Capital Impact Partners and The Kresge Foundation Launch Innovative Woodward Corridor Investment Fund
$30.25 Million Fund to Provide Critically Needed Real Estate Financing in Detroit
ARLINGTON, VA (September 17, 2013) —Capital Impact Partners and The Kresge Foundation today announced the launch of the Woodward Corridor Investment Fund, developed to invest in transformative real estate projects that advance the physical redevelopment of Detroit’s Woodward Corridor. With the support of MetLife, Inc., PNC Bank, Prudential, Calvert Foundation, Living Cities, and the Max M. & Marjorie S. Fisher Foundation, the Fund will provide capital to projects that are mixed-use, mixed income, transit-oriented and promote density, diversity, vibrancy, and walkability in Detroit’s core.
“By engaging major foundations and commercial lenders, our work will break the traditional mold of community development financing,” said Terry Simonette, President and CEO of Capital Impact Partners. “The Woodward Corridor Investment Fund is an innovative new approach that is built around the needs of local borrowers.”
The $30.25 million Woodward Corridor Investment Fund is designed to support Detroit’s revitalization by financing critically needed housing units along Woodward Avenue, a main artery and home to major medical and academic campuses and arts and entertainment venues. Capital Impact Partners, a certified nonprofit Community Development Financial Institution (CDFI), will serve as the lender for the Fund.
The Woodward Corridor includes Detroit’s Midtown neighborhood, where occupancy rates exceed 95 percent and demand is high for hundreds of additional units. By focusing on the Woodward Corridor, home to many of Detroit’s largest institutions and employers, the fund will help attract residents and commercial activity, establish a model sustainable corridor, and expand economic opportunity for all residents.
“Access to capital is critical to expanding opportunity, strengthening neighborhoods and improving quality of life in our cities,” said Rip Rapson, president of The Kresge Foundation. “We know we need an array of tools to support the revitalization of our hometown. We also need creative partners. This Fund is an example of all of those elements.”
In recent years, Detroit’s public, private and philanthropic sectors have worked together to reestablish the city as a place that is economically, socially and environmentally sustainable, and competitive with peer urban centers. Major efforts including the federal government’s Strong Cities Strong Communities initiative, Living Cities’ Integration Initiative, The New Economy Initiative, and, the Detroit Future City planning framework focus on building stronger neighborhoods, creating economic opportunity and making Detroit a better city for current and future residents. The Fund will demonstrate market viability in neighborhoods that represent the leading edge of the city’s revitalization and support job growth through the development of additional residential and commercial space.
The Fund will provide long-term fixed rate loans under terms not currently available through traditional financial institutions, allowing a single loan source rather than the many layers of capital that can be time consuming and difficult to assemble. This will allow developers to commence construction on their projects more quickly.
“We know from market studies and from our revitalization work that there’s pent up demand for mixed-use, mixed income, transit-oriented projects in Detroit’s core,” says Kresge’s Laura Trudeau, who leads the foundation’s Detroit Program. “The Woodward Corridor is a diverse and vibrant area, but broader economic conditions have created conditions that have discouraged lenders.” Capital Impact Partners began working in Detroit several years ago as part of the Woodward Corridor Initiative (WCI). Living Cities, a funder collaborative focused on improving the lives of lowincome people, chose the WCI in Detroit to participate in The Integration Initiative, its effort to apply a collective impact framework to stimulate systems change in five cities. Through this Initiative, Living Cities and its members have supported efforts to revitalize Detroit, investing grant and loan dollars, helping aggregate local talent, knowledge and investment; and integrate leadership across multiple sectors.
The work over the past three years helped identified a gap in the lending market which the Woodward Corridor Investment Fund will help to fill. Living Cities is providing a grant to support the Woodward Corridor Investment Fund, and three of the fund’s investors: Prudential, MetLife and the Kresge Foundation, are members of Living Cities.
