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Prudent Investment in Urban Revitalization

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. Double Bottom Line (DBL) Private Equity Funds .

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Prudent Investment in Urban Revitalization

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  1. 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

  2. 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

  3. 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

  4. 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

  5. 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 Proven Fund Managers

  6. III. Case Study: Genesis Family of Funds $450 million capital $1.5 billion deals in LMI areas 100% Self-sufficient not-for-profit Continues to create Funds Works with small – medium sized developers

  7. Case Study: Genesis Workforce Housing Fund IManaged by: Phoenix Realty Group • For-Sale Housing: Single Family Detached, Townhouses and Condo • S. California’s 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

  8. City of Los Angeles, Lincoln Heights New construction of old factory site Adjacent to Gold Line Metro station Not-for-profit Developer Case Study: Genesis Workforce Housing Fund IAvenue 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

  9. 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

  10. 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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