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    Data Highlights CED Program’s Ability to Provide Jobs to Low-Income Individuals and Revitalize Distressed Communities

    Posted by on Dec 27, 2016 in Uncategorized | 0 comments

    In December 2016, a report prepared by Rapoza Associates, a Washington DC based government relations firm, took a look at federal Community Economic Development (CED) grants. An analysis of both survey data and federal government reporting points to the success of federal CED grants, which are administered by the Department of Health and Human Services (HHS) and the local Community Development Corporations that work with this program.

    The firm surveyed 52 local community development corporations that had recently received CED grants.  These organizations received some $35 million in grant funds and with that leveraged over $280 million (including almost $100 million from private financial institutions) in financing from other sources, financing 45 businesses, creating 3,200 jobs at a cost to the federal government of $8,900 per job.

    CDCs use CED to funds to provide technical and financial assistance to business that agree to create jobs for people with incomes up to 125 percent of the poverty level. The type or uses of the funds include financing of industrial and commercial facilities, child and health care centers, small business loan funds, and grocery store and healthy food facilities located in federal designated food deserts.

    Rapoza Associates’ also filed a Freedom of Information Act (FOIA) request for reports by CDCs that are grantees of the Community Economic Development program. The firm analyzed HHS data from 168 reported projects by 123 CDCs for 2014 and 2015.  The projects spanned 38 states, Puerto Rico, and the District of Columbia.

    The 123 CDCs received an average grant of $700,000 per project financed for a total of $11.7 million.  These CDCs report to OCS that this amount leveraged over $787.5 million financing sources for CED projects. For every dollar in federal CED funds, CDCs leveraged $7 in other financing. This leverage total was able to create 871 new businesses, as well as help 602 existing businesses expand, for a total of nearly 1,500 businesses in the two year period.

    As stated above, the mission of the CED program is to provide jobs to low-income individuals and to revitalize low-income communities.  In 2014 and 2015, the grant recipients of the CED program created 6,997 full-time equivalent jobs, including 2,504 part-time jobs, and 5,745 full-time jobs.

    For more examples of CDC’s work in low-income communities, be sure to read the 2014 Stories of Community Impact report.

    Midwest Minnesota CDC Project Visited by Treasury Secretary

    Posted by on Aug 16, 2016 in Blog, Community Economic Development Grants, New Markets Tax Credit | 0 comments

    On August 8th, 2016, U.S. Secretary of the Treasury Jack Lew visited Seward Community Cooperative Friendship Store, a grocery store in Minneapolis, Minnesota. The store, which is located in a low-income census tract and provides access to healthy, fresh foods, was financed in part by the New Markets Tax Credit (NMTC) and federal Community Economic Development (CED) funds from Midwest Minnesota Community Development Corporation (MMCDC). The event was also attended by Congressman Keith Ellison who represents the district where the grocery store is located.

    MMCDC founder Arlen Kangas shakes hands with Sec. Lew. President Kevin Shipley in background along with Seward Co-Op store manager Ray Williams.

    MMCDC founder Arlen Kangas shakes hands with Sec. Lew. MMCDC President Kevin Shipley in background along with Seward Co-Op store manager Ray Williams.

    MMCDC Sec of State Visit to Seward-7_WEB

    MMCDC president Kevin Shipley noted that the project is making a positive impact on the community.

    “By working collaboratively with private and public workforce development programs, the co-op is creating new living-wage jobs with benefits for residents in the neighborhoods surrounding their locations.” He added, “the project greatly benefited from CED funding for job creation and would not have been possible without the NMTC.”

    The Seward Co-Op, with a project cost of $15 million, was completed in 2015. The project included the financing of a new food production facility, along with a new grocery store in a Minneapolis neighborhood where fresh food options were scarce.  The new store was built using environmentally friendly, sustainable products and services, and a focus on healthy and sustainable products carries through to the food choices on the shelves and at the restaurant. The company employs 350 people in all and the store’s wages start at $13 per hour.

    Kentucky Project Saves Over 300 Jobs and Facilitates Critical Health Services

    Posted by on Aug 9, 2016 in Blog | 0 comments

    The Pineville Community Hospital has provides healthcare services to southeastern Kentucky residents since 1938. The nonprofit hospital, which was in need of modernization and expansion to serve the needs of the community, received a $3.1 million USDA  Business and Industry (B&I) Guarantee Loan through veteran Community Development Corporation, Kentucky Highlands Investment Corporation (KHIC). Through the B&I program, KHIC helped restructure the hospital’s existing debt, allowing First State Financial to then provide the hospital with a line of credit.

