Cullman County Alabama Real Estate - PowerPoint by iij12600


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• How HECA was formed

• HECA’s structure

• Two of the most pressing challenges, which we
  also view as opportunities
         Region 2020 Visioning Process

• The Housing Enterprise of Central Alabama LLC was established as
  a cooperative effort and as the end product of a regional study to
  increase the supply of affordable housing in Central Alabama.

• This effort was initiated by Region 2020, a 501 (c)(3) “citizen-
  driven”, grassroots organization that advocates regional cooperation
  and citizen involvement in Central Alabama to improve quality of life
  in areas such as education, affordable housing, the environment,
  transportation and the arts.

• The visioning process started in 1997 and encompassed a 12-
  county Central Alabama region, involved some 5,000 citizens and
  helped to formulate Region 2020’s 34 goals and 217 strategies for
                   Focus Areas Included:
•   Government
     – Structure of Government and Service
•   Environment
     – Preservation of Natural Resources
•   Places and Activities
     – Downtowns
•   Economy and Jobs
     – Economic Development
•   Learning
     – Professional Development in Education
•   Moving Around
     – Mass Transit
•   Neighborhoods
     - Housing

     Develop regional center for affordable housing to facilitate local
     partnerships of governments, financial institutions, charitable
     institutions and developers.
         Region 2020 Visioning Process

• Summarily, during the visioning process, citizens in 12 counties in
  Central Alabama pictured a region with “strong, diverse, beautiful
  and safe neighborhoods, towns, and cities in which to live and

• Because places such as these cannot exist without quality
  affordable housing, Region 2020 initiated a focus on affordable

• In 1999, the Community Foundation of Greater Birmingham, which
  also recognized that a lack of affordable housing is an ongoing
  problem in our community, partnered with Region 2020 and Habitat
  for Humanity to launch the Region 2020 Affordable Housing
             Woodlawn Housing Initiative
•   Seven subcommittees were formed, including one to launch a pilot program called
    the Woodlawn Housing Initiative. It entailed a 9-block area that was targeted for in-fill,
    new construction, and rehabilitation by private and non-profit developers.

•   From June 2000 to December 2001, eleven houses owned by absentee landlords
    were purchased.

     –   Five of these units were rehabbed and sold to new homeowners.
     –   Two new units of rental housing were developed.
     –   Additionally, six homes owned by existing elderly were repaired.

•   Other tangible accomplishments include:
     – Requests from 200 people for information on the initiative
     – Applications to purchase homes from 32 people
     – Identification of critical need for more comprehensive homebuyer training and
     – Establishment of a homeowners association
          Legacy Study Committee Hearings

•   Next, Region 2020 recruited the Legacy Study Committee (one of the 7
    subcommittees formed) to undertake the long-term challenge of eliminating
    substandard housing and increasing the supply of safe, decent housing in the

•   This committee, which was headed by Maria Campbell, the former State
    Superintendent of Banking, researched affordable housing prototypes across
    the United States including Land Banks, Community Development
    Corporations, Housing Trust Funds and Community Development Financial

•   Additionally, more than 10 half-day meetings were held to speak with
    experienced private developers, non-profits, banks, governments, and other
    industry stakeholders to gain insight into the state of affordable housing in
    Central Alabama.
     Lessons Learned and Conclusions

• Experience from the volunteer study groups, lessons learned from
  the pilot project, and its own research lead the Legacy Study
  Committee to conclude that barriers to the development of an
  Affordable Housing industry in Central Alabama included:

   – a lack of consistent long-term resources
   – an absence of flexible gap financing
   – few incentives for private sector involvement

  Thus, the Committee recommended the creation of a Community
  Development Financial Institution (CDFI) and an affiliated non-profit
  as a method to address these issues.
Two Related and Coordinated Organizations

•   Housing Enterprise of Central Alabama (HECA)
     – A “community-spirited LLC” owned by its investor institutions, including:
        • AmSouth Bank
        • Regions Bank
        • Compass Bank
        • New South Federal Savings Bank

•   The Housing Fund of Central Alabama (“the Fund”)
     – Non-profit affiliate whose investors include the financial institutions listed
       above and:
         • The Community Foundation of Greater Birmingham
         • The Walker Area Community Foundation
         • The Calhoun County Community Foundation
HECA/HFCA Organizational Chart

