Category: Development Finance Initiative

The Development Finance Initiative (DFI) at the UNC School of Government assists local governments with attracting private investment for transformative projects by providing specialized finance and development expertise. DFI partners with communities on projects including building reuse, community development, downtown revitalization, economic development, neighborhood redevelopment, and small business finance. Click here for DFI contact information.

» Evidence to Support CED programs: The Growing Talk About RCTs

Whether you work in community or economic development, there has always been pressure to measure your success. CED professionals are very familiar with having to explain what type of impact they hope to have with their initiatives.  It is even harder to document success. Evidence-based decision-making is front and center in conversations on good governance. But what does this mean in practice? What serves as evidence? In the eyes of a growing group of CED policymakers, the best evidence comes from randomized controlled trials (RCTs). Read More…

» American Rescue Plan Act: Aid for Small Businesses and Nonprofits with ARP/CLFRF

The American Rescue Plan Act of 2021 (ARPA) is a wide-ranging law that provides federal funding in areas ranging from child care to higher education to community service to relief for shuttered venues to a restaurant revitalization fund. Separate from those programs, one component of ARPA distributes Coronavirus State and Local Fiscal Recovery Funds (“CLFRF”) to state and local governments for the purpose of responding “to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19) or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries.” (Part 8, Subtitle M of ARPA).

Temporary rules governing the use of CLFRF have been promulgated Read More…

» What @sog_ced is reading online: March 2021

The following are articles and reports on the web that the Community and Economic Development Program at the UNC School of Government shared through social media over the past month. Follow us on twitter or facebook to receive regular updates.


Items of interest related to CED in North Carolina:

NC Main Street Award winners announced: Hendersonville’s mill revitalization project with UNC DFI among winners for best adaptive reuse

USA Today reporter looks at tensions created by development and growth in NC small towns Mebane and Leland.

Other CED items:

Unintended consequences of geographic tax breaks like opportunity zones: lobbyists sought to change long-standing census tract boundaries, which disrupts policy-making and data for research

Harvard housing report: Construction of smaller, affordable homes steadily increased over the past decade, but not yet at levels seen in prior decade.

Lincoln Institute: Renters really are paying more today. Share of renters paying over 30% of income on rent went from under 25% un 1960 to nearly 50% in 2016. The severely rent-burdened rose from 13% to 26% in the same period.

DFI Online

Orangeburg, SC residents provide input on the redevelopment vision for the historic Railroad Corner during virtual sessions organized by UNC DFI, preservation and student-oriented retail are two common themes.

Read More…

» What @sog_ced is reading online: January 2021

The following are articles and reports on the web that the Community and Economic Development Program at the UNC School of Government shared through social media over the past month. Follow us on twitter or facebook to receive regular updates.



Items of interest related to CED in North Carolina:

NC Supreme Court affirms the General Assembly, not the Governor, controls the allocation of federal block grants received by the State (like CDBG, CARES Act).

Wall Street Journal reports on small business success in winning payouts from insurers for Covid-related losses, citing NC cases.

Other CED items:

Novogradac summary of Covid-19 relieft package

DFI Online

Renovation of historic Blue Bell Mill in Lenoir; public-private partnership study by UNC DFI modeled a financially feasible project

Read More…

» What @sog_ced is reading online: December 2020

The following are articles and reports on the web that the Community and Economic Development Program at the UNC School of Government shared through social media over the past month. Follow us on twitter or facebook to receive regular updates.


Items of interest related to CED in North Carolina:

NC Department of Commerce released new county development tier rankings for 2021; 22 counties will change rankings.

Other CED items:

Freddie Mac releases white paper on Low Income Housing Tax Credit properties in rural persistent poverty counties, where the majority of rental housing is single-family.

DFI Online

Morrisville, NC, with DFI’s assistance, is seeking a development partner to realize its Town Center vision.

Read More…

» What @sog_ced is reading online: September 2020

The following are articles and reports on the web that the Community and Economic Development Program at the UNC School of Government shared through social media over the past month. Follow us on twitter or facebook to receive regular updates.


Items of interest related to CED in North Carolina:

NC Housing Finance Agency announces that awards of federal tax credits and tax exempt bond financing in 2020 will result in over $1 billion in new affordable apartments. A new record for a single year.

