One City Built to Last

More documents

Recommendations

Info

y enid burns On a Mission to Create Affordable Housing While partial blame has been placed on banks for the residential credit crisis during the Great Recession there are many banks that have fulfilled their mission to serve the needs of the communities they serve by making affordable housing more available. The Community Reinvestment Act (CRA) is an initiative monitored by the various Regulatory Agencies designed to encourage banks to meet the credit needs of the individuals within their self-defined service area. Investing in Low Income Housing Tax Credits (LIHTC) helps satisfy the requirements under the Act. While large banks tend to have their own Community Development Corporations (CDC’s) which they utilize to make direct investments, smaller institutions rely on companies such as the St. Louis Equity Fund, or SLEFI, to manage this process on their behalf. To date, SLEFI has contributed to the building of affordable housing from south of Springfield, Illinois to St. Louis, throughout Missouri and the eastern counties of Kansas, adjoining Kansas City, Missouri. SLEFI began investing in LIHTC’s soon after the 1986 Tax Act was passed which created the LIHTC. This addition to the Code was intended to help transfer some of the responsibility of providing affordable housing from the public sector to the private sector. By investing in these credits financial institutions earn CRA credit and earn a market rate of return on their investment which turns out to be a win-win proposition. Shortly after the passage of the Act a group of civic minded leaders in St. Louis came to realize that this newly formed program could be very beneficial to the entire community. Creating Affordable Housing “They thought that it would be a good idea to have a vehicle in St. Louis that could utilize this newly created program to promote affordable housing,” John Wuest, president of the St. Louis Equity Fund, told The Suit Magazine in an interview. “These leaders went to Civic Progress , the local business leadership group, and obtained a THE SUIT MAGAZINE - NOV 2014
$75,000 grant. And that’s how the Equity Fund got started.” Raising roughly $355 million in equity to date, since its beginning the Equity Fund has produced 4,400 housing units throughout its service area. The equity raised has funded both rehabilitation of residential units, as well as new construction of residential units. These units include one, two and three bedroom apartments as well as three bedroom single family homes. The Process SLEFI identifies new projects that are in the planning phase that it would be interested in investing. “We know who is making applications to the Missouri Housing Development Commission (MHDC), who allocates the credits on behalf of the IRS, and who we would like to invest with,” said Wuest. “We’re tracking them – and we issue a support letter which is included in the application package that is submitted to MHDC. If they are successful in receiving an allocation SLEFI then negotiates a purchase of the credits from the recipient utilizing the funds raised from the Financial Institutions and Corporations who have agreed to invest in the Fund created by SLEFI. A limited partnership or a limited liability corporation is created and the current years Fund becomes the 99.9% limited partner in the developer entity which enables SLEFI to pass back through to its investors 99.9% of the tax benefits of the Credits along with the operating losses of the specific project.” Banks represent the largest portion of any given Fund. The Bank investor group includes both larger regional banks along with community banks. “This vehicle has a particular attraction for the smaller community bank’s whose resources limit their ability to have in house personnel participating in these endeavors,” said Wuest. In addition to banks, SLEFI raises funds from corporations. Current participating companies include Ameren and The Laclede Group (local utilities),Anheuser-Busch and Centene Corporation. For the year 2014, SLEFI is on track to raise $30 million. Wuest indicated that a future goal is to raise an annual Fund in the $40 to $45 million range. The average investment per project is in the $6 million range. Special Needs Projects Wuest commented that in recent years SLEFI has placed an emphasis on investing in projects that serve individuals having special needs. These needs include alcohol and drug dependency, mental health issues, and ex-offenders. They have teamed with the leading institutions providing these services including The Salvation Army and the St. Louis Archdiocese. SLEFI has partnered with the Salvation Army on three projects, including a 48-unit building of furnished apartments strictly dedicated to both male and female veterans. “These are individuals that, for one reason or another, have not been able to get back into the mainstream of society, mostly because of addiction and other problems,” Wuest explained. To qualify for residency the individual is required to make a commitment to participate in the treatment program provided “with the goal of becoming a productive member of society,” he said. The individual is able to live in a safe environment while in recovery – and even after they gain employment if they wish to. Gateway Community Development Fund, Inc. In an effort to provide a wider range of products and services to serve the affordable housing community and its investors, SLEFI formed Gateway which is a wholly owned subsidiary of SLEFI. Gateway is a certified CDFI whose primary mission is to provide both consulting services and lending products to be used to assist groups participating in community development and provide financing for the creation and sustainability of affordable housing. Gateway has solicited participation from Banks to participate in the formation of Loan Pools, the proceeds of which will be used to finance affordable housing. To date Gateway has raised $4.5 million in these Pools. Both SLEFI and Gateway are governed by its investors and participants who serve on the boards and committees of both organizations. The Community Reinvestment Act previously mentioned has three basic tests: Investment, Lending and Service. With the addition of Gateway, SLEFI is able to offer opportunities to banks that assist in meeting all three tests. THE SUIT MAGAZINE p.69
Page 1 and 2:
Issue 63 NOV 2014 Top Billing Docs
Page 3 and 4:
publishers note ISSUE 63 | NOV 2014
Page 5 and 6:
BUSINESS / FINANCE 34 Technology Se
Page 7 and 8:
THE SUIT MAGAZINE p.7
Page 9:
By exposing such massive variations
Page 13 and 14:
estimates that around 90 percent of
Page 15 and 16:
or prospect just to say “hi” an
Page 17 and 18: Arragg also sees the nation’s alr
Page 19 and 20: As of Sept. 2014, NYC is now the wo
Page 22 and 23: n HORMONE AVERTi HEALTHY BREAST PRO
Page 24 and 25: Alternative medicine emerged as con
Page 26 and 27: y amy m. armstrong Intensive Specia
Page 28: y rich monetti NEVER MAKE the Same
Page 31 and 32: product, sell it to the hospital an
Page 33 and 34: y peter suciu Compliance is Key for
Page 35: their needs are, but still require
Page 38 and 39: y enid burns HELPING SMALL LENDERS
Page 40 and 41: y amy m. armstrong Employee non-Com
Page 42 and 43: y g. levin Health Agent says Everyo
Page 46 and 47: y amy m. armstrong Providing More t
Page 48 and 49: EARLY IDENTIFICATION OF LD AND ADHD
Page 50 and 51: y rodric j. bradford Commitment to
Page 52 and 53: y enid burns THE CORNERSTONES OF Ho
Page 54 and 55: y mary minor davis Offsetting the T
Page 57 and 58: y gerald h. levin Shifting Markets
Page 59 and 60: the economic downturn of 2008-09. D
Page 62 and 63: y dan harvey Thinking the UNTHINKAB
Page 64 and 65: y judy scinyamagness EXPERT witness
Page 66 and 67: y felix badea Familial Advice at An
Page 71 and 72: y peter suciu GUIDING PEOPLE THROUG
Page 73 and 74: Continuously striving to set new in
Page 75 and 76: that obstacle a challenging one,”
Page 77 and 78: y peter suciu GUIDING CLIENTS COMMU
Page 79 and 80: “Retirement is not necessarily th
Page 81 and 82: OUR MISSION AT BRIDGEWORTH IS TO PA
Page 83 and 84: abuse did occur,” Arragg said.
Page 85 and 86: explained Travis. “And then I rea
show all

One City Built to Last

Create successful ePaper yourself

Delete template?

Save as template?