Nov. 9, 2009
The Phoenix Community Development and Investment Corporation (PCDIC) and Mutual of Omaha Bank announce the closing of a $10 million commercial real estate fund for small businesses and nonprofits. The fund is structured with New Markets Tax Credits (NMTC) to assist small businesses and nonprofits with loans to purchase and improve real estate property in designated NMTC Census Tracts (map attached). Loan size is typically between $1 and $3 million.
PCDIC is a 501(c)3 corporation the city of Phoenix created to manage the U.S. Treasury’s New Markets Tax Credit Program. This collaboration with Mutual of Omaha Bank allows PCDIC to continue to improve economic conditions and create job opportunities in Phoenix's low-income communities. Projects that further PCDIC’s mission can receive competitive interest rates. Underwriting criteria also offers non-traditional terms such as lower debt service coverage ratios, higher loan-to-value ratios and longer interest-only terms (seven to 10 years or more), with amortizations up to 25 years.
“The timing of this news couldn't come at a better time as we continue to face a challenging economy,” said Phoenix Mayor Phil Gordon. “I applaud this collaboration that will create jobs and allow Phoenix businesses and nonprofits to access capital to purchase, construct and renovate commercial facilities at very competitive interest rates.”
“Mutual of Omaha Bank is excited about continuing its partnership with PCDIC and the prospect of providing access to capital to small businesses,” added Ed Celaya, sr. vice-president of Mutual of Omaha Bank.
The PCDIC/Mutual of Omaha Bank fund targets commercial real estate development in light manufacturing, industrial, retail and office developments similar to those it has previously financed, but for smaller transactions. The borrowers for these commercial real estate developments are small business owners, nonprofit agencies and real estate developers.
"In this economy, many business owners and nonprofits are struggling to pay the bills and it's tough to get a loan. This partnership provides a critical resource to businesses that ultimately will lead to job creation and help sustain the vital services that nonprofits provide to low and moderate income families," said District 8 Phoenix City Councilman Michael Johnson.
PCDIC will consider projects in Phoenix’s NMTC’s census tracts with the highest distress factors that:
- attract employers and small businesses that bring wealth-creating jobs
- finance smaller businesses that have difficulty securing loans or adequate rates and terms
- remove blight, particularly within the city's redevelopment areas, as well as the West Phoenix Revitalization area
- help nonprofits finance and expand real estate developments that provide services to their respective low and moderate income and disadvantaged communities
In October 2008, PCDIC was awarded $40 million of New Market Tax Credits. The Mutual of Omaha fund will deploy $10 million; $20 million was utilized in a Phoenix commercial real estate development project with US Bank Community Development Corporation of St. Louis, Mo; and the remaining $10 million is under negotiations with local lending institutions.
“The PCDIC is so pleased to be working with our investor and partner Mutual of Omaha Bank to make capital available to small businesses and nonprofits through our New Market Tax Credit Program,” said PCDIC Chairman Jerome Miller.
PCDIC is governed by a seven-member board of directors that approves investment and operational decisions. The board is comprised of three members who are accountable to the low-income community, one member of the business community and three members from the city of Phoenix. Each board member brings a wealth of experience from their respective nonprofit organizations that provide services to disadvantaged persons in the Phoenix community. Board members include:
- Pete Garcia, president/CEO, The Victoria Foundation (a subsidiary of Chicanos por La Causa)
- George Dean, president/CEO, Greater Phoenix Urban League
- Patricia Garcia Duarte, executive director, Neighborhood Housing Services of Phoenix
- Don Keuth, president/CEO, Phoenix Community Alliance
- Jeff DeWitt, acting finance director, city of Phoenix
- Jerome Miller, director, Neighborhood Services Department, city of Phoenix
- Roberto Franco, assistant director, Community and Economic Development Department, city of Phoenix
|Roberto E. Franco||602-495-5247|