallace@ahfa.com
“The project had to be structured to meet the needs for the MI/MR individuals to
mainstream them into quality affordable housing while meeting the needs of the
other income-qualified individuals in the proposed market area,” said Pat
Dobbins, chief financial officer of Angela Meadows owner Olympia Construction
Inc. “As a development team, we went to work with the attitude of making this
project a reality, and educated ourselves on the challenges we would face from
an ownership, development and management standpoint.”
Olympia worked closely with the Albertville Housing Authority and DMH/MR for
referrals for the special needs units. In addition, the Albertville Housing Authority
was able to provide rental assistance for residents with mental disabilities.
Once the initial tenant selection process was completed, management of the
special needs units has been no different than for the other 40 units. Case
management for residents with mental disabilities is provided on a one-on-one
basis by the service provider.
“We haven’t had any challenges,” said Dobbins. “I think helping anybody with a
need like this is a good thing. The demand for this type of quality housing is great
within rural and metropolitan communities for income-qualified individuals and
special needs households.”
In fact, the program has been so successful in generating additional housing
needed to meet the Wyatt decree that DMH/MR has informed AHFA that they will
not need to use this program again.
Alabama Housing Finance Authority; Montgomery, AL 36123-0909
Barbara Wallace; 334/244-9200; bwallace@ahfa.com
Best Practices
BAC Funding Corporation
BAC Funding Corporation is a nonprofit CDE located in Miami, FL.
The project is a five (5) story +/- 200,000 Square Foot Commercial Office
Building leased by various departments of Miami-Dade County. The project has
stimulated economic growth for the local community via revitalization and
beautification of one the lowest-income enterprise zones in the country. The
MLK project (including food court concept) has created more than 200 temporary
construction jobs and has created over thirty (30) permanent jobs.
Miami-Dade County has full use and ultimate ownership of a new office building
without having to make a large capital expenditure or encumbering its borrowing
capacity. Rental payments paid to BAC will be applied towards the ownership of
the building. BAC’s income will help it to fund operation costs as well as
business development and loan programs for African-American businesses.
The project is a collaborative effort between Miami-Dade County and BAC
Funding Corporation to provide an economically efficient way to house various
departments for Miami-Dade County as well as provide an additional instrument
of self-sufficiency for BAC and its clients.
BAC was able to obtain tax-exempt bond financing via the United States
Treasury due to its not for profit status and history of community development.
The bond payments are guaranteed by Miami-Dade County. The budget for this
project was $33,895,306. A grant was also provided by Miami-Dade County.
The MLK Office Building represents the best practices in community
development because all stakeholders are rewarded for their participation.
Specifically, investors in the tax-exempt treasury bonds, which were used to
finance the construction and development of the MLK Office Building benefit from
receiving a guaranteed return on investment for thirty (30) years, while
supporting a worthwhile cause and avoiding additional tax burdens from their
investment income.
Miami-Dade County, as grantor and tenant of the building will be saving money
on providing headquarters for several of its essential departments by locking in
below market rental rates for office space for the next thirty (30) years. Miami-
Dade County has the option of purchasing the building at any time at a pre-
negotiated price. Essentially, Miami-Dade County is able to obtain use of a
major asset without encumbering its own borrowing capacity.
BAC Funding Corp; 2525 NW 62nd Street; Miami, FL 33147
Brian Culmer; 305-693-3550; brian@bacfunding.com
Miami-Dade County taxpayers will save significant amounts of money via
reduced operating expenses for many of its public services such as the
Departments of Corrections, Team Metro, Transit and Solid Waste. The money
saved from this project can be channeled to other community development
activities. The office building is located at a major Metrorail transit station and
as such, promotes the use of public transportation in an effort to reduce
automotive traffic and increase revenues to Miami-Dade County.
Finally, BAC Funding Corporation and its clientele base benefit from the project
as the building created a significant source of income for the non-profit
organization, enabling it to provide additional financial services and assistance to
small minority businesses, which are generally located in economically
disadvantaged neighborhoods
BAC Funding Corp; 2525 NW 62nd Street; Miami, FL 33147
Brian Culmer; 305-693-3550; brian@bacfunding.com
Best Practices
ACCION Texas
There are thousands of small businesses in Texas that do not have access to
capital from traditional financial institutions. Additionally, many have little or no
training about business plans, financial statements and other business related
activities.
ACCION Texas is a CDFI nonprofit microlender that lends to small businesses in
Texas. ACCION Texas has offices in 10 locations throughout the state. There are
44 Small Business Development Centers in Texas that provide training and
technical assistance to small businesses, but do not have funds to disburse.
At an annual SBDC convention on May 17, 2005, ACCION Texas proposed a
partnership between SBDC’s and ACCION Texas. SBDC’s received training and
booklets on the ACCION Texas loan process. The result has been that Texas
small businesses have been able to learn the fundamentals of business from the
SBDC and concurrently can apply for funding from ACCION Texas.
The result of this partnership is that ACCION Texas has been able to extend its
services without hiring additional people through the 44 SBDC’s in Texas. In
some areas distant from ACCION Texas offices, SBDC representatives actually
close an ACCION Texas loan and hand the business owner an ACCION Texas
check. This partnership has worked the advantage of ACCION Texas, the
SBDC’s and thousands of small business owners and demonstrates the power of
teamwork among organizations and people.
So far, $12 million has been deployed in 1500 fixed interest business loans with
average term of 30 months.
Almost without exception, the biggest challenge to any small business owner is
access to capital. Many do not qualify for bank loans for various reasons (start
up business, industry to which banks don’t lend, credit not up to bank standards,
prior bankruptcy, etc). Not surprising, many of these businesses are minority,
women owned, or startup business.
Aside from capital, many small business owners do not have the education,
training or experience in the business world. This is where the Small Business
Development Center provides the essentials and the “how to” of managing a
business in a fiscally responsible manner.
The partnership between ACCION Texas and SBDC’s is a powerful combination
that puts a small business owner on the right track from day one. The SBDC’s
are vital in spreading the word about ACCION in the rural and more parts of the
ACCION Texas; 2014 S. Hackberry; San Antonio, TX 78210
Gary Lindner, 210-226-3664, glindner@acciontexas.org
state. Every one of the 254 Texas counties has small business owners who need
the services of ACCION Texas and the SBDC.
A loan from ACCION Texas ripples across families, communities, and even
generations. ACCION loans create jobs, promote income stability, improve client
credit scores, help clients become bankable, and generate public revenues. In
2002, an independent study quantified the social and economic impact of an
ACCION Texas loan. As an example a $25,000 loan from ACCION generates
$39,977 in total economic activity, $15,203 in labor compensation, 4 new and
sustained jobs, and $2703 in tax revenues.
Forty per cent of ACCION clients report that if it weren’t for their businesses, they
would probably rely on welfare, disability, retirement, or minimum wage work for
income. In communities across Texas we witness the positive effects of a loan in
the life of a small business owner. We see the increase in income, equity, and
self-esteem.
Thank you for considering the ACCION Texas and SBDC Loan Partner Program
as a best practice. Together we make a dramatic and positive difference in the
Texas small business world every day.
ACCION Texas; 2014 S. Hackberry; San Antonio, TX 78210
Gary Lindner, 210-226-3664, glindner@acciontexas.org
Best Practices:
Making it work in Texas:
The Valued Advisor Fund (VAF) was proud to participate in conjunction with its chosen
CDE partner, the Texas Mezzanine Fund (TMF) in the re-development of the Historic
Alamo Bank in San Antonio Texas.
The City of San Antonio was deeply involved in the re-development of this high impact
project, working with the developers for well over 24 months prior to the closing of the
financial transaction. The project includes the use of Empowerment Zone Bonds, historic
tax credits and allocations of New Markets Tax Credits from both the Valued Advisor
Fund and Enterprise Social Investment Corporation.
The Historic Alamo Bank is located in an area which has a poverty rate greater than 30%;
an area gross median income below 60% and unemployment rates that are 3.02x the
national average. In addition, it is located in an Enterprise Community, a CDFI
designated Hot Zone, a State designated Empowerment Zone and a HOPE VI
development area.
