VCDC // Annual Report 2011

VCDC

Investing with

Purpose,

2011 Annual Report

Partnering with Trust

VCDC

1

Recently, I was visiting with a potential new investor. After we talked about the performance of VCDC’s portfolio, he asked, “What’s your secret sauce? What enables you to consistently deliver good results for your investors?” I paused. This was an open-invitation to restate VCDC’s selling points. So I told him: there is no secret sauce, but there is an explanation.

A review of 2011 affirms, as it has for 22 years, that at the center of VCDC’s success is our mission. We are accountable for the success of the partners, the partnership, and the project. This is how we achieve our mission and it works. In 2011, despite the challenges faced by the housing and financial markets:

• VCDC raised $26,797,000 in equity and closed nine projects, which provides housing for 281 individuals and families.

• Our portfolio includes 122 properties and continues to perform well.

• Our overall occupancy stays between 93% and 95%, and debt coverage on a portfolio basis exceeds 1.48.

• Properties that successfully exited earlier funds are positioned to meet the needs of their communities long into the future.

We work hard to make sure our projects start strong and stay strong. We get involved with project sponsors early in the development process and remain involved through the life of the project to ensure that everyone is successful.

We care about the communities we serve.We work with local organizations to create investments that make a strong impact on their communities and the Commonwealth. Recently, we established a partnership with the Federation of Appalachian Housing Enterprises (FAHE), which includes communities in Kentucky and will soon include Tennessee. And look for our offering of a Historic Equity Fund to expand our tools to help our communities.

VCDC is successful because we have stayed true to our mission. It’s not as easy as having a “secret sauce,” but it’s been the source of our success for 22 years and will continue to be. We provide affordable housing, revitalize Virginia’s communities and serve special-needs populations by “acting as a catalyst for profitable private sector investments” and by ”empowering non-profits and other providers.” Simply put, we work with local groups to help them meet community needs.

Our success is due to hard work, to staying true to our mission and to the support of our partners. We look forward to working with you to create success in 2012, 2013 and beyond.

L e t t e r f r o m o u r C e o

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B o a r d o f d i r e C t o r s& s ta f f

Board of DirectorsDouglas W. Densmore, Chairman

Attorney, LeClairRyan

David K. Boyer, Jr. CEO, GlobalWatch Technologies

Thomas F. CherryExecutive Vice President,

Chief Financial Officer and Secretary, C&F Financial Corp.

Kenneth N. DanielsProfessor of Finance, Virginia Commonwealth University

Laura N. DupuyExecutive Director, Lynchburg Neighborhood

Development Foundation

Charles R. Henderson, Jr.President of Hampton Roads Market, Bank of America

Barry M. KornblauPresident, Summit Realty Group, Inc.

John C. Purnell, Jr.Retired (formally Executive Director of

Friends Association, Children in Richmond)

Jeff D. Smith, IIIPresident, The Smith Group, Inc.

John P. SalopSenior Vice President and Senior Credit Officer,

BB&T’s Northern Virginia Region

Sara Redding WilsonDirector of the Department of Human Resource Management,

Commonwealth of Virginia

StaffRalph H. B. Nodine

President & CEO

Surajat “Bisi” Ade-SaluAsset Management Portfolio Director

Steven BleileClosing Development Officer

Graham DriverDirector of New Markets Tax Credits & Project Development Advisor

Leslie FlahartInformation Services Manager

Earl HowertonConstruction Specialist

Joseph JonesEquity Funds Senior Analyst

Olivia JonesFinancial Analyst

Tera LockleySenior Asset Management Portfolio Director

George McDowellStaff Accountant

Mia MatternDirector of Asset Management

Jeffrey Michael MeyerProject Development Advisor

Linda MossCompliance Management Director

Tyler NicholsDirector of Multifamily Development

Donna SchurmanAdministrative Specialist

Gary D. SchwamChief Financial Officer

Chris SterlingProject Development Advisor

Dan TatarVice President of Equity Investments

Arild TrentDirector of Investor Relations

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Estimated Economic ImpactOne-Time Benefits:

Total Value of Construction: $47,215,170

Local Business Income: $5,806,205

Local Wages and Salaries: $24,735,229

Total Local Income from Construction: $30,541,435

Taxes and Fees from Construction: $3,618,109

Local Jobs: 368

Annual Benefits

Total Additional Household Income: $8,263,980

Total Addition Income to Local Businesses and Employees: $5,210,361

Total in Taxes and Revenue to the Local Government: $1,461,733

Jobs Supported: 112

This indicator measures the total economic impact of a housing development project as each dollar spent on construction or rehabilitation flows through the local economy. It traces the original investment through the purchase of goods and services by the developer, construction workers, residents, and the local government.

It is based on the N-BEST Model Created by Michael Collins for the NeighborWorks Campaign for Home Ownership. The methodology derives multipliers from the National Homebuilders Association’s 2002 analysis, “The Local Impact of Homebuilding in Average City, USA.”

