Capital Impact Partners Announces $45 Million-Plus in Fourth Quarter Lending
Detroit Revitalization, Community Health Centers and New Markets Tax Credits Are Key Elements of Project Financing in Underserved Communities
Arlington, VA (February 12, 2015) – Capital Impact Partners announced today that its 2014 fourth quarter lending to projects in underserved communities topped $45 million. Highlights of this financing included continued Capital Impact leadership in funding Federally Qualified Health Center (FQHC) projects to increase the availability of healthcare to low income residents, supporting inclusive housing growth in Detroit by closing the first loan through the organization’s partnership with JPMorgan Chase & Co., and leveraging New Markets Tax Credits (NMTC) to support a variety of projects.
These loans support a number of social impact goals that are at the core of Capital Impact’s mission, including improvement of access to healthcare services, education and healthy foods; inclusive and affordable housing; and dignified aging support.
“We ended the year strongly by closing a number of loans that will have a positive impact on underserved communities across this country,” said Terry Simonette, president and CEO of Capital Impact Partners. “This work further demonstrates our ability to leverage investments from such partners as JPMorgan Chase and The California Endowment, as well as the U.S. Treasury’s Community Development Financial Institution Fund, to ensure that good projects are able to access the financing they need.”
Capital Impact increased its presence in Detroit by closing the first loan made through the Detroit Neighborhoods Fund. Capital Impact and JPMorgan Chase first announced the launch of their $30 million fund in July 2014 as part of a larger effort to support the revitalization of Detroit.
At $23.5 million, fourth quarter lending to community health centers around the country represented more than half of Capital Impact’s total loan volume and further distinguished the organization as the leading community development financial institution (CDFI) in this sector. In addition, Capital Impact continued to demonstrate its ability in leveraging tax credit incentives to spur investments in underserved communities by the more than $26 million of its fourth quarter closings that included NMTC awarded through the U.S. Treasury’s CDFI Fund.
“While there is a lot of debate on Capitol Hill about the need for New Markets Tax Credits, we are plainly demonstrating their importance by showing how they allow us to underwrite projects that provide critical services to low-income people,” said Scott Sporte, chief lending officer for Capital Impact Partners. “Beyond these social impacts, this program allows us to catalyze millions of dollars in private capital. These are not handouts, but rather a cost-effective means to build strong, vibrant communities of opportunity.”
In the fourth quarter of 2014, Capital Impact Partners worked with borrowers to close the following transactions:
Expanding Community Health Centers Nationwide:
Clinicas de Salud del Pueblo, Inc (CDSDP) is a non-profit FQHC that provides a variety of medical, dental and health services to low- and moderate-income Hispanic families in California’s Imperial County and the southeastern Coachella Valley, east of San Diego. Through the CPCA Ventures Loan Program managed by Capital Impact, CDSDP received a $420,000 loan to improve its services by upgrading and acquiring new information technology hardware and software systems.
Clinica de Salud del Valle de Salinas (CSVS) is a Salinas, California-located borrower that has been working with Capital Impact since 2004.The most recent $3.8 million loan will help CSVS renovate a vacant building that will become a new medical and dental clinic supporting an estimated 28,000 medical visits annually. The vast majority of CSVS patients are low income farm workers and their families. It is estimated that about 79% of low-income patients in CSVS’s service area are currently not being served and this project will help close that gap.
Health Mobile is a non-profit organization that operates five mobile vans providing medical and dental services to rural and school-based communities in and around San Jose and Los Angeles, Calif. The $100,000 loan will support efforts to expand their service area and transition to more stable sources of revenue.
Hudson River Health Center secured $6 million in NMTC financing from Capital Impact as part of a larger financing package to rehabilitate and expand its flagship health center in Peekskill, New York. The number of patients served will increase significantly, to 72,000 visits per year. Services will include internal medicine, behavioral health and dental services, and result in the creation of 13 full-time jobs.
LifeLong Medical Care operates three small facilities in and around the “Iron Triangle” neighborhood of Richmond, California, with no capacity for expansion. Through a $900,000 loan from Capital Impact and The California Endowment, Lifelong financing will be able to consolidate and expand its operations into a new primary-care clinic – LifeLong Richmond Harbour Way Health Center. The new clinic will double current patient visits, to 30,500, and provide primary care, behavioral health and wellness services.