The project is the redevelopment of a 25 story historic building and its adjacent 169,250
square foot parking garage. It will be converted from its current use as primarily vacant
“b” class office space to a three star hotel, onsite restaurants, retail shops and a bank. The
property will also include 16,000 square feet of commercial space. Leases for this space
are expected to provide a 10% discount under market driven by the benefits of the
financing, allowing them to attract quality long term tenants. The project also includes
the extension of one of the City’s primary tourist attractions, the River Walk. This walk
way currently belts around the downtown district in a horseshow shape, stopping across
the street from the Historic Alamo Bank and requiring tourists to climb up to grade level
and cross over to resume their stroll along the river. The revitalization project will bridge
this gap fully connecting the River Walk and enhancing the City’s tourist experience.
The Valued Advisor Fund’s $7 million allocation was structured as a leveraged
investment. This means that the tax credit equity was combined with other funds
previously committed to the project to fund the $7 million allocation. The project
received the benefit of the net tax credit equity from this allocation and the other sources
listed above needed to start construction in December 2005. In addition, the net equity
provided by the VAF will remain with project at the end of the 7 year compliance period.
Our CDE Partner, the Texas Mezzanine Fund, will ultimately receive an origination fee
for its participation when the final structuring component closes in August 2006 when a
portion of the construction is complete. In addition TMF have gained access to new
relationships with additional investors and lenders and is currently receiving financial
counseling and other services by VAF and industry professionals in order to provide for
its strategic growth. .
225 N. Michigan Ave., Suite 1100; Chicago, IL 60601-7683
Terri Preston-Koenig; 608.240.2546;tpreston-koenig@valuedadvisorfund.com
Best Practices
A Little More Cheese Please:
This cheese manufacturer/processor was purchased in a leveraged buyout by management
and its employees through an employee stock ownership plan. The company was located
in a very low-income rural community designated by the SBA as a HUB Zone. After the
purchase the company was short of working capital. As the nature of this industry calls
for the owner to hold large quantities of product while it ages for a minimum of nine
months, the working capital issue was significant. In addition, the company had also just
completed the acquisition of a new facility without inventory or work in process. When
the company approached Virchow Krause & Company, LLP and its affiliates (VKC), it
had already tried to raise the needed debt and equity necessary to solve its immediate
needs.
VKC reviewed the company’s operations and its needs for working capital. To initiate
the revitalization of the company, VKC was able to negotiate a plan with a separate
company that would buy the un-aged cheese under a purchase agreement allowing the
manufacturer to free up working capital trapped in inventory. VKC was then able to
negotiate a $15 million loan to finance the business expansion needs and raise $7 million
in capital from private sources rather than institutional investors. This transaction
resulted in the retention of the existing employee base and the generation of over 75 new
jobs within 12 months of the financing of the expansion plan.
Ten Terrace Court; Madison, WI 53718
Mike Ross, 608.240.2354, mross@virchowkrause.com
Best Practices:
Preserving Resources:
Virchow Krause & Company, LLP specializes in meeting the needs of its communities
and clients nationwide. Recently, staff was asked to work on the redevelopment of a 72
unit assisted housing project in an inner-city, very low-income community. This
community had a poverty rate of 63%, median incomes of 29% and an unemployment
rate of over 20%. The project was located in a designated Renewal Zone. Total project
costs, to acquire and rehabilitate the project were estimated at roughly $6million.
VK staff began by underwriting the project, utilizing the market study, construction
budgets for similarly sized projects, databases of operating expenses and a review of the
competitive process of tax credits in the area where the project was located. This project
also had a Housing Assistance Payment contract that staff considered with regard to:
renewal options, expiration, level of tenant payments, and other relevant data to be used
in a transition or turnover calculation. In addition, staff reviewed with the client, the
development and management capacity of the client and how that capacity would reflect
in the scoring criteria under the competitive process. An application was prepared and
reviewed against the market study, and scoring submission to make sure that
discrepancies were caught prior to submission. The client then submitted the application
upon determining that it was ready.
After receipt of the competitive credits, the client was offered 83 cents to the dollar for
the tax credits. As this level did not cover the gap needs of the project, VK staff was
asked to step in. Based on our relationships with the institutional investment market,
staff was able to increase the net pricing to 89.5 cents to the dollar. This provided a
significant boost to the project, making it possible for them to reduce some of the hard
debt. The project included over $30,000 per unit in renovation costs, and additional
amenities including security, a computer learning center and a job center. The client was
able to negotiate a 20 year HAP contract based on their non-profit status – preserving
resources and creating a better living environment.
Ten Terrace Court; Madison, WI 53718
Mike Ross, 608.240.2354, mross@virchowkrause.com
National Trust Community
Investment Corporation
PROJECT DESCRIPTION
Haffa Building, Waterloo, Iowa
Project Goal:
Office, retail and artist
PROJECT DESCRIP- BACKGROUND
live-work space
TION The Haffa Building was built in 1885 in downtown
Waterloo, Iowa, and first housed a retail clothier
Property:
Total Development and furrier business. Named after its original owner
Former retail property
Cost: and developer, the building later accommodated a
$662,000 variety of commercial establishments until 2002
Location: when the final occupant moved out of the first floor.
Downtown Waterloo, IA
Square Footage: In early 2003, the building was purchased for a
14,400 square feet mixed-use rehabilitation project. It now houses Wa-
Developer: terloo’s creative businesses and artists, and has
Charles Orr/Fowler Pro-
Developer: helped stimulate economic development in this
ject, LLC Orr
Charles Iowa Main Street community of 68,000.
Historic Status:
Key Project Financing: THE PROJECT
$450,500 National
Eligible for — The Haffa Building is a two-story concrete, brick and steel building. Rehabilitation work included
Register of National
Community all new electrical wiring, plumbing, and safety systems, six new apartments with full kitchens and
Historic Places
Bank loan; baths, and new drywall and finishes to the office spaces. Tenants include a framing studio and
$38,500 — kitchen design firm. Six rental housing units have made modified as live/work space for artists. An
Managing member capi-
Project Goals: adjacent property, the Fowler Building, is currently being rehabilitated by the developer into art-
14,400 square feet of
tal contribution ists’ work studios and commercial and residential space. Since the success of the Haffa, a third
commercial and artist 8,000-square-foot building has been acquired and is being converted to an educational center for
live/work spaceTax
New Markets ceramicists. The City has shown its support for the project by guaranteeing 20% of the NMTC
Credit Allocation: loan and by implementing a seven-year 100% property tax abatement plan to fund remodeling the
$500,000
Total Project Cost: building’s storefronts. The project won the “Best Adaptive Reuse of a Building” awarded by the
$22.3 MM (million) Main Street Iowa program in 2005.
Construction Jobs:
12 created
Project Financing: NEW MARKETS TAX CREDIT SOLUTION
$6.4 MM — The NMTC loan was provided at better rates and terms than the market offers: an interest rate at
Permanent historic
Federal/stateJobs: 2% below market, no origination fees, seven-year interest-only payments, 100% loan to value ra-
8 credit equity and
taxcreated; 4 retained tio, no borrower equity, and nontraditional forms of collateral. These terms allowed the developer
NMTC equity invest- to charge below-market-rate rents for the office and residential units, even with cost overruns.
ment by Banc of Amer-
ica Historic Tax Credit
Fund; COMMUNITY IMPACT
$2.7 MM — The Haffa Building is the first phase of the developer’s $3 million plan to revitalize a quarter-
Developer equity; block in Waterloo’s Arts and Retail District. The project is part of the River Renaissance Redevel-
$11.5 MM — opment Plan and is in the Cultural District. It has already spurred the opening of three new restau-
Developer loan; rants in formerly vacant buildings and played a key role in generating momentum for downtown
$7.5 MM — revitalization. The Haffa (together with the Fowler Building, when completed) serves as a hub for
Bank of America con- Waterloo’s creative class, fostering a collaborative spirit among artists. Its downtown housing
struction loan units are also an important piece of the City’s Master Plan. The developer, who donated his time
and provided loan funds to the project, acted as a general contractor and hired 12 local workers
through a Waterloo job placement center to perform clean-out and demolition work. In addition,
Project Completion:
2005 six former convicts living in half-way houses near the property gained valuable construction skills
as part of the construction labor pool. The Fowler Building has created five part-time jobs. The
tenants have created three full-time jobs and retained four full-time jobs. All six of the rental units
are being rented at below-market-rates to local artists. Tenants participated in the rehabilitation
design and used their skills to contribute to the finishing work of the building. Its census tract has a
poverty rate of 39%, a median family income that is 44% of the national average, and an unem-
ployment rate at 2.74 times the national average and that is a CDFI Hot Zone for housing, SBA
HubZone and a medically underserved area.
