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Stories of Philanthropic Leadership in Advancing Regional and ...

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In the late 1990s, the city <strong>of</strong> Albuquerque establisheda strategy for downtown revitalization <strong>and</strong> hadalready made its own significant <strong>in</strong>vestments whenHDIC approached. The HDIC sought adevelopment agreement by which the city wouldsupport some <strong>of</strong> a proposed new mixed-usedevelopment’s up-front risk—a $12 million<strong>in</strong>vestment <strong>of</strong> tax abatement, <strong>in</strong>frastructure, l<strong>and</strong>,<strong>and</strong> future park<strong>in</strong>g structures. In exchange, the city,like the McCune Charitable Foundation, receives apercentage <strong>of</strong> HDIC’s mid- to long-term cash flows(25 percent <strong>in</strong> years six to 12, 50 percent <strong>in</strong> years 13to 20), a projected $18 million return to the city (not<strong>in</strong>clud<strong>in</strong>g <strong>in</strong>creased property tax revenues). Thus,two “patient” <strong>in</strong>vestors (McCune CharitableFoundation <strong>and</strong> the city) made a f<strong>in</strong>ancialcommitment to the HDIC, evidenc<strong>in</strong>g a consensusbelief <strong>in</strong> the mid- to long-term f<strong>in</strong>ancial performance<strong>of</strong> a planned progressive development.Yet questions rema<strong>in</strong>ed. Could these fairlypredictable future revenue streams be converted to apresent value (i.e., “latched on to”)? Could thatpresent value be made available to acquire a l<strong>and</strong> basefor affordable hous<strong>in</strong>g? And what k<strong>in</strong>d <strong>of</strong> entitywould be appropriate for such activities?In the City-HDIC Development Agreement, the citycommitted that its share <strong>of</strong> future cash flows wouldbe re<strong>in</strong>vested <strong>in</strong> downtown. The HDIC approachedthe Enterprise Foundation, look<strong>in</strong>g for assistance <strong>in</strong>conv<strong>in</strong>c<strong>in</strong>g the city to pledge, as part <strong>of</strong> thatcommitment, these future cash flows to a neworganization that would then leverage these funds tosecure additional <strong>in</strong>vestments <strong>and</strong> then issue its ownloans <strong>and</strong> make its own <strong>in</strong>vestments <strong>in</strong> furtherance <strong>of</strong>affordable hous<strong>in</strong>g <strong>and</strong> other public purposes.The Enterprise Foundation supported the concept <strong>of</strong>a new entity but, concerned about undue developerbenefit/control <strong>and</strong> a lack <strong>of</strong> <strong>in</strong>volvement from theadjacent communities, <strong>in</strong>sisted that a new operationcome from an <strong>in</strong>clusive, community-based plann<strong>in</strong>gprocess. With <strong>in</strong>itial fund<strong>in</strong>g from McCune, latersupplemented by Enterprise <strong>and</strong> the FordFoundation, Enterprise convened a multi-stakeholderplann<strong>in</strong>g process to determ<strong>in</strong>e whether a neworganization was appropriate, what types <strong>of</strong><strong>in</strong>vestments it might make, <strong>and</strong> which geographicareas such <strong>in</strong>vestments might target. In the end, thisfacilitator-led, Ford Foundation-documented, two<strong>and</strong>-a-halfyear process yielded a consensus product,a bus<strong>in</strong>ess plan for a new entity named theDowntown Albuquerque Civic Trust.Now <strong>in</strong> its first year <strong>of</strong> operation, the Civic Trust is anot-for-pr<strong>of</strong>it, 501(c)(3) organization. It recentlyhired an experienced community developmentpr<strong>of</strong>essional, Joseph Montoya, as its first executivedirector. The Trust’s mission is, “To complementdowntown Albuquerque revitalization through loans<strong>and</strong> <strong>in</strong>vestments which assure the cont<strong>in</strong>uedavailability <strong>of</strong> convenient <strong>and</strong> affordable hous<strong>in</strong>g, aswell as affordable commercial, arts, <strong>and</strong> public spaceswhile ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g diversity <strong>and</strong> social responsibility.”Its 26-member board <strong>of</strong> directors is composed <strong>of</strong> thesame stakeholder <strong>in</strong>terests represented <strong>in</strong> theplann<strong>in</strong>g process: lenders, large downtown <strong>and</strong> neardowntown employers, downtown bus<strong>in</strong>ess <strong>and</strong>property owners, adjacent neighborhoods, localgovernment, not-for-pr<strong>of</strong>it developers, for-pr<strong>of</strong>itdevelopers, commercial <strong>and</strong> residential realtors,foundations, public schools, arts organizations,architects, planners, urban designers, <strong>and</strong> impactedpopulations.The Trust’s market area <strong>in</strong>cludes the downtown core<strong>of</strong> Albuquerque <strong>and</strong> those portions <strong>of</strong> theimmediately adjacent neighborhoods that couldimpact, or be impacted by, the revitalization <strong>of</strong>downtown. Per the bus<strong>in</strong>ess plan, potential lend<strong>in</strong>g<strong>and</strong> <strong>in</strong>vestment projects <strong>in</strong>clude homeownership (30to 60 percent Area Median Income [AMI], 60 to 80percent AMI, 80 to 120 percent AMI—withdifferent <strong>in</strong>vestments associated with the differentranges); rental hous<strong>in</strong>g (below 30 percent AMI, 30 to60 percent AMI, 60 to 80 percent AMI, 80 to 120percent AMI—with different <strong>in</strong>vestments associatedwith the different ranges); <strong>and</strong> arts, commercial, ormixed-use projects.In this first year <strong>of</strong> operation, the Trust’s primary goalis secur<strong>in</strong>g the all-important current revenue streamwhich would allow it to pursue mission-driven loans<strong>and</strong> <strong>in</strong>vestments. Acquir<strong>in</strong>g program-related<strong>in</strong>vestment, or PRI, is the focus <strong>of</strong> this goal.Revenues from Trust-funded projects would be thefirst source for PRI repayment <strong>and</strong> any programrelated<strong>in</strong>vestor would also have some right aga<strong>in</strong>stthe projects themselves. Lastly, <strong>and</strong> most importantly,it is anticipated that the city <strong>of</strong> Albuquerque would<strong>of</strong>fer secondary support for any PRI, secured by itsright to future HDIC cash flows. The City Councilhas passed a resolution <strong>in</strong> support <strong>of</strong> this potentialEQUITABLE PUBLIC INVESTMENTPart III: Section 1: Promot<strong>in</strong>g Equitable Public Investment 46

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