Centering our commitment to community-centered value will support hard-working communities to move forward and thrive in the wake of the pandemic
Arlington, VA (June 10, 2021) – 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. Our communities, including communities of color and communities living with low incomes, were hard-hit by the pandemic, as many of our neighbors were already struggling with inequity and lack of opportunities 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 who has experienced disinvestment to 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 of color, who will be vital to building economic mobility for communities. We are centering diversity, equity, and inclusion in everything that we do to ensure that we put our communities first and create impact where they find value. Resiliency is not enough; justice, equity, and prosperity for disinvested communities are the goals.
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 Disinvested 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 historically disinvested communities to advance economic empowerment and equitable 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 legacy issues including the growth of economic inequity, 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. Read our report to see how expanding these conversions can be instrumental in creating and preserving just work and ownership opportunities.
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 an inclusive food system that provides economic opportunities and access to healthy, affordable, and culturally appropriate food, particularly in communities impacted by historic disinvestment and structural racism.
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. In particular, we were recognized for our Diversity, Equity, and Inclusion efforts as well as a focus on employee wellness.
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. His participation will support the work of community organizing leaders shifting balances of power and building a representative economy.
Programmatic Support for Our Communities
The Equitable Development Initiative Continues to Expand Racial Equity in Real Estate Development
In 2021, we completed the second cohort of our Equitable Development Initiative (EDI) 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 of color 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 equity and opportunity remain among our highest priorities at Capital Impact. We recognize that equitable opportunity in real estate development is about more than just creating opportunities for developers of color to participate in the field; it is also about financing those opportunities. As we have provided essential training and technical assistance to developers of color through EDI, we also launched our $12.5 million Diversity in Development – Detroit Loan Fund in 2020 to support projects led by Detroit developers of color.
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 of color, 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 Equity through 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, as well as decades of racial injustice.
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 African-American 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. Far Rockaway already experienced poverty and high rates of illness before the pandemic, as compared with other neighborhoods in the city; it was particularly hard-hit by the COVID-19 pandemic.
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. CWCLA charter schools are diverse-by-design, meaning they intentionally seek to create a school that reflects the socioeconomic, racial, and cultural diversity of the neighborhoods in which it operates.
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.