The results should generally be considered conservative.

Communities Impacted

Angel Court• King George, VA• 36 jobs created

Beckstoffer’s Mill Lofts and Apartments

• Richmond, VA• 31 jobs created

The Crossings at 4th and Preston

• Charlottesville, VA• 64 jobs created

Heron’s Landing• Chesapeake, VA• 69 jobs created

Jefferson Union• Wytheville, VA

• 30 jobs created

Mill Run• Belle Haven, VA• 32 jobs created

Russell School• Lexington, KY

• 48 jobs created

Toms Brook School• Toms Brook, VA• 26 jobs created

St. Bartholomew Senior• Louisville, KY

• 28 jobs created

e C o n o m i Ci m pa C t

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Hampton RoadsGiving vets more to come home to Cedar Grove Apartments, sponsored by Virginia Beach Community Development Corporation (VBCDC), will be the first permanent supportive housing development for homeless disabled veterans in Virginia’s Hampton Roads region.

Cedar Grove will include 32 affordable, fully furnished, universally designed, EarthCraft Virginia™-certified units featuring geothermal heat pumps. The project design includes an organic garden, community room, computer lab, fitness center, patios, and balconies. Cedar Grove will also feature 16 apartments that will be fully accessible to residents with disabilities.

In addition to affordable housing, VBCDC and the Hampton Veterans Center will provide veterans with case management services. And a van, donated by a local car dealership, will transport residents to community resources and benefit offices. This is VBCDC’s second tax credit development in partnership with VCDC.

$6,613,000: Total development cost$3,500,000: Expected equity contribution, Housing Equity Fund of Virginia XV, L.L.C.

WythevilleTransforming blight to brightA site long-occupied by two abandoned houses and a vacant lot now boasts housing with colorful hardiplank exteriors, bamboo flooring, and open floor plans. And each of the 24 households enjoys landscaped grounds and striking views of the Blue Ridge Mountains.

Jefferson Union Apartments, sponsored and managed by Wytheville Redevelopment and Housing Authority (WRHA), has transformed an entire residential block in the town of Wytheville.

The one- and two-bedroom apartments are universally designed and EarthCraft Virginia-certified. Jefferson Union Apartments is WRHA’s third Low-Income Housing Tax Credit (LIHTC) property developed in partnership with VCDC.


VCDC creates productive investment opportunities that benefit diverse locations and people—urban to rural, working families to homeless individuals.

a f f o r d a B L e H o u s i n g :

“ We are so proud and grateful to be able to provide affordable housing and services to veterans who have given so much to all of us and to our country.”

Mary Kay Horoszewski Executive Director Virginia Beach Community Development Corporation

“ Because of the financing package WRHA was able to secure, we were able to construct this low-volume, yet extremely high-quality apartment community and maintain very affordable rents. One of our residents said, ‘It would take a SWAT team to move me out of here!’ This gentleman has no legs. He said that he didn’t know what living was until he moved to Jefferson Union.”

Randy Martin Executive Director/CEO Wytheville Redevelopment and Housing Authority

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Bu i Ld ing B enef i t s aCross tHe s tate

ChesapeakeHousing that can end homelessnessHeron’s Landing is being embraced as a regional solution to end homelessness by Chesapeake and the surrounding localities of Portsmouth, Norfolk, Virginia Beach, and Suffolk. The five localities will provide project-based Section 8 subsidies for a minimum of ten years.

Heron’s Landing SRO (Single Room Occupancy) is sponsored by Virginia Supportive Housing (VSH) and will provide 60 newly constructed efficiency-style apartments for formerly homeless individuals. In addition, Heron’s Landing offers comprehensive supportive services to help residents stabilize and improve their health, incomes, and housing.

This is the fifth SRO facility that VSH and VCDC have developed in partnership.

• All apartments will be fully furnished.

• Six apartments will be fully accessible to persons with mobility impairments; two apartments will be accessible to those with sight and hearing impairments.

• The design will be EarthCraft Virginia™-certified and feature photovoltaic panels, structural insulated panels, and a solar thermal hot water system.

• The building includes laundry facilities, a community room with outdoor patio, a computer lab, and housing manager’s apartment.


King George CountyLiving green, inside and out Angel Court, in King George County, features barrier-free living and a community courtyard that encourages residents to explore the landscaped grounds and walking paths. And of course, the two- and three-bedroom apartment homes meet EarthCraft Virginia™ sustainable design standards. With greywater recycling, rainwater retention systems, and solar electric panels, Angel Court enables residents to enjoy the environment and care for it, at the same time.

Project FAITH (Facilitating Access to Independent Housing for Persons with Disabilities and Elder Individuals of Low Incomes) sponsored the 24 new-construction apartments to serve families, seniors, and people with disabilities. This is the third LIHTC project that Project FAITH and VCDC have developed in partnership.


