VOLUME 22 | ISSUE 3 | 2015
A PUBLICATION OF GREAT LAKES CAPITAL FUND
GLCF IMPLEMENTS SUCCESSION PLAN
• Why We Did It • How We Did It • How You Can Do It • What To Do Moving Forward
FEATURES
3 KEYS TO MAKING SUCCESSION PLANNING A CORNERSTONE OF PARTNER CONFIDENCE.............. 6
HOW TO SHAPE SUCCESS INTO SUCCESSION............. 8
5 TIPS FOR PUTTING THE SUCCESS INTO SUCCESSION PLANNING.................................. 12
RETIRING FROM A LABOR OF LOVE............................ 14
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WHERE DO WE GO FROM HERE?............................... 16
DEPARTMENTS
6
CEO’s MESSAGE.......................................................... 5 Preparing for the Future
EVENTS & HAPPENINGS............................................ 18
ADVERTISER INDEX..................................................... 22
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Promises Made, Promises Kept. Syndicators and lenders will attest to our rock solid reputation.
For more information, contact our administrator at 248.833.0550
CEO’s MESSAGE
GOVERNING BOARD Wendell Johns, Chair Former SVP, Fannie Mae Michael J. Taylor, Secretary/Treasurer PNC Bank Catherine A. Cawthon Fifth Third CDC Derrick K. Collins Chicago State University Christine R. Hobbs Former Director, Freddie Mac Multifamily
PREPARING FOR THE FUTURE BY MARK MCDANIEL, PRESIDENT & CEO GREAT LAKES CAPITAL FUND
William C. Perkins Wisconsin Partnership for Housing Development, Inc. Robert Rossiter AIG Federal Saving Bank James W. Stretz George K. Baum & Company Donald F. Tucker Don Tucker Consulting Paul J. Weaver Former SVP and Controller, FHLBI
CORPORATE OFFICERS Mark S. McDaniel, President & CEO Christopher C. Cox, CFO James L. Logue III, COO Kevin Crawley, Executive Vice President Jennifer A. Everhart, Executive Vice President Rick Laber, Executive Vice President Marge Novak, Executive Vice President Jim Peffley, Executive Vice President
LOCATIONS Lansing Headquarters 1118 S. Washington Avenue Lansing, MI 48910 Phone 517.482.8555 Detroit Office 2111 Woodward Avenue, Suite 600 Detroit, MI 48201 Phone 313.841.3751 Illinois Office 225 West Washington, Suite 1350 C Chicago, IL 60606 Phone 708.781.9603 Indianapolis Office 320 N. Meridian, Suite 516 Indianapolis, IN 46204 Phone 317.423.8880 Wisconsin Office 2 E. Mifflin Street, Suite 403 Madison, WI 53703 Phone 608.234.5291 Delaware Office 100 W. 10th Street, Suite 302 Wilmington, DE 19801
Three years ago I was asked a question that I was unprepared to answer, let alone consider seriously. It was asked at the end of our annual board retreat. Not an agenda item, never discussed before, and I was unprepared to answer. The question...”Mark, what are your plans for retirement?” Initial thought…NOT!! But, as we discussed it further, it was a very smart and critical question for the future of the organization. The board wanted to plan for succession to ensure the culture of the organization would be preserved upon my retirement. A very prudent topic for the board to be concerned with. I took the challenge up and committed to presenting a plan by the end of the year. I believed it to be a simple undertaking; however, after two months of research, it became clear it was beyond my capabilities and, most importantly, it needed to include every executive and management position in the organization. For me personally, to face the question of when will I retire brought many things to the table at home and at the organization that I was unprepared to think about. Not only things I didn’t want to face, but also things my family didn’t want to face. I’m thankful now for the challenge the board threw out to me. Not only am I prepared for the future, but the organization is more than prepared to carry on the diverse community development work it does. Investor, partners, and staff all can take comfort in the future strength and plans for the organization. The succession plan and its implementation is the cornerstone of evolution of the organization to be here for the long-term. This edition of Avenues will outline and guide you through succession planning. It’s an important step for all organizations to take seriously. It builds confidence and credibility with your lenders, investors, partners, and staff. It is really a must-do step to ensure the longevity of your organization. On another note, this will be the last edition of Avenues that will refer to us as Great Lakes Capital Fund. We have spent 2015 going through a branding process that will result in us being well-positioned for further growth and services as a Community Development Finance Institution. It really was another step we needed to take that came out of the succession planning process. The next edition of Avenues will present our new name, look, and refined mission and message. It is another historical moment in the evolution of what started as the Michigan Capital Fund for housing 22 years ago and became Great Lakes Capital Fund 13 years ago. Never become complacent…always look to the future so your organization is always relevant and viable!