For more information, please contact
Corinne Ingrassia Tel.: 202-588-6279; email: Corinne_Ingrassia@ntcicfunds.com; www.ntcicfunds.com
National Trust Community Investment Corporation
National Trust
Community Investment Fund
PROJECT DESCRIPTION Tennessee T eatre, Knoxville, Tennessee
Project Goal:
Rehabilitation of movie BACKGROUND
theatre into a perform- When the Tennessee Theatre opened in
ing arts center downtown noxville in 1 28, it was lauded
as the state s premiere movie palace . Its
Total Development lavish panish-Moorish interior earned it
Cost status as the city s premier entertainment
$2 .3 million (MM) destination. By the late 1 70s, demo-
graphic changes sapped the downtown of
Square Footage: its vitality and demolition threatened the
60,000 square feet
theatre. In 1 7, it was donated to Historic
Developer: Tennessee Theatre Foundation, a non-
Historic Tennessee profit with a vision to transform the theater
Theatre Foundation into a state-of-the-art performing arts facil-
ity.
Tax Credit Investor:
Bank of America THE PROJECT
Following an eighteen-month and $30 million rehabilitation, the grand space is once
Key Project Financing: again the toast of Tennessee, now as a state-of-
$6.8 MM — "Without the National Trust, we
the-art performing arts center. It retained its clas-
Federal historic/new never would have been able to
markets tax credit equity capture the rehab tax credits for sic ticket booth, elegant foyer and grand lobby,
investment by NTCIF the project, and without the tax elliptical auditorium and a classic Wurlit er organ.
$22.4 MM — credits, we could not restore the The rehabilitation included repair of broken and
rants and fundraising Tennessee Theatre to its highest uncomfortable seating, expansion of the stage
$1 MM — beauty.” and new lighting and sound equipment. The worn
Deferred developer fee interior was also spruced up in historically accu-
$4.1 MM — Bruce Hartmann rate fashion by repainting/plastering interior sur-
First Tennessee Bank President, Historic Tennessee faces and replacing furnishings.
construction bridge loan
$5.0 MM —
Bank of America NEW MARKETS TAX CREDIT SOLUTION
construction bridge loan The new markets tax credits helped this project quickly move forward on closing
and construction after inching along for over four years. It did so by bringing 25
New Markets Tax more equity to the nonprofit s development budget, which was largely dependent on
Credit Allocation fundraising. The result was a more extensive and higher impact rehabilitation than
Amount: originally feasible.
$2.631 million
COMMUNITY IMPACT
Construction Jobs: The 1,631-seat theater, which re-opened in mid- anuary 2005, serves as an anchor
285
for the revitali ation of downtown, bringing 150,000 residents and visitors to the city
Permanent Jobs: center for its concerts, plays, operas and special events annually. This economic
16 stimulus comes with a relatively modest price tag, considering the historic and aes-
thetic value of the theatre and the cost of comparable new construction. This thea-
tre is located within a designated Federal Empowerment one, a BA H B one
and a medically underserved area. Its rehabilitation has stimulated the creation of
adjacent loft residences and the preservation of a row of historic storefronts.
For more information on t e Fund, please contact
Corinne Ingrassia Tel.: 202-588-6279; email: Corinne_Ingrassia@ntcicfunds.com;
www.ntcicfunds.com
National Trust Community Investment Corporation
National Trust
Community Investment Fund
PROEJCT DESCRIPTION
W eeling Stamping Building, W eeling, West irginia
Project Goals:
Conversion of industrial BACKGROUND
building into fully mod- The Wheeling tamping
erni ed office space Building first made a name
for itself as the home of a
Total Development metal stamping industry and
Cost: then as a wholesale grocery
$ .8 million warehouse in the late 1 th
century. Built in 18 0, its
Square Footage:
4,000 gross square proximity to Pennsylvania,
feet Maryland, Ohio and en-
tucky helped fuel the boom-
Developer: ing growth of the Ohio alley at the turn-of-the-century. Over a hundred years
Ohio alley Industrial later, the Wheeling tamping Building is no longer a player in the trades but its
and Business Develop- proximity to modern transportation routes has earned it a prominent role in the
ment Corporation information age.
Tax Credit Investor:
Bank of America "I have been very impressed with THE PROJECT
the 'can do' spirit of the Fund To prepare for the building s new use as the
Key Project Financing: staff. They are very professional global operations center for a multinational
$1.06 MM — and know their business very law firm, the existing roof supports were re-
Federal historic/new well. By working with the Fund, a placed, steel and wood windows were re-
markets tax credit equity local developer taps into a wealth paired and code compliant elevators and
investment by National of experience and expertise that stairs were installed along with new electri-
Trust Community In- is difficult to duplicate."
Danny Aderholt,
cal, H AC and mechanical systems.
vestment Fund
$450,000 — Co-developer, Century Equities
tate historic tax credit
equity
THE NEW MARKETS TAX CREDIT SOLUTION
New Markets Tax Historic and new markets tax credit equity bridged a $1 million financing gap in
Credit Allocation the development budget. The rehabilitation also qualified for the 10 West ir-
Amount: ginia state historic tax credit.
$512,000
COMMUNITY IMPACT
Construction Jobs: In its new role, the Wheeling tamping Building infuses important new revenue
300 into the city and county by creating 120 mid-level management jobs. These
jobs pay an estimated 25 more than the average wage in the area. Further-
Permanent Jobs:
120 more, before the Wheeling tamping project, the surrounding area was badly
blighted. ince its rehabilitation, two adaptive reuse office developments total-
ing $7 million have been completed in the vicinity. Neither would have been
pursued without the Wheeling tamping precedent. Employees and visitors to
these properties have increased business at surrounding retail outlets, helping
to transform a previously derelict area into a bustling office environment.
For more information on t e Fund, please contact
Corinne Ingrassia Tel.: 202-588-6279; email: Corinne_Ingrassia@ntcicfunds.com;
www.ntcicfunds.com
National Trust Community Investment Corporation
Best Practices
Rock Island Economic Growth Corporation (GROWTH)
GROWTH offers assistance for households looking to purchase a home in Rock Island. Each
household is different, and each is looked at individually, in order to provide the most assistance
possible. GROWTH provides assistance with down payment, below market rate mortgages,
assistance with closing costs, home purchase with rehabilitation, homebuyer education, and post
closing counseling.
GROWTH led the initiate for the creation of the 7th Alliance Community designated by Freddie Mac
committing over $60 million in special mortgage product. GROWTH’s Homebuyer Program partners
with Freddie Mac, Fannie Mae, HUD, eight area lenders and most recently over 70 employers to offer
“Live & Work Rock Island” an Employer Assisted Homebuyer Program.
Rock Island, Illinois, located on the banks of the Mississippi River, has a population of 39,700 and is
the oldest city in the Quad City metro market, which has a total population of 376,000. Rock Island
has the fewest housing starts, oldest housing stock, and lowest median income of the metro market.
The City of Rock Island and GROWTH work closely together to help the citizens of Rock Island. This
public/private partnership is considered a model throughout the State of Illinois. GROWTH, a leader
in Community Development Lending, has been instrumental in negotiating commitments with the
secondary market and HUD to assist with overcoming barriers to homeownership. Since 1998,
GROWTH has assisted 293 homebuyers enabling, them to experience the dream of homeownership.
To date there has only been one default.
The purpose of the Homebuyer Assistance Program is to provide assistance with down payment,
below market rate mortgages, assistance with closing cost, home purchase with rehabilitation,
homebuyer education, and post purchase counseling.
The goals of the Homebuyer Assistance Program are to draw low to moderate income household into
the home buying market by providing the financial and educational support needed for participants to
access mortgage financing suited to meet their needs. The program meets its goals by:
x Promoting homeownership opportunities to low to moderate households.
x Educating the prospective homebuyer in credit counseling, budgeting, applying for a loan,
selecting a home to purchase, making an offer, the home closing process, property care and
maintenance, and predatory lending.
x Assisting low to moderate income homebuyers with down payment, who are unable to save
funds for a down payment and closing cost, but can otherwise afford a mortgage payment.
x Pre-qualifying buyers with a participating lender.
x Achieving lower overall housing costs by increasing energy efficiency.
x Repairing and improving major systems that impact the quality of life and long term
affordability.
