Building Revitalization
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Introduction
When meeting with West Jefferson residents, it was brought to Atlas’ attention that not only the need, but the sustaining and expansion of one of their existing childcare facilities, Mt. Jefferson Child Development Center (MJCDC), was crucial to the community. Atlas was made aware of existing plans for a new facility to be built that could support the expansion of the existing center by increasing size, staff, and shifts available. However, funding had not been secured to build the new $1.7M facility.
Atlas agreed to collaborate with MJCDC and their partner entity, the Northwestern Housing Enterprises/Northwestern Regional Housing Authority, to review a variety of funding tools and resources that could be utilized to secure the $1.7M needed to build the new facility. Atlas believes the following recommendations pose a number of options that can be explored to secure the necessary funding, either through one source or the combination of multiple sources.
Despite the completion of this placemaking action plan, Atlas is continuing collaboration with MJCDC and the Housing Authority by facilitating discussions among potential financing partners to develop a specific funding model that will acquire the total $1.7M needed to begin construction of the new center.
Rural LISC Loan Product
Rural Local Initiatives Support Corporation (LISC) is an organization that partners with rural communities to develop community and economic development strategies and programs that meet their existing needs. Atlas was made aware that Rural LISC was engaged back in 2017 regarding their various loan products that could support this type of project.
Atlas recommends that MJCDC and the Housing Authority reengage LISC and discuss their current loan products that could provide funding for the construction of the new childcare facility. At the time this plan was completed, preliminary conversations were occurring with all parties to eligible options.
Local or Regional Banks
A resource that is sometimes overlooked is local and regional banks. MJCDC had also previously engaged a local West Jefferson bank, LifeStore Bank, back in 2017 regarding a loan for the new childcare facility. Atlas would also recommend reengaging this partner to better understand their preferred level of engagement.
Atlas would also advise that MJCDC consider local or regional banks that have applied for and been accepted to be a part of the Community Reinvestment Act (CRA). This was a policy enacted to encourage financial institutions to help meet the credit needs of the communities they serve. Typically, this includes supporting community and economic development projects and/or entities that may not be able to obtain traditional loan products. Investments in child care-related projects, such as forgivable loans or grants, are potentially eligible for CRA consideration if they meet the CRA’s definition of community development, which includes “community services targeted to low-moderate-income individuals.”
USDA Business & Industry Loan Guarantee
The U.S. Department of Agriculture (USDA) offers the Business & Industry (B & I) Loan Guarantee to rural businesses who are seeking to repair, modernize or enlarge their business, purchase and/or develop land, buildings and commercial infrastructure, as well as business acquisitions. MJCDC’s project would be eligible for this product and would have coverage of 80% of the loan amount.
Grant Funding
It is important to reiterate that this option will be feasible only if MJCDC has a designated grant writer or team that can prepare a competitive application for both state and federal funding. Although the Housing Authority has assisted with grant writing in the past, MJCDC should initiate discussions on sharing grant writing resources if this is a path they wish to pursue.
MJCDC would be a competitive applicant for the USDA Community Facilities Grant due to being located in a rural community of fewer than 5,000 as well as having a median household income (MHI) below 80% of the state non-metropolitan:
- State non-metropolitan MHI: $40,240
- West Jefferson MHI: $29,417
This program supports the purchase, construction, and/or improvement of essential community facilities and MJCDC could be eligible for up to 35% coverage of project costs.
The Department of Commerce offers the One North Carolina Fund, which is a discretionary cash-grant program that is meant to support competitive job-creation projects. There is a tier system based on demographic information and Ashe County is ranked in Tier 2, which would require a local match of $1 for every $2 provided by the One NC Fund.
Equity Crowdfunding
Crowdfunding is a method of raising capital through the collective effort of friends, family, customers, and individual investors. Rewards-based crowdfunding platforms, such as Kickstarter and Go Fund Me, invite people to support projects as a form of social investment in exchange for non-monetary returns, such as a bracelet or t-shirt or even a simple thank you note.
Equity crowdfunding is a form of impact investment, which returns social benefits alongside possible financial gains. Prior to the Jobs Act of 2012, only accredited investors (about 3% of the adult population) could invest in opportunities like this. Now, federal legislation allows regulated platforms to host projects that everyone 18 years and older, no matter their income or their net worth, can invest in businesses and projects.
When instituted at the local level, this tool gives residents the opportunity to actively influence and participate in reshaping the community. This resource isn’t intended to fund the project in its entirety but could represent between 10% and 30% of the project costs. For the project developer, this is often the most valuable capital, because a successful project means successful investors. The local investors not only get a potential financial return on their investment, but they also benefit from an improved tax base, a likely increase in property values, and a richer quality of life.