Rock Island’s Riverfront: The Redevelopment Story

Rock Island’s Riverfront: The Redevelopment Story

Beth Payne, Administration Director

Renaissance Rock Island

In the 1980’s, one of Rock Island’s major employers, International Harvester, closed its doors resulting in a loss of 5,000 jobs.

Rock Island's population dropped over 20%, and a common bumper sticker read “If you are the last one to leave, please turn out the lights.”

The History

Instead of giving up, the community joined together to seek ways to promote new development, new housing, new businesses, expansion of current businesses and to improve the overall quality of life in Rock Island.

The renaissance began and GROWTH was birthed, serving as a catalyst to spur the commitment and investment of public and private partners.

The History

• 21 units currently under construction or predevelopment in Rock Island

• 118 units currently under construction or predevelopment outside of Rock Island

Today 243 units of downtown housing created

• Owner/ Developer

• General Contractor

• Construction Management

• New Construction

• Single Family Rehabilitation

Today 1142 Single Family Homes Impacted in the Region

• Over 30 year history working in Rock Island since the 1980’s

• Lead of Regional Coalition since 2009

• National non-profit since 2012

Today 680 Homebuyers welcomed to the region

Economic Growth Corporation

Comprehensive Approach to

Community Revitalization

Economic Growth

Corporation

Bridge Investment CDC

Development Association of

Rock IslandThe District

Central States Development

Partners Inc CDE

Comprehensive Approach to Community Revitalization

Who We Are. What We Do.

$1,800,000 in commercial lending

and support

$17,000,000 New Market Tax Credits

closed/ facilitated

$16,000,000 in residential loan product

$162,000,000

Community Investment

17 business currently

being incubated

680

homebuyers assisted

2000 Local jobs supported

$1,000,000

Increase in retail

sales tax

$233,000,000 Generated in local

economic impact

44 units

commercial management

1142 units

of single family units in region

243 units

of downtown housing

147 units currently under construction or under predevelopment in the region

280 employees purchased homes in Rock Island to date through Employer Assisted homebuyer program

$1,500,000 downpayment assistance to 280 employees through Employer Assisted Homebuyer program

$27,000,000 generated in real estate transactions with 49% of participating households relocating to Rock Island from outside communities

PartnersExpert in Public-Private Partnerships

Downtown Housing Rebuilds Critical Mass

First Mortgage $1,700,000–Risk Sharing 50/50 insured by IHDA & USHUD–Funded by the AFL-CIO

•Second Mortgage $ 750,000–Funded by HTF

•Third Mortgage $ 275,320–Funded by the City of Rock Island

•Equity $3,308,870–Historic $ 433,210–Affordable $2,758,466–Deferred Dev. Fee $ 117,194

•Grants $ 272,000–City Façade $ 30,000–State Energy $ 68,000–AHP $ 175,000

•Total $6,307,190•Other

–15 year property tax negotiated schedule– 30 year lease back of commercial space

Goldman & Renaissance Lofts

Goldman Lofts

Renaissance Lofts

Goldman & Renaissance Lofts

Goldman Lofts

Goldman & Renaissance Lofts

Renaissance Lofts

Reinventing One Block

Reinventing One Block

Goldman Lofts

The process begins with decision of a property owner to donate a white elephant structure to a local not-for-profit.

Goldman Lofts – 28 units

Goldman & Renaissance Lofts

In one project two white elephants were converted to 52 units of loft housing.

Patience can be a virtue.

Goldman Lofts

501 c3 status allowed tax benefits to exceed probable cash sale proceeds.

Splitting the parcel, the former annex became the offices of Renaissance Rock Island, now home to a new downtown business.

Goldman Lofts

$6.3 million development employed 100 workers through various trades. An additional 40 persons were utilized in peripheral positions.

Renaissance Lofts – 24 units

Goldman & Renaissance Lofts

Renaissance Lofts

Innovative partnerships transforming Rock Island!