Rock Island Economic Growth Corporation (GROWTH)
Brian Hollenback; 309.788.6311; brian@teamrockisland.com
x Implementing lead based paint interim controls and providing clearance testing prior to
occupancy.
x Meeting current building codes and addressing other health and safety issues.
x Expanding the life of housing through reinvestment.
x Promoting community stability and revitalization.
x Providing increased housing opportunities inside and outside minority and/or low-income
concentration.
Rehabilitation programs in Rock Island continue to battle tight resources. This program adds
significantly to revitalization efforts in older neighborhoods and involves a public/private partnership
which has opened up opportunities for other program development.
Rock Island is a city of neighborhoods, which prides itself on historic preservation, affordable housing,
reducing blight and the commitment of working together to create a warm, friendly, diverse
community to work, live, play and raise a family.
The key to successful planning is citizen participation. Over the past ten years, neighborhood plans
have been developed with input from citizens, the city, community leaders, and GROWTH. This
process is ongoing with the neighborhood plans being updated as needed. GROWTH is listed as an
organization with major responsibility to implement the homeownership opportunities in Rock Island.
The best evidence to the success of the program is demonstrated by creating three pilot programs
including: a Home Purchase and Purchase/Renovation Program, Employer Assisted Homebuyer
Program, and the Section 8 Housing Choice Voucher Program.
The total dollars leveraged for the Homebuyer Assistance Program is $45,437,235 assisting 293
households.
In addition the programs have created spin off developments including 120 units of mixed income
multi-family rental units with a $15,400,000 investment and 11 units of mixed income/mixed use
owner occupied units contributing an additional $2,000,000 in investment.
GROWTH has received numerous awards from the local historic preservation society for its single
family renovation program as well as historically sensitive in-fill new construction.
For additional information about GROWTH, please visit www.LiveRI.com.
Rock Island Economic Growth Corporation (GROWTH)
Brian Hollenback; 309.788.6311; brian@teamrockisland.com
Clipper Condominiums
Rock Island, IL
Project Description
Clipper Condominiums is a first of its kind in downtown Rock Island, with fantastic views of the
Mississippi River and Centennial Bridge. The new construction of nine loft style mixed-income
residential and two commercial units provided the first owner-occupied housing in downtown Rock
Island in over fifty years.
These urban dwellings offer a unique lifestyle option in the Quad Cities in the heart of The Downtown
Rock Island Arts & Entertainment District (The District). The building is located at the site of the
former Yankee Clipper / Tiger’s Den, renowned local nightclubs. Clipper Condos are close to the
Great River Trail bike path, gym facilities, outdoor dining at downtown restaurants, art galleries, and
specialty stores.
The Clipper Condominiums feature urban-townhouse living including eleven-foot ceilings, stained
concrete floors, exposed interior brick, an elevator, balconies, and rooftop decks. A graystone walk-
up faux copper corrugated steel roof, archways, and the melding of art and architecture allow the
condos to blend with the existing buildings in the neighborhood. Some of the details designed by local
artists include copper crests, iron work, and architectural glass.
The nine condominiums ranged from a studio to two-bedrooms and sales prices ranged from $60,000
to $210,000 and ranged in size from 450 square feet to 1,600 square feet.
Clipper Condominiums provided housing that was affordable to buyers earning less than 60%, 80%,
and 120% the area media income as well as market rate.
Impact on Community
Re-inventing one block at a time, this development marks the completion of twenty projects in
downtown Rock Island with a total investment of over $11,000,000 along Second Avenue including
32,000 square feet of new commercial space, 19,000 square feet of renovated commercial space, 28
rental housing units, and 9 owner-occupied housing units. Clipper Condominiums serves as a
gateway to The District. A downtown neighborhood has been established that incorporates
businesses, renters, and homeowners helping to establish a 24-hour downtown.
Rock Island Economic Growth Corporation (GROWTH)
Brian Hollenback; 309.788.6311; brian@teamrockisland.com
Budget
Contributions from five employers, five other sources and a construction loan at 1% below prime were
accessed to complete this $2,000,000 development.
Funding from eleven sources include:
City of Rock Island $260,000
Sales Tax Waiver $23,000
Deferred Developer Fee $50,000
Department of Commerce and Economic Opportunity $8,000
Illinois Housing Development Authority’s
Accessible Housing Demonstration Program $30,000
State Housing Tax Credit Allocation $300,000 ***
Modern Woodmen of America $50,000
National City Bank’s CDC (purchase of State Tax Credits) $240,000 ***
Royal Neighbors of America $135,000 (loan)
The Doris and Victor Day Foundation $8,000
US Bank (low interest loan) $1,068,000
** The following contributions to GROWTH’s Housing Programs were utilized for a State Housing Tax
Credit Allocation which was sold to National City Bank’s CDC, contributing an additional $240,000 to
buy down mortgages for 6 units with income restrictions at or below 120% AMI.
Rock Island Economic Growth Corporation (GROWTH)
Brian Hollenback; 309.788.6311; brian@teamrockisland.com
Rock Island Economic Growth Corporation (GROWTH)
Brian Hollenback; 309.788.6311; brian@teamrockisland.com
Sala Flats
Rock Island, IL
Project Description
Sala Flats is the acquisition and $5.1 million rehabilitation of two existing historic buildings (on the
National Register of Historic Places) in downtown Rock Island to create 33 apartments. In
September 2003, Sala Flats was purchased and construction was completed in May 2005.
Before the rehab began, City staff considered the building blight on the downtown area. Several
windows were boarded, the back porch was rotting, the fire escape was falling off, and the roof was in
such poor condition that water leaked throughout the building. Within the building there were many
health and safety issues identified, such as the boiler system was missing all of its insulation, and
structural problems with walls and floors.
The rehabilitation included replacing the roof, back porches, and replacing all of the windows. The
heating system has been converted from a boiler to individual furnaces with central air conditioning
for each unit. All plumbing lines have been replaced, as well as the electrical wiring. All of the
kitchens and bathrooms have been updated with new fixtures, flooring, and cabinets. All units were
painted and the wood floors sanded and/or carpeted. An elevator has been installed at the back of
the building to facilitate easy access to floors within the building. In addition, two one-bedroom units
were built on top of the third-story building. Parking for the building is located directly across the
street from the property.
The result is original woodwork, fireplaces, and bowed windows updated with contemporary lighting,
appliances, and conveniences combined to create living spaces that offer unique living. These
beautiful units feature floor plans ranging from a cozy 369 square foot studio to a spacious 1,600
square foot three-bedroom apartment. Rents in this mixed income development range from $240 to
$620. The property features seven studios, nine one-bedrooms, eight two-bedrooms, and nine three-
bedroom units.
Results
Within 45 days, all 33 apartments were rented!
Impact on Community
A blighted building that had once been home to the city’s most prominent business people now has
new residents. Located in the heart of downtown, 75 people have chosen to make downtown Rock
Island their home.
Rock Island Economic Growth Corporation (GROWTH)
Brian Hollenback; 309.788.6311; brian@teamrockisland.com
Budget
IHDA HOME Loan $2,125,000
City of Rock Island Grant $ 200,000
City of Rock Island Façade Program Grant $ 20,000
DCEO Energy Grant $ 62,500
State Donation Credits $ 81,000
FHLB Affordable Housing Program $ 237,500
Deferred Developer’s Fee $ 11,194
CEF & NCCDC, LIHTC $1,501,129
CEF & NCCDC, Historic Tax Credits $ 865,873
Total Financing $5,104,196
Rock Island Economic Growth Corporation (GROWTH)
Brian Hollenback; 309.788.6311; brian@teamrockisland.com
BEYOND COMMUNITY DEVELOPMENT:
$4 BILLION “OPPORTUNITY FINANCE NETWORK” LAUNCHED TO LEVERAGE MORE PRIVATE
CAPITAL FOR OVERLOOKED COMMUNITIES IN U.S.
New Emphasis on High-Volume, High-Impact Strategies Using Private Capital; Among
Initiatives: Anti-Predatory Loan Platform, Affordable Housing Push, Natural Disaster/Terror
Relief Fund, and Panel Led by Former Fed Governor
PHILADELPHIA, PA.//January 25, 2006//The new $4 billion “Opportunity Finance Network” of 167
financial institutions across the U.S. today unveiled a far-reaching campaign including: the first phase of a
multi-billion “Fair Mortgage™” strategy to combat predatory lending; plans for $100 million or more in
financing to preserve the affordability of housing units in manufactured home parks for low- and
moderate-income homeowners; plans for a relief and recovery fund for communities and businesses
struggling in the wake of natural disasters and acts of terrorism; the launch of a “National Opportunity
Investor Council” to be headed by former Federal Reserve Governor Ned Gramlich; and the development
of a bipartisan strategy.