UNC DFI presents market analysis in Salisbury

National Council of State Housing Agencies shares report estimating that by January, NC renter households will owe combined $632 – $824 million in back rent. Picture looks similar across the nation.

Read More…

» What @sog_ced is reading online: July 2020

The following are articles and reports on the web that the Community and Economic Development Program at the UNC School of Government shared through social media over the past month. Follow us on twitter or facebook to receive regular updates.

Items of interest related to CED in North Carolina:

US Dept of Commerce announces CARES Act funding for existing revolving loan funds across North Carolina

NC Policy Watch article states that housing advocates, legal experts expect wave of evictions following expiration of state moratorium 

CED items:

Amount of funding still available in the federal Paycheck Protection Program (a federal loan program with loan forgiveness for small businesses) according to the SBA report.

The School’s Development Finance Initiative (DFI) is evaluating financial feasibility of redeveloping “largest single-owner piece of property in downtown Mocksville”

Read More…

» How North Carolina has used Community Development Block Grants to Fund Disaster Recovery Programs

This post is Part 2 of a two-part series explaining how Community Development Block Grants for Disaster Recovery (CDBG-DR) are administered in North Carolina and how they’ve been used to help rebuild communities affected by Hurricane Matthew and Hurricane Florence.

In October 2016, Hurricane Matthew made landfall in North Carolina, bringing up to 18 inches of rainfall and setting record level floods in 17 counties. In the aftermath of the storm, over 77,000 households applied for assistance from FEMA, and over 300,000 businesses were either physically or economically impacted.

The first part of this series documented how federal disaster recovery funds are administered by the state, and how they’ll be used to address the damage caused by Hurricane Florence in 2018. This post will demonstrate ways CDBG-DR funds have been used in the past to recover from Hurricane Matthew. Read More…

» Local Government as Lender: Emergency Loans for Small Businesses

Economic activity can be disrupted by any number of unanticipated emergencies, ranging from natural disasters to virus outbreaks like COVID-19. When these events threaten the survival of small businesses, the owners may turn to government for assistance. One legal and effective way for a government to assist a small business with weathering a crisis is by providing an emergency loan. The loan allows the business to maintain operations when cash flow is severely constrained due to disruptions in demand. Loans are a common tool in these situations. For example, the federal Small Business Administration (SBA) offers disaster assistance loans to businesses that are impacted by natural disasters. SBA loans offer interest rates between 4% to 8% depending on a borrower’s ability to access other credit (see SBA disaster loan web page here). North Carolina is designated as eligible for SBA loans in response to the coronavirus outbreak.

Local governments may have the means and desire to offer their own local loan programs for small businesses during a crisis. Such loans could provide financing for businesses that cannot qualify for SBA loans or may provide bridge financing until an SBA loan is obtained. This post provides legal and practical guidance for local governments who wish to design and offer such loans. Read More…

» Strategies for Creating Mixed-Income Neighborhoods

Durham County hired the Development Finance Initiative (DFI) in 2017 to help redevelop two county-owned parcels in downtown. Though currently serving as surface parking for county employees, the two sites are located adjacent to recent high-end residential development, government and institutional services, and subsidized public housing. County and community leaders recognized the strong potential of these sites to transform the area’s character and hired DFI to help develop a plan for a mixed-income residential development. After 18 months of intensive analysis and community engagement, the County—with the help of DFI—selected a development partner in early July 2019.

Throughout the process, the topic of mixed-income development was reoccurring. What exactly does mixed-income mean? And how can it be administered and achieved? For Durham, given current state-level regulations, mixed-income ultimately came to mean a diversity of income across the broader neighborhood context. While incomes will be mixed within the larger development site, the buildings themselves will house either market-rate or income-restricted affordable housing. Read More…

» Kannapolis, NC: Strategic Vision, Financial Planning, Development

This blog post features a project undertaken by the UNC School of Government’s Development Finance Initiative. The Development Finance Initiative (DFI) was established in 2011 to assist North Carolina communities with achieving their community economic development goals. DFI partners with communities in North Carolina to attract private investment for transformative projects by providing specialized finance and real estate development expertise.

