A Private REIT for Neighborhood Investors Mercy Corps Northwests model for family asset building linked to neighborhoodbased community development Why Asset Poverty is a pressing Oregon and national challenge ID: 696009
Download Presentation The PPT/PDF document "Community Investment Trust" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Slide1
Community Investment Trust A Private REIT for Neighborhood InvestorsMercy Corps Northwest’s model for family asset building linked to neighborhood-based community developmentSlide2
Why?Asset Poverty is a pressing Oregon and national challenge
1 in 4 Oregonians
(24%) live
in
a condition of asset poverty(Without income for 3 mos. must rely on friends, family, public assistance)
17% of Oregonians have zero or negative net worth
26% of renters in Oregon spend 50% or more of income on rent
(2
nd
highest nationally)Slide3
Population of four census tracts surrounding Plaza 122 is approximately 30,000 people
Ethnically diverse (Somali, Russian, Hispanic, Vietnamese)
90% of the children and Mill Park elementary school qualify for free or reduced lunch program
Where?
Mill Park & Hazelwood Neighborhood
Only 35% of homes are owner occupied; large renter population
Median family income is 67% of Portland metro median; poverty rate is 22%Slide4
People’s Motivation for long-term investments:Children’s educationFamily emergencyPurchase a homeRetirementGet out of debt, start a business, buy a car, Moving from Owing to Owning:People embrace the opportunity to take action for themselvesThey rebel against being left out
Everyone wants
access and
opportunities, and to learn
and understandWe all yearn to join into and be part of something larger Information was gathered from neighborhood residents by a Reed economics thesis student, Melody Harvey ,and Willamette University MBA teams
What?
Providing a Nudge: Improving Decisions about Health, Wealth and Happiness –
Author, Richard
ThalerSlide5
1 Property Evaluation Tool2 Property Financial Spreadsheets Tool3 Capitalization Options: Debt / Equity / Grant Subsidy 4 Community Mapping Tool 5 Investor Training and Curriculum 6 REIT Management
7
Legal
Framework 8 Communications, Public Relations & Web Portal9 Investment Web Portal
10 Design, Monitoring and Evaluation
How?
Implementation
Plan-Toolkit & License Package for
Replication
Slide6
GoalsImplement investment of Plaza 122 in June 2016License model Establish partnership with national foundation Sell replication model regionally and nationallyInitiate second and third property in Portland region (ground-up new building and portion of large project) Earn sustaining and greater revenue. Build CIT advisory/monitoring teamSlide7
Next Steps by 6/30/16Hire CIT Business Analyst (in process by April)Insulate building, meet and photograph all tenants, finish website, convene advisory group, reengage community leaders, teach classes, develop public relations plan, renew tenant leases, secure orphan property (new hire to do)3. Audit Plaza 122 Community Investment LLC (in process by April)4. Secure bank loan and backstop (in process)5. Obtain security exemption (Orrick doing pre-vet)Slide8
What are Obstacles? Too new Untested Too many steps Real Estate is risky Earthquakes Investors should diversity People won’t understand Banks don’t get CRA credit for it Funding is difficult Lack of trust Crime Lack of Staffing Appraisals are costly Traffic Sellers are tough Tenants may not want it City County State must be involved Mercy Corps has limited real estate experience Renter Investors are mobile People have no time or interest in classes
Must partner with affordable housing
Must partner with schools
Gangs Must partner with churches GraffitiSlide9
What are Obstacles? Untested Earthquakes People won’t understand Banks don’t get CRA credit for it Crime Traffic Renter Investors are mobile People have no time or interest in classes Gangs GraffitiSlide10Slide11
Theory of ChangeImpact
Successful
CIT will
make:
Mill Park/Hazelwood neighborhood: safer, more engaged, equitable, economically viable with greater quality of life.Slide12
Population of four census tracts surrounding Plaza 122, ranging from 1 to 2.5 miles, is approximately 30,000 people
Ethnically diverse (Russian, Somali, Hispanic, Vietnamese)
90% of the children and Mill Park elementary school qualify for free or reduced lunch program
Only 35% of homes are owner occupied; large renter population
Median family income is 67% of Portland metro median; poverty rate is 22%Slide13
Theory of ChangeImpact Strategies/Activities
Successful
CIT will
make: Mill Park/Hazelwood neighborhood: safer, more engaged, equitable, economically viable with greater quality of life.
CIT impact on three levels:
Individual and familyNeighborhoodPlaza 122 and tenantsSlide14
Theory of ChangeImpact Strategies/Activities (grouping of what we do to create impact) (link strategies, activities and
.
interventions with eye on impact)
Successful CIT will make: Mill Park/Hazelwood neighborhood: safer, more engaged,
equitable, economically viable with greater quality of life.
Local investing access with short & long-term return available to all E
ducation and mentoringPeer networking online and at churches, affordable housing, schools and Plaza 122
CIT impact on three levels:
Individual and family
Neighborhood
Plaza 122 and tenantsSlide15
Theory of ChangeImpact Strategies/Activities (grouping of what we do to create impact) (link strategies, activities and
.
interventions with eye on impact)
Successful CIT will make: Mill Park/Hazelwood neighborhood: safer, more engaged,
equitable, economically viable with greater quality of life.
