Prudent Investment in Urban Revitalization

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Prudent Investment in Urban Revitalization

• Belden Hull Daniels, CEO
• Economic Innovation International, Inc

Deborah La Franchi, CEO Strategic Development
Solutions
Pension Funds Urban Revitalization Baltimore,
MD June 7, 2006
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Double Bottom Line (DBL)Private Equity Funds

• 1st Bottom line Superior Risk-Adjusted Market
  Returns
• 2nd Bottom Line Measurable Urban
  Revitalization
• Rapidly growing 6.5 billion industry doing
  well doing good
• Targets investment in low-income communities
• Managed by proven private equity fund managers
• Creates superior risk-adjusted market returns for
  investors
• Creates jobs and economic opportunity
• Provides flexible, responsive, value-added
  capital

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Market Discipline Accountability

• Private-sector discipline is central
• Risk-adjusted market rate returns (mid- to
  high-teens)
• Fund Sponsor sets the second bottom line goals
• Fund Managers chosen in national competitive
  process
• Fund Sponsor makes Fund Manager selection
• Investors must approve Fund Manager
• Fund Managers protected by firewall at risk
• Accountability to Fund Sponsor community
  stakeholders
• Fund Sponsor participates in financial returns

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Repeat Institutional Investors

• Commercial Banks B of A, Chase, Citibank,
  Union, USBank, Wachovia, WaMu, Wells and others
  
• Insurance Companies AAA, Axa, Hancock, Liberty,
  Mass Mutual, Mercury, Met Life, NY Life,
  Northwestern, Pacific Life, PMI, Prudential and
  others
• Foundations California Community Annie E
  Casey, Danforth, Ford, Jacobs, Heron, Knight,
  MacArthur, McCune, McDonnell, Sand Hill and
  others
• Public Pension Funds CalPERS, CalSTRS, Contra
  Costa County, Connecticut, Illinois, LACERA,
  LACERS, MassPRIM, NYCERS, NY Common and others
• Union Pension Funds AFL-CIO Housing Building
  Trusts, SEIU and others
• University Endowments Washington University and
  others
• High-Net-Worth Persons Bay Area, Northwest
  Louisiana and others

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Proven Fund Managers

• Access Capital
• Boston Capital
• Canyon/Johnson
• Cityscape Capital
• Community Preservation Corp.
• Equibase Capital Group
• Enterprise Community Investment
• Fidelity Partners
• Hanover Financial
• Hunter Chase

• Ironwood Equity Fund
• Kennedy Wilson
• Landmark Equity
• MacFarlane Partners
• Massachusetts Capital
• Pacific Coast Capital Partners
• Phoenix Realty
• The Reinvestment Fund
• Shamrock Holdings
• Urban America

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III. Case Study Genesis Family of Funds
450 million capital 1.5 billion deals in LMI
areas 100 Self-sufficient not-for-profit Continue
s to create Funds Works with small medium sized
developers
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Case Study Genesis Workforce Housing Fund I
Managed by Phoenix Realty Group

• For-Sale Housing Single Family Detached,
  Townhouses and Condo
• S. Californias Underserved Communities (LMI)
• 102 million Financing for Real Estate
  Development
• Investment of 2 to 20 million
• Fund to Provide Institutional Capital to Local
  Developers
• Income of Buyers 80 - 150 AMI, flexible to
  200 AMI
• Nurses, Teachers, Firefighters, Police, Office
  Workers

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Case Study Genesis Workforce Housing Fund I
Avenue 26 Condominiums

• 165 for-sale residential units
• Child care center
• Community arts center
• Retail/office component
• Senior affordable and tax-credit units to be
  built on adjacent site

• City of Los Angeles, Lincoln Heights
• New construction of old factory site
• Adjacent to Gold Line Metro station
• Not-for-profit Developer

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Case Study Bay Area 2nd Bottom Line

• Soon Four funds, 300 million capital, 1
  billion in deals
• First Fund 66 million Bay Area Smart Growth
  Fund I
• First 3 Years 51 million invested in 10
  projects
• 100 of projects are smart growth Three E
• 1121 permanent construction jobs created
  retained
• 633 units of affordable for-sale homes developed
• 1.2 million sq. ft. of commercial space developed
• 1.6 million sq. ft. of affordable housing
  developed

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IV. Creating a Maryland Regional Workforce
Housing Fund I

• 60 - 90 Million Maryland Fund generates
  180-270 Million in deals
• 100 Smart and Sustainable Growth projects
• Preservation and conservation of open and
  recreational space
• Revitalization of downtowns with mixed-income and
  mixed-use projects
• Family housing for firemen, school teachers,
  policemen, nurses etc.
• Transit-oriented development for livable
  walkable communities.
• Maryland Enterprise Fund Sponsor oversees Fund.
• Enterprise Community Investment, Inc. Fund
  Manager brings track record.
• National pool of repeat institutional investors
  have high interest
• Now More Across Country New England Workforce
  Housing Fund I

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