Opportunity Finance Network is the new organization that supersedes the 20-year-old National
Community Capital Association. In a major shift, its launch marks a step beyond traditional community
development strategies rooted in government funding and a commitment to engaging private capital in
“opportunity markets.”
Opportunity Finance Network President and CEO Mark Pinsky said: “While community development has
won countless important battles, the reality is that we are losing the war. Too many of the problems we
are supposed to be solving instead are growing worse, not better. We need a new approach to financing
opportunities for underserved people, neighborhoods, communities, and markets. We need to leverage
the capacity of mainstream financial systems using the proven market expertise of special-purpose
financial institutions – the ‘tugboat lenders’ that exist to steer capital into hard-to-reach markets. What is
at stake here are critical emerging markets -- many of which will drive economic growth in the U.S. for
the next 20 or more years.”
Pinsky added: “Emerging domestic markets – what we call ‘opportunity markets’ -- need more private
capital than traditional government-backed community development strategies can provide. What sets
apart “opportunity finance” from community development is that it is accountable to its financial investors
and its consumers -- and not primarily to the government. The fact is that only a new and unprecedented
set of partnerships among mainstream capital market leaders and opportunity finance institutions can
bridge the growing divides that separate opportunity from accomplishment.”
Pinsky outlined the following key Opportunity Finance priorities for 2006:
• Fair Mortgage™ lending. Pinsky explained: “We are developing a national responsible subprime
mortgage platform to challenge predatory lenders who are stealing wealth from homeowners. This
‘Fair Mortgage™’ strategy is a partnership between responsible mainstream mortgage lenders and
the Opportunity Finance Network. This new platform will sharply increase the volume of Opportunity
Finance—perhaps by an order of magnitude or more. After a pilot launch in 2006, we expect to
originate $1 billion or more per year of Fair Mortgages™ by 2010, growing from there. Our partners
will include a major investment bank, a prominent wholesale mortgage lender, and a national bond
issuer.”
• Preserving housing affordability for low- and moderate-income individuals. The
Opportunity Finance Network President and CEO said: “The fastest growing segment of affordable
housing today is manufactured housing. Yet the people who live in manufactured home parks are
vulnerable to speculation when landowners sell park land. Each year, this uproots thousands of
people living near or below 50 percent of median income. We are preparing to introduce a national
commercial loan conduit to preserve the permanent affordability of these parks. We project
preserving and improving almost 4,000 housing units with $97.5 million in financing in the first three
years, starting later this year.”
• Natural disaster/terrorism relief and recovery fund. Pinsky said: “We are now at the very early
stages of developing a plan with a major national business group to establish a disaster relief and
recovery loan fund for future natural disasters and acts of terrorism. The recent experiences of this
nation following 9/11 on the business community in New York City and Hurricane Katrina in New
Orleans and the rest of the Gulf Coast region illustrates that traditional government-financed
community development is not enough to rebuild hope and opportunity. This is an ‘opportunity
finance’ situation that really illustrates what we are hoping to accomplish as an organization.”
• National advisory panel headed by a former Fed governor. According to Pinsky: “During the
spring of 2006, we will formally introduce a new ‘National Opportunity Investor Council’ to bring
together the major capital sources involved in this long-term effort to find and finance opportunities
that others miss—national, regional, and local banks; philanthropic organizations; faith-based
investors; and the Opportunity Finance Network. Former Federal Reserve Governor Ned Gramlich will
chair the Council. At the Fed, Gramlich was in charge of consumer and community affairs. We intend
to integrate the Opportunity Finance Network of institutions with mainstream institutions that are
pursuing emerging domestic markets. Vertically integrated collaborations will take advantage of
Opportunity Finance Network’s expertise at finding and financing opportunities that others overlook
and leverage it with the capital markets might of conventional institutions.”
• Bipartisan policies. The Opportunity Finance Network leader said: “Opportunity is a bipartisan
value. We are promoting a bipartisan policy solution that recognizes the role of government as a
seed-capital investor in market-based financial intermediaries and other market-based strategies. On
March 16th, in Washington, DC, we will convene a small, select, and bipartisan group of leading policy
specialists to frame a bipartisan ‘Opportunity Agenda for the 21st Century.’ This event, called ‘Into the
Economic Mainstream,’ responds to the growing recognition that community development policy
needs more than a fresh coat of paint; it needs an overhaul. We need to keep what works and
replace what does not work. A diverse set of players from across the political spectrum are
participating in developing a common, bipartisan ‘Opportunity Agenda’.”
For more details about Opportunity Finance Network initiatives for 2006 and beyond, go to
http://www.opportunityfinance.net.
CONTACT: Ailis Aaron, (703) 276-3265 or aaaron@hastingsgroup.com
EDITOR’S NOTE: A streaming audio recording of a related Opportunity Finance Network news event will
be available on the Web as of 4 p.m. ET on January 25, 2006 at http://www.opportunityfinance.net.
Small Business Financing for CDFIs.
Product terms:
The Opportunity Finance Network, with a $10 million investment from Bank
of America, will finance CDFIs, which in turn will use the proceeds for
business financing in their local communities. The primary product available
is a senior loan with terms ranging from five to ten years, and interest rates
ranging from 4.0% to 4.75%. The Opportunity Finance Network will discuss
other products with CDFIs.
Eligibility:
To be eligible for financing, CDFIs must:
1. Have a primary mission of community development and/or serve
economically disadvantaged people and communities.
2. Have a track record of at least two years of community
development financing.
3. Be an Opportunity Finance Network Member (application process is easy
and can take place during the underwriting process).
4. Be located in one of Bank of America assessment areas throughout a
32-state area (full list of assessment areas is available). Product
implementation will initially occur in California.
Application Process:
To apply, please forward your organization's most recent audit and interim
financial statements, portfolio reports with aged receivables, and business plan
to the Opportunity Finance Network at the address listed below. Upon review
of these materials, the Opportunity Finance Network will contact you to
discuss financing eligibility and, if applicable, possible loan terms. If eligible,
the Opportunity Finance Network will forward a list of required documents and
set up due diligence interview calls and/or site-visits. Please contact Beth
Lipson (215.320.4315 or blipson@opportunityfinance.net) or Wendy Weiss
(215.320.4311 or wweiss@opportunityfinance.net) with questions.
Send Materials to:
Wendy Weiss, Senior Associate, Financial Services
Opportunity Finance Network
620 Chestnut Street, Suite 572
Philadelphia, PA 19106
Underwriting:
During the underwriting process, the Opportunity Finance Network analyzes
the following areas to assess the CDFI's organizational capacity:
Capitalization Earnings
Asset Quality Liquidity
Management Impact
(over)
In addition, the Opportunity Finance Network uses the following information
to evaluate CDFIs:
Capital structure, character and diversity of capital, capitalization strategies;
Portfolio performance including write-offs and delinquencies,
portfolio composition, portfolio management policies, underwriting
process and criteria;
Strategy, management depth and leadership, staff experience,
tenure, and structure, Board and Committee meeting minutes,
Board composition and skills, governance structure, and
infrastructure and information systems;
Three years audited and latest interim financial statements, ratio and
trend analysis, methodology for matching assets and liabilities,
systems for financial and information management;
Historic loan productivity, pipeline, and impact information; and
Interviews with key staff and Board.
About Opportunity Finance Network:
The Opportunity Finance Network of 167 financial institutions finds and
finances opportunities that others overlook. We are community development
financial institutions (CDFIs) and other opportunity finance institutions who
work just outside the margins of conventional finance to bring those markets
into the economic mainstream and to help the economic mainstream flow
into those markets.
Through fiscal year-end 2004, the Opportunity Finance Network had loaned
and invested $9.6 billion to create economic opportunities for women-owned,
minority-owned, and other small businesses; quality, affordable housing;
and essential community facilities and services. That financing has generated
or maintained 141,000 jobs and 28,900 businesses, 317,000 housing units,
and 4,700 community facility projects in urban and rural neighborhoods in
all 50 states.