Renaissance Lofts

Units are attractive to young professionals.

Goldman & Renaissance Lofts

Goldman & Renaissance Lofts

Community-based developer takes back a 30 year, $1 per year lease on commercial space.

Commercial space – MidCoast Gallery known as “The ARTery”

Goldman & Renaissance Lofts

Commercial space – Shear Elements & SK Models

Goldman & Renaissance Lofts

Commercial Space Lease Back

•$1.00 per year + pro rata share of taxes, insurance & maintenance.

•Sublease income pays for commercial build out costs then becomes an annuity for the not-for-profit.

•Gives us flexibility for income or retail development.

Zin Wine Lounge

ICONS MartiniHickey Bros.

Shear Elements & SK Models

Atlante

Renaissance Lofts: Highest Commercial Performer

Goldman Lofts: Business Incubator Supporting Arts & Wellness

Taste Buds Be Well QC:

QC Holistic StudioMidcoast Gallery

West

Sources of Funding:Neighborhood Stabilization Program 2 $5,908,898

MWA Bank $1,305,000

City of Rock Island TIF $740,000

US EPA $300,000

State Donation Tax Credits $318,200

DCEO $36,000

Total Project Cost $8,831,087

Jackson Square 51 Full Time Jobs Supported

Award-winning project• Eddy Award for Revitalization - River Action

• Wyvetter H. Younge Illinois Affordable Housing Award

• Certificate of Appreciation - Quad Cities Riverfront Council

• Community First Partnership Award - Federal Home Loan Bank of Chicago

GROWTH purchased this 87 year old site in 2010 to advance the Downtown Strategic Plan, Arsenal Gateway Plan and meet housing needs of the community

Jackson Square

Jackson Square

Features: •3 bedroom / 2 bath Units

•High Speed Internet, Washer & Dryer Hook Ups in Units

•3,159 Sq Ft of Community Space, Kitchen& Meeting Rooms

•3,700 Sq Ft Future Commercial Space on First Floor

Rent Ranges:$432 - $875

Unit Counts:

1 Bedroom (830 sq ft) = 32 Bedroom (925 sq ft) = 173 Bedroom (1300 sq ft) =10

Over 40,000 sq. ft. of blight demolished

Nearly $1,000,000 spent in environmental remideiation

Jackson Square

Jackson Square-2012

Jackson Square- 2016

$215,900

$10,000 Grant

$920/PI

$194,900

$5,000 Grant

$831/PI

$159,900

$6,247EAP Grant

$682/PI

$215,900

$10,000 Grant

$920/PI

$215,900

$10,000 Grant

$920/PI

$149,900

$5,997EAP Grant

$639/PI

\\

$194,900

$5,000 Grant

$831/PI

The Garden District

The Garden DistrictModel Unit: 2448 3rd Ave

The Garden DistrictModel Unit: 2448 3rd Ave

The Garden DistrictModel Unit: 2448 3rd Ave

The Garden DistrictModel Unit: 2448 3rd Ave

The Garden District

Total Project Budget Amount

Debt $1,105,000

City of Rock Island- TIF $25,000

Foundation $15,000

Illinois Attorney General National Foreclosure Settlement Funds– Sales Proceeds

$60,000

NSP 2 $300,000

NSP 1 $45,000

IHDA- State Affordable Housing Tax Credits $215,800

Deferred Dev Fee & Sales Proceeds $95,000 + $229,288

Total $2,090,653

The Garden District

A national for-profit Community Development Entity, Central States has a pending $48 million application for its own allocation of NMTC.

Governance Structure & Roles

GROWTH Corp.Board of Directors

Central States Development Partners, Inc.

CDEAdvisory

Board

GROWTH Board of Directors is Governing Body of Central States Development Partners, a for-profit Community Development Entity.

CDE Advisory Board: Ensures that activities of CDE are occurring in low income communities.

