1. Current Practice: Measuring Economic, Social, and Environmental Impacts Presentation to the National Roundtable December 11, 2007

2. 2 Sustainable Systems Lead consultant to the Bay Area Council, Sponsor of the $200 million + Bay Area Family of Funds  Bay Area Smart Growth Funds I & II  Bay Area Equity Fund and California Equity Fund  California Environmental Redevelopment Fund Acting Managing Director, Strategic Action Council of Northwest Louisiana, sponsoring the Northwest Louisiana Community Development Fund I Co-author: The Double Bottom Line Handbook: A Practitioner’s Guide to Regional Double bottom Line Investment Initiatives and Funds (available at www.sdsgroup.com) www.sdsgroup.com  The first comprehensive study of the $12 billion + asset class of Double Bottom Line private equity funds  Drafted the section on Monitoring, Evaluation, and Reporting Leader in the development of the reporting systems for Bay Area Smart Growth Fund I, Bay Area Equity Fund, and Northwest Louisiana Community Development Fund

3. 3 Double Bottom Line Funds First Bottom Line: Market rate of financial return Second Bottom Line: Significant economic, social, and environmental impact Second Bottom Line = the three “Es” of Sustainable Development  Economic prosperity  Social Equity  Environmental quality Sometimes referred to as Triple Bottom Line  Similar orientation  Issue of focus on economic impact

4. 4 Second Bottom Line Criteria: Real Estate Funds Geographic Scope: Investments in LMI census tracts, which may qualify as Community Reinvestment Act (CRA) investments Economic Impact: Catalyst for increased economic activity and value creation in the priority neighborhoods, particularly for current residents Community Impact: Job creation, affordable rental housing and home ownership, joint ventures with community developers, and local and minority contracting Wealth Creation: Home, business and real estate ownership, better quality community shopping centers, including grocery stores, banks, etc. Community Engagement: Incorporation of community input through the entitlement process and/or other community participation vehicles Environmental Impact: Energy conservation, waste reduction, recycling, pollution prevention, alternative energy, and green building construction/operations

5. 5 A Story Behind the Criteria Important to include descriptions of individual developments as well as aggregate numbers For example, Vallejo Plaza is in the Bay Area Smart Growth Fund I portfolio:  Failing 7 acre, 227,000 sq. ft. regional destination shopping center at a transit hub, depressing an Asian/Filipino neighborhood at 39% of AMI  Investment of $5.2 million refurbished, refocused, retenanted center  Shifted to serving the neighborhood with Seafood City Asian-owned grocery store, Mercado, banquet facility, Max’s, below market rent for community organizations, 200 units of mixed income housing  Now thriving, with 75 jobs created and 250 preserved, stimulating economic activity in the surrounding neighborhood, sold for better than the projected mid to high teens financial return  Example of the theory of Domestic Emerging Markets – inner city has higher per acre purchasing power than the suburbs, due to density

6. 6 Second Bottom Line Metrics: Economic Impact Developer(s) of the project Type of development(s) in the project (residential, retail, office, industrial, mixed use) and square footage for each type Amount of investment by Fund Amount of additional private sector, public sector, and nonprofit investment leveraged Ways in which the project engages with and contributes to the local, municipal, and regional economy Total revenues of the commercial tenants in the project Tax revenue (including tax increment) generated at the municipal, county, state, and federal levels Ancillary economic activity stimulated using economic multiplier calculations

7. 7 Second Bottom Line Metrics: Community Impact Number of permanent jobs created or preserved and projected to be created or preserved, including basic salary range and benefits for the jobs and total payroll generated Percentage of entry level jobs created, preserved, and projected Employment development and job training programs used to assist in filling the entry level jobs Number of temporary construction jobs created Units of rental housing and for sale homes built Amount of new neighborhood-serving retail and banking Number of community amenities, such as parks, open space

8. 8 Second Bottom Line Metrics: Wealth Creation Number of units of affordable rental and for sale housing and the affordability ranges for the housing, expressed as affordable to a percentage of area median income (AMI) First-time homebuyer programs utilized and the number of participants in first-time homebuyer programs that purchase homes Participation of a nonprofit Community Development Corporation as a joint venture partner on the development team Local, minority, and women developers undertaking projects directly or as a joint venture partner Local, minority, and women contractors used for contracting or sub-contracting Ownership by local residents of businesses that are tenants in the project

9. 9 Second Bottom Line Metrics: Environmental Performance Project profile in terms of mixed-use and transit-orientation Use of green building construction or retrofit measures, including an indication if the project is seeking or has obtained Leadership in Energy and Environmental Design (LEED) Certification and, if so, at what level Brownfield clean-up involved in the project Environmental standards for operation incorporated in the project and its tenants, including: energy conservation; solar, wind, and other alternative energy use; and waste reduction, recycling, and pollution prevention

10. 10 Some Lessons Learned Establish a clear understanding with the Fund Manager on:  Importance of monitoring, evaluation and reporting  The information that needs to collected  The need for tenants in the developments that receive investment to cooperate in the information gathering process Report aggregate as well as deal by deal information and report qualitative (tell the story) as well as quantitative information Collect enough information frequently enough for timely accuracy, but avoid being a burden to the developer and the tenants Task an independent organization, preferably affiliated with a University, with the collection of the information Visit the sites and talk to the people in the neighborhood

11. 11 Developing the Field Evolving a standard approach to monitoring, evaluation, and reporting is critical to the evolution of the field of Double Bottom Line Investments There needs to be a common approach  Criteria  Metrics  Information gathering procedures  Reporting formats Meetings like this can help move the field in this direction

12. THANK YOU