    The working capital freed up through the restructure allowed the hospital to convert  space for healthcare services that were badly needed in the community. The added services include a geriatric psychiatric unit, which the Pineville Community Hospital indicated wasn’t being offered within a 30-mile radius, despite approximately 38,000 community members over age 65 who need of care for issues such as depression and PTSD. Further, the loan and working capital facilitated the creation of 12 new positions at the hospital, as well as save over 300 jobs.

    Photo courtesy of KHIC USDA Under Sec. Mensah and Rep. Rogers at Pineville Community Hospital event

    Photo courtesy of KHIC
    USDA Under Sec. Mensah and Rep. Rogers at Pineville Community Hospital event

    In February 2016, an event was held at the Pineville Community Hospital to celebrate its success. In attendance at the event was USDA Under Secretary for Rural Development Lisa Mensah, Representative Hal Rogers (R-KY), and Kentucky Governor Matt Bevin.

    Read more about the project and event in the KHIC 2016 newsletter…

     

    Leadership, Legacy and Cardboard Lobsters—Thank you Ron Phillips

    Posted by on Mar 18, 2016 in Blog, CDFI Fund Program, Community Economic Development Grants, Job Creation, JOLI, New Markets Tax Credit | 0 comments

    Post written by Bob Rapoza

    A celebration of a retiring leader in the CDC community was held this week. My good friend, Ron Phillips, the founder and president of Coastal Enterprises, Inc. is retiring. While I was not able to attend Ron’s celebration in Maine, I knew it would be quite an event, and a fitting tribute to all the good work done by a great organization and its leader. As such, I want to add a comment about my work with Ron and the Eagles and take this opportunity to put our efforts in perspective.

    Ron was part of a generation of CDC leaders that came of (political) age in the late 1970s to early 1980s. The group included David Lizarraga, Jim Dowdy, Don Maxwell, Dennis West, Steve McConnell, Pete Garcia, Perry Eaton and Bill Duncan. All had been involved in various ways in the OEO Title VII CDC program. That program was, of course, eliminated by the Reagan Administration in favor of the much smaller Community Economic Development grant program at HHS. However, this much diminished program – $17 million in 1982 – was the only source of funding available to CDCs for community economic development.

    Despite this setback, these CDC leaders formed what we now refer to as the Eagles – a group of 15 or so CDCs that was originally organized to try to support the HHS program and develop cooperative agreements with other federal agencies. The purpose of the group was to find a strategy to build federal resources for CDCs. Side note: the group was christened the “Eagles” by Perry Eaton, the only member of the group to admit to being a Republican. The Reagan fundraising operation had dubbed their biggest givers as Eagles. Perry thought it was a perfect name and it stuck. Over the years, the group had many new recruits including Mary Nelson, John MacDonald, Jerry Rickett, Ray Moncrief, Arlen Kangas, Steve Fairfield, the late Karl Pnazek, Bill Bay, Howard Snyder, Bill Linder, the late Harry Bowie, the late Nick Smith, Lee Beaulac, Kerry Doi, Roberto Barragán and a number of their successors.

    Beginning in March 1987, through meetings at TELACU House in Dupont Circle, we hashed out plans: look for targets of opportunity within federal agencies – there were not many – after all this was the Reagan Administration and in Congress, which was much more interesting. In the early years, we succeeded in getting CDC demonstrations on a trade bill, a workforce bill, working with Senator Mitchell on welfare reform and enacted the JOLI program and in the 1993 Budget Reconciliation Bill – the CDC Tax Credit.

    Some of us at the White House in Spring 1993, at the unveiling of the Clinton Administration proposal for a Community Development Financial Institutions Fund. From left to right in back: Bob Rapoza, Bob Justis (NCIC), Bill Bay (Impact 7) Lee Beaulac (PathStone), and Ron Phillips; front: Vicky Stein (Rapoza Associates).

    Some of us at the White House in Spring 1993, at the unveiling of the Clinton Administration proposal for a Community Development Financial Institutions Fund. From left to right in back: Bob Rapoza, Bob Justis (NCIC), Bill Bay (Impact 7) Lee Beaulac (PathStone), and Ron Phillips; front: Vicky Stein (Rapoza Associates).