Central States Development Partners, Inc. • Central States Development Partners (Central States) is a nationwide

CDE, formed by its parent non-profit, Economic Development Growth Corporation (GROWTH), to utilize NMTCs to revitalize low-income communities.

• Central States is primarily focused on three states: Illinois, Indiana, and Iowa.

• Utilizes coordinated efforts to bring mixed-use, manufacture, healthcare and fresh food to communities

• Central States applied for $48 million of NMTC allocation in this round, which is expected to be announced in October/ November.

Central States Development Partners, Inc. • Central State’s parent entity, GROWTH and its affiliates, have provided over

$49 million of financing to projects in low-income communities.

• Central State’s focus is on projects that create opportunity (accessible jobs) and add amenities that improve the quality of life in areas which are the most highly underserved in the target geography.

• Central State’s prioritizes projects that have community alignment, a demonstrated need for gap capital, demonstrated ability to improve the low-income community and long-term viability.

• Experienced working with NMTC projects:

• Dot Foods $10 million of allocation• Hill and Valley $10 million of allocation

Application for National AllocationBusiness Strategy & Focus

• Bringing critical services manufacturing

education

healthcare

• Creating jobs quality (not less than 130% above median worker wage)

and accessible (less than 80% AMI)

• Bringing fresh food to urban areas with: industrial disinvestment

poverty concentration

low wage levels

low levels of education

Our application has a focus on funding manufacturing/industrial, health care clinics, fresh food retail and mixed-use transactions that provide workforce training/education services.

Subsidiary Community Development Entities Sub- CDE’s

GROWTH

Controlling Entity

Sub CDE 1

NMTC Project 1

Sub CDE 2

NMTC Project 2

Sub CDE 3

NMTC Project 3

Sub CDE 4

NMTC Project 4

Sub CDE 5

NMTC Project 5

Central States Development Partners, Inc.

For Profit Community Development Entity

CDE Capacity 2012: Expansion of DOT FoodsMt. Sterling, ILProject: $16 MillionPermanent Jobs Created: 50

2014: Facilitation of the Relocation and Expansion of Hill &ValleyRock Island, IL Project: $16 Million Permanent Jobs Created: 45Jobs Retained: 130

2008: CDE Identified Columbia Park Plan as potential for NMTC

From This

To This

Catalytic Impact • Hill & Valley was featured in

Novogradac Journal of Tax Credit’s October 2014 issue

• Brings national attention to a Rock Island project.

• Hill & Valley’s relocation and expansion provides a catalyst for investment of $50 million and the creation of an additional 400 local jobs.

Hill & Valley, Inc.$16 Million Investment in a distressed census tract 25 new jobs, 12 more to be added before end of year 200 employee workforce

Resilience ReportHill & Valley, Inc.

• 10 years ago, LRC Developers group tore down 1 million square feet of old warehouse space and opened 15 acres.

• Of the four original buildings still standing, three were filled by Hill & Valley.

• The rest of the property was cleaned up for future development, including a 10-acre sale three years ago to the Metro Link system as a maintenance facility, a $36.1 million investment

• MetroLINK maintenance facility now considered a national model for replication nationwide for transit maintenance facilities.

$51 Million in new

investment since 2014

Resilience ReportHill & Valley, Inc.

• NMTCs played a key role in the $16 M development

• New bakery, office and warehouse into 136,000 sf operation space for Hill & Valley, creating a boon for the company, and a huge lift for its hometown, Rock Island.• It kept a local company and allowed it to grow.

• It created jobs (50+)

• Gave the company the ability to make the product in a more efficient layout and with more testing equipment.

New Market Tax Credit Timeline

Q2:

New Market Tax Credit Forum hosted in downtown RI

2015-2016 Rounds combined for a total $7 billion available

Q3:

5 sub-CDE’s created

Q4:

Announcement

238 applicants requesting $17.6 billion

Note: officials have been working to distribute NMTCs across the US, including “underserved states” that have received the least NMTC allocation in

proportion to their population living in low-income communities.