Local investing access with short & long-term return available to all E
ducation and mentoringPeer networking online and at churches, affordable housing, schools and Plaza 122
CIT impact on three levels:
Individual and family
Neighborhood
Plaza 122 and tenants
Voter registration
Join neighborhood associationsSlide16
Theory of ChangeImpact Strategies/Activities (grouping of what we do to create impact) (link strategies, activities and
.
interventions with eye on impact)
Successful CIT will make: Mill Park/Hazelwood neighborhood: safer, more engaged,
equitable, economically viable with greater quality of life.
Local investing access with short & long-term return available to all E
ducation and mentoringPeer networking online and at churches, affordable housing, schools and Plaza 122
CIT impact on three levels:
Individual and family
Neighborhood
Plaza 122 and tenants
Voter registration
Join neighborhood associations
Tenant marketing and events for investors and neighborhood.
Peer networking online and at churches, affordable housing and schoolsSlide17
Theory of ChangeImpact Strategies/Activities Connections (grouping of what we do to create impact) (link strategies, activities and
.
interventions with eye on impact)
Successful CIT will make: Mill Park/Hazelwood neighborhood: safer, more engaged
, equitable, economically viable with greater quality of life.
Local investing access with short & long-term return available to all
Education and mentoring
Peer networking online and at churches, affordable housing, schools and Plaza 122
CIT impact on three levels:
Individual and family
Neighborhood
Plaza 122 and tenants
Tenant marketing and events for investors and neighborhood.
Peer networking online and at churches, affordable housing and schools
Voter registration
Join neighborhood associationsSlide18
Theory of ChangeImpact Strategies/Activities Connections (grouping of what we do to create impact) (link strategies, activities and
.
interventions with eye on impact)
Successful CIT will make: Mill Park/Hazelwood neighborhood: safer, more engaged
, equitable, economically viable with greater quality of life.
Local investing access with short & long-term return available to all
Education and mentoring
Peer networking online and at churches, affordable housing, schools and Plaza 122
CIT impact on three levels:
Individual and family
Neighborhood
Plaza 122 and tenants
Tenant marketing and events for investors and neighborhood.
Peer networking online and at churches, affordable housing and schools
Voter registration
Join neighborhood associations
Individual Behavior Change through:
Incentives
Knowledge of cost of old behaviors
Knowledge of benefits of new behaviors
External mentors
7
) Community engagement / events
Tenant marketing /PR
5
) Coaching
and modeling
6
) Peer
mentoring Slide19
Theory of ChangeImpact Strategies/Activities Connections (grouping of what we do to create impact) (link strategies, activities and
.
interventions with eye on impact)
Successful CIT will make: Mill Park/Hazelwood neighborhood: safer, more engaged
, equitable, economically viable with greater quality of life.
CIT impact on three + MCNW levels:
Individual and familyNeighborhood
Plaza 122 and tenants
Mercy Corps Northwest
Impact Innovation, Influence
Self-sustaining licensing income
National thought leader and collaboration platformSlide20
Theory of ChangeWhat organizations forget in design monitoring and evaluation
1) Economic Conditions
2) Institutional Change
3) Community Change
4) New Regulations5) AccessSlide21
Theory of ChangeWhat organizations forget in design monitoring and evaluation
1) Economic Conditions
2) Institutional Change
3) Community Change
4) New Regulations5) AccessAccess to Resources = Use of Resources Knowledge = Behavior ChangeSending Message or website development = communicationOwnership = Responsibility
Faulty Theories Slide22
“A Jewel in the rough, handyman’s delight and bigger than it looks!”
Todd
VanDomelen
, broker Norris Stevens, 6/26/14
29,000 square feet
Built in 1962 on farm landCommercial propertyCurrently: 22 tenants non-profits and businesses, at 85% occupancySlide23Slide24
Short-term OutcomesLong-term OutcomesNumber of Investors (estimated at 300 for $350K equity in Plaza 122)
1. Longevity
of Investor
Commitment
(3 year minimum to 15 years)
2. Amount of Annual Investment per Investor ($120 to $1,200/year @ $10 to $100/ mo.)
2. Investment Yield Target(annual dividend
of at least
5% plus share price change from
property value & debt reduction
)
3.
Participation
from Youth to Adult
3. Neighborhood
Health
(safety
,
engagement, further
development)
4. Competency with
Long-term
Investing
(requirement
guiding
individual
investment plans)
4. Property
Value
Change
(3-5% annually)
5. Establish
Personal Goals
&
Investment
Plan
(a requirement to invest
)
5. Neighborhood Development Catalyst or Community
Asset
6. Connect
Investors with
Mentors and Online learning
tools
(we will develop this)
6. Success of
Tenants in
building
(5- 10%
vacancy; survey of success)
Blending Neighborhood Development with Personal Asset Development