ISSUE 4 | 2016
NEW CONSTRUCTION RENOVATIONS HISTORIC REHAB MULTI-FAMILY COMMERCIAL MIXED USE
TABLE OF CONTENTS
04 06 08 12 17 22 27
REFLECT
A Note from Mark FEATURE
Bridges to the New Philanthropy
FEATURE
CNote: A Breath of Fresh Air IMPACT
Joy, Hope and Ice Cream
CULTURE
Cinnaire News IMPACTFUL NEWS
Industry News ADVERTISER’S CORNER
| REFLECT
a note
FROM MARK
I hope you enjoyed this year’s series of Avenues, which focused on the CDFI industry. As I mentioned in the first edition, Cinnaire has provided holistic community development services for over 20 years. We were formally designated as a CDFI in 2006 and have strategically embraced and built our inner CDFI in recent years. We have a very unique position that we will continue to develop and differentiate in the years to come. The first edition of this series gave a primer on CDFI’s and career opportunities available for young, diverse leaders. Diversity and inclusion is a hallmark of CDFI growth. I’d like to thank our staff for being contributors. Issue two focused on CDFI’s and the growth of impact investing they are leading across the country. Opportunity Finance Network was a significant contributor, interviewing leaders and founders of the CDFI movement which was a grass roots effort that grew out of the Civil Rights movement of the 1960’s. To read the history from the actual leaders is very inspiring. I want to thank Donna Fabiani from Knowledge Sharing, Opportunity Finance Network; Jeremy Howak, J. Howak Associates LLC; Beth Lipson, Strategic Initiatives Opportunity Finance Network and United States Senator Chris Coons(D-DE) for the insightful contributions made regarding the powerful work being carried out by CDFI’s. Our third edition highlighted the importance of marketing, communication, and storytelling that is the hallmark of CDFI operations. Personally, I love telling the stories of the work we do and the impact it has on residents, employees, and partners. Special thanks goes to the Community Loan Fund, the Reinvestment Fund, Accion the Community First Fund, 4
and Clearinghouse for their contributions on these subjects. It shows why they are best-in-class organizations. This final edition highlights how CDFI’s are developing innovative ways to access capital from a wider and more diversified investor pool. Technology is at the heart of these efforts. The presentations by these relatively new organizations is exciting and it’s inspiring to see how individuals can develop an idea into reality when driven by mission and the challenge to fill gaps that exist in accessing capital. Both ImpactUs and CNote demonstrate how they identified a gap and turned it into an opportunity, showcasing why they are industry leaders. It’s indeed a breath of fresh air. The story regarding Herkimer in Grand Rapids, a Cinnaire investment, is inspiring and humbling. A special thanks goes to Kelly Haracourt, Alternative Solutions, LLC, for pouring her heart into telling this story. This would not have been possible without the guidance of our Executive Vice President, Jim Peffley; President of Cinnaire Lending, Katey Forth; and, our Community Development Initiatives Manager, Ashlee Barker. A big shout-out goes to the team at Alternative Solutions, Cinnaire’s marketing/communications consultant, for writing and producing Avenues, a publication that has been recognized over the years as a valuable quality resource to our partners. In addition, without our advertisers, this valuable resource would not even be possible to produce. Avenues reached over 5,000 readers for each edition this year.
CONTINUED ON PAGE 27 CINNAIRE
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| FEATURE
BRIDGES
TO THE NEW PHILANTHROPY Community Development Financial Institutions (CDFIs) are a product of the Civil Rights Movement, and many have been serving communities across the United States for over 30 years. Internationally, they are recognized as a robust network of organizations helping capital flow to communities in need. However, despite their missions being more relevant today than ever, CDFIs seem to be virtually unknown to new philanthropists and impact investors. ImpactUs Marketplace is an innovative platform that can help CDFIs better position their organizations to attract this capital and a broader pool of impact investors. A CHANGING LANDSCAPE The financial crisis of the late 2000s sent shockwaves throughout the financial sector. It changed the way a lot of individuals and institutions were thinking about their money and forced CDFIs to consider the diversification of their funding sources as banking relationships and priorities shifted. This was one of the first signs that the makeup and dynamics of potential CDFI investors were reshaping themselves. In 2012, as the dust was settling, a group of CDFIs came together to understand how they might tap into an emerging trend of individual investors, and their advisors, seeking out investment opportunities in CDFIs. This organic, community-driven initiative grew, and ultimately drew on the rich knowledge and resources of not only its members, but a wide range of external stakeholders including major financial institutions, community development leaders, academics, and financial professionals. From this collaborative effort, emerged a much clearer picture of where the barriers to frictionless capital flow rest: • Individually, CDFIs had great stories to tell, but the industry as a whole lacked the cohesive, compelling narrative that would motivate widespread new investment.
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• • • •
Sales and marketing of financial products was a costly ground game that often diverted precious resources from the pursuit of mission. Only a handful of CDFIs had developed impact investment products. Those CDFIs that had already launched successful impact investment products needed better distribution and stronger back office functionality. Financial professionals—gatekeepers to tremendous capital pools—told us that infrastructure comparable to that of the traditional capital markets would be required for them to move money at scale.