“ Supportive studio apartments like Heron’s Landing are a proven, permanent solution to homelessness. The 2010 outcomes for VSH’s supportive apartments in South Hampton Roads show that 100% of the residents did not return to homelessness and five residents moved on to other permanent housing.”

Allison Bogdanovic Director of Housing Development Virginia Supportive Housing

Under Construction, Angel Court, Phase 3

Angelwood, Phase 16

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C o m m u n i t y d e v e L o p m e n t & H i s t o r i C p r e s e r vat i o n :

Revitalization by the numbers

Home to theatre, ballet, museums and more, Center in the Square launched an era of cultural and economic vitality in Roanoke more than 25 years ago. In 2013, after $36 million in renovation, the Center debuts in its starring role for the next generation.

The Virginia Community Development Fund’s New Market Tax Credits (NMTC) generated $12 million of the funding. Another $19 million in NMTC allocation from SunTrust Community Capital and equity from the syndication of federal and state historic tax credits completed the funding.

The renovation restores many of the 100-year-old buildings’ original architectural features and introduces innovations that make it one of the few projects in Virginia to seek Leadership in Energy and Environmental Design (LEED) certification with a historic renovation project. The developer is Center in the Square, the non-profit that has operated this facility since the beginning.

B u i L d i n g B e n e f i t s a C r o s s t H e s tat e

•Thespace: More than 168,000 square feet

• Jobs created by construction: Approximately 200 jobs during construction. Upon completion, more than 50 will be retained.

• Jobs created by expanded facility: Additional 43 full-time and 56 part-time positions.

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“ The most notable thing about this development was the way that its design allowed us to retain so much of the mill’s character in a manner that celebrates and preserves the history of the business while also creating a new identity with a mix of complementary housing types that fit so well into the neighborhood.”

Lee Alford Senior Project Manager Better Housing Coalition

Beckstoffer’s Mill Lofts and Apartments

For 110 years, Beckstoffer’s Mill created custom architectural millwork that enhanced homes and businesses across Virginia, including the Executive Mansion, Colonial Williamsburg, and the University of Virginia. Though the mill closed in 2007, its legacy of creating a living environment of quality and unique beauty lives on.

In 2008, the Better Housing Coalition (BHC) purchased the 2.5-acre industrial site, one of the largest remaining development opportunities in the City of Richmond. BHC’s vision for the building was as magnificent as the millwork Beckstoffer’s produced. BHC transformed the structure into 22 eco-friendly, mixed-income apartments and lofts. No two are alike. Phase Two will feature 39 apartments for low-income seniors and Phase Three will add another seven apartments.

VCDC facilitated an equity investment of $1.2 million from Capital One, and provided predevelopment financing of $168,000 to the project.

Grand Opening Tour of Beckstoffer’s Mill

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v C d Cs u C C e s s f u L f o r o v e r 2 0 y e a r s

Virginia Community Development Corporation (VCDC) is Virginia’s largest and most experienced non-profit tax credit equity fund manager. For more than 20 years, we’ve been bringing together developers, investors, and communities to build affordable rental housing that benefits our partners and improves quality of life for Virginians. All of our equity funds yield a market-based rate of return, and all are performing at or above the fund’s targeted rate of return.

Our expertise is embedded in our history. VCDC began as the Virginia Housing Foundation, established in 1989 by the Virginia state legislature, and was charged with generating support from the private sector for affordable housing. The Foundation identified the Low-Income Housing Tax Credit (LIHTC) program as the incentive for attracting corporate investments. In 1990, the Foundation became the Virginia Community Development Corporation and began operating independently from the state government.

VCDC’s portfolio has never experienced a mortgage foreclosure or a loss of tax credits. Introducing our first statewide tax credit equity fund in 1992, we have managed 16 tax credit equity funds and raised more than $350 million in capital. Our portfolio features 122 quality properties containing 5,000 affordable rental units. As a result of our diligent project oversight and program compliance, VCDC is proud that no property in its investment portfolio has ever experienced an incidence of mortgage foreclosure or loss of tax credits.

More than 20 years of success VCDC projects start strong and stay strong.

VCDC’s business model is unique: we get involved early in the development process and remain involved through the life of the project. We achieve our mission by providing training, technical assistance and ongoing support to our project partners.

• Before the deal is sealed, we have already worked for two to three years with the project’s sponsor to reinforce the sponsor’s capabilities. By establishing a partnership early in the process, we avoid being forced into bidding on projects, which can undermine pricing and underwriting.

• VCDC’s full-time asset managers are based in Virginia and focus on the financial health of the project and on keeping the project in compliance with federal LIHTC regulations throughout the 15-year compliance period.

• VCDC requires each of its project partnerships to maintain operating reserves. In the event that a project should require additional operating support, a second tier of operating reserves is established by each of VCDC’s equity funds. Projects can receive further operating support from a third tier of operating reserves that are held in VCDC’s corporate accounts.

