View
5
Download
0
Category
Preview:
Citation preview
2009 NH&RA Annual Meeting
Measuring Community Benefit of NMTC Transactions
Joe WesolowskiMarch 11, 2009
2
Transaction Selection Process
NMTC Screening ApplicationDiscussion with Enterprise “Impact Market” leader
Project Ranking Worksheet
“Demonstration Project”
Internal Pipeline Review
Community Impact Assessment Completed
3
Transaction Selection
Is it a Qualified Low Income Community Business?
Does it meet the requirements of applicable Allocation Agreements?
Does it meet the investment guidelines for investors?
Financially Viable Structure
Strength of the Development Team
Importance to the city
“But for” test
4
Transaction Selection
Deal “Readiness”
Consistency with Network Advisory Board Feedback
Timing of closing relative to CDFI Performance rules
Size of the transaction vs. Cost to close
Geographic Concentration
COMMUNITY IMPACT
5
Impacts
IndividualJobs
Living Wages
Employee Benefits
Wealth Creation
Home Ownership
Training Programs
Access to Goods and Services
CommunityReduced Crime
Increased Revenue for State and Local Governments
Increase in Social Programs
Alleviation of Poverty
Closing the Affordability Gap
Women and Minority Ownership
Decrease number of individuals on Public Assistance
“Catalytic” Impacts
6
Impacts
Environmental Green Building (LEED)
Brownfields Cleanup
Saving Greenfields
Reduced CO2 Emissions
Individual Health Benefits (Water & Air Quality)
Renewable Energy
8
Rosa Parks School
Project was Key Element in Community Revitalization
Attached Boys and Girls Club
Jobs
Small Amount of City Revenue
Walking Distance to School
Community Use of Library and Computers
LEED Silver Rating
2007 Richard Riley Award
11
Columbus Housing Partnership - Columbus, OH
Project type: For-Sale HousingTDC $90,000,000QEI $9,500,000Phased Construction/Rehab ~ 700 affordable single family homes over 7 yrsAffordable to families earning less than 80% AMIQEI recycles > 9 timesCatalytic project; leverages city’s Home Again Program100 construction jobs Sponsored by Columbus Housing Partnership
12
East Baltimore Development, Inc.
Project is immediately adjacent to East Baltimore campus of Johns Hopkins:
Nation’s top-ranked hospitalHighly-regarded schools of medicine, public health, and nursingCountry’s largest recipient of NIH research fundingCity and State’s largest private employerOver 4,300 graduate students, post-docs, and research fellows
13
Massive disinvestment and property abandonment in community marked by an over 70% vacancy rate
Less than $4.0 million market valuation for 31-acres of real estate located in Phase I of project area
Crime rates, poverty levels, and lead poisoning rates significantly above the city and regional averages
Household income levels and educational attainment rates significantly below the city and regional averages
Long and complex “town/gown”relationship between the community and Johns Hopkins
East Baltimore in 2002
14
Over 2,200 new residential housing units targeted to a mix of incomes and households
Nearly 2 million square feet of new life science and other workplace space
Upwards of 8,000 new employment opportunities
Neighborhood retail stores and services
Community school campus
Intermodal transit station at Gay near Broadway
New parks integrated into neighborhood in support of schools, recreational trails and other amenities.