The initiative provided the industry with tremendous findings, but the next step was not clear. At the same time, City First Enterprises (CFE) was exploring what the 2012 Jumpstart Our Business Startups (JOBS) Act could do for helping capital flow to CDFIs and the communities they served. A partnership was formed between Enterprise Community Partners, one of the CDFIs participating in the industry collaborative, and City First Enterprises to see if there was a business model that would help CDFIs connect with new sources of capital, leveraging the growth of impact investing, and detailed understanding of what Financial Service
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Providers needed while leveraging some of the new opportunities available because of the JOBS Act. City First Enterprise and Enterprise Community Partners worked to develop a business plan that helped CDFIs connect with impact investors in a way that worked for the sector. This meant managing costs, preserving the personal relationships between the investor and the community, and amplifying the truly transformative stories of the work CDFIs do. With the business plan and a working prototype, the two organizations were able to attract support from MacArthur Foundation and Ford Foundation along with letters of support from CDFIs that represented a desire for almost $2 billion in capital. HOW DOES THE MARKETPLACE WORK? The ImpactUs Marketplace enables mission-driven institutions, including CDFIs, to market their impact-investment products directly to the widest range of potential investors, simply and cost-effectively. Organizations seeking capital are showcased with a robust profile that details their mission, history, management team, and available products. Individual product pages outline offering terms, organizational financials, and links to offering documents. Mission driven organizations are featured by their impact area(s) of focus, such as affordable housing, small business, healthy and sustainable food, education and childcare, and more, allowing investors to readily find the investment products that mean the most to them. Investors can open an account in a few simple steps and hold all of their impact investments in one place. When an individual or institution is ready to make a purchase, it’s a simple matter of clicking “Invest” on a product profile, funding their investment, and ImpactUs Marketplace takes care of the rest. EARLY LESSONS AND INTENTIONS FOR THE FUTURE As with any start-up, we have learned a lot about the audiences we are serving as we’ve built our product. One key factor is that financial advisors and CDFIs don’t really know much about each other. This has been one of many education opportunities that ImpactUs has taken on in order to increase capital flow. We feel that we are in a unique position to bridge knowledge gaps between community development organizations and a whole new group of investors.
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CDFIs and the larger impact investing community are at a critical juncture. Financial technology and changes in regulation have presented an opportunity to attract a new and more diverse set of investors, a new administration presents uncertainties about historic funding sources, and capital is transitioning from boomers to millennials. As an industry, CDFIs cannot wait on the sidelines to see what happens, they must take advantage of these changes and opportunities if they want to continue to grow and serve the changing needs of communities across the country. We believe ImpactUs Marketplace is a critical piece of the infrastructure, that will assist CDFIs to diversify their funding sources. FOR MORE INFORMATION ABOUT LISTING WITH IMPACTUS MARKETPLACE, CONTACT LIZ SESSLER AT LSESSLER@IMPACT-US.COM OR AT 202.798.5251. PLEASE ALSO VISIT US AT IMPACTUSMARKETPLACE. COM. LIZ SESSLER IS VICE PRESIDENT OF CLIENT ENGAGEMENT FOR IMPACTUS. LIZ HELPED DEVELOP AND LAUNCH IMPACTUS WHILE AT ENTERPRISE COMMUNITY PARTNERS, INC., AND ALSO OVERSAW THE INTRODUCTION OF ENTERPRISE COMMUNITY LOAN FUND’S FIRST RETAIL INVESTMENT PRODUCT. LIZ HAS BEEN ACTIVE IN THE IMPACT INVESTING COMMUNITY FOR OVER A DECADE.
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| FEATURE
CNOTE:
A BREATH OF FRESH AIR TO THE INVESTMENT POOL FOR CDFIS CDFIs are receiving attention for their community building efforts from a new and innovative source of investment. This new source could expand their pool of funds beyond institutional investors to the mass market which can hopefully, in turn, expand the depth of their reach into communities. CNote, founded by Cat Berman, will bring the benefits of a solid investment to consumers while offering a community building capacity not seen before in the CDFI space. Cat Berman, previously a Managing Director of Charles Schwab, has a rich background in entrepreneurship and impact investing she is bringing to the forefront in an innovative approach to pooling funds for CDFIs. It all started
EARLY ADOPTER ADVANTAGES: EXCELSIOR GROWTH FUND’S CONTRIBUTION TO CNOTE’S DEVELOPMENT The Excelsior Growth Fund (EGF) was quick to see CNote’s potential and become one of the first CDFI partners to test the model. Based in New York, EGF has invested in technology to fund underserved small businesses. The organization sits at the intersection of finance technology (FinTech), alternative finance, and mission-based community economic development. Their SmartLoan™ product utilizes an online platform and provides responsible and affordable small business capital, approving loans in two
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days and funding them in one week. EGF’s innovative spirit, experience in market disruption, and adaptability made the organization a great advisory partner on CNote’s development. To the EGF team, this type of development and serving as an agent of industry disruption is rewarding. “We are a CDFI pioneer in online business lending to neighborhood businesses that cannot receive conventional financing, says Steve Cohen, president of EGF. “Supporting
CNote and helping to figure out the model and structure for CDFI investment, especially given our technology, offers great opportunity to get money into the hands of many neighborhood businesses quickly. CNote has the potential to build enormous awareness for the great work of CDFIs within the individual and institutional investor communities, and they offer a new kind of flexible product.” In Steve’s experience, an increasing number of individual investors are looking to make a modest amount of money while supporting community endeavors such as small business growth, affordable housing, social services delivery to the needy, and