    We also laid the groundwork for enduring and successful programs: at SBA with the micro loan program; at USDA with rural development loan and grant programs; and we have maintained the CED program at HHS all of these years. The success of the CDC Tax Credit paved the way for meeting at the White House and Treasury and then a series of late night negotiations with the Clinton Administration officials on the design of a new tax credit for community development – the New Markets Tax Credit (NMTC). The NMTC has greatly enhanced the impact of many CDCs, including CEI, and has open the door to many new relationships for CDCs. In fact, the NMTC stands as the largest new federal community development program in more than 20 years.

    We accomplished this by bringing the CDCs to Washington to translate their local success stories into public policy. Over the years, in various combinations, the Eagles would troop around Capitol Hill or to federal agencies. Ron was almost always there, carrying with him not only his message of success from Maine, but also his low key and persistent advocacy on doing more for people and communities. Ron always – cue his colleagues rolling their eyes—had his CEI swag: cardboard lobsters, lip lube, and clam chowder.

    The CDC group that Ron helped established 29 years ago has a lot to look back on with pride. The group never had a chairperson, never kept minutes, and never had a budget to speak of. It was all about increasing resources for communities and people. It is a tribute to all the Eagles that the field of community economic development has come so far. As in Maine, Ron was a leader in Washington, and much of the success of the Eagles is a result of his efforts.

    Finally, thank you to my friend Ron. For your leadership in the CDC movement, for the legacy you are leaving to the community development industry, and even for the cardboard “lobstahs” you brought to our meetings. You have made an indelible impact and the CDCs appreciate your dedication and work.

    CPLC Makes the White House Best Photos for President’s Visit to Nuevas Villas At Beverly

    Posted by on Feb 22, 2016 in Blog, Housing | 0 comments

    As many people in the community development corporation (CDC) know, Chicanos Por La Causa (CPLC) is an Arizona-based CDC that has been providing integrated group programs and services in economic development, education, health and human services, and housing since 1969.  On January 8, 2015, one of CPLC’s housing sites, the Nueva Villas at Beverly, had a very well-known figure come to visit. This person was the President of the United States of America, Barack Obama.  To make this day even more memorable for CPLC and the Phoenix community, on December 30, 2015, the Huffington Post published a story on some of the best White House photographs from 2015.  One of the pictures that appeared in the best White House photographs of 2015 was of President Obama greeting an emotional resident of the Nueva Villas at Beverly holding her child.

    The reason for President Obama’s visit, was a speech he planned on giving at a local high school, so he could announce that the fees that are charged by the FHA for loans are going to be lowered and could save families that would purchase a home through the FHA could save upwards of $900 per year.  However, before President Obama went to give his speech at the local high school, he decided to take CPLC up on an offer to come visit the Nueva Villas at Beverly.  President Obama did not give CPLC or the community of Nueva Villas at Beverly much notice, as they were informed only 15 minutes prior to his arrival that he was on his way.  However, even with the short notice, the president took his time to meet every single worker and member of the community that day.  The picture that made the article in the Huffington Post was an example of President Obama walking across the street and saying hello to a single mother and her young child.  This was just one of many amazing photographs that were captured on that day.

    Photo from Huffingtonpost.com by Pete Souza/White House

    Photo from Huffingtonpost.com by Pete Souza/White House

    As previously mentioned, the project that President Obama visited was the Nuevas Villas at Beverly, which was a foreclosed development that was previously owned by another non-profit organization.  CPLC was able to purchase this development with the help of a $137 million grant, an amount that became the largest award that any Latino organization had ever received from the U.S. Department of Housing and Urban Development (HUD). As part of a consortium with NALCAB (National Association of Latino Community Asset Builders), CPLC, the largest grantee, was able to show HUD and the rest of the United States that you can put investment of grant dollars into the communities that were most affected by the housing crisis, and come out successful.

    The Nueva Villas at Beverly  was a foreclosed development with 25 homes already built on a 50 home lot when CPLC purchased it.  At the time of the purchase, the community looked like it was in a war-torn country, with trees in the middle of the road and homeless individuals taking claim to the unused land.  However, when CPLC came into ownership of the property, they revitalized the community and reenergized the owners of the houses of the previously built houses. The program is designed to help low to moderate income buyers with up to 120% of the average median income in designated census tracts most affected by the foreclosure crisis. This allows people who most likely could never afford a brand new home to fulfill one of their lifelong dreams.

    Other pictures include Vice President Joe Biden congratulating President Obama after hearing the Supreme Court’s decision on the Affordable Care Act on June 25, 2015, President Obama having a conversation with Prime Minister Shinzo Abe of Japan, and President Obama hugging Rep. John Lewis (D-Ga.) after his introduction during the event to commemorate the 50th Anniversary of Bloody Sunday and the Selma to Montgomery civil rights marches in Selma, Alabama, on March 7, 2015.

