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Training Module:Real Estate Restructuring

CDFI Deal Examples

This training contains general information only and Deloitte is not, by means of this training session, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This training is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

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CDFI Deal Example: FAME Assistance Corporation

Houses up to 30 small businesses in earliest stage in business incubators in Los Angeles

• Support many woman- and/or minority-owned companies that have been in business for approximately 2 to 5 years.

• On-site Tenant Program: includes individual consulting, monthly educational seminars, and certification assistance with MBE, DBE, WBE, 8A and 8C

• Off-site Tenant Program: individual consulting sessions, monthly educational seminars, weekly training, and additional assistance around: Contract procurement, Business Plan Creation, Business financials, and Marketing

Source: http://www.famecorporations.org/business.htm

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CDFI Deal Example: Building Hope

Building Hope - A Charter School Facility Fund

• Developed transitional or incubator-facilities to house charter schools during their first five years of operation by establishing a partnership with the District of Columbia's Office of the State Superintendent of Education (OSSE).

• Manages six such facilities for schools at a below-market price on an ongoing basis

• Continues to develop new sites for schools

Source: http://www.buildinghope.org/index.php?option=com_content&view=article&id=54

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• Partners with Commonwealth of Kentucky for neighborhood revitalization

• Leases office space to small businesses in small business incubators with prime office locations in Kentucky's two metropolitan cities - Lexington and Louisville

• Offers “Virtual Offices” such as phone and conferencing capabilities

CDFI Deal Example: Community Ventures Corporation

Source: http://www.cvcky.org/officespace.htmlhttp://www.cvcky.org/louisvilleofficespace.html

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CDFI Deal Example: Community Assets for People LLC

Repositioning Distressed Real Estate

Lease/Purchase Program – CDFI purchases or builds facility designed to the business' specifications and leases it back to the business with an option to purchase.

CAP offers commercial and manufacturing space to businesses below market rates.

“CAP provided financing for the building expansion and installation of solar panels at the Central Waters Brewery. The solar panels are expected to save more than $10,000 a year in space and water heating costs.”

http://www.capserv.org/cafp.html

Source: Interview with CAP and http://www.capserv.org/cafp.htm

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• Small Contractor Line of Credit Facility– 72% of the contractors work in Minority Communities– 51% are minority or women-owned

• Case Study – Charlie, a painter, never had more than $75,000 in revenues in his 10 years of business. He got an opportunity to paint two local schools for $200,000-- his largest contract by far– Detroit Development Fund gave him a $50,000 line of credit to bring on staff and to

purchase materials– Terms include: knowing who Charlie is working with and an assignment of the

contract to ensure the line of credit was paid first– Given the current instability of Detroit, The Fund will no longer finance contracts with

the City of Detroit

• Previously Shorebank Enterprise Detroit

CDFI Deal Example: Detroit Development Fund

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CDFI Deal Example: Bornstein and Pearl Food Processing Center• Redevelopment of 2-acre former Pearl Meat Factory in Dorchester, MA

• Fully-equipped, shared-use, commercial kitchen supporting

• start-ups

• established food production businesses.

• Dorchester Bay Econ. Dev. Corp. with CropCircle Kitchen as anchor tenant

• $1.7MM loan in 2012 from BCC’s Boston Community Loan Fund

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CDFI Deal Example: Union Crossing, Lawrence, MA• Southwick Mill complex along Merrimack River acquired by non-profit Lawrence

CommunityWorks in 2007 as part of Master Plan redevelopment

• Upper 3 floors of Building No. 9, now known as Union Crossing, renovated for adaptive-reuse as apartments, 100% of which are affordable

• Lower 2 floors of Bldg. No. 9 plus adjacent Dyeworks Building will provide > 81,000 sq.ft. of light industrial and office space post-renovation

• Boston Community Capital has provided > $5.6MM through various credit facilities, starting with a $492,000 predevelopment loan in 2011

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For further information, see the “Real Estate Restructuring” section of Virtual Resource Bank