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v C d C ’ se q u i t y f u n d s

Profitable investments, stronger communities

VCDC supports community development throughout the Commonwealth by offering three types of tax credit equity funds. Investors receive tax credits and a competitive market rate of return. Banks receive positive CRA (Community Reinvestment Act) consideration for investing in the communities they serve. And communities grow stronger by addressing housing needs and revitalizing commercial areas.

The Low-Income Housing Tax Credit (LIHTC) program is the country’s largest and most successful federal program providing affordable multi-family housing. It was signed into law in 1986 by President Ronald Reagan to encourage the private sector to invest in affordable housing for lower income people. Under the program, corporations invest capital into a tax credit equity fund that provides most of the financing for the project. Investment returns come from the flow of tax credits and the passive losses associated with rental real estate ownership, not from real estate property appreciation.

New Markets Tax Credits (NMTC) attract private capital to support commercial and economic development in underserved communities. This program brings job-creating investments to the inner cities and distressed rural communities. Investors in a VCDC New Markets Tax Credit fund receive federal tax credits and the project’s passive losses, which together produce a competitive market rate of return.

Historic Rehabilitation Tax Credits facilitate the restoration of historic properties and communities in the Commonwealth. Eligible historic properties in Virginia receive both Federal Historic Rehabilitation Tax Credits (FHTC), and Virginia State Historic Tax credits. Also, depending on the project being developed, it may qualify for FHTC and either LIHTC or NMTC. When this happens, the inclusion of FHTC and the Virginia State Historic Tax Credits will boost the fund’s yield.

At a recent grand opening, Graham Driver, VCDC’s Director of New Markets Tax Credits, shares a quote from Robert F. “Bobby” Kennedy: “There are those who look at things the way they are, and ask why? I dream of things that never were, and ask why not?”

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Bristol City

Buchanan Co.

Galax City

Lee Co.

Russell Co.

Scott Co.

Smyth Co.

Tazewell Co.

Washington Co.

Wise Co.

Wythe Co.

Albemarle Co.

Charlottesville City

Lynchburg City

Orange County

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5

7

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Halifax Co.

Prince Edward Co.1

1Alleghany Co.

Bath Co.

Harrisonburg City

Shenandoah Co.

Waynesboro City4

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2Giles Co.

Montgomery Co.

Pulaski Co.

Roanoke City

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Dinwiddie Co.

Petersburg City

Richmond City

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Alexandria City

Culpeper Co.

Fairfax Co.

Fauquier Co.

Fredericksburg City

Prince William Co.

Spotsylvania Co.

Warren Co.

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Chesapeake City

Hampton City

Isle of Wight Co.

James City Co.

Newport News City

Portsmouth City

Virginia Beach City

York County

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Accomack Co.

Essex Co.

King George Co.

Northampton Co.

Richmond Co.

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VCDC COVERAGE MAP# NUMBER OF AFFORDABLE

HOUSING PROJECTS COMPLETED

COUNTY / INDEPENDENT CITYSOUTHWEST VA • ROANOKE - NEW RIVER VALLEY • SHENANDOAH VALLEY • CENTRAL VA • SOUTHSIDE VA • NORTHERN VA • RICHMOND • HAMPTON ROADS • EASTERN VA

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Bristol City

Buchanan Co.

Galax City

Lee Co.

Russell Co.

Scott Co.

Smyth Co.

Tazewell Co.

Washington Co.

Wise Co.

Wythe Co.

Albemarle Co.


Lynchburg City

Orange County

3

5

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Halifax Co.

Prince Edward Co.1

1Alleghany Co.

Bath Co.

Harrisonburg City

Shenandoah Co.

Waynesboro City4

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2Giles Co.

Montgomery Co.

Pulaski Co.

Roanoke City

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Dinwiddie Co.

Petersburg City

Richmond City

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5

10

Alexandria City

Culpeper Co.

Fairfax Co.

Fauquier Co.

Fredericksburg City

Prince William Co.

Spotsylvania Co.

Warren Co.

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1

2

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1

Chesapeake City

Hampton City

Isle of Wight Co.

James City Co.

Newport News City

Portsmouth City

Virginia Beach City

York County

4

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Accomack Co.

Essex Co.

King George Co.

Northampton Co.

Richmond Co.

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Bristol City

Buchanan Co.

Galax City

Lee Co.

Russell Co.

Scott Co.

Smyth Co.

Tazewell Co.

Washington Co.

Wise Co.

Wythe Co.

Albemarle Co.


Lynchburg City

Orange County

3

5

7

1

Halifax Co.

Prince Edward Co.1

1Alleghany Co.

Bath Co.

Harrisonburg City

Shenandoah Co.

Waynesboro City4

3

2

1

2Giles Co.

Montgomery Co.

Pulaski Co.

Roanoke City

6

5

3

8

Dinwiddie Co.

Petersburg City

Richmond City

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5

10

Alexandria City

Culpeper Co.

Fairfax Co.

Fauquier Co.

Fredericksburg City

Prince William Co.

Spotsylvania Co.

Warren Co.

