Capital Impact Partners Marks Largest Quarter Ever In Financing Community Development Projects
Arlington, VA (September 19, 2017) – (RealEstateRama) — Capital Impact Partners announced today that it provided $75 million in project financing during the second quarter of 2017. This represents the largest quarterly loan volume in the company’s history as it worked to support increased access to health care, education, affordable housing, and healthy food around the United States.
“In the first half of 2017 alone, our loan volume has nearly surpassed our totals from across all of last year,” said Ellis Carr, president and CEO of Capital Impact Partners. “That is a testament to our hard working team’s efforts to do everything we can to ensure that good projects that help create equity and opportunity get the financing they need. Moving into new markets like Kansas further demonstrated our resolve and creativity to reach new communities.”
Capital Impact’s recent loans have supported projects across seven states, including its first in Kansas. Other loans were deployed across California, Washington, D.C., Texas, New Jersey, Michigan, and Washington. This work is expected to create upward of 228 permanent and 775 construction-related jobs, further helping those who live in the communities Capital Impact serves.
“While we often look at loan deployment and people served as barometers of our success, I am equally proud of the fact that we have six returning borrowers represented in the second quarter. This not only illustrates our commitment to helping our partners be successful, but expanding these relationships further scales our impact in those regions of the country that need the most support,” said Scott Sporte, chief lending officer for Capital Impact Partners.
Second-quarter financing highlights include:
Fostering Community Development in Washington, D.C.
In an exciting partnership near Capital Impact’s headquarters, the organization is working with Martha’s Table to support the organization’s plans to relocate and expand. The new Martha’s Table headquarters will be part of a new three-acre, community-services campus development project in Washington, D.C.’s Ward 8 called “The Commons at Stanton Square.” This multi-phase project will address key disparities in this low-income community by bringing together a variety of key social services including health care services and affordable housing while spurring community development.
Services provided at the new headquarters will include a branch of its popular preschool program, food distribution, nutrition and parenting workshops. Martha’s Table opened up 35 years ago, and now reaches more than 18,000 people through its food, education and thrift store programs with significant support from 18,000 volunteers every year. In 2015, Martha’s Table served more than 1 million meals, distributed free clothing and housewares to more than 10,000 neighbors in need, and provided education to more than 200 children and older youth.
The campus will also become home to Community of Hope and other complementary nonprofit organizations. The housing component will feature 125 affordable-rent 1-3 bedroom apartments and 42 market-rate 3-bedroom town homes.
Capital Impact contributed $5.9 million in New Markets Tax Credits (NMTC) toward the $29 million transaction. Other investors included Local Initiatives Support Corporation (LISC) and City First, with Morgan Stanley serving as the tax credit investor.
Increasing Access to Health Care
Among the highlights of its health care financing is the fact that Capital Impact made loans to three returning customers.
Capital Impact partnered once again with Ole Health in Northern California to enable the Federally Qualified Health Clinic (FQHC) to serve another 15,000 low-income patients. Project financing will support the ground-up construction of a 3-story, 30,000 sq. ft. clinic that will include 22 exam rooms, 9 dental chairs, a vision center and an in-house pharmacy. Specialty services will include pediatric, behavioral health, and women’s health providers.
Ole Health is the only FQHC in Napa County, where approximately 28% of residents live under 200% of the federal poverty level. One in four children, and one in six adults, living in Napa County are Ole Health patients. The facility serves a critical need, as no other pediatric practices in the county are currently open to uninsured children or those who use Medi-Cal. Ole is also the only Denti-Cal provider in the county.
Capital Impact supported the $30 million project with both debt and NMTC allocations. The debt was a $3 million leverage loan from Capital Impact’s Healthier California Fund as well as $6.9 million in New Markets Tax Credits allocations. The Nonprofit Finance Fund (NFF) also provided financing, with Chase Bank serving as the tax credit investor.
Capital Impact also worked with Unity Healthcare, a longtime FQHC borrower in Washington, D.C., on a two-part transaction that included a $4.8 million refinancing loan coupled with $2 million line-of-credit. This financing was urgently required when the financial institution that Unity had previously worked with announced it would no longer engage in nonprofit health care lending. Capital Impact’s ability to quickly fill this void once again demonstrated the importance that Community Development Financial Institutions (CDFIs) play in financing projects that traditional banks tend to avoid.
Unity has been the main health care provider for low-income and marginalized communities in Washington, D.C. Founded in 1985, Unity has grown from operating in a single homeless shelter to running programs out of 10 full clinics, 10 homeless health sites, 5 schools, and a mobile clinic. Unity also works with Washington, D.C.’s Department of Corrections to provide health care to all inmates in the D.C. prison system. In 2015, Unity served more than 100,000 patients, with 70% at income levels below 100% of the Federal Poverty Line.
