Capital Impact Partners Focuses on More Than Just Doing Good in Third Quarter Community Investments
Fostering equity and inclusion through lending and programmatic initiatives is driving opportunities for community wealth building
Arlington, VA (December 5, 2019) – In the third quarter of 2019, Capital Impact Partners continued to center equity and inclusion in our work with communities. Championing community assets as a starting point for building community wealth both builds the inherent power of our neighbors and addresses the systemic cause of inequities, increasing the sustainability of solutions. As part of this effort, Capital Impact announced today that its financing and investment efforts in the third quarter served nearly 41,000 beneficiaries and created nearly 250 permanent and construction-related jobs.
“It is not enough for mission-driven organizations to just ‘do good.’ We have to face and address the systems that hold members of our communities back from success. This year, we have worked to be very clear about the issues that we want to address, and our investments and initiatives have reflected that focus,” said Ellis Carr, president and CEO of Capital Impact. “I am really proud of the work that we have engaged in this year to foster more equitable and inclusive communities.”
Capital Impact’s lending and programs leveraged partnerships and acumen to catalyze innovative practices that move immigrants, workers, minority entrepreneurs, and others toward shared prosperity. We also renewed our commitment to using impact investing to build power for all of our communities.
Capital Impact continued to offer investors the ability to take part in our work expanding equity and opportunity across the country with the launch of our 2019 Capital Impact Investment Notes (Notes) offering and S&P Global A+ rating. This marks Capital Impact’s third Notes offering. More than $140 million in Notes have been purchased by a range of retail and individual investors since they became available in late 2017. For investors set on creating social impact with their funds, our Notes program creates an opportunity to foster social good and financial returns.
In November, the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) announced that Capital Impact Partners was awarded $2.8 million in grants through the 2019 round of the CDFI Program. Capital Impact was the 5th highest awardee among 412 applicants. We received all three FA awards: the Base Financial Assistance award ($650,000), the Healthy Food Financing Initiative Financial Assistance award ($2 million), and the Disability Funds-Financial Assistance award ($202,000). The awards will enable us to expand our Equitable Development Initiative (EDI) and develop a new loan product for EDI graduates to help them bridge the gap toward acquiring larger financing packages; support job training, supportive housing, and health services for individuals with disabilities in California; and expand our Michigan Good Food Fund.
Building the Power of Communities of Color
Capital Impact’s Equitable Development Initiative began in Detroit with the realization that not enough investment was being directed toward real estate developers of color in a majority African-American city. Our goal of providing developers of color with the skills, mentorship, networks, and capital needed to revitalize their city resonated, and now we have expanded EDI to the Washington Metropolitan area. Our first cohort of 35 developers begin training this fall, with local developers and housing experts as mentors. With the stark need for affordable housing in the area, that will be a focus of the training.
Simultaneously in Detroit, applications for our third EDI cohort were just accepted and new trainings will begin in the new year.
Lending Highlights for the third quarter of 2019
Capital Impact’s $41 million in financing for the third quarter of the year spans several states, including California, Florida, Michigan, 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 third quarter of 2019 includes:
Scaling Affordable Housing
With increased housing prices and gentrification, affordable housing within Washington, D.C. has grown scarce. As a D.C. Affordable Housing Preservation Fund (AHPF) manager for the mayor, we have helped District residents maintain the housing that they have often lived in for years. 1101 Euclid was originally constructed in the 1900s; over the past several years, the neighborhood has experienced a rapid loss in affordable housing, and the building has fallen into disrepair. Through AHPF, Capital Impact provided a $3.2 million loan, helping the tenants work with a black-owned developer to acquire their building and make critical repairs while maintaining affordability for up to 78 residents.
Originally built in 1897, the historic Scott Castle went through numerous iterations before sadly falling into disrepair. In 2015, Capital Impact worked closely with longtime Detroit developer Joel Landy to provide $3.5 million in financing to ensure that the property would continue as an active part of Detroit’s history. Today, this former mansion provides 27 apartments affordable to people with a range of incomes. Capital Impact recently supported the refinancing of this loan.