“Prudential’s investment in Detroit underscores our commitment to support underserved communities and develop innovative financial solutions,” said Lata Reddy, vice president, Corporate Social Responsibility at Prudential and president of The Prudential Foundation. “The Woodward Corridor resurgence is vital to the city and we welcome the opportunity to help strengthen this neighborhood.”
“It’s well known that Detroit faces tremendous challenges, but those challenges present opportunities and can bring together investors and mission-driven organizations to make a better Detroit,” said Matthew Sheedy, Director, Social Investment Program, MetLife, Inc. “If this formula can work in Detroit, it could be a model for how to work in other cities across the country,” he added. PNC’s capital was also pivotal to catalyzing the fund as it demonstrated how a local Detroit bank’s finances leveraged funding from other national partners.
“PNC is committed to developing strong communities and creating financial opportunities for individuals, families and businesses,” said PNC Regional President Ric DeVore. “That commitment includes playing a leadership role in projects such as this that will help build a better Detroit.”
“Long term capital is essential to revitalizing urban areas suffering from underinvestment, and we look forward to providing that in Detroit”, said Calvert Foundation CEO Jennifer Pryce. “As part of our Iconic Places Initiative, we’re working to raise that capital from residents who want to support urban redevelopment in their own backyards.”
The Fund will begin accepting applications October 1, 2013 and the application can be downloaded from Capital Impact’s website.
Capital Impact Partners transforms underserved communities into strong, vibrant places of opportunity for people at every stage of life. We deliver strategic financing, incubate new social programs and provide technical assistance 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 non-profit community development financial institution, Capital Impact Partners has disbursed more $2 billion to revitalize communities over the last 30 years. Headquartered in Arlington, VA, Capital Impact Partners operates nationally with local offices in Detroit, MI and Oakland, CA. Read more at www.capitalimpact.org
The Kresge Foundation is a $3 billion private, national foundation that works to expand opportunities in America’s cities through grantmaking and investing in arts and culture, education, the environment, health, human services and community development efforts in Detroit, Kresge’s hometown. In 2012, the Board of Trustees approved 410 awards totaling $130.5 million; $150.3 million was paid out to grantees over the course of the year. For more information, visit www.kresge.org.
Living Cities: Founded in 1991, Living Cities is an innovative philanthropic collaborative of 22 of the world’s largest foundations and financial institutions. Living Cities blends the collective financial resources of its members and deploys their collective knowledge and experience to improve the lives of low-income people and the cities where they live. Since its establishment, Living Cities has invested almost $1B in affordable housing, community facilities, and the creation of economic opportunity across the US.
>MetLife, Inc. is a leading global provider of insurance, annuities and employee benefit programs, serving 90 million customers. Through its subsidiaries and affiliates, MetLife holds leading market positions in the United States, Japan, Latin America, Asia, Europe, the Middle East and Africa. For more information, visit www.metlife.com.
The PNC Financial Services Group, Inc. (www.pnc.com) is one of the nation’s largest diversified financial services organizations providing retail and business banking; residential mortgage banking; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. Follow @PNCNews on Twitter for breaking news, updates and announcements from PNC.
Prudential Financial, Inc. (NYSE: PRU), a financial services leader with more than $1 trillion of assets under management as of June 30, 2013, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudential’s iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit www.news.prudential.com.
Calvert Foundation empowers investors to empower communities. Through the Community Investment Note, Calvert Foundation enables individuals and institutions to invest in helping lowincome communities become healthy and prosperous. Our investors have facilitated the creation of thousands of jobs, classroom seats, affordable homes, and critical services in the U.S. and around the world.
The Max M. & Marjorie S. Fisher Foundation. The mission of the Max M. & Marjorie S. Fisher Foundation is to enrich humanity by strengthening and empowering children and families in need. While remaining flexible in our approach we give priority to: Providing for the needs of and ensuring the future of the Jewish people and to respecting our legacy and commitment to the Detroit community. Areas of critical importance include education, arts & culture and health with particular attention to HIV/AIDS. During the course of the last five years the Foundation has placed in motion over $89 million on three continents.