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COVER STORY
KEYS TO MAKING SUCCESSION PLANNING A CORNERSTONE OF PARTNER CONFIDENCE
S
uccession planning, whether in a family business, service organization, or multi-national corporation, offers a fundamental support to building and maintaining partner confidence. When partners can be assured of the continued growth and opportunity with an entity even through executive turnover due to retirement or attrition, they feel more confident about their investment of time and resources into an organization. Also, they better understand where an organization is going, again bolstering confidence, especially if the succession plan mirrors the organization’s strategic efforts as described by the Plante & Moran team which assisted GLCF in its recent succession planning process. Clarity is a cornerstone of confidence, and lack of clarity can make it tough when organizational transitions occur suddenly or over time. According to a 2015 McKinsey & Company report, newly ascended executives were struggling to achieve support for their strategic efforts with a 1/3 reporting not achieving key objectives and 27% citing lack of resources for achievement of objectives. In the community and housing development business, diminishing resources and industry speed do not allow for a long ramp up time for new leadership, and new C-levels who have to navigate lack of clarity and resources are bound to miss growth targets and organizational objectives. For our development world, this means populations in need remain underserved. Succession planning was all about clarity now and into the future for the GLCF
and their investment and development partners, so the leadership put as much focus, time, and investment into the right planning partner as necessary to ensure the Fund could continue their culture of service well into the future. Three key items in regards to partner confidence came to light during this planning process. First, partners need to know an organization has invested the right time, resources and thought into planning for the plan to actually inspire confidence. According to Catherine Cawthon, GLCF board member and President of Fifth Third CDC, “Because we are making investments with a 15 year window, it is critical for us as an investment partner to see a formal process with the required time and effort was followed to build a solid succession plan. It’s not just about money, it’s about trust in the ability of an organization to carry out its mission even through leadership changes. It is clear with the results that the GLCF put significant thought and time into this plan, and it support their investment growth as a result.” Partners also need to understand how relationships will be maintained or new ones built with changes in leadership. While a succession plan might not address this directly, by having a plan in place, partners will know an organization is serious about putting the right people in place to maintain partnerships with positive outcomes and longevity. Jack Brummet, Senior Vice President for GLCF, started working towards a retirement plan as the overall succession plan was being built. His prime concern was leaving the cradle to grave relationships he built over the years in good hands. His replacement, Keith Broadnax, fits the need perfectly in his opinion. Jack says, “GLCF has been a great place for me to work for a long time. We work hard to find the win-win as deal originators and succession planning, as I have experienced firsthand, is so critical to maintaining our success while making GLCF a great place to work. I am leaving the relationships I have built in capable hands, and knowing this solid succession process is formalized will
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keep our partners confident. Now I can go spend time with my wife, my children, and my 5 and 1/3 grandchildren.” Finally, succession planning can be about setting an example for partners to engage in their own planning. According to Warren Hanson, President and CEO of the Minnesota Housing Fund and Minnesota Equity Fund, a deal-making partner of the GLCF, “We look to organizations like the GLCF to set an example of not only what to do in our industry but on topics such as succession planning because the organization does everything it sets out to do well. Succession planning is about the health and longevity not only of our organization but our industry as well. Therefore, we invested our time into building one.” GLCF is hoping a significant outcome of its planning process is the inspiration for its partners to undergo a similar commitment so the industry can increase
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AVENUES TO AFFORDABILITY
Risk Well Managed
the confidence of investors and developers. If asked, nobody at GLCF would say the process was easy, but everyone in post planning interviews has reiterated the importance not only to the organization, but to its external partners. The team building and maintaining relationships to get deals done cite the plan as a key piece of the discussion with existing partners and new ones. To sum it up, Jim Peffley, who manages investor development for the East Region, says, “GLCF now has a succession plan that is more robust than organizations much larger than ours. This says something about the caliber of our organization and leadership, and makes the plan a great tool in the development of future relationships.” CITATION OF THE MCKINNEY REPORT: WWW.MCKINSEY.COM/INSIGHTS/LEADING_IN_THE_21ST_CENTURY/ASCENDING_TO_THE_C-SUITE?CID=OTHEREML-NSL-MIP-MCK-OTH-1505.
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FEATURE
HOW TO SHAPE SUCCESS INTO SUCCESSION A TACTICAL LOOK AT GLCF’S SUCCESSION PLANNING EFFORTS
W
hen the GLCF board asked Mark McDaniel and team to build a succession plan as a last minute topic on a board retreat agenda a few years ago, the team immediately understood the merits of the request, but had no idea of the time and effort ahead of them to build something true to GLCF’s trademark culture. According to Mark, “We are serious about everything we do because the stakes are so high. We knew a succession plan was important, but it was hard to predict at this point the resources and knowledge base required for the plan. It did not take us long to find out.” After some initial conversations, it was clear to the GLCF leadership team that a great plan required an expertise they would need to outsource, and they determined Plante & Moran was the best partner to achieve what was needed. Stan Hannah was one of the Plante & Moran team members assigned to the project, and from the first moment he met with the team at GLCF, he knew he was in for a different experience than he was used to on similar planning efforts. Stan says, “GLCF is one of the most grounded organizations I have ever
worked with in regards to succession and in general. They are highly engaged with the communities they want to help, and even though they are known for their technical expertise and thought leadership, we could tell the organization also cared deeply about the futures of their team members, partners, and the industry as a whole. Any planning needed to factor in the preservation of GLCF’s culture of caring.” When Plante & Moran is hired for succession planning, there are a few items which are critical to a company’s successful planning experience: • Company leadership needs to be accessible and open for group and individual conversations, • The plan also needs to factor in the overall strategies and goals for the organization so that succession is moving with the momentum of the organization and not against it, and • The planning team needs to understand the process is an interruptive one in terms of both their time commitment and shifts it can create within the organization. Once these items were established
with the GLCF leadership team, the planning process began in earnest. Plante & Moran used a mix of testing and behavioral interviews to gather information regarding characteristics desired for leaders and team members at the organization in addition to detailed review and assessment of current documents such as plans, job descriptions, and organizational charts. The conversations required for this part of the process can be difficult even for transparent organizations such as the GLCF, but Plante & Moran was able to complete the work in an objective manner as a third party easing some of the angst and burden of such a comprehensive phase of collection and review. It was still not without pitfalls and challenges according to Mark. When asked about the challenges in the process, Mark was candid regarding a rough start. He said, “I probably did not launch the process in the smoothest manner. I approached it by announcing we needed to undertake the process because there was nobody within the organization currently ready to take my role. Boy, did that ruffle some feathers. I learned quickly succession is a sensitive and important
COLLECT INFORMATION AND REVIEW DOCUMENTS Plante & Moran requested existing documentation to gain a high-level understanding of GLCF operations and current leadership situation.