    CEI Helps Local Flower Farm Blossom

    Posted by on Feb 8, 2016 in Blog | 0 comments

    Coastal Enterprises, Inc. (CEI) is a Maine-based CDC that has made loans and investments, and provided business advisory services to people and businesses in Maine and New England since 1977.[1] CEI is unique in its holistic approach to addressing the multifaceted challenges of poverty alleviation, rural development and environmental sustainability. Little River Flower Farm is a recent example of a project that meets CEI’s triple bottom line.

    Photo courtesy of CEI

    Photo courtesy of CEI

    Little River Flower Farm grows and produces Maine Organic Farmers and Gardeners Association (MOFGA) certified flowers.  The issue that Little River Flower Farm faced before partnering with CEI was that they could not grow their flowers year-round due to Maine’s climate.  In order to grow year-round, the owners of Little River Flower Farm, Bruce and Nancy Stedman, invested in an ArchSolar integrated solar greenhouse. The greenhouse features flexible solar panels integrated into the glazing, supplemental lighting and heat storage systems, making it not only economically sustainable but also environmentally sustainable. CEI was able to finance the deal between the Little River Flower Farm and Archsolar with a loan of $480,000, including a $200,000 participation by CEI Investment Notes, Inc.[2]

    The challenge of year-round production is not unique to Little River Flower Farm. ArchSolar founder Tony Keiffer notes that, “One challenge of helping small farms scale production and adopt year round agriculture is capital. CEI is filling that need for capital, allowing farmers to increase their margins and contribute to regional food systems more predictably and with better returns.”[3]  Thanks to projects like this one, the work of CDCs is gaining more currency across the country.

    [1] http://www.ceimaine.org/about/cei-history/

    [2] http://www.ceimaine.org/about/cei-stories/little-river-flower-farm/.

    [3] http://www.ceimaine.org/about/cei-stories/little-river-flower-farm/.

    VEDC Creates New Lending Program to Boost African American-Owned Small Businesses

    Posted by on Oct 29, 2015 in Blog | 0 comments

    VEDC, a long-standing member of the CDC community, announced that it is joining forces with JPMorgan Chaise to create a new lending program for African American-owned small businesses in New York City, Chicago and Los Angeles. VEDC released the following information on the program:

    The National African American Small Business Loan Fund will boost economic opportunity for minority-owned businesses in these cities and help them serve low-income communities by providing them with greater access to capital, technical assistance and financial consulting. JPMorgan Chase Foundation has contributed a $3 million grant to help VEDC reach its goal of creating a $30 million loan fund.

    Facilitated by VEDC, a California 501(c)3 Community Development Financial Institution (CDFI), this new Fund will provide financing for businesses across all industries. By providing the initial $3 million grant to seed the Fund, JPMorgan Chase is helping VEDC support small businesses that are a critical source of jobs and economic opportunity in their neighborhoods, but may be credit-impaired and unable to qualify for traditional capital. Without access to sustainable financing, these businesses may miss a growth opportunity or risk closing their operations.

    “As a direct small business lender and a leading intermediary of SBA loan programs, VEDC has a 39-year track record of providing business services to small businesses in low-and middle-income communities and especially in communities of color,” said Robert Barragan, President and CEO, VEDC. “Approximately 20 percent of our existing portfolio serves the African American community. With JPMorgan Chase’s seed funding, we look forward to helping more small businesses in our effort to further narrow the lending gap.”

    Currently, there are 268,000 African American-owned small businesses in New York, Chicago and Los Angeles – making them among the top cities for African American-owned small businesses. With ownership of approximately 1.9 million, 7 percent of small businesses nationwide, African Americans are the fastest growing segment of small business owners.  However, business loans to African American entrepreneurs have yet to rebound since the economic downturn in 2008.

    To address this need, the National African American Small Business Loan Fund will provide short and long-term loans. Loan sizes will vary, but the average loan will range from $35,000 to $250,000. The JPMorgan Chase grant will allow the National African American Small Business Loan Fund to provide loans and technical assistance and establish a loan loss reserve. This reserve will allow VEDC to expand its lending criteria to New York, Chicago and Los Angeles small businesses that traditionally did not qualify for a loan.

