Mercado la Paloma

For decades, the residents of the diverse Figueroa Corridor in Los Angeles struggled with a lack of quality jobs and business opportunities, low educational attainment, high poverty, health issues and substandard housing conditions.

After a period of research, planning and engagement, the concept of Mercado La Paloma was born, providing hope and opportunity for the community. Esperanza Community Housing Corporation, a nonprofit organization that supports affordable housing, health, arts and sciences, education and economic development, renovated a former garment factory into a 35,000-square-foot mixed-use building. Mercado La Paloma opened its doors in early 2000, with space for retail, restaurants, local small businesses, nonprofits and art and cultural groups.

The mixed-use rehab project has been a huge success. On the ground floor they have an incubator for restaurants, basically, and a few of those restaurants have graduated to having their own freestanding restaurant elsewhere. Upstairs, they offer space to several nonprofits through Esperanza. They offer community facilities upstairs with community services while on the ground floor they offer healthy foods for the community as well as job creation with the incubator element.

Asian American Drug Abuse Program

AADAP is a nonprofit 501[c] [3] corporation established in 1972. During the last 35 years, the organization has grown with the changing needs of its community by broadening its scope of services from drug abuse prevention/treatment to include HIV/AIDS outreach, drug court and parenting services. The company has experienced an increased demand for its products and required additional facilities to support to effective deliver services in the South Los Angeles community; additionally, it wanted to lower its borrowing costs. Loan proceeds were used to acquire a 22,500 square foot office building in South Los Angeles and consolidate existing loans used to acquire two other office buildings totaling 40,000 square feet utilized for AADAPs social services programs.

Orthopedic Center for Children

Build-out of a new ambulatory surgery center and rehab another building to include an urgent care center, slinical space, research facilities and administration facilities.

Ednovate USC Hybrid High

Development of a 460-seat charter high school: Established by the USC Rossier School of Education in 2012, USC Hybrid High College Prep, Ednovate with USC Rossier has for six years operated out of downtown Los Angeles in a space that was always meant to be temporary. Thanks in part to NMTC financing, the school now has a permanent home in a newly constructed building. Open space permeates 29,000 square feet of instructional space, with giant glass windows looking out on the Los Angeles Memorial Coliseum across the street. On the second floor, another 5,500 square feet of outdoor space serves as both a recreational area and cafeteria.

Math and Science Prep

The Math and Science College Prep (MSCP) High School facility at 3200 Adams Blvd. was financed with ExED and LIIF NMTCs in May 2016, provides 550 permanent charter school seats in the West Adams neighborhood of South Los Angeles. MSCP provides students with a high quality secondary education, focused on Science, Technology, Engineering and Math (STEM), and a goal of sending all graduates to college. MSCP is one of two charter schools-the other being Crown Preparatory Academy Middle School, located just a few blocks away-in the newly formed STEM Preparatory Schools network which is committed to disrupting the status quo of inequitable access to high quality STEM pathways for women and minorities by cultivating a family of students and staff who solve problems through collaboration, innovation, passion, and perseverance. While first started just three years ago, in 2013-14, on a traditional school district campus, MSCP has already been awarded the 2015 California Gold Ribbon School Award for putting forth an exemplary effort to ensure that every student is ready for 21st century college and careers. MSCP’s new home-purchased from Pacific Charter School Development Development-includes 24 classrooms, a college counseling center, meeting rooms, and a newly renovated historic church sanctuary which has been converted into a large multi-purpose room – all on a 1.77-acre parcel.

Friends Community Housing

Historically, California has funded privately contracted, for-profit service providers to develop and operate group homes for individuals with developmental disabilities. However, this can leave these ‘community care facilities’ at risk of closure if an operator retires or goes out of business. With the closure of several of the state’s developmental centers and the relocation of clients into community-based settings, more individuals with disabilities are living in group homes. Given these circumstances, the South Central Los Angeles Regional Center, which administers the provision of services for individuals with disabilities, sought to acquire care facilities once, to ensure they serve individuals with disabilities in perpetuity. To do so, a nonprofit controlled affiliate, Friends Community Housing, was established to acquire, renovate, manage, and lease group homes to individual service providers. This model, now promoted by the state, provides stability for vulnerable and medically fragile individuals and allows them to age in place. But Friends Community Housing lacked access to the capital needed to acquire and extensively renovate 10 separate houses for ADA-equivalent accessibility and onsite services. Given this unique asset class and lack of market comparables, no banks would lend to Friends Community Housing. To facilitate the transaction, Genesis LA was flexible with its credit standards. We understood that the organization was newly formed and controlled by a small nonprofit undertaking a new business model, so we looked to the value of the underlying real estate and the income sources of the service providers that operate each facility and pay rent to Friends Community Housing. This underwriting resulted in Genesis LA providing a $4.3 million leverage loan and $5.9 million in New Markets Tax Credit (‘NMTC’) allocation, which, given Friends Community Housing’s lack of capital, provided 100% of the project financing. Genesis LA’s financial structuring for Friends Community Housing is considered a first-of-its-kind use of NMTC financing for a scattered-site group home project. Several other nonprofits have approached Genesis LA for advice in structuring similar projects and the project has been recognized by the New Markets Tax Credit Coalition as an innovative use of NMTCs. Today, the project serves 41 clients and employs 10 small business service providers, 8 of which are minority-owned and operating in severely underserved communities like Watts and Compton.
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