                           Board of Directors

                   CHIEF EXECUTIVE OFFICER
                      Michele Jenkins-Utomi

     Executive Assistant
      Courtney J. Davis

         Grants Officer                             Capacity Building
         Lois Chenier                              Advisory Committee

    Underwriting Consultant                         Loan & Investment
        CENSEO, Inc.                                   Committee

    CFO Function contracted                     Public Relations Consultant
    to Claude H. Estes + Co.                           Tabitha J Lacy
                            Board Of Directors
 Jim America                                     Ted Kennedy*
       U.S. Pipe & Foundry Company,      Vice
        President of Human Resources                    BE&K Founder, HECA Board Chair

 Charles Ball                                    John Oliver
       City of Gadsden, Director of Planning           Walker Area Community Foundation,

 Gale Blackstock*
       Regions Bank, Corporate CRA Officer       The Honorable Jerry Pow
                                                        Bibb County, Probate Judge
 Maria Campbell*
       SC&B Strategic Services, Chairman         Jerry Powell
                                                        Compass Bank, General Counsel &
 Jesse Cleveland
       Head Start, Director, Talladega, Clay,
        Randolph Counties; Former Mayor,
                                                  Mimi Tynes
        Sylacauga, AL                                   The Community Foundation of Greater
                                                         Birmingham, Former President

 Gayle Cunningham                                  2 vacant seats
       Jefferson County Committee for                  Bank/Tuscaloosa County
        Economic Development, Executive
                                                  General Counsel
 Wayne Hoar                                             Paul Compton, Bradley Arant Rose &
                                                         White, LLP
       Hoar Construction, Chairman

 Doug Jackson*                                  * Executive Committee Member
       AmSouth Bank, Chief Compliance Officer
HECA’s Loan and Investment Committee

• AmSouth Bank, Regions Bank and Compass Bank each have a
  representative on the Loan and Investment Committee

• Members of the Committee are:

   – Neill Fox, Compass Bank, Executive Vice President Real Estate

   – Jeff Gish, AmSouth, Vice President, Corporate Community
     Reinvestment Manager

   – Jeremy DiPiazza, Regions Bank, Senior Vice President Group Credit

• The mission of HECA and the Fund is to lend money to private and
  non-profit developers to help build and renovate safe, decent entry-
  level housing for low- and moderate-income families.

• Jointly, HECA and the Fund will provide gap financing and/or
  aggressive construction/acquisition loans or investments to qualified

• In addition, the Fund provides grants to non-profits for core
  operating support and other initiatives on a limited basis. The Fund
  also provides technical assistance and programs related to capacity
  building in the affordable housing development community.
HECA Investor Equity, Charitable and Loan Contributions
                    EQUITY        Charitable      Loan Fund
                    (HECA)        (The Fund)       (HECA)
 Regions Bank   $ 750,000       $ 250,000       $ 20,000,000

 AmSouth Bank $ 750,000         $ 250,000       $ 20,000,000

 Compass Bank $ 375,000         $ 125,000       $ 10,000,000

 New South      $   75,000      $ 25,000        $ 2,000,000
 Savings Bank
 Total          $1,950,000      $ 650,000       $ 52,000,000
                (payable over   (payable over
                three years)    three years)
Housing Fund of Central Alabama Foundation Investors
           Foundation             Commitment

Community Foundation of Greater    $ 750,000
Calhoun County Community           $ 90,000
The Walker Area Community          $ 27,000
Foundation Commitments             $ 867,000
(payable over three years)
Plus commitments of investor       $ 650,000
Total                             $ 1,517,000
                       Financial Products
•   Loan Products: HECA offers two financial products: construction loans and
    permanent financing:

•   Construction Loan
     – Interest Rate: Floating
     – Term: Up to 36 months
     – Loan To Value: Up to 100%
     – Guarantee: Completion guarantee only
     – Convertible to permanent at stabilization
     – Minimum Loan Size: $500,000

•   Permanent Financing
     – Interest Rate: Fixed or Floating
     – Term: Up to 10 years; 20-30 year amortization
     – Loan to Value: Up to 100%
     – Debt Service Coverage: 1.2x minimum
     – Guarantee: Not required
     – Minimum Loan Size: $1,000,000
Where We Work

         HECA’s service area includes the
         following twelve counties: Bibb,
         Blount, Calhoun, Chilton, Cullman,
         Etowah, Jefferson, St. Clair,
         Shelby, Talladega, Tuscaloosa and
         Walker Counties.

