EQUITABLE PUBLIC INVESTMENTneighborhoods. This <strong>in</strong>creased desirability feeds aquick run-up <strong>in</strong> l<strong>and</strong> values <strong>and</strong> related costs (e.g.,rents, property taxes). S<strong>in</strong>gle-family rentals are sold<strong>and</strong> converted to homeownership <strong>and</strong> subst<strong>and</strong>ardproperties are razed or improved to meet thedem<strong>and</strong>s <strong>of</strong> the new, higher-<strong>in</strong>come residents.Exist<strong>in</strong>g residents are subjected to multiple displac<strong>in</strong>gpressures <strong>and</strong> exist<strong>in</strong>g bus<strong>in</strong>esses <strong>and</strong> employers faceris<strong>in</strong>g operat<strong>in</strong>g expenses <strong>and</strong> the steady loss <strong>of</strong> theircustomer base. Affordable rental property, residentialor commercial, is harder to f<strong>in</strong>d—<strong>and</strong> harder todevelop—as local community developmentcorporations (CDCs) <strong>and</strong> other affordable hous<strong>in</strong>gproviders struggle to make projects pencil out <strong>in</strong> thisnew, high l<strong>and</strong> value marketplace.Given these facts, regionalism <strong>and</strong> equity face thesetwo challenges. First, how to consistently f<strong>in</strong>anceprogressive development as a key strategy for centralcity revitalization? Second, assum<strong>in</strong>g the f<strong>in</strong>anc<strong>in</strong>g issecured <strong>and</strong> the development moves forward, how toensure that adjacent neighborhoods have a l<strong>and</strong> baseavailable for greater affordable hous<strong>in</strong>g dem<strong>and</strong>? Thesolutions may not always connect, but <strong>in</strong>Albuquerque—thanks to a multi-stakeholder,community-based bus<strong>in</strong>ess plann<strong>in</strong>g process—theymight with “value latch<strong>in</strong>g.” The value latch<strong>in</strong>gproject <strong>in</strong> downtown Albuquerque is a comb<strong>in</strong>edeffort <strong>of</strong> the Enterprise Foundation, Marshall L. <strong>and</strong>Perr<strong>in</strong>e D. McCune Charitable Foundation, <strong>and</strong>Ford Foundation that advances a critical aspect <strong>of</strong>regional equity—hous<strong>in</strong>g affordability. This pr<strong>of</strong>ilehighlights the Enterprise Foundation’s experience <strong>in</strong>support<strong>in</strong>g this project.Funder InterestThe Enterprise Foundation’s Albuquerque focus is toensure that the city’s low- <strong>and</strong> moderate-<strong>in</strong>comeneighborhoods avoid the fate <strong>of</strong> similar, nowdisplacedneighborhoods <strong>in</strong> Santa Fe, N.M. Know<strong>in</strong>gthat a revitalized downtown would overwhelmadjacent neighborhoods—neighborhoods alreadyexperienc<strong>in</strong>g early <strong>in</strong>stances <strong>of</strong> property speculation—Enterprise saw value latch<strong>in</strong>g as an opportunity to get<strong>in</strong> early <strong>and</strong> make a proactive difference. In an erawhere affordable hous<strong>in</strong>g <strong>and</strong> communitydevelopment require <strong>in</strong>creas<strong>in</strong>gly <strong>in</strong>novative ways tocreate local assets, the Enterprise Foundationrecognized the unique importance <strong>of</strong> creat<strong>in</strong>g af<strong>in</strong>ancial model that did not rely exclusively ongovernment dollars. Enterprise got <strong>in</strong>volved view<strong>in</strong>gthis as an opportunity to mean<strong>in</strong>gfully addressgentrification <strong>and</strong>displacement.Throughout thecountry, Enterprisepersonnel had seen“so many terribleth<strong>in</strong>gs happen” tocommunities at risk<strong>of</strong> displacement,accord<strong>in</strong>g to EdRosenthal, director <strong>of</strong>the Santa Fe <strong>of</strong>fice <strong>of</strong>the EnterpriseFoundation. So, <strong>in</strong>Albuquerque,In an era where affordablehous<strong>in</strong>g <strong>and</strong> communitydevelopment require<strong>in</strong>creas<strong>in</strong>gly <strong>in</strong>novative waysto create local assets, theEnterprise Foundationrecognized the uniqueimportance <strong>of</strong> creat<strong>in</strong>g af<strong>in</strong>ancial model that didnot rely exclusively ongovernment dollars.Enterprise embraced the opportunity to get <strong>in</strong> ahead<strong>of</strong> the social <strong>and</strong> real estate value curve.