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when she was reviewing her own savings account online one day thinking of a better use for her funds. She wanted to make her money produce a yield greater than 1% while having a mechanism in place channel her funds to investments where she could actually see the results. Born into a family which immigrated to America from Argentina, Cat understood the opportunity CDFIs offered to often underserved, well-deserving entrepreneurs and communities. Cat had firsthand experience with the microfinance world’s impact on small business growth, and she developed a passion for social ventures as a result. With an affinity for economic empowerment of small business and financial inclusion for people of all social backgrounds, Cat put her creative business mind to work to establish a vision for a broad based investment vehicle. Her passion and knowledge regarding CDFIs made them the logical beneficiary of this socially conscious investment vehicle. CNote was founded on this
other opportunities to make a tangible difference. The partnership of CNote and EGF offer exactly this investment model, in part, through the use of a technology platform built for efficiency and speed in raising funds and applying them towards community needs. EGF was a critical partner for CNote as they developed their technology and their model to invest in CDFIs. This partnership is producing results in a pilot phase whereby several neighborhood businesses have already been financed with CNote capital. Steve is both hopeful and optimistic that CNote will continue to grow and transform the world of mission-based
AVENUES TO AFFORDABILITY
investing, allowing millions of dollars in socially conscious investment to reach the businesses and communities targeted by CDFIs. Steve says this new model should be considered by innovative and ambitious CDFIs because it opens up options not just for individual organizations but for the industry as a whole. The increase in social purpose investment coupled with CDFIs exploring new models for serving the underserved, supports blue sky opportunities for underserved communities. The existing infrastructure of CDFIs could be leveraged to serve thousands of additional small businesses all across the country who are facing predato-
ry or expensive lending options. CNote and EGF are advancing this vision through this partnership. Steve and the entire EGF team have the same passion for making a difference through market innovation as CNote’s Cat Berman and team. EGF is on a path to lead the CDFI market in new and fruitful directions, including his organization’s early adoption of the CNote model. He summarized this individual and organizational passion perfectly in a conversation with Avenues to Affordability when he said, “We care about helping businesses grow,
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| FEATURE passion, knowledge, and logical connection to making more dollars work harder for both individuals and communities. According to Cat, “CDFIs are part of the most successful and inspiring industries of the current time. We believe CNote can bring greater investment and visibility to the wonderful work they do in communities.” Initially wanting to invest $10,000 of her own money in a CDFI, Cat discovered this was too low of a threshold per current industry standards and preferences. The CDFI industry still
year as the first scalable technology platform to drive new capital to CDFIs via a retail savings product. Since August, CNote has acquired over $5M in committed savings through the platform from across the country. CNote is partnering with the Opportunity Finance Network (OFN) on a holistic solution to launch more broadly to any interested CDFIs. OFN will also help CNote ensure adherence to best practices as it continues to expand its reach. CNote also tapped into three highly valued, forward thinking CDFI industry leaders during its development
CNote was launched in August of this year as the first scalable technology platform to drive new capital to CDFIs via a retail savings product. Since August, CNote has acquired over $5M in committed savings through the platform from across the country. faces a challenge in access to retail capital even with a willingness in the general population to make their dollars work for communities. CNote has evolved into a solution to this access challenge, with a goal of assisting in filling as much of the $600M CDFI capital demand each year. CNote was launched in August of this
phase: Steve Cohen from Excelsior Growth Fund (EGF, profiled in sidebar beginning on page 8), Allison Kelly of CDC Small Business Finance (CDC), and Penelope Douglas of the Opportunity Finance Network (OFN). These leaders possessed an innovative spirit and a deep knowledge and commitment regarding the CDFI industry. They could see the vision for CNote
creating jobs, and transforming communities at EGF. We do this through innovative financial services and a suite of business advisory services. I ran a small music production company before becoming more involved in community economic development and finance, so I know the importance of small businesses and the challeng-
es faced by entrepreneurs all across the country. CDFIs directly address some of those challenges, and it’s an exciting time for the industry. At EGF, we go to work every day to find innovative and transformative ways to help entrepreneurs, their employees, and their communities, and it’s a passion we all share, and a passion that made
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in addition to recognizing an exciting new chapter for CDFIs. Another key knowledge and innovation asset was CNote’s co-founder Yuliya Tarasava. Yuliya has over a decade of experience on Wall Street and a background in financial innovation and inclusion. As a Global Acumen Fellow, she saw first-hand how new product development in finance can make a world of difference to underserved communities. The power of her knowledge and the industry leaders CNote relied upon in its development phase poised it for success currently and in the future as it launches to a broader market. CNote has initially worked with accredited investors during its proof of investment model. In 2017, CNote will open to all investors as an important expansion of the company’s mission to provide access to new, high-impact vehicles that are currently available to only accredited investors. Currently, CNote delivers a 2.5% return, 13 times better than a yield from traditional savings, with no fees and 100% impact, measureable and visible daily, in the world surrounding interested investors. CNote has accomplished this return with its first position in the technology required to manage the investment pool, passing the majority of interest earned to customers.
us a natural fit for partnering with CNote.” Early adoption and a commitment to industry innovation can lead to transformation. Could your CDFI be the next adopter? FOR MORE INFORMATION ABOUT EGF, VISIT WWW.EXCELSIORGROWTHFUND.ORG.