Another returning borrower included La Maestra Family Clinic out of San Diego, California. Through a $650,000 loan from Capital Impact’s CPCA Ventures Loan Program, La Maestra is able to commence completion of renovations to one of its flagship facilities.
La Maestra will be adding 24 additional medical and behavioral exam rooms, as well as expansions to its first-floor walk-in clinic and pharmacy. These improvements will allow La Maestra to provide additional services, reduce patient wait times, and serve more than 15,000 additional patients annually at the site.
La Maestra began in the late 1970s as an immigration counseling center and later opened a health center in 1990 to focus on historically marginalized communities in San Diego County that would otherwise lack access to these services. They currently operate seven sites across San Diego County.
Just north of Dallas, TX, more than 1,200 patients will have access to quality care with the construction of a new 5,500 sq. ft. health center in the town of Denton. The eighth clinic of Health Services of North Texas (HSNT) will provide preventive and primary medical care; integrated behavioral health care; well child services; voluntary family planning; prenatal care and perinatal care; outreach and health education; and prescription assistance. Capital Impact provided a $2.5 million construction loan to support the project.
HSNT is the only FQHC serving Denton and Collin counties, with 35% of its patients at or below the federal poverty level and 85% at or below 200% of the federal poverty level. Nearly half of patients are medically uninsured. Five counties within HSNT’s service area are federally designated as Medically Underserved Areas. In 2015, 49% of patients were uninsured and 48% were on Medicare or Medicaid.
Providing High-Quality Education
Mastery Charter Schools, a nonprofit charter school network operating in Philadelphia, PA and Camden, NJ is working to renovate and improve four of its sites in Camden, NJ with financing from Capital Impact. This initiative will benefit the more than 2,250 students attending these schools.
Mastery is a nationally recognized leader in the “turnaround” education reform model, wherein a struggling school district turns over a specific school with a long history of failure to Mastery. Test scores in the turnaround schools have on average increased by 40% per grade over four years. In addition, there has been an 80% decrease overall in violent incidents at Mastery schools after their turnarounds. The school model is based on a rigorous curriculum, engaging instruction, grit, resilience, and growth mindset.
The $8.7 million transaction was made possible through Capital Impact’s use of the Bond Guarantee Program, an initiative of the U.S. Department of the Treasury’s CDFI Fund, which enables the organization to offer borrowers long-term financing at low fixed rates.
DC International School (“DCIS”) will be able to move into a new, permanent campus with $8 million in financing from Capital Impact as part of a larger $55 million project. DCIS is a high-performing charter school providing a multilingual education to 400 students in 6-8th grades, with plans to expand to 1,400 students in 6-12th grades. Roughly 50% of this socio-economically diverse student body qualify for free and reduced lunch (FRL).
This exciting project will allow the school to be part of a larger, mixed-use redevelopment of the Walter Reed Medical Center in Northwest Washington, D.C., while still remaining close to five bilingual charter elementary feeder schools. Several organizations supported this project, including Bank of America and the Low-Income Investment Fund (LIIF).
Based on high demand from parents, and limited strong educational options in the area, Impact Academy will open a new middle school to serve as a feeder school for its existing high school in Hayward, CA. Capital Impact provided $3.7 million to fund the second phase of a multi-phase project as the school continues to grow at a fast rate. The middle school is expected to create access for 360 new students.
Impact Academy has been in operation since 2007 and currently serves 465 high-school students. Approximately 60% of the students qualify for FRL, and has a much higher percentage of students who will be first generation college students. Since its first graduating class in 2011, their college acceptance has improved from 58% to more than 75%, and with the expansion to middle school, the administration is confident that this percentage will continue to increase. The Academy’s college persistence rate has also increased each year.
Impact Academy is run by Envision Education, a non-profit charter management organization that Capital Impact has partnered with several times.
Supporting another multi-phase charter school expansion project, Capital Impact provided $4.9 million in New Markets Tax Credits allocations, along with an $8.4 million construction loan, to support a permanent home for Montessori for All (MFA). This financing package expands on Capital Impact’s previous loan that helped launch Phase One of the project. This will allow the Austin, Texas charter school to continue its move from portables to a permanent campus, and grow its enrollment from 390 to 600 p8th-gradeugh 8th grade students.
MFA is a high-performing public Montessori school that draws from diverse socio-economic communities. When fully enrolled, approximately half of the students are expected to qualify for the FRL program. Since launching in 2015, MFA has offered a high-quality education model that compares favorably to 14 nearby elementary schools. MFA was given the highest rating in preparing students for a post-secondary education, and third-highest for student achievement and closure of performance gaps. MFA met the state’s higher academic accountability requirements in its first year and was given two out of three possible distinctions.