CONDUCT ON-SITE INTERVIEWS Upon receipt and review of the existing documentation, Plante & Moran conducted on-site interviews at GLCF and with appropriate leadership and staff. The purpose of these interviews was to understand the core operations performed within the organization and address the following topic areas: succession planning considerations, leadership continuity, organizational infrastructure and capacity, efficiency and effectiveness, reporting relationships, and leadership best practices.
FIGURE 1 PROJECT INITIATION Plante & Moran worked with the project sponsors to schedule and invite key project stakeholders to a project kick off meeting to review and confirm the project scope, examine the project work plan, identify stakeholder expectations, and further develop a schedule of project activities.
FIGURE 2: Leadership Characteristics
topic and the whole point is to give people a roadmap towards achievement, including my role.” The process Plante & Moran deployed for the GLCF was bullseye targeted at creating the roadmap necessary to support the future growth and leadership success of the organization while continuing to keep it relevant even through changing industry conditions. The overall process which contributed to a final report now being disseminated and discussed is summarized in Figure 1. As a result of this process and the doggedness of the cap fund’s leadership team in continuing with it even through the onerous portions, Plante & Moran was able to compile 11 leadership characteristics specific to GLCF and establish a prioritization system regarding the characteristics for all key organizational roles. This was in addition to clarified job descriptions and a transition process specific to each role. It was also identified during the discovery phase that the leadership team desired a more formal nomination process for future leaders from within the organization, and a form was created. This did not mean someone had to be ready for the position immediately, but rather they were identified as having some of the required characteristics, and their nominator could take a proactive approach and build a plan to grow them into positions. The nomination forms and other tools can be found in a sidebar to this article, and the 11 characteristics, cited repeatedly by the GLCF team as an excellent output of the process, are summarized in Figure 2. For each leadership role, priorities per characteristic were established. Here’s an example of the priorities established for the Executive Vice President of Underwriting: Top Priority • Strong relationship to builder • Strategist • Agility • Ambassador for the CapFund High Priority • Rainmaker AVENUES TO AFFORDABILITY
Strong Relationship Builder • Strong networking skills • Quickly establishes rapport and forges new relationships with diverse individuals • Attends to the maintenance of existing CapFund relationships of importance • Rapidly builds influential relationships • Demonstrates strong influencing skills • Ideally would have a highly developed existing network to leverage Strategist • Conductor: Able to coordinate and shape the behavior of others for the common good • Able to articulate a unique value proposition for CapFund • Pays attention to and strategizes about CapFund’s direction based on the changing landscape • Creates a sustainable business model for the organization • Demonstrates business, organizational, and political savvy • Inspires and communicates to staff the vision and goals of the organization Agility • Opportunistic, seizes new possibilities that present themselves • Innovative, willing to experiment with new ideas, without abandoning existing strategies that continue to be successful • Flexible, adapts and evolves as conditions change • First response is “yes we can” when new opportunities present themselves • Adopts change as the organization continues to evolve • Strategically manages change efforts to gain appropriate buy-in and support Ambassador • Champion for the mission • Cheerleader in promoting the organization and inspiring the team • Statewide, regional, and nationwide advocate • Bridge builder between CapFund and its multiple key stakeholders • Creates and maintains high visibility in the community • Presents well in both public and private settings Rainmaker • Proactively identifies alternative revenue sources and assesses cost-benefit of investing in new relationships • Focuses on business development activities and understands the importance of these activities to the future success of the organization • Leverages relationships effectively to generate productive leads for revenue sources Collaborator • Skilled in bringing people together to effectively solve problems, while acknowledging differences • Successfully builds consensus at meetings and behind the scenes • Open-minded, seeks out others’ viewpoints to benefit the organization • Pragmatic, without losing sight of organizational goals “Can do” Spirit • Demonstrates tenacity in pursuing goals that benefit the organization • Unflappable under pressure, but acknowledges situational cost-benefit • Displays optimism in communications and behavior when appropriate • Maintains a solution-focused mindset • Possibility thinker and change agent, looks forward to what the future “can be” Team Builder • Successfully attracts additional talent to the organization while maintaining the existing talent pool • Appropriately recognizes staff for their contributions • Nurtures and develops team members • Embraces input from others and healthy dissent Figure 2 continued on page 11 9
FEATURE
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• Collaborator • “Can Do” Spirit • Team Builder Priority • Servant Leader • Results-Focused • Uses Authority Effectively The GLCF team was not always on the same page out of the gate during these prioritization discussions, but they stayed focused enough to ultimately reach a consensus on what they were looking for in their various leaders as well as their dedication to supporting development in areas where there were gaps. For example, Mark shared a story about building a public speaking goal into a recent growth plan. Through every step of the process, Plante & Moran continued to be impressed by the commitment and determination of the GLCF team in building a high quality succession plan. If done well, succession plans generate organizational success by providing clarity, direction, and a detailed development path for future leaders. It was clear to Stan Hannah the GLCF team was on a mission to put “success“ in their succession plan. He summarized the experience by saying, “GLCF has developed a best in class succession plan because of their openness to the process and tough conversations. They were willing to try new ways of doing things, and the leadership team had a high touch involvement with the best personal and professional interests of their team members at heart. Not once in the process did they lose sight this plan could help them do the important things they do for people and communities well into the future.” Some steps remain in changing the GLCF’s human resource systems, including compensation structure and the performance measurement and coaching process, to be consistent the succession plan, but GLCF will finish the transition this year. The organization is ready to share the plan and best practices as widely as possible to encourage GREAT LAKES CAPITAL FUND
FIGURE 2: Leadership Characteristics (continued) • Ensures that team members have the resources needed to build and maintain organizational success • Helps shape a positive and vibrant organizational culture