Public Ledger Building, Suite 572
620 Chestnut Street
Philadelphia, PA 19106
Phone: 215.923.4754
Fax: 215.923.4755
www.opportunityfinance.net
Best Practices
Self-Help Credit Union
This project was a new construction loan to allow a charter school in Rio Grand
Valley to expand their facility. The school serves 82% economically
disadvantaged children and 95% Hispanic children. The school is recognized by
the State of Texas for its academic achievement.
This deal utilized the New Markets Tax Credit, the USDA Rural Community
Facilities Loan Guarantee Program and a US Department of Education Charter
School Credit Enhancement Grant.
By incorporating a number of federal subsidies – New Markets Tax Credit, loan
guarantee and credit enhancement grant – we were able to make a loan to a
borrower in a rural area with where limited collateral value made it difficult to
obtain conventional financing. Our staff provided extensive technical assistance
to the borrower and provided customized deal packaging. Our in-house
construction advisors have expertise in developing charter schools and assisted
with the construction process. In addition to evaluating the borrower’s financial
strength and management, we also assess the school’s academic performance
and effectiveness in serving low-wealth students. Pending final approval from the
USDA, Self-Help will also refinance a second parcel loan of ~$2 million to
consolidate the school’s debt and lower debt payments and interest rate.
Jane Ellis, 919-956-4407, janee@self-help.org
Best Practices
Federal Home Loan Bank of Atlanta
YMCA of Selma, Inc., Selma, AL
This project provided permanent financing for a 41,500 square foot state-of-the-
art facility to allow one of the first YMCA’s in the country to continue providing
services.
A subsidized-rate loan was provided by FHL Bank Atlanta to The People’s Bank
and Trust so they could make a $1,250,000, 15-year loan at 2.5%.
This project represents a best practice because a community bank is working
with the local YMCA and other funders to insure needed services continue for
low to middle income residents.
Greater Peace Childcare Center, Opelika, AL
This project provided permanent financing for a 5,400 square foot daycare center
for 75 children – infants to 8 years of age, plus after school care.
A subsidized rate loan was provided to AmSouth Bank by FHL Bank Atlanta so
they could make a $488,750, 20 year loan at four percent.
This project created a partnership between a CDC and AmSouth Bank, and
provided childcare for 2-3 shifts at a local manufacturing plant.
Deborah Miller; 800-536-9650 ext.8451; dmiller@fhlbatl.com
Tech Building I – Madison, WI
Community Need/Project Description
The Southdale neighborhood is one of the most distressed neighborhoods in all
of Dane County, Wisconsin. Recent economic data indicated that the poverty
rate is 43% and the median family income is just 30% of the County median, both
facts that community leaders are anxious to change. Barriers to redevelopment
and investment in the neighborhood include the relatively higher cost of infill
redevelopment, environmental issues related to a former landfill and brownfield,
perceived safety concerns, and the lack of adequate infrastructure. In 2000, The
Alexander Company of Madison, Wisconsin, began an ambitious development
initiative in the area known as the Novation Campus, a 70-acre business park to
be built on the neighborhood's two former landfills.
Constructed in 2002, Tech Building I was the first building to be completed in the
campus. The 54,000 square foot flex building was oriented towards Madison's
growing high tech industries. Wisconsin Impact Fund provided a NMTC loan at
approximately 300 basis points below market interest rates. The lower interest
rates allowed The Alexander Company to write down the rental rates to attract
new start up technology companies. These efforts proved extremely successful
with the procurement of a number of small business tenants. Shop Bop, a start-
up online retailer, was one of those early tenants occupying a small space in the
building in 2004. Since that time, Shop Bop has grown by multiples of its original
size into 45,000 square feet of space. Although recently acquired by
Amazon.com, ShopBop will remain in the campus, providing jobs for the
surrounding neighborhood. Growth rates projected by company executives call
for the expansion to hundreds of employees by 2010. Tech Building I is 100%
leased and the economic impact is aiding in rebuilding the economic vitality of
the entire neighborhood.
The Alexander Company, Inc., 145 E. Badger Rd., Suite 200, Madison, WI 53713
Matt Meier, 608-258-5580, mdm@alexandercompany.com
Collaborative/Creative Nature of Project
A master plan for the revitalization of the neighborhood was created through
collaboration with The Alexander Company, the project developer, the Town of
Madison, the Dane County Executive, the Governor of the State of Wisconsin,
and the congressional delegation. The goal of the plan is to remove blight,
create jobs, improve public health by remediating the brownfields, and leverage
the investment to improve infrastructure and access. An environmental TIF
district was created by the Town of Madison to pay for remediation of the site and
the County, State, and Federal governments funded a variety of grants and loans
to pay for site improvements and neighborhood infrastructure.
Best Practices
Tech Building I represents the first step towards achieving Novation Campus’s
ambitious $100 million master planned goal aimed at revitalizing a neighborhood
suffering from severe economic distress. Removal of blight, improvement of
public health through environmental remediation, job creation, and infrastructure
enhancements were all accomplished as part of this project. The overwhelming
success of this first phase has already created an enormous economic engine for
the neighborhood. Perhaps more importantly, the success of the first phase has
helped to inspire spin-off development both within and outside of the campus
boundaries. While it was just the first phase and there is much more to do, the
accomplishments to date are widely regarded as a model for successful
economic development.
The Alexander Company, Inc., 145 E. Badger Rd., Suite 200, Madison, WI 53713
Matt Meier, 608-258-5580, mdm@alexandercompany.com
Central Station – Memphis, TN
Community Need/Project Description
Built in 1914 and designed by famed architect Daniel Burnham, Memphis' Central
Station has always played an important role in the vitality of the city. The station
served not only as the main passenger rail hub for the region, but also as the
offices and headquarters of several railway companies. However, the station
had been consistently falling into disrepair since the 1970's. The neighborhood,
in response to its landmark, began to go downhill as well.
The revitalization effort took into consideration the rich history and feeling of pride
surrounding Central Station - the Main Hall was painstakingly restored down to
the last detail, including the original arrival and departure board. The final product
includes 63 apartment residences and 35,000 square feet of commercial space.
The facility continues to serve as an Amtrak Passenger Station. Additionally, the
Memphis Police Department and Memphis Area Transit Authority now call
Central Station home. Sitting on the south end of Memphis' downtown trolley
line, Central Station also hosts the city's weekly farmers market, and has once
again become a focal point in a resurgent downtown
The Alexander Company, Inc., 145 E. Badger Rd., Suite 200, Madison, WI 53713
Matt Meier, 608-258-5580, mdm@alexandercompany.com
Memphis Collaborative/Creative Nature of Project
The support of the City of Memphis proved key in the development of Central
Station, providing not only the property but $18 million in public subsidies through
the Memphis Area Transit Authority. The inherent difficulty in the project was the
fact that although the Memphis Area Transit Authority (MATA) had $18 million to
restore the building, it was not enough. Moreover, MATA could not get access to
Federal Historic Tax Credits (which added an additional$3.34 million) or a for-
profit equity investor (another $3 million) due to its status as a non-profit
organization. The Alexander Company was able to structure the deal in such a
way that MATA would retain control of the property, which was required in order
for it to keep its federal funding, while leveraging $6 million additional dollars in
private debt and equity. The City of Memphis provided aid to the project in the
form of 10-year tax abatement, while a grant was given by the Federal Transit
Authority for the inclusion into the project of a multi-modal transportation hub
within the building. This hub includes an Amtrak station, bus transfer station, and
light rail (trolley) stop.
Best Practices
Central Station represents a true commitment to community development by the
private partner, The Alexander Company, and the public, the City of Memphis and
MATA. Although the financing was extremely complex, both sides worked
collaboratively to come up with a beneficial solution.
A clear example of inner city rehab and a building that has long been seen as a
landmark in Memphis, negative during its less fortunate years, Central Station
provided a type of housing that at the time of completion was singular in its location,
but since has spawned a multitude of spin-off ownership and high-end rental housing
in the immediate area. Local retail has also begun to thrive, following in Central
Station’s footsteps, and the housing of a branch of the Memphis Police Department in
the building provides increased neighborhood security. Once more, Central Station is
positive landmark in the city of Memphis.
The Alexander Company, Inc., 145 E. Badger Rd., Suite 200, Madison, WI 53713
Matt Meier, 608-258-5580, mdm@alexandercompany.com
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Best Practices
Neighborhood Investment and Development Corporation
The City of Manhattan, KS is the home of Kansas State University and nearby Ft.