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2

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Chesapeake City

Hampton City

Isle of Wight Co.

James City Co.

Newport News City

Portsmouth City

Virginia Beach City

York County

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Accomack Co.

Essex Co.

King George Co.

Northampton Co.

Richmond Co.

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Bristol City

Buchanan Co.

Galax City

Lee Co.

Russell Co.

Scott Co.

Smyth Co.

Tazewell Co.

Washington Co.

Wise Co.

Wythe Co.

Albemarle Co.


Lynchburg City

Orange County

3

5

7

1

Halifax Co.

Prince Edward Co.1

1Alleghany Co.

Bath Co.

Harrisonburg City

Shenandoah Co.

Waynesboro City4

3

2

1

2Giles Co.

Montgomery Co.

Pulaski Co.

Roanoke City

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5

3

8

Dinwiddie Co.

Petersburg City

Richmond City

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5

10

Alexandria City

Culpeper Co.

Fairfax Co.

Fauquier Co.

Fredericksburg City

Prince William Co.

Spotsylvania Co.

Warren Co.

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1

1

2

1

1

1

1

Chesapeake City

Hampton City

Isle of Wight Co.

James City Co.

Newport News City

Portsmouth City

Virginia Beach City

York County

4

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1

7

2

1

3

Accomack Co.

Essex Co.

King George Co.

Northampton Co.

Richmond Co.

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Bristol City

Buchanan Co.

Galax City

Lee Co.

Russell Co.

Scott Co.

Smyth Co.

Tazewell Co.

Washington Co.

Wise Co.

Wythe Co.

Albemarle Co.


Lynchburg City

Orange County

3

5

7

1

Halifax Co.

Prince Edward Co.1

1Alleghany Co.

Bath Co.

Harrisonburg City

Shenandoah Co.

Waynesboro City4

3

2

1

2Giles Co.

Montgomery Co.

Pulaski Co.

Roanoke City

6

5

3

8

Dinwiddie Co.

Petersburg City

Richmond City

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5

10

Alexandria City

Culpeper Co.

Fairfax Co.

Fauquier Co.

Fredericksburg City

Prince William Co.

Spotsylvania Co.

Warren Co.

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2

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1

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1

Chesapeake City

Hampton City

Isle of Wight Co.

James City Co.

Newport News City

Portsmouth City

Virginia Beach City

York County

4

1

1

1

7

2

1

3

Accomack Co.

Essex Co.

King George Co.

Northampton Co.

Richmond Co.

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Bristol City

Buchanan Co.

Galax City

Lee Co.

Russell Co.

Scott Co.

Smyth Co.

Tazewell Co.

Washington Co.

Wise Co.

Wythe Co.

Albemarle Co.


Lynchburg City

Orange County

3

5

7

1

Halifax Co.

Prince Edward Co.1

1Alleghany Co.

Bath Co.

Harrisonburg City

Shenandoah Co.

Waynesboro City4

3

2

1

2Giles Co.

Montgomery Co.

Pulaski Co.

Roanoke City

6

5

3

8

Dinwiddie Co.

Petersburg City

Richmond City

1

5

10

Alexandria City

Culpeper Co.

Fairfax Co.

Fauquier Co.

Fredericksburg City

Prince William Co.

Spotsylvania Co.

Warren Co.

1

1

1

2

1

1

1

1

Chesapeake City

Hampton City

Isle of Wight Co.

James City Co.

Newport News City

Portsmouth City

Virginia Beach City

York County

4

1

1

1

7

2

1

3

Accomack Co.

Essex Co.

King George Co.

Northampton Co.

Richmond Co.

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Bristol City

Buchanan Co.

Galax City

Lee Co.

Russell Co.

Scott Co.

Smyth Co.

Tazewell Co.

Washington Co.

Wise Co.

Wythe Co.

Albemarle Co.


Lynchburg City

Orange County

3

5

7

1

Halifax Co.

Prince Edward Co.1

1Alleghany Co.

Bath Co.

Harrisonburg City

Shenandoah Co.

Waynesboro City4

3

2

1

2Giles Co.

Montgomery Co.

Pulaski Co.

Roanoke City

6

5

3

8

Dinwiddie Co.

Petersburg City

Richmond City

1

5

10

Alexandria City

Culpeper Co.

Fairfax Co.

Fauquier Co.

Fredericksburg City

Prince William Co.

Spotsylvania Co.

Warren Co.

1

1

1

2

1

1

1

1

Chesapeake City

Hampton City

Isle of Wight Co.

James City Co.

Newport News City

Portsmouth City

Virginia Beach City

York County

4

1

1

1

7

2

1

3

Accomack Co.

Essex Co.

King George Co.

Northampton Co.

Richmond Co.

1

1

3

2

3




1

1

3

2

3

4

11

1

7

2 1

31

5

10

2

112

1

1

1

1

1

1

35

7

1

2

2

1

3

4

6

53

8

1

21

4

1

11

11

43

2

1

1

1

1

1

1

1

4

4

3

Bristol City

Buchanan Co.