succession planning throughout the industry they are so passionate about. Mark says the initial feedback on the plan is overwhelmingly positive and reports, “Investors and potential investor indicate the depth of the plan is unbelievable. They like the thoughtfulness of it and are taking a copy and showing their executives. As a result, our credibility has increased, and we have established a solid game plan for sustainability. I will never leave this industry fully even when I’m technically in retirement, but I know when my role changes, the organization will continue to be successful as a result of this monumental effort.” FOR MORE INFORMATION ABOUT CREATING YOUR OWN
SUCCESSION
PLAN,
CONTACT
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MORAN AT 517.336.7460 OR VISIT WWW.PLANT-
Servant Leader • Demonstrates active listening skills • Demonstrates reliability and strength in difficult times • Strong awareness of self and others involved in mission • Leads with stewardship model — being accountable and sharing control, when appropriate • Commits to the growth of self and others • Shares in successes and failures Results-Focused • Gets things done when organizational benefit requires that they be done • Possesses a history of accomplishment, while also acknowledging failures • Action-oriented, but not just for the sake of action • Recognized as a “go to” person, makes things happen to the benefit of the organization • Effectively communicates a sense of urgency in pursuing goals and objectives Uses Authority Effectively • The interest of the organization is paramount • Combine caring values with the need to be tough and decisive when circumstances demand a decision that may not please all • Willing to exert authority “up” as well as “down” to protect the human and financial assets of the organization • Relationships are highly valued but are secondary to overall organizational needs
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SUCCESS PLAN
TIPS FOR PUTTING THE SUCCESS IN SUCCESSION PLANNING
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Every 12 months, minimally, look at the organizational chart- specifically considering critical roles. Formally be aware of what positions may be open in the future, or where new roles may be developing or waning. Consider the exit risks and begin succession and/or recruitment planning for the highest risks. Consider and look for talent inside and outside of the organization. However, do not settle for an internal employee who does not fully meet the desired criteria for the position. Using the term “Outside Hire” as a placeholder for a specific position is a prudent and completely appropriate course of action when an internal candidate is thought not to currently exist. • Bringing in an external hire may make some internal staff feel threatened or unrecognized in their efforts to develop and possibly fill the role that has been filled by the external hire. • Be sure to fully communicate with existing employees, especially those most affected by the new hire. These communications should focus on transparency and honesty regarding the entire process. Employees may not like decisions, but they can’t argue with the truth. This communication process can help onboarding and reduce or avoid unnecessary completion or animosity. Actively identify the high performers in your organization, but also those who have great potential but may lack some opportunities. Attempt to get the most out of these individuals by providing opportunities for growth and development. • Create opportunities for these individuals to be exposed to leaders who may not interact with them on a daily basis. • Create opportunities where they stretch out of their comfort zone (i.e., present during a meeting, begin meeting with a client, etc.). These activities and tasks should allow for senior leaders to observe and evaluate these individuals.
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To develop a future leader, be sure that adequate time is given to these individuals to demonstrate various skills and abilities — plus gain the necessary experience. In general an individual needs 18 months to 36 months to fully learn a role. While a prescriptive approach (focusing on what to do, rather than what not to do) is best, it is important to acknowledge a few “don’ts” too: • Don’t make succession a process that is too difficult to explain • Don’t make succession too complex. It should not become a burden and disrupt daily tasks and responsibilities. • Don’t over promise. Never offer positions or promise positions to potential candidates without explicit knowledge that those messages are valid. SUCCESSION TOOL SAMPLES The GLCF succession plan, to be best in class, had to go beyond words by creating a path to future action. There is no better way to do this than through the use of clear and consistent tools from forms to process outlines which provide clear guidance on how to activate the plan. Two of the tools which resulted from the GLCF’s succession planning process, are the leadership nomination form (Figure 1) and the step by step process with timelines for replacing each key leadership role: 12-18 Months Before Retirement • Board establishes Nominating Committee and Chair 12 Months Before Retirement • Nominating Committee agrees on job posting/ description • A selection process is adopted • An Executive Search firm is retained to identify candidates • A third-party assessment firm is retained to further assess finalist candidates (e.g. cognitive abilities testing, personality testing, skills testing, interviews) GREAT LAKES CAPITAL FUND
CANDIDATE NOMINATION FORM
FIGURE 1 Name
11 Months Before Retirement • Nominating Committee reports back to the Board with strategy and progress updates 10 Months Before Retirement • Announcement and CEO search process is made • Board discusses communication strategy for new CEO 6 Months Before Retirement • Three finalist candidates for CEO position identified 4 Months Before Retirement • CEO candidate hired • Communication is made regarding new CEO with positive messaging for the organization 3 Months Before Retirement • New CEO begins at GLCF • New CEO receives on-boarding plan • Mark Steps out of the company and assists away from office 3-0 Months Before Retirement • Mark assists new CEO in transition • Mark introduces new CEO to key stakeholders Retirement • Mark McDaniel retires With the nomination form, the strengths and development needs for the nominated team member can be clearly documented and reviewed, providing both transparency to the organization and current leaders from a human resources perspective while demonstrating to the impacted individual a commitment to their growth. As for the transition process for each leadership role, the documentation of a step by step process provides consistency and focus, timelines, as well as roles and responsibilities for each of the team members involved in the process. GLCF chose to go through the extra effort of customizing the process per role in recognition a “one size fits” process would not work for their organization. AVENUES TO AFFORDABILITY
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ORGANIZATIONAL GROWTH
RETIRING FROM
A LABOR OF BY MARK MCDANIEL, PRESIDENT & CEO GREAT LAKES CAPITAL FUND
E
very day, I live my personal and professional
is that succession is not about stopping. It is about building a
dreams as a leader of the Great Lakes Capital Fund.
