$30.25 million fund to provide critically needed real estate financing in Detroit.

NCB Capital Impact and The Kresge Foundation announced the launch of the Woodward Corridor Investment Fund, developed to invest in transformative real estate projects that advance the physical redevelopment of Detroit’s Woodward Corridor. With the support of MetLife, Inc., PNC Bank, Prudential, Calvert Foundation, Living Cities and the Max M. & Marjorie S. Fisher Foundation, the fund will provide capital to projects that are mixed-use, mixed income, transit-oriented and promote density, diversity, vibrancy and walkability in Detroit’s core.

“Access to capital is critical to expanding opportunity, strengthening neighborhoods and improving quality of life in our cities,” says Kresge President Rip Rapson. “We know we need an array of tools to support the revitalization of our hometown. We also need creative partners. This fund is an example of all of those elements.”

“By engaging major foundations and commercial lenders, our work will break the traditional mold of community development financing,” adds Terry Simonette, President and CEO of NCB Capital Impact. “The Woodward Corridor Investment Fund is an innovative new approach that is built around the needs of local borrowers.”

The $30.25 million Woodward Corridor Investment Fund is designed to support Detroit’s revitalization by financing housing along Woodward Avenue, a main artery and home to major medical and academic campuses and arts and entertainment venues.

The Woodward Corridor includes Detroit’s Midtown neighborhood, where occupancy rates exceed 95 percent and demand is high for hundreds of additional units. By focusing on the Woodward Corridor, home to many of Detroit’s largest institutions and employers, the fund will help attract residents and commercial activity, establish a model sustainable corridor, and expand economic opportunity for all residents.

In recent years, Detroit’s public, private and philanthropic sectors have worked together to re-establish the city as a place that is economically, socially and environmentally sustainable and competitive with peer urban centers.

Major efforts including the federal government’s Strong Cities Strong Communities initiative, Living Cities’ Integration Initiative, The New Economy Initiative, and, the Detroit Future City planning framework focus on building stronger neighborhoods, creating economic opportunity and making Detroit a better city for current and future residents. The fund will demonstrate market viability in neighborhoods that represent the leading edge of the city’s revitalization and support job growth through the development of additional residential and commercial space.

Kresge works to expand opportunities in America’s cities through grantmaking and investing in arts and culture, education, the environment, health, human services and community development efforts in Detroit, Kresge’s hometown.

NCB Capital Impact is a Congressionally chartered, District of Columbia, non-profit community development finance institution, which provides financial services and technical assistance to help make high-quality health care, healthy foods, housing, and education more accessible and attainable, and eldercare more dignified and respectful.

The Fund

The Woodward Corridor Investment Fund will provide long-term fixed rate loans under terms not currently available through traditional financial institutions, allowing a single loan source rather than the many layers of capital that can be time consuming and difficult to assemble. This will allow developers to commence construction on their projects more quickly.

“We know from market studies and from our revitalization work that there’s pent up demand for mixed-use, mixed income, transit-oriented projects in Detroit’s core,” says Kresge’s Laura Trudeau, who leads the foundation’s Detroit Program. “The Woodward Corridor is a diverse and vibrant area, but broader economic conditions have created conditions that have discouraged lenders.”

NCB Capital Impact began working in Detroit several years ago as part of the Woodward Corridor Initiative. Living Cities, a funder collaborative focused on improving the lives of low-income people, chose the Woodward Corridor Initiative in Detroit to participate in The Integration Initiative, its effort to apply a collective impact framework to stimulate systems change in five cities.

Through the Intregration initiative, Living Cities members have supported efforts to revitalize Detroit – investing grant and loan dollars, helping aggregate local talent, knowledge and investment; and integrate leadership across multiple sectors. The work over the past three years helped identified a gap in the lending market which the Woodward Corridor Investment Fund will help to fill. Living Cities is providing a grant to support the Woodward Corridor Investment Fund, and three of the fund’s investors – Prudential, MetLife and Kresge – are members of Living Cities.

“Prudential’s investment in Detroit underscores our commitment to support underserved communities and develop innovative financial solutions,” says Lata Reddy, vice president, Corporate Social Responsibility at Prudential and president of The Prudential Foundation. “The Woodward Corridor resurgence is vital to the city and we welcome the opportunity to help strengthen this neighborhood.”

“It’s well known that Detroit faces tremendous challenges, but those challenges present opportunities and can bring together investors and mission-driven organizations to make a better Detroit,” says Matthew Sheedy, director, Social Investment Program, MetLife, Inc. “If this formula can work in Detroit, it could be a model for how to work in other cities across the country,” he added.

PNC’s capital was also pivotal to catalyzing the fund as it demonstrated how a local Detroit bank’s finances leveraged funding from other national partners.

“PNC is committed to developing strong communities and creating financial opportunities for individuals, families and businesses,” says PNC Regional President Ric DeVore. “That commitment includes playing a leadership role in projects such as this that will help build a better Detroit.”

The Woodward Corridor Investment Fund will begin accepting applications Oct. 1. It will make initial loan approvals before the end of 2013 for projects that will start construction prior to the end of 2014. Information is available at www.capitalimpact.org/focus/place-based-revitalization/woodward-corridor-investment-fund/.

“Long-term capital is essential to revitalizing urban areas suffering from underinvestment, and we look forward to providing that in Detroit,” says Calvert Foundation CEO Jennifer Pryce. “As part of our Iconic Places Initiative, we’re working to raise that capital from residents who want to support urban redevelopment in their own backyards.”