Galax City

Lee Co.

Russell Co.

Scott Co.

Smyth Co.

Tazewell Co.

Washington Co.

Wise Co.

Wythe Co.

Albemarle Co.


Lynchburg City

Orange County

3

5

7

1

Halifax Co.

Prince Edward Co.1

1Alleghany Co.

Bath Co.

Harrisonburg City

Shenandoah Co.

Waynesboro City4

3

2

1

2Giles Co.

Montgomery Co.

Pulaski Co.

Roanoke City

6

5

3

8

Dinwiddie Co.

Petersburg City

Richmond City

1

5

10

Alexandria City

Culpeper Co.

Fairfax Co.

Fauquier Co.

Fredericksburg City

Prince William Co.

Spotsylvania Co.

Warren Co.

1

1

1

2

1

1

1

1

Chesapeake City

Hampton City

Isle of Wight Co.

James City Co.

Newport News City

Portsmouth City

Virginia Beach City

York County

4

1

1

1

7

2

1

3

Accomack Co.

Essex Co.

King George Co.

Northampton Co.

Richmond Co.

1

1

3

2

3




13

Lending that changes lives

In a letter to the Virginia Community Development Fund (VCDF), Jeffrey Smith, Assistant Director of Rush Lifetime Homes, describes the value of a VCDF loan:

“ Your loan is making a huge impact in the lives of real people in our community. I urge you to continue to work with smaller non-profits like Rush Homes, as we are often at ground zero, providing support and independence directly to the people in need. Often, all we need is some financial support to make a project go that significantly impacts an entire community. That’s exactly what the Virginia Community Development Fund did for us.”

The Virginia Community Development Fund (founded 1996) is a certified Community Development Financial Institution. The fund provides alternative financing and technical assistance to non-profit and publically accountable developers who create affordable housing or community development opportunities in Virginia, Kentucky and Tennessee. The fund offers two financial products at below-market interest rates:

• Short-term, zero-interest advances, and

• Longer-term, pre-development and carry-forward loans

In the last 10 years, VCDF has made 85 loans to more than 50 different organizations totaling over $4.4 million.

v C d f

In 2009, Rush Lifetime Homes, a small non-profit organization with the mission to provide housing for people with disabilities and low incomes, faced a challenge. The non-profit had a long list of clients waiting for housing, and few options to meet their needs. So, Rush Homes decided to develop the project independently. While financially stable, Rush Homes did not have cash assets readily available and would find it difficult to borrow the funds to hold, and ultimately purchase, the site for Victoria Ridge.

VCDF made funds available at a substantially below-market interest rate. In the spring of 2011, Victoria Ridge opened its doors and was able to provide 24 families and individuals with affordable, energy-efficient housing built to accommodate their clients’ special needs.

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14

K e n t u C K y f u n d s

The Housing Equity Funds of KentuckyA Partnership of VCDC and FAHEThrough an agreement with Federation of Appalachian Housing Enterprises (FAHE), VCDC helps facilitate affordable multi-family rental housing in the state of Kentucky. FAHE is a non-profit based in Berea, KY that has a community development mission similar to that of VCDC. Since 2004, VCDC has provided technical assistance in project development, equity development, asset management and fund management to FAHE’s staff. To date, the VCDC and FAHE partnership has produced three LIHTC equity funds that have attracted $31.75 million of capital from 13 banks operating in Kentucky. The funds have invested in 10 multi-family projects that provide a total of 233 rental housing units.

A progressive housing model to help women in Richmond, KentuckyLiberty Place is a 28,500-square-foot facility located in Richmond, Madison County, Kentucky.It serves women recovering from substance abuse. Liberty Place is part of The Recovery Model, a program initiated by Kentucky Housing Corporation to combat the growing drug use and dependency problem in the state. The developer, Kentucky River Foothills Development Council, Inc., provides on-site supportive services. Demand for this type of housing is high. Operations are supported by Section 8 subsidies and the Kentucky Department of Corrections.

$4,808,680: Total development cost$3,427,000: Equity contribution, Housing Equity Fund of Kentucky I, L.L.C.

Liberty Place

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15

VCDC’s Vern Henley Special Initiatives Grant Program

In 2008, VCDC established the Vern Henley Special Initiatives Grant Program to help our partners fund programs that enhance the quality of life for residents living in affordable housing in Virginia. We hope our partners will pilot programs that can be replicated in other communities.

This program affirms our belief that affordable housing should provide residents with quality shelter and access to services that foster their success. This holistic approach considers the variety of factors—social, educational, physical, emotional, and economic—that shape success.

The Vern Henley Special Initiatives Grant Program has helped fund a wide range of initiatives that share our goal

Projects and grantees include: • Summer camp for low-income children:

Albemarle Housing Improvement Program (AHIP) received a grant to support an on-site children’s summer camp at Park’s Edge Apartments, an LIHTC community in Charlottesville, Virginia. These residents have an average annual household income of $10,000. The camp offered activities, classes, and field trips—including an outing to a Madison County farm where the children fished, milked cows, fed

v e r n H e n L e y s p e C i a L i n i t i at i v e s

16

apples to a horse, shared a picnic, and took a hayride.