Scope of Development Activities
15
Community Development:
Master Planning“Clean and Safe” ActivitiesTransit-Oriented Development
Human Development:
Household Relocation Family ServicesEducational InitiativesFamily Resources CenterShared Equity Housing Fund
Economic Development:
Workforce DevelopmentEconomic InclusionBusiness Incubation
Real Estate Development:Property AcquisitionDemolitionInfrastructureConstructionProject Management
Programmatic Activities
Demonstrating Results:
Defining, Measuring and Reporting Post‐Development Community Impact
Virchow, Krause & Co., LLP + The Valued Advisor Fund
HOW IT W
ORKS
POST‐DEVELOPMENT COMMUNITY IMPACT ASSESSMENT
•Define what is to be measured•Project size, scope and land use•Access to capital•Serving LIC residents and Businesses•Economic Impact to the LIC
•Develop a method to measure•Area of impact and area of comparison•CDE/community assumptions•Required data•Constraints•Benchmarks
•Report results•Audience•Format•Updates
•Understand why and how the CDE invested in the project, in the LIC•Community context•CDE expectations and criteria for investment•CDE community impact requirements
INDICA
TORS O
F IMPA
CT POST‐DEVELOPMENT COMMUNITY IMPACT ASSESSMENT
Depending upon size, scope and land use of the completed project, CDEs require evaluations of impact typically within three categories:
Access to Capital
INDICA
TORS O
F IMPA
CT POST‐DEVELOPMENT COMMUNITY IMPACT ASSESSMENT
Depending upon size, scope and land use of the completed project, CDEs evaluate impact in three categories:
Serving LIC Residents
and Businesses
Access to Capital
INDICA
TORS O
F IMPA
CT POST‐DEVELOPMENT COMMUNITY IMPACT ASSESSMENT
Depending upon size, scope and land use of the completed project, CDEs evaluate impact in three categories:
Economic Impact
To the LIC
Serving LIC Residents
and Businesses
Access to Capital
CASE STU
DY: SECO
ND LIN
E STUDIOS
POST‐DEVELOPMENT COMMUNITY IMPACT ASSESSMENT
Second Line Stages Studios, New Orleans, LA
•The Valued Advisor Fund and other investors and partners provided an $8 million dollar NMTC allocation in December 2008.
•This was an example of the leveraging of public and private resources for economic development in a highly distressed LIC
• The QALICB produces short and full length feature films and television productions
• This project is unique in that it involves the restoration of the historic Toye Cab Company building into a LEED certified structure and provides the first fully “Green” film studio in the United States utilizing full recycling of production materials and materials utilized on sets and in the various areas of the site.
• Second Line has also linked with the Kingsley house to provide apprenticeships to local youth in the film industry helping to inspire hope and bring new opportunity into this LIC corridor.
•Understand why and how the CDE invested in the project, in the LIC
•Define what is to be measured
HOW IT W
ORKS : SECO
ND LIN
E STAGES
POST‐DEVELOPMENT COMMUNITY IMPACT ASSESSMENT
Access to Capital
Serving LIC Residents
and Businesses
Economic Impact
To the LIC
HOW IT W
ORKS : SECO
ND LIN
E STAGES
POST‐DEVELOPMENT COMMUNITY IMPACT ASSESSMENT
•Develop a method to measure
•Area of impact
•Comparison neighborhood or comparison over time
•Constraints
•Benchmarks
Access to Capital: Leveraging Other Public and Private Investment
Serving LIC Residents and Businesses:Creating Environmentally Sustainable Outcomes
Economic Impact to the LIC:Commitment to Training and Hiring LIC Residents
REPORTIN
G RESU
LTS POST‐DEVELOPMENT COMMUNITY IMPACT ASSESSMENT
•Report results
•What factors created impact?
•Who was served?
•How do we know?
•Was the project successful? What is success?
Constraints must be addressed:•Causality•Timing•Data•Benchmarks
Measuring post-project impactis important:
•Stakeholders need to know•Funders need to know•CDEs need to know•Informs future development plans
•Thank you for your continued interest in supporting our nation’s low- income communities.
