Development Finance for Downtown

12/01/2017 2:30 PM | Jamie Shapiro

Recently, I had the opportunity to to travel to Atlanta, Georgia to attend the Council of Development Finance Agencies (CDFA) National Summit due to a generous scholarship from CDFA.! If you have not been to a CDFA event, I highly encourage it. Presentations I attended included: affordable housing in Greenville, SC and August GA; the redevelopment of the Baltimore Harbor (currently the largest private development); revitalization efforts in North Miami Beach; and adaptive reuse of a warehouse building in Peoria, IL.

As a downtown professional, working to assist vibrant commercial districts, I find that there is so much more to learn about development finance . Below are 3 takeaways I came up with for Colorado downtown districts:

1.       Project Focus Should Start Broad and then Narrow In

David Corbin, from SMC Terminus Group, presented as part of a panel on the Assembly development in the northeast Atlanta metro area. The team discussed their approach to stakeholder engagement, and forming a team with the idea of starting broad, with as many people as possible, and then narrowing as you go.

Starting with a narrow approach could be difficult as it may a) offend stakeholders that weren’t included, b) miss important stakeholders in key early processes c) miss key resources in the early stages of a project.

Another key advantage of starting broad is to “socialize the cost” of development (according to Corbin). Broadly speaking, this means that the cost (including in-kind costs and time) should be shared by as many benefiting entities as possible.

2.       Learn Key Elements of Development Finance

For me, the best way to learn is a combination of reading, hearing presentations (case studies are best) and talking to the professionals involved. The CDFA Practitioners Guide to Economic Development Finance offers a great introduction.  DCI is a great resource to hear presentations especially for Colorado professional (In the Game Event, April 2018), meet other professionals (DCI Upcoming Events) and read (Join DCI for members only resources on URAs & TIF, DDAs, Historic Tax Credits, and much more).

What is development finance? It’s all the financing tools besides traditional bank loans that make projects happen. It is essential to public oriented projects, and becoming increasingly necessary to make anything happen. Some examples:

A)      URA & TIF Financing
B)      Bonds  
·         Industrial Development Bonds (IDBs)
·         501(c)(3) Bonds
·         Aggie Bonds
·         Exempt Facility Bonds
·         New Clean Renewable Energy Bonds
·         Qualified Energy Conservation Bonds
·         TIF Bonds
·         Green Bonds
C)      Tax Credits
D)      Revolving Loan Funds
E)      Brownfield Redevelopment Funds

3.       Be Creative!

Development Finance requires creativity- the market alone no longer makes publicly oriented projects happen. I saw this repeatedly in examples at the CDFA Summit:

A)      Augusta, GA Housing & Community Development Laney Walker Bethlehem Revitalization. City or URA is buying dilapidated properties, and leasing to a developer to build low-cost, small footprint, high quality homes.
B)      Great Falls Montana, West Bank Landing Project – a variety of funding sources (including TIF, private financing, banks, MicroBusiness loans, etc.) are making this rural project happen.
C)      Port Covington, Baltimore- has put a focus on local workforce development, including local construction jobs, and local jobs in new establishments. Sagamore, the developer, has emphasized community outreach early on as well- this can save money over the long term, as community needs are brought into the project from the beginning.

Next Steps: Stay informed and learn about development finance by Joining DCI, register for In the Game Event, to meet colleagues throughout Colorado, and always check DCI Upcoming Events!

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