ARLINGTON, Va., Sept. 20, 2018 /PRNewswire/ -- Capital Impact Partners announced today that it has received $3.7 million in grants from the U.S. Department of the Treasury's Community Development Financial Institutions Fund (CDFI Fund) to increase its mission-driven lending and investment efforts in low-income and economically distressed communities. Capital Impact Partners will use this funding to expand financing activity in Detroit to further its inclusive growth strategy in the city, as well as support for healthy food-related projects delivering social and economic impact across Michigan more broadly.
"We have been working in Detroit for more than a decade to help ensure that its residents have equitable access to high-quality services that foster good health, economic opportunity, and interconnectedness. This funding from the CDFI Fund supports our continued vision for the city by allowing us to jumpstart development in areas of the city that have not seen investment since the 1970s," said Ellis Carr, president and CEO of Capital Impact Partners. "We are grateful for the leadership of the CDFI Fund in not only helping Capital Impact, but also the CDFI industry as a whole address some of the most pressing social and economic justice issues facing low-income communities."
The CDFI Fund grants received by Capital Impact are made up of two parts. The first is the Financial Assistance (FA) award given to build the capacity of Community Development Financial Institutions (CDFIs) to help sustain and expand their financial products and services.
The second is the Healthy Food Financing Initiative (HFFI) award, which serves as a supplemental funding opportunity for eligible CDFIs that expressed an interest in expanding their healthy food-focused financing activities and also received an FA award.
For the FY 2017 CDFI Program round, Capital Impact Partners is one of only 14 CDFIs that received both FA and HFFI grants, out of a total of 432 applicants.
Capital Impact will use its $700,000 FA award to leverage other private and philanthropic capital investments and expand financing for mixed-income housing and commercial space in key corridors of Detroit that have seen virtually no new investment activities in decades. In particular, Capital Impact will focus on smaller projects that larger financial institutions deem too risky for traditional financing.
Capital Impact's overarching investment goal is to boost residents' economic mobility in targeted neighborhoods by increasing density and income diversity. Since 2006, Capital Impact has invested nearly $200 million in Detroit, with a majority of that focused in the city's core neighborhoods. This additional funding will allow the organization to expand revitalization efforts by moving into new areas of the city that need the support of mission-driven lenders.
The $3 million HFFI grant that Capital Impact received will be used to support innovations in the healthy food sector that help eliminate food deserts in urban and rural areas. In particular, Capital Impact will leverage these funds to build on its Michigan Good Food Fund work to support healthy food enterprises throughout Michigan. The range of targeted sectors includes independent grocers, local wholesalers, food hubs, processors, and mobile fresh food marts and farm stands.
In its press release about the awards, CDFI Fund Director Annie Donovan noted that "[t]he FY2018 CDFI Program and Native American CDFI Assistance Program awardees will provide vital financial services and lending to low-income communities nationwide. The awards will also benefit Native Communities, areas of persistent poverty, and individuals with disabilities."
For the FY 2018 CDFI Program round, the CDFI Fund awarded $165 million in Financial Assistance and Technical Assistance to 264 organizations in 45 states, the District of Columbia, and Puerto Rico. In addition, the CDFI Fund awarded $22 million to 14 CDFIs through the Healthy Food Financing Initiative Financial Assistance awards (HFFI-FA), as well as $5 million to 15 CDFIs through the Disability Funds Financial Assistance awards (DF-FA), a supplemental program designed to help CDFIs finance projects and services that will assist individuals with disabilities.
Since its creation in 1994, the CDFI Fund has awarded over $1.96 billion in FA and TA awards through the CDFI Program. Through HFFI-FA, the CDFI Fund has provided $164 million in awards to CDFIs.
Building Communities of Opportunity in Detroit
Capital Impact has previously used its HFFI and FA funding from the CDFI Fund to advance its inclusive growth strategy in Detroit. Examples include:
Capital Impact's focus on inclusive growth continues in Detroit with the Coe at West Village development. This mixed-use development has created 11 new row houses, space for two retail businesses, and several jobs. In addition, the development has created three units of affordable housing, rented at 80 percent of AMI in a neighborhood where there are few housing options for lower-income residents. Capital Impact supported this investment through two loans totaling $2.6 million, one of them through our $30 million Detroit Neighborhoods Fund.
The Avenue of Fashion was once a bustling and vibrant neighborhood within Detroit, but has seen years of blight and retail flight. Through our Detroit Neighborhoods Fund, Capital Impact provided $4.7 million in loans to support the construction of 7.Liv, a mixed-use residential space that has created affordable housing in the community and feature retail space for Detroit businesses. This development is the first of its kind in the neighborhood, bringing together three buildings to create 10 units of housing and 20,000 sq. ft. of retail space. Funded in partnership with Invest Detroit, the Michigan Economic Development Corporation, and the Detroit Economic Growth Corporation, and developer Matt Hessler, this investment creates density and economic opportunity in a community on the rebound.
Midtown Fresh (formerly Park Street Market) brings high-quality healthy food to a severely distressed part of Kalamazoo, Michigan, drying up the food desert that once existed. Filling the void that another grocery left, Midtown Fresh serves an area with about 14,149 people. In addition to infusing healthy food into the community, this investment creates jobs for community members in an area that has suffered from high rates of unemployment. Capital Impact participated in an $8.2 million dollar loan, including $2.7 million in New Markets Tax Credits.
Capital Impact also provided financing to support a more traditional mixed-income housing development near Grand Rapids, MI. Diamond Place, which will convert a brownfield industrial lot to a mixed-use development near the city's downtown area, will include 175 units of mixed-income housing. Ninety-eight of those will be reserved for people living at or below 60 percent of the Area Media Income ($32,000 for a family of four) and nine units for those living below 80 percent ($51,000 for a family of 5). Retail space comprising 22,000 square feet will house a new grocery store. Capital Impact partnered with JP Morgan Chase; Cinnaire, a local CDFI partner; and the State of Michigan to finance this $40 million project. Capital Impact provided a $6.4 million leverage loan into a $9 million New Market Tax Credit financing package.
About Capital Impact Partners:
Through capital and commitment, Capital Impact Partners helps people build communities of opportunity that break barriers to success. We champion social and economic justice for underserved communities to foster good health, economic opportunity, and interconnectedness. Through mission-driven lending, incubating social impact programs, impact investing, and policy reform we partner with local communities to create equitable access to health care and education, healthy foods, affordable housing, and dignified aging for those most in need. We have disbursed more than $2.5 billion to revitalize communities over the past 35 years. Our leadership in delivering financial and social impact has resulted in Capital Impact earning a "AA-" rating from S&P Global 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.
SOURCE Capital Impact Partners