<strong>Regional</strong>/Neighborhood Equity ImpactsThe Arcadia L<strong>and</strong> Company (Arcadia) is aprogressive developer active <strong>in</strong> downtownAlbuquerque. Arcadia knew that f<strong>in</strong>anc<strong>in</strong>g apotential new development would require more thanjust conventional capital, but also “patient” capital. Itfound this capital <strong>in</strong> the McCune CharitableFoundation, New Mexico’s largest foundation <strong>and</strong>also one with a mission-driven commitment tosmarter growth policies <strong>and</strong> practices. With Arcadia,McCune formed the Historic District ImprovementCompany (HDIC), <strong>in</strong>vest<strong>in</strong>g $7 million <strong>in</strong>Foundation assets. The HDIC would be a “catalyticdevelopment company, [build<strong>in</strong>g] the <strong>in</strong>itial privatesector projects anchor<strong>in</strong>g the revitalized downtown,”accord<strong>in</strong>g to Le<strong>in</strong>berger.A daytime view render<strong>in</strong>g <strong>of</strong> the Gold Avenue L<strong>of</strong>t <strong>in</strong> downtownAlbuquerque, a new progressive real estate development that “burys” a180,000-square foot, 630-car park<strong>in</strong>g structure. (Source: Arcadia L<strong>and</strong>Company <strong>and</strong> HDIC).45Funders’ Network for Smart Growth <strong>and</strong> Livable Communities
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
- Page 1 and 2: Stories of Philanthropic Leadership
- Page 3 and 4: Signs of Promise:Stories of Philant
- Page 5 and 6: Funders’ Network for Smart Growth
- Page 7 and 8: (II. B.)(II. C.)Turning Neighborhoo
- Page 9 and 10: PART I:IntroductionThe Purpose of t
- Page 11 and 12: social justice issues as they relat
- Page 13 and 14: PART II:Perspectives on Advancing R
- Page 15 and 16: peer work, we can reestablish a sig
- Page 17 and 18: Annie E. Casey FoundationBaltimore,
- Page 19 and 20: neighborhoods into healthy ones—g
- Page 21 and 22: Charles and Helen Schwab Foundation
- Page 23 and 24: Section 1:Promoting Equitable Publi
- Page 25 and 26: I. A. BUILDING POWER AND GIVINGVOIC
- Page 27 and 28: policy advocates. In 2002, Milwauke
- Page 29 and 30: in Los Angeles, Ford’s Anthony no
- Page 31 and 32: I. B. PROMOTING COALITIONSTO ADVANC
- Page 33 and 34: Yet the interpersonal dynamics of c
- Page 35 and 36: guidelines. “Many of the member o
- Page 37 and 38: Funder InterestThe EPA supported th
- Page 39 and 40: I. D. DEMONSTRATING THESTRUGGLE FOR
- Page 41 and 42: Richmond, Calif.The second regional
- Page 43 and 44: through policy reform at the local
- Page 45 and 46: I. E. BUILDING COALITIONTHROUGH KNO
- Page 47 and 48: organizing project, the Connecticut
- Page 49 and 50: and businesses are quantified in a
- Page 51: I. G. REVITALIZING WHILEASSURING DI
- Page 55 and 56: I. H. A TRAVEZ DE LA FRONTERA:LAND
- Page 57 and 58: The International Community Foundat
- Page 59 and 60: I. I. MOBILIZING ACTION FORREGIONAL
- Page 61 and 62: To meet all of these objectives, th
- Page 63 and 64: efforts. And with each public plann
- Page 65 and 66: pattern of disproportionate transpo
- Page 67 and 68: Clinica de la Raza identify this cr
- Page 69 and 70: Contact PeopleCarl AnthonyActing Di
- Page 71 and 72: Section 2:Making All Neighborhoods
- Page 73 and 74: II. A. REACHING BEYONDHOUSING TO IM
- Page 75 and 76: A local resident receives the keys
- Page 77 and 78: East Baltimore community and the Jo
- Page 79 and 80: example, adjacent to the EBDI area,
- Page 81 and 82: II. C. YIELDING REGIONALBENEFITS TH
- Page 83 and 84: is using transit-oriented developme
- Page 85 and 86: financing and innovative, forward-t
- Page 87 and 88: The Row House Community Development
- Page 89 and 90: II. E. COUNTERING THE PERFECTSTORM:
- Page 91 and 92: funded community programs, includin
- Page 93 and 94: housing developments and commercial
- Page 95 and 96: owned enterprises, totaling $8.5 mi
- Page 97 and 98: LOAN GUARANTEESSection 3:Connecting
- Page 99 and 100: III. A. MAKING HOUSING ANOPPORTUNIT
- Page 101 and 102: A new report from the National Hous
- Page 103 and 104:
The Straphangers Campaign was found
- Page 105 and 106:
Funder InterestThe Straphangers Cam
- Page 107 and 108:
or increase poverty. Whether direct
- Page 109 and 110:
The Regional Plan Association then
- Page 111 and 112:
multi-stakeholder effort composed o
- Page 113 and 114:
director with LISC. No one set of s
- Page 115 and 116:
12 western Louisville neighborhoods
- Page 117 and 118:
III. E. UNITING THREE STATESFOR ONE
- Page 119 and 120:
increased their personal wealth by
- Page 121 and 122:
summary evaluation of MSDI found th
- Page 123 and 124:
method alone was strong enough to m
- Page 125 and 126:
consistent body of work. The Counci
- Page 127 and 128:
3) Issues Need to be ConnectedThe f
- Page 129 and 130:
PART V:Glossary of TermsThe terms d
- Page 131 and 132:
Regional and neighborhood equity. A
- Page 133 and 134:
Tijuana River Reserve, California:h
- Page 135 and 136:
Sargent Shriver National Center on
- Page 137:
1500 San Remo Avenue • Suite 249