Community Preservation Corporation Non-profit mortgage company since 1974 Consortium of 77 banks and insurance companies Investment in the Hudson Valley $900 million CPC is a Community Development Lender CPC developed a specialty in “Downtown Redevelopment Lending”

The “New Rochelle Model” Based on our experience working with the BID in New Rochelle Process of identifying and overcoming the obstacles to Main Street investment Created an investment model and accompanying financial tools to overcome those obstacles

Creating Solutions Understanding the problems so you can figure out how to solve them “Community Assessment Model” CPC identified 5 key infrastructure aspects of to help us evaluate good investment areas Communities should view themselves through this lens Will help you think comprehensively Identify strengths and weaknesses Will communicate your preparedness

1. Physical Infrastructure Is there a concentration of properties with development potential? Vacant land and/or existing structures Find out who owns them? Can the physical image of the “place” be improved or, if necessary, transformed? Are the properties concentrated in a dense area? Who owns them and are they “in play”?

2. Political Infrastructure Does the current leadership support downtown revitalization? What have they done to prove it? Is the Mayor aligned with the Trustees/Council? Has leadership been consistent? Are leaders, council people and the majority of stakeholders in the target area invested and aligned?

3. Economic Infrastructure Is there demand for housing and retail downtown? What are the vacancy rates? Retail and residential What are the rents? Do deals work on market rate basis? If not, is there public subsidy to fill the gaps?

4. Social Infrastructure Is there a “There” there? Does the downtown have “cachet” Is the area desirable and accessible? What are the existing attractions? Theaters, Arenas, Restaurants, Public Spaces, Museums, Shopping If none of this exists, is it possible that investment can help to create it?

5. Development Infrastructure Is there a capable Local Partner It is critical to have an engaged and capable conduit to the community Connection to individual property owners Connection to local building department & community development department Connection to Local and State Subsidies BIDS, Chambers, Local Development Corps or Municipalities

Partnerships are Key A community needs to be plugged in to available sources DHCR “Main Street” grants CDBG infrastructure grants HOME Funds, Rental Rehab, historic and low income tax credits Investors and lenders are looking for credibility and collaboration

“Show Me the Money” Challenges during boom times: Products Required: Downtown deals aren’t always “sexy” Individual property owners are typically one time customers Products Required: Long term fixed rate loans (30 years) Flexible low rate façade “bridge” loans Technical assistance money to educate owners Pool of aggressive “out of the box” capital

Identify a Local Community Development Lender Large commercial banks are on the sidelines right now Their capital is severely constrained They are currently not lending Small to mid-sized local banks Still have liquidity and strong balance sheets Looking to build their business Identify your strengths and market your community’s assets

Credit Crisis: What Happened? Overheated homeownership market Initiative to increase homeownership was well intended Good buyers got good loans which made good investments for Wall Street buyers Wall Street had great appetite for product Loan products were marginalized to “feed the beast” Home values rose because of low rates and high leverage – not true real estate value Homeowners stopped paying due to adjusting rates and negative equity

Credit Crisis (continued) When debtors (homeowners) stop paying then the investors retreat The value in real estate which had been created by loan products evaporated Banks end up with negative equity Bank reserves required to pay non-performing loans were insufficient Pendulum swings back to where no one can get loans – banks are afraid Credit markets seize up Main Street suffers

So What’s Next? Markets should stabilize eventually Banks are currently “hoarding” capital to bolster balance sheets Eventually they will have to lend again Regulation will change the landscape Position yourselves for the future Orient yourselves as a good place to invest Create the necessary partnerships now which will serve you well going forward