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One step ahead. It does not take long to understand CNote has mastered the balance between return on investment doing good in the world around it. They advise their potential customers to have an emergency fund in place, typically three to six months worth of spending, as they consider this investment. Money outside of the emergency fund can be used in investments from home down payments to the CNote opportunity. CNote offers what is considered a medium-term savings vehicle designed for savers looking to earn more on savings for the near term or long term. CNote has advisors on hand to assist potential customers in determining if this is the proper vehicle for their currently available dollars. With no minimum deposit required, more people can make their dollars work both for their pocketbooks and communities. In addition to expanding their pooled investment through the Mycnote.com platform in 2017, CNote is also excited about adding new CDFIs to their investment roster.
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
Cat says, “We would like to invite any interested CDFI to this opportunity. We plan to reach out heavily in the coming years. We are not exclusive. We want to be as inclusive as CDFIs are in reaching investment opportunities in communities.” CNote is already seeing their dollars deployed to women and minority run businesses during the pilot. In talking to Cat, the excitement about the future of CNote is palpable. She and her CNote team are a breath of fresh air to an industry which deserves all of the investment, recognition, and growth possible on the path to making a difference in communities and lives around the country and world. FOR MORE INFORMATION ABOUT CNOTE, VISIT WWW.MYCNOTE.COM. AVENUES TO AFFORDABILITY
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| IMPACT
I
ce cream. Today, they get to choose what flavor of ice cream they want. They get to choose if they want sprinkles. Whipped cream. Hot fudge. Today, instead of holding a bottle of liquor in her hand, Tia is holding a spoon to enjoy her ice cream sundae. Today, instead of locking herself away in her apartment, Milly is enjoying the laughter and conversation that is taking place at the ice cream social. And, today, James has the freedom to wheel himself to the ice cream social and make himself whatever kind of sundae his taste buds are craving. Today, there is hope. 12
There is independence. And, where there is ice cream, there is always joy. Dwelling Place, a non-profit, affordable housing developer, had a vision to bring new life and opportunities to downtown Grand Rapids, Michigan. With support from Cinnaire, through the allocation of Low Income Housing Tax Credits and Federal Historic Tax Credits, this vision was brought to fruition. In 2013, the former historic Hotel Herkimer opened its doors to provide newly renovated, permanent supportive housing for homeless, or near-homeless, individuals and/
or persons with disabilities. Tia, Milly, and James each have a unique story to tell, yet there is one commonality among their stories: Herkimer Apartments has provided them with a place to call their own. A place to call home. TIA Living in a small, rural community, Tia struggled to find the resources she needed to overcome her substance abuse and mental health issues. She relied on her Mom and “Grammy� to take her to therapy appointments, AA meetings, and support groups. Tia desperately wanted to be able to CINNAIRE
Tia
take the bus or walk on her own to her appointments. She felt that this independence would help her on her road to recovery. “That was my dream. I thought, if I can get to Grand Rapids, then I will be able to do it on my own. I will really be able to figure out how to live sober and have a recovery community to live in.” In order to make this dream become a reality, Tia required access to affordable and supportive housing. For many years, she was living at her parent’s house or staying with friends, neither of which provided Tia with the independence and consistent support that she needed to stay sober. Two years ago, Tia was able to move into her own apartment at Herkimer Apartments. She now has a stable place to call home and it provides her with the independence she needs to live her own life. “Living here has really changed my life. It’s so peaceful now. My life was AVENUES TO AFFORDABILITY
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| IMPACT chaos for a long time.”
Milly
Tia has been sober for 10 months, is newly engaged, and plans to start looking for a job in the near future. Herkimer Apartments has provided Tia with the independence and hope she needs to create the future that she has always dreamed about. MILLY In search of a new life, Milly left Detroit and moved to Grand Rapids 16 years ago. She moved into a house, began a career providing in-home daycare, and found a church family. Today, all she has left of that life is her church family. Despite efforts to create a prosperous life for herself, and after several years of adversity, Milly found herself living in a women’s shelter. Grieving the death of her son, as well as dealing with homelessness, Milly was struggling to make it through each day. She was able to find some respite at the shelter for a short period of time, but still longed for a more positive and supportive living environment. “I was so excited when Herkimer called me. They gave me an apartment of my own, that I could afford.” Beneath the initial excitement, Milly continued to struggle with the devastation of losing her son. During her first few months at Herkimer, Milly would often seclude herself in her apartment. She requested that the staff come check on her, to make sure she was okay. To knock down the door if she didn’t answer. With the support of the staff at Herkimer Apartments, as well as from fellow neighbors, Milly is now seen socializing and enjoying her new life. “Where else could you go for low-income housing like this?! It’s beautiful. You can’t ask for nothing else. You have central air; you can have all the air you want. You can keep your lights on as much as you want. I love it here! Not only do I love my apartment, but I love the people that I am around.” Along with socializing with her neighbors, she is also able to enjoy one of her favorite hobbies, BINGO. “BINGO! I LOVE BINGO! I LOVE BINGO!” In addition to ruling the BINGO scene at Herkimer Apartments, Milly has aspirations of traveling to Niagara Falls with her mother, getting married, and continuing to be strong each and every day. JAMES James lived an all-too-common scenario: a wife and children, a modest home, a stable job. Then one day, he finds
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himself with nothing. Divorced. Foreclosed home. Laid-off. The distress that James felt led him into a deep depression, which ultimately led to a severe case of diabetes and the loss of one of his legs. At the young age of 50, James is now confined to a wheelchair. Although some would perceive this as another set-back in life, James has fully embraced his new way of maneuvering through the world. He is continuously seen with a smile on his face, with positive words to share, and emits an infectious joy for life.