         By studying the workforce and commuting patterns
         of areas surrounding Birmingham and considering
         the projected growth of its surrounding counties, the
         group that started Region 2020 decided that its
         boundaries should include Jefferson County and the
         11 other counties whose borders fell within a one-
         hour drive of Birmingham.
               Greatest Challenges

• First, we face the challenge of Urban Sprawl:
   – Outmigration of the City of Birmingham’s population
     to surrounding counties.

• This is an important issue because:
   – Birmingham is the largest urban area in the state.
   – Birmingham is the “heart” of the region.
   – The problem is that the growth is in the cities and
     surrounding counties outside of Jefferson County
        Regional Growth

Predicted Fastest Growing Counties 2000 - 2025
Where We Are
                       Housing Starts

• Adams Homes (new housing developer in the Birmingham market)

• Area of interest: Shelby County; Alabaster and Calera.

• Has 10 to 15 for-sale, single-family subdivisions slated for
  construction commencement in 2005.

• Will result in the production of between 200 - 300 new homes.

• Sales prices of between $136,000 - $145,000.
                                Housing Starts

 • Shelby County: Alabaster, Helena, Pelham

 Year 2000                                                      1325

 Year 2001                                                      1340

 Year 2002                                                      1623

 Year 2003                                                      1807

Source: Joseph & Company, Real Estate Appraisers (Hoover, AL)
                                    Housing Starts

• Jefferson County: Homewood, Vestavia

 Year 2000                                                      760
 Year 2001                                                      555

 Year 2002                                                      651

 Year 2003                                                      1019

Source: Joseph & Company, Real Estate Appraisers (Hoover, AL)
                                             Housing Starts
•      City of Birmingham
•      From January to October 2004: 8,770 permits for commercial and
       residential construction were pulled.
•      Of this number, 189 were for single-family new construction

• Land assembly
    – Reasonable prices
    – Title clearance issues associated with “heir property”
• Community Amenities
    – Poor school system
    – Perception of higher crime rate
• Bureaucracy
• Results: Market value of homes are below construction costs, generally
   speaking. Can’t attract builders in any great number to the area without
   significant subsidy.

    Source: City of Birmingham, Department of Planning & Permits
             Birmingham Bright Spots

• Urban Design Associates, a nationally recognized urban planning
  and design firm based in Pittsburgh, PA, just completed
  Birmingham’s City Center Master Plan.

• This process took several months and was done in three phases.
   – First phase: information gathering
   – Second phase: design charette and presentation of
   – Third phase: final presentation, October 2004
City Center Master Plan Area
          Birmingham Bright Spots

• That plan projects that the “City Center” can
  absorb 1,700 new apartments, condominiums
  and townhouse units.

• Additionally, that 1,300 units of detached, single-
  family housing can be built and absorbed in the
  14 neighborhoods directly abutting the City
  Center. The recommendation is that 10 – 20%
  of these units should be affordable.
          Greatest Challenges

• The second challenge we face is housing
                      Metro Area Profile *

• Birmingham Metro Employees = 450,890
• Occupations Earning < $33,000 = 253,790
                             (60 % of Median $55,200)
What Do They Do?
Job                          Total Employees                          Income
Office Clerks                        9,900                            $20,770
Secretaries                          8,440                            $23,840
Customer Service                     7,760                            $25,700
Retail Salesperson                   14,740                           $18,540
Maintenance / Repair                 4,590                            $28,150
Bank Tellers                         1,900                            $18,520

  *Metropolitan Statistical Area is made up of 6 counties including, and surrounding,
  Jefferson County.
   How We Get Money “Out the Door”

• Jointly Utilize HECA and HFCA resources
  to finance projects
  – Underwrite project according to HECA Loan
  – Evaluate market viability and social impact
  – If necessary, structure “gap” financing (grant,
    mezzanine debt) to achieve financial viability
     • LLC will also finance projects with outside

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