A community wanting to transform its downtown could focus on singular projects, but DFI analysis often reveals that a greater scale of redevelopment can enhance feasibility and achieve more impact. If an entire city block is vacant, the redevelopment of one building will not make a huge difference. Large-scale efforts will sometimes help mitigate the costs of development and allow for a shared vision and coordinated investment among public and private sectors—all factors that can enhance the likelihood of a successful and sustainable revitalization effort. Read More…

» Federal Opportunity Zones: What Local Governments Need to Know

Opportunity Zones are the latest effort by the federal government to encourage investment in low-income census tracts. The Tax Cuts and Jobs Act, enacted at the end of 2017, grants significant tax benefits to investors who reinvest their capital gains in designated “Opportunity Zones.” The market potential is enormous, with some analysts estimating that trillions of dollars could be available for investment in these zones. The U.S. Department of Treasury has certified more than 8,700 Opportunity Zones nationwide and 252 in North Carolina. Local governments are now asking what they can do in order to take full advantage of the investment potential. This post answers some common questions asked by local government officials about Opportunity Zones and offers advice for next steps. Read More…

» Opportunity Zones at a Local Level

The Opportunity Zone (OZ) program was rolled out this year, creating a new community economic development tool. Prior posts on the CED blog have covered this topic — an overview of OZs can be found here and a discussion of North Carolina’s selection of zones here. This post will discuss how OZs relate to other community economic development tools and how different local contexts may affect OZ investment. This post will also include strategies for local government participation in concert with these programs to maximize the impact of OZ investment in communities to meet community development goals.  Read More…

» Maintenance of vacant or neglected commercial buildings: options for NC local governments

UPDATE 2021: Some statutory provisions referenced in the original post were relocated to new Chapter 160D of the North Carolina General Statutes, effective January 1, 2021. This post has been updated with the new statutory references.

The downtown buildings in the Town of Old Well have “good bones.” The structures lining the four downtown blocks of Main Street are solid brick and reflect their historic character, harkening back to a time when downtown was thriving with retail on the ground floor and residential units on the second floor. The very center of downtown is in fairly good shape, and some committed merchants have established a pocket of commercial activity there. However, even that central area is pocked with a handful of underutilized and neglected retail buildings. The downtown blocks immediately outside of the center, where vacant buildings outnumber those with active uses, are not inviting to pedestrians.

Residents and downtown merchants have complained to Town officials about the privately-owned vacant buildings within and surrounding the center of downtown. Some of the vacant structures are in fair condition but are used for storage; peering through the wide display windows reveals piles of boxes, dusty floors, litter, or worse. Some display windows are papered over to conceal the interior. While a handful of vacant buildings appear to be in good condition, others look visibly worse than those with active uses. Can Town officials enact any regulations to govern the appearance and general maintenance of these commercial buildings? Yes, they can. Read More…

» Natural Hazard Mitigation Saves Lives, Money, and Property

In December 2017, the National Institute of Building Sciences published Natural Hazard Mitigation Saves: 2017 Interim Report. This report shows that acting to reduce the impacts of floods, hurricane surges, wind, earthquakes, and wildfires is a sound financial investment. Such action, often called mitigation, can result in significant savings of lives, money, and property. The Institute’s objective is to provide information to key decision-makers at federal, state, and local levels so they can develop more resilient communities that can better withstand natural disasters. This post summarizes the report’s findings.

Read More…

» Local Government Owners of Historic Property Asked to Convey Property by End of 2017: What Public Officials Should Know

Federal tax reform is likely to be enacted before the end of the year. While the final form of the bill has not been determined, it is nearly certain that federal historic preservation tax credits—an important financing mechanism for preservation of historic properties—will be significantly affected. In fact, most observers anticipate that the value of the tax credits will be diminished by tax reform, thereby making historic preservation projects more difficult to finance and complete. For that reason, some real estate developers have asked local government owners of historic properties to convey those properties to new ownership before the end of the 2017 tax year (December 31, 2017) in order to “grandfather” those projects under the older, more favorable rules. This post briefly describes how federal tax reform could affect historic rehabilitation projects and offers some guidance for North Carolina public officials who wish to respond (on a very tight deadline) to a request to transfer historic properties owned by local governments. Read More…