James
At Herkimer Apartments, James is able to live a fully independent life. One that he didn’t think was possible after losing his leg. “This is for ME?! I didn’t even know it was going to be handicap accessible! Herkimer gave me more than just a place to lay my head. It gave me courage. It gave me my independence. I can cook on my own. I can wash my own clothes. I can be like I was before, even without a leg.” James has embraced all that Herkimer Apartments has to offer. He frequents the Community Garden and the community events, such as ice cream socials. He has also had the opportunity to take part in board meetings regarding community engagement initiatives. With help from the staff at Herkimer, he is able to fill out paperwork that, due to the numbness in his hands from diabetes, he wasn’t able to do before. Prior to living at Herkimer, James explains that “behind my smile, was a bitter man.” Now, after being given the opportunity to live in an affordable, supportive, and safe environment, James would gladly shout from the rooftops of Grand Rapids “I LIVE A JOYOUS LIFE!” AVENUES TO AFFORDABILITY
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| CULTURE LAURENT LEADS SEGMENT AT GO4IT! SUMMIT Chris Laurent, Cinnaire Senior Vice President, recently spent a weekend leading a real estate development and investment segment for the Go4it! Summit. The Go4it Summit provides entrepreneurial education and training for Milwaukee area students and young adults ages 16 to 24. At the summit, attendees learned the basics of business planning, budgeting, filmmaking and how to get started in real estate.
LABER FEATURED BY MICHIGAN CHAMBER The Michigan Chamber of Commerce recently featured Rick Laber, Cinnaire Executive Vice President and Develop Michigan Inc. President, in the fall edition of the Quarterly Report. Develop Michigan is a Lansing-based, non-profit, innovative development finance organization formed through a partnership between Cinnaire, Michigan Strategic Fund and Development Finance Group. Other topics of interest included information about Rick, his greatest challenges, greatest opportunities and the reasons why he belongs to the Michigan Chamber. For the full report, visit http://www.michamber. com/quarterly-report. 17
| CULTURE THE BREAD HOUSE THANKS CINNAIRE
The Bread House of Lansing recently hosted their annual Day of Thanks Community Dinner. Each year, the Bread House hosts this dinner for the community to provide a free meal to ensure homeless, less fortunate, elderly, those without family or anyone else in the Lansing community can enjoy a hearty meal for Thanksgiving. Cinnaire was proud to support the event this year. Anthony Winston, Cinnaire Executive Assistant, is a member of the Bread House and volunteers at this annual event. The 2016 Day of Thanks provided a free delicious meal to over 200 people!
CINNAIRE RECENTLY RECEIVED A $75 MILLION NEW MARKET TAX CREDIT AWARD The US Department of Treasury and the Community Development Financial Institutions (CDFI) Fund announced the award to Cinnaire subsidiary, Cinnaire New Markets, LLC, as part of the largest award round since the NMTC program was created. Of the record $7 billion that was allocated, Cinnaire New Markets received one of the largest awards for a regional fund. “This allocation will be essential in bringing life to numerous transformative developments,” said Mark McDaniel. “We are honored and grateful to be one of the recipients of this award. To date, Cinnaire New Markets has invested over $164 million in developments that revitalize neighborhoods and are directly responsive to the needs of low-income communities in the Midwest’s most underserved areas. This year’s allocation of $75 million will further uplift communities in the Cinnaire footprint – including both urban and rural areas across the Midwest. Cinnaire New Markets is a designated Community Development Entity serving Michigan, Wisconsin, Indiana and Illinois.
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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
| CULTURE CINNAIRE ANNUAL MEETING
For several years, the Deleware office (formerly DCIC) held an Annual Meeting to highlight events from the past year and give a strategic picture of what was planned for the future year. When Cinnaire acquired DCIC, the executive team decided to continue the tradition of hosting this informative event. The Annual Meeting was held in October. We are immensely grateful to our sponsors, JP Morgan Chase, TD Bank
and Discover Bank for supporting this event, which hosted over 75 guests including investors, partners and developers. Featured speaker, Mark Pinsky, gave a compelling speech on the history and evolution of the CDFI industry. Cinnaire staff provided an overview of our accomplishments and impact over the past year. Several partners shared their collaborative experience with Cinnaire, their overall community
development work and their impact on the community. Partners who spoke included Rob Snowberger of The Buccini / Pollin Group and Reverend Terrence Keeling from the Central Baptist Community Development Corporation and the East Side Rising initiative. Bringing people together and helping them understand the breadth of our impact is vitally important to our mission.