If Application is Funded= DARI’s loan to be paid back in full ($20,000) Approved at November 2015 board

90 Day Impact

Support job creation and economic growth in low and-moderate-income communities and underserved areas by:

• Providing community-based lending and investment;

• Leveraging public and private investment for economic and community development;

• Fostering the creation and preservation of low-and-moderate-income housing for low-and-moderate-income households.

• Seeks to empower individuals, businesses,and cities through its financial programs.

• Assists the emerging economic needs of communities.

Support Local Businesses. Create Jobs. Change Communities.

Structure

Rock Island Economic Growth

Corporation

Bridge Investments

Management Agreement

• First 90-days operations:

• Governance: • Board of Directors • Nine banks• Two for-profit businesses• One non-profit

• Raised $465,000 in capital

• Increased Asset Base by an additional $150,000

• $3,780,000 in forward commitments

Neighborhood Reinvestment Fund

Neighborhood Reinvestment Fund$1,600,000

Neighborhood Reinvestment Fund

• $1.6 Million in forward commitments for initial phase

• The Neighborhood Reinvestment Initiative allows: • Purchase• Renovate• Sell neglected homes

• Bi-state region of Iowa and Illinois• Rock Island County • Scott County• Whiteside County

• The effort will result in creating sustainable homeownership and wealth building opportunities for local families

Loan Activity

$2,574,000 in forward commitments

Loan Activity

Neighborhood Housing Services- Davenport, IA: •Single Family Redevelopment•$394,000 loan approval•$30,000 bridge financing •$2,002,638 leverage•15.6 jobs supported•4 units of housing stock improved•4 new homebuyers

Loan Activity

• Coatsworth Apartments- Galena, IL:

• Preservation of senior, multi-family, mixed use development in a rural/ underserved county

• $75,000 loan approval

• $1,285,000 leverage

• 15.31 jobs supported

• 18 low income rental units

• First Floor Commercial Space

Loan Activity

Zimmerman Lofts- Rock Island, IL:•Low Income Housing Tax Credit Residential Development •$1,850,000 loan approval

Bridge lead lender through participation agreements•$10,339,428 leverage•137.25 jobs supported•25 new jobs created•45 total housing units, of which 89% will serve residents earning at or below 60% Area Median Income. •First Floor Commercial•Addressing housing and business needs in a low-income, distressed census tract

Loan Activity

Downtown Business- Rock Island, IL:•40-year old business located in low-income, distressed census tract•$100,000 loan approval•$150,000 leverage•2.81 construction jobs supported•40 permanent jobs supported

Loan Activity

Rock Island Economic Growth Corporation- Rock Island, IL: •Patient Capital Utilizing a Development Agreement•$125,000 loan approval•$2,104,210 leverage•25.10 construction jobs supported•8 residential units with first floor commercial space•Addressing housing and business needs in a low income, distressed census tract

Resilience Report 90 days of activity

75

housing units

261.07

Jobs supported/

retained

$15,881,276 Leverage

Comprehensive Economic Development Plan for the Region

Community Benefit Agreements$500,000- potential

Community Benefit Agreements

HUD 108: Revolving Loan Fund$5 Million • State Wide Program

• In partnership with HUD and the DCEO

• The preferred concept would need to be lending for very secured transactions, with emphasis on tax credit secured or other collateral in a senior position.

Revolving Loan Fund: AG/ NSP Program Income

$300,000

• Launching 1st Quarter 2017

Economic Growth

Corporation

Bridge Investment CDC

Development Association of

Rock IslandThe District

Central States Development

Partners Inc CDE

Comprehensive Approach to Community Revitalization

Thank you!

Beth Payne

Administration Director

Renaissance Rock Island

100 19th Street, Suite 109

Rock Island, IL 61201

309-788-6311

beth@teamrockisland.com

Brian Hollenback

President/ CEO

Renaissance Rock Island

100 19th Street, Suite 109

Rock Island, IL 61201

309-788-6311

brian@teamrockisland.com