• After school program for low-income children: The Park’s Edge After School (PEAS) program received a grant to help transform “affordable housing” into a supportive community for children by offering a safe, fun and stimulating after-school environment. The PEAS program partners with the Piedmont Family YMCA, Greer School faculty and staff, Albemarle Baptist Church Academy, Jefferson-Madison Regional Library Bookmobile, The Women’s Initiative, the Center for Youth and Family Services, and scores of volunteers from the University of Virginia and local high schools.

• 1,000 Homes for 1,000 Virginians campaign: Virginia Coalition to End Homelessness (VCEH)

• Support for a collaboration among University of Virginia, VCDC’s Charlottesville area development partners, and citizens to improve the quantity and quality of affordable housing for local residents: The Charlottesville Institute

• Community gardens; social activities for residents with disabilities: Virginia Beach Community Development Corporation

• Resident services, furniture, and move-in funds for formerly homeless clients: Virginia Supportive Housing

• Resident services and furniture for formerly homeless clients: People, Inc.

• Community room computers and furnishings: Robert Pierre Johnson Housing

Who is Vern Henley?Vernard “Vern” Henley served as Chairman, President and Chief Executive Officer of Consolidated Bank and Trust, the first minority-owned and operated bank in the United States. Vern is a past member of the Board of Commissioners of Virginia Housing Development Authority. He was a member of VCDC’s first board of directors and served for 20 years. Vern has lived a life dedicated to service, and while he is now retired, he remains very active in the Richmond metropolitan area.

“ Our industry spends a lot of resources measuring the performance and success of affordable housing from the standpoint of a real estate portfolio, but in the bigger picture, our mission is achieved when the residents we serve are happy and successful. We established the Vern Henley Special Initiatives Grant Program to encourage a holistic approach to improving the lives of residents living in affordable housing. The key to this holistic approach is to support relevant solutions; this requires giving residents a voice and an opportunity to collaborate in creating solutions to achieve their goals.”

“ Mia Mattern Director of Asset Management VCDC

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17

VCDC and Affiliates STATEMENT OF FINANCIAL POSITION

ASSETS 2011 2010Cash & Cash Equivalents 1,550,076 1,566,299Cash Reserves 2,100,000 2,000,000Accounts Receivable (net of allowance) 1,255,312 1,243,438Notes Receivable (net of allowance) 1,347,519 1,188,028Furniture and Equipment (net) 90,886 84,761Other Assets 45,265 40,788Investments in Operating Entities 251,200 250,000

$6,640,258 $6,373,314

LIABILITIES AND NET ASSETSAccounts Payable 1,852 55,419Accrued Expesnes and Liabilities 525,662 551,181Notes Payable 310,000 0

837,514 606,600

Total Net Assets 5,802,744 5,766,714

TOTAL LIABILITIES and NET ASSETS $6,640,258 $6,373,314

STATEMENT OF ACTIVITIES

REVENUES 2011 2010Acquisition & Consulting fees 3,298,729 2,882,314Other Income* 142,545 128,239

$3,441,274 $3,010,553

ExpensesProgram Services 2,755,441 2,207,702General & Administrative 635,813 610,222Other 13,990 16,178

$3,405,244 $2,834,102

CHANGE IN NET ASSETS $36,030 $176,451

*Other Income includes net flow‐through profits and losses of subsidary entities in 2011 and 2010.

2 0 1 1 f i n a n C i a L s tat e m e n t

VCDC Assets

1%1%

4%

19%

20%

Cash & Equivalents

Cash Reserves

Accounts Receivable

Notes Receivable

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Equity Funds STATEMENT OF FINANCIAL POSITION

ASSETS 2011 2010Cash & Cash Equivalents 7,451,310 3,769,858Accounts Receivable (net of allowance) 419,204 634,657Notes Receivable (net of allowance) 29,532 0Other Assets 8,862,425 8,360,201Investments in Operating Entities 177,013,141 165,700,260

$193,775,612 $178,464,976

LIABILITIES AND NET ASSETSAccounts Payable 77,804 5,042Accrued Expesnes and Liabilities 196,673 0Due to Affiliates 1,050,744 1,105,276Partnership Payables 35,775,481 36,735,660Notes Payable 36,690,541 38,894,185

73,791,243 76,740,163

Total Net Assets 119,984,369 101,724,813



REVENUES 2011 2010Income from Partnerships 477,845 536,682Other Income* 8,649 13,266

$486,494 $549,948

ExpensesProgram Services 1,931,033 1,831,127General & Administrative 1,428,540 1,456,276Other 12,441,971 11,514,677

