Through the COVID-19 Pandemic, Capital Impact Partners Remains Committed to Equity and Wealth Building for Disinvested Communities in the First Three Quarters of 2020
Through partnerships and commitment, Capital Impact works to make sure that communities do not lose gains they have made in building equity and generational wealth
Arlington, VA (December 3, 2020) –Since early 2020, Capital Impact Partners, our communities across the country, and our partners have been working to pivot in the face of the COVID-19 pandemic. In addition, the country is facing a reckoning born from the undeniable spotlight on the generations-long inequities that communities of color have experienced. This is a moment in which many people are asking not just how do we get back where we were, but how can we use this moment to enable the transformation that we want to see, so that communities can build real stability, prosperity, and equity.
Through this crisis, mission-driven organizations have once again worked as a counterforce to help communities address the now-amplified needs of individuals, families, and businesses. We have worked hard this year with our community partners and borrowers to ensure that communities across the country do not lose momentum on their journey to equity and wealth building. Through our programmatic work and our lending, we have and continue to invest in disinvested communities to build economic mobility, resilience, equity, and opportunity.
You can learn more about our COVID-19 response in this blog series and throughout this press release.
In the first three quarters of 2020, Capital Impact’s mission-driven work supported more than 62,000 community members and created nearly 1,500 permanent and construction jobs.
Expanding Equity, Wealth Creation with Our New Alliance Partner, CDC Small Business Finance
One of the new developments that will help us work to expand economic mobility and justice for our communities is our alliance with CDC Small Business Finance. With a focus on economic empowerment and equitable wealth creation, CDC Small Business Finance, the leading mission-based small business lender in the country, and Capital Impact have the unique ability to deliver a full suite of lending products and programs that support community efforts to create strong, vibrant, and healthy places of opportunity.
Work will begin through three place-based pilots in the Los Angeles, Detroit, and Washington, D.C. Metropolitan (DMV) areas. In each community, cross-organizational teams will listen and actively engage with local community members to understand the problems that are unique to each region, while sharing tools, programs, and services that are strategically customized to address high-priority issues.
“Our old ways of working toward shared prosperity have not worked. Creating communities of opportunity in areas that have seen historical disinvestment will take innovative thinking and collaboration,” said Ellis Carr, president and CEO of Capital Impact Partners. “Leveraging both Capital Impact and CDC Small Business Finance’s years of experience and proximity to community, we can accelerate solutions to address critical needs at scale.”
Lending Addressing Community Needs
CPCA COVID Response Loan Fund
California’s community health centers (CHCs) are facing significant lost revenue as a result of business disruptions due to the COVID-19 pandemic. To bridge this cash flow gap, the California Primary Care Association (CPCA) and Capital Impact Partners launched the $25 million CPCA COVID Response Loan Fund to provide flexible financing for CHCs. It is a vital need: since the beginning of the COVID-19 pandemic, CHCs have seen primary and preventive care visits drop by more than 50 percent, leading to temporary site closures, as well as staff layoffs and closures. CHCs not only serve one-in-six Californians, but also a predominate number of patients who fall below the federal poverty level. The CPCA COVID Response Loan Fund is made possible through the generous support of several key partners: Alliance Healthcare Foundation, The California Endowment, California Primary Care Association, The California Wellness Foundation, JPMorgan Chase, Richard W. Goldman Family Foundation, and UnitedHealth Group.
Diversity in Development Loan Fund
In an effort to increase support for real estate developers of color in Detroit who have traditionally be unable to secure traditional capital, Capital Impact launched a $12.5 million Diversity in Development – Detroit Loan Fund. The Fund builds on Capital Impact’s Equitable Development Initiative (EDI), a program comprised of training, mentorship and financing to support historically underserved local developers. The fund provides a new tool to increase Capital Impact’s commitment to equitable development and inclusive growth in Detroit, by deploying low-cost and flexible construction financing to developers of color who live in and around Detroit — with a preference given to graduates of Capital Impact’s Equitable Development Initiative.