When construction is final, the campus will include 56 permanent buildings and 20 classrooms. The final campus will also house a teacher training center, multipurpose room, infant and toddler classrooms, student support facilities, and food service operations. Capital One and PeopleFund both supported the NMTC portion of the transaction, while a $3.5 million participation was sold to Raza Development Fund.
Longtime partner Pacific Charter School Development returned once again to work with Capital Impact to finance a ground-up construction of a new permanent home for Valor High School operated by Bright Star. The Los Angeles, CA school will serve 500 students, 86% of whom qualify for FRL, 13% of whom are English language learners (ELL) and 12% of whom are special education students. The school offers a strong college prep curriculum and outperforms both its local peers as well as many public schools across the state in some subjects.
Capital Impact joined with LIIF to serve as 50/50 co-lenders on the $9.2 million transaction to build the new 29,700 sq. ft. facility.
Scaling Affordable Housing and Housing Cooperatives
In an effort to ensure more inclusive and affordable housing options in a rapidly gentrifying area of Washington, D.C., Capital Impact provided a $3 million acquisition loan to Mass Place Apartments, LLC, a subsidiary of the NHT-Enterprise.
Originally constructed in the 1960’s, this 11-story building contains 160 studio and 1-bedroom units and is one of few affordable housing options downtown. Given the neighborhood dynamics, maintaining project affordability is paramount.
Beginning in the 1990s, the area has grown younger, whiter, and more affluent as residents move to the downtown area for access to jobs and amenities. Between 1990 and 2010, the African-American population dropped from 60% to just 19%, as long-time residents were displaced. The current racial disparity is especially stark as the median income for black households in the census tract is $15,751, while white households have a median income of $98,722. In addition to maintaining affordability, the property is highly accessible by public transportation, located blocks from all 5 Metro lines, grocery stores, banks, and restaurants.
Capital Impact joined with the LISC and Pembrook Capital on the $22.5 million transaction.
Capital Impact’s affordable housing work also included a cooperative component through its ongoing partnership with ROC USA dedicated to making possible resident ownership of manufactured home communities (aka “mobile home parks”) by helping people work cooperatively in purchasing the land their community sits on.
Capital Impact’s $1 million real estate acquisition loan will unite and preserve two communities now known as Woodbrook Wagon Housing Cooperative in Lakewood, WA. The combined community is home to 120 residents, 90% of whom live at 50% or below adjusted median income (AMI). Lakewood, WA is located 10 miles southwest of Tacoma, but is still considered a suburb of Seattle along the I-5 corridor, where housing costs are under severe pricing pressure.
Continuing Detroit’s Revitalization
In Detroit, Capital Impact is continuing its work with Midtown Detroit, Inc. to finish the renovation of a building that formerly served as a casket company. The four-floor building will include mixed-income rental housing, with 30% set aside for households at 60% average medium income (AMI). It will also house the Creative Company Accelerator, which will focus on promoting job creation opportunities for women and minority owned businesses. The ground floor will include a new restaurant, North Cookshop, being developed by 3mission design and development, owners of Midtown’s popular Jolly Pumpkin Brewery.
The $7.1 million project will be part of the ongoing “Seldon Innovation Corridor” and compliment other existing developments that will turn five neighboring vacant blighted parcels into inhabitable space. In addition to bringing more density to Midtown Detroit, the project compliments other nearby inclusive growth projects supported by Capital Impact including the Finn Apartments and Rainer Court.
Supporting Aging in the Community:
Capital Impact’s efforts to support dignified, community-oriented aging facilities continued with a $125,000 pre-development loan to Kansas Senior Living. SunPorch of Smith Center will become a new senior living community in Smith County, Kansas built on the Green House model. The four Green House homes will include 40 skilled nursing beds, a 24-bed assisted living facility (non-Green House), and 12 independent living apartments. An estimated 45% of residents are expected to be enrolled in Medicaid. It is also expected to fill a gap as Smith County Memorial Hospital will no longer operate a long-term care unit when it moves to a new site.
About Capital Impact Partners: Through capital and commitment, Capital Impact Partners helps people build communities of opportunity that break barriers to success. We deliver strategic financing, incubate new social programs, and provide capacity-building to help ensure that low-to-moderate-income individuals have access to quality healthcare and education, healthy foods, affordable housing, and the ability to age with dignity. A nonprofit community development financial institution, Capital Impact Partners has disbursed more than $2 billion to revitalize communities over the past 30 years. Our leadership in delivering financial and social impact has resulted in Capital Impact earning a “AA” rating from S&P Global “AA” and being recognized by Aeris since 2005 for our performance. Headquartered in Arlington, VA, Capital Impact Partners operates nationally, with local offices in Detroit, MI, and Oakland, CA. Learn more at www.capitalimpact.org.