$15,801,544 $14,802,080

Capital Contributions 33,574,606 29,523,060

CHANGE IN NET ASSETS $18,259,556 $15,270,928


VCDC and Affiliates STATEMENT OF FINANCIAL POSITION

ASSETS 2011 2010Cash & Cash Equivalents 1,550,076 1,566,299Cash Reserves 2,100,000 2,000,000Accounts Receivable (net of allowance) 1,255,312 1,243,438Notes Receivable (net of allowance) 1,347,519 1,188,028Furniture and Equipment (net) 90,886 84,761Other Assets 45,265 40,788Investments in Operating Entities 251,200 250,000

$6,640,258 $6,373,314

LIABILITIES AND NET ASSETSAccounts Payable 1,852 55,419Accrued Expesnes and Liabilities 525,662 551,181Notes Payable 310,000 0

837,514 606,600

Total Net Assets 5,802,744 5,766,714



REVENUES 2011 2010Acquisition & Consulting fees 3,298,729 2,882,314Other Income* 142,545 128,239

$3,441,274 $3,010,553

ExpensesProgram Services 2,755,441 2,207,702General & Administrative 635,813 610,222Other 13,990 16,178

$3,405,244 $2,834,102

CHANGE IN NET ASSETS $36,030 $176,451


VCDC Assets

23%

32%

Furniture & Equipment

Other Assets

Investments in Operating Entities

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f u n d r e t u r n s & e q u i t y r a i s e d

20

i n v e s t o r s

Bank of America

Bank of Botetourt

Bank of Southside Virginia

Bank of the James

BB&T

Burke & Herbert Bank

Capital One

Cardinal Bank

Central Virginia Bank

Chesapeake Bank

Citizens and Farmers Bank

Citizens Bank & Trust

Community Bankers’ Bank

Consolidated Bank and Trust

Dominion Capital

Essex Bank

EVB

Fannie Mae

Farmers & Merchants Bank

The Fauquier Bank

Franklin Federal Savings Bank

Freddie Mac

John Marshall Bank

Monument Street Funding

National Bank Of Blacksburg

The Old Point National Bank

Owens & Minor Medical, Inc.

Pioneer Bank

Regions Bank

Stellar One Bank

SunTrust Bank

TruPoint Bank

Union First Market Bank

United Bank

Virginia Community Bank

Wells Fargo Bank

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d e v e L o p e rpa r t n e r s

Accomack-Northampton Planning District Commission

Albemarle Housing Improvement Program

Alleghany Highlands Housing Alliance

Avalon: A Center for Women & Children

Better Housing Coalition

Bristol Redevelopment & Housing Authority

Central Virginia Housing Coalition

Chesapeake Redevelopment & Housing Authority

Community Housing Partners Corporation

Community Services Housing, Inc.

Cross Properties, Inc.

Culpeper Community Development Corporation

Dungannon Development Commission

Fairfax County Redevelopment & Housing Authority

Fauquier Housing Corporation

Giles County Housing Development Corporation

Hampton RHA

Hampton-Newport News CSB

Helping Overcome Poverty’s Existence, Inc.

Jefferson Area Board for Aging, Inc.

Koogler Construction, Inc

Lynchburg Neighborhood Development Foundation

Mark-Dana Corporation

Newport News Redevelopment & Housing Authority

Northwest Neighborhood Environmental Organization

People Incorporated Virginia

Petersburg Redevelopment & Housing Authority

Piedmont Housing Alliance

Project FAITH

Roanoke Redevelopment & Housing Authority

Robert Pierre Johnson Housing Development Corporation

Rush Lifetime Homes

South River Development Corporation

Southwest Virginia Housing Corporation

SWA Corporation

Virginia Beach Community Development Corporation

Virginia Supportive Housing

Virginians in Partnership for Housing

Waynesboro Redevelopment & Housing Authority

Wise County Redevelopment & Housing Authority

Wytheville Redevelopment & Housing Authority

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L o o K i n g f o r wa r d

King George County: Looking Ahead to HELP

From modest beginnings in 2000 as a citizen-driven non-profit, Project FAITH has brought more than $13 million of affordable housing to King George County. Project FAITH’s next effort in King George County will be the HELP Center (Health/Higher Education Learning Parenting Assistance Center). Envisioned as a 30,000-square-foot, LEED-certified (Leadership in Energy and Environmental Design) space, the HELP Center is expected to use VCDC’s New Markets Tax Credit Fund.

The Center will enable low-income families, including those residing at Project FAITH’s Angel Court and Angelwood properties, to access health services, social services, child care, the food bank, and workforce training—all under one roof. The HELP Center will work to address families’ needs from a holistic perspective, beyond housing.

An Angelwood resident shares a laugh with Project FAITH Executive Director Fronce Wardlaw.

Angelwood children enjoy playing in a safe environment.

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1840 W. Broad StreetSuite 200

Richmond, VA 23220P (804) 343-1200F (804) 343-1043

vacdc.org

VCDC

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Documents

VCDC // Annual Report 2011