» Legal and Business Reasons Why Downtown Development Programs Should Involve Secured Loans—Not Grants

Dr. Blaine Beeper is a retired hospital administrator who was recently elected to council in the Town of Bushwood. Dr. Beeper thinks he has figured out how to jumpstart revitalization of Bushwood’s historic downtown. He proposes for the Town to offer annual cash grants to any owner who redevelops a commercial property within the downtown. Dr. Beeper reasons that redeveloped properties will carry a higher tax assessed value, and the additional tax revenue can be “granted back” to the owners in the form of cash grants for five years, calculated as some percentage of the additional property taxes received by the Town.  When Dr. Beeper floats this idea, he runs into resistance from the Town Attorney and the Economic Development Director, each for different reasons. The Town Attorney raises serious concerns about the legality of such a program, while the Economic Development Director says it doesn’t make good business sense and a loan program would better address owners’ financing needs. This post explains the legal and business reasons why Dr. Beeper’s proposed grant program should be scrapped in favor of a loan program. Read More…

» Conveyance of property in a public-private partnership for a “downtown development project”

[UPDATE: Effective January 1, 2021, G.S. 160A-458.3 was moved to new Chapter 160D and the powers were made available to counties as well as municipalities. The new statute pertaining to downtown development projects is G.S. 160D-1315.]

Downtowns across America are experiencing a renaissance. Population growth in downtowns has outpaced growth in the broader regions in which those downtowns are located. North Carolina downtowns are likewise experiencing record growth. To capitalize on this renewed interest in downtowns, private developers and local governments are increasingly seeking to partner on relatively larger, coordinated development projects that involve construction of both public and private facilities.

Often these public-private partnerships are necessary because the local government owns property downtown and needs a private partner to develop it. When a municipality (not a county) seeks to partner with a private developer for development of a downtown parcel involving construction of both public and private facilities, there is a statute designed just for that purpose: G.S. 160A-458.3 Downtown development projects. The statute makes some potentially confusing references to a variety of other statutes when authorizing disposition of real property and therefore requires some explanation. This post provides historical context for the statute and describes the property disposition procedures. Read More…

» DFI Case Study: Attracting Private Investment for the Redevelopment of a Downtown Parking Deck

Water-St-Deck_aerial_sizedThe City of Wilmington, North Carolina, hired the Development Finance Initiative (DFI) in 2013 to conduct a pre-development process for the Water Street Parking Deck. The parking deck is an aging public parking facility prominently located in the city’s historic downtown on the Cape Fear riverfront.

Wilmington is one of North Carolina’s largest and fastest growing cities and a popular tourist destination. Its downtown area is an economic and social hub for the region. With a nearly 300-block historic district, the area includes cobblestone streets with ancient trees and lovingly restored historic homes, restaurants, shops, music and art venues, hotels, a river walk, a college campus, and a convention center.

The Challenge

The two-story Water Street Parking Deck was constructed in the 1960s and sits on 1.2 acres along Water Street overlooking the Cape Fear River. Though it is nearing functional obsolescence, the parking deck serves as primary public parking for tourists and locals alike. Surrounded by vibrant retail and entertainment businesses, the parking deck is an eyesore.

City officials long believed that a parking structure alone was not the highest and best use for the high-profile location. They envisioned a future for the site that would spur additional private investment while respecting the historic fabric of the surrounding built environment.  Read More…

» Development Finance Initiative (DFI) helps revitalize NC towns – University Gazette

This article was originally published in the University Gazette on September 9, 2014, as “Carolina program helps revitalize NC towns.” It is republished here with permission.

Tyler Mulligan leads a class for public officials at the School of Government.
Tyler Mulligan leads a class for public officials at the School of Government.

They call them “wicked problems,” the complicated, long-term, seemingly impossible, hard-to-wrap-your-head-around issues for which solutions seem far away.

The team involved in the School of Government’s Development Finance Initiative (DFI) specializes in them, and they’re teaching students how to tackle them, too.

