Clark-Fulton, Glenville, Buckeye-Kinsman awarded $9 million investment in real-estate projects

Cleveland Finance 3 weeks ago

CLEVELAND, Ohio – Three city neighborhoods are slated for nearly $9 million in investments for projects that create positive social impacts such as affordable housing, digital connectivity, and access to fresh food, green space and good jobs.

Cleveland Development Advisors (CDA), the real estate and business development finance arm of the Greater Cleveland Partnership, today announced that Clark-Fulton, Glenville, Buckeye-Kinsman and areas immediately surrounding those neighborhoods will benefit from a JPMorgan Chase program that supports neighborhood development projects.

Cleveland is one of seven winners of JPMorgan Chase’s annual Partnership for Raising Opportunity in Neighborhoods competition, which drew 75 applications from 49 cities.

Over the course of three years, JPMorgan Chase will invest $5 million in projects in those neighborhoods. CDA will contribute an additional $3.75 million, and create and manage a fund that qualifying developers can tap for loans with below-market rate lending rates. Also part of the program is technical assistance provided by nonprofit real-estate developer Finance Fund Capital Corporation (FCAP).

The goal, leaders of the initiative say, is to support projects with measurable social impacts, as well as leverage the investment to attract additional private and public sector dollars.

That’s important, because projects in the selected neighborhoods often require multiple layers of financing to fill gaps, explained Yvette Ittu, CDA president.

“This grant from JPMorgan Chase — when bundled with the city’s incentives, other public and private monies and the Opportunity Zone designations — allows us greater ability to attract, encourage and assist investment and development to empower these neighborhoods,” she said in a news release.

Mayor Frank Jackson, in a news release, lauded the investment and noted that it complements his Neighborhood Transformation Initiative, for which the areas of Circle North, Buckeye-Woodhill, Clark-Metro and part of East 79th Street have been targeted for investment.

“This commitment from JPMorgan Chase and the matching loan funds from Cleveland Development Advisors will give us another significant tool to leverage new investments aimed at benefitting residents of the Clark-Fulton, Glenville and Buckeye-Kinsman neighborhoods,” Jackson said.

The opportunity to pair its dollars with funding from other sources, including from the mayor’s initiative, is one reason Cleveland’s application stood out, according to JPMorgan Chase.

“Our $5 million investment is going to leverage dollars from additional sources. Any investments we make in organizations like Cleveland Development Advisors and [FCAP], we look at what other sources of capital are available in the market,” said Alex Derkson, vice president of global philanthropy for the financial institution. “That was an important consideration for us, here.”

CDA and FCAP chose Clark-Fulton, Glenville and Buckeye-Kinsman based on Cleveland State University research suggesting that they are areas with Opportunity Zone designations that would benefit from focused planning and could attract private investment, according to a news release.

Opportunity Zones are federally designated census tracts where investors can get tax incentives in exchange for investing capital gains from unrelated investments. Cuyahoga County has 64 opportunity zones, with 48 in Cleveland.

Because there is no system in place to track Opportunity Zone investments, it’s difficult to tell how much investors are taking advantage of the program locally. But Ittu said that, anecdotally, her organization is seeing Opportunity Zone activity in neighborhoods that are already drawing a considerable amount of investment, such as Ohio City and Tremont.

The hope is that programs such as this one will further incentivize Opportunity Zone investors to fund projects in neighborhoods — like these three, which have higher average poverty and unemployment rates than the city overall — that are attracting less investment.

“We recognize that attracting the right Opportunity Zone investor and capital is really, really important in these deals,” said Derkson.

Ittu declined to give details about projects that might be in the pipeline for funding, but noted a few examples of projects that are under way that would likely meet the program’s criteria, such as the redevelopment of the former Astrup Co. complex on West 25th St. and the Glenville Circle North apartment project.

FCAP and CDA will work directly with the neighborhoods’ community development corporations, providing technical assistance and using existing community plans to assess what needs projects should aim to meet.

Tags: Business

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