Capital Impact Partners Works to Put Equity at the Heart of its Mission-driven Work in the Fourth Quarter of 2019
Centering equity and inclusion internally supports Capital Impact’s mission to help communities transform into places of opportunity, wealth building
Arlington, VA (March 16, 2020) – In the fourth quarter of 2019, Capital Impact Partners continued to center equity and inclusion in our work with communities and within our organization, recognizing that systemic change requires continually evolving our practices. Working to serve our neighbors in community, Capital Impact announced today that our financing and investment efforts in the fourth quarter served nearly 138,000 beneficiaries and created nearly 750 permanent and construction-related jobs.
“Community Development Financial Institutions like Capital Impact Partners rose out of the civil rights movement, which fought for equity for communities held back by prejudiced practices,” said Ellis Carr, president and CEO of Capital Impact. “To continue that movement forward, we continue pushing back against systems and structures that persist in curtailing people’s ability to thrive. Our focus across 2019 has been on creating our own structures so that we embody equity at every level, for ourselves and our communities.”
Over the course of 2019, Capital Impact’s mission-driven work supported nearly 165,000 community members and created more than 2,100 permanent and construction jobs. Our social justice work also:
· Addressed the need for quality charter school education for more than 1,500 students;
· Created nearly 1,300 homes for individuals and families; and
· Provided nearly 16,000 patients with quality health care.
Using our Voice for Communities
This effort also included voicing our objection to proposed changes to an important piece of legislation designed to strengthen our ability to support communities. The Community Reinvestment Act (CRA) is essential to the work of mission-driven CDFIs, and its impact is substantial. In 2018 alone, banks invested nearly $4 billion in CDFI loan funds, and nearly half of the debt capital collectively deployed to finance desperately needed affordable housing, small businesses, and community facilities primarily benefiting communities with low incomes. That is why the CEOs of four of the largest CDFIs – including our CEO Ellis Carr – wrote an open letter to U.S. Office of the Comptroller and the Federal Deposit Insurance Corporation to ask them to reconsider regulation changes that could harm communities with low-and-moderate incomes. The comment period on their proposal has been extended into April, giving others a chance to lend their voices to the cause.
Third-party Recognition and Strengthen Partnerships
Our success in creating impact with communities led to strengthened partnerships and important validation. For the second straight year, Washington, D.C.’s Department of Housing and Community Development (DHCD) has named Capital Impact Partners as a manager of the District’s Housing Preservation Fund (HPF). Capital Impact was awarded a $3.3 million grant as part of this announcement, which we expect to leverage at a 3:1 ratio to deploy an additional $13 million in loans to help preserve more than 340 homes across the District. To date, Capital Impact has preserved 860 homes through the Fund.
And for the third consecutive year, ImpactAssets named Capital Impact to its ImpactAssets 50 (IA 50), a publicly available, online database for impact investors, family offices, financial advisors, and institutional investors that features a diversified listing of private capital fund managers that deliver social and environmental impact as well as financial returns. In 2019, Capital Impact released a new $150 million offering of its S&P “A” rated Notes to investors.
Lending Highlights for the fourth quarter of 2019
Capital Impact’s $67.2 million in financing for the fourth quarter of the year spans several states, including California, Louisiana, Michigan, New York, Texas, and Washington, D.C. This effort helped increase access to quality health care for all, create new educational opportunities in communities of color, address affordable housing needs, expand access to healthy food, and create spaces for communities of color to prosper.
Working within and becoming of our communities, our social impact in the fourth quarter of 2019 includes:
Scaling Affordable Housing
Affordable housing continues to be a crisis in the San Francisco Bay Area. Capital Impact is proud to participate in the Bay’s Future Fund, part of the Partnership for the Bay’s Future, which aims to produce and preserve affordable housing for communities across the region. February 2020 marked the first anniversary of this seminal partnership.
At the end of 2019, we provided $2.6 million as part of a $5 million loan with the Corporation for Supportive Housing (CSH), to support Allied Housing and Abode Services to acquire a three-acre property in Hayward, CA. The funding will allow for the construction of a 126-unit supportive housing facility, which will focus on formerly homeless persons with serious mental illness or other disabilities. This project aims to build community among the residents, with community rooms and outdoor recreation space as some of the amenities. Importantly, the supportive housing will provide access to a broad array of services, including vocational and employment assistance, primary health and dental services referrals, and comprehensive service plans.