CINNAIRE STAFF ANNOUNCEMENTS Yulonda Byrd is now Vice President of Commercial Real Estate. In this new role, Yulonda will focus on underwriting for Develop Michigan (DMI), continue to oversee DMI asset management on a limited basis, and work on and help lead new commercial real estate and other initiatives. Yulonda’s personal life vision is to be an integral part of and contributor to an environment that craves freedom of all people; respects the diversity and contribution of all mankind; and embraces and encourages integrity. She has been Vice President at Cinnaire (previously the Great Lakes
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Capital Fund) since 2013. Her roles have included Asset Manager, Vice President of Special Assets and more recently Vice President of Commercial Real Estate. Her responsibilities have included underwriting mezzanine and senior debt investments in a broad array of real estate projects with a view toward having significant economic development impact through the promotion of job creation and investment in the redevelopment, development, rehabilitation and repositioning of sites for a variety of industries and uses. Previously, she was Assistant Vice President at J. P. Morgan Chase where she had underwriting responsibilities for government, nonprofit and healthcare type loans. She received a Bachelor of Arts degree from Siena Heights University.
Josh Ghena has been promoted to Director of Special Assets. In his new role his efforts are focused on workouts and stabilization of troubled deals. In addition, he works on Cinnaire’s internal risk rating process and Watchlist management. He has been with Cinnaire since 2014 and was formerly an Asset Manager. Prior to joining Cinnaire, he provided technical assistance to distressed HUD Grantees. His work as a technical assistance provider specialized in CDBG, HOME, and NSP. He earned a M.S. in Urban and Regional Planning from the University of Wisconsin and holds a B.S. in Political Science from Calvin College. CINNAIRE
Family owned & operated Since 1957
Josh’s personal life vision is to be available and authentic to the people in my life. Mary Manuel, Cinnaire Asset Manager, recently assisted the Greater Lansing Housing Coalition (GLHC) in collecting donations to provide Thanksgiving Baskets. On any given night, GLHC provides shelter for approximately 150 people. During the holidays, GLHC seeks food donations and financial assistance to provide baskets to very low income residents. Mary put out a request to the Cinnaire staff, her own family and friends, and was able to donate over $300 and a large amount of food. GLHC provided food baskets for over 20 families — many of the residents that received baskets live on less than $1,000/ month. Mary’s personal life vision is “to do my part in making the world a better place by ensuring everything I do is focused on my core values: Trust, Leadership, and Helping Society.” Her efforts that went into this volunteer work exemplify how she puts her personal life vision to work in her personal and professional life.
ManageMent
AffordAble housing speciAlists Your project is important to us! That’s why we’re on time and within budget... every time!
ConstruCtion
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| IMPACTFUL NEWS CELEBRATING NEW, SATELLITE OUTPATIENT CLINIC Cinnaire recently joined Portage Health and Upper Great Lakes Family Health Center to celebrate the building of a brand new, satellite outpatient clinic facility in Calumet, located in the Keweenaw Peninsula of Michigan. The clinic will primarily house Upper Great Lakes Family Health Center, a Federally Qualified Health Center (FQHC), as well as health services provided by Portage Health. The FQHC designation will allow the clinic to provide healthcare services to low-income Calumet residents, as well as access to care for those from outside the area who may not be able to afford healthcare services. In addition to the FQHC, the clinic will allow space for Portage Health to provide complimentary health services in the same
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location, resulting in a comprehensive suite of health offerings. Providing quality, affordable healthcare for 2,500 residents of Calumet and surrounding areas, the new clinic building will be approximately 11,000 square feet, but will be expandable to 17,000 square feet or more. It will include space for 21 clinic exams rooms, X-Ray, Ultrasound, Physical and Occupational Therapy, and associate support spaces. The clinic will also house a Dental practice bringing vitally needed oral health services to the community. Cinnaire provided $7.M in New Market Tax Credit (NMTC) allocation. The project has a total development cost of $8.8M. Construction is underway with an estimated completion date of March 2017.
CINNAIRE IS PROUD TO SUPPORT THE URBAN ACRES PRODUCT (UAP) WORKFORCE DEVELOPMENT INITIATIVE
UAP is a component of the East Side Rising’s Blueprint Community Program, a Federal Home Loan Bank sponsored community revitalization effort. Their mission is to create job and entrepreneurship opportunities in the food industry through retail
{Build confidently.} Get the expert support you need to see your housing and community development project through to completion. Audits, reviews, & compilations Transaction structuring Market feasibility Financial projections Tax credit incentivized financing Tax planning & compliance Strategic & business planning Protecting your bottom line while you build from the ground up.