The Elliott Building, home of the original Kresge Five & Dime store—and the epicenter of downtown Detroit’s thriving shopping district— sat vacant for many years. As part of Capital Impact’s work to increase density in the downtown and Midtown Detroit neighborhoods, we financed a $6 million transaction in 2016 through our Woodward Corridor Investment Fund. The loan supported the renovation of the building, which created 23 market-rate units geared toward working professionals as well as ground-floor retail businesses. Capital Impact recently supported the refinancing of this loan.
The Woodward Corridor has been a focus of Capital Impact’s revitalization work in Detroit, as a means to bring vibrancy and economic viability back to communities. Built in 1914, an old warehouse at 207 East Baltimore was tapped for rehabilitation in 2016, turning a largely vacant block in the heart of Detroit’s New Center into housing. With a $1.4 million loan from Capital Impact, the 10,000-sqare-foot building was converted into 12 units of rental housing just a few blocks from mass transit. Capital Impact recently supported the refinancing of this loan.
Increasing Access to Health Care
In Miami, Care Resource Community Health Centers, Inc. provides its community with primary, dental and behavioral health services, and importantly, HIV/AIDS care and treatment services. Approximately 40 percent of CRCHC’s patients are HIV-positive or have AIDS, and 20 percent of CRCHC’s patient visits are supported by the federal Ryan White grant program for HIV/AIDS treatment. In this medically underserved part of Miami, with many people living without insurance coverage, the services that CRCHC provides are essential. To better serve its 10,000 clients, CRCHC needed to expand its Midtown Miami site. Capital Impact provided $5 million as part of a $20.7 million New Markets Tax Credit transaction, to finance the renovation and expansion of CRCHC’s 22,000 sq. ft. Midtown Miami health clinic. In addition to health services, this building will include a pharmacy and a food bank.
Expanding Healthy Food Access
As older adults age, especially for those who are struggling economically, social isolation and nutrition issues are real barriers to long-term health. Meals on Wheels (MOW) provides services that help older adults age with dignity in their own homes for as long as possible. Most people know Meals on Wheels through its meal program for older adults, but they also provide safety checks, nutrition counseling, social work, and companionship for both older adults and adults with disabilities. In San Francisco, MOW delivers healthy meals twice daily to more than 3,600 low-income seniors and adults with disabilities. In the third quarter, we supported MOW with $16 million in financing as part of a $46.4 million New Markets Tax Credit Transaction to construct a new kitchen facility that will double its daily meal production.
Providing High-Quality Education
Founded in 1998, Detroit Edison Public School Academy (DEPSA) serves primarily African American students, who make up 98 percent of all students. The school consistently outperforms its K-12 peers at the district level, and K-8 peers across the state. Eighty-two percent of its students go to college, versus 68 percent for the state of Michigan. In 2012, DEPSA constructed a new 58,000-square-foot high school facility, and was looking for ways to bring down annual costs. We supported this effort with a $6 million loan to refinance an existing $11 million New Markets Tax Credit (NMTC) loan using the Community Development Financial Institution (CDFI) Bond Guarantee Program.
In western Michigan, students learn science and more at a school on a 57 acres farm. West Michigan Academy of Environmental Science provides an outdoor classroom for its students to gain a Science, Technology, Engineering, Art, and Math (STEAM) education. It routinely outperforms the local district and the state. With few high-quality preschool options in the area, WMAES decided to expand its preschool offerings. Capital Impact provided a $1.3 million loan for ground-up construction to help the school build an additional wing. With this expansion, students will have a direct track to continue on to the middle and high school that WMAES offers. The addition also enabled WMAES to expand its pre-school services.
About Capital Impact Partners
Through capital and commitment, Capital Impact Partners helps people build communities of opportunity that break barriers to success. We deliver strategic financing, incubate new social programs, and provide capacity building to help ensure that low-to-moderate-income individuals 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 Partners has disbursed more than $2.7 billion to revitalize communities over the past 35 years. Our leadership in delivering financial and social impact has resulted in Capital Impact earning an “A+” rating from S&P Global and being recognized by Aeris since 2005 for our performance. Headquartered in Arlington, VA, Capital Impact Partners operates nationally, with local offices in Detroit, MI, and Oakland, CA. Learn more at www.capitalimpact.org.