In the Bywater neighborhood of New Orleans, local developers are working to develop a 68,923-square-foot property into a multifamily development that will benefit the entire community. The Bourgogne Bywater project will construct 70 one-, two-, and three-bedroom rental units, and 6,807 sq. ft. of commercial/retail and pool space. As part of an agreement with the city, seven of the multifamily units will be held as affordable at 80 percent of Area Median Income (AMI), consisting of five one-bedroom units and 2 two-bedroom units. Additionally, the building will restrict seven more units to 120 percent AMI. Due to market pricing, the building is projected to have a total of 36 units (51 percent) be affordable for 112 percent AMI (i.e. workforce housing).
The developers are working with the New Orleans Center for Creative Arts (“NOCCA”) regional high school to offer first rights of refusal to teachers and administrative staff for the workforce housing units. Capital Impact provided $5 million as part of a $15.9 million loan, with partners LIIF, Blue Hub Capital, and Partners for the Greater Good participating. The loan will support a catalytic investment that will increase the mixed-income housing stock and encourage further economic development.
Cascade Park Apartments, a 132-unit, multifamily rental property located in southeast Washington, D.C., has experienced a long period of disinvestment, resulting in poor living conditions for residents, high vacancy rates, and operating losses. Capital Impact provided $8.9 million as part of a larger financing package to Dantes Community Partners, a D.C.-area affordable housing developer, to preserve the affordability of the property for its approximately 429 residents. Dantes Partners will also work to improve property management and address immediate repairs.
Located in the Adams Morgan neighborhood, a building on Champlain St. has provided extremely affordable housing to individuals and families for years. The neighborhood has experienced considerable gentrification and increased home prices, putting this vital resource at risk. When the building came up for sale, Capital Impact provided a $6.5 million loan and worked with MED Developers to acquire the building so that tenants who wanted to remain in their homes and community could do so through Washington D.C.’s Tenant Opportunity to Purchase Act. The loan will allow the developer to make critical repairs to the 30-unit building while maintaining deep affordability of the building rents.
Washington D.C.’s southeast quadrant has seen considerable disinvestment over decades, creating a significant need for affordable housing in its communities. Capital Impact provided an $836,000 acquisition loan to return borrower Banneker Ventures, a D.C.-area affordable housing developer, to develop The Clara on MLK Jr. Ave SE. The loan will help Banneker Ventures acquire a vacant commercial building in the Anacostia neighborhood, part of an assemblage where Banneker intends to construct a new, 100 percent affordable, 81-unit apartment building with ground-floor retail.
Capital Impact closed more than $5 million in construction financing, $2.4 million of which came from our Detroit Neighborhoods Fund, to finance 40 Hague. The financing will be used to convert 40 Hague – a former Packard Automobile Showroom in Detroit’s North End neighborhood – into 38 rental units, with eight of those units reserved for households earning less than 60 percent AMI.
The Parker Durand is a 92-unit, rent-restricted, mixed-use development located at the northeast corner of Kercheval and Van Dyke in Detroit’s West Village neighborhood. The Parker Durand will provide rental housing to households experiencing significant economic hardship, including those earning 50 percent AMI. Financed by Capital Impact and led by the Roxbury Group and Invest Detroit, the $22.5 million, new construction development will additionally provide four retail spaces prioritized for locally owned businesses.
Financing the Parker Durand was made possible by a bringing together local, state, and national government funding; philanthropy through Detroit’s Strategic Neighborhood Fund; and Capital Impact Partners’ $4.8 million Capital Magnet Fund award, received from the U.S. Department of Treasury’s CDFI Fund. Capital Impact used this award to seed a $48 million fund to create and preserve affordable rental housing throughout Detroit and Wayne County.
New York City’s history of high housing costs has led to a long history of housing co-ops. In 2004, Capital Impact provided a $653,954 loan to a housing co-op at 278 East 7th Street on the Lower East Side of Manhattan for acquisition and construction. Last year, we provided a $548,623 loan to refinance the original loan.
