In the First Quarter of 2021, Capital Impact Partners Works to Create Impact Where Communities See Value, Fostering Generational Wealth Building

June 10, 2021 (Arlington, VA) – After pivoting to face the realities that 2020 laid bare, the first quarter of 2021 for Capital Impact Partners has been about expanding our work to create opportunities for hard-working communities to move onward and upward. Communities were hard-hit by the pandemic, as many of our neighbors were already struggling before the COVID-19 pandemic started.

This year, we are focused not just on ensuring that our communities are resilient and have the ability to build back what has been lost, but that our communities can build systems that help everyone thrive. We are piloting community-centered and community-engaging models as part of our new enterprise with CDC Small Business Finance. We are centering the capital and technical assistance needs of entrepreneurs who will be vital to building economic mobility for communities.

In the first quarter of 2021, Capital Impact’s mission-driven work supported more than 24,000 community members and created or preserved more than 10,000 permanent and construction jobs.

Capital Impact and CDC Small Business Finance Align Operations Under One CEO to Transform How Capital Flows into Communities

We are excited to announce that Capital Impact Partners and CDC Small Business Finance have united operations under President and CEO Ellis Carr. This transformative new enterprise is innovating how capital and investments flow into communities to advance economic empowerment and wealth creation.

Through our singular national strategy, we will leverage our combined 80 years of experience, nearly $3 billion in assets, and strong ties to both large financial institutions and community-based organizations to address key issues including the lack of place-based, community-led solutions, and the disconnected supply and demand of capital between investors and communities. 

Worker Co-op Conversions: The Power of Employee Ownership to Foster Wealth Building and Opportunity

This year, we are proud to announce the financing of our first worker co-op conversion with long-time partner Cooperative Fund of New England. This proud new cooperative, Ward Lumber, is another example of the power of worker co-op conversions — when owners sell their businesses to their workers — to maintain and augment wealth and stability within communities. 

Ward Lumber is a 130-year-old business in New York, employing more than 40 workers. When Jay Ward realized that the family business would not pass to his next generation, he and his workers looked for another way to ensure that the business continued. This is an important transaction, not only for the workers themselves, but because the ripple effect of this business closing would have been felt throughout the local economy for years to come. Instead, this effort helps preserve a community pillar for years to come. 

This loan fits within our broader cooperative development strategy, which identifies worker co-op conversion as a model for not only for building wealth for workers and their families, but for supporting the broader economy by ensuring that small businesses owned by Baby Boomers who are retiring do not close all together.

Capital Impact Awarded $1 million to Manage the Nourish D.C. Fund

Washington, D.C. Mayor Muriel Bowser awarded Capital Impact Partners $1 million to manage the newly announced Nourish D.C. Fund. The goal is to foster a food system that provides economic opportunities and access to healthy and affordable food.

Capital Impact Partners Named One of the Best Nonprofits to Work For

Capital Impact Partners was selected as one of the 50 Best Nonprofits To Work For in 2021 by The NonProfit Times, the leading publication for nonprofit managers. In this national program, Capital Impact was 19th overall, and 8th in the medium-sized category.

Ellis Carr Joins the Board of the Marguerite Casey Foundation

We are excited to announce that Capital Impact Partners and CDC Small Business Finance CEO Ellis Carr is joining the board of the Marguerite Casey Foundation.

Programmatic Support for Our Communities

The EDI Program Continues to Expand Community-Centric Real Estate Development

In 2021, we completed the second cohort of our EDI program in the Washington Metropolitan area (DMV) and our fourth cohort in Detroit. So far this year, we have provided training and technical assistance for real estate developers through an online learning series, 17 in the DMV and 19 in Detroit. Each learning series ended with participants presenting Capstone project proposals for development sites in their region.

Advancing opportunity remains among our highest priorities at Capital Impact. We recognize that opportunity in real estate development is about more than just creating opportunities for community-centric developers to participate in the field; it is also about financing those opportunities. As we have provided essential training and technical assistance to developers through EDI, we also launched a $12.5 million fund in 2020 to support projects led by Detroit developers.

Lending Highlights for the First Quarter of 2021

Capital Impact’s nearly $33 million in financing in the first quarter of 2021 spans several states, including California, Michigan, and New York. This effort helped increase access to quality health care for all, create new educational opportunities in communities, address affordable housing needs, and expand cooperative and small business development to help communities prosper.

