2. 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”

3. 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

4. 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

5. 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”?

6. 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?

7. 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?

8. 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?

9. 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

10. 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

11. “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

12. 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

13. 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

14. 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

15. 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