As inner-city neighborhoods in Los Angeles continue to revitalize and attract new investors to previously overlooked markets, rising real estate prices and rents contribute to higher levels of displacement for small businesses and nonprofit organizations operating in low-income communities. As such, Genesis LA identified the need for creative investment products and proactive strategies to facilitate community-oriented development and mitigate the effects of displacement and gentrification of local small businesses and nonprofits that serve low-income communities. Through the Community Owned Real Estate (CORE) program, Genesis LA assists three local nonprofit community development corporations (East LA Community Corporation, Inclusive Action for the City, and Little Tokyo Service Center) to acquire, rehabilitate, and operate a portfolio of 5 commercial properties located throughout the eastside of Los Angeles.
Goals of the program include the renovation of aging commercial properties, stabilization of rents for existing mom-and-pop businesses within the portfolio, filling vacancies with community-serving nonprofits and small businesses, and offering superior commercial space relative to the availability in the community. These efforts intend to stabilize commercial districts in low-income communities and alleviate displacement pressures due to rising rents, speculative real estate investment, and gentrification. Genesis LA provided $10 million in NMTC financing to this project to acquire and rehabilitate 5 commercial properties (approx. 30,000 sq. ft.) located in the El Sereno and Boyle Heights communities of Los Angeles as well as Unincorporated East Los Angeles. Tenants within the portfolio include approximately 23 small business and nonprofit organizations who, in turn, provide goods, services, and jobs to the community.
Occupants of the commercial spaces, small businesses and nonprofits, benefit from technical assistance provided by the CORE Partners. Genesis LA worked with JPMorgan Chase as the tax credit investor and two local foundations who provided grants and PRI loans to the project. This project supports the growth of the CORE partners as local community development corporations and incubates a new model for addressing community development by assisting nonprofits to take a proactive role in the commercial real estate market. The CORE program ensures that mom-and-pop businesses and nonprofits can remain in their neighborhoods, enter into formal leases, and gain certainty over their economic futures.
The CORE program also helps to fill commercial vacancies with businesses and nonprofits that address specific community needs while also providing quality goods, services, and programs to local residents.