Increasing Access to Health Care
El Dorado County Community Health Center (EDCCHC) is a Federally Qualified Health Center (FQHC) that serves nearly 11,000 patients in El Dorado County, California, part of the Greater Sacramento area. EDCCHC primarily serves seniors with low incomes, pregnant women, and people seeking substance abuse care; approximately 60 percent of its patients live below the federal poverty level (FPL).
In 2018, El Dorado purchased land with plans to build a new health center, expanding its number of exam rooms from 26 to 40. Through our CPCA Ventures Loan Fund, we provided a $1 million loan to help EDCCHC with funding for working capital needs, such as predevelopment costs associated with developing the newly acquired site. The loan also supports the refinance of a 2015 CPCA loan to EDCCHC.
Centro Medico Community Clinic, Inc. (CMCC) is an FQHC Look-Alike located in Riverside County, California. CMCC has two existing service sites in Corona and Riverside, California, where it served 4,715 patients in 2018, 84 percent of whom were people of color. All of CMCC’s patients have a family income at or below 200 percent of FPL and 80 percent live at or below 100 percent of FPL.
Capital Impact provided a $400,000 loan through our CPCA Ventures Loan Program to support CMCC in expanding its Corona site (“Corona I”) into an additional 6,461 sq. ft. of leased space (“Corona II”). Capital Impact’s loan will cover tenant improvements, furnishing and equipment, migration of EMR systems, and IT-related equipment and staff training associated with the new Corona II location. CMCC’s expansion includes nine exam rooms and new administration offices. It will double CMCC’s existing medical capacity and allow CMCC to serve approximately 1,700 new patients annually.
Expanding Healthy Food Access
In southern California, Numero Uno Markets provide healthy food options to residents across Los Angeles County. A repeat borrower of Capital Impact’s, Numero Uno operates 13 Hispanic-focused supermarkets serving communities with low-and-moderate incomes. Using funds from a previous Healthy Food Financing Initiative (HFFI) award, we closed a $2 million participation in a $7 million loan from the National Cooperative Bank, which will help Numero Uno acquire 11 grocery stores, seven of which are either in an area designated by the USDA as a Food Desert or in a low-income area adjacent to a Food Desert.
Providing High-Quality Education
Detroit School for Digital Technology (DSDT) is a woman-owned vocational institution, training Detroit residents in technical skills like coding, Information Technology repair, and digital arts. A large percentage of DSDT’s 148 students are veterans or individuals living with criminal records. Capital Impact provided $886,500 to help DSDT purchase the facility in southwest Detroit that it had previously rented. Financed in partnership with Invest Detroit, this project enabled DSDT to establish a permanent home to continue fostering educational opportunities.
The Schools of Science and Technology in Texas aim to create safe and healthy learning environments that guide students through development of creative and critical thinking and learning skills and enables them to apply these skills through cooperative and interactive instruction. SST offers a student-centered, rigorous educational program with a strong emphasis on science, technology, engineering, and math (STEM) and operate a collaborative learning environment. Capital Impact provided Building Hope with $4 million as part of an $18 million loan for this project; PNC is the co-senior lender with Capital Impact. The campus will ultimately serve 750 students in grades K-8, who are mostly people of color.
About Capital Impact Partners
Through capital and commitment, Capital Impact Partners helps people build communities of opportunity that break barriers to success. Through mission-driven financing, social innovation programs, capacity building, and impact investing, we work to champion key issues of equity and social and economic justice. Our commitment to community focuses on ensuring that individuals with low-to-moderate incomes have access to quality health care and education, healthy foods, affordable housing, and the ability to age with dignity.
A nonprofit Community Development Financial Institution, Capital Impact has disbursed more than $2.5 billion since 1982 to ensure that individuals with low-to-moderate incomes have access to quality health care and education, healthy foods, affordable housing, and the ability to age with dignity. Our leadership in delivering financial and social impact has resulted in Capital Impact being rated by S&P Global and recognized by Aeris for our performance. Headquartered in Arlington, VA, Capital Impact Partners operates nationally, with local offices in Detroit, MI, New York, NY, and Oakland, CA. Learn more at www.capitalimpact.org.