Riley Army Base. The community through its Downtown Redevelopment
Steering Committee is guiding a “one of kind” entertainment and retail center that
will draw over 1 million visitors to the area annually. The Committee
recommended a Prairie Discovery / Visitors Center featuring a Smithsonian
exhibit and establishing a number of national and local partnerships to enhance
the permanent exhibit space in the facility. With a public/private cost of this
redevelopment project is over $160 million. This project, when built out will
include the following:
1. Retail Component
The Project will be anchored by 17 new businesses and 200 new living units. The
Project consists of approximately 250,000 square feet of retail, which may
include up to 15,000 square feet of office space. There will be a number of
medium sized retailers (15,000 – 30,000 square feet structures), one large
anchor (68,000 square feet), and approximately 6 new restaurants.
2. Residential Component
The Project will also consist of approximately 235,000 square feet of residential
space. The residential space will include town homes, condominiums, and
apartments. There will be a variety of options for prospective tenants and
ownership opportunities as well.
3. Commercial and Infrastructure Projects
The public projects described below are highlighted.
a. Street Improvements – the city has designated a number of street
improvement projects to improve the flow of traffic through the downtown
business district and to develop better access and parking for new
businesses which it hopes to attract as a part of its strategic plans
b. Business Relocation - the city has identified a number of businesses
that will need to be relocated in order to allow for the commercial
development of strategic business corridors surrounding the main
business district. Negotiations with these companies are underway and
access to new sites has been secured.
c. Trail Project
The Trail Project encompasses a concrete pedestrian and bike trail ten
feet in width from the Union Pacific Depot to Bluemont Avenue. The Trail
Project will include the trail itself, landscaping, irrigation, bicycle signage,
benches, storm drainage and et cetera. The trail will also be designed as
an accessible route.
Neighborhood Investment and Development Corporation
Steve Duvall (402) 432-1448 steve@nicorp.us
d. Parking Garage
The City and Developer have agreed to negotiate at a future date in
regard to a public/private parking structure, potentially located at the
corner of Leavenworth Street and 4th Street. The public portion of the
structure would open to the public and most likely will be the ground floor
of the structure. It has been estimated that the garage itself will
encompass 180 parking stalls, with a potential 60 parking stalls as public.
The private stalls of this garage would facilitate the residential and
commercial uses of the surrounding properties.
e. Commercial Development - The city’s strategic plan calls for specific
development phases of the commercial district. The first of these is the
redevelopment of a site prior occupied by a steel plant. This site, long
abandoned will now house a Best Buy, Olive Garden, and several other
new businesses. The site which fronts a primary business artery and
accesses the downtown mall is a key to future development plans. NIDC
is proud to be involved in this initial business activity. Working in
conjunction with the Valued Advisor Fund, NIDC is helping to provide the
catalyst for the city’s rejuvenation. This initial financial investment is the
first step in moving toward completion of the Downtown Redevelopment
District.
4. Summary
The Downtown Redevelopment District will have a positive impact on the local
economy by filling current voids in the local retail market, attracting additional
visitation to the area; extending the average length of stay; and generating
increased retail sales volumes. The Downtown Redevelopment District is
designed to serve as a regional tourism destination through operation of the
Prairie Discovery and Visitors Center as well as the entertainment and retail
component. This critical mass of attractions will elevate Manhattan’s regional
exposure and generate additional visitors and retail sales to the area.
Implementation of the Downtown Redevelopment Conceptual Plan would
increase visitation to the Manhattan area and assist in capturing trade area and
visitor spending currently escaping the community. The elements of the plan are
interconnected. The Prairie Discovery and Visitors Center would serve as both a
distinctive visitor attraction and a centralized marketing and promotion outlet for
Manhattan and the surrounding region, driving increased visitor counts. The
Downtown Redevelopment District’s planned retail would capture new visitor
spending by serving as a major tourism destination through a tenant mix of “one-
of-a-kind” destination entertainment and retail in Kansas. Both downtown
merchants and the balance of Manhattan’s retail trade would benefit from the
heightened visitor spending. The Prairie Discovery and Visitors Center would in
turn benefit from Manhattan’s elevated visitor counts through increased
attendance and revenues.
Neighborhood Investment and Development Corporation
Steve Duvall (402) 432-1448 steve@nicorp.us
Unique opportunity for the
The Manhattan community and region to enhance the
exposure to the natural resources
Attraction
around us. The Tall Grass Prairie
Discovery Center will facilitate t he
history and culture of the region, as
well as augment the nature based
tourism to Northeast Kansas.
A Kansas Connection
Downtown Redevelopment
Manhattan, Kansas
Prairie Discovery and Visitors Center
Portfolio of Plans and Processes November 2004
Attraction Focus Area
City of Manhattan
Downtown Discovery Center
Executive Summary
BACKGROUND
Considerable public and professional involvement has been solicited throughout the
preliminary planning process for the “attraction” of the Downtown Redevelopment
Conceptual Plan. An Attractions Committee, appointed by the City Commission, made
up of several community leaders and interested citizens, set out to define the attraction
component of the Downtown Redevelopment project. Multiple ideas were considered by
the Committee and the public at several meetings during May, June and July of 2004.
RTKL, Inc. out of Baltimore, MD and Washington D.C. assisted the community with the
definition and programming of the facility. As a result of this effort, a Prairie Discovery
& Visitors Center has been identified. Conceptually the facility would house several
exhibits detailing the experience in the Flint Hills and the Tall Grass Prairie, including
the traveling Smithsonian exhibit “Listening to the Prairie”, which traveled the nation
over the past three years. Other exhibits would highlight the historical and cultural
aspects of the Flint Hills region, including but not limited to the Native Americans, early
settlers to Kansas and Fort Riley, and the establishment of the City of Manhattan and
Kansas State University. Interactive components have also been identified by the
Committee that includes features for children and adults to enjoy. One feature in
particular highlights a theater experience as one travels some 80 feet towards to the top of
the main tower of the facility, before making their way down through the tower in a spiral
motion taking in the Prairie exhibits from the sky to the roots. The Discovery & Visitors
Center would also include a regional tourism center for the Northeast Kansas destination
visitor. Local and regional attractions would be highlighted in the facility, along with
travel and tourism information provided for each attraction. Partnerships with the Konza
Prairie and other outdoor destination resources could be arranged from the Center, so
daily tours and hikes could be organized.
The City of Manhattan has drafted the Downtown Redevelopment Conceptual Plan
designed to revitalize the downtown area. Anchored by the Prairie Discovery and
Visitors Center, the plan calls for a broad mix of destination entertainment and retail,
professional office, and housing. Implementation of the plan would establish a vibrant
urban center, heighten community pride and the image of Manhattan, and improve the
area as a tourist destination. The public-private partnership between the City and the
developer will create a synergy in the Downtown area, providing an opportunity for
everyone within a family or traveling party. Visitors and locals could experience the
downtown, realize the Flint Hills Region’s culture and history, plus take part in unique
shopping, a classic theatre experience at a Downtown theater, and dine at well known
eating establishments throughout the district.
The Prairie Discovery and Visitors Center has been identified and recommended by the
Attractions Committee. A similar concept was identified and consensus was gained
about 8 years ago to put a Tall Grass Prairie Interpretive / Visitor Center along I-70. The
executive summary of this concept is attached, and was prepared by a local consulting
firm, DPRA. This concept did not come to fruition due to the obstacles of acquiring land
along I-70.
The Downtown Prairie Discovery / Visitors Center would serve as a regional centerpiece
for travel and tourism. The Center could be a place where a local or visitor can learn
more about the settlement of Manhattan, Sunset Zoo, the Konza Prairie, Tuttle Creek
Lake, Kansas State University, and other local attractions. It would also facilitate
information about the history and culture of the Prairie, the Kansas River, Fort Riley, the
Oz Museum, and other destinations in Northeast / East-central Kansas.
Nature-based tourism has become a very lucrative industry. Nature tourism is travel and
recreation for the appreciation of nature and the outdoors. Areas that attract nature
tourism accrue to those in a community who provide goods and services to tourists. A
nature-based tourism brief is attached from the Office of Sustainable Ecosystems &
Communities division of the U.S. Environmental Protection Agency (EPA).