•For additional information or discussion please feel free to contact me at:
•Terri Preston-Koenig
The Valued Advisor Fund
(312) 307-9550
tpreston-koenig@valuedadvisorfund.com
POST‐DEVELOPMENT COMMUNITY IMPACT ASSESSMENT
Metrics in Community Metrics in Community Impact AnalysisImpact Analysis
RealPropertyRealPropertyResearchResearchGroupGroupWashington / Baltimore Washington / Baltimore ••
AtlantaAtlanta
NH&RA’s 2009 Winter NMTC SymposiumMarch 11, 2009
Measuring the Community Benefit of NMTC Transactions
James Riggs
RealPropertyResearchGroup
Telling the StoryTelling the Story……Over $12.6 billion QEIs made into CDEs
Nearly $9 billion QLICIs made through FY 2007
$5.9 billion invested in LIC Real Estate Projects
• over 46 million square feet constructed or rehabilitated
• 210,000 construction jobs
$3.0 billion invested in LIC operating businesses
• over 45,000 full time equivalent jobs created or retained
Source: http://www.cdfifund.gov/docs/nmtc/2009/2009%20NMTC%20Workshop%20Materials.ppt
RealPropertyResearchGroup
Community ImpactCommunity Impact
Since inception, community impact has been the centerpiece of the NMTC program
The presentation of historic and projected community impact with relevant and relevant and quantifiable dataquantifiable data is a necessary component of a successful NMTC application
The importance of community impact will only increase
RealPropertyResearchGroup
Increased TransparencyIncreased TransparencyThe Obama administration’s “change of tone in Washington”includes an increase in accountability and transparencyaccountability and transparency
Stimulus Bill + Record Deficit Spending =
A heightened awareness of how A heightened awareness of how taxpayer dollars are spenttaxpayer dollars are spent
See www.recovery.gov
RealPropertyResearchGroup
2009 NMTC Application 2009 NMTC Application Impact GoalsImpact Goals
Create or maintain jobs for LI persons or residents of LICs
Increase wages of LI persons or residents of LICs
Finance or assist businesses owned by or serving residents of LICs
Finance or assist minority, women or LI person-owned businesses
Finance or assist organizations that provide childcare, healthcare, educational or other benefits
Facilitate wealth creation or asset accumulation
Provides goods and services to LI persons or residents of LICs
Create environmentally sustainable outcomes
Finance real estate projects which provide rent reductions or flexible lease provisions to businesses
RealPropertyResearchGroup
The NMTC program supportsThe NMTC program supportsReal estate development projects
• Shopping centers, office buildings & residential
Community facility projects• Charter schools, community & cultural centers
Operating businesses• Manufacturers, retail stores & restaurants
Projects in cities, suburbs, small towns and rural communities throughout the country
Different types of projects generateDifferent types of projects generatedifferent types of impacts different types of impacts
in different types of communitiesin different types of communities
RealPropertyResearchGroup
Spectrum of ImpactsSpectrum of Impacts
Economic• Measured by change in economic output, employment
and income
Fiscal• Measured by change in local government revenue and
expenditures
Social• Measured by change in service delivery capacity
Green• Measured by the extent to which a project meets
industry standard benchmarks for Green building (ie, LEEDS)
RealPropertyResearchGroup
Understanding ContextUnderstanding Context
Insight of local context is the key to a Insight of local context is the key to a projectproject’’s impact on its communitys impact on its community
Project and Site Analysis
Neighborhood and Demographic Characteristics
Local and Regional Economic Conditions
Analysis of local context is an Analysis of local context is an ““on the on the groundground”” exercise exercise
RealPropertyResearchGroup
Economic ImpactsEconomic Impacts
Measured by change in economic Measured by change in economic output, employment and incomeoutput, employment and income
The NMTC program is a jobs program• Impacts from past performance and projected
impacts are scored in part on the jobs created or maintained, specifically for low income persons
Impacts during construction and operations are measured separately
• Temporary vs permanent impacts
RealPropertyResearchGroup
Regional MultipliersRegional MultipliersRegional multipliers form the basis for most economic impact analysis
Multipliers describe the relationship between different sectors in an economy
An increase in output in one sector (direct impact) increases demand for output in other sectors (indirect impact)
40¢
16¢
6¢
60¢
24¢
10¢
4¢
1¢3¢
$1
2¢
Initial 1 2 3 4 5
Leakage
Local Spending
Initial Impact:
Indirect Impact:
Total Impact:
$1.00
.40
.16
.06
.03
.01$1.66The Indirect
Impact
Initial Change – the Direct Impact
RealPropertyResearchGroup
$1M Increase in $1M Increase in Construction SpendingConstruction Spending
Multipliers are used to measure change in output, income and employment
Impact of $1,000,000 Increase in Construction Spending
Sector Output IncomeEmployment
(jobs)Resource Extraction $13,900 $1,500 0Construction $1,004,700 $200,500 4Manufacturing $51,400 $6,500 0Transporation/Trade $154,800 $33,800 1Services $435,900 $88,500 2TOTAL $1,660,700 $330,800 8
Regional Multipler 1.6607 0.3312 8.0945Source: US Dept of Commerce, Bureau of Economic Analysis; RIMS II I-O Model, Suburban Maryland, 2006.
