New York City, New York On the other side of the country, the New York City NHS received a $200,000 grant from FY 1992 equity capital funds to devote to lending for mixed use, multi-family properties which are invariably extremely difficult to finance. NHS used these dollars in conjunction with the city, the state and a consortium of banks to support the purchase and rehabilitation of two buildings by low-income Latino tenants wanting to own their own homes. Both tenant groups had worked for over seven years to find the means to acquire these properties and convert them to 18 limited equity cooperative units and four commercial spaces. The buildings had been city-owned, vacant and severely vandalized for several years and rehabilitation costs were staggering, totalling $1.6 million. Once again, the flexible rehabilitation financing that our equity capital provided allowed NHS to effectively weave together the more constrained city, state and bank financing. As of July 1, all units are completed and occupied and both properties are fully returned to the tax rolls of the City of New York. In addition, creation of four commercial spaces has provided room for small businesses which have brought much needed jobs and services to the neighborhood. The equity capital dollars available to the NeighborWorksR network constitute an extraordinary and precious resource. These grants typically fill a need that no other funding source can fill. As the examples suggest, equity grants become the "early money" that a NeighborWorks® organization needs to fully assess feasibility; they cover the initial investment that increases the confidence of skeptical lenders; they become the pre-development costs which no one else wants to fund; they become the gap financing which successfully weaves other funders together; they become the bridge loan that saves penalties, insures affordability and keeps a project moving; they become the occasional mid-course infusion which allows a NeighborWorks® organization to manage an undetected environmental hazard; and, occasionally, they allow rehabilitation in excess of value in a network of organizations for whom the revitalization of a neighborhood is as important as the completion of a project. The demand for these dollars has been relentless. Currently, we are making very difficult decisions among very deserving initiatives and, in many cases, we are saying no, or not yet. Inevitably some of the projects on the waiting list disappear as windows of opportunity close and other funding sources are exhausted. In FY 1995, $6,650,000 will allow us to respond more broadly and rapidly to network need for flexible capital as well as allowing network members to expand their lending capacity. Our FY 1996 request would allow our existing network and Neighborhood Housing Services of America to further expand their reach and effectiveness while also providing access to this valuable resource to 30 new members of the NeighborWorksR network. The consistent, creative, competent use of equity capital by the NeighborWorksR network has touched many communities across the country and has had a significant effect on network impact and productivity. After three years of experience in successful, strategic application of this precious resource, Neighborhood Reinvestment is convinced that an enhanced level of capital funding is a sound and promising investment which will have enormous returns. A list of all FY 1992 and FY 1994 equity capital grants are on the next pages. |