Public-Private partnerships are essential in many successful economic development
initiatives all across the country. One specifically, which has helped the State of Kansas
took place in Wyandotte County in Kansas City, Kansas. The Unified Government of
Wyandotte County, partnered with Cabela’s and the State of Kansas to create a financing
mechanism where public dollars could be used in tandem with private investment to
create a private retail store, along with a public museum destination. The public museum
space within Cabela’s is owned and was paid for by the Unified Government by what is
known as STAR bonds. STAR bonds are the State and local sales taxes generated from
the development that are reinvested in the public improvements within the development
project. Essentially, that is the partnership the downtown redevelopment project is
capable of with the Prairie Discovery Center as an anchor to a major retail, residential,
hotel and restaurant development in Downtown Manhattan. By creating a destination
where there is something for everyone to do including shopping, eating, education, and
entertainment, a synergy is formed that will keep the area vibrant.
HOW DOES IT WORK?
The Manhattan area currently hosts an estimated 1.0 million visitors per year, drawn by
the four cultural and recreational sites; KSU athletic and cultural events; parents, business
professionals, and academic professionals visiting KSU; youth sports; and visiting friends
and family. The potential economic impact of these visitors to the Manhattan area is
enormous. Unfortunately, Manhattan’s retail trade is insufficient to fully capitalize on
the potential visitor spending.
Implementation of the Downtown Redevelopment Conceptual Plan would increase
visitation to the Manhattan area and assist in capturing visitor spending currently
escaping the community. The elements of the plan are interconnected. The Prairie
Discovery and Visitors Center would serve as both a distinctive visitor attraction and a
centralized marketing and promotion outlet for Manhattan and the surrounding region,
driving increased visitor counts. The Downtown Redevelopment District’s planned retail
would capture new visitor spending by serving as a major tourism destination through a
tenant mix of “one-of-a-kind” destination entertainment and retail. Both downtown
merchants and the balance of Manhattan’s retail trade would benefit from the heightened
visitor spending. The Prairie Discovery and Visitors Center would in turn benefit from
Manhattan’s elevated visitor counts through increased attendance and revenues.
Given the potential to elevate Manhattan as one of Kansas’ major regional tourist
destinations, public financing in the form of STAR bonds, Transportation Development
District (TDD), and Tax Increment Financing (TIF) are being considered to assist in the
implementation of the Downtown Redevelopment Conceptual Plan. All three of these
financing tools consist of capturing the incremental tax dollars generated out of the new
redevelopment, and putting them back into public improvements within the project. TDD
and STAR consist of capturing the additional sales tax generated in the redevelopment
area. TIF consists of capturing both the local sales and property taxes generated from the
new development.
ECONOMIC FEASIBILITY
The Feasibility Analysis (attached) performed by Canyon Research concluded that the
Downtown Redevelopment District is forecast to generate sufficient incremental tax
revenues to cover the projected debt service obligations through maturity of the public
bonds. With over 1 million visitors and an expected increase in regional shopping,
sufficient revenues have been forecasted. The total project has been estimated at $150
million. The public and private investment split the project costs nearly 50/50. Retail
sales in the new redevelopment district have been forecasted to reach $93 million
annually at full build out. Sufficient revenues from the three sources identified above
have been forecasted to cover the public’s portion of the debt to be financed in this
project. In fact according to Canyon Research, the 1.63 coverage suggests that ample
“cushion” exists for the Downtown Redevelopment District to cover the debt service on
$75 million in bond financing. Although further analysis will have to be complete at the
time of issuing the bonds, this is a strong indication that the downtown redevelopment
project is viable and feasible.
The City of Manhattan has drafted the Downtown Redevelopment Conceptual Plan designed to
revitalize the downtown area. Anchored by the Prairie Discovery and Visitors Center the plan
calls for a broad mix of destination entertainment and retail, professional office, and housing.
Implementation of the plan would establish a vibrant urban center, heighten community pride
and the image of Manhattan, and improve the area as a tourist destination.
The Manhattan area currently hosts an estimated 1.0 million visitors per year, drawn by the four
cultural and recreational sites; youth sports; and KSU’s athletic and cultural events; parents,
business people, and academic professionals. The potential economic impact of these visitors to
the Manhattan area is enormous. Unfortunately, Manhattan’s retail trade is insufficient to fully
capitalize on the potential visitor spending.
Together, the Prairie Discovery and Visitors Center and Downtown Redevelopment District are
capable of drawing from and expanding on the area’s large existing visitor base. The Prairie
Discovery and Visitors Center is forecast to attract 60,000 to 100,000 annual visitors, translating
into only 5 to 8 percent of forecast annual visitation to the area. By comparison, according to the
2003 Attraction Visitor Report published by the Kansas Department of Commerce similar
attractions generally garnered similar or much higher visitation. .
The Downtown Redevelopment District will have a positive impact on the local economy by
filling current voids in the local retail market, attracting additional visitation to the area;
extending the average length of stay; and generating increased retail sales volumes. The
Downtown Redevelopment District is designed to serve as a regional tourism destination through
operation of the Prairie Discovery and Visitors Center as well as the entertainment and retail
component. This critical mass of attractions will elevate Manhattan’s regional exposure and
generate additional visitors and retail sales to the area.
Implementation of the Downtown Redevelopment Conceptual Plan would increase visitation to
the Manhattan area and assist in capturing trade area and visitor spending currently escaping the
community. The elements of the plan are interconnected. The Prairie Discovery and Visitors
Center would serve as both a distinctive visitor attraction and a centralized marketing and
promotion outlet for Manhattan and the surrounding region, driving increased visitor counts. The
Downtown Redevelopment District’s planned retail would capture new visitor spending by
serving as a major tourism destination through a tenant mix of “one-of-a-kind” destination
entertainment and retail. Both downtown merchants and the balance of Manhattan’s retail trade
would benefit from the heightened visitor spending. The Prairie Discovery and Visitors Center
would in turn benefit from Manhattan’s elevated visitor counts through increased attendance and
revenues.
Given the potential to elevate Manhattan as one of Kansas’ major regional tourist
destinations, public financing in the form of STAR bonds, Transportation Development
District (TDD), and Tax Increment Financing (TIF) are being considered to assist
in the implementation of the Downtown Redevelopment Conceptual Plan. The
Feasibility Analysis concluded that the Downtown Redevelopment District is
forecast to generate sufficient incremental tax revenues to cover the projected debt
service obligations through maturity of the public bonds. In fact, the
1.63 coverage suggests that ample “cushion” exists for the Downtown Redevelopment
District to cover the debt service on $75 million in bond financing.
Downtown Redevelopment
Preliminary Expenditures
Private
Partial Land/Acquisition/Demolition $7,096,920.00
Retail $22,417,594.00
Hotel $8,739,360.00
Office $785,400.00
Apartments/Housing $29,098,560.00
3rd Party Development $2,337,500.00
Soft Costs $4,088,270.00
TOTAL $74,563,604.00
Public
Partial Land/Relocation/Demolition $25,345,180
- Acquisition
- Relocation / Moving Expenses
Utilities Relocation / Improvements $9,642,659
- Water, Sewer, Stormwater
- Alleyways
Infrastructure Costs $20,477,186
- Landscape, Streetscape, Lighting
- Streets, Trails, Sidewalks, Parking Lots & Structures
- Plazas, Way Finding, Underpass, Bridge Connection
*Attraction Expense $10,988,900
- Building Construction
Fees $7,355,084
- Professional Services
TOTAL $73,809,009.00
* Note: Additional Discovery/Visitor Center exstablishment costs (exhibits, furnishings, etc) are not eligible
for STAR bonds or TIF financing and will be financed by other mechanisms.
Canyon Research Revenue Analysis
Present Value *20 Year Value
Forecasted Revenues Forecasted Revenues
TDD $2,697,623 $5,092,087
TIF $11,933,237 $22,765,751
*STAR Bond $71,271,203 $134,532,928
TOTAL $85,902,063 $162,390,766
* STAR Bonds are a combination of local and State sales tax increment
Local Sales $14,081,593
State Sales $57,189,610
Total $71,271,203
Canyon Research Expenditure Analysis
Bond + Debt Service
Present Value of Issue (20 Years)
Bond Authority for Public Improvements $75,000,000 $99,692,300
Developer Investment $74,600,000
Total $149,600,000
Total Development Costs (Estimated) $147,000,000
STAR Bond Breakdown
Based on Canyon's Forecast of realizing 74% of
new sales in the Downtown District from tourists and
regional visitors. Revenues
TIF $11,933,237
TDD $2,697,623
Local Sales Tax $14,081,593
State Sales (Based on 74% Forecast) $42,320,312
Federal, State, Other Sources $3,967,236
TOTAL $75,000,000