sustainable future for an organization and the talent bench to sup-
So when our esteemed and wise board raised the
port it.
idea of a succession plan at a board retreat a few
Early on in the process of working on the plan, the leadership
years ago, I was taken aback. I certainly under-
of the GLCF quickly surmised the large scope of work, time com-
stood the merits of having a plan in place from an investor and
mitment, and expertise needed to build the plan, so we reached
developer confidence perspective, but I could not conceive of a
out to the team at Plante Moran to make sure we did this with
time when I would not be doing what I am today. The CDFI com-
the same intelligence and determination with which we built and
munity is a passionate one, charging me each day with visions
expanded the fund. Plante Moran was brought into the plan-
and energy to help underserved communities. Why would I ever
ning process to act as the independent party asking the tough
want to stop? What I learned over the course of the next few years
questions, including those which addressed current leadership
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GREAT LAKES CAPITAL FUND
weaknesses, and also the fun questions such as what our future product line might include. Succession is about marrying where you want to go in your business with a structure for recruiting, retaining, and measuring the talent to do it. Through surveying, one-on-one conversations, and a thorough review of our business, we arrived at a plan, and it has been one of the most fundamentally rewarding activities, personally and professionally, during my tenure at the fund. One of the greatest rewards from the planning process is the fact we now have 11 leadership characteristics which we can tie to any position in the organization. It gives our current and future team clarity on what they need to fit into different positions within the organization. It was difficult, because we needed to be honest with ourselves regarding current gaps in our structure. This can be an uncomfortable place to go even for a solid, growthoriented service company. However, once we navigated the discomfort and provided individual plans to help people grow into positions, formalizing it as part of our human resources process, the team is feeling the forward momentum of the plan. We even have a specific process with the board which will allow them to choose our next executive level team members in case of an opening. As leaders, we have to face the fact we are most likely to choose people just like us, and this is not always in the best interest of the organization. What got us where we are today, may not get us to the future. For CDFI efforts, the future is full of consolidation and expansion of our scope of funding activities, and I am convinced the GLCF plan positions us for success in our evolving industry by being robust and honest at the same time. We have been busy rolling out the plan to our team, the board, investors, developers, and other constituents, and the reception has been humbling. Organizations, even traditional private sector companies, are looking to our plan as a best practice, and parties which have made an investment in AVENUES TO AFFORDABILITY
us express confidence in their investments and our organizational and leadership capabilities. The plan is comprehensive in that it spells out exactly what we need on our team and how we will get there, and it is built with the goal of retaining the wellknown and emulated GLCF culture of technical expertise paired with heart. We are not done yet, but we are active on next steps. GLCF is currently working on making our performance management systems, from goal setting to coaching, coherent with the plan, and we experienced the added benefit of identifying how we should also coordinate the new compensation system on which we were working with the plan. It was perfect timing. I am not going to say any of this was easy, and I was personally uncomfortable many times thinking about what was next for me from a financial and family perspective. As community and
housing development organizations and professionals, we are all facing the fact of shrinking federal and state resources for what we do, in addition to the resultant industry consolidation. Succession plans are a key manner in which we can keep relevant and good at what we do. You will never find me in a rocking chair in retirement reminiscing about my days in community planning as most of you know very well. I will have a reduced, more project-based role someday in the future though, and I want to make sure GLCF and all of our partners like you have everything they need from a cultural and resource perspective to do great things and preserve our labor of love. Should any of you need any help in building out similar plans and joining us in the effort to preserve the great things we do, we are here as a resource.