Programmatic Support for Our Communities
New Cohorts of the Equitable Development Initiative Help Catalyze Racial Equity
This year, we completed the third cohort of our Equitable Development Initiative (EDI) in Detroit and our first Washington, D.C. area (DMV) cohort, in which we trained and mentored a combined 54 real estate developers of color through online learning sessions, shifting from in-person sessions as a result of COVID-19. Our second DMV EDI cohort began in November, and our fourth Detroit cohort begins in 2021.
Capital Impact started and continues the Equitable Development Initiative as a result of our work in Detroit. Through research into our loan portfolio, we realized we needed to apply a racial equity lens to our work in order to meet our goals. Given the disproportionate impacts of COVID-19 on communities of color, as well as lasting inequities that developers of colors experience, it is now as important as ever that developers who represent their communities are engaged in shaping the future of communities nationwide.
D.C. Co-op Impact Award: Growing Cooperative Businesses Led by People of Color
Nationwide, cooperatives are on the rise to create dignified employment, ownership, and wealth-building opportunities. The Washington Area Community Investment Fund (Wacif) and Capital Impact Partners awarded $40,000 in grants to support cooperatively owned businesses through the first D.C. Co-op Impact Grant.
DMV Good Food Fund Innovative Response Fund: Preserving Food Security During the Pandemic
Capital Impact launched its DMV Good Food Fund (DMV GFF) Innovative Response Fund early this year, providing $100,000 in awards to key partners in order to allow local good food enterprises to reposition and pivot in response to the COVID-19 pandemic and its impacts on the regional food economy.
Expanding Empowerment and Sovereignty through the Co-op Innovation Award
For six years, Capital Impact has fostered innovation and expansion of the cooperative market through our Co-op Innovation Award. This year, our recipients are change agents expanding knowledge of and opportunities for wealth building and sovereignty through the co-op model, particularly in the face of COVID-19.
Lending Highlights for the first three quarters of 2020
Capital Impact’s $52 million in financing for the first three quarters of the year spans several states, including California, Michigan, Tennessee, 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 so far in 2020 includes:
Fostering Community Development
Even before the COVID-19 pandemic, individuals and families in disinvested communities were facing difficult circumstances. The homeless community consistently faces difficulty accessing services to remain healthy and housed. Capital Impact provided a $1.5 million loan to Memphis Union Mission as part of a $23 million project to build their new Opportunity Center, providing critical shelter and meals for individuals battling addiction, and their families. This development will also benefit from Capital Impact’s first Affordable Housing Program grant through the Federal Home Loan Banks.
Memphis Union Mission serves 91.5 percent of people experiencing homelessness in Memphis, TN, providing 124,000 hot meals per year, emergency shelter, substance abuse counseling, and job readiness skills. Its new 61,050-square-foot Opportunity Center will double the number of shelter beds and provide space for comprehensive programming for 2,750 individuals to address the root causes of homelessness and empower and support clients.
Scaling Affordable Housing
The Murray – Hubbard Farms is a mixed-income, multifamily project in Southwest Detroit led by a Black developer, W. Emery Matthews. These long-abandoned row homes will undergo a total renovation to become 12 units of modern, efficient housing across 16,404 square feet, including three units that will be offered as affordable housing at 60 percent of the Area Median Income (AMI). Capital Impact provided $2.2 million in loans – in part through our Detroit Neighborhoods Fund – to support the $4.57 million rehab of this historic landmark in the Hubbard Farms Historic District. The project is Capital Impact’s first multifamily project in the southwest neighborhood.