    “African American small business owners have identified flexible capital as a critical resource for growth, but they face a shortage of this kind of support,” said Janis Bowdler, Head of Community Development for Global Philanthropy, JPMorgan Chase. “CDFIs like VEDC provide small businesses with the consulting and financing they need to grow their operations and often serve as a bridge to traditional bank loans down the road. We’re proud to partner with VEDC on this new fund, which will increase access to the capital and assistance that African American entrepreneurs need most.”

    Businesses receiving financing will be able to use the capital to expand, finance equipment, address short-term cash flow needs and provide contractor lines of credit. The Fund will also provide small business loan recipients with technical assistance such as networking, marketing, business plan development and financial consulting. Eligible small businesses must be majority-owned by African Americans. “

    Read the release in its entirety, including some notable statements of support from mayors and federal government officials…

    VEDC also has a great video on the National African American Small Business Loan Fund.

     

    Can Business School Save a Company?

    Posted by on Mar 31, 2015 in Blog, Rural Economic Development, Small Businesses | 0 comments

    A family printing business in eastern Kentucky was struggling after coal’s decline. Then the CFO got sent to Babson.

    • Read more about Kentucky Highlands work in The Atlantic

    Report Shows Community Development Groups Create Jobs and Grow Local Economies

    Posted by on Dec 9, 2014 in Blog, Uncategorized | 0 comments

     

    Contact: Ayrianne Parks

    Telephone: 202.579.7445

    Email: Ayrianne@Rapoza.org

    FOR IMMEDIATE RELEASE

     

    Report Shows Community Development Groups Create Jobs and Grow Local Economies

    A report released by Rapoza Associates shows 26 community development projects resulted in nearly 7,000 jobs in communities still plagued by high unemployment and poverty rates

    December 9, 2014—Washington, D.C.—Amidst federal funding negotiations happening on Capitol Hill, a new report was released today on the impact Community Development Corporations (CDCs) have around the country, as a result of several of these federal programs. The report highlights 26 community-driven projects CDCs have completed over the past few years in urban and rural communities with federal community development funding. Rapoza Associates represents the CDCs and produced the report, which includes case studies and outcome data.

    “Over the last 30 years, federal investments for community development programs have declined by over 75 percent [measured as a share of GDP],” said Bob Rapoza, president and principal of Rapoza Associates. “In response to this, CDCs have skillfully combined limited federal funding with private sector capital to get a payoff for their communities, in terms of improved housing, better community facilities, financing for small business and creation of jobs.”

    2014 CDC Report coverThe case studies highlight projects employing federal program funding, including Office of Community Services’ Community Economic Development grants, Community Development Block Grants, rural development funding from the Department of Agriculture, the Low-Income Housing Tax Credit, the New Markets Tax Credit and other programs targeted toward revitalizing economically distressed communities and neighborhoods.

    The 26 projects showcased by 17 CDCs achieved the following results:

    • Created/retained nearly 7,000 jobs in areas struggling with unemployment, the majority of which are in the double digits;
    • Resulted in over 700 units of affordable housing, several community facilities, healthcare facilities, and weatherization projects; and
    • Provided business lending and investments, totaling more than $200 million in areas with exceptionally high poverty rates.

    CDCs work in many of the nation’s poorest areas nationwide, attracting private capital to underserved, investment-starved neighborhoods. With moderate public support from federal, state and local government agencies, CDCs increase capacity by effectively leveraging private capital.

    CDCs apply rigorous standards to the community investments they make. Although they take risks more conventional funders might avoid, they look for projects with a high potential for long-term self-sustainability, and then supply the guidance and technical assistance that can markedly improve the prospects for success. Because CDCs are community-controlled, they are highly accountable, not just to their funding sources, but to the people they serve.

    “The foundation for CDCs is the notion that community revitalization should be initiated locally—and that’s just what they’ve done since the 1960s, quietly working their magic,” says Rapoza.

    About Rapoza Associates

    RAPOZA ASSOCIATES is a lobbying and government relations firm specializing in federal community development policy. Our clients work to build stronger communities across the nation – and we support their work by providing them a range of key services, including representation before Congress and federal agencies and consultation on federal policy and programs. We have more than 30 years of experience in legislative strategy, public policy analysis and action-oriented research.

    CPLC President Recognized For Community Development Work

    Posted by on Oct 21, 2014 in Blog | 0 comments

    Edmundo HidalgoChicanos Por La Causa President and CEO Edmundo Hidalgo has been named by Hispanic Business as one of the 50 Most Influentials for 2014. He was recognized for his work helping CPLC become one of the most influential community development corporations in the United States.

    Read his biography on Hispanic Business.