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CAREER ADVANCEMENT
WHERE DO WE GO FROM HERE? THE BENEFITS TO YOUR TEAM AND COMMUNITIES FROM SUCCESSION PLANNING
Whether a person is just starting their career or continuing their journey on the path to success, career aspirations present a constantly moving target at which everyone attempts to aim. Career aspirations are also agnostic to the size and type of organization. Whether a team member is navigating the ups and downs of a startup or the bureaucracy of a larger organization, most people navigate towards what they think is their next stop up the ladder. Succession planning can form the rungs of
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the ladder. When the Great Lakes Capital Fund (GLCF) undertook the monumental effort of developing a succession plan, it was not clear just how deep the plan would go in forming a clearer path to success within the organization. As a busy, constantly evolving organization, team members tended to find their paths organically. However, as the organization grew larger and opened new offices, employee satisfaction surveys conducted annually were
indicative of a restlessness regarding moving up in the company. Team members indicated it was not clear how you did this, and it impacted their otherwise solid career satisfaction at GLCF. While a succession plan is focused first on replacing key leaders in the organization, the plan is built with a deeper intention to create a transparent and articulated pathway to moving up in the organization from the beginning career levels to the top. Employees at GLCF are appreciating this clarity, and in a recent employee survey, satisfaction is increasing as a result of the improved sense of career direction. As a more recent team member at the beginning of her career at GLCF, Kellie Green, Capital Management Coordinator, enjoys the unique environment of GLCF, and is hard at work building her technical skills and industry relationships. According to Kellie, “Having the succession plan spell out the personality traits for growing within the organization is helpful. You can work on the qualities required for leadership positions. Also, the succession plan is a clear indication the Cap Fund understands bench building is important. This is really encouraging.� The GLCF plan contains the personality traits associated with leadership positions and success in the organization in general. It either affirms current traits or gives team members a sense of what they need to work on to grow. This aspect of the plan has offered relief to GLCF team members wanting to understand what growth looks like in their dynamic, constantly shifting organization and industry environments. It has also helped team members look more deeply at their next steps in not only professional development, but personal development as well. GREAT LAKES CAPITAL FUND
From a leadership perspective, Keith Broadnax, Senior Vice President, has learned a lot about himself, not only in relationship to his career but life in general through the planning process. Keith says, “The succession plan helps address good and bad habits of being a team member at the Cap Fund. There is peace in understanding this. I am looking for a balance between my career and life at this point, and this plan has helped me establish how I can still grow while achieving balance.” Yulonda Byrd, Vice President of Asset Management, believes the plan not only builds the team, but a future for the organization as well. She says, “The fact that we are planning for our future and the ongoing viability of this organization means we can continue to do good work and change lives.” One thing the entire team at GLCF realized regarding the succession plan is the demonstration of commitment GLCF leadership as to the organization’s entire team, the recipients of the community benefits the organization delivers, its dedicated investors and developers, and the future of affordable housing and community development. Ashlee Barker, Community Development Initiatives Manager, summed it up best, “When no succession plan exists in community development organizations, loss of key leaders can hurt these organizations. While thinking about Mark retiring is tough, this plan will ensure we continue to improve lives as an organization, and the team here will be cared for with growth opportunities. It’s not just words. It’s our culture.” There is no doubt succession planning is a significant time investment, especially from the senior leaders who must be more directly involved in the discussions. And even after the plan is created, the work continues in formalizing the plan as part of an organization’s human resources and performance management systems in addition to communicating the benefits and key details of the plan to the organization’s AVENUES TO AFFORDABILITY
WHILE A SUCCESSION PLAN IS FOCUSED FIRST ON REPLACING KEY LEADERS IN THE ORGANIZATION, THE PLAN IS BUILT WITH A DEEPER INTENTION TO CREATE A TRANSPARENT AND ARTICULATED PATHWAY TO MOVING UP IN THE ORGANIZATION FROM THE BEGINNING CAREER LEVELS TO THE TOP. constituents. However, bench strength, employee satisfaction, and organizational continuity are critical to housing and community development efforts aiding the most vulnerable populations in the country. Every single team member at GLCF was able to make the connection between the plan and their ability to
serve communities well. The community development business is hard, necessary work. Succession planning is a key piece of the foundation in support of this work, and for the benefit of the talented team members in the industry and the community members served, it cannot be overlooked.
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EVENTS & HAPPENINGS
NEW HIRES & PROMOTIONS JO FIGUERAS, MARKETING COORDINATOR Jo has been hired as the marketing coordinator to act as a liaison between headquarters and Alternative Solutions, LLC, who provides all marketing services to the organization. Jo will be responsible for processing staff registrations and travel, maintaining the marketing database and assist marketing with clerical duties. She brings over 15 years of experience in the marketing administrative area. ROBERT BECK, VICE PRESIDENT, BUSINESS DEVELOPMENT AND LEGAL AFFAIRS Bob joined the Great Lakes Capital Fund as the Vice President for Business Development and Legal Affairs in July 2015. Bob is responsible for marketing all GLCF products and services to real estate developers and to individuals in the public and private sectors to improve the quality of life in communities within the GLCF footprint.
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VARIONA CARR, ADMINISTRATIVE COORDINATOR Variona has joined GLCF as a part-time administrative coordinator in our Chicago office. In her role as administrative coordinator, Variona maintains an efficient office environment and provides administrative support to the staff in the Chicago office. KARYN KNAAK, MANAGER, BUSINESS DEVELOPMENT Karyn, in her role as Manager, Business Development, is responsible for marketing loan products to existing and potential customers. Working from our Madison office, Karyn’s expertise in the field of affordable lending supports the functions of our Business Development team.