Capital Impact provided a $6.2 million loan for the ground-up construction of 655 W. Willis in Midtown Detroit. This four-story building will feature ground floor retail and 36 new residential units for Detroiters, nine of which will be affordable to individuals and families with incomes equal to or less than 80 percent AMI. The development is led by returning borrower and Equitable Development Initiative mentor Richard Hosey, a Black developer in Detroit. This infill project will be located in a dense neighborhood within one block of a variety of neighborhood services including a movie theater, restaurants, a community garden, retailers and another Capital Impact financed project, 711 Alexandrine.
Using a $3.9 million loan from Capital Impact Partners through the Washington, D.C. DHCD Preservation Fund, Black-owned developer Equilibrium Real Estate Investments will acquire a 36-unit multi-family apartment building (1507-1511 19th St SE), located in the Anacostia neighborhood of Washington, D.C. The funds will support Equilibrium to stabilize the property and upgrade currently vacant units. All of the current residents are living with low incomes. This development will continue to provide affordable housing in the District, which has seen the highest rates of gentrification of any city in the country over the past several years, particularly in communities “east of the river” like Anacostia.
Also in Washington, D.C., Capital Impact provided a $5.2 million loan through the Washington, D.C. DHCD Preservation Fund to support the Colorado Gardens tenant association to purchase its building through the D.C. Tenant Opportunity to Purchase Act (TOPA) and form a limited equity cooperative. This development will preserve 28 units of affordable housing in an increasingly desirable neighborhood of northwest D.C. All of the households in the building earn 80 percent of the Area Median Income (AMI) or less, with almost 30 percent of the building earning between 50-80 percent AMI. Additionally, the development could also provide residents with access to quality services through partners. By facilitating the creation of a limited equity cooperative, the loan supports an ownership model which Capital Impact believes is critical to preventing displacement caused by gentrification.
Through our partnership in the Bay’s Future Fund lending initiative, Capital Impact is providing a $1.3 million acquisition loan to HIP Housing to finance the $3.3 million purchase of a fully occupied 10-unit apartment property in Redwood City. HIP’s acquisition of this property preserves 10 units of affordable housing, 100 percent of which will be restricted for 55 years to households with low incomes (60 percent of Area Median Income). Affordable housing is critical in this area, which, due to the city’s proximity to several high-profile tech companies, has a median rent that is nearly twice the national average and the largest unsheltered homeless population of any city in San Mateo County (as of 2019).
Capital Impact closed an $864,000 loan to RGTP Real Estate for Sweeney Lane Apartments, a 10-unit affordable housing development in Austin, TX. The project will provide short-term housing for individuals struggling with homelessness. RGTP will be partnering with a local Austin organization, the Ending Community Homelessness Coalition, or ECHO. ECHO manages Austin’s Continuum of Care program. Continuum of Care includes delivering housing and services to meet the specific needs of people who are homeless as they move to stable housing and maximize self-sufficiency.
Increasing Access to Health Care
To acquire its South Tulare Clinic in in Tulare, CA, Capital Impact provided Altura Centers for Health with a $1 million loan through the CPCA Ventures Loan Program. Altura provides medical, dental, and behavioral health services to children and adults in Tulare County, serving up to 27,000 patients each year, the majority of whom experience poverty. The acquisition of this property will allow Altura to make this a permanent home for their clients to access a full continuum of care.
Capital Impact provided a $300,000 loan to North Orange County Regional Health Foundation, a Federally Qualified Health Center (FQHC) in Fullerton, California. Financed through the CPCA Ventures Loan Program , the loan will facilitate the integration of a new Electronic Medical Records (EMR) system and purchase updated furniture and equipment. In a community where more than 75 percent of residents experience poverty, quality, accurate health care is vital.
Westside Family Health Center (WFHC) received a $3 million loan through Capital Impact’s Healthier California Fund to finance tenant improvements in a 24,500-square-foot, three-story commercial building in Culver City, CA. WHFC will renovate the space for use as its main clinic and will relocate its existing clinic operations to the new location.
To support The Achievable Foundation’s general operations that were impacted by COVID-19, Capital Impact provided a $500,000 working capital loan through the CPCA Ventures Loan Fund. The Achievable Foundation is a Federally Qualified Health Center (FQHC) located in Culver City, CA, who previously utilized the CPCA Loan Program in 2015 after obtaining their FQHC designation. The health center focuses on primary care and supportive services for people with disabilities, and they are the only FQHC in Los Angeles County, and one of a handful across the country, with this overall focus.
Expanding Healthy Food Access
Capital Impact has invested considerably in healthy food systems and enterprises across Michigan through the Michigan Good Food Fund (MGFF), a $30 million public-private partnership loan fund that provides financing and business assistance to good food enterprises that benefit underserved communities across the state. In addition to lending to good food borrowers itself, MGFF works with intermediary lenders like Northern Initiatives to administer loans less than $250,000 to grocery stores, growers, and good food entrepreneurs. To support Northern Initiatives to extend more funding and technical assistance to several food borrowers across the state, Capital Impact provided Northern Initiatives with a $500,000 loan.
Providing High-Quality Education
Capital Impact closed a $2.9 million loan as part of a larger $12 million financing package for the Richard Wright Public Charter School for Journalism and Media Arts. This loan will help Richard Wright transform its currently leased space into a bright and spacious new high school campus with room to grow, as well as creating space for an early childhood education charter school.
Richard Wright Public Charter School’s dedication to making a difference for its students is clear: its programming for students, including those living with disabilities, has resulted in a 100 percent college acceptance rate.
Capital Impact closed two $3 million Revolving Lines of Credit to Equitas Academy Charter Schools and Ednovate, Inc, both of whom are returning borrowers to the organization.
Equitas Academy is a charter network that serves 1,600 K-8 students in the Pico Union neighborhood of Los Angeles. Ednovate is a charter network that serves 2,100 high school students across five campuses in Los Angeles and Orange Counties. The majority of their student populations live with low incomes, are first-generation college-bound, and are English Language Learners or fluent English speakers from Spanish-speaking homes.
Both networks will use the lines of credit to support their cash balances as they continue to expand education to more students in the face of state funding deferrals due to COVID-19.
Marygrove Conservancy is a nonprofit organization that was established to operate and steward the 53-acre Marygrove College campus after its closure in 2019. Capital Impact closed $9 million of New Market Tax Credit (NMTC) financing – as part of a $22 million NMTC transaction – to support the ground-up construction of Marygrove Early Learning Center (“ELC”) in Detroit.
Marygrove Conservancy’s primary objective is to facilitate the redevelopment of the campus as a cradle-to-career, pre-Kindergarten to graduate degree education campus. The newly constructed single-story building will encompass approximately 29,000 square feet of space designed to provide wrap-around services to 144 children (infant to Pre-K) across the income and socioeconomic spectrum. To ensure income diversity, half of the slots will be federally subsidized through Early Head Start and Head Start programs. The project will create twelve classrooms and will have focused therapy rooms that will include play therapy, health therapy, and sensory rooms.
Capital Impact Partners closed a $1.35 million acquisition loan to CityScape Schools, an emerging charter school network in Dallas, Texas, for the purchase of a vacant building to renovate into an early childhood center. The new center will be specially designed for, and solely serve, Pre-K three year-olds and Pre-K four year-olds. The new building will free up 10 classrooms in their existing space to allow for growth at the K-8 campus.
CityScape serves a predominately Latinx student population; the staff is also majority Latinx. CityScape has received 10 state distinctions for its academic performance, including in Student Progress and Closing Performance Gaps.
Capital Impact closed a $5,2 million acquisition loan to Green Dot Public Schools California to purchase their Green Dot Ánimo Ellen Ochoa Middle School in Los Angeles, CA. The loan supports Green Dot to provide a permanent home to their 365 students, and the ability to expand over time. The school serves children who experience poverty and homelessness; it has a track record of increasing students’ academic achievement.
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.