SECOND AND THIRD BOTTOM LINE IMPACTS:
Measuring Results
Deborah J. La FranchiCEO – Strategic Development Solutions
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June 10, 2008
Double and Triple Bottom Line Funds
1st Bottom Line: Risk-adjusted market-rate returns
2nd Bottom Line: Positive social and community benefits (low-income community)
3rd Bottom Line: Positive environmental impacts
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Funds Created by SDS and Economic Innovation
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Impact Reporting
No Standard
Challenges – data collection
Upfront Design – collect upfront
Reporting that Works for Investors
Reporting that is Feasible for Developers / Fund Managers
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Second and Third Bottom LineImpact Report
Goal: Standardized reporting tool; ease of use (investors); capture relevant data
Process: Compared 6 different reports; reviewed Gary Pivo’s Delphi Method paper; talking with investors
Input: Pension funds, banks, insurance companies, foundation endowments,
RPI (David Wood/Gary Pivo), ICIC
Current Status: Template under development; sample constructed
Completion: End of Summer
Next Steps: Finalize and share with industry
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One-Page Scorecard
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Sections
Project Description
Investment Overview
Project and Area Profile
Second Bottom Line: Social and Economic Impacts
Third Bottom Line: Environmental Impacts
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Project Description
TBL World Headquarters The TBL World Headquarters Project will rehabilitate the historic four-story Hudson Building, as well as construct a new building extension and parking lot on an adjacent site. This $38 million project includes $7.5 million in National New Markets Fund tax credits to develop over 80,000 sq. ft. of space to house the administrative office of the global headquarters for TBL World, to support itshumanitarian work addressing global poverty, hunger, and conflict resolution in over 35 developing countries world-wide. The project will also house TBL World’s new interactive public Action Center, community conference facilities, and TBL World Northwest’s Small Business Development Center. The facility will also serve as the new headquarters of the Lemming Foundation. The Action Center will serve as a regional educational center and resource for area schools and serve as a tourist attraction for outside visitors, and the business development center will assist low-income entrepreneurs who want to create or expand small businesses. The project also creates significant environmental impacts through its LEED Gold Certified design, though it is striving to achieve a platinum designation upon completion.
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Investment Overview
INVESTMENT OVERVIEW
Project Timeframe: Start Date: 3/2008; End Date: Fall 2009
Investment Date: March 19, 2008
Asset Class: Mixed-Use: Office, Cultural Learning Center
Type of Development: Historic Rehab; New Construction
Developed Square Feet: 80,000 (4-story facility)
Total Development Cost: $39,000,000
NNMF Investment: $ 7,500,000
Financing Sources: Other Federal NMTCs
$12.0MM
Federal Historic Tax Credits $ 3.3MM
Private Grants $ 2.9MM
Debt $13.3MM
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Project and Area Profile
PROJECT AND AREA PROFILE
Location: Portland, Oregon
Area: Downtown (Old Town/Chinatown)
Site Status: Underutilized; 75% vacant
Previous Use/Operations: Retail/Shopping Center; Parking Lot
Degree of Blight: Moderate to Significant Blight
Unemployment Rate: 18%
Area Median Income: 68%
Poverty Rate: 45%
Special Economic Zones: Downtown Waterfront Urban Renewal Area; SBA HUB Zone
Barriers to Development: High crime area; historic building
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Second Bottom Line:Social and Economic Impacts
2nd Bottom Line: Social and Economic Impacts
Economic Output for Construction: $23.24MM
Economic Output for Operations: $10.96MM annually
Employee Compensation for Construction: $ 6.10MM
Employee Compensation for Operations: $ 6.61MM annually
Construction Tax Revenue: $ 3.46MM
Operation Tax Revenue: $ 2.28MM annually
Taxpayer Break Even: $11MM/yr 5 (cumulative)
20 Year Cumulative Taxes: $45MM
Taxpayer 20 Year ROI: 310%
Taxpayer Internal Rate of Return: 18%
Operating savings and program funds: ($X)
Consolidates business infrastructure
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Second Bottom Line:Social and Economic Impacts,
Continued
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Second Bottom Line:Social and Economic Impacts,
Continued
2nd Bottom Line: Social and Economic Impacts
Jobs: 420 Total (220 Construction; 200 Permanent- 150 Existing/50New)
Creates new tourist attraction
Bolster foot traffic to support area businesses
Rehabilitates a historic property / Blight eradication
Outreaching to Women- and Minority-Owned Subcontractors
Increases region’s nonprofit infrastructure
Transit-oriented development: located on light-rail path
Working with Local WIB to hire low income workers
Finances real estate with flexible leases/rent
Retirement Benefits: X
Health Insurance: X
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Third Bottom Line:Environmental Impacts
3rd Bottom Line: Environmental Impacts
LEED Gold Certified (targeting Platinum)
CO2 Emissions reduction: X
Energy: 37% reduction in overall energy usage
Rooftop solar panels
Green roof installation
Mechanical system 50% more efficient than code
Energy efficient glass
Energy saving light fixtures
Potable water usage reduction: 40% reduction in overall usage
Low-flow fixtures
Storm water filtration and management
Water resistant landscaping
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Third Bottom Line:Environmental Impacts, Continued
3rd Bottom Line: Environmental Impacts
Recycling of materials:
Rehabs a historic building
95% of construction waste diverted from landfills
Building products of high recycled content
Promotes alternative transportation:
Strategically situated on a Metro line
Parking for fuel efficient cars
Bike friendly amenities (storage, showers, changing areas)
Environmental and sustainable living education provided in Action Center
Reduced heat island effect through green roof and light colored roofing
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DBL Handbook
Funded by the Ford Foundation
Provides a comprehensive overview of the field of Double Bottom Line investment private-equity funds.
The Handbook is available at:
www.sdsgroup.com
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