FIRST GRADUATE OF HAMILTON CROSSING FAMILY EMPOWERMENT PROGRAM The Great Lakes Capital Fund is pleased to congratulate Marcus Moore on being the first graduate of the Hamilton Crossing Family Empowerment Program. Hamilton Crossing I is the redevelopment of the former Parkview Apartments located at an important entryway into Ypsilanti, Michigan. This long troubled property was foreclosed on by HUD in 2010 and ownership of the property was transferred to the Ypsilanti Housing Commission (YHC). The YHC and its developer, Chesapeake Community Advisors, Inc. (CCA), brought together a team including Rohde Construction, Fusco, Shaffer & Pappas Architects and Millennia Housing Management to return these seventy units of housing to the market. The redevelopment was funded with a 9% LIHTC investment through Great Lakes Capital Fund along with debt from MSHDA, HUD and Washtenaw County. The property offers a mix of 1-, 2- and 3- bedroom unit townhouses and flats, all with project-based Section 8 rental subsidy. One of the most positive impacts Hamilton Crossing I has brought to the community is the Family Empowerment Program. The program helps residents take charge and responsibility for their self-sufficiency. The highly collaborative program allows Hamilton Crossing Phase I to offer numerous family empowerment services including GED education classes, case management counselors, Zumba classes, CPR training, childcare and transportation vouchers. The Family Empowerment Program works to boost resident’s income levels, encourage paid employment and boost savings through Individual Development GREAT LAKES CAPITAL FUND
Accounts (IDAs). These accounts are open to employed, low-income individuals and are supported by a mix of federal grant dollars and a locally raised match. For each $1 residents deposit to their account, the amount becomes $3 thanks to a grant from the U.S. Department of Health and Human Services Assets for Independence Program and the required matching funds donated by The Great Lakes Capital Fund, Zingerman’s Family of Businesses, Chesapeake Community Advisors, the United Way of Washtenaw County, the Eastern Leaders Group, Eastern Michigan University and the Washtenaw Federal Credit Union. Marcus, the first to graduate using funds from the program, received his Bachelor’s Degree in sports management from Eastern Michigan University. Marcus currently works at Hannigan Insurance Agency but recently interviewed at the University of Michigan for a more advanced position with better benefits. Of the Family Empowerment Program, Marcus said “I had one semester of school left with no cash and no financial aid. I was at my wit’s end and this program was a lifesaver for me. Without my Individual Development Account, I would not have been able to finish my last semester and earn my degree. Everyone involved in the program was so helpful and made the entire process very simple. It is very emotional for me to talk about, as I don’t know where I would be without this program. The Family Empowerment Program has changed my life and created a great example for my son. I encourage everyone at Hamilton Crossing to participate in this program and hope to hear of other developments creating similar opportunities to succeed.” The Great Lakes Capital Fund wishes to again congratulate Marcus on this significant achievement and to thank the Ypsilanti Housing Commission for being committed to improving lives of residents at Hamilton Crossings.
AVENUES TO AFFORDABILITY
IF YOU WOULD LIKE TO LEARN MORE ABOUT THIS HIGHLY SUCCESSFUL PROGRAM, PLEASE CONTACT
UPCOMING EVENTS
MARQUAN JACKSON AT MJACKS55@EMICH.EDU OR RUSS OLWELL AT ROLWELL@EMICH.EDU .
BUILDING STEEPED IN GRAND RAPIDS HISTORY SECURES NECESSARY FINANCING TO FINISH RENOVATIONS Downtown’s Harris Building, Home to ArtPrize Exhibits, Will Soon Complete Second and Third Floor Venue Space The iconic Harris Building in Grand Rapids’ Heartside district is almost finished renovating its multi-faceted, loftstyle venue. However, up until just a few months ago, financing obstacles prevented the developer from fully realizing the vision he had for the historic building. Owner and developer of the Harris Building, Harris Lofts LLC, is making it
Great Lakes Capital Fund has many exciting events planned for 2015 and 2016, please save the dates and stay tuned for more information! DELAWARE ANNUAL MEETING October 26, 2015 GLCF HOLIDAY PARTY December 17, 2015 GLCF BOARD RETREAT May 2016 UNIVERSITY TO AFFORDABILITY May 17-18, 2016
One step ahead. Within our full-service accounting and advisory firm, Baker Tilly’s nationally recognized affordable housing specialists can help you analyze options, overcome barriers, and uncover resources to make your project successful. Our strategic solutions go beyond the basics to help public and private development entities, managers, lenders, and investors make the right decisions with candid advice and clear industry insight. Connect with us: bakertilly.com Don Bernards, CPA, Partner 608 240 2643 | Donald.Bernards@bakertilly.com
Baker Tilly refers to Baker Tilly Virchow Krause, LLP, an independently owned and managed member of Baker Tilly International. © 2015 Baker Tilly Virchow Krause, LLP
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EVENTS & HAPPENINGS
a home for art, culture, music, film, fine food and more. Downtown visitors have enjoyed the downtown market and cooking classes The Local Epicurean offers on the first floor of the building, as well as the art gallery and event space The
Renaissance Club offers; but now the second and third floors can permanently host some of Grand Rapids’ trendiest events, displays and exhibits. Thanks to a recently formed partnership with Develop Michigan, Inc. (DMI),
OVER 20 YEARS EXPERIENCE IN ALL PHASES OF AFFORDABLE HOUSING • Audits • Cost Certifications Mt. Pleasant & Midland Michigan
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the historic Harris building will be preserved and repurposed for Grand Rapids residents, artists and visitors alike. DMI is a nonprofit development finance organization committed to revitalizing Michigan communities through commercial real estate investments. Since late 2013, DMI has invested in metropolitan and rural downtowns, including Detroit, Royal Oak, Milan and Alma, and is looking at multiple opportunities across the state. The Harris Building is the first investment DMI has made in West Michigan – with more in the works. “Develop Michigan is thrilled to be a team player in the Harris Building revitalization and preservation,” said DMI President, Rick Laber. “Even before fully complete, Grand Rapids residents and visitors have flocked to the iconic space for one-of-a-kind cultural experiences. It will be fascinating to see where community leaders and activists take things next.” ArtPrize exhibits have made the Harris Building their home for the past two years, but now the space can be utilized as a year-round venue for the arts and more. Additionally, the master tenant, The Renaissance Club, plans to offer art and music classes as well as special events such as a dinner theater and dance club.