“We are excited to play a role in revitalizing a formerly rundown street corner in the midst of a bustling low-income neighborhood in Richmond,” said Nance Rosencranz, Lifelong Medical Care director of Strategic Planning & Business Development. “LifeLong’s Richmond Harbour Way Health Center offers new access to health services, and a welcoming outdoor park for patients and neighbors,”
Wake Health Services, Inc. (WHSI) is the largest FQHC in the Raleigh, North Carolina, metropolitan area, providing primary care and family dental services to approximately 17,000 patients per year. With $5 million in NMTC allocations contributed by Capital Impact toward the $11.4 million project financing package provided by the Healthy Future’s Fund, WHSI will soon consolidate and expand two existing clinics into a new 35,000-square-foot facility. The expansion will allow WHSI to repurpose the existing facility on site to create centralized space for its administrative offices and meeting space available for use by community members and organizations.
The WHSI project is located in a federally designated Medically Underserved Area and “highly distressed” census tract, with a 15.5% unemployment rate and a 27% poverty rate. In addition, WHSI’s services are particularly critical in a state that has opted out of Medicaid expansion, and will provide a lifeline to patients ineligible for either Medicaid or federal subsidies to purchase private insurance.
Walnut St. Community Health Center (WSCHC) provides primary care and dental and mental health services to 7,000 patients per year. The $7.22 million NMTC transaction will allow WSCHC to move from its cramped 8,000-square-foot facility in Hagerstown, Maryland to a newly renovated 33,000-square-foot space. This will allow WSCHC to expand health care access in this federally designated Medically Underserved Area, “highly distressed” census tract by doubling its patient base and opening an in-house pharmacy to provide low-cost prescription medicine.
Supporting Inclusive Growth in Detroit:
Through Capital Impact’s financing work with The Roxbury Group, Detroit will once again see activity at its iconic “Hammer and Nail” building. This $500,000 loan jumpstarts renovation of the Professional Plaza Tower. Once slated for demolition, the building will now become a mixed-use development with retail spaces and 72 housing units. In addition to increasing the economic vibrancy of Midtown Detroit, the deal demonstrates Capital Impact’s commitment to working with partners that are interested in saving historical properties.
Capital Impact also closed the first loan made through its JPMorgan Chase supported Detroit Neighborhoods Fund with $4.5 million in financing for Rainer Court. PK Development Group will soon begin renovation of this 1920s building in Midtown Detroit, creating market-rate housing and retail space that will attract students and young professionals back into the city’s core.
Vacant for many years, The St. Regis House will also offer needed housing in the New Center area of Detroit as a result of a $3.6 million loan closed with Joe Barbat and Dave Ebner. Rents are expected to be set at market-rate prices as well as rates that are affordable for low-income households. The project will help expand economic revitalization beyond Detroit’s central neighborhoods and is expected to create 100 temporary and 17 full-time jobs.
Furthering Education & Job Creation:
Capital Impact continued its relationship with Equitas Academy Charter Schools to support the building of a permanent middle-school facility. The $8.2 million NMTC financing package was put together with ExEd and Pacific Charter School Development and included a $3.7 million loan from Capital Impact. This loan will allow Equitas to provide an education for K-8 students in Pico Union, a primarily Latino neighborhood of Los Angeles. The middle school will serve 350 students, 94% of whom qualify for free or reduced-price lunches.
“We thank you for all your work in making it possible for a new middle school space within walking distance of our students’ homes. It is a dream come true and our students most certainly deserve this amazing new place,” said Malka Borrego, founder and CEO of the Equitas Academy Charter Schools.
Job Options, Inc. is a San Diego-based not-for-profit company that places professional service personnel, many of whom have severe mental, physical or psychological disabilities, in basic service jobs. Capital Impact’s $1.2 million 6-month non-revolving line of credit will support the company’s continued operations as it helps provide jobs to underserved individuals.
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About Capital Impact Partners: Capital Impact Partners transforms underserved communities into strong, vibrant places of opportunity for people at every stage of life. 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 health care 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 last 30 years. Headquartered in Arlington, Va., Capital Impact Partners operates nationally, with local offices in Detroit, Mich., and Oakland, Calif. Learn more at www.capitalimpact.org