RealPropertyResearchGroup
IMPLAN IMPLAN vsvs RIMS IIRIMS IITwo standard Input-Output models are used to estimate job creation
• RIMS II or IMPLAN
RIMS II provides only multipliers• Analyst is responsible for input of all data• Requires thorough understanding of the regional
economy
IMPLAN provides a “blackbox”• Analyst inputs only project variables• Allows for estimating impact without understanding
underlying data• Offers more detailed industry and geographic
disaggregation
RealPropertyResearchGroup
Fiscal ImpactsFiscal Impacts
Measured by the estimated change to Measured by the estimated change to local local govgov’’tt expenditures and revenueexpenditures and revenue
Temporary impacts include permit and utility connection fees as revenue
Long-term impacts include new taxes directly resulting from the project (property, income, sales, occupancy, etc) net of development incentives
RealPropertyResearchGroup
Fiscal ImpactsFiscal Impacts
Direct and indirect employment and income Direct and indirect employment and income impacts also generate fiscal impactimpacts also generate fiscal impact
Indirect fiscal impacts are measured on a per unit or per capita basis (jobs and population)
This analysis takes into account general fund revenue and expenditures
• Revenue from traffic tickets, user fees, business taxes, etc.• Expenditures for general gov’t, police, fire, courts, etc.
Analysts should also address fiscal impact on schools for projects with a residential component
RealPropertyResearchGroup
Social ImpactsSocial Impacts
Measured by change in capacity for Measured by change in capacity for social servicessocial services
Analyst should understand community context and document need for additional capacity
• Charter school project > Document poor performance at area schools
• Job training center > Document high unemployment, underemployment or ongoing structure changes in the local economy
• Community center > Document a special needs population and/or lack of facilities
RealPropertyResearchGroup
Social ImpactsSocial ImpactsSocial impacts of similar projects are not Social impacts of similar projects are not
likely to be comparablelikely to be comparableStudies have shown that some job training programs provide graduates with increased employment opportunities and higher incomes
• Job training programs in a different context or offering different programs are not likely to produce comparable results
Charter schools can help stabilize neighborhoods by retaining middle income households, increasing property values and lowering crime
• Not all charter schools have similar success and are unlikely to impact neighborhoods uniformly
RealPropertyResearchGroup
Green ImpactGreen ImpactMeasured by the extent to which a Measured by the extent to which a
project meets Green building industry project meets Green building industry benchmarksbenchmarks
Site Selection and Site Design
Water Efficiency
Energy Efficiency
Reuse and Recycling of Materials
Indoor Air Quality
Innovative Design
or other similar guidelines
RealPropertyResearchGroup
Green ImpactGreen ImpactSite design can have a significant impact on Site design can have a significant impact on
surrounding low income neighborhoodssurrounding low income neighborhoodsDevelopment density and community connectivity
Brownfield redevelopment
Support for alternate modes of transportation
Open space preservation
Storm water management
Heat-island effect mitigation
Reduced light pollution
RealPropertyResearchGroup
Telling the story...Telling the story...Impact studies have multiple uses beyond that of Impact studies have multiple uses beyond that of
required backup for a NMTC applicationrequired backup for a NMTC applicationA pre-transaction analysis will set the framework for future analysis of post-transaction impacts
Help CDEs evaluate their portfolio
Impact studies can help generate local support for a project
Lenders can utilize impact studies to document CRA requirements
Community impact analysis tells the Community impact analysis tells the whole story whole story
Recommended