CORRECTION It recently came to our attention that the two most recent issues of Avenues were incorrectly numbered. We apologize for this error and ask that you please make a note of the correct issue numbers: Homeless Heroes Issue 1, 2015
(Incorrectly marked as Issue 4, 2014)
Annual Education Conference Special Coverage Issue 2, 2015 (Incorrectly marked as Issue 1, 2015)
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GREAT LAKES CAPITAL FUND
“It is fantastic to see a Michigan company partner with a local developer to push The Harris Building renovations over the finish line,” President & CEO of Downtown Grand Rapids Inc., Kristopher Larson said. “The Harris Building has been an integral part of the Heartside District’s revitalization and with financing complete, thanks to Develop Michigan, revitalization efforts have been bolstered even more in the neighborhood.” Originally built in 1892, the Harris building was first home to the secret fraternal organization the Knights of Pythias. Following, it was home to several furniture companies. Since the late 2000’s and the transformation of the Heartside neighborhood becoming the “Avenue for the Arts,” the Harris building has been host to special events as well as pop-up stores. DEVELOP MICHIGAN, INC. (DMI) TRANSACTIONS • $2.7M semi-permanent first mortgage loan for the Harris Building, LLC, a mixed-use event space building in Grand Rapids. • $1.45M short-term first mortgage loan to facilitate the acquisition of Dartmouth Square Apartments, a 126-unit multifamily development in Inkster. • $1.6M bridge loan for the East Main Redevelopment project, a renovation of four historic downtown buildings for mixed use in Milan. • $1.85M bridge loan on the Wright Opera Block, the renovation of three historic downtown buildings for mixed use in Alma. • $7.25M forward commitment for permanent financing on 1145 Griswold, a mixed use development located in the Capitol Park Historic District in downtown Detroit. • $2.275M participation in construction financing for The Forefront, a mixed use development located in downtown Birmingham. AVENUES TO AFFORDABILITY
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ADVERTISER INDEX Managing Editor Mary McDaniel, CMP, Alternative Solutions 517.333.8217 mcdaniel64@comcast.net Advertising Jennifer Calery, Great Lakes Capital Fund 517.896.0873 jcalery@capfund.net Graphic Design Melissa Travis, Ink Ideas Graphic Design 989.272.3101 www.inkideasgraphicdesign.com Cover Design & Illustration Matthew McDaniel, Student matthewmcdaniel1294@gmail.com Editorial Kelly Rogers, Pixie Publishing, LLC 517.575.5051 pixiepublishing@gmail.com Avenues to Affordability magazine is published quarterly by the Great Lakes Capital Fund (GLCF). This publication is copyrighted. The reproduction of Avenues to Affordability is prohibited by law. For additional copies, comments, concerns or to be added to the mailing list, please contact the Great Lakes Capital Fund office at 517.482.8555 or visit www.capfund.net.
Associated Management Company............................................................................... 13 Baker Tilly.................................................................................................................... 19 Blystone & Bailey......................................................................................................... 20 Chesapeake Community Advisors, Inc......................................................................... 17 Clark Hill..................................................................................................................... 10 Community Economic Development Association of Michigan...................................... 11 Dauby O’Conner & Zaleski.......................................................................................... 21 Ginosko Development Company.................................................................................. 24 Keller........................................................................................................................... 13 KMG Prestige............................................................................................................... 11 Loomis, Ewert, Parsley, Davis & Gotting, P.C................................................................ 22 Love Funding............................................................................................................... 20 Maner Costerisan & Ellis.............................................................................................. 11 Medallion Management, Inc......................................................................................... 18 MHT Housing, Inc......................................................................................................... 4 O’Brien Construction Company, Inc............................................................................. 23 Occupancy Solutions.................................................................................................... 10 Plante Moran................................................................................................................ 15 PM Environmental......................................................................................................... 7 Rohde Construction....................................................................................................... 2
Karl L. Gotting Kenneth W. Beall Michael G. Oliva Michael H. Rhodes Jeffrey L . Green Kevin J. Roragen Richard W. Pennings Ted S. Rozeboom Tracey L . Lackman Michael G. Stefanko Elizabeth Husa Briggs
OVER 45 YEARS OF EXPERIENCE IN AFFORDABLE HOUSING Representing developers and syndicators before the Michigan State Housing Development Authority, and numerous other state financing agencies, U.S. Department of Housing and Urban Development, USDA Rural Housing and municipalities,
124 W. Allegan, Suite 700 Lansing, Michigan 48933 Phone 517.482.2400 www.loomislaw.com
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and with private lenders, including projects receiving LIHTC, historic and new markets tax credits.
GREAT LAKES CAPITAL FUND
NEW CONSTRUCTION RENOVATIONS HISTORIC REHAB MULTI-FAMILY COMMERCIAL MIXED USE
Great Lakes Capital Fund 1118 S. Washington Avenue Lansing, MI 48910 www.capfund.net
Ginosko Development Company “Creating a Brighter Community Today” Ginosko Development Company (GDC) is a real estate development company specializing in the creation and preservation of quality affordable housing. GDC has a successful track record meeting the financing challenges of these developments, from MSHDA and HUD loan programs, tax-exempt bond programs, rental subsidy programs, and Low-Income Housing Tax Credits; to historic tax credits, brownfield credits and other specialized financing programs unique to the affordable housing industry. GDC is also known for its success in meeting the design, planning and environmental challenges of these developments. GDC’s residential communities are recognized for careful and coordinated planning, an experienced development team of top architects, attorneys, contractors and engineers, attention to detail and design quality, and respect for the environment. Visit our website to get to know us better!
Ginosko.com 41800 West 11 Mile Road, Suite 209 | Novi MI 48375 | office 248.513.4900 | fax 248.513.4904