A higher return on experience. Contact: Rob Edwards, partner robert.edwards@plantemoran.com 517.336.7460
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CINNAIRE
and wholesale produce distribution networks that utilize urban community gardens and local growers. UAP is developing an industry on Wilmington’s distressed East Side that creates job opportunities, promotes entrepreneurship and increases social capital from within the community. The program teaches students how to run and operate a small business venture. In addition to teaching basic business skills, UAP is also creating access to fresh and healthy produce for the underserved neighborhoods of Wilmington’s East side. Cinnaire’s Wilmington, DE office has been working closely with the East Side Rising and Urban Acres teams to secure funding for a new van to accommodate their training program, increase logistical efficiency and mobility, and expand the marketing in gardening and produce sales. We are happy to announce that with a combination of grant contributions from Discover Bank and the State of Delaware, coordinated and raised by Cinnaire, the fundraising goal has been met and the van is now fully operational and bringing healthy foods to an underserved community! Cinnaire was awarded over $3.9 million from the Federal Home Loan Bank of Chicago (FHLBC) Affordable Housing Program (AHP). In their second year of submitting applications for the AHP awards, Cinnaire received the highest allocation of awards for all rental projects. Out of the 44 awards that were made, Cinnaire received seven awards, two of which were included in the Top 10 scoring projects. These awards will allow Cinnaire to assist in the new construction, acquisition, rehabilitation and adaptive reuse of over 300 units of rental housing in Illinois and Wisconsin. These units will serve seniors, special needs populations, Veterans and families. Since 1989, the FHLBC has awarded more than $398 million in competAVENUES TO AFFORDABILITY
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ENVIRONMENTAL & ENGINEERING SERVICES
NATIONWIDE
Low-Income Housing Tax Credit (LIHTC) state approvals & HUD experience • Phase I & II Environmental Site Assessments (ESAs) • HUD Environmental Assessments (4128) • Hazardous Materials (Asbestos, Lead-based paint, Radon) Management & Consulting • National Environmental Protection Act (NEPA) Compliance • ASTM E-2018 Property Condition Assessments (PCAs) • Capital Needs Assessments (CNAs) • Fannie Mae, Freddie Mac Physical Needs Assessments (PNAs) • HUD Project Capital Needs Assessments (PCNAs) • HUD RAD Physical Needs Assessments (RPCAs) • HUD Green Physical Needs Assessments (GPNAs) •
www.pmenv.com 23
| IMPACTFUL NEWS itive AHP grants. Nonprofit groups, for-profit developer and public entities apply for the competitive AHP grants through one of the FHLBC’s member institutions. “Congratulations to Cinnaire on their recent Affordable Housing Program awards. Exclusive access to our community investment programs is a benefit of membership at the Federal Home Loan Bank of Chicago,” said Suzi Thackston, its Community Investment Officer. “ We applaud Cinnaire and its partners as they work together to produce quality, affordable housing options in the communities they serve.” The following projects will receive AHP awards through Cinnaire Lending Corporation, a subsidiary of Cinnaire: • Chicago, IL: Montclare/JoAnn Thompson Senior Residences of Englewood Phase I • Gurnee, IL: Stonebridge of Gurnee • Milwaukee, WI: Century Building • Hudson, WI: The Carmichael • Sparta, WI: Bayshore Townhomes • Superior, WI: Cottages of Superior Phase I • Superior, WI: Cottages of Superior Phase II CINNAIRE AND MICHIGAN BANKERS ASSOCIATION Cinnaire and the Michigan Bankers Association Service Corporation (MBASC) recently closed its fourth housing equity fund, generating $12.5 million to support the development and rehabilitation of 10 different apartment communities across the state, providing 669 units of quality, safe and affordable housing for lower income residents. Cinnaire wishes to thank the following banks for their continued commitment to providing affordable housing: • Bank of Ann Arbor • ChoiceOne Bank • Commercial Bank • County National Bank • Eaton Federal Savings Bank 24
CINNAIRE AND MICHIGAN BANKERS ASSOCIATION
• • • • • • •
First National Bank of Michigan Isabella Bank Lake-Osceola State Bank Level One Bank Macatawa Bank Mercantile Bank United Bank of Michigan
CINNAIRE AND INDIANA BANKERS ASSOCIATION Cinnaire and the Indiana Bankers Association (IBA) recently closed its fourth housing equity fund, generating $9 million to support the development and rehabilitation of 6 different apartment communities across the state, providing 475 units of quality, safe and affordable housing for lower income residents. Cinnaire wishes to thank the following banks for their continued commitment to providing affordable housing: • First Bank Richmond • First Federal Savings Bank – Huntington • First Federal Savings Bank – Rochester • GABC Development Corporation • Home Bank SB • Lake City Bank • Springs Valley Bank & Trust Company To learn more about the MBA and IBA,
please visit, www.mibankers.com and indianabankers.org. GLASTAR AWARDS CEREMONY Recently, Cinnaire staff attended the annual GLASTAR Awards Ceremony in Lansing, the “Academy Awards” for property management in Michigan. Recognition is given to maintenance staff, leasing staff, site managers, groundskeepers, regional managers and ultimately, the best management company. Cinnaire wishes to extend a special congratulation to Tim Fox, founder of MHT Housing/Continental Management for his honor in receiving a lifetime achievement award. This award recognizes long term commitment and dedication to the multifamily housing industry. Tim has been involved in the use of the LIHTC since its inception. He was a founding board member of the Michigan Housing Council. Mark McDaniel considers Tim a mentor, as they worked together early in Mark’s career. Tim taught Mark how to model the building of a company around your most important asset – its people. Please join us in congratulating Tim on this well deserved honor! We also wish to recognize the following Cinnaire partners that also CINNAIRE
We Do More Than Just Answer Your Questions... WE CREATE THE SOLUTIONS! “My properties have shown incredible improvement since you started working with them. I can’t believe how much better the sites are doing today. I don’t know what took me so long to get you involved!”