DFI partners with local governments across the state to attract the private investments they need to revitalize their communities. Community revitalization is one of those “wicked problems” said Tyler Mulligan, who teaches both public officials and graduate students about community development, finance and revitalization.

“You don’t always know from the start how you’re going to make it work, and that can be daunting,” said Mulligan.

DFI itself was borne from a perplexing problem: Local government officials often asked Mulligan to visit their towns and assist them with their communities’ needs. But, he couldn’t do it on his own.

“It’s part of my job to advise these officials and answer their calls and emails when they need me, but I couldn’t provide intensive assistance to every community, and the challenges they face require a multi-disciplinary approach,” he said. “It soon became clear that a team of professionals was needed to answer the call for assistance.”

The demand was undeniable. Downtown streets were in desperate need of revitalization, historic buildings were wearing away with neglect and prime parcels of land sat empty without a purpose in many of North Carolina’s towns. Read More…

» How a North Carolina Local Government Can Operate a Land Bank for Redevelopment

Aerial downtownIf America’s cities and towns are to realize their greatest potential as attractive and welcoming places—and as drivers of the new American economy—they must be able to repurpose their vacant, abandoned and foreclosed properties. Those properties—whether the product of the current foreclosure crisis or the remnants of the old economy—diminish the sense of community among neighbors, erase the value of lifelong investment in a home, and make it nearly impossible for cities and towns to attract and keep the creative, innovative, entrepreneurial citizens who will build the next economy.

Dan Kildee, founder of Genesee County Land Bank, in the foreword to Land Banks and Land Banking

Dan Kildee’s sentiment is shared by local governments across North Carolina, but how can they “repurpose” their vacant and abandoned properties and revitalize distressed communities? The answer in Genesee County, Michigan, was a redevelopment tool called a land bank, which is a public authority created to acquire and redevelop vacant and abandoned properties. In the span of a decade, the Genesee County Land Bank acquired more than 10,000 parcels to hold or redevelop, and during the “great recession,” catalyzed more than $60 million in new private investment. Land banks continue to spring up across the nation and are playing an increasingly important role in revitalization efforts in places such as Cuyahoga County, Ohio, and Fulton County, Georgia. A complete explanation of land bank policies and approaches across the nation can be found in a downloadable text, Land Banks and Land Banking. [Update: Second edition (2015) of the book can be downloaded here.]

In Michigan, forming a land bank is rather straightforward, because the Michigan state legislature enacted specific enabling authority for the establishment and operation of land banks. No such land bank legislation exists in North Carolina. Nonetheless, local governments in North Carolina can perform the basic functions of a land bank by cobbling together existing statutory authority. In this way, the local government itself serves as the land bank and performs the major activities of a land bank:

  1. Acquire and hold troubled properties
  2. Stabilize properties and eliminate encumbrances
  3. Convey properties to a redeveloper

Each activity will be addressed in turn. Read More…

» When May NC Local Governments Pay an Economic Development Incentive?

Shell building under construction 2News outlets regularly report about the latest company that was lured to North Carolina through the payment of a cash economic development incentive by a local government and the state. Local government cash incentives often take the form of an annual cash payment to a company that is contingent on the company’s creation of jobs, investment in taxable property in the jurisdiction, and timely payment of property taxes, among other conditions. The statutory authority for making the incentive payment is supplied by G.S. 158-7.1, and the local government is required to approve and account for how the incentive payment is expended by the recipient company pursuant to G.S. 158-7.2. The accounting of payments is accomplished through an incentive agreement in which the recipient company agrees, typically, to create jobs at a facility that involves leasing or purchasing land, constructing a building, and/or installing equipment in the jurisdiction.

For most of the last century, however, North Carolina local governments were not permitted to make such incentive payments. It wasn’t until 1996, following the loss of economic development projects to other states, that the North Carolina Supreme Court finally decided that economic development incentives serve a constitutionally-permitted public purpose—under certain conditions. These conditions continue to impose limitations on incentives today, so this post reviews the relevant limitations and summarizes the conclusions of a 2013 North Carolina Law Review article entitled, Economic Development Incentives and North Carolina Local Governments: A Framework for Analysis. Read More…

» Mezzanine Financing in Community Economic Development
Post Renovation
Post Renovation

Mezzanine financing, or mezz debt, can play a critical role in the funding of a community economic development project and has other advantages discussed in this post, but what exactly is it, and how does it work?