Working within and becoming of our communities, our social impact in the first quarter of 2021 includes:

Expanding Cooperative Development

Capital Impact financed its first worker co-op conversion, providing a $775,000 loan to support the workers of Ward Lumber, a 130-year-old business in New York, to purchase the business and become worker-owners. This loan preserves the jobs of more than 50 workers. 

Worker co-op conversions, where owners sell their businesses to the workers, are a powerful model for building and holding wealth for workers and for securing the socioeconomic futures of communities. This point has become more underscored as communities have been touched by the instability that the COVID-19 pandemic has caused within our health and economic systems.

Expanding Small Business Development

CDC Small Business Finance — Capital Impact’s new enterprise partner — closed on a $60,000 loan to Crème Brulée, a start-up salon/spa located on Woodward Ave. in the New Center neighborhood. With this loan, Katrina Wilson, Crème Brulée’s founder and a successful tenured salon manager, is able to bring her vision of a “full-service, multicultural, upscale beauty bar that is designed to serve people regardless of their hair texture or ethnicity” to life in Detroit.

Scaling Affordable Housing

Capital Impact closed on $9.3 million in construction financing for Dreamtroit, an innovative combination of affordable housing, retail, event space, recycling, and cultural resources in the Northwest Goldberg neighborhood. The project will redevelop the 3.8-acre former site of the first Lincoln Motor Car Company factory, and will include 81 affordable residential units totaling 38,000-square-feet. In addition, the development will open up 30,000 sq. ft. of commercial space and 100,000 sq. ft. of outdoor public spaces including art installations and educational programming. Importantly, all of the residential units will be affordable to residents earning less than 120 percent of the Area Median Income (AMI) with 55 of the units affordable to residents earning less than 80 percent of the AMI and 18 of the units affordable to residents earning less than 50 percent of AMI.

Capital Impact closed on a $2.98 million loan to Kercheval East LLC, which will enable the developers to finance the renovation of two existing, vacant, and blighted buildings and the construction of one new building on a vacant lot, creating a mixed-use development in the West Village neighborhood of Detroit. This development will include 15 new apartments, and 3,336-square-feet of commercial space likely to be occupied by a local entrepreneur. Three of the 1-bedroom units will be affordable at 50 percent AMI, five will be affordable at 80 percent AMI, and the remaining will be affordable at 120 percent AMI, adding affordable residential space to this historic neighborhood.

Capital Impact closed a $8.25 million loan to revive two existing and operating apartment buildings, 329 and 381 Holbrook Avenue in the North End neighborhood of Detroit. The loan will provide 138 studio and one-bedroom units with 28 units at or below 50 percent of AMI; 42 units at or below 80 percent of the AMI; and 68 units at or below 120 percent of AMI. The buildings were deemed uninhabitable by the City due to severe deferred maintenance and a total of 65 residents were residing in the buildings. The developer of the project is working with local groups that specialize in housing assistance to identify permanent, affordable and safe housing for the 55 tenants that required assistance. The project will be utilizing Capital Magnet Funds and includes a participation from IFF. This loan will assist with rejuvenation of two underutilized buildings, providing a value-add to the North End.

Increasing Access to Health Care

Capital Impact closed a $5 million loan to support the ground-up construction of a four-story, 48,451 sq. ft. health and outpatient center, which will be owned and operated by St. John’s Episcopal Hospital, a nonprofit safety net hospital. Located in Far Rockaway, Queens in New York City, the development will increase access to primary care, dental and behavioral health services, as well as creating new access to cancer treatment and other ancillary services for the community. It will also increase the patients base from 18,000 to 20,000 and create 50 new jobs.

Though part of New York City, the Rockaway Peninsula is geographically isolated from the rest of the city and lacks sufficient access to medical care; St. John’s is the only hospital serving this community.

Providing High-Quality Education

Capital Impact closed a $2 million revolving line of credit to Citizens of the World Los Angeles (CWCLA) to support operations due to anticipated payment deferrals from the state due to COVID-19. CWCLA operates a network of high-performing public charter schools serving the communities of West Hollywood, Silver Lake, and Mar Vista in Los Angeles, California.