received awards at GLASTAR: • Best Innovative Idea at a Community – Associated Management, Rosehaven Apartments • Community Support Staff of the Year – Donnie Deaton, Association Management, Oakhaven Manor • Excellence in Education – Continental Management
Lora D. Gilbert, Vice President of Asset Management, Larc Properties, Inc.
Operations • Marketing • Leasing Training Specialists • Compliance Call today to reduce expenses and increase your occupancy. 800.865.0948 | WWW.OCCUPANCYSOLUTIONS.COM
TTY: 711
TTY: 711
OVER 20 YEARS EXPERIENCE IN ALL PHASES OF AFFORDABLE HOUSING • Audits • Cost Certifications Mt. Pleasant & Midland Michigan
• LP Tax Returns • Mortgage Certifications
Phone 989.772.4673 | Fax 989.772.6371 | Email jbourland@blystonebailey.com AVENUES TO AFFORDABILITY
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SaVE ThE DaTE! Keynote speaker confirmed: SaRah BRaBBS Author of “So People Say You’re an Asshole.”
E! E DAT
0& 21 2 r E b SEptEm TH S AV E
FIRST R E SPONDER S
ion 2017 EduEcraEtn cE conf
ntEr kEllogg cE , mi EaSt lanSing
confErEncE dE
• • • • • • •
SignEd for:
GERS REGIONAL MANA RS GE NA RESIDENT MA AF ST F MAINTENANCE LEASING STAFF DEVELOPERS INVESTORS PARTNERS
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
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.
CINNAIRE
A NOTE FROM MARK CONTINUED FROM PAGE 4
Cinnaire has been blessed to be able to work with a team of consultants who are recognized as the top experts in the evolution of CDFI’s. A special kudos goes to Barry Zigas, Adina Abramowitz, and Mark Pinsky for their excellent valuable guidance and their belief in us as an organization. We are blessed to have you on our team. While 2017 appears to be an unsettling year of unknowns, we at Cinnaire see this period as one of new opportunities and growth. We are prepared for what is to come and want to support our partners as much as possible to help them weather through some of the rough seas that may be in front of us. I wish all of you a bright and meaningful New Year!
Mark McDaniel Mark McDaniel President & CEO, Cinnaire
GOVERNING BOARD Wendell Johns, Chair Retired, Fannie Mae James W. Stretz, Vice-Chair George K. Baum & Company Michael J. Taylor, Secretary/Treasurer PNC Bank Catherine A. Cawthon Fifth Third CDC Derrick K. Collins Chicago State University Christine R. Hobbs Retired, Freddie Mac Multifamily Brett Macleod JP Morgan Chase William C. Perkins Retired, WPHD Carl Riedy State Street Global Advisors Sheldon Schreiberg Pepper Hamilton LLP Donald F. Tucker Don Tucker Consulting Paul J. Weaver Retired, 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
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ADVERTISERS Baker Tilly.......................................................... 11 Blystone & Bailey.......................................... 25 Chesapeake Community Advisors..............9 Clark Hill, PLC.................................................. 21 Community Economic Development Association of Michigan.............................. 25 Dauby O’Connor & Zaleski, LLC................ 23 Ginosko Development Company.............. 28 Keller Development....................................... 21 Kincaid Henry....................................................5 KMG Prestige, Inc........................................... 13 Loomis, Ewert, Parsley, Davis & Gotting..... 26 Love Funding.................................................... 11 Maner Costerisan, P.C................................... 18 Medallion Management, Inc....................... 25 MHT Housing, Inc........................................... 19 O’Brien Construction Company, Inc............2 Occupancy Solutions, LLC.......................... 25 Plante Moran.................................................. 22 PM Environmental, Inc................................. 23 Rohde Construction....................................... 16 INTERESTED IN ADVERTISING? Contact Jennifer Calery at 517.896.0873 or jen@altmgmtsolutions.com for more information. MANAGING EDITOR Mary McDaniel, CMP Alternative Solutions, LLC EDITORIAL Kelly Rogers Pixie Publishing, LLC ADVERTISING Jennifer Calery Alternative Solutions, LLC GRAPHIC DESIGN Melissa Travis Ink Ideas Graphic Design, LLC COVER ILLUSTRATION Matthew McDaniel Student Avenues to Affordability magazine is published quarterly by Cinnaire. 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 Cinnaire office at 517.482.8555 or visit www.cinnaire.com.
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!
www.Ginosko.com 41800 West 11 Mile Road, Suite 209 | Novi MI 48375 office 248.513.4900 | fax 248.513.4904