Financing the renovation of historic buildings is far more complicated than new construction on vacant land. Reuse of an older building adds both risk and limitations to the project. For example, the removal of hazardous chemicals adds risk, or low ceiling heights limit potential future uses.

Because of this increased risk, traditional lenders are even more conservative when analyzing these projects and will often only lend up to 50% of the total redevelopment costs. If the developer defers the majority of their fee and does a great job applying for and receiving tax credits and grants, they can get up to 30% equity to finance the project. But, after all this work, there is still a 20% hole, or gap, in the financing; this is where mezzanine debt comes into play. Read More…

» Small Business Access to Capital (Part IV): Funding Sources to Capitalize Revolving Loan Funds

Azariahs-CCPFunding sources to capitalize revolving loan funds is the fourth topic in a series on tools local governments can use to assist small businesses. As discussed in Part II of this blog post series, local governments across North Carolina are using revolving loan funds to support their small businesses. A difficulty in establishing revolving loan funds is capitalizing them. The federal government currently offers at least five programs to assist local governments and nonprofits capitalize revolving loan funds: Read More…

» Small Business Access to Capital (Part II): Revolving Loan Funds

Kinston NC #6554Small business success is one of the cornerstones to the vitality of our communities. A variety of tools are available to local governments interested in supporting their small businesses. In this continuing series of blog posts about how local governments can assist small businesses, we will review common tools used to offer financing, how to capitalize these finance tools, methods to promote entrepreneurship, and new trends such as crowdfunding.

Across North Carolina, multiple local governments operate some type of loan fund to support their local businesses. These programs operate with several common goals including business recruitment/expansion, job creation, and increase in quality of life. The majority of these loan funds are operated as revolving loan funds. Read More…

» Federal grant funds for redevelopment: Overcoming challenges with “security” and cash flow

The STARworks Center for Creative Enterprise is located in Star, North Carolina. The organization is a product of the Central Park North Carolina Regional Partnership, a non-profit partnership between seven counties in the south-central region of North Carolina. The mission of both STARworks and Central Park is to support a new economy through entrepreneurship and job creation in the creative, agricultural, and alternative energy industries throughout the region. STARworks supports small businesses by providing inexpensive work space, technical assistance,and shared resources.

STARworks recently received a $1.175 million grant from the Economic Development Administration (EDA) of the U.S. Department of Commerce. The grant was awarded to support redevelopment of a 187,000 square foot, former textile mill into a new home for Central Park NC Regional Partnership and STARworks. The excitement of receiving a sizable federal grant was quickly quashed when the organization’s leadership learned details of the grant’s security requirements and payout provisions. Adequate security for the grant meant that the value of the project provided sufficient collateral and, in cases where additional funding had been provided by other sources, the EDA maintained an acceptable lien position.

Given the particular circumstances, STARworks needed an innovative solution in a short time period in order to meet EDA’s requirements. Read More…

» Using a Redevelopment Area to Attract Private Investment

The neighborhood of Doherty Heights has seen better days. Once a vibrant residential neighborhood that was home to families and retail businesses close to the downtown core, Doherty Heights is now better known for its vacant storefronts and dilapidated houses. The majority of the city’s housing code complaints come from Doherty Heights. Police have identified Doherty Heights as an area of concern. To make matters worse, the neighborhood lies along Main Street, so every visitor to the city gets to see the blighted housing stock and commercial buildings first-hand. As part of a larger effort to revitalize Doherty Heights, city officials are exploring ways to attract private investment to the community, and they want to know how a redevelopment area can help them achieve their goals. The School of Government Development Finance Initiative has been working with city officials on various options, and as part of that effort, Read More…

» Using Historic Tax Credits to Transform a Landmark
Before Renovation

After sitting empty for twenty odd years this abandoned department store was in need of a total transformation.  The property had a solid foundation, a beautiful facade, and held rich memories for the locals, but behind the broken/boarded up storefront was a building begging for a wrecking ball.  The building lacked plumbing, electrical service, required fire safety, or even a safe way to get to the upper floors (ie no elevator or internal stairs)!  To get to the upper floors of this 5 story building you had to climb a dilapidated fire escape.

The amount of investment required to redevelop this historic landmark would clearly exceed the cost of new construction on a suburban green field.  This harsh reality helps explain why so many North Carolina downtown buildings remain empty and why Federal and State historic tax credit programs have been created to encourage private investment into core properties like this one. Read More…

» School of Government Grants Community Revitalization Award to Rockingham County Business & Technology Center

Participants in the School of Government’s recent Development Finance Toolbox course, led by faculty member Tyler Mulligan, received more than training in economic development finance. This year’s participants were invited to submit project proposals for a community revitalization award of 30 days of intensive project support from a team of graduate student fellows working with the School’s Development Finance Initiative (DFI).

Course participant Mark Wells, executive director of the Rockingham County Business & Technology Center (RCBTC), submitted a project that aims to establish a fund to assist entrepreneurial businesses in Rockingham County. The project had received an initial intent for funding from a local foundation, but the RCBTC team needed assistance in determining the most appropriate type of fund and developing a plan for implementation and management. Read More…

» Local government assistance for a real estate development project—without making a grant

Al Czervik is a real estate developer who has invested in several shopping malls and mixed-use developments across the Tar Heel state. He is planning a mixed use development called “Gopher Commons” in your community, but “in order to make the numbers work,” he claims that he needs local government assistance to address a “financing gap.” He wants the local government to provide him a cash grant to be paid out over five years, with the annual grant amount equivalent to 50% of the additional tax assessed as a result of the higher taxable value of the property upon completion. He hasn’t locked down any commercial tenants yet, so he can’t promise any jobs. He’s also not exactly sure what kinds of tenants might occupy the space, but he’s certain that the retail businesses will need to hire new employees.

The city council wants to support the project because it generally comports with the council’s vision for development in this area. But the council is not interested in offering grants to real estate developers. The claims about new jobs ring hollow, since the developer can’t promise any, and retail establishments generally don’t pay high wages. Besides, the council reasons, any new jobs at this development will likely come at the expense of retail establishments elsewhere in the community. There certainly is no interstate competition for this project—the developer can’t threaten to take his development elsewhere. The city attorney has raised concerns about the developer’s request right from the start. Is there a way for the council to offer support for this real estate development without offering a grant or other direct subsidy? Read More…

» Housing Assessment in Kinston, NC

The Development Finance Initiative (DFI) and the Kenan Institute at UNC have teamed up to prepare a comprehensive housing assessment for the City of Kinston. The housing assessment, which combines public records with qualitative data collected through an on-the-ground property survey, will provide City leaders with detailed information on the housing stock in particular areas of town. It will provide a baseline to help staff prioritize redevelopment investments.

The following are anticipated benefits of a comprehensive housing assessment: Read More…

» What services are available from DFI?

DFI services support implementation of local community and economic development priorities that require private investment. DFI can be thought of as an extension of a local government’s finance, planning, economic and community development departments. DFI services include:

  • Real estate finance and structuring, including identification of investors, lenders, tax credit equity sources and other partners
  • Advising on public-private partnerships and development incentives
  • Assessment of distressed properties
  • Creation of Requests for Proposals (RFPs) to attract private development into underserved areas
  • Development of small business finance programs
  • Assistance with pre-development including program design, market assessment and valuation, cost assumptions, and pro forma creation
  • Evaluation of development proposals, agreements and contracts
  • Assessment/review of development team experience and capacity
» What development finance tools can DFI help our community to implement?

The DFI team’s experience touches on a broad range of development finance tools that are designed to attract private investment into local community and economic development projects including:

  • targeted financing/incentive programs (Tax Increment Financing (TIF), Business Improvement Districts (BIDs))
  • tax credit financing (historic preservation, new markets, brown fields, low-income housing)
  • loan funds (revolving loan funds, microenterprise loans, and innovative debt and equity hybrid products)
  • secondary market and securitization programs (loan loss reserve funds)
  • equity (individual investors, foundations, community development venture capital